Respondent’s Arguments (WON):
Module 4 ● On the basis of said Receipt, FPA demanded
Defenses of Common Carrier
Article 1734
Fire as cause
DSR-Senator Lines and C.F. Sharp and Co., Inc.
v. Federal Phoenix Assurance Co., Inc.
G.R. No. 135377 | Date: October 7, 2003
Facts:
● (Berde Plants), Inc. (BP) delivered 632 units
of artificial trees to (C.F. Sharp) and
Company, Inc., the General Ship Agent of
DSR-Senator Lines (DSR), a foreign shipping
corporation, for transportation and delivery
to the consignee, Al-Mohr International
Group (AMIG), in Saudi Arabia.
● C.F. Sharp issued an International Bill of
Lading for the cargo, which was insured
against all risks by Federal Phoenix
Assurance Company, Inc. (FPA). Under the
Bill of Lading, the port of discharge for the
cargo was at the (Khor Fakkan) port and the
port of delivery was Riyadh, via Port
Dammam.
● The cargo was first loaded in M/S "Arabian
Senator". When the vessel arrived in Khor
Fakkan, the cargo was reloaded on board
M/V "Kapitan Sakharov", DSR's feeder
vessel, bound for Dammam. However, while
in transit, the vessel and all its cargo caught
fire.
● DSR informed Berde Plants that M/V "Kapitan
Sakharov" of the incident. Thereafter, C.F.
Sharp issued a certification to that effect.
● Consequently, FPA paid the amount of
insurance for the cargo to Berde Plants, who,
in turn, executed in its favor a "Subrogation
Receipt".
● When petitioners refused to reimburse FPA,
the latter filed with the RTC a complaint for
damages against petitioners, praying that
they be ordered to pay actual and
compensatory damages.
Petitioner’s Argument/s (LOST):
● DSR and C.F. Sharp contended that such
liability was extinguished when the vessel
carrying the cargo was gutted by fire.
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 1
reimbursement of the amount paid to Berde
Plants from C.F. Sharp.
Ruling of the lower court:
● The RTC ruled in favor of FPA. In affirming
the RTC, the CA stated that the appellant
carrier was presumed to have acted
negligently for the fire that gutted the feeder
vessel and the consequent loss or destruction
of the cargo.
● The status of the appellant as ship agent
subsisted and its liability as a ship agent was
co-terminous with and subsisted as long as
the cargo was not delivered to the consignee
under the terms of the Bill of Lading.
Issue: WON DSR and C.F. sharp are liable for the
shipment that was lost when their ship caught fire.
(YES NAMAN.)
Rule:
● 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:
(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;
(5) Order or act of competent public
authority."
● A common carrier's duty to observe the
requisite diligence in the shipment of goods
lasts from the time the articles are
surrendered to or unconditionally placed in
the possession of, and received by, the
carrier for transportation until delivered to or
until the lapse of a reasonable time for their
acceptance by the person entitled to receive
them. When the goods shipped either are lost
or arrive in damaged condition, a
presumption arises against the carrier of its
failure to observe that diligence, and there
need not be an express finding of negligence
to hold it liable.
Application:
● Since the peril of fire is not comprehended
within the exceptions in Article 1734, the
common carrier shall be presumed to have
been at fault or to have acted negligently,
unless it proves that it has observed the
extraordinary diligence required by law.
● Even if fire were to be considered a natural
disaster within the purview of Art. 1734, it is
required under Art. 1739 of the same Code
that the natural disaster must have been the
proximate and only cause of the loss, and
that the carrier has exercised due diligence
to prevent or minimize the loss before,
during or after the occurrence of the disaster.
● In those cases where the presumption is
applied, the common carrier must prove that
it exercised extraordinary diligence in order
to overcome the presumption. In this case,
petitioners failed to overcome it by sufficient
proof of extraordinary diligence.
Storm or Peril of the Sea
Transimex Co. v. Mafre Asian Insurance Corp.
G.R. No. 190271 | September 14, 2016
Facts:
Sometime in 1996, M/V Meryem Ana received a
shipment consisting of 21,857 metric tons of Prilled
Urea Fertilizer from Ukraine which was covered by two
separate bills of lading and consigned to Fertiphil
delivery to two ports — one in Poro Point, San
Fernando, La Union; and the other in Tabaco, Albay.
Fertiphil insured the cargo against all risks under
Marine Risk Notes issued by the respondent.
M/V Meryem Ana arrived at La Union to discharge
14,339.507 metric tons of fertilizer. The vessel docked
at the Tabaco port for the remainder of the metric tons
but when the cargo was subsequently weighed, it was
discovered that only 7,350.35 metric tons of fertilizer
had been delivered.
Thus, Fertiphil filed a claim with the respondent in
which the latter paid. Subsequently, the respondent
demanded reimbursement from petitioner but to no
avail, hence the instant petition.
Petitioner’s Argument/s (LOST):
It contended that it is exempt from liability under both
Civil Code and COGSA which exempts the carrier from
liability for any loss or damage arising from "perils,
dangers and accidents of the sea,” because damage
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 2
to the cargo was caused by the bad weather
encountered by the vessel while at sea.
Respondent’s Arguments (WON):
It maintains liability of the petitioner for the shortage
of the cargo in accordance with the Civil Code
provisions on common carriers.
Ruling of the lower court:
RTC – in favor of respondent and ordered the
petitioner to pay the claim. It found that there was
indeed a shortage in the cargo delivered, for which the
common carrier must be held responsible under
Article 1734 of the Civil Code.
CA – affirmed RTC’s decision stating that defendant-
appellants did not present proof that the “bad
weather” they encountered was a "storm" as
contemplated by Article 1734(1) of the Civil Code.
String winds are the ordinary vicissitudes of a sea
voyage.
Issue:
Whether the petitioner is liable for the loss or damage
sustained by the cargo due to the bad weather. YES.
Rule:
It must be emphasized that not all instances of bad
weather may be categorized as "storms" or "perils of
the sea" within the meaning of the provisions of the
Civil Code and COGSA on common carriers.
Central Shipping Co. Inc. v. Insurance Company of
North America:
According to PAGASA, a storm has a wind force of
48 to 55 knots, equivalent to 55 to 63 miles per
hour or 10 to 11 in the Beaufort Scale. The second
mate of the vessel stated that the wind was blowing
around force 7 to 8 on the Beaufort Scale.
Consequently, the strong winds accompanying the
southwestern monsoon could not be classified as a
"storm." Such winds are the ordinary vicissitudes
of a sea voyage.
The phrase “perils of the sea,” generally limits the
application to weather that is "so unusual, unexpected
and catastrophic as to be beyond reasonable
expectation,” as defined in the US courts which the
Philippine Court considered persuasive in light of the
fact that COGSA was originally an American statute
and was merely adopted by the Philippine Legislature.
Accordingly, strong winds and waves are not
automatically deemed perils of the sea, if these
conditions are not unusual for that particular sea area
at that specific time, or if they could have been
reasonably anticipated or foreseen.

Application:
In this case, evidence indicated that M/V Meryem Ana
faced winds of only up to 40 knots while at sea. This
wind force clearly fell short of the 48 to 55 knots
required for "storms" under Article 1734 (1) of the
Civil Code based on the threshold established by
PAGASA.
Petitioner also failed to prove that the inclement
weather encountered by the vessel was unusual,
unexpected, or catastrophic.
In particular, the strong winds and waves, which
allegedly assaulted the ship, were not shown to be
worse than what should have been expected in that
particular location during that time of the year.
Proximate Cause
Batangas Laguna Tayabas Bus Co., et. al. v. IAC
G.R. No. 74387-90 | Date: November 14, 1988
Facts:
The collision between Bus No. 1046 of the Batangas
Laguna Tayabas Bus Company (BLTB, for brevity)
driven by Armando Pon and Bus No. 404 of Superlines
Transportation Company (Superlines, for brevity)
driven by Ruben Dasco took place at the highway
traversing Barangay Isabong, Tayabas, Quezon in the
afternoon of August 11, 1978, which collision resulted
in the death of Aniceto Rosales, Francisco Pamfilo and
Romeo Neri and in several injuries to Nena Rosales
(wife of Anecito) and Baylon Sales, all passengers of
the BLTB Bus No. 1046. The evidence shows that as
BLTB Bus No. 1046 was negotiating the bend of the
highway, it tried to overtake a Ford Fiera car just as
Bus No. 404 of Superlines was coming from the
opposite direction. Seeing thus, Armando Pon (driver
of the BLTB Bus) made a belated attempt to slacken
the speed of his bus and tried to return to his proper
lane. It was an unsuccessful try as the two (2) buses
collided with each other.
Petitioner’s Argument/s: (LOST)
It is argued by petitioners that if the intention of
private respondents were to file an action based on
culpa contractual or breach of contract of carriage,
they could have done so by merely impleading BLTB
and its driver Pon. As it was in the trial court, private
respondents filed an action against all the defendants
basing their action on culpa aquiliana or tort.
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 3
Respondent’s Arguments: (WON)
Private respondents filed an action against all the
defendants basing their action on culpa aquiliana or
tort.
Ruling of the lower court:
CFI ruled that only BLTB and Pon should be liable, and
they were ordered jointly and severally to pay
damages.
On appeal, the IAC affirmed the CFI's ruling.
Issue:
WON IAC erred in ruling that the actions of private
respondents are based on culpa contractual. (NO)
Rule and Application:
The proximate cause of the death and injuries of the
passengers was the negligence of the bus driver Pon,
who recklessly overtook a car despite knowing that
that the bend of highway he was negotiating on had a
continuous yellow line signifying a “no-overtaking”
zone. It is presumed that a person driving a motor
vehicle has been negligent if at the time of the
mishap, he was violating any traffic regulation.
In the instant case, the driver of the BLTB bus failed
to act with diligence demanded by the circumstances.
Pon should have remembered that when a motor
vehicle is approaching or rounding a curve there is
special necessity for keeping to the right side of the
road and the driver has not the right to drive on the
left-hand side relying upon having time to turn to the
right if a car is approaching from the opposite
direction comes into view.
As to the liability of the petitioners, Pon is primarily
liable for his negligence in driving recklessly the truck
owned by BLTB. The liability of the BLTB itself is also
primary, direct and immediate in view of the fact that
the death of or injuries to its passengers was through
the negligence of its employee. The common carrier's
liability for the death of or injuries to its passengers is
based on its contractual obligation to carry its
passengers safely to their destination. They are
presumed to have acted negligently unless they prove
that they have observed extraordinary diligence. In
the case at bar, the appellants acted negligently.
BLTB is also solidarily liable with its driver even
though the liability of the driver springs from quasi
delict while that of the bus company from contract.
 Sabido, et. al. v. Custodio, et. al.
G.R. No. L-21512 | August 31, 1966
Facts:
Petitioners Sabido and Lagunda, owner and driver
respectively of a truck which sideswiped a bus owned
by Laguna Tayabas Bus (LTB) Company. The said
accident resulted to the death of Agripino Custodio
relative of herein respondents. The petitioners, to
avoid any liability, threw all the blame on the driver of
the LTB Bus citing negligence since the staff of LTB
Bus allowed Custodio to ride by hanging on the side
of the bus instead of sitting properly inside, which
could have prevented his death.
Petitioner’s Argument/s:LOST
Carrier is wholly liable and that they should not be
held solidarily liable with the carrier and its driver
since the liability of the carrier arises from breach of
contract.
Respondent’s Arguments:
WON. Petitioner is liable for negligence
Ruling of the lower court:
CFI Laguna and affirmed by the CA, ruled that LTB,
the carrier and its driver has violated the contract of
carriage with Custodio and also found the petitioners
guilty of quasi delict hence all were held solidarily
liable.
Issue:
WON, the petitioners can be held solidarily liable with
the carrier, LTB Bus when the liability of the carrier
arose from breach of contract, while their came from
quasi delict.
Rule:
Ruling of the CA is affirmed. Though the carrier was
clearly guilty of negligence, (violation of Sec. 42 of Act
3992) the petitioners are also guilty of contributory
negligence, which was as much a proximate cause of
the accident as the carrier’s negligence. Petitioner’s
negligence was the last, in point of time hence the
petitioner had the last clear chance to avoid the death
of Custodio
Application:
Concurrent or successive negligent acts or omission of
two or more persons, though acting independently of
each other, in combination the direct and proximate
cause of a single injury to a third person and it is
impossible to determine in what proportion each
contributed to the injury. Either is responsible for the
whole injury.
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 4
Shore pass requirement
Japan Airlines v. Asuncion
G.R. No. 161730 | Date Jan. 28, 2005
Facts
Respondents Michael and Jeanette left MNL on board
Japan Airlines (JAL) bound for Los Angeles.
Their itinerary included a stop-over in Narita and an
overnight stay at Hotel Nikko Narita. Upon arrival at
Narita, Mrs. Higuchi of JAL endorsed their applications
for shore pass and directed them to the Japanese
immigration official.
A shore pass is required of a foreigner aboard a
vessel or aircraft who desires to stay in the
neighborhood of the port of call for not more than 72
hours.
During their interview, the Japanese immigration
official denied shore pass entries to respondents due
to the fact that Respondent Michael appeared shorter
than his height as indicated in his passport. Thus, they
were brought instead to the Narita Airport Rest House
where they were billeted overnight.
Mr. Takemoto of the International Service Center
(ISC), the agency tasked by Japan's Immigration
Department to handle passengers who were denied
shore pass entries, brought respondents to the Narita
Airport Rest House where they stayed overnight until
their departure the following day to LA. Respondents
were charged US$400.00 each for their
accommodation, security service and meals.
(started with respondent’s arguments so it’s easier to
understand)
Respondent’s Arguments – LOST
Respondents filed a complaint for damages claiming
that JAL did not fully apprise them of their travel
requirements and that they were rudely and forcibly
detained at Narita Airport.
Petitioner’s Arguments –WON
JAL denied the allegations of respondents. It
maintained that the refusal of the Japanese
immigration authorities to issue shore passes to
respondents is an act of state which JAL cannot
interfere with or prevail upon. Consequently, it cannot
impose upon the immigration authorities that
respondents be billeted at Hotel Nikko instead of the
airport resthouse.
Ruling of the Lower Court
RTC: The court ordered JAL to pay damages.
CA: CA affirmed in toto the decision of the lower
court.

Issue: Whether JAL is guilty of breach of contract?
NO
Rule
Under Article 1755 of the Civil Code, a common carrier
such as JAL is bound to carry its passengers safely as
far as human care and foresight can provide, using
the utmost diligence of very cautious persons, with
due regard for all the circumstances. When an airline
issues a ticket to a passenger, confirmed for a
particular flight on a certain date, a contract of
carriage arises. The passenger has every right to
expect that he be transported on that flight and on
that date and it becomes the carrier's obligation to
carry him and his luggage safely to the agreed
destination.
If the passenger is not so transported or if in the
process of transporting he dies or is injured, the
carrier may be held liable for a breach of contract of
carriage.
Application
We find that JAL did not breach its contract of carriage
with respondents. It may be true that JAL has the duty
to inspect whether its passengers have the necessary
travel documents, however, such duty does not
extend to checking the veracity of every entry in these
documents. JAL could not vouch for the authenticity
of a passport and the correctness of the entries
therein. The power to admit or not an alien into the
country is a sovereign act which cannot be interfered
with even by JAL. This is not within the ambit of the
contract of carriage entered into by JAL and herein
respondents. As such, JAL should not be faulted for
the denial of respondents' shore pass applications.
JAL or any of its representatives have no authority to
interfere with or influence the immigration authorities.
The most that could be expected of JAL is to endorse
respondents' applications, which Mrs. Higuchi did
immediately upon their arrival in Narita. Mrs. Higuchi
did all she could to assist the respondents. Upon being
notified of the denial of respondents' applications,
Mrs. Higuchi immediately made reservations for
respondents at the Narita Airport Rest House which is
really more a hotel than a detention house as claimed
by respondents.
Nowhere in respondent Michael's testimony did he
state categorically that Mrs. Higuchi or any other
employee of JAL treated them rudely or exhibited
improper behavior throughout their stay. We
therefore find JAL not remiss in its obligations as a
common carrier.
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 5
There being no breach of contract nor proof that JAL
acted in wanton, fraudulent or malevolent manner,
there is no basis for the award of any form of
damages.
Exercise of Extraordinary Diligence, Inherent
Character of Goods, and Inadequacy of
Packaging
Planters Products Inc. v. CA
G.R. No. 101503 | September 15,1993
Facts:
● Planters Products, Inc. (PPI) purchased from
Mitsubishi International Corporation
(MITSUBISHI) of New York, USA 9,329.7069
metric tons of Urea which was shipped in bulk
aboard the cargo vessel M/V Sum Plum owned by
herein private respondent Kyosei Kisen Kabushiki
Kaisha (KKKK)
● Prior to its voyage, a time charter-party on M/V
Sum Plum pursuant to the Uniform General
Charter was entered into between Mitsubishi as
shipper/charterer and KKKK as shipowner.
