Transpo October 8 2020 From

EXCEPTION:
Accommodation passengers – invited guest.
Lourdes Lara, et al. v. Brigido Valencia, G.R. No. L-9907, 30 June 1958;
DAMAGES; AUTOMOBILE; INVITED GUEST; OWNERS DUTY TO EXERCISE

ORDINARY OR REASONABLE CARE. — The owner and driver of a vehicle owes to
accommodation passengers or invited guests merely the duty to exercise reasonable care so that
they may be transported safely to their destination. Thus, "The rule is established by weight of
authority that the owner or operator of an automobile owes the duty to an invited guest to
exercise reasonable care in its operation, and not unreasonably to expose him to danger and
injury by increasing the hazard of travel. The owner of the vehicle in the case at bar is only
required to observe ordinary care, and is not in duty bound to exercise extraordinary diligence as
required by our law. (Articles 1755 and 1756, new Civil Code).
LIABILITY OF CARRIER; PASSENGERS INJURY ON HIS OWN NEGLIGENCE. — A

passenger must observe the diligence of a father of a family to avoid injury to himself (Article
1761, new Civil Code) which means that if the injury to the passenger has been proximately
caused by his own negligence, the carrier cannot be held liable.
FACTS: The deceased was an inspector of the Bureau of Forestry stationed in Davao. The
defendant is engaged in the business of exporting logs from his lumber concession in
Cotabato.
Lara went to said concession upon instructions of his chief to classify the logs of defendant
which were about to be loaded on a ship anchored in the port of Parang.
Lara boarded with several others a pick-up bound for Davao and were seated at the back on an
improvised bench. A person by the name of Leoning was seated on a box located on the left side
while in the middle Lara sat on a bag. Before leaving Parang, defendant invited Lara to sit with
him on the front seat but Lara declined. It was their understanding that upon reaching barrio
Samoay, Cotabato, the passengers were to alight and take a bus bound for Davao, but when they
arrived at that place, only Bernