Planters Products, Inc. v.

CA decision was reversed by the appellate court, which

Facts:
Planters Products, Inc. purchased from Mitsubishi
International Corporation 9,329.7069 metric tons of
Urea 46% fertilizer, which the latter shipped aboard
the cargo vessel M/V Sun Plum on June 16, 1974.
Prior to its voyage, a time-charter party was entered
into between Mitsubishi as shipper, and Kyosei Kisen
Kabushiki Kaisha as shipowner. Before loading the
fertilizer aboard the vessel, four of her holds were
presumably inspected by the charterer’s representative
and found it fit to take the load. After loading the
cargo, the steel hatches were closed with heavy iron
lids, covered with 3 layers of tarpaulin then tied with
steel bonds. It remained sealed throughout the entire
voyage.
Upon arrival of the vessel, petitioner unloaded the
cargo, which took 11 days. A private marine and cargo
surveyor, Cargo Superintendents Company, Inc.
(CSCI) was hired by petitioner to determine the
outturn of the cargo shipped. CSCI reported shortage
of 106.726 metric tons, and contamination of 18
metric tons due to dirt. PPI sent a claim letter against
Soriamont Steamship Agencies, the resident agent of
KKKK. The request was denied, hence, PPI filed an
action for damages before the CFI Manila. The lower
court sustained the petitioner’s claim, but such
absolved the carrier from liability. The appellate court
ruled that the vessel was a private carrier and not a
common carrier by reason of the charter party.
Issues:
(1) Whether a common carrier becomes a private
carrier by reason of a charter party
(2) Whether the ship owner was able to prove the
exercise of the diligence required under the
circumstances
Held:
(1) A "charter-party" is defined as a contract by which
an entire ship, or some principal part thereof, is let by
the owner to another person for a specified time or
use; Charter parties are of two types: (a) contract of
affreightment which involves the use of shipping
space on vessels leased by the owner in part or as a
whole, to carry goods for others; and, (b) charter by
demise or bareboat charter, by the terms of which the
whole vessel is let to the charterer with a transfer to
him of its entire command and possession and
consequent control over its navigation, including the
master and the crew, who are his servants. Contract of
affreightment may either be time charter, wherein the
vessel is leased to the charterer for a fixed period of

 time, or voyage charter, wherein the ship is leased for
a single voyage.
Upon the other hand, the term "common or public
carrier" is defined in Art. 1732 of the Civil Code. The
definition extends to carriers either by land, air or
water which hold themselves out as ready to engage in
carrying goods or transporting passengers or both for
compensation as a public employment and not as a
casual occupation. The distinction between a
"common or public carrier" and a "private or special
carrier" lies in the character of the business, such that
if the undertaking is a single transaction, not a part of
the general business or occupation, although involving
the carriage of goods for a fee, the person or
corporation offering such service is a private carrier.
Article 1733 of the New Civil Code mandates that
common carriers, by reason of the nature of their
business, should observe extraordinary diligence in the
vigilance over the goods they carry. In the case of
private carriers, however, the exercise of ordinary
diligence in the carriage of goods will suffice.
Moreover, in case of loss, destruction or deterioration
of the goods, common carriers are presumed to have
been at fault or to have acted negligently, and the
burden of proving otherwise rests on them. On the
contrary, no such presumption applies to private
carriers, for whosoever alleges damage to or
deterioration of the goods carried has the onus of
proving that the cause was the negligence of the
carrier.
When petitioner chartered the vessel M/V "Sun Plum",
the ship captain, its officers and compliment were
under the employ of the shipowner and therefore
continued to be under its direct supervision and
control. Hardly then can we charge the charterer, a
stranger to the crew and to the ship, with the duty of
caring for his cargo when the charterer did not have
any control of the means in doing so. This is evident in
the present case considering that the steering of the
ship, the manning of the decks, the determination of
the course of the voyage and other technical incidents
of maritime navigation were all consigned to the
officers and crew who were screened, chosen and
hired by the shipowner. 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.
(2) In an action for recovery of damages against a
common carrier on the goods shipped, the shipper or
consignee should first prove the fact of shipment and
its consequent loss or damage while the same was in
the possession, actual or constructive, of the carrier.
Thereafter, the burden of proof shifts to respondent to

prove that he has exercised extraordinary diligence
required by law or that the loss, damage or
deterioration of the cargo was due to fortuitous event,
or some other circumstances inconsistent with its
liability. To our mind, respondent carrier has
sufficiently overcome, by clear and convincing proof,
the prima facie presumption of negligence.
Before the fertilizer was loaded, the four (4) hatches
of the vessel were cleaned, dried and fumigated. After
completing the loading of the cargo in bulk in the
ship's holds, the steel pontoon hatches were closed and
sealed with iron lids, then covered with three (3)
layers of serviceable tarpaulins which were tied with
steel bonds. The hatches remained close and tightly
sealed while the ship was in transit as the weight of
the steel covers made it impossible for a person to
open without the use of the ship's boom. It was also
shown during the trial that the hull of the vessel was in
good condition, foreclosing the possibility of spillage
of the cargo into the sea or seepage of water inside the
hull of the vessel. When M/V "Sun Plum" docked at
its berthing place, representatives of the consignee
boarded, and in the presence of a representative of the
shipowner, the foreman, the stevedores, and a cargo
surveyor representing CSCI, opened the hatches and
inspected the
condition of the hull of the vessel. The stevedores
unloaded the cargo under the watchful eyes of the
shipmates who were overseeing the whole operation
on rotation basis.
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. A shipowner is
liable for damage to the cargo resulting from improper
stowage only when the stowing is done by stevedores
employed by him, and therefore under his control and
supervision, not when the same is done by the
consignee or stevedores under the employ of the latter.
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 primary cause of these
spillages is the clamped shell which does not seal very
tightly. Also, the wind tends to blow away some of the
materials during the unloading process. 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. If there was loss or
contamination of the cargo, it was more likely to have
occurred while the same was being transported from
the ship to the dump trucks and finally to the
consignee's warehouse.

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 remiss in the
exercise of due diligence in order to minimize the loss
or damage to the goods it carried.