● Before loading the fertilizer aboard the vessel, four
of her holds were all presumably inspected by the
charterer’s representative and found it 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, covered with three layers of
tarpaulin, then tied with steel bonds. The hatches
remained closed and tightly sealed throughout the
entire voyage.
● Upon arrival, petitioner unloaded the cargo from
the holds into its steel-bodied dump trucks which
when filled up was covered with tarpaulin before it
was transported to the consignee’s warehouse
located some 50 meters from the wharf.
● Petitioner hired a private marine and cargo
surveyor who submitted a report of shortage in the
cargo and that a portion of the Urea fertilizer was
contaminated with dirt.
● Petitioner sent a claim letter to Soriamont
Steamship Agencies (SSA) the resident agent of
KKKK, representing the cost of the alleged
shortage in the goods shipped and diminution in
value of that portion said to have been
contaminated with dirt.
● Denied, Petitioner filed an action for damages with
the Court of First Instance of Manila.
Petitioner’s Argument/s (LOST):
M/V Sum Plum owned by KKKK is a commercial carrier
thus, the presumption of negligence applies. Absent
any showing that it exercised the diligence required of
it as a commercial carrier, it is liable for the loss of
PPI.
Respondent’s Argument/s (WON):
The strict public policy governing common carriers
does not apply to them because they have become
private carriers by reason of the provisions of the
charter-party. (TN: Although it was held that the
courier was a commercial one, it sufficiently overcome
the presumption of negligence and proved that Urea
fertilizer is inherently bears the risk of loss/damage)
Issue:
WON shipowner was able to prove that he had
exercised the degree of diligence required of him
under the law. (YES)
Rule:
Article 1734 of the New Civil Code provides that
common carriers are not responsible for the loss,
destruction or deterioration of the goods if caused by
the character of the goods or defects in the packaging
or in the containers. The Code of Commerce also
provides that all losses and deteriorations which the
goods may suffer during the transportation by reason
of fortuitous event, force majeure, or the inherent
defect of the goods, shall be for the account and risk
of the shipper, and that proof of these accidents is
incumbent upon the carrier. The carrier, nonetheless,
shall be liable for the loss and damage resulting from
the preceding causes if it is proved, as against him,
that they arose through his negligence or by reason
of his having failed to take the precautions which
usage has established among careful persons.
The period during which private respondent was to
observe the degree of diligence required of it as a
public carrier began from the time the cargo was
unconditionally placed in its charge after the vessel's
holds were duly inspected and passed scrutiny by the
shipper, up to and until the vessel reached its
destination and its hull was re-examined by the
consignee, but prior to unloading.
Application:
The respondent carrier has sufficiently overcome, by
clear and convincing proof, the prima facie
presumption of negligence.
During trial, it was proved that the dissipation of
quantities of fertilizer, or its deterioration in value, is
caused either by an extremely high temperature in its
place of storage, or when it comes in contact with
water. When Urea is drenched in water, either fresh
or saline, some of its particles dissolve. But the
salvaged portion which is in liquid form still remains
potent and usable although no longer saleable in its
original market value.
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 6
The probability of the cargo being damaged or getting
mixed or contaminated with foreign particles was
made greater by the fact that the fertilizer was
transported in "bulk," thereby exposing it to the
inimical effects of the elements and the grimy
condition of the various pieces of equipment used in
transporting and hauling it.
Respondent carrier sufficiently proved that 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, as was the case at bar. This is a risk the
shipper or the owner of the goods has to face.
Clearly, respondent carrier 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.
Exercise of Extraordinary Diligence and
Doctrine of Last Clear Chance
William Tiu v. Pedro Arriesgado
G.R. No. 138060 |September 1, 2004
Facts:
When the cargo truck driven by Sergio Pedrano
passed over a bridge in Compostela, Cebu, one of its
rear tires exploded. As a result, the driver then parked
along the right side of the national highway while he
went to a nearby vulcanized shop.
Meanwhile, at about 4:45 a.m., D’ Rough Riders
passenger bus driven by Laspiñas was approaching
the bridge, it rammed into the truck’s left rear. The
impact damaged the right side of the bus and left
several passengers injured including Arriesgado and
his wife, Felisa, who died shortly thereafter.
Arriesgado then filed a complaint for breach of
contract of carriage, damages and attorney’s fees
before the RTC of Cebu City against the petitioners.
Petitioner’s Argument/s: (Partially granted)
Tiu filed a Third-Party Complaint among others the
registered owner of the cargo truck and Pedrano, the
driver of the truck as they are liable as well. He also
alleged that Laspinas is driving at a moderate and
normal speed, and despite his efforts to avoid damage
to property and physical injuries on the passengers,
the right side portion of the bus hit the cargo truck’s
left rear.
Respondent’s Arguments: (WON)
He alleged that the passenger bus in question was
cruising at a fast and high speed along the national
road, and that petitioner Laspiñas did not take
precautionary measures to avoid the accident that due
to the reckless and imprudent driving, they failed to
safely reach their destination which was Cebu City. In
addition, Tiu, being the owner and operator of the said
passenger bus is therefore directly liable for the
breach of contract of carriage for his failure to exercise
the diligence of a good father of the family in the
selection and supervision of his employees.
Ruling of the lower court:
The RTC ruled in favor of Arriesgado. It stated that
Laspiñas is negligent for driving at a fast pace that
resulted in an unfortunate incident. It also found that
Tiu evidence was insufficient to prove that he
observed the diligence of a good father of a family in
the selection and supervision of his employees.
Further, the CA affirmed the trial court’s decision with
modification and held Tiu liable for failure to prove
that extraordinary diligence was observed in ensuring
the safety of passengers during transportation.
Issues:
1. WON Tiu has overcome the presumption of
negligence against him as one engaged in the
business of common carriage for failure to observe the
extraordinary diligence, when one of his bus has
caused death and injuries to its passenger. - No
2. WON the Doctrine of last clear chance is applicable
when the passenger bus rammed the parked cargo
truck. - No
Rule:
1. No. Tiu failed to observe the required
extraordinary diligence, as the negligence of his driver
is binding against him, as the owner of the passenger
bus engaged as a common carrier.
Article 1733. Common carriers, from the nature of
their business and for reasons of public policy, are
bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of
passengers transported by them, according to all the
circumstances of each case.
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 7
Such extraordinary diligence in the vigilance over the
goods is further expressed in articles 1734, 1735, and
1745, Nos. 5, 6, and 7, while the extraordinary
diligence for the safety of passengers is further
set forth in articles 1755 and 1756.
Article 1755. A common carrier is bound to carry
passengers safely as far as human care and foresight
can provide, using the utmost diligence of very
cautious persons, with a due regard for all the
circumstances.
Article 1756. In case of death of or injuries to
passengers, common carriers are presumed to
have been at fault or to have acted negligently,
unless they prove that they observed extraordinary
diligence as prescribed in articles 1733 and 1755.
Application:
The rules which common carriers should observe as to
the safety of their passengers are set forth in the Civil
Code, Articles 1733, 1755 and 1756. In this case,
respondent Arriesgado and his deceased wife
contracted with petitioner Tiu, as owner and operator
of D’ Rough Riders bus service, for transportation from
Maya, Daanbantayan, Cebu, to Cebu City. It is
undisputed that the respondent and his wife were not
safely transported to the destination agreed upon. In
actions for breach of contract, only the existence of
such contract, and the fact that the obligor, in this
case the common carrier, failed to transport his
passenger safely to his destination are the matters
that need to be proved. This is because under the said
contract of carriage, the petitioners assumed the
express obligation to transport the respondent and his
wife to their destination safely and to observe
extraordinary diligence with due regard for all
circumstances. Any injury suffered by the passengers
in the course thereof is immediately attributable to the
negligence of the carrier. Upon the happening of the
accident, the presumption of negligence at once
arises, and it becomes the duty of a common carrier
to prove that he observed extraordinary diligence in
the care of his passengers. It must be stressed that in
requiring the highest possible degree of diligence from
common carriers and in creating a presumption of
negligence against them, the law compels them to
curb the recklessness of their drivers.
While evidence may be submitted to overcome such
presumption of negligence, it must be shown that the
carrier observed the required extraordinary diligence,
which means that the carrier must show the utmost
diligence of very cautious persons as far as human
care and foresight can provide, or that the accident
was caused by a fortuitous event. As correctly found
by the trial court, petitioner Tiu failed to conclusively
rebut such presumption. The negligence of petitioner
Laspiñas as driver of the passenger bus is, thus,
binding against petitioner Tiu, as the owner of the
passenger bus engaged as a common carrier.
2. No, the Doctrine of last clear chance is inapplicable
in the case at bar.
In Phil. Rabbit Bus Lines, Inc. v. IAC, the principle of
last clear chance is inapplicable in the instant case,
as it only applies in a suit between the owners and
drivers of two colliding vehicles. It does not arise
where a passenger demands responsibility from the
carrier to enforce its contractual obligations, for it
would be inequitable to exempt the negligent driver
and its owner on the ground that the other driver was
likewise guilty of negligence.
In Phoenix Construction, Inc. v. Intermediate
Appellate Court, the common law notion of last clear
chance permitted courts to grant recovery to a
plaintiff who has also been negligent provided that the
defendant had the last clear chance to avoid the
casualty and failed to do so. Accordingly, it is difficult
to see what role, if any, the common law of last clear
chance doctrine has to play in a jurisdiction where the
common law concept of contributory negligence as an
absolute bar to recovery by the plaintiff, has itself
been rejected, as it has been in Article 2179 of the
Civil Code.
Application:
Thus, petitioner Tiu cannot escape liability for the
death of respondent Arriesgado’s wife due to the
negligence of petitioner Laspiñas, his employee. It
was proven that since the driver was traveling at a
fast pace and admitted that he saw the stalled truck
at a distance of 25 meters, which is more than enough
time to swerve to his left to avoid hitting it, but failed
to do so. The evidence showed that the Rough Rider
instead of swerving to the still spacious left lane of the
national highway plowed directly into the parked
cargo truck hitting the latter at its rear portion; and
thus, the (sic) causing damages not only to herein
plaintiff but to the cargo truck as well.
Fortuitous Event
Central Shipping Co. Inc. v. Insurance Co. of
North America
G.R. No. 150751 | Date: Sept. 20, 2004
Facts:
On 25 July 1990, the M/V Central Bohol undertook the
transport of 376 pieces of Philippine Apitong Round
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 8
Logs from Puerto Princesa, Palawan to Manila for
delivery to Alaska Lumber Co., Inc.
At about 01:25 am on July 26, the vessel listed about
10 degrees starboardside (meaning, the vessel tilted
to the side) due to the shifting of logs in the hold. At
about 01:28 am, the listing of the vessel had
increased to 15 degrees and the ship captain ordered
his men to abandon ship and at about 01:30 am, the
vessel completely sank. The cargo was totally lost
because of this.
Petitioner’s Argument/s (LOST):
● Petitioner interposed the defense that the
vessel was fully manned, fully equipped and
in all respects seaworthy; that all the logs
were properly loaded and secured; that the
vessel’s master exercised due diligence to
prevent or minimize the loss before, during
and after the occurrence of the storm.
● It raised as its main defense that the
proximate and only cause of the sinking of its
vessel and the loss of its cargo was a natural
disaster, a tropical storm which neither
[petitioner] nor the captain of its vessel could
have foreseen.
Respondent’s Arguments (WON):
● Respondent alleged that the total loss of the
shipment was caused by the fault and
negligence of the petitioner and its captain
and as direct consequence thereof the
consignee (Alaska Lumber) suffered damage
in the sum of P3, 000, 000.
○ NOTE: (The consignee presented a
claim for the value of the shipment
to the petitioner but the latter failed
and refused to settle the claim,
hence [respondent], being the
insurer, paid said claim and now
seeks to be subrogated to all the
rights and actions of the consignee
as against the petitioner.)
Ruling of the lower court: RTC ruled in favor of
the respondents. The court was unconvinced that
the sinking of M/V Central Bohol has been caused by
the weather or any other caso fortuito. It noted that
monsoons, which were common occurrences
during the months of July to December, could
have been foreseen and provided for by an
ocean-going vessel. Applying the rule of
presumptive fault or negligence against the carrier,
the trial court held the petitioner liable for the loss of
the cargo.
CA affirmed RTC finding that the soutwestern
monsoon encountered by the vessel was not
unforeseeable. The appellate court further held that
the weather disturbance was not the sole and
proximate cause of the sinking of the vessel,
which was also due to the concurrent shifting of
the logs in the hold that could have resulted only
from improper stowage. Thus, the carrier was held
responsible for the consequent loss of or damage to
the cargo, because its own negligence had contributed
thereto.
Issue/s:
1. W/N the carrier is liable for the loss of
the cargo. (YES - Liable)
2. W/N the doctrine of limited liability is
applicable. (NO)
Rule: The defense of fortuitous event or natural
disaster cannot be successfully made when the
injury could have been avoided by human
precaution. Thus, if a common carrier fails to
exercise due diligence - or that ordinary care that the
circumstances of the particular case demand - to
prevent or minimize the loss before, during and after
the occurrence of the natural disaster, the carrier shall
be deemed to have been negligent. The loss or injury
is not, in a legal sense, due to a natural disaster.
Application:
From the nature of their business and for reasons of
public policy, common carriers are bound to observe
extraordinary diligence over the goods they transport,
according to all the circumstances of each case. In the
event of loss, destruction or deterioration of the
insured goods, common carriers are responsible; that
is, unless they can prove that such loss, destruction
or deterioration was brought about - among others -
by "flood, storm, earthquake, lightning or other
natural disaster or calamity." In all other cases not
specified under Article 1734 of the Civil Code,
common carriers are presumed to have been at fault
or to have acted negligently, unless they prove that
they observed extraordinary diligence.
SC adapted the factual findings of CA since the
petitioner has not given the Court sufficient cogent
reasons to disturb the conclusion of the CA that the
weather encountered by the vessel was not a "storm"
as contemplated by Article 1734(1). Established is the
fact that between 10:00 p.m. on July 25, 1990 and
1:25 a.m. on July 26, 1990, M/V Central Bohol
ONLY encountered a southwestern monsoon in
the course of its voyage.
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 9
The pieces of evidence with respect to the weather
conditions showed that there was a southwestern
monsoon at the time. This is normally to be expected
on sea voyages, however, were such monsoons,
during which strong winds were not unusual. PAGASA
testified that a thunderstorm might occur in the midst
of a southwest monsoon. Accordingly, one did occur
between 8:00 p.m. on July 25, 1990, and 2 a.m. on
July 26, 1990, as recorded by the PAGASA Weather
Bureau.
Thus, the court ruled that it would not be sufficient to
categorize the weather condition at the time as a
"storm" within the absolutory causes enumerated in
the law. Significantly, no typhoon was observed within
the Philippine area of responsibility during that period.
Even if the weather encountered by the ship is to be
deemed a natural disaster under Article 1739 of the
Civil Code, petitioner failed to show that such natural
disaster or calamity was the proximate and only cause
of the loss. Human agency must be entirely excluded
from the cause of injury or loss. In other words, the
damaging effects blamed on the event or
phenomenon must not have been caused, contributed
to, or worsened by the presence of human
participation. The defense of fortuitous event or
natural disaster cannot be successfully made when
the injury could have been avoided by human
precaution.
SC also finds no reason to disturb the CA’s finding that
the loss of the vessel was caused not only by the
southwestern monsoon, but also by the shifting of the
logs in the hold. Such shifting could be due only to
improper stowage.
Facts show that the vessel proceeded through the first
southwestern monsoon without any mishap, and that
it began to list only during the second monsoon
immediately after the logs had shifted and seawater
had entered the hold. In the hold, the sloshing of tons
of water back and forth had created pressures that
eventually caused the ship to sink. Had the logs not
shifted, the ship could have survived and reached at
least the port of El Nido. One of the testimonies of the
boatswain averred that the logs stored in the lower
hold were not secured by cable wire, because they
fitted exactly from floor to ceiling. Thus, the court said
that it is obvious, as a matter of common sense, that
the manner of stowage in the lower hold was not
sufficient to secure the logs in the event the ship
should roll in heavy weather. Notably, they were of
different lengths ranging from 3.7 to 12.7 meters.
Being clearly prone to shifting, the round logs should
not have been stowed with nothing to hold them
securely in place. Considering the strong force of the
wind and the roll of the waves, the loose arrangement
of the logs did not rule out the possibility of their
shifting. By force of gravity, those on top of the pile
would naturally roll towards the bottom of the ship.
As to the Doctrine of Limited Liability, the SC held
it to be inapplicable. It has already been established
that the sinking of M/V Central Bohol had been caused
by the fault or negligence of the ship captain and the
crew, as shown by the improper stowage of the cargo
of logs. As such, the shipowner was equally negligent.
It cannot escape liability by virtue of the limited
liability rule.
FGU Insurance v. CA
G.R. No. 137775 and 140704 | Date March 31, 2005
Facts:
● San Miguel Corp. shipped from Mandaue to
Iloilo (bill of lading #1) and Antique (bill of
lading #2) some cases of Pale Pilsen and
Cerveza Negra.
● This was carried by the barge D/B Lucio
which had to be towed by the tugboat M/T
ANCO all the way from Mandaue to San Jose,
Antique. The tugboat left immediately after.
● The clouds got dark and the waves were big.
The arrastre workers were having difficulty in
unloading the cargos so SMC’s District Sales
Supervisor requested ANCO’s representative
to transfer the barge to a safer place.
● ANCO’s supervisor did not heed the request
because he was confident that the barge
could withstand the waves. At that time, only
the M/T ANCO was left at the wharf of San
Jose, Antique, as all other vessels already left
the wharf to seek shelter. With the waves
growing bigger and bigger, only 10,790
cases of beer were discharged into the
custody of the arrastre operator.
● The next evening the crew of D/B Lucio
abandoned the vessel because the barge's
rope attached to the wharf was cut off by the
big waves. At around midnight, the barge run
aground and was broken and the cargoes of
beer in the barge were swept away.
● ANCO failed to deliver 29,210 cases of Pale
Pilsen and 550 cases of Cerveza Negra to
SMC’s consignee. SMC’s claim against ANCO
amounted to more than 1Mn pesos.
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 10
Petitioner’s Argument/s (WON):
• SMC filed a case against ANCO with FGU insurance
as the third party defendant.
Respondent’s Arguments (LOST):
• ANCO admitted that the cases of beer were loaded
on its vessel but it claimed that it should not be held
liable because it had an agreement with SMC that it
would not be liable for any losses or damages
resulting to the cargoes by reason of fortuitous event.
• ANCO asserted that there was an agreement
between them and SMC to insure the cargoes to FGU
Insurance in order to recover indemnity in case of loss
and therefore FGU Insurance should be held liable to
pay SMC
Third-Party Defendant (FGU Insurance, WON):
● FGU admitted that there was an insurance
policy but it maintained that the alleged loss
of the cargoes covered by the said insurance
policy cannot be attributed directly or
indirectly to any of the risks insured against
in the said insurance policy. It argued that it
would only be liable in case of (a) total loss
of the entire shipment; (b) loss of any case
as a result of the sinking of the vessel; or (c)
loss as a result of the vessel being on fire.
● FGU alleged that ANCO and SMC failed to
exercise ordinary diligence in the care and
supervision of the cargos.
Ruling of the lower court:
● While the cargoes were indeed lost due to
fortuitous event, there was failure on ANCO's
part, through their representatives, to
observe the degree of diligence required that
would exonerate them from liability.
● Estate of Ang Gui and Co To (ANCO) is liable
to SMC for the amount of the lost shipment.
● FGU liable to bear 53% of the amount of the
lost cargos.
Issue/s:
1. Was the negligence of the crewmembers of
ANCO the proximate cause of the loss of the
cargoes? -YES, ANCO’s representatives failed
to exercise the extraordinary degree of
diligence required by law to exculpate them
from liability.
2. Is FGU liable under the insurance contract
considering the circumstances surrounding
the loss of the cargoes? -YES, there is a
complete contract of carriage.
Rules:
Art. 1733. Common carriers, from the nature of their
business and for reasons of public policy are bound to
observe extraordinary diligence in the vigilance over
the goods and for the safety of the passengers
transported by them, according to all the
circumstances of each case.
Such extraordinary diligence in vigilance over the
goods is further expressed in Articles 1734, 1735, and
1745 Nos. 5, 6, and 7.
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:
(1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity;
xxx xxx xxx
Art. 1739. In order that the common carrier may be
exempted from responsibility, the natural disaster
must have been the proximate and only cause of the
loss. However, the common carrier must exercise due
diligence to prevent or minimize loss before, during
and after the occurrence of ood, storm, or other
natural disaster in order that the common carrier may
be exempted from liability for the loss, destruction, or
deterioration of the goods . . . (Emphasis supplied)
Application:
1. ANCO admitted that they failed to deliver to the
designated consignee the 29,210 cases of Pale Pilsen
and 550 cases of Cerveza Negra.
• The barge D/B Lucio had no engine of its own and
could not maneuver by itself. Yet, the patron of
ANCO's tugboat M/T ANCO left it to fend for itself
notwithstanding the fact that as the two vessels
arrived at the port of San Jose, Antique, signs of the
impending storm were already manifest.
• D/B Lucio was the only vessel left at San Jose,
Antique, during the time in question. The other
vessels were transferred and temporarily moved to
Malandong, 5 kilometers from the wharf where the
barge remained. Clearly, the transferred vessels were
definitely safer in Malandong than at the port of San
Jose, Antique, at that particular time.
• While the loss of the cargoes was admittedly caused
by the typhoon Sisang, a natural disaster, ANCO could
not escape liability to respondent SMC. The records
clearly show the failure of ANCO'S representatives to
exercise the extraordinary degree of diligence
mandated by law. To be exempted from responsibility,
the natural disaster should have been the proximate
and only cause of the loss. There must have been no
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 11
contributory negligence on the part of the common
carrier.
• In this case, the calamity, which caused the loss of
the cargoes, was not unforeseen nor was it
unavoidable. In fact, the other vessels in the port of
San Jose, Antique, managed to transfer to another
place, a circumstance which prompted SMC's District
Sales Supervisor to request that the D/B Lucio be
likewise transferred, but to no avail.
2. Is there a certain degree of negligence on the part
of the insured or his agents that will deprive him the
right to recover under the insurance contract? Yes.
However, to what extent such negligence must go in
order to exonerate the insurer from liability must be
evaluated in light of the circumstances surrounding
each case. When evidence show that the insured's
negligence or recklessness is so gross as to be
sufficient to constitute a willful act, the insurer must
be exonerated.
• Both the trial court and the appellate court had
concluded from the evidence that the crewmembers
of both the D/B Lucio and the M/T ANCO were
blatantly negligent
• There was blatant negligence on the part of the
employees of defendants- appellants when the patron
(operator) of the tug boat immediately left the barge
at the San Jose, Antique wharf despite the looming
bad weather. Negligence was likewise exhibited by the
defendants-appellants' representative who did not
heed Macabuag's request that the barge be moved to
a more secure place. The prudent thing to do, as was
done by the other sea vessels at San Jose, Antique
during the time in question, was to transfer the vessel
to a safer wharf. Note that it was the only vessel left
at the wharf.
• Such blatant negligence being the proximate cause
of the loss of the cargoes amounting to P1,346,197.
• Taking into account the circumstances present in the
instant case, concludes that the blatant negligence of
ANCO's employees is of such gross character that it
amounts to a wrongful act which must exonerate FGU
from liability under the insurance contract.
Lea Mer Industries, Inc. v. Malayan Insurance
Co. Inc.
G.R. No. 161745 | September 30, 2005
Facts:
Ilian Silica Mining entered into a contract of carriage
with Lea Mer Industries, Inc., for the shipment of 900
metric tons of silica sand valued at ₱565,000.
Consigned to Vulcan Industrial and Mining
Corporation, the cargo was to be transported from
Palawan to Manila. On October 25, 1991, the silica
sand was placed on board Judy VII, a barge leased by
Lea Mer. During the voyage, the vessel sank, resulting
in the loss of the cargo.
Malayan Insurance Co., Inc., as insurer, paid Vulcan
the value of the lost cargo and demanded
reimbursement from Lea Mer with its right of
subrogation.
Petitioner’s Argument/s:
(LOST) Lea Mer refused to comply contending that
they were not liable for the loss because such loss was
caused by a fortuitous event--Typhoon Trining.
Respondent’s Arguments:
(WON) As common carrier, petitioner failed to rebut
the presumption on common carriers being at fault or
to have acted negligently for the loss or damage to
the goods they have transported.
Ruling of the lower court:
RTC - sided with petitioner that the loss was caused
by a fortuitous event which could not have been
avoided by petitioner. Dismissed Malayan’s complaint.
CA - sided with respondent that loss of the cargo was
due to petitioner’s negligence.
Issue:
Whether petitioner is liable for the loss of the cargo
(YES)
Rule:
Rule on Fortuitous Events:
● Article 1174 of the Civil Code provides that
"no person shall be responsible for a
fortuitous event which could not be foreseen,
or which, though foreseen, was inevitable."
Thus, if the loss or damage was due to such
an event, a common carrier is exempted
from liability.
● Jurisprudence defines the elements of a
"fortuitous event" as follows: (a) the cause
of the unforeseen and unexpected
occurrence, or the failure of the debtors to
comply with their obligations, must have
been independent of human will; (b) the
event that constituted the caso fortuito must
have been impossible to foresee or, if
foreseeable, impossible to avoid; (c) the
occurrence must have been such as to render
it impossible for the debtors to fulfill their
obligation in a normal manner; and (d) the
obligor must have been free from any
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 12
participation in the aggravation of the
resulting injury to the creditor.
Application:
The evidence presented by petitioner in support of its
defense of fortuitous event was sorely insufficient. It
had to show that it was free from any fault -- a fact it
miserably failed to prove.
First, petitioner presented no evidence that it had
attempted to minimize or prevent the loss before,
during or after the alleged fortuitous event. Its
witness, Joey A. Draper, testified that he could no
longer remember whether anything had been done to
minimize loss when water started entering the barge.
Second, the alleged fortuitous event was not the sole
and proximate cause of the loss. There is a
preponderance of evidence that the barge was not
seaworthy when it sailed for Manila. Respondent was
able to prove that, in the hull of the barge, there were
holes that might have caused or aggravated the
sinking.
Loadstar Shipping Co. Inc. v. Pioneer Asia
Insurance Corp.
G.R. No. 157481 | Date January 24, 2006
Facts:
Petitioner Loadstar Shipping Co., Inc. is the registered
owner and operator of the vessel M/V Weasel.
On June 6, 1984, Loadstar entered into a voyage-
charter with Northern Mindanao Transport Company,
Inc. for the carriage of 65,000 bags of cement from
Iligan City to Manila. The shipper was Iligan Cement
Corporation, while the consignee in Manila was Market
Developers, Inc.
On June 24, 1984, 67,500 bags of cement were loaded
on board M/V Weasel and stowed in the cargo holds
for delivery to the consignee. The shipment was
covered by petitioner Loadstar's Bill of Lading.
Prior to the voyage, the consignee insured the
shipment of cement with respondent Pioneer Asia
Insurance Corporation for P1,400,000, for which
respondent issued Marine Open Policy No. MOP-006
dated September 17, 1980, covering all shipments
made on or after September 30, 1980.
At 12:50 in the afternoon of June 24, 1984, M/V
Weasel left Iligan City for Manila in good weather.
However, at 4:31 in the morning of June 25, 1984,
Captain Vicente C. Montera, master of M/V Weasel,
ordered the vessel to be forced aground.
Consequently, the entire shipment of cement was
good as gone due to exposure to sea water. Petitioner
thus failed to deliver the goods to the consignee in
Manila.
The consignee demanded from petitioner full
reimbursement of the cost of the lost shipment which
petitioner refused to reimburse.
Nonetheless respondent insurance company paid the
consignee P1.4 million plus additional amount of
P500, the value of the lost shipment. In return, the
consignee executed a Loss and Subrogation Receipt in
favor of respondent concerning the latter's
subrogation rights against petitioner
Petitioner’s Argument/s: (LOST)
Petitioner argued that at the time of the voyage the
carrier's voyage-charter with the shipper converted it
into a private carrier. Thus, the presumption of
negligence against common carriers could not apply.
Petitioner further avers that the stipulation in the
voyage-charter holding it free from liability is valid
and binds the respondent. In any event, petitioner
insists that it had exercised extraordinary diligence
and that the proximate cause of the loss of the cargo
was a fortuitous event.
It argued that no fault nor negligence could be
attributed to it because it exercised due diligence to
make the ship seaworthy, as well as properly manned
and equipped. Petitioner insisted that the failure to
deliver the subject cargo to the consignee was due to
force majeure. Petitioner claimed it could not be held
liable for an act or omission not directly attributable
to it.
Respondent’s Arguments: (WON)
Respondent on the other hand argued that petitioner
was a common carrier despite the charter of the whole
vessel, since the charter was limited to ship only.
Respondent filed a civil case against petitioner
alleging that: (1) the M/V Weasel was not seaworthy
at the commencement of the voyage; (2) the weather
and sea conditions then prevailing were usual and
expected for that time of the year and as such, was
an ordinary peril of the voyage for which the M/V
Weasel should have been normally able to cope with;
and (3) petitioner was negligent in the selection and
supervision of its agents and employees then manning
the M/V Weasel
Ruling of the lower court:
RTC ordered Loadstar to pay. The RTC reasoned that
petitioner, as a common carrier, bears the burden of
proving that it exercised extraordinary diligence in its
vigilance over the goods it transported. The trial court
explained that in case of loss or destruction of the
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 13
goods, a statutory presumption arises that the
common carrier was negligent unless it could prove
that it had observed extraordinary diligence
Issue: WON petitioner is a common carrier or private
carrier and WON petitioner exercised the required
diligence (extraordinary diligence if common carrier
and ordinary diligence if private carrier) COMMON
CARRIER; NO
Rule:
Art. 1732 defines common carriers 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.
Petitioner is a corporation engaged in the business of
transporting cargo by water and for compensation,
offering its services indiscriminately to the public.
Thus, without doubt, it is a common carrier. And even
when petitioner entered into a voyage-charter with
Northern Mindanao, it did not in any way convert the
common carrier into a private carrier
In Planters Products, Inc. Vs. Court of Appeals, the
court ruled that: “It is therefore imperative that a
public carrier shall remain as such, notwithstanding
the charter of the whole or portion of a vessel by one
or more persons, provided the charter is limited to the
ship only, as in the case of a timecharter or voyage-
charter. It is only when the charter includes both the
vessel and its crew, as in a bareboat or demise that a
common carrier becomes private, at least insofar as
the particular voyage covering the charter-party is
concerned.”
Application:
Petitioner remains a common carrier notwithstanding
the existence of the charter agreement with the
Northern Mindanao Transport Company, Inc. Since
the said charter is limited to the ship only and does
not involve both the vessel and its crew. As elucidated
in Planters Products, its charter is only a voyage-
charter, not a bareboat charter.
As a common carrier, petitioner is required to observe
extraordinary diligence in the vigilance over the goods
it transports. When the goods placed in its care are
lost, petitioner is presumed to have been at fault or to
have acted negligently. Petitioner therefore has the
burden of proving that it observed extraordinary
diligence in order to avoid responsibility for the lost
cargo.
It is incumbent upon the common carrier to prove that
the loss, deterioration or destruction was due to
accident or some other circumstances inconsistent
with its liability.
Article 1734 enumerates the instances when a carrier
might be exempt from liability for the loss of the goods
and these are: (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. Petitioner claims that the
loss of the goods was due to a fortuitous event under
paragraph 1 which involves flood, storm, earthquake,
lightning, or other natural disaster or calamity. Yet its
claim is not substantiated.Yet, its claim is not
substantiated. On the contrary, we find supported
by evidence on record the conclusion of the trial court
and the Court of Appeals that the loss of the entire
shipment of cement was due to the gross negligence
of petitioner. Records show that in the evening of
June 24, 1984, the sea and weather conditions in the
vicinity of Negros Occidental were calm. The records
reveal that petitioner took a shortcut route, instead of
the usual route, which exposed the voyage to
unexpected hazard. Petitioner has only itself to blame
for its misjudgment.
Bernales v. Northwest Airlines
G.R. No.182395 | Oct. 5, 2015
Facts: The petitioner Marito T. Bernales is a lawyer, a
university dean, and a board member of the
Sangguniang Panlalawigan of Camarines Sur. On 1
October 2002, he and several other prominent
personalities from Bicol were on their way to Honolulu,
Hawaii, as the delegates of a trade and tourism
mission for the province. They were economy class
passengers of Northwest Airlines Flight No. 10 from
Manila to Honolulu via Narita, Japan.
The delegation arrived at Narita International Airport
(NRT) at around 11:00 a.m. Their connecting flight
was scheduled at 8:40 p.m., later that evening. At
around 6:00 p.m., a typhoon hit Japan, leading to the
cancellation of most flights, including NWA Flight No.
10. However, NWA did not cancel Flight No. 22, also
bound for Honolulu later that night, to minimize delays
and to accommodate stranded passengers in case the
typhoon would subside.
The delegates opted to be wait-listed for Flight No. 22.
The petitioner was placed last in the wait-list as he
was the last economy class passenger to check in for
Flight No. 10. To ensure departure before the 1:00
a.m. curfew, NWA gave out "dummy" boarding passes
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 14
to the wait-listed passengers even before the priority
passengers boarded the plane.
The passengers of Flight 22 were called for boarding
at around 11:00 p.m. and the delegates boarded the
shuttle taking them to the airplane. But before the
shuttle bus could leave, NWA Customer Service Agent
Tsuruki Ohashi entered the shuttle and informed the
petitioner that he could not take Flight 22 as no
available seat was left for him.