 SPOUSES TEODORO and NANETTE PERENA.,
Petitioners, -versus SPOUSES TERESITA
PHILIPPINE NICOLAS and L. ZARATE,
NATIONAL RAILWAYS, and the COURT OF
APPEALS, Respondents.
G.R. No. 157917, FIRST DIVISION, August 29,
2012, BERSAMIN, J.
The true test for a common carrier is not the quantity
or extent of the business actually transacted, or the
number and character of the conveyances used in the
activity, but whether the undertaking is a part of the
activity engaged in by the carrier that he has held out
to the general public as his business or occupation.
Despite catering to a limited clientèle, the Pereñas
operated as a common carrier because they held
themselves out as a ready transportation
indiscriminately to the students of a particular school
living within or near where they operated the service
and for a fee.
FACTS
The Pereñas were engaged in the business of
transporting students from their respective residences
in Parañaque City to Don Bosco in Pasong Tamo,
Makati City, and back. They employed Clemente
Alfaro (Alfaro) as driver of the van.
In June 1996, the Zarates contracted the Pereñas to
transport Aaron to and from Don Bosco. Considering
that the students were due at Don Bosco by 7:15 a.m.,
and that they were already running late because of the
heavy vehicular traffic on the South Superhighway,
Alfaro took the van to an alternate route. At about the
time the van was to traverse the railroad crossing,
PNR Commuter No. 302 (train) was in the vicinity of
the Magallanes Interchange travelling northbound.
The train hit the rear end of the van, and the impact
threw nine of the 12 students in the rear, including
Aaron, out of the van. Aaron landed in the path of the
train, which dragged his body and severed his head,
instantaneously killing him.
Devastated, the Zarates commenced an action for
damages against Alfaro, the Pereñas, PNR and Alano.
The RTC ruled in favor of the Zarates and held that
the cooperative gross negligence of the Pereñas and
PNR had caused the collision that led to the death of
Aaron.
Upon appeal, the Court of Appeals promulgated its
decision, affirming the findings of the RTC.
ISSUE
Whether defendant spouses Pereña are liable for
breach of the contract of carriage with plaintiff-

 spouses in failing to provide adequate and safe
transportation for the latter's son. (YES)
RULING
Although in this jurisdiction the operator of a school
bus service has been usually regarded as a private
carrier, primarily because he only caters to some
specific or privileged individuals, and his operation is
neither open to the indefinite public nor for public use,
the exact nature of the operation of a school bus
service has not been finally settled. This is the
occasion to lay the matter to rest.
A carrier is a person or corporation who undertakes to
transport or convey goods or persons from one place
to another, gratuitously or for hire. The carrier is
classified either as a private/special carrier or as a
common/public carrier. A private carrier is one who,
without making the activity a vocation, or without
holding himself or itself out to the public as ready to
act for all who may desire his or its services,
undertakes, by special agreement in a particular
instance only, to transport goods or persons from one
place to another either gratuitously or for hire. The
provisions on ordinary contracts of the Civil Code
govern the contract of private carriage. The diligence
required of a private carrier is only ordinary, that is,
the diligence of a good father of the family. In
contrast, a common carrier is a person, corporation,
firm or association engaged in the business of carrying
or transporting passengers or goods or both, by land,
water, or air, for compensation, offering such services
to the public. Contracts of common carriage are
governed by the provisions on common carriers of the
Civil Code, the Public Service Act, and other special
laws relating to transportation. A common carrier is
required to observe extraordinary diligence, and is
presumed to be at fault or to have acted negligently in
case of the loss of the effects of passengers, or the
death or injuries to passengers.
In relation to common carriers, the Court defined
public use in the following terms in United States v.
Tan Piaco, viz:
"Public use" is the same as "use by the public". The
essential feature of the public use is not confined to
privileged individuals, but is open to the indefinite
public. It is this indefinite or unrestricted quality that
gives it its public character. In determining whether a
use is public, we must look not only to the character of
the business to be done, but also to the proposed mode
of doing it. If the use is merely optional with the
owners, or the public benefit is merely incidental, it is
not a public use, authorizing the exercise of the
jurisdiction of the public utility commission. There
must be, in general, a right which the law compels the
owner to give to the general public. It is not enough

that the general prosperity of the public is promoted.
Public use is not synonymous with public interest. The
true criterion by which to judge the character of the
use is whether the public may enjoy it by right or only
by permission.
In De Guzman v. Court of Appeals, the Court noted
that Article 1732 of the Civil Code avoided any
distinction between a person or an enterprise offering
transportation on a regular or an isolated basis; and
has not distinguished a carrier offering his services to
the general public, that is, the general community or
population, from one offering his services only to a
narrow segment of the general population.
Nonetheless, the concept of a common carrier
embodied in Article 1732 of the Civil Code coincides
neatly with the notion of public service under the
Public Service Act, which supplements the law on
common carriers found in the Civil Code. Public
service, according to Section 13, paragraph (b) of the
Public Service Act, includes:
x x x every person that now or hereafter may own,
operate, manage, or control in the Philippines, for hire
or compensation, with general or limited clientèle,
whether permanent or occasional, and done for the
general business purposes, any common carrier,
railroad, street railway, traction railway, subway motor
vehicle, either for freight or passenger, or both, with or
without fixed route and whatever may be its
classification, freight or carrier service of any class,
express service, steamboat, or steamship line,
pontines, ferries and water craft, engaged in the
transportation of passengers or freight or both,
shipyard, marine repair shop, ice-refrigeration plant,
canal, irrigation system, gas, electric light, heat and
power, water supply and power petroleum, sewerage
system, wire or wireless communications systems,
wire or wireless broadcasting stations and other
similar public services. x x x.
Given the breadth of the aforequoted characterization
of a common carrier, the Court has considered as
common carriers pipeline operators, custom brokers
and warehousemen, and barge operators even if they
had limited clientèle.
As all the foregoing indicate, the true test for a
common carrier is not the quantity or extent of the
business actually transacted, or the number and
character of the conveyances used in the activity,
but whether the undertaking is a part of the activity
engaged in by the carrier that he has held out to the
general public as his business or occupation. If the
undertaking is a single transaction, not a part of the
general business or occupation engaged in, as
advertised and held out to the general public, the
individual or the entity rendering such service is a

 private, not a common, carrier. The question must be

determined by the character of the business actually
carried on by the carrier, not by any secret intention or
mental reservation it may entertain or assert when
charged with the duties and obligations that the law
imposes.

Applying these considerations to the case before us,

there is no question that the Pereñas as the operators
of a school bus service were: (a) engaged in
transporting passengers generally as a business, not
just as a casual occupation; (b) undertaking to carry
passengers over established roads by the method by
which the business was conducted; and (c)
transporting students for a fee. Despite catering to a
limited clientèle, the Pereñas operated as a common
carrier because they held themselves out as a ready
transportation indiscriminately to the students of a
particular school living within or near where they
operated the service and for a fee.

 MINDANAO TERMINAL AND
BROKERAGESERVICE, INC.- versus
-PHOENIX ASSURANCE COMPANY OF NEW
YORK/MCGEE & CO., INC- Case Digest:
FACTS: The stevedoring company Mindanao
Terminal and Brokerage Service, Inc is contracted by
Del Monte Philippines, Inc., to load and stow a
shipment of fresh green Philippine bananas and fresh
pineapples belonging to Del Monte Fresh Produce
International, Inc. into the cargo hold of the vessel M/
V Mistrau. The vessel was docked at the port of Davao
City and the goods were to be transported by it to
the port of Inchon, Korea in favor of consignee Taegu
Industries, Inc. The vessel set sail from the port of
Davao City and arrived at the port of Inchon, Korea. It
was then discovered upon discharge that some of the
cargo was in bad condition. The Marine Cargo
Damage Surveyor of Incok Loss and Average Adjuster
of Korea, through its representative Byeong
Yong Ahn (Byeong),surveyed the extent of the
damage of the shipment. In a survey report, it was
stated that16,069 cartons of the banana shipment and
2,185 cartons of the pineapple shipment were so
damaged that they no longer had commercial value.
Phoenix and McGee instituted an action for damages
against Mindanao Terminal After trial, the RTC held
that the only participation of Mindanao Terminal was
to load the cargoes on board the M/V Mistrau under
the direction and supervision of the ship’s officers,
who would not have accepted the cargoes on board the
vessel and signed the foreman’s report unless they
were properly arranged and tightly secured to
withstand voyage across the open seas.
Accordingly, Mindanao Terminal cannot be held liable
for whatever happened to the cargoes after it had
loaded and stowed them. Moreover, citing the survey
report, it was found by the RTC that the cargoes were
damaged on account of a typhoon which M/V Mistrau
had

 encountered during the voyage. It was further held that
Phoenix and McGee had no cause of action against
Mindanao Terminal because the latter, whose services
were contracted by Del Monte, a distinct corporation
from Del Monte Produce, had no contract with the
assured Del Monte Produce. The RTC dismissed the
complaint and awarded the counterclaim of
Mindanao Terminal in the amount of P83,945.80 as
actual damages and P100,000.00 as attorney’s fees.
ISSUE: Whether Mindanao Terminal is liable for not
having exercised extraordinary diligence in the
transport and storage of the cargo.
RULING: No, in the present case, Mindanao
Terminal, as a stevedore, was only charged with
the loading and stowing of the cargoes from the pier to
the ship’s cargo hold; it was never the custodian of the
shipment of Del Monte Produce. A stevedore is
not a common carrier for it does not transport goods or
passengers; it is not akin to aware houseman for it
does not store goods for profit. **Phoenix and
McGee appealed to the Court of Appeals. The
appellate court reversed and set aside the decision The
same court ordered Mindanao Terminal to pay
Phoenix and McGee “the total amount of $210,265.45
plus legal interest from the filing of the complaint
until fully paid and attorney’s fees of 20% of the
claim." It sustained Phoenix’s and McGee’s argument
that the damage in the cargoes was the result of
improper stowage by Mindanao Terminal.**
Mindanao Terminal filed a motion for reconsideration,
which the Court of Appeals denied in its 26 February
2004 resolution. Hence, the present petition for
review.

 Asian Terminals, Inc. v Allied Guarantee Insurance,
Co., Inc. GR No. 182208, October 14, 2015
FACTS: Marina, the predecessor of Asian Terminals
Inc., is an arrastre operator based on Manila. On
February 5, 1989, a shipment of kraft linear board was
loaded and received from the ports of Lake Charles,
LA, and Mobile, Al, USA for transport and delivery to
San Miguel. Upon offloading, it was assessed that a
total of 158 rolls were damaged during shipping.
Further, upon the goods' withdrawal from arrastre and
their delivery to the customs broker, Dynamic and
eventually to the consignee San Miguel, another 54
rolls were found to have been damaged, for a total of
212 rolls of damaged shipment worth P755,666.84.
Allied Insurance was the insurer of the shipment.
Thus, it paid San Miguel P755,666.84 and was
subrogated in the latter's right. Allied filed a
Complaint against Transocean, Philippine
Transmarine, Dynamic and Marina seeking to be
indemnified for the P755,666.84 it lost paying San
Miguel.
ISSUES: Whether or not petitioner has been proven
liable for the additional 54 rolls of damaged goods to
respondent
RULING: Yes. Marina, the arrastre operator, from the
above evidence, was not able to overcome the
presumption of negligence. The Bad Order Cargo
Receipts, the Turn Over Survey of Bad Order Cargoes
as well as the Request for Bad Order Survey did not
establish that the additional 54 rolls were in good
condition while in the custody of the arrastre. Said
documents proved only that indeed the 158 rolls were
already damaged when they were discharged to the
arrastre operator and when it was subsequently
withdrawn from the arrastre operator by [the] customs
broker. Further, the Turn Over Inspector and the Bad
Order Inspector who conducted the inspections and
who signed the Turn Over Survey of Bad [Order]
Cargoes and the Request for Bad Order Survey,
respectively, were not presented by Marina as
witnesses to verify the correctness of the document
and to testify that only 158 rolls was reported and no
others sustained damage while the shipment was in its
possession.
On the other hand, defendant Dynamic (which) in its
capacity as broker, withdrew the 357 rolls of kraft
linear board from the custody of defendant Marina and
delivered the same to the consignee, San Miguel
Corporation's warehouse in Tabacalera at United
Nations, Manila, is considered a common carrier.

 It is noteworthy to mention that "in general, the nature
of the work of an arrastre operator covers the handling
of cargoes at piers and wharves,"
"To carry out its duties, the arrastre is required to
provide cargo handling equipment which includes,
among others, trailer, chassis for containers."
Hence, the "legal relationship between the consignee
and the arrastre operator is akin to that of a depositor
and the warehouseman. The relationship between the
consignee and the common carrier is similar to that of
the consignee and the arrastre operator. Since it is the
duty of the arrastre to take good care of the goods that
are in its custody and to deliver them in good
condition to the consignee, such responsibility also
develops upon the carrier. Both the arrastre and the
carrier are, therefore, charged with and obligated to
deliver the goods in good condition to the consignee."
Since the relationship of an arrastre operator and a
consignee is akin to that between a warehouseman and
a depositor, then, in instances when the consignee
claims any loss, the burden of proof is on the arrastre
operator to show that it complied with the obligation
to deliver the goods and that the losses were not due to
its negligence or that of its employees.
the broker, Dynamic, cannot alone be held liable for
the additional 54 rolls of damaged goods since such
damage occurred during the following instances: (1)
while the goods were in the custody of the arrastre
ATI; (2) when they were in transition from ATI's
custody to that of Dynamic (i.e., during loading to
Dynamic's trucks); and (3) during Dynamic's custody.
While the trial court could not determine with pinpoint
accuracy who among the two caused which particular
damage and in what proportion or quantity, it was
clear that both ATI and Dynamic failed to discharge
the burden of proving that damage on the 54 rolls did
not occur during their custody. As for petitioner ATI,
in particular, what worked against it was the
testimony, as cited above, that its employees' use of
the wrong lifting equipment while loading the goods
onto Dynamic's trucks had a role in causing the
damage. Such is a finding of fact made by the trial
court which this Court, without a justifiable ground,
will not disturb,
The arrastre operator's principal work is that of
handling cargo, so that its drivers/operators or
employees should observe the standards and measures
necessary to prevent losses and damage to shipments
under its custody.