In either case, the petitioner was given a dummy
boarding pass for Seat No. 35 in the name of "Eddie
Tanno." The dummy boarding pass was issued out of
necessity due to the lack of time to issue a new one.
The petitioner, however, thought it was a real
boarding pass. He proceeded to Seat No. 35-H and
found it occupied by Eddie Tanno. He showed the
dummy boarding pass to Tanno who, noticing his
name irately asked, "Can't you read?" An attendant
noticed the commotion and immediately escorted the
petitioner to Seat No. 15-H, his allotted vacant seat.
Unfortunately, Flight No. 22 failed to depart in time to
beat the Narita curfew. The pilot thus instructed the
passengers to disembark and wait for the next flight.
The passengers of Flight No. 22 were returned to the
terminal where they had to wait with 1,500 other
stranded passengers.
All the nearby hotels were fully booked from the many
flight cancellations. Because it was already late, NWA
failed to find billeting for the stranded Flight No. 22
passengers and they had to spend the night at the
airport; they were given blankets, pillows, snacks,
water, and food coupons. The petitioner claims that
he was made to sleep on the terminal floor "akin to
the beggars of Quiapo and Baclaran" and had to suffer
the discomfort of using the public toilets.
In the morning of 2 October 2002, NWA gave the
delegates two options: (1) take a direct flight to
Honolulu scheduled for 3 October 2002; or (2) take a
3:35 p.m. flight later that day to Los Angeles,
California, with an immediate connecting flight to
Honolulu. The delegates chose the second option so
they could leave immediately. The delegates arrived
at Honolulu on 2 October 2002 between 3:00 and 4:00
p.m., Honolulu time. But they had already missed the
courtesy calls they were to make on the governor and
the mayor, which were scheduled for earlier that day.
Petitioner’s Argument/s:
Ohashi barged into the bus and shouted "Marito,
Marito Bernales, where are you?" When the petitioner
identified himself, Ohashi allegedly yelled, "Bullshit,
Marito Bernales, you are not included in the manifest.
Get out! Get out!" Ohashi allegedly took the
petitioner's boarding pass and grabbed him by the
arm before ejecting him from the shuttle. The shuttle
bus carrying his hand-carried bag left the petitioner
alone outside the terminal without his money,
passport, and other travel documents. Because of the
incident, the other delegates refused to board the
airplane unless the petitioner was physically brought
to them at the tarmac. After a stalemate between the
delegates and the airline's employees, the petitioner
was transported by shuttle to the aircraft to rejoin his
group. (LOST)
Respondent’s Arguments:
NWA narrates in its narration of events, that Ohashi
politely approached the petitioner in the shuttle bus
and informed him that they needed to accommodate
two original priority passengers who arrived. Ohashi
politely asked the petitioner to alight. Ohashi assured
the petitioner that he would look for a volunteer
passenger who would give up his seat to
accommodate the petitioner and asked him to wait
inside the terminal. NWA alleges that the petitioner
gracefully complied without objections. Ohashi found
a volunteer passenger within ten minutes. NWA
immediately transported the petitioner to the airplane
for the flight. NWA maintains that Ohashi has an
impeccable service record in customer relations and
has received multiple commendations. (WON)
Ruling of the lower court: Petitioner filed a
complaint for moral and exemplary damages against
respondent for breach of contract of carriage.
RTC decided in favor or petitioner.
CA reversed the RTC’s decision.
CA held that: 1) moral damages cannot be awarded
in breaches of contracts of carriage except in cases of
the death of a passenger or when the common carrier
acted in bad faith;
(2) the typhoon was the real and proximate cause of
the cancellation of flights and NWA's failure to bring
the petitioner to Honolulu in time;
(3) the petitioner's accusation that Mr. Ohashi
verbally abused him is not believable and contrary to
ordinary human experience;
(4) the airline cannot be responsible for the remarks
of Eddie Tanno, a fellow passenger; and
(5) 1,500 other passengers similarly experienced the
discomfort of spending the night at the airport, and
NWA did not maliciously single him out.
The CA concluded that NWA did not act in bad faith;
therefore, there was no basis to grant moral and
exemplary damages.
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 15
Issue: Whether or not Bernales is entitled to damages
because of the incident? NO.
Rule: *The case did not specify a law or rule that is
connected with Transpo Law, instead SC presented
the fact that petitioner raised only questions of fact,
which is inconsistent with Rule 45, Section 1.”
Application:
Moral damages predicated upon a breach of a carriage
contract is only recoverable in instances where the
mishap results in the death of a passenger, or where
the carrier is guilty of fraud or bad faith. Bad faith is
not simple negligence or bad judgment; it involves ill
intentions and a conscious design to do a wrongful act
for a dishonest purpose.
SC on Ohasi’s Alleged Discourtesy:
We do not believe the petitioner's accusations that
Ohashi barged into the shuttle bus, verbally abused
him, and forced him off the bus. It makes no sense
for Ohashi to suddenly yell, "Bullshit, Marito Bernales,
you are not included in the manifest. Get out! Get
out!" out of nowhere without any prior exchanges.
Moreover, we find it hard to believe that neither the
petitioner nor the other delegates protested on the
spot against the alleged abusive treatment. As the CA
observed, this version of events is contrary to ordinary
human experience.
Moreover, Ohashi has a good track record in customer
service and was the recipient of several
commendation letters that were presented in court.
We agree with the petitioner that under the rules of
evidence, his previous acts are not admissible to
prove how Ohashi behaved during the incident. But as
the respondent pointed out, previous conduct may be
received as evidence to prove specific intent, habit,
and tendencies. Ohashi's track record contradicts the
petitioner's portrayal of him as an unreasonably rude
person.
We also find it hard to swallow the petitioner's theory
that Ohashi only brought him to the plane because the
other delegates stayed on the tarmac and refused to
board unless the petitioner was with them. These
delegates did not object when the petitioner was
allegedly maltreated and ejected from the shuttle bus,
yet the petitioner would have us believe that they
protested on the tarmac for thirty to forty minutes in
his behalf. We find it contrary to common experience
for people to do or say nothing when a companion is
being abused, then suddenly protest after the fact
when they were already away from the incident.
These, to us, are inconsistent reactions. Thus, we find
NWA's account to be more credible.
On the insulting remark from Eddie Tanno, we cannot
possibly hold NWA responsible for the actions of the
other passengers. The RTC blames the mistake of
NWA's agents in the issuance of the dummy boarding
pass for putting the petitioner in that situation. Moral
damages, however, cannot be awarded for simple
mistakes in the absence of bad faith.
SC on the defense of fortuitous event against breach
of contract:
Under the carriage contract, NWA had the obligation
to transport the petitioner from Narita International
Airport to Honolulu, Hawaii, on 1 October 2002 at 8:40
p.m. NWA failed to perform this duty because a strong
typhoon hit Japan that evening, forcing widespread
flight cancellations. Nevertheless, NWA attempted to
fly the petitioner to Honolulu on a later flight after the
typhoon passed. This attempt failed because NWA was
prevented by the mandatory airport curfew. NWA was
only able to fulfill its obligation at 3:35 p.m. the
following day.
The primary cause of NWA's delay in the fulfillment of
its obligation was the unusually strong typhoon that
struck Japan that evening. We take notice that this
was Typhoon Higos, one of the most powerful
typhoons to hit Japan as of that date. Typhoon Higos
resulted in the cancellation of more than 200 flights.
From this perspective, we cannot attribute bad faith
or ill motives on NWA for cancelling Flight No. 10.
Pushing through would have recklessly endangered
the lives of the passengers and the crew. Evidently,
the real and proximate cause of NWA's breach of
contract was a fortuitous event. Moreover, NWA
demonstrated good faith when it exerted its best
efforts to accommodate the delayed Flight No. 10
passengers on Flight No. 22. While Flight No. 22 also
failed to leave, the failure was caused by the 1:00
p.m. Narita curfew. Again, we cannot attribute malice
on NWA for the cancellation of Flight No. 22.
SC on the alleged bad accommodation:
Finally, we also cannot impute bad faith on NWA's
failure to house the passengers in any nearby hotels.
Flight No. 22 was cancelled at around 1 a.m.
Considering the number of flights cancelled earlier
that evening, it is understandable that hotel rooms
had already been booked by the other airlines also
billeting their passengers. The petitioner paints the
dismal picture that he was forced to use the public
comfort rooms and sleep on the floor like "the beggars
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 16
of Quiapo and Baclaran."He fails to mention though
that the 1,500 other stranded passengers had to
endure the same discomforts that he experienced;
NWA did not maliciously single him out. All the
stranded passengers suffered the same experience
because of Typhoon Higos. NWA did the next best
thing it could and provided the passengers with
blankets, snacks, and other comforts available under
the circumstances. The arrival of Typhoon Higos was
an extraordinary and unavoidable event. Its
occurrence made it impossible for NWA to bring the
petitioner to Honolulu in time for his commitments.
We cannot hold the respondent liable for a breach of
contract resulting from a fortuitous event. Moreover,
we find that NWA did not act in bad faith or in a
wanton, fraudulent, reckless, or oppressive manner.
On the contrary, it exerted its best efforts to
accommodate the petitioner on Flight No. 22 and to
lessen the petitioner's discomfort when he and the
other passengers were left to pass the night at the
terminal.
Torres-Madrid Brokerage, Inc. v. FEB Mitsui
Marine Insurance Co., Inc., et. al.
G.R. No. 194121 | Date July 11, 2016
Facts:
● A shipment arrived at the Port of Manila for
Sony Philippines, Inc. (Sony). Sony engaged
Torres-Madrid Brokerage Inc (TMBI) in
facilitating, processing, withdrawing and
delivering the shipment to its warehouse in
Binan, Laguna.
● TMBI subcontracted BMT Trucking services
since it did not own any delivery truck which
Sony did not object to the arrangement.
● 4 BMT trucks picked the shipment but only 3
arrived at Sony’s warehouse. One truck was
found abandoned. Both the driver Rufo
Reynaldo Lapesura and the shipment were
missing. TMBI filed a complaint for
“hijacking”.
● Sony filed an insurance claim with Mitsui.
After being subrogated to Sony’s rights,
Mitsui sent a demand letter to TMBI for
payment of the lost goods.
● TMBI impleaded BMT as it was due to BMT’s
negligence as the proximate cause of the
loss. Also, it added that in the event it is held
liable to Mitsui for the loss, it should be
reimbursed by BMT.
Petitioner’s Argument/s: (LOST)
● TMBI denies being a common carrier bound
to observe extraordinary diligence.because it
does not own a single truck to transport its
shipment and it does not offer transport
services to the public for compensation.
● The service it offered was limited to the
processing of paperwork attendant to the
entry of Sony's goods. It denies that delivery
of the shipment was a part of its obligation.
● TMBI solely blames BMT as it had full control
and custody of the cargo when it was lost.
BMT, as a common carrier, is presumed
negligent and should be responsible for the
loss.
● TMBI alleged in its Third Party Complaint
against BMT that Lapesura was responsible
for hijacking the shipment
Respondent’s Arguments:
● TMBI is a common carrier. It also points out
Victor Torres' admission during the trial that
TMBI's brokerage service includes the
eventual delivery of the cargo to the
consignee.
● Neither TMBI nor BMT alleged or proved
during the trial that the taking of the cargo
was accompanied with grave or irresistible
threat, violence, or force. Hence, the incident
cannot be considered "force majeure" and
TMBI remains liable for breach of contract
Ruling of the lower court:
● RTC found TMBI and Benjamin Manalastas
were common carriers and had acted
negligently.
● CA held that hijacking is not necessarily a
fortuitous event and that TMBI's failure to
observe extraordinary diligence in overseeing
the cargo and adopting security measures
rendered it liable for the loss
Issue: WON TMBI showed that they exercised
extraordinary diligence (NO)
Rule:
● A common carrier is presumed to have been at
fault or to have acted negligently, unless it can
prove that it observed extraordinary diligence.
(for instances like theft and robbery)
● Theft or the robbery of the goods is not
considered a fortuitous event or a force majeure.
Nevertheless, a common carrier may absolve
itself of liability for a resulting loss:
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 17
(1) if it proves that it exercised extraordinary
diligence in transporting and safekeeping the
goods; or
(2) if it stipulated with the shipper/owner of
the goods to limit its liability for the loss,
destruction, or deterioration of the goods to
a degree less than extraordinary diligence.
Application:
● Instead of showing that it had acted with
extraordinary diligence, TMBI simply argued
that it was not a common carrier bound to
observe extraordinary diligence. Its failure to
successfully establish this premise carries
with it the presumption of fault or
negligence, thus rendering it liable to
Sony/Mitsui for breach of contract
● 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.
● Article 1735 already presumes that the
common carrier is negligent. The common
carrier can only free itself from liability by
proving that it observed extraordinary
diligence. It cannot discharge this liability by
shifting the blame on its agents or servants
Notice of Claim
Phil. Charter Insurance Corp. v. Chemoil
Lighterage Corp.
G.R. No. 136888 | June 29, 2005
Facts:
● This is a petition for review on certiorari
assailing the decision of the Court of Appeals
which set aside the RTC decision which
ordered the respondent to pay the
petitioner’s claim in the amount of
P5,000,000 with legal interest from the date
of filing of the complaint.
● Petitioner (PCIP) is a domestic corporation
engaged in the business of non-life
insurance. Chemoil is a domestic corporation
engaged in the transport of goods.
● Samkyung Chemical Company based in
South Korea shipped 62.06 metric tons of the
liquid chemical dioctyl phthalate (DOP) on
board MT Tachibana which was valued at
USD 90, 201.57 and another 436.70 metric
tons of DOP valued at USD 634,724.89 both
 evidenced by two (2) separate Bills of Lading.
The consignee was Plastic Group Phils. Inc
(PGP) in Manila.
● PGP insured the cargo with PCIP (Petitioner)
against all risks for P31,757,969.19 and
P4,514,881.00 evidenced by two separate
Marine Endorsements. The former’s value
was amended and reduced to
P24,667,422.03.
● MT Tachibana unloaded the cargo to the
tanker barge of respondent Chemoil which
will then transport the same to Pasig River
and unload the cargo to its tank trucks also
owned by the respondents, and finally haul it
by land to PGP’s storage tanks in Laguna.
● Upon inspection by PGP, the samples taken
from the shipment showed discoloration from
yellowish to amber, demonstrating that it
was damaged, as DOP is colorless and water
clear. PGP then sent a letter to PCIP to claim
for the insurance from the loss it sustained
due to the contamination.
● PCIP requested an independent insurance
adjuster, GIT Insurance (GIT) to conduct a
Quality and Condition Survey of the
shipment. GIT found that the cargo tanks
showed manhole covers of ballast tank’s
ceilings loosely secured and the rubber
gaskets of the manhole covers reacted to the
chemical causing shrinkage loosening the
covers and cargo ingress to the rusty ballast
tanks (Sorry medj libog sya and very
technical but to summarize, this is what
allegedly caused the discoloration of DOP).
● PCIP paid PGP the amount of P5,000,000 for
the loss in exchange of the Subrogation
Receipt. PGP also paid Chemoil P301,909.50
as full payment for the services it rendered.
● PCIP then filed an action for damages against
Chemoil before the RTC praying for damages
in the amount of P5,000,000 and attorney’s
fees of P1,000,000.
Petitioner’s Argument/s: PCIP (LOST)
● The telephone call made by Alfredo Chan of
PGP to one of the Vice Presidents
(Encarnacion) of Chemoil was sufficient
notice to satisfy the compliance of notice of
claim. It further alleged that it also informed
the drivers of Chemoil when the delivery was
actually being made of the defects and
discoloration of the DOPs.
Respondent’s Arguments: CHEMOIL (WON)
● It admitted that it undertook to transport
PGP’s shipment to Pasig River where it was
transferred to its tanker trucks which were
hauled to PGP’s storage tanks.
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 18
● It alleged that before the DOP was loaded
into its barge, the surveyor/representative of
PGP inspected it and found the same clean,
dry and fit for loading and that the entire
loading and unloading of the shipment were
also controlled and supervised by PGP’s
representative.
● It further alleged that the contract between
it and PGP expressly stipulated that it shall
be free from any and all claims arising from
contamination, loss of cargo and that the
consignee accepted the cargo without any
protest or notice. As a subrogee, PCIP should
be bound by its stipulations.
● As a carrier, no fault and negligence can be
attributed against it as it exercised
extraordinary diligence in handling the cargo.
Ruling of the lower court:
● Trial Court ordered Chemoil to pay PCIP the
said amount and dismissed the latter’s
counterclaim.
● Respondent appealed to CA where it alleged
that PGP failed to file any notice, claim of
protest within the period required by Article
366 of the Code of Commerce, which is a
condition precedent to the accrual of a right
of action against a carrier and that a
telephone call made by an employee of PGP
(Alfred Chan) to them informing them of the
discoloration was not the notice required by
law.
● CA reversed the ruling of RTC and ruled in
favor of Chemoil.
Issue:
● WON the notice of claim was filed within the
prescribed period required by Article 366 of
the Commerce Code. NO
Rule:
● Art. 366. Within twenty-four hours
following the receipt of the merchandise
a claim may be made against the carrier on
account of damage or average found upon
opening the packages, provided that the
indications of the damage or average giving
rise to the claim cannot be ascertained from
the exterior of said packages, in which case
said claim shall only be admitted at the time
of the receipt of the packages.
● After the periods mentioned have elapsed, or
after the transportation charges have been
paid, no claim whatsoever shall be admitted
against the carrier with regard to the
condition in which the goods transported
were delivered.
 ● The object sought to be attained by the
requirement of the submission of claims in
pursuance of this article is to compel the
consignee of goods entrusted to a carrier to
make prompt demand for settlement of
alleged damages suffered by the goods while
in transport, so that the carrier will be
enabled to verify all such claims at the time
of delivery or within twenty-four hours
thereafter, and if necessary assume
responsibility and secure evidence as to the
nature and extent of the alleged damages to
the goods while the matter is still fresh in the
minds of the parties.
Application:
● It must be pointed out that compliance with
the period for filing notice is an essential part
of the requirement, i.e., immediately if the
damage is apparent, or otherwise within
twenty-four hours from receipt of the goods,
the clear import being that prompt
examination of the goods must be made to
ascertain damage if this is not immediately
apparent. SC examined the evidence, and
was unable to find any proof of compliance
with the required period, which is fatal to the
accrual of the right of action against the
carrier.
● Having examined the entire records of the
case, SC could not find a shred of evidence
that will precisely and ultimately point to the
conclusion that the notice of claim was timely
relayed or filed.
● Alfredo Chan had no personal knowledge that
the drivers of Chemoil were informed of the
contamination as no witnesses were also
presented in court.
● Where the contract of shipment contains a
reasonable requirement of giving notice of
loss of or injury to the goods, the giving of
such notice is a condition precedent to the
action for loss or injury or the right to enforce
the carrier's liability. This protects the carrier
by affording it an opportunity to make an
investigation of a claim while the matter is
fresh and easily investigated so as to
safeguard itself from false and fraudulent
claims.
● The filing of a claim with the carrier within
the time limitation therefore actually
constitutes a condition precedent to the
accrual of a right of action against a carrier
for loss of, or damage to, the goods. The
shipper or consignee must allege and prove
the fulfillment of the condition. If it fails to do
so, no right of action against the carrier can
accrue in favor of the former. The
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 19
aforementioned requirement is a reasonable
condition precedent; it does not constitute a
limitation of action.
Aboitiz Shipping Corp. v. Insurance Co. of North
America
G.R. No. 168402 | August 6, 2008
Facts: (This case was cited under Module 3
under Extraordinary diligence) MSAS Cargo
procured a marine insurance policy from respondent
(ICNA) for the shipment of wooden work tools and
workbenches (ordered from Germany) purchased by
consignee STIP in Cebu City. When the shipment
arrived at the Manila Intl Port it was received by
Petitioner (Aboitiz Shipping Corp). A bill of lading was
issued by Aboitiz containing a notation “grounded
outside warehouse”. The cargo was transferred to
another container van without any notation on the bill
on the condition of the cargo. The container van was
then shipped to Cebu City. In petitioner’s shipping
report, the checker noted that the crate were slightly
broken or cracked at the bottom. The cargo was
withdrawn by the representative of the consignee and
delivered to Don Bosco. Mr. Wilig of Don Bosco
informed Aboitiz of the water damage caused unto the
cargo. Consignee contacted respondent for insurance
claims. ICNA paid consignee the amount of the
damages, a subrogation receipt was signed by
consignee and ICNA filed a civil complaint against
Aboitiz for collection of damages that it paid to
consignee.
Petitioner’s Argument/s (LOST): Aboitiz
reiterated that ICNA lacked a cause of action. It
argued that the formal claim was not led within the
period required under Article 366 of the Code of
Commerce; that ICNA had no right of subrogation
because the subrogation receipt should have been
signed by MSAS, the assured in the open policy, and
not Willig, who is merely the representative of the
consignee.
Respondent’s Arguments (WON): ICNA appealed
to the CA. It contended that the trial court failed to
consider that its cause of action is anchored on the
right of subrogation under Article 2207 of the Civil
Code.
Ruling of the lower court: CA reversed RTC
decision. The CA opined that the right of subrogation
accrues simply upon payment by the insurance
company of the insurance claim. As a subrogee, ICNA
is entitled to reimbursement from Aboitiz, even
assuming that it is an unlicensed foreign corporation.
Issue: the controversy rotates on three (3) central
questions: (a) Is respondent ICNA the real party-in-
interest that possesses the right of subrogation to
claim reimbursement from petitioner Aboitiz? (b)
Was there a timely ling of the notice of claim as
required under Article 366 of the Code of
Commerce? (YES) (c) If so, can petitioner be held
liable on the claim for damages?
Rule: Under the Code of Commerce, the notice of
claim must be made within twenty four (24) hours
from receipt of the cargo if the damage is not apparent
from the outside of the package. For damages that are
visible from the outside of the package, the claim
must be made immediately. (Check ARTICLE 366
Code of Commerce). The periods in the article, as well
as the manner of giving notice may be modified in the
terms of the bill of lading, which is the contract
between the parties. (In this case there was no
modification).
Application: this ruling is being made pro hac vice,
not to be made a precedent for other cases. The giving
of notice of loss or injury is a condition precedent to
the action for loss or injury or the right to enforce the
carrier's liability. Circumstances peculiar to this case
lead Us to conclude that the notice requirement was
complied with. Provisions specifying a time to give
notice of damage to common carriers are ordinarily to
be given a reasonable and practical construction. In
this case, the goods were received on August 11 by
Don Bosco, on August 13, Mr. Willig (DB
Representative) called Mayo (Aboitiz representaive)
informing her about the damage, then on August 15
Willig sent Aboitiz a letter informing them of the
damage.
The call to Aboitiz was made two days from delivery,
a reasonable period considering that the goods could
not have corroded instantly overnight such that it
could only have sustained the damage during transit.
Aboitiz was able to immediately inspect the damage
while the matter was still fresh. In so doing, the main
objective of the prescribed time period was fulfilled.
Thus, there was substantial compliance with the
notice requirement in this case. We give due
consideration to the fact that the final destination of
the damaged cargo was a school institution where
authorities are bound by rules and regulations
governing their actions. Understandably, when the
goods were delivered, the necessary clearance had to
be made before the package was opened. Upon
opening and discovery of the damaged condition of
the goods, a report to this effect had to pass through
the proper channels before it could be finalized and
endorsed by the institution to the claims department
of the shipping company.
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 20
UCPB Insurance Co. v. Aboitiz Shipping Corp..,
et. al.
G.R. No. 168433 | February 10, 2009
Facts:
Three units of waste water treatment plant with
accessories were purchased by San Miguel
Corporation (SMC) from Super Max Engineering
Enterprises, Co., Ltd. (SMEECoL) of Taipei, Taiwan.
The goods came from Charleston, U.S.A. and arrived
at the port of Manila on board MV "SCANDUTCH
STAR". The same were then transported to Cebu on
board MV "ABOITIZ SUPERCON II". After its arrival
at the port of Cebu and clearance from the BoC, the
goods were delivered to and received by SMC at its
plant site. It was then discovered that one electrical
motor of DBS Drive Unit was damaged.
Pursuant to an insurance agreement, plaintiff-
appellee paid SMC. Consequently, plaintiff-appellee
filed a Complaint as subrogee of SMC seeking to
recover from defendants the amount it had paid SMC,
AND later on impleaded East Asiatic Co. Ltd. (EAST)
as among the defendants for being the "general
agent" of DAMCO.
Upon plaintiff-appellee’s motion, defendant DAMCO
was declared in default by the lower court.
In the meantime, defendant EAST sought the
dismissal of the complaint against it on the
ground of prescription, which was however denied,
and was elevated by EAST to SC through a Petition for
Certiorari. Eventually, SC set aside the lower court’s
assailed order of denial and further ordered the
dismissal of the complaint against defendant EAST.
Plaintiff-appellee moved for reconsideration thereof
but the same was denied. SC’s decision ordering the
dismissal of the complaint against defendant EAST
became final and executory. Trial ensued with respect
to the remaining defendants.
Petitioner’s Argument/s: LOST
1. The claim requirement under Art. 366 of the Code
of Commerce does not apply to this case because the
damage to the merchandise had already been known
to the carrier. Damage to the cargo was found upon
discharge from the foreign carrier onto the
International Container Terminal Services, Inc.
(ICTSI) in the presence of the carrier’s representative
who signed the Request for Bad Order Survey and the
Turn Over of Bad Order Cargoes. On transshipment,
the cargo was already damaged when loaded on board
the inter-island carrier." This knowledge dispenses
with the need to give the carrier a formal notice of
claim.
2. Under the Carriage of Goods by Sea Act (COGSA), The lower court then rendered its assailed Decision
notice of loss need not be given if the condition of the declaring DAMCO, Eagle Express Lines, Inc. and
cargo has been the subject of joint inspection such as, defendant Aboitiz Shipping solidarily liable to
in this case, the inspection in the presence of the plaintiff-subrogee for the damaged shipment.
Eagle Express representative at the time the cargo
was opened at the ICTSI. Aggrieved, EAGLE and ABOITIZ appealed before SC.
3. The issue of the applicability of Art. 366 of the Code
of Commerce was never raised before the trial court Issue:
and should, therefore, not have been considered by
the Court of Appeals. WON UCPB’s cause of action against
respondents has already prescribed pursuant to
Respondent’s Arguments: Art. 366 of the Code of Commerce. (YES)
1. CA reversed the RTC’s decision and ruled that
UCPB’s right of action against respondents did not Rule:
accrue because UCPB failed to file a formal notice of
claim within 24 hours from (SMC’s) receipt of the
Art. 366. Within twenty-four hours
damaged merchandise as required under Art. 366 of
following the receipt of the merchandise,
the Code of Commerce. CA said that the filing of a
the claim against the carrier for damage
claim within the time limitation in Art. 366 is a
or average which may be found therein
condition precedent to the accrual of a right of action
upon opening the packages, may be
against the carrier for the damages caused to the
made, provided that the indications of
merchandise.
the damage or average which gives rise
to the claim cannot be ascertained from
2. Eagle Express
the outside part of such packages, in
a.) It cannot be held liable for the damage to the
which case the claim shall be admitted
merchandise as it acted merely as a freight
only at the time of receipt.
forwarder’s agent in the transaction. It allegedly
facilitated the transshipment of the cargo from Manila
Application:
to Cebu but represented the interest of the cargo
owner, and not the carrier’s. The only reason why the
The issue of whether a claim should have been
name of the Eagle Express representative appeared
made by SMC, or UCPB as SMC’s subrogee,
on the Permit to Deliver Imported Goods was that the
within the 24-hour period prescribed by Art. 366
form did not have a space for the freight forwarder’s
of the Code of Commerce was squarely raised
agent, but only for the agent of the shipping line.
before the trial court.
(UCPB had previously judicially admitted that it was
East Asiatic, regarding whom the original complaint
UCPB obviously made a gross misrepresentation to
was dismissed on the ground of prescription, which
the SC when it claimed that the issue regarding the
was the real agent of DAMCO Intermodal Services,
applicability of the Code of Commerce, particularly the
Inc. (DAMCO), the ship owner); (WON)
24-hour formal claim rule, was not raised as an issue
b.) The applicability of Art. 366 of the Code of
before the trial court. CA correctly looked into the
Commerce was properly raised as an issue before RTC
validity of the arguments raised by Eagle Express,
as it mentioned this issue as a defense in its Answer
Aboitiz, and Pimentel Customs on this point after the
to UCPB’s Amended Complaint. Hence, UCPB’s
trial court had so ill-advisedly centered its decision
contention that the question was raised for the first
merely on the matter of extraordinary diligence.
time on appeal is incorrect. (WON)
3. Aboitiz- WON
a.) It cannot be held liable for the damage to the cargo Interestingly enough, UCPB itself has revealed that
which, by UCPB’s admission, was incurred not during when the shipment was discharged and opened at the
transshipment to Cebu on board one of Aboitiz’s ICTSI in Manila in the presence of an Eagle Express
vessels, but was already existent at the time of representative, the cargo had already been found
unloading in Manila. damaged. In fact, a request for bad order survey was
b.) Art. 366 of the Code of Commerce is applicable then made and a turnover survey of bad order cargoes
and serves as a condition precedent to the accrual of was issued, pursuant to the procedure in the
UCPB’s cause of action against it. discharge of bad order cargo. The shipment was then
4. Pimentel Customs reiterates the applicability of repacked and transshipped from Manila to Cebu on
Art. 366 of the Code of Commerce. -WON board MV Aboitiz Supercon II. When the cargo was
finally received by SMC at its Mandaue City
Ruling of the lower court:

TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 21
warehouse, it was found in bad order, thereby
confirming the damage already uncovered in Manila.
The damage could not have been attributable to
Aboitiz since there was no evidence presented that the
cargo was further damaged during its transshipment
to Cebu. Even by the exercise of extraordinary
diligence, Aboitiz could not have undone the damage
to the cargo that had already been there when the
same was shipped on board its vessel.
UCPB’s cause of action has already prescribed.
The law clearly requires that the claim for
damage or average must be made within 24
hours from receipt of the merchandise if, as in
this case, damage cannot be ascertained merely
from the outside packaging of the cargo. After the
periods mentioned have elapsed, or the transportation
charges have been paid, no claim shall be admitted
against the carrier with regard to the condition in
which the goods transported were delivered.
In PCIC v. Chemoil Lighterage Corp., petitioner, as
subrogee of PGP, filed suit against respondent therein
for the damage found on a shipment of chemicals
loaded on board respondent’s barge. Respondent
claimed that no timely notice in accordance with Art.
366 of the Code of Commerce was made by petitioner
because an employee of PGP merely made a phone
call to respondent’s Vice President, informing the
latter of the contamination of the cargo. SC ruled that
the notice of claim was not timely made or relayed to
respondent in accordance with Art. 366 of the Code of
Commerce.
The purpose for the requirement to give notice of loss
or damage to the goods is not to relieve the carrier
from just liability, but reasonably to inform it that the
shipment has been damaged and that it is charged
with liability therefor, and to give it an opportunity to
examine the nature and extent of the injury. This
protects the carrier by affording it an opportunity to
make an investigation of a claim while the matter is
still fresh and easily investigated so as to safeguard
itself from false and fraudulent claims.
The 24-hour claim requirement is a condition
precedent to the accrual of a right of action
against a carrier for loss of, or damage to, the
goods. The shipper or consignee must allege and
prove the fulfillment of the condition. Otherwise, no
right of action against the carrier can accrue in favor
of the former.
The shipment in this case was received by SMC on
August 2, 1991. However, as found by the CA, the
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 22
claims were dated October 30, 1991, more than 3
months from receipt of the shipment and, at that,
even after the extent of the loss had already been
determined by SMC’s surveyor. The claim was,
therefore, clearly filed beyond the 24-hour time
frame prescribed by Art. 366 of the Code of
Commerce.
But what of the damage already discovered in
the presence of Eagle Express’s representative
at the time the shipment was discharged in
Manila? The Request for Bad Order Survey and
Turn Over Survey of Bad Order Cargoes,
respectively dated June 17, 1999 and June 28, 1991,
evince the fact that the damage to the cargo was
already made known to Eagle Express and, possibly,
SMC, as of those dates.
Sec. 3(6) of the COGSA provides a similar
claim mechanism as the Code of Commerce
but prescribes a period of three (3) days
within which notice of claim must be given if
the loss or damage is not apparent.
Sec. 3(6). Unless notice of loss or
damage and the general nature of such
loss or damage be given in writing to
the carrier or his agent at the port of
discharge or at the time of the removal
of the goods into the custody of the
person entitled to delivery thereof
under the contract of carriage, such
removal shall be prima facie evidence
of the delivery by the carrier of the
goods as described in the bill of lading.
If the loss or damage is not apparent,
the notice must be given within three
days of the delivery.
Said notice of loss or damage may be endorsed upon
the receipt of the goods given by the person taking
delivery thereof.
The notice in writing need not be given if the state of
the goods has at the time of their receipt been the
subject of joint survey or inspection.
UCPB seizes upon the last paragraph which
dispenses with the written notice if the state of
the goods has been the subject of a joint survey
which, in this case, was the opening of the
shipment in the presence of an Eagle Express
representative.
The applicability of the above-quoted provision of the
COGSA was not raised as an issue by UCPB before
the RTC and was only cited by UCPB in its
Memorandum in this case.