In the performance of its obligations, an arrastre the same was under the custody, control and
operator should observe the same degree of diligence possession of the arrastre operator.
as that required of a common carrier and a
warehouseman. As it is now established that there was negligence in
both petitioner ATI's and Dynamic's performance of
Being the custodian of the goods discharged from a their duties in the handling, storage and delivery of the
vessel, an arrastre operator's duty is to take good care subject shipment to San Miguel, resulting in the loss
of the goods and to turn them over to the party entitled of 54 rolls of kraft linear board, both shall be
to their possession. With such a responsibility, the solidarily liable for such loss.
arrastre operator must prove that the losses were not
due to its negligence or to that of its employees. And
to prove the exercise of diligence in handling the
subject cargoes, petitioner must do more than merely
show the possibility that some other party could be
responsible for the loss or the damage. It must prove
that it exercised due care in the handling thereof.

a mere sign-off from the customs broker's

representative that he had received the subject
shipment "in good order and condition without
exception" would not absolve the arrastre from
liability, simply because the representative's
signature merely signifies that said person thereby
frees the arrastre from any liability for loss or damage
to the cargo so withdrawn while the same was in the
custody of such representative to whom the cargo was
released, but it does not foreclose the remedy or right
of the consignee (or its subrogee) to prove that any
loss or damage to the subject shipment occurred while

 TORRES-MADRID BROKERAGE, INC.,
Petitioner –versus- FEB MITSUI MARINE
INSURANCE CO.,
INC. and BENJAMIN P. MANALAST AS, doing
business under the name of BMT TRUCKING
SERVICES, Respondents.
G.R. No. 194121, July 11, 2016, SECOND
DIVISION, BRION, J.
A brokerage may be considered a common carrier if it
also undertakes to deliver the goods for its customers.
The law does not distinguish between one whose
principal business activity is the carrying of goods and
one who undertakes this task only as an ancillary
activity.
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: (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.
FACTS: A shipment of various electronic goods
arrived at the Port of Manila for Sony Philippines, Inc.
(Sony). Previous to the arrival, Sony had engaged the
services of TMBI to facilitate, process, withdraw, and
deliver the shipment from the port to its warehouse in
Biñan, Laguna. TMBI - who BMT Trucking Services
(BMT), to transport the shipment from the port to the
Biñan warehouse. Four BMT trucks picked up the
shipment from the port. However, only three trucks
arrived at Sony’s Biñan warehouse. The fourth truck
driven by Rufo Reynaldo Lapesura was found
abandoned.
Sony filed an insurance claim with the Mitsui, the
insurer of the goods. After evaluating the merits of the
claim, Mitsui paid Sony the value of the lost goods.
After being subrogated to Sony’s rights, Mitsui sent
TMBI a demand letter for payment of the lost goods.
TMBI refused to pay Mitsui’s claim. As a result,
Mitsui filed a complaint against TMBI. TMBI, in turn,
impleaded Benjamin Manalastas, the proprietor of
BMT, as a third-party defendant. TMBI prayed that in
the event it is held liable to Mitsui for the loss, it
should be reimbursed by BMT

 RTC found TMBI and Benjamin Manalastas jointly
and solidarily liable to pay Mitsui. CA affirmed the
RTC’s decision. TMBI denies being a common carrier
because it does not own a single truck to transport its
shipment and it does not offer transport services to the
public for compensation and hence, it is not bound to
observe extra-ordinary diligence. Furthermore, TMBI
insists that the hijacking of the truck was a fortuitous
event which should exonerate its liability
ISSUES: 1. Whether TMBI is a common carrier.
(YES)
2. Whether TMBI should be held liable for the
hijacking of the truck. (YES)
3. Whether BMT should be held liable with TMBI.
(NO)
RULING: 1. TMBI is a common carrier. A brokerage
may be considered a common carrier if it also
undertakes to deliver the goods for its customers.
Common carriers are persons, corporations, firms or
associations engaged in the business of transporting
passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public.
In A.F. Sanchez Brokerage Inc. v. Court of Appeals,
we held that a customs broker - whose principal
business is the preparation of the correct customs
declaration and the proper shipping documents - is
still considered a common carrier if it also undertakes
to deliver the goods for its customers. The law does
not distinguish between one whose principal business
activity is the carrying of goods and one who
undertakes this task only as an ancillary activity.
Despite TMBI’s present denials, we find that the
delivery of the goods is an integral, albeit ancillary,
part of its brokerage services. TMBI admitted that it
was contracted to facilitate, process, and clear the
shipments from the customs authorities, withdraw
them from the pier, then transport and deliver them to
Sony’s warehouse in Laguna.
That TMBI does not own trucks and has to
subcontract the delivery of its clients’ goods, is
immaterial. As long as an entity holds itself to the
public for the transport of goods as a business, it is
considered a common carrier regardless of whether it
owns the vehicle used or has to actually hire one.
Lastly, TMBI’s customs brokerage services - including
the transport/delivery of the cargo - are available to
anyone willing to pay its fees. Given these
circumstances, we find it undeniable that TMBI is a
common carrier.