UCPB, however, is ambivalent as to which party Eagle
Express represented in the transaction. By its own
manifestation, East Asiatic, and not Eagle Express,
acted as the agent through which summons and court
notices may be served on DAMCO. It would be
unjust to hold that Eagle Express’s knowledge of
the damage to the cargo is such that it served to
preclude or dispense with the 24-hour notice to
the carrier required by Art. 366 of the Code of
Commerce. Neither did the inspection of the cargo in
which Eagle Express’s representative had participated
lead to the waiver of the written notice under the Sec.
3(6) of the COGSA. Eagle Express, after all, had acted
as the agent of the freight consolidator, not that of the
carrier to whom the notice should have been made.
At any rate, the notion that the request for bad
order survey and turn over survey of bad
cargoes signed by Eagle Express’s
representative is construable as compliant with
the notice requirement under Art. 366 of the
Code of Commerce was foreclosed by the dismissal
of the complaint against DAMCO’s representative,
East Asiatic.
As regards respondent Pimentel Customs, it is
sufficient to acknowledge that it had no participation
in the physical handling, loading and delivery of the
damaged cargo and should, therefore, be absolved of
liability.
Federal Express Corporation v. Antonio, et. al.
G.R. No. 199455 | June 27, 2018
Facts:
Eliza was the owner of Unit 22-A (the Unit) in Allegro
Condominium, located at 62 West 62nd St., New York,
United States. In November 2003, monthly common
charges on the Unit became due. These charges were
for the period of July 2003 to November 2003, and
were for a total amount of US$9,742.81.
On December 15, 2003, Luwalhati and Eliza were in
the Philippines. As the monthly common charges on
the Unit had become due, they decided to send
several Citibank checks to Veronica Z. Sison (Sison),
who was based in New York. Citibank checks allegedly
amounting to US$17,726.18 for the payment of
monthly charges and US$11,619.35 for the payment
of real estate taxes were sent by Luwalhati through
FedEx with Account No. x2546-4948-1 and Tracking
No. 8442 4588 4268. The package was addressed to
Sison who was tasked to deliver the checks payable
to Maxwell-Kates, Inc. and to the New York County
Department of Finance. Sison allegedly did not receive
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 23
the package, resulting in the non-payment of
Luwalhati and Eliza's obligations and the foreclosure
of the Unit.
Upon learning that the checks were sent on December
15, 2003, Sison contacted FedEx on February 9, 2004
to inquire about the non-delivery. She was informed
that the package was delivered to her neighbor but
there was no signed receipt.
On March 14, 2004, Luwalhati and Eliza, through their
counsel, sent a demand letter to FedEx for payment
of damages due to the non-delivery of the package,
but FedEx refused to heed their demand. Hence, on
April 5, 2004, they filed their Complaint for damages.
Petitioner’s Argument/s: (LOST)
FedEx claimed that Luwalhati and Eliza "ha[d] no
cause of action against it because [they] failed to
comply with a condition precedent, that of filing a
written notice of claim within the 45 calendar days
from the acceptance of the shipment."
Ruling of the lower court:
Regional Trial Court ruled for Luwalhati and Eliza
Issue:
WON provisions in a contract of carriage requiring the
filing of a formal claim(Notice of Claim) within a
specified time is a valid stipulation. YES.
Rule:
Provision in a contract of carriage requiring the filing
of a formal claim within a specified period is a valid
stipulation. Jurisprudence maintains that compliance
with this provision is a legitimate condition precedent
to an action for damages arising from loss of the
shipment: More particularly, where the contract of
shipment contains a reasonable requirement of giving
notice of loss of or injury to the goods, the giving of
such notice is a condition precedent to the action for
loss or injury or the right to enforce the carrier's
liability. Such a requirement is not an empty
formalism. The fundamental reason or purpose of
such a stipulation is not to relieve the carrier from just
liability, but reasonably to inform it that the shipment
has been damaged and that it is charged with liability
therefore, and to give it an opportunity to examine the
nature and extent of the injury. This protects the
carrier by affording it an opportunity to make an
investigation of a claim while the matter is fresh and
easily investigated so as to safeguard itself from false
and fraudulent claims.
Petitioner's Air Waybill stipulates the following on
filing of claims:
Claims for Loss, Damage, or Delay. All
claims must be made in writing and
within strict time limits. See any
applicable tariff, our service guide or
our standard conditions for carriage for
details.
The right to damages against us shall
be extinguished unless an action is
brought within two (2) years from the
date of delivery of the shipment or
from the date on which the shipment
should have been delivered.
Within forty-five (45) days after
notification of the claim, it must be
documented by sending to us [all the]
relevant information about it.
For their claim to prosper, respondents must, thus,
surpass two (2) hurdles: first, the filing of their formal
claim within 45 days; and second, the subsequent
filing of the action within two (2) years.
There is no dispute on respondents' compliance with
the second period as their Complaint was filed within
2 years.
Because of petitioner’s ambiguous and evasive
responses, nonchalant handling of respondents'
concerns, and how these bogged down respondents'
actions and impaired their compliance with the
required 45-day period, SC upheld the lower court's
finding that the herein appellees complied with the
requirement for the immediate filing of a formal claim
for damages as required in the Air Waybill or, at least,
Supreme Court find that there was substantial
compliance therewith.
Application:
Provision in a contract of carriage requiring the filing
of a formal claim within a specified period is a valid
stipulation.
Presumption of Negligence
Diaz v. CA
G.R. No. 149749 | July 25, 2006
Facts:
Petitioner Agapita Diaz operated a common carrier, a
Tamaraw FX, that rammed a cargo truck which then
caused the death of 9 passengers of the taxi including
Sherlyn Moreño. The heirs of Sherlyn file an action for
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 24
breach of contract of carriage and damages against
the petitioner and her driver, Arman Retes.
The petitioner and her counself have failed to
appear on the scheduled pre-trial and rescheduled
pretrial despite due notice. Their non-appearance
prompted the court to allow private respondent to
present their evidence ex parte. 7 months after the
conclusion of the private respondent’s presentation of
evidence ex parte, petitioner filed a motion for leave
to present evidence on her defense which was denied.
Petitioner’s Argument/s (LOST):
Petitioner was not able to present her arguments due
to failure to appear during trial.
Respondent’s Arguments (WON):
No specific arguments
Ruling of the lower court:
Ruled in favor of the respondent and held the
petitioner liable for breach of contract of carriage.
Issue:
WON CA committed grave abuse of discretion in
affirming the lower court’s decision holding the
petitioner liable for breach of contract
Rule:
Article 1755. A common carrier is bound to carry the
passengers safely as far as human care and foresight
can provide, using the utmost diligence of very
cautious persons, with due regard for all the
circumstances.
Application:
No, CA did not commit GAD
Petitioner, as common carrier, failed to establish
sufficient evidence to rebut the presumption of
negligence. It is expected from common carriers to
carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of a
very cautious person, with due regard for all the
circumstances.
In a contract of carriage, it is presumed that the
carrier is at fault when a passenger dies or is injured.
There is even no need for the court to make an
express finding of fault or negligence on the part of
the common carrier. This presumption can only be
overcome by evidence that the carrier exercised
extraordinary diligence.
Findings of the lower court showed that the accident
which led to the death of Sherly, was caused by the
reckless speed and gross negligence of the petitioner’s
driver who demonstrated no regard for the safety of
his passenger.
Burden of Common Carrier
Regional Container Lines (RCL) of Singapore,
et. al. v. The Netherlands Insurance Co.
(Philippines), Inc.
G.R. No. 168151 | September 4, 2009
Facts:
● 405 cartons of Epoxy Molding Compound were
consigned to be shipped from Singapore to
Manila.
● As the cargo was highly perishable, the inside of
the refrigerated container had to be kept at a
temperature of 0* celsius. Such was then loaded
on board M/V Piya Bhum, owned by RCL, and a
Bill of Lading was issued.
● To insure the cargo against loss & damage,
Netherlands Insurance issued an insurance policy
in favor of the buyer (Temic), which covers all
losses/damages to the shipment.
● When M/V Piya Bhum docked in Manila, plugged
to the power terminal of the pier to keep its
temperature constant.
● After a protective survey of the cargo was
conducted, they found that when the cargo had
already been unloaded from the ship, the
temperature fluctuated with a reading of 33*
Celsius. They believed the fluctuation was caused
by the burnt condenser fan motor of the
refrigerated container.
● When Temic received the shipment, it found the
cargo completely damaged; hence, it filed a claim
for cargo loss against Netherlands Insurance. The
latter paid P1,036,497; thereafter, Temeric
executed a loss and subrogation receipt.
● Netherlands Insurance filed a complaint for
subrogation of insurance settlement against
petitioners.
Petitioner’s Argument/s: (LOST)
● RCL and EDSA Shipping disclaim any
responsibility for the loss or damage to the goods
in question, claiming that the cause of the
damage to the cargo was the "fluctuation of the
temperature in the reefer van", which occurred
after the cargo had already been discharged from
the vessel; they point out that no fluctuation
arose when the cargo was still on board M/V Piya
Bhum.
● As the cause of the damage to the cargo occurred
after it was already discharged from the vessel
and was under the custody of the arrastre
operator, the presumption of negligence should
not apply. What applies in this case is Article 1734
(3) and (4), which exempts the carrier from
liability for loss or damage to the cargo when it is
caused either by an act or omission of the shipper
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 25
or by the character of the goods or defects in the
packing or in the containers.
● They further insisted that Netherlands Insurance
had failed to prove any valid subrogation.
Respondent’s Arguments: (WON)
N/A
Ruling of the lower court:
● The trial court dismissed the case on demurrer to
evidence; that while there was a valid
subrogation, the defendants could not be held
liable as their respective liabilities ended at the
time of the discharge of the cargo at the port.
● CA reversed the decision, and ordered defendants
to pay Netherlands Insurance the sum of
P1,036,497 with interest.
Issue:
Whether RCL and EDSA Shipping are liable as
common carriers under the theory of presumption of
negligence. (Yes)
Rule:
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:
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.
To overcome the presumption of negligence, the
common carrier must establish by adequate proof that
it exercised extraordinary diligence over the goods. It
must do more than merely show that some other
party could be responsible for the damage.
Application:
RCL and EDSA failed to prove that the exercised
extraordinary diligence over the goods they
transported. While there is sufficient evidence
showing that the fluctuation of the temperature in the
refrigerated container van occurred after the cargo
had been discharged from the vessel and was already
under the custody of the arrastre operator, this does
not disprove that the condenser fan, which caused the
fluctuation of the temperature, was not damaged
while the cargo was being unloaded from the ship. It
is settled in maritime law jurisprudence that cargoes
while being unloaded generally remain under
the custody of the carrier, and RCL & EDSA
Shipping failed to dispute this.

RCL & EDSA Shipping could have offered evidence to
show that damage to the condenser fan did not occur
and that they exercised extraordinary diligence, but
they opted to file a demurrer to evidence; hence,
when the order granting such demurrer was
reversed in CA, they are deemed to have waived
their right to present evidence, and the
presumption of negligence must stand.
Effect Affidavit of Desistance and Release of
Claim
Sanico, et. al. v. Colipano
G.R. No. 209969 | Sept. 27, 2017
Facts: On December 25, 1993, Christmas Day,
Colipano and her daughter were paying passengers in
the jeepney operated by Sanico, which was driven by
Castro. Colipano claimed she was made to sit on an
empty beer case at the edge of the rear entrance/exit
of the jeepney with her sleeping child on her lap. And,
at an uphill incline in the road to Carmen, Cebu, the
jeepney slid backwards because it did not have the
power to reach the top. Colipano pushed both her feet
against the step board to prevent herself and her child
from being thrown out of the exit, but because the
step board was wet, her left foot slipped and got
crushed between the step board and a coconut tree
which the jeepney bumped, causing the jeepney to
stop its backward movement. Colipano's leg was badly
injured and was eventually amputated. Colipano was
made to execute an Affidavit of Desistance and
Release of Claim. Eventually, Colipano filed a case for
actual damages, loss of income, moral damages,
exemplary damages, and attorney's fees against
Sanico.
Petitioner’s Arguments (LOST): Since Colipano
freely and voluntarily executed an Affidavit of
Desistance and Release of Claim, Sanico is no longer
liable for damages.
Ruling of the lower court: The RTC ruled that "the
Affidavit of Desistance and Release of Claim is not
binding on Colipano in the absence of proof that the
contents thereof were sufficiently translated and
explained to her." The CA affirmed the findings of the
RTC.
Issue: Whether the Affidavit of Desistance and
Release of Claim is binding on Colipano (NO)
Rule: For there to be a valid waiver, the following
requisites are essential:
(1) that the person making the waiver possesses the
right
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 26
(2) that he has the capacity and power to dispose of
the right
(3) that the waiver must be clear and unequivocal
although it may be made expressly or impliedly, and
(4) that the waiver is not contrary to law, public
policy, public order, morals, good customs or
prejudicial to a third person with a right recognized by
law.
The Civil Code requires extraordinary diligence from
common carriers because the nature of their business
requires the public to put their safety and lives in the
hands of these common carriers. The State imposes
this extraordinary diligence to promote the well-being
of the public who avail themselves of the services of
common carriers. Thus, in instances of injury or
death, a waiver of the right to claim damages is
strictly construed against the common carrier so as
not to dilute or weaken the public policy behind the
required standard of extraordinary diligence.
Application: While the first two requirements can be
said to exist in this case, the third and fourth
requirements are lacking. For the waiver to be clear
and unequivocal, the person waiving the right should
understand what she is waiving and the effect of such
waiver. Both the CA and RTC made the factual
determination that Colipano was not able to
understand English and that there was no proof that
the documents and their contents and effects were
explained to her.
The fourth requirement for a valid waiver is also
lacking as the waiver, based on the attendant facts,
can only be construed as contrary to public policy.
Colipano testified that she did not understand the
document she signed. She also did not understand the
nature and extent of her waiver as the content of the
document was not explained to her. The waiver is
therefore void because it is contrary to public policy.
Waivers executed under similar circumstances are
indeed contrary to public policy and are void. To
uphold waivers taken from injured passengers who
have no knowledge of their entitlement under the law
and the extent of liability of common carriers would
indeed dilute the extraordinary diligence required
from common carriers, and contravene a public policy
reflected in the Civil Code.
Violation of terms of Air Waybill (Check)
Federal Express Corporation v. Antonio
(see “Notice of Claim” section)
Eliza was the owner of a condominium unit located at
New York, USA. Luwalhati and Eliza were in the Philip-
pines. As the monthly charges on the Unit had become
due, they decided to send several checks to Sison who
was based in New York.
The package was addressed to Sison who was tasked
to deliver the checks payable to Maxwell-Kates, Inc
and to the New York Country Department Finance.
Sison allegedly did not receive the package, resulting
in the non-payment of the obligations and foreclosure
of the Unit.
Sison was informed that the package was delivered to
her neighbor but there was no signed receipt.
Respondents’ contention (WON): they send a demand
letter to FedEx for payment of damages due to the
non-delivery of the package, but FedEx heed their
demand.
Petitioner’s contention: Respondents had no cause of
action against FedEx because the former failed to
comply with the condition precedent, that of filing of
a written notice of claim within 45 days from the
acceptance of the shipment. Moreover, petitioner
contended that it is absolved of liability as Luwalhati
and Eliza shipped prohibited items and misdeclared
these items as “documents”. It pointed to conditions
under its Air Waybill prohibiting the “transportation of
money (including but not limited to coins or negotiable
instruments equivalent to cash such as endorsed
stocks and bonds.
Issue:
WON FedEx Corporation can be held liable for
damages on account of its failure to deliver the checks
shipped by respondents to Sison, the consignee.
Rule:
A provision in a contract of carriage requiring the filing
of a formal claim within a specified period is a valid
stipulation. Jurisprudence dictates that compliance
with this provision is a legitimate condition precedent
to an action for damages arising from loss of the
shipment.
For the respondent’s claim to prosper, respondents
must surpass two hurdles: (1) Filing of their formal
claims within 45 days and (2) the subsequent filing of
the action within 2 years.
Article 1186 of the NCC provides that the condition
shall be deemed fulfilled when the obligor voluntarily
prevents its fulfillment.
Also, the Civil Code mandates common carriers to
observe extraordinary diligence in caring for the goods
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 27
they are transporting: Article 1733. Common carriers,
from the nature of their business and for reasons of
public policy, are bound to observe extraordinary
diligence in the vigilance over the goods and for the
safety of the passengers transported by them,
according to all the circumstances of each case
Application:
There is no dispute on respondents’ compliance with
the second period as their complain was timely filed.
With regard to the first period, the CA detailed the
efforts made by respondents and consignee. It also
noted petitioner’s ambiguous and evasive
respondents, nonchalant handling of respondents’
concerns, and how these bogged down respondents’
action and impaired their compliance with the
required 45-day period.
In this case, petitioner is unable to prove that it
exercised extraordinary diligence in ensuring delivery
of the package to its designated consignee. It claims
to have made a delivery but it even admits that it was
not to the designated consignee. Given the
circumstances in this case, the more reasonable
conclusion is that the package was not delivered. The
package shipped by respondents should then be
considered lost, thereby engendering the liability of a
common carrier for this loss.
Petitioner further asserts that respondents violated
the terms of the Air Waybill by shipping checks. It
adds that this violation exempts it from liability.
Petitioner's International Air Waybill states: Items Not
Acceptable for Transportation . “We do not accept
transportation of money (including but not limited to
coins or negotiable instruments equivalent to cash
such as endorsed stocks and bonds)…”
The prohibition has a singular object: money. What
follows the phrase "transportation of money" is a
phrase enclosed in parentheses, and commencing
with the words "including but not limited to." The
additional phrase, enclosed as it is in parentheses, is
not the object of the prohibition, but merely a
postscript to the word "money."
It is settled in jurisprudence that checks, being only
negotiable instruments, are only substitutes for
money and are not legal tender; more so when the
check has a named payee and is not payable to
bearer.
The contract between petitioner and respondents is a
contract of adhesion; it was prepared solely by
petitioner for respondents to conform to. Although not
automatically void, any ambiguity in a contract of
adhesion is construed strictly against the party that
prepared it. Thus, the prohibition against transporting
money must be restrictively construed against
petitioner and liberally for respondents.
Defenses in Carriage of Passenger
Acts of Strangers and Other Passengers (Article
1763)
MRR v. Ballesteros
G.R. No. L-19161 | April 29, 1966
Facts:
Private respondents were passengers on petitioner's
bus, the driver 1was Jose Anastacio. In Bayombong,
Nueva Vizcaya, Anastacio stopped the bus and got off
to replace a defective spark plug. While he was thus
engaged, Dionisio Abello, an auditor assigned to
defendant company by the General Auditing Office,
took the wheel and told the driver to sit somewhere
else.
With Abello driving, the bus proceeded on its way,
from time to time stopping to pick up passengers.
Anastacio tried twice to take the wheel back but Abello
would not relinquish it. Then, in the language of the
trial court, "while the bus was negotiating between
Km. posts 328 and 329 (in Isabela) a freight truck ...
driven by Marcial Nocum ... bound for Manila, was also
negotiating the same place; when these two vehicles
were about to meet at the bend of the road Marcial
Nocum, in trying to evade several holes on the right
lane, where his truck was running, swerved his truck
towards the middle part of the road and in so doing,
the left front fender and left side of the freight truck
smashed the left side of the bus resulting in extensive
damages to the body of the bus and injuries to
seventeen of its passengers, ... including the plaintiffs
herein."
Petitioner’s Argument/s: (LOST)
The accident was caused by the negligence of the
driver of the freight truck, Nocum. MRR should not be
held liable for Abello’s acts who is not their employee
Respondent’s Arguments:(WON)
No specific argument, filed a complaint for damages
against MRR.
Ruling of the lower court:
Trial court found Abello was likewise reckless when he
was driving the bus at the rate of from 40 to 50
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 28
kilometers per hour on a bumpy road at the moment
of the collision.
Issue:
WON petitioner may be held liable on account of such
negligence, considering that he was not its employee.
(YES)
Rule:
Art. 1763. A common carrier is responsible for injuries
suffered by a passenger on account of the willful acts
or negligence of other passengers or of strangers, if
the common carrier's employees through the exercise
of the diligence of a good father of a family could have
prevented or stopped the act or omission.
Sec. 48(b). No professional chauffeur shall permit any
unlicensed person to drive the motor vehicle under his
control, or permit a person, sitting beside him or in
any other part of the car, to interfere with him in the
operation of the motor vehicle, by allowing said
person to take hold of the steering wheel, or in any
other manner take part in the manipulation or control
of the car.
Application:
These are no longer justiciable questions which would
justify our issuing the peremptory writ prayed for. The
first is a question of fact on which the affirmative
finding of respondent court is not reviewable by Us;
and the second is one as to which there can be no
possible doubt in view of the provisions of the Civil
Code and of the Motor Vehicle Law hereinbefore cited.
There would be no point in giving the appeal due
course.
As opined by the Government Corporate Counsel: the
acts of the bus personnel, particularly "in allowing Mr.
Abello to drive despite two occasions when the bus
stopped and the regular driver could have taken over,
constitute reckless imprudence and wanton injurious
conduct on the part of the MRR employees."
Bacarro v. Castano
G.R. No. L-34597 | November 5, 1982
Facts:
● Castano boarded a jeep, driven by
Mobtefalcon, as a paying passenger. The
route of the jeep is from Oroquieta to
Jiminez.
● On its way to Jimenez and while approaching
a bridge, a truck from behind the jeep blew
 its horn to signal that it was trying to
overtake.
● While the truck was trying to overtake the
jeep, it sideswiped the jeep causing it to fall
into a ditch or canal.
● The accident crushed Castanos’ leg
● Castanos the filed a case against the Truck
Driver and the Jeepney driver for damages
Petitioner’s Argument/s: (LOST)
● Montefalcon, driver of the Jeep, claimed that
the accident was a fortuitous event as the
jeep was side swept by the truck
● It also claim that the truck driver alone
should be liable as he was driving without
license at the time of the accident
Respondent’s Arguments:
● Castanos claims that Montefalcon is liable for
damages as the contract of carriage was
breached because he failed to carry him
safely as safely as human care and foresight
can provide, using utmost diligence
Ruling of the lower court:
● Lower court found both Truck Driver and
Jeepney Driver jointly and severally liable for
damages
Issue:
Whether the jeepney driver is liable for damages when
he claims that the accident was a fortuitous event
(YES)
Rule:
● Article 1755 of the NCC provides that a
common carrier is bound to carry the
Passengers safely as far as human care and
foresight can provide, using the utmost
diligence of very cautious persons, with a due
regard for all the circumstances.
Application:
● The rule that fortuitous events is a defense
of common carriers does not apply to this
case.
● SC ruled that the jeepney driver was
negligent in driving the jeep. The driver failed
to exercise extraordinary diligence when it
failed to slow down knowing that a truck was
trying to overtake them while approaching a
bridge that can only fit one vehicle.
● Thus, we cannot call the accident as a
fortuitous event that would exculpate the
driver from paying damages as he had the
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 29
control to slow down the speed of the jeep
but failed to do so.
G.V. Florida Transport, Inc. v. Heirs of Romeo L.
Battung Jr.
G.R. No. | October 14, 2015
Facts:
Battung boarded the petitioner’s bus bound for
Manila.
He was seated at the 1st row behind the driver and
slept during the ride.
When the bus reached Nueva Ecija, the bus driver,
Duplio, stopped the bus and alighted to check the
tires.
At this point, a man who was seated at the 4th row of
the bus stood up, shot Battung at his head, and then
left with a companion.
The bus conductor Baraoay notified Duplio of the
incident and thereafter brought Battung to the
hospital. Unfortunately, he was later pronounced
DOA.
Petitioner’s Argument/s: WON
Petitioners maintained that they had exercised
extraordinary diligence required by law from common
carriers and that a common carrier is not an absolute
insurer of its passenger and that Battung’s death
should be properly deemed a fortuitous event
Respondent’s Arguments: LOST
Respondents filed a complaint for damages based on
a breach of contract of carriage against petitioner
Duplio and Baraoay. They contended that as a
common carrier, petitioner and its employees are
bound to observe extraordinary diligence in ensuring
the safety of passengers. Hence, they should be civilly
liable for Battung’s death.
Ruling of the lower court:
RTC ruled in respondents’ favor and ordered the
petitioners to pay the amount for damages
Dissatisfied, petitioners appealed to the CA.
CA affirmed the RTC ruling in toto.
Issue: WON the CA correctly affirmed the ruling of
the RTC finding petitioner liable for damages to
respondent arising from culpa contractual.
Rule:
I. Article 1733. Common carriers, from the
nature of their business and for reasons of
public policy, are bound to observe
extraordinary diligence in the vigilance over
the goods and for the safety of the
passengers transported by them, according
to all the circumstances of each case.
Article 1755. A common carrier is bound to
carry the passengers safely as far as human
care and foresight can provide, using the
utmost diligence of very cautious persons,
with a due regard for all the circumstances.
II. Article 1763. A common carrier is
responsible for injuries suffered by a
passenger on account of the willful acts or
negligence of other passengers or of
strangers, if the common carrier's employees
through the exercise of the diligence of a
good father of a family could have prevented
or stopped the act or omission.
Application:
I.
The foregoing provisions notwithstanding, it should be
pointed out that the law does not make the common
carrier an insurer of the absolute safety of its
passengers.
It is imperative for a party claiming against a common
carrier under the above-said provisions to show that
the injury or death to the passenger/s arose from the
negligence of the common carrier and/or its
employees in providing safe transport to its
passengers.
The presumption of fault or negligence against the
carrier is only a disputable presumption.
As ruled in Pilapil vs. CA, “Where…the injury sustained
by the petitioner was in no war due to any defect in
the means of transport or in the method of
transporting or to the negligent or wilful acts of the
common carrier’s employees,…the presumption is
rebutted and the carrier is not and ought not to be
held liable.
II.
In contrast, no similar danger was shown to exist in
this case so as to impel petitioner or its employees to
implement heightened security measures to ensure
the safety of its passengers.
Relevantly, as ruled in Nocum v. Laguna Tayabas Bus
Company, “the common carriers should be given
sufficient leeway in assuming that the passengers
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 30
they take in will not bring anything that would prove
dangerous to himself, as well as his co-passengers,
unless there is something that will indicate that a
more stringent inspection should be made.
In this case, records reveal that when the bus stopped
at San Jose City to let 4 men ride the bus (2 of which
turned out to be Battung’s murderers), the bus driver
Duplio, saw them get on the bus and even took note
of what they were wearing. Daraoay, the bus
conductor even approached them and have them pay
the corresponding fare. During the foregoing, they
observed nothing which would arouse their suspicion
that the men were armed or were to carry out an
unlawful activity.
Therefore, the petition is GRANTED and the complaint
for damages filed by the respondent’s heirs of Battung
is DISMISSED for lack of merit.
Absence of Contributory Negligence
Cangco v. Manila Railroad Co.
G.R. No. L-12191 | October 14, 1918
Facts:
Jose Cangco was in the employment of Manila Railroad
Company. He lived in the pueblo of San Mateo, in the
province of Rizal, which is located upon the line of the
defendant railroad company; As an employee, he was
given a pass that entitles him to ride the company’s
train free of charge.
During his ride in the train he arose from his seat and
made his way to the exit while the train was still on
transit. When the train had proceeded a little farther
Cangco stepped down into the cement platform but
stepped on a sack of watermelon, fell down and rolled
under the platform and was drawn under the moving
car which resulted in his arm being crushed and
lacerated. He was rushed to the hospital and sued the
company and the employee who put the sack of
watermelon on the platform.
The accident occurred between 7 and 8 o'clock on a
dark night, and the railroad station was dimly lit, the
objects on the platform where the accident occurred
were difficult to discern especially to a person
emerging from a lighted car.
Petitioner’s Argument/s: (WON)
It is the negligence of the servants and employees of
the defendant in placing the sacks of melons upon the
platform and leaving them so placed as to be a
menace to the security of passenger alighting from
the company's trains.
The contract of carriage is established and there is
proof that the same was broken by failure of the
carrier to transport the passenger safely to his
destination, the liability of the former attaches.
Respondent’s Arguments: (LOST)
The employees were negligent in placing
obstruction upon the platform, the direct and the
proximate cause of the injury suffered by the plaintiff
was his own contributing negligence failing to wait
until the train had come to a complete stop before
alighting.
Ruling of the lower court:
CFI ruled in favor of MRR because there was
contributory negligence on the part of Cangco. While
MRR was negligent as the sacks of melons were placed
as to obstruct passengers passing to and from the
cars, nevertheless, Cangco himself had failed to use
due caution in alighting and was precluded from
recovering.
Issue:
WON Cangco is barred from recovering damages
against MRR because of his own contributory
negligence? (NO)
Rule:
The test by which to determine whether the passenger
has been guilty of negligence in attempting to alight
from a moving railway train, is that of ordinary or
reasonable care. It is to be considered whether an
ordinarily prudent person, of the age, sex and
condition of the passenger, would have acted as the
passenger acted under the circumstances disclosed by
the evidence. This care has been defined to be not the
care which may or should be used by the prudent man
generally, but the care which a man of ordinary
prudence would use, under similar circumstances, to
avoid injury. (Thompson, Commentaries
Negligence, Vol. 3, Sec. 2010.)
Application:
There is no contributory negligence on behalf of the
plaintiff. Thousands of people alight from trains under
these conditions every day of the year, and sustain no
injury where the company has kept its platform free
from dangerous obstructions. There is no reason to
believe that plaintiff would have suffered any injury
whatsoever in alighting as he did had it not been for
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 31
defendant's negligent failure to perform its duty to
provide a safe alighting place.
The plaintiff was possessed of the vigor and agility of
young manhood, and it was by no means so risky for
him to get off while the train was yet moving as the
same act would have been in an aged or feeble
person. In determining the question of contributory
an negligence in performing such act — that is to say,
whether the passenger acted prudently or recklessly
— the age, sex, and physical condition of the
passenger are circumstances necessarily affecting the
safety of the passenger, and should be considered.
Again, it may be noted that the place was perfectly
familiar to the plaintiff as it was his daily custom to
get on and off the train at this station. There could,
therefore, be no uncertainty in his mind with regard
either to the length of the step which he was required
to take or the character of the platform where he was
alighting. Our conclusion is that the conduct of the
plaintiff in undertaking to alight while the train was
yet slightly under way was not characterized by
imprudence and that therefore he was not guilty of
contributory negligence.
Isaac v. A.L. Ammen Transportation Co.
G.R. No. L-9671 | Aug. 23, 1957
Facts: Plaintiff Isaac boarded the bus of defendant as
a paying passenger. But, before reaching his
destination, the bus collided with a pick-up as a result
of which, plaintiff’s left arm was completely severed
and the severed portion fell inside the bus.
Petitioner’s Argument/s (LOST): Plaintiff brought
this action against defendant for damages alleging
that the collision which resulted in the loss of his left
arm was mainly due to the gross incompetence and
recklessness of the driver of the bus operated by
defendant.
on
Respondent’s Arguments (WON): Defendant set
up a special defense that the injury suffered by
plaintiff was due entirely to the fault or negligence of
the driver of the pick-up car which collided with the
bus driven by its driver and to the contributory
negligence of plaintiff himself. Defendant further
claims that the accident which resulted in the injury of
plaintiff is one which defendant could not foresee
or,though foreseen, was inevitable.
Ruling of the lower court: The lower court decided
in favor of the defendant and dismissed the complaint
hence this appeal.
Issue: Whether the defendant exercised
extraordinary diligence in ensuring the safety of its
passengers and therefore liable for damages.
Rule: We can make the following restatement of the
principles governing the liability of a common carrier:
(1) the liability of a carrier is contractual and arises
upon breach of its obligation. There is breach if it fails
to exert extraordinary diligence according to all
circumstances of each case; (2) a carrier is obliged to
carry its passenger with the utmost diligence of a very
cautious person, having due regard for all the
circumstances; (3) a carrier is presumed to be at fault
or to have acted negligently in case of death of, or
injury to, passengers, it being its duty to prove that it
exercised extraordinary diligence; and (4) the carrier
is not an insurer against all risks of travel.
Application: In taking note of the evidence of the
case, it appears that the Bus, immediately prior to the
collision, was running at a moderate speed because it
had just stopped at the school zone. The pickup car
was at full speed and was running outside of itsproper
lane. The driver of the bus, upon seeing the manner
in which the pick-up was then running,swerved the
bus to the very extreme right of the road until its front
and rear wheels had gone over the pile of stones or
gravel situated on the rampart of the road. Despite
this effort, the rear left side of the bus was hit by the
pick-up car.
The SC concluded that the driver of the bus has done
what a prudent man could have done to avoid the
collision.
A circumstance which militates against the stand of
appellant is the fact that when he boarded the bus in
question, he seated himself on the left side thereof
resting his left arm on the window sill but with his left
elbow outside the window, this being his position inthe
bus when the collision took place. It is for this reason
that the collision resulted in the severance ofsaid left
arm from the body of appellant thus doing him a great
deal of damage. It is therefore apparent that the
appellant is guilty of contributory negligence.
Had he not placed his left arm on the window sill with
a portion thereof protruding outside, perhaps the
injury would have been avoided as is the case with the
other passengers. It is to be noted that appellant was
the only victim of the collision.
It is true that such contributory negligence cannot
relieve appellee of its liability but will only entitle it to
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 32
reduction of the amount of damage caused but this is
a circumstance which further militates against the
position taken by appellant in present case.
Hence, the defendant has no liability.