 2. TMBI is liable for the hijacking of the truck. 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: (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. 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
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: (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.
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.
3. TMBI and BMT are not solidarily liable to Mitsui.
TMBI’s liability to Mitsui does not stem from a quasi-
delict (culpa aquiliana) but from its breach of contract
(culpa contractual). The tie that binds TMBI with
Mitsui is contractual, albeit one that passed on to
Mitsui as a result of TMBI’s contract of carriage with
Sony to which Mitsui had been subrogated as an
insurer who had paid Sony’s insurance claim. The
legal reality that results from this contractual tie
precludes the application of Article 2194 on solidary
liability of the parties based on quasi-delict.
The Court likewise disagree with the finding that
BMT is directly liable to Sony/Mitsui for the loss of
the cargo. While it is undisputed that the cargo was
lost under the actual custody of BMT (whose
employee is the primary suspect in the hijacking or
robbery of the shipment), no direct contractual
relationship existed between Sony-Mitsui and BMT. If
at all, Sony/Mitsui’s cause of action against BMT
could only arise from quasi-delict, as a third party
suffering damage from the action of another due to the
latter’s fault or negligence, pursuant to Article 2176 of

the Civil Code. In the present case, Mitsui’s action is

solely premised on TMBI’s breach of contract. Mitsui
did not even sue BMT, much less prove any
negligence on its part. If BMT has entered the picture
at all, it is because TMBI sued it for reimbursement
for the liability that TMBI might incur from its
contract of carriage with Sony/Mitsui. Accordingly,
there is no basis to directly hold BMT liable to Mitsui
for quasi-delict.

The Court, however, do not say that TMBI must

absorb the loss. By subcontracting the cargo delivery
to BMT, TMBI entered into its own contract of
carriage with a fellow common carrier. Since BMT
failed to prove that it observed extraordinary diligence
in the performance of its obligation to TMBI, it is
liable to TMBI for breach of their contract of carriage.

 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 242860 March 11, 2019
THE LAND TRANSPORTATION
FRANCHISING AND REGULATORY BOARD
(LTFRB), and the DEPARTMENT OF
TRANSPORTATION (DOTr), Petitioners,
vs.
HON. CARLOS A. VALENZUELA, in his capacity
as PRESIDING JUDGE of the REGIONAL
TRIAL COURT OF MANDALUYONG CITY,
BRANCH 213 and DBDOYC, INC., Respondents.
PERLAS-BERNABE, J.::
FACTS
On May 8, 2015, the Department of Transportation
and Communications (DOTC), the predecessor of
DOTr, set the standard classifications for public
transport conveyances to be used as basis for the
issuance of a Certificate of Public Convenience (CPC)
for public utility vehicles (PUVs). The DOTC,
through DO 2015-11, created two (2) new
classifications, namely, Transportation Network
Companies (TNC) and Transportation Network
Vehicle Service (TNVS).
Although DO 2015-11 made mention of TNVS, the
term was not clearly defined until June 19, 2017,
when the DOTr issued DO 201 7-11 which set the
rules and procedures on the issuance of franchises for
public transport routes and services, including TNCs
and TNVS. DO 2017-11 further provided that
"[m]otorcycles x x x are likewise not allowed as
public transport conveyance."
Consequently, the LTFRB issued various
memorandum circulars to govern the issuance of the
necessary CPC for a TNVS and the accreditation of a
TNC. In its issuances, the LTFRB declared that a
TNC is treated as a transport provider, whose
accountability commences from the acceptance by its
TNVS while online. On the other hand, the
accountability of the TNVS, as a common carrier,
attaches from the time the TNVS is online and offers
its services to the riding public.
Meanwhile, on May 26, 2016, DBDOYC registered its
business with the Securities and Exchange
Commission (SEC), and subsequently, in December
2016, launched "Angkas," an online and on-demand
motorcycle-hailing mobile application (Angkas or
Angkas app) that pairs drivers of motorcycles with
potential passengers without, however, obtaining the
mandatory certificate of TNC accreditation from the
LTFRB. In this regard, DBDOYC accredited Angkas
drivers and allowed them to offer their transport
services to the public despite the absence of CPCs.

Cognizant of the foregoing, the LTFRB issued a press
release on January 27, 2017 informing the riding
public that DBDOYC, which is considered as a TNC,
cannot legally operate. Despite such warning,
however, DBDOYC continued to operate and offer its
services to the riding public sans any effort to obtain a
certificate ofTNC accreditation.
In response, DBDOYC, on July 4, 2018, filed a
Petition for Declaratory Relief with Application for
Temporary Restraining Order/Writ of Preliminary
Injunction19 against petitioners before the RTC
alleging that: (a) it is not a public transportation
provider since Angkas app is a mere tool that
connects the passenger and the motorcycle driver; (b)
Angkas and its drivers are not engaged in the delivery
of a public service.
RTC Ruling
In an Order 22 dated July 13, 2018, the RTC issued a
Temporary Restraining Order (TRO) finding
DBDOYC's business not subject to any regulation nor
prohibited under existing law. It added that since the
use of DBDOYC's internet-based mobile application
is not contrary to law, morals, good customs, public
order, or public policy, a clear and unmistakable right
has been established in favor of DBDOYC such that
if petitioners prohibit the operation of Angkas, the
same would cause irreparable injury to the company.
Aggrieved, petitioners are now before the Court
ascribing grave abuse of discretion on the part of the
R TC in issuing the writ of preliminary injunction
through the Assailed Order. Notably, in the present
petition, petitioners sought the issuance of a TRO to
enjoin the R TC from enforcing its injunctive writ,
which the Court granted in a Resolution 30 dated
December 5, 2018.
Respondent Contends
For its part, DBDOYC claims reprieve from the
above-stated regulatory measures, claiming that it and
its accredited drivers are not common carriers or
transportation providers. It argues that "[its]
technology [only] allows a biker willing to give a ride
and a passenger willing to pay the set price to meet
and contract with each other. Under this set-up, an
Angkas biker does not offer his/her service to an
indefinite public." Since the application "merely pairs
an Angkas biker with a potential passenger under a
fare scheme which [DBDOYC] fixes for both,
[DBDOYC] may not compel an Angkas driver to pick
up a potential passenger even after the latter confirms
a booking because as between the biker and the
passenger, there is but a purely private contractual
arrangement. "
ISSUE: Whether or not Transport Network
Vehicles and Companies such as Angkas are
common carriers.