Compania Maritima v. CA and
Vicente Concepcion
G.R. No. L-313-79 | August 29, 1988
Facts:
Vicente E. Concepcion, a civil engineer doing business
under the name and style of Consolidated
Construction had a contract with the Civil Aeronautics
Administration (CAA) sometime in 1964 for the
construction of the airport in Cagayan de Oro City,
Misamis Oriental. Being a Manila-based contractor,
Concepcion had to ship his construction equipment to
Cagayan de Oro City. Having shipped some of his
equipment through Compania Maritima and having
settled the balance of P2,628.77 with respect to said
shipment, Concepcion negotiated anew with
Concepcion, thru its collector, Pacifico Fernandez, on
28 August 1964 for the shipment to Cagayan de Oro
City of 1 unit payloader, 4 units 6x6 Reo trucks and 2
pieces of water tanks. He was issued Bill of Lading 113
on the same date upon delivery of the equipment at
the Manila North Harbor. These equipment were
loaded aboard the MV Cebu in its Voyage 316, which
left Manila on 30 August 1964 and arrived at Cagayan
de Oro City in the afternoon of 1 September 964. The
Reo trucks and water tanks were safely unloaded
within a few hours after arrival, but while the
payloader was about 2 meters above the pier in the
course of unloading, the swivel pin of the heel block
of the port block of Hatch 2 gave way, causing the
payloader to fall. The payloader was damaged and
was thereafter taken to Compania Maritima’s
compound in Cagayan de Oro City.
On 7 September 1964, Consolidated Construction,
thru Concepcion, wrote Compania Maritima to
demand a replacement of the payloader which it was
considering as a complete loss because of the extent
of damage. Consolidated Construction likewise
notified Compania Maritima of its claim for damages.
Unable to elicit response, the demand was repeated
in a letter dated 2 October 1964. Meanwhile,
Compania Maritima 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, Compania
Maritima denied the claim for damages of
Consolidated Construction in its letter dated 7 October
1964, contending that had Concepcion declared the
actual weight of the payloader, damage to their ship
as well as to his payloader could have been prevented.
 use the heel block of hatch No. 2 (which only has a 5-
On 6 July 1965, Concepcion filed an action for ton capacity) in unloading the payloader.
damages against Compania Maritima with the then
CFI of Manila, seeking to recover damages allegedly CA: reversed; Ordered Petitioner to pay Concepcion.
suffered for the period of 97 days that he was not able But reduced the value of the payloader by 20% due
to employ a payloader in the construction job. After to Concepcion’s contributory negligence.
trial, the then CFI dismissed on 24 April 1968 the
complaint with costs against Concepcion, stating that
Issue: (NO)
the proximate cause of the fall of the payloader was
Concepcion’s act or omission in having WON the act of private respondent Concepcion in
misrepresented the weight of the payloader as 2.5 furnishing petitioner Compañia Maritima with an
tons, which underdeclaration was intended to defraud inaccurate weight was the proximate cause of the
Compañia Maritima of the payment of the freight damage, as would absolutely exempt petitioner from
charges and which likewise led the Chief Officer of the liability for damages.
vessel to use the heel block of hatch 2 in unloading
the payloader.
Rule:
The general rule under Articles 1735 and 1752 of the
From the adverse decision against him, Vicente E.
Civil Code is that common carriers are presumed to
Concepcion appealed to the Court of Appeals which
have been at fault or to have acted negligently in case
reversed the CFI’s decision ordering petitioner to pay
the goods transported by them are lost, destroyed or
Concepcion but reduced the value of the payloader
had deteriorated. To overcome the presumption of
due to Concepcion’s contributory negligence.
liability for the loss, destruction or deterioration of the
goods under Article 1735, the common carriers must
Petitioner’s Argument/s: (WON)
prove that they observed extraordinary diligence as
required in Article 1733 of the Civil Code. The
Petitioner claims absolute exemption under this
responsibility of observing extraordinary diligence in
provision upon the reasoning that private
the vigilance over the goods is further expressed in
respondent's act of furnishing it with an inaccurate
Article 1734 of the same Code, the article invoked by
weight of the payloader constitutes misrepresentation
petitioner to avoid liability for damages.
within the meaning of "act or omission of the shipper
or owner of the goods" under the above- quoted
Corollary is the rule that mere proof of delivery of the
article. It likewise faults the respondent Court of
goods in good order to a common carrier, and of their
Appeals for reversing the decision of the trial court
arrival at the place of destination in bad order, makes
notwithstanding that said appellate court also found
out prima facie case against the common carrier, so
that by representing the weight of the payloader to be
that if no explanation is given as to how the loss,
only 2.5 tons, private respondent had led petitioner's
deterioration or destruction of the goods occurred, the
officer to believe that the same was within the 5 tons
common carrier must be held responsible. Otherwise
capacity of the heel block of Hatch No. 2. Petitioner
stated, it is incumbent upon the common carrier to
would thus insist that the proximate and only cause of
prove that the loss, deterioration or destruction was
the damage to the payloader was private respondent's
due to accident or some other circumstances
alleged misrepresentation of the weight of the
inconsistent with its liability.
machinery in question; hence, any resultant damage
to it must be borne by private respondent Vicente E.
In the instant case, We are not persuaded by the
Concepcion.
proferred explanation of petitioner alleged to be the
proximate cause of the fall of the payloader while it
Respondent’s Arguments: (LOST)
was being unloaded at the Cagayan de Oro City pier.
Petitioner seems to have overlooked the extraordinary
Private respondent had led petitioner's officer to
diligence required of common carriers in the vigilance
believe that the same was within the 5 tons capacity
over the goods transported by them by virtue of the
of the heel block of Hatch No. 2
nature of their business, which is impressed with a
special public duty.
Ruling of the lower court:

CFI: dismissed; the proximate cause of the fall of the
payloader was Concepcion's act or omission in having
misrepresented the weight of the payloader, which
underdeclaration led the Chief Officer of the vessel to
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

TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 33
the goods and for the safety of the passengers
transported by them according to all the
circumstances of each case.
Such extraordinary diligence in the vigilance over the
goods is further expressed in Articles 1734, 1735 and
1745, Nos. 5, 6 and 7.
Application:
The extraordinary diligence in the vigilance over the
goods tendered for shipment requires the common
carrier to know and to follow the required precaution
for avoiding damage to, or destruction of the goods
entrusted to it for safe carriage and delivery. It
requires common carriers to render service with the
greatest skill and foresight and "to use all reasonable
means to ascertain the nature and characteristic of
goods tendered for shipment, and to exercise due care
in the handling and stowage including such methods
as their nature requires." Under Article 1736 of the
Civil Code, the responsibility to observe extraordinary
diligence commences and 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 the
right to receive them without prejudice to the
provisions of Article 1738.
While petitioner has proven that private respondent
Concepcion did furnish it with an inaccurate weight of
the payloader, 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 the petitioner's crew. Evidence on record
sufficiently shows that the crew of petitioner had been
negligent in the performance of its obligation by
reason of their having failed to take the necessary
precaution under the circumstances which usage has
established among careful persons.
In that sense, therefore, private respondent's act of
furnishing petitioner with an inaccurate weight of the
payloader upon being asked by petitioner's collector,
cannot be used by said petitioner as an excuse to
avoid liability for the damage caused, as the same
could have been avoided had petitioner utilized the
"jumbo" lifting apparatus which has a capacity of
lifting 20 to 25 tons of heavy cargoes. Even if the
petitioner chose not to take the necessary precaution
to avoid damage by checking the correct weight of the
payloader, extraordinary care and diligence compel
the use of the "jumbo" lifting apparatus as the most
prudent course for petitioner.
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 34
Del Prado v. Manila Electric Co.
G.R. No. 29462 | March 7, 1929
Facts:
Respondent is engaged in operating street cars, which
have appointed points for stoppage. Petitioner herein
approached the car and hailed it. In response, the
motorman eased up a little, without stopping. The
plaintiff clutched the handpost and placed his left foot
on the platform. However, before the plaintiff’s
position became secure, the motorman applied the
power. The sudden impulse to the car caused the
plaintiff to fall to the ground. His foot was crushed by
the car, resulting in amputation.
Petitioner’s Argument/s (WON):
Claims for damages on account of culpa contractual
Respondent’s Arguments (LOST):
That it is not liable as the motorman did not see the
plaintiff attempting to board the car, that the company
exercised due diligence in the selection and
supervision of its employees, and that the negligence
of the plaintiff bars him from claiming damages.
Ruling of the lower court:
The trial court awarded to the plaintiff the sum of
P10,000, as damages, with costs of suit
Issue:
WON respondent is responsible for the accident
Rule:
Article 1101, Spanish Civil Code
Damages caused by those who in the performance of
their obligations suffer in wilful, negligence or
delinquency, and those which in any way contravene
the wording of those obligations, are subject to
compensation.
Article 1103, Spanish Civil Code
Liability arising from negligence is equally enforceable
in the fulfilment of all kinds of obligations; but it may
be moderated by the Courts as the case may be.
Application:
Yes. Though there is no obligation on the part of a
street railway company to stop its cars to take on
intending passengers at other points than those
appointed for stoppage, nevertheless when the
motorman sees a person attempting to board the car
while in motion, and at a place not appointed for
stopping, he should not do any act to increase the
peril of such person. The relation between a carrier of
passengers for hire and its patrons is of a contractual
nature; and the failure of the carrier to use due care
in conveying its passengers safely is a breach of
contractual obligation (culpa contractual) under
Article 1101 of the Civil Code. Furthermore, the duty
that the carrier extends to persons boarding the cars
as well as to those alighting therefrom. It is worthy to
note the difference between culpa contractual and
culpa aquiliana. In culpa aquiliana, an employer may
exculpate himself from liability by proving that he
exercised due diligence to prevent the damage, while
this defense is not available in culpa contractual. The
instant case involves culpa contractual. Hence, the
defense of the respondent is untenable. Contributory
negligence on the part of a plaintiff, not amounting to
the proximate cause of his injury does not remove his
right of action in cases where liability arises from
breach of a contractual duty. However, such
contributory negligence will be considered in
mitigating the damages.
PNR v. CA, et. al.
G.R. No. L-55347 | October 4, 1985
Facts:
Winifredo Tupang, a paying passenger, fell off the PNR
train he boarded bound for Manila. This resulted in his
death. The train did not stop despite the alarm raised
by the other passengers that somebody fell from the
train. Instead, the train conductor called the station
agent and requested for verification of the
information. The police authorities found the lifeless
body of Tupang at Iyam Bridge. CFI held PNR liable
for damages and ordered it to pay costs. PNR
contended that it enjoys immunity from suit, and
consequently, its funds cannot be subject to
garnishment.
Petitioner’s Argument/s:
PNR raised the doctrine of state immunity from suit.
It alleged that it is a mere agency of the Philippine
government without distinct or separate personality of
its own, and that its funds are governmental in
character and, therefore, not subject to garnishment
or execution - LOST
Respondent’s Arguments:
The CA sustained the holding of the trial court that the
PNR did not exercise the utmost diligence required by
law of a common carrier.
It further increased the amount adjudicated by the
trial court by ordering PNR to pay the plaintiff an
additional sum of P5,000,00 as exemplary damages.
- WON
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 35
Ruling of the lower court:
CFI held PNR liable for damages and ordered to pay
costs
Issue:
1. W/N PNR enjoys immunity from suit – NO
2. W/N PNR is liable – YES
3. W/N the passenger was chargeable of
contributory negligence – YES
Rule:
Rep. Act 4156, Section 4 - The Philippine National
Railways shall have the following powers:
a. To do all such other things and to transact all
such business directly or indirectly
necessary, incidental or conducive to the
attainment of the purpose of the corporation;
and
b. Generally, to exercise all powers of a
corporation under the Corporation Law.
Application:
On whether PNR enjoys immunity from suit… -
NO
Under Sec. 4 of RA 4156, the PNR has all the powers,
the characteristics and attributes of a corporation
under the Corporation Law. Hence, PNR may sue and
be sued and may be subjected to court processes.
When the government enters into commercial
business, it abandons its sovereign capacity and is to
be treated like any other corporation.
Consequently, PNR’s funds could be garnished or
levied upon on execution.
On whether PNR is liable… - YES
The train boarded by Winifredo Tupang was so over-
crowded that he and many other passengers had no
choice but to sit on the open platforms between the
coaches of the train. The train did not even slow down
when it approached the Iyam Bridge which was under
repair at the time. Neither did the train stop, despite
the alarm raised by other passengers that a person
had fallen off the train at lyam Bridge.
PNR has the obligation to transport its passengers to
their destinations and to observe extraordinary
diligence in doing so. Death or any injury suffered by
any of its passengers gives rise to the presumption
that it was negligent in the performance of its
obligation under the contract of carriage.
PNR failed to overthrow such presumption of
negligence with clear and convincing evidence.
On whether the passenger was chargeable of
contributory negligence… - YES
The deceased was chargeable with contributory
negligence.
Since he opted to sit on the open platform between
the coaches of the train, he should have held tightly
and tenaciously on the upright metal bar found at the
side of said platform to avoid falling off from the
speeding train.
Hence, the deletion of the amount adjudicated as
moral damages, and the setting aside of exemplary
damages must be set aside.
Tabacalera Insurance Co., et. al. v. North Front
Shipping Services Inc., et. al.
G.R. No. 119197 | May 16, 1997
Facts: On Aug. 2 , 1990, sacks of corn grains were
shipped on board NORTH FRONT 777, a vessel owned
by North front Shipping (Respondent) and the cargo
was consigned to Republic mills Corp. in MNL. The
vessel arrived in MNL on the 16th, Republic Flour was
advised of cargo arrival but did not immediately
commence unloading. It took them 20 days to
complete unloading the cargo. Republic Flour rejected
the entire cargo and demanded Respondent for
damages. The insurance companies (one of which is
petitioner - tabacalera insurance) paid Republic Flour
but lodged a complaint against Respondent claiming
that the loss was attributable to the fault and
negligence of the carrier - respondent.
Petitioner’s contention (Tabacalera Insurance):
The Marine Cargo Adjusters hired by the insurance
companies conducted a survey and found cracks in the
bodega of the barge and heavy concentration of molds
on the tarpaulins and wooden boards. They did not
notice any seals in the hatches. The tarpaulins were
not brand new as there were patches on them,
contrary to the claim of North Front Shipping Services,
Inc., thus making it possible for water to seep in. They
also discovered that the bulkhead of the barge was
rusty.
Respondent’s contention (North Front Shipping): it
could not be made culpable for the loss and
deterioration of the cargo as it was never negligent.
Captain Solomon Villanueva, master of the vessel,
reiterated that the barge was inspected prior to the
actual loading and was found adequate and
seaworthy. In addition, they were issued a permit to
sail by the Coast Guard. The tarpaulins were doubled
and brand new and the hatches were properly sealed.
They did not encounter big waves hence it was not
possible for water to seep in. He further averred that
TRANSPORTATION LAWS | ATTY. CAPANAS | CASE DIGEST COMPILATION | EH405 2020-2021 | PAGE | 36
the corn grains were farm wet and not properly dried
when loaded.
Issue: WON North Front shipping was negligent in its
duties as a “common carrier” and WON contributory
negligence may be attributed to Republic Flour. (the
issue of contributory negligence was not raised as an
issue to the SC but the SC nonetheless found that
Republic Flour was negligent also).
Rule: A common carrier is required to observe
extraordinary diligence in its vigilance over the goods
it transports. When goods placed in its care are lost or
damaged, the carrier is presumed to have been at
fault or to have acted negligently. Therefore, the
common carrier has the burden of proving that it
observed extraordinary diligence in order to avoid
responsibility for the lost cargo.
Application: We find that the carrier failed to observe
the required extraordinary diligence in the vigilance
over the goods placed in its care. The proofs
presented by North Front Shipping Services, Inc.,
were insufficient to rebut the prima facie presumption
of private respondent's negligence, more so if we
consider the evidence adduced by petitioners. It is not
denied by the insurance companies that the vessel
was indeed inspected before actual loading and it was
issued a Permit to Sail. They proved the fact of
shipment and its consequent loss or damage while in
the actual possession of the carrier. The carrier failed
to volunteer any explanation why there was spoilage
and how it occurred. It was shown during the trial that
the vessel had rusty bulkheads and the wooden
boards and tarpaulins bore heavy concentration of
molds. The tarpaulins used were not new, contrary to
the claim of North Front Shipping Services, Inc., as
there were already several patches on them, hence
making it highly probable for water to enter.
HOWEVER, we cannot attribute the destruction, loss
or deterioration of the cargo solely to the carrier. The
consignee Republic Flour is guilty of
contributory negligence. It was seasonably notified
of the arrival of the barge but did not immediately
start the unloading operations. No explanation was
proffered by the consignee as to why there was a
delay of six (6) days. Had the unloading been
commenced immediately the loss could have been
completely avoided or at least minimised. As testified
to by the chemist who analyzed the corn samples, the
mold growth was only at its incipient stage and could
still be arrested by drying. The corn grains were not
yet toxic or unfit for consumption. For its contributory
negligence, Republic Flour Mills Corporation should
share at least 40% of the loss.