HELD: YES.
As the DBDOYC itself describes, Angkas is a mobile
application which seeks to "pair an available and
willing Angkas biker with a potential passenger, who
requested for a motorcycle ride, relying on geo
location technology." Accordingly, it appears that it is
practically functioning as a booking agent, or at the
very least, acts as a third party liaison for its
accredited bikers. Irrespective of the application's
limited market scope, i.e., Angkas users, it remains
that, on the one hand, these bikers offer transportation
services to wiling public consumers, and on the other
hand, these services may be readily accessed by
anyone who chooses to download the Angkas app.
In De Guzman v. Court of Appeals, the Court
discussed the relation between Article 1732 of the
Civil Code and Section 13 (b) of the Public Service
Act, explaining that Article 1732 of the Civil Code
does not distinguish between a carrier who offers its
services to the general public and one who offers
services or solicits business only from a narrow
segment of the general population.
In this relation, DBDOYC posits that its accredited
bikers are private carriers as they do not hold out their
services generally to the public because they cannot
just be hailed on the street as they only contract via
the Angkas online front. However, the Court is hard-
pressed to rule - at least at this point, and for the
purpose of determining the validity of the writ of
preliminary injunction - that these bikers are only
private carriers who may publicly ply their trade
without any regulation.
As the Court observes, the genius behind the Angkas
app is that it removes the inconvenience of having to
physically hail for public transportation by creating a
virtual system wherein practically the same activity
may now be done at the tip of one's fingers. As it is the
trend of modern technology, previously cumbersome
mundane activities, such as paying bills, ordering
food, or reserving accommodations, can now be
accomplished through a variety of online platforms.
By DBDOYC's own description, it seems to be that
Angkas app is one of such platforms. As such, the fact
that its drivers are not physically hailed on the street
does not automatically render Angkas accredited
drivers as private carriers.
While DBDOYC further claims that another
distinguishing factor of its business is that "[its]
drivers may refuse at any time any legitimate demand
for service by simply not going online or not logging
in to the online platform," still when they do so log-
in, they make their services publicly available. In
other words, when they put themselves online, their
services are bound for indiscriminate public
consumption. Again, as also-mentioned above, Article

1732 defining a common carrier "carefully avoids
making any distinction between a person or enterprise
offering transportation service on a regular or
scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis." 57 This
doctrinal statement seems to be the apt response to
DBDOYC's assertion.
Moreover, based on the way the app works, it appears
that there is really no contractual discretion between
the Angkas bikers and would be passengers because
the app automatically pairs them up based on
algorithmic procedures. Whether or not the parties
once paired with each other have the choice to freely
accept, reject, or modify the terms of their
engagement based solely on their discretion is a matter
which appears to have not yet been traversed in the
proceedings below. Verily, the absence of any true
choice on these material contractual points apparently
contradicts the postulation that the Angkas app
merely facilitates a purely private arrangement
between the biker and his passenger.
That being said, the Court therefore concludes that no
clear and unmistakable right exists in DBDOYC's
favor; hence, the RTC gravely abused its discretion in
issuing the assailed injunctive writ. In the final
analysis, the business of holding one's self out as a
transportation service provider, whether done through
online platforms or not, appears to be one which is
imbued with public interest and thus, deserves
appropriate regulations. With the safety of the public
further in mind, and given that, at any rate, the above-
said administrative issuances are presumed to be valid
until and unless they are set aside, the nullification of
the assailed injunctive writ on the ground of grave
abuse of discretion is in order.
WHEREFORE, the petition is GRANTED. The
Order dated August 20, 2018 issued by the Regional
Trial Court of Mandaluyong City, Branch 213 (RTC)
directing the issuance of a writ of preliminary
injunction in R-MND-18-01453-SC is ANNULLED
and SET ASIDE. The RTC is hereby ORDERED to
conduct further proceedings, and thereafter, resolve
R-MND-18-01453-SC with utmost dispatch.
SO ORDERED.


ABELARDO LIM and ESMADITO GUNNABAN,
petitioners vs. COURT OF APPEALS and DONATO
H. GONZALES, respondents. G.R. No. 125817,
January 16, 2002 Bellosillo,J.:
FACTS: Sometime in 1982 private respondent Donato
Gonzales purchased an Isuzu passenger jeepney, from
Gomercino Vallarta, holder of a certificate of public
convenience for the operation of PUVs. Gonzales
continued offering the jeepney for public transport
services but he did not have the registration of the
vehicle transferred in his name nor did he secure for
himself a certificate of public convenience for its
operation. Thus, Vallarta remained on record as its
registered owner and operator.
On 22 July 1990, while the jeepney was running
northbound along, Meycauayan, Bulacan, it collided
with a ten-wheeler-truck owned by petitioner Abelardo
Lim and driven by his co-petitioner Esmadito
Gunnaban. Gunnaban owned responsibility for the
accident, explaining that while he was traveling
towards Manila the truck suddenly lost its brakes and
smashed into a Ferroza automobile, and later, into
private respondent's passenger jeepney driven by
Virgilio Gonzales. The impact caused severe damage
to both the Ferroza and the passenger jeepney and left
one (1) passenger dead and many others wounded.
Lim shouldered the costs for hospitalization of the
wounded, compensated the heirs of the deceased
passenger, and had the Ferroza restored to good
condition. He also offered to have the passenger
jeepney repaired at his shop which Gonzales did not
accept. Lim then offered him P20,000.00 which was
again rejected. Instead, Gonzales demanded a brand-
new jeep or the amount of P236,000.00. Lim increased
his bid to P40,000.00 but Gonzales also rejected it.
Hence, Gonzales filed a complaint against the
petitioners.
Meanwhile, the damaged passenger jeepney was left
by the roadside to corrode and decay. Gonzales
explained that he had no capability, financial or
otherwise, to tow the damaged vehicle. The trial court
upheld Gonzales’ claim and awarded him P236,000.00
as compensatory damages. The trial court held that as
vendee and current owner of the passenger jeepney,
Gonzales stood as the real party in interest. Gunnaban
was found by the trial court to have caused the
accident since he panicked in the face of an
emergency. On the other hand, Lim was held liable for
want of diligence in supervising his employees
because Gunnaban doubled as a mechanic of the truck
although he was not trained to do so. The petitioners
appealed to the CA which affirmed the decision of the
trial court. The CA concluded that while an operator
under the kabit system could not sue without joining

the registered owner of the vehicle as his principal,
equity demanded that the present case be made an
exception. Hence, this petition.
ISSUE: Whether or not Donato Gonzales was the real
party in interest in the suit, despite the fact that he is
not the registered owner under the certificate of public
convenience.
HELD: YES. The kabit system is an arrangement
whereby a person who has been granted a certificate
of public convenience allows other persons who own
motor vehicles to operate them under his license,
sometimes for a fee or percentage of the earnings.
Although the parties to such an agreement are not
outrightly penalized by law, the kabit system is
invariably recognized as being contrary to public
policy and therefore void and inexistent under Art.
1409 of the Civil Code. In the early case of Dizon v.
Octavio, the Court explained that one of the primary
factors considered in the granting of a certificate of
public convenience for the business of public
transportation is the financial capacity of the holder of
the license, so that liabilities arising from accidents
may be duly compensated. The kabit system renders
illusory such purpose and, worse, may still be availed
of by the grantee to escape civil liability caused by a
negligent use of a vehicle owned by another and
operated under his license. If a registered owner is
allowed to escape liability by proving who the
supposed owner of the vehicle is, it would be easy for
him to transfer the subject vehicle to another who
possesses no property with which to respond
financially for the damage done.
In the present case it is at once apparent that the evil
sought to be prevented in enjoining the kabit system
does not exist. First, neither of the parties to the
pernicious kabit system is being held liable for
damages. Second, the case arose from the negligence
of another vehicle in using the public road to whom no
representation, or misrepresentation, as regards the
ownership and operation of the passenger jeepney was
made and to whom no such representation, or
misrepresentation, was necessary.
Thus it cannot be said that private respondent
Gonzales and the registered owner of the jeepney were
in estoppel for leading the public to believe that the
jeepney belonged to the registered owner. Third, the
riding public was not bothered nor inconvenienced at
the very least by the illegal arrangement. On the
contrary, it was private respondent himself who had
been wronged and was seeking compensation for the
damage done to him. Certainly, it would be the height
of inequity to deny him his right. In light of the
foregoing, it is evident that private respondent has the
right to proceed against petitioners for the damage

caused on his passenger jeepney as well as on his

business. Any effort then to frustrate his claim of
damages by the ingenuity with which petitioners
framed the issue should be discouraged, if not
repelled. The Court also upheld that it is but just to
award Gonzales 236,000.00 as compensatory damages
for indemnification for damages comprehends not
only the value of the loss (damnum emergens)
suffered but also that of the profits which the obligee
failed to obtain (lucrum cessans).


Juaniza v. Jose
G.R. No. L-50127-28, 30 March 1979
FACTS:
Eugenio Jose, a registered owner and operator of the
passenger jeepney involved in an accident of collision
with a freight train of the PNR that took place in
November 1969 resulted in the 7 deaths and 5 physical
injuries of its passengers. That time, Eugenio was
married to Socorro but had been cohabiting with
Rosalia Arroyo, defendant-appellant for 16 years as
husband and wife. Trial court decision rendered them
jointly and severally liable to pay damages to the heir
of the deceased, Victor Juaniza. A motion was prayed
for by Rosalia for the decision to be reconsidered.
ISSUE:
Whether or not Eugenio and Rosalia are co-owners of
the jeepney.
RULING:
No. Eugenio and Rosalia are not co-owners of the
jeepney.
It has been consistently ruled by this Court that the co-
ownership contemplated in Article 144 of the Civil
Code requires that the man and the woman living
together must not in any way be incapacitated to
contract marriage. It is settled in our jurisprudence that
only the registered owner of a public service vehicle is
responsible for damages that may arise from
consequences incident to its operation, or maybe
caused to any of the passengers therein.
Since Eugenio Jose is legally married to Socorro
Ramos, there is an impediment for him to contract
marriage with Rosalia Arroyo. Under the afore-cited
provision of the Civil Code, Arroyo cannot be a co-
owner of the jeepney. The jeepney belongs to the
conjugal partnership of Jose and his legal wife. There
is therefore no basis for the liability of Arroyo for
damages arising from the death of, and physical
injuries suffered by, the passengers of the jeepney
which figured in the collision. Rosalia Arroyo, who is
not the registered owner of the jeepney can neither be
liable for damages caused by its operation.

 METRO MANILA TRANSIT CORPORATION vs.
REYNALDO CUEVAS
G.R. No. 167797, June 15, 2015
FACTS: Metro Manila Transit Corporation (MMTC)
and Mina’s Transit Corporation (Mina’s Transit)
entered into an agreement to sell dated August 31,
1990, whereby the latter bought several bus units from
the former at a stipulated price. They agreed that
MMTC would retain the ownership of the buses until
certain conditions were met, but in the meantime
Mina’s Transit could operate the buses within Metro
Manila.
On October 14, 1994, one of the buses subject of the
agreement to sell hit and damaged a Honda
Motorcycle owned by Reynaldo and driven by Junnel.
Reynaldo and Junnel sued MMTC and Mina’s Transit
for damages in the Regional Trial Court (RTC).
MMTC denied liability claiming that although it
retained the ownership of the bus, the actual operator
and employer of the bus driver was Mina’s Transit;
and that, in support of its cross-claim against Mina’s
Transit, a provision in the agreement to sell mandated
Mina’s Transport to hold it free from liability arising
from the use and operation of the bus units.
ISSUE1: Whether or not MMTC is liable considering
that it was not the actual operator and employer of the
bus driver
HELD1: YES. In view of MMTC’s admission in its
pleadings that it had remained the registered owner of
the bus at the time of the incident, it could not escape
liability for the personal injuries and property damage
suffered by the Cuevases. This is because of the
registered-owner rule, whereby the registered owner
of the motor vehicle involved in a vehicular accident
could be held liable for the consequences.
The Court has reiterated the registered-owner rule in
other rulings, like in Filcar Transport Services v.
Espinas, to wit:
x x x It is well settled that in case of motor vehicle
mishaps, the registered owner of the motor vehicle is
considered as the employer of the tortfeasor-driver,
and is made primarily liable for the tort committed by
the latter under Article 2176, in relation with Article
2180, of the Civil Code.
In Equitable Leasing Corporation v. Suyom, we ruled
that in so far as third persons are concerned, the
registered owner of the motor vehicle is the employer

of the negligent driver, and the actual employer is all or part of a claim asserted in the action against the
considered merely as an agent of such owner. cross-claimant.

MMTC could not evade liability by passing the buck

to Mina’s Transit. The stipulation in the agreement to
sell did not bind third parties like the Cuevases, who
were expected to simply rely on the data contained in
the registration certificate of the erring bus.

ISSUE2: May MMTC recover from Mina’s Transit

(the actual employer of the negligent driver)?

HELD2: YES. Although the registered-owner rule

might seem to be unjust towards MMTC, the law did
not leave it without any remedy or recourse.
According to Filcar Transport Services v.
Espinas, MMTC could recover from Mina’s Transit,
the actual employer of the negligent driver, under the
principle of unjust enrichment, by means of a cross-
claim seeking reimbursement of all the amounts that it
could be required to pay as damages arising from the
driver’s negligence. A cross-claim is a claim by one
party against a co-party arising out of the transaction
or occurrence that is the subject matter either of the
original action or of a counterclaim therein, and may
include a claim that the party against whom it is
asserted is or may be liable to the cross-claimant for

 Caravan Travel and Tours International, Inc. v. Abejar
FACTS: Jesmariane Reyes was walking along the
west-bound lane of Sampaguita St., United Paranaque
subdivision, Paranaque city. A Mitsubishi L-300 van
was travelling along the east-bound lane opposite
Reyes. To avoid an incoming vehicle, the van swerved
left and hit Reyes.Alex Espinosa, a witness, went to
her aid and loaded her in the back of the van. Espinosa
told the driver of the van, Jimmy Bautista, to bring
Reyes to the hospital. Instead, Bautista left the van
parked inside a nearby subdivision with Reyes still in
the van. Thereafter, an unidentified civilian came to
help and drove Reyes to the hospital. The registered
owner of the van was Caravan, which is a corporation
engaged in the business of organizing travel and tours.
Bautista was Caravan’s employee assigned to drive the
van as a service driver. Caravan shouldered the
hospitalization expenses of Reyes, but Reyes died 2
days after the accident.
Respondent Ermilinda Abejar, Reyes’ paternal
aunt and who raised Reyes since she was 9 years old,
filed in RTC a complaint for damages against Bautista
as Caravan’s employee and Caravan as the registered
owner. Bautista was dropped as defendant since
summons could not be served upon him.
RTC ruled that Bautista was grossly negligent in
driving the vehicle. Hence this petition.
Caravan argues that Abejar is not a real-party-
in-interest for she does not exercise legal or substitute
parental authority, nor is she judicially appointed as
guardian of Reyes, or her only living relative. Abejar
is also not the executor or administrator of the estate
of Reyes. According to Caravan, only the victim
herself or her hairs can enforce an action based on
culpa aquilana such as Abejar’s action for damages.
Caravan also excuses itself from liability on the
premise that it exercised diligence of a good father of
a family in the selection and supervision of its
employees.
ISSUES:
1. Whether Abehar is a real party-in-interest to file
this suit.
2. Whether Caravan is liable for the death of
Reyes.
HELD: We deny the petition.

1. YES. Abehar’s capacity to file a complaint stems
from her having exercised substitute parental authority
over Reyes. Under the Article 216 of the Family Code,
in default of parents or a judicially appointed
guardian, the following persons shall exercise
substitute parental authority over the child in the order
indicated xxx (3) The child's actual custodian, over
twenty-one years of age, unless unfit or disqualified.
Also, Art. 233 of FC states that “the person exercising
substitute parental authority shall have the same
authority over the person of the child as the parents.”
Reyes’ parents and paternal grandparents are
deceased. The whereabouts of her maternal
grandparents are unknown, and she has no record that
she has any siblings. Abehar took custody of Reyes
when she was a child and assumed the role of her
parents, and thus exercised substitute parental
authority over her. As Reyes’ custodian, Abehar
exercised the statutorily recognized rights and duties
of a parent. Thus, Abehar’s right to proceed against
Caravan is based on two grounds: first, Abehar
suffered the same anguish that a natural parent would
have felt upon loss of one’s child; second, Abehar is
capacitated to do what Reyes’ parents would have
been capacitated to do.
Even if Reyes was already 18 years old when she
died. While parental authority terminates upon
emancipation, Abehar continued to support and care
for Reyes. Except for the legal technicality of Reyes’
emancipation, her relationship with Abehar remained
the same. The anguish caused to Abehar was no
different because of the emancipation.
In The Receiver for North Negros v. Ybanez, we
ruled that Art. 1902 of the old Civil Code (now Art.
2176) is broad enough to accommodate even plaintiffs
who are not relatives of the deceased. The article does
not limit or specify the active subjects, much less the
relation that must exist between the victim of the culpa
aquiliana and the person who may recover damages,
thus warranting the inference that, in principle,
ANYBODY who suffers any damage from culpa
aquiliana, whether a relative or not of the victim, may
recover damages from the person responsible therefor.
2. YES. Contrary to Caravan’s contention, it was not
fatal to Abehar’s cause that she did not prove that
Bautista acted within the scope of his authority. It was
sufficient that Abehar proved that Caravan was the
registered owner of the van that hit Reyes.
We must consider two rules:

 1. Art. 2180’s specification that employers are liable
for damages caused by their employees “acting within
the scope of their assigned tasks.”
2. REGISTERED OWNER RULE: That registered
owners are liable for the death or injuries caused by
operation of their vehicles.
These rules appear to be in conflict in cases
where the employer is also the registered owner. Art.
2180 requires proof that first, employment relationship
between the driver and owner, and second, the driver
acted within the scope of his assigned tasks. Applying
the registered owner rule only requires proof that the
defendant-employer is the registered owner.
There is no categorical statutory pronouncement
in the Land Transportation and Traffic Code
stipulating the liability of a registered owner. The
source of a registered owner’s liability is not a distinct
statutory provision, but remains to be Arts. 2176 and
2180 of NCC. Jurisprudence provides that Art. 2180
should “defer” to the registered owner rule, not that
Art. 2180 should be totally abandoned. Thus, we must
apply the registered owner rule in a manner that
harmonizes it with Arts. 2176 and 2180.
Therefore, the appropriate approach is that in
cases where both the registered-owner rule and Article
2180 apply, the plaintiff must first establish that the
employer is the registered owner of the vehicle in
question. Once the plaintiff successfully proves
ownership, there arises a disputable presumption that
the requirements of Article 2180 have been proven. As
a consequence, the burden of proof shifts to the
defendant to show that no liability under Article 2180
has arisen.
Abehar presented a copy of the certificate of
registration of the van which attests to Caravan’s
ownership thereof. Thus, a presumption that the
requirements of Art. 2180 have been satisfied arises.
Caravan must show that it is not liable under Art.
2180. Caravan admitted that Bautista was its
employee. Caravan was also unable to prove that
Bautista was not acting within the scope of his
assigned tasks at the time of accident. Caravan’s
supervisor, Sally Bellido, testified that she did not
know why Bautista was there in the place of accident.
This testimony does not affect the presumption that
Art. 2180’s requirements are satisfied. Mere
disavowals are not proof suffice to overturn a
presumption. Lastly, Caravan failed to prove that it
exercised the required diligence in the selection and
supervision of Bautista. It contented itself with

 Bautista’s non-professional driver’s license when it

selected him. But employing a holder of non-
professional license to operate another’s motor vehicle
violates Section 24 of the Land Transportation Traffic
Code. Evidently, Caravan was not just negligent but it
also committed an actual violation of law. Caravan
submission memoranda and company rules are also
insufficient since Caravan failed to prove actual
compliance therewith. It is not enough to emptily
invoke company guidelines and policies on hiring and
supervision. There must be showing that they were
being complied with. Thus, Caravan, in failing to
overturn the presumption that Art. 2180’s
requirements are satisfied, must be held liable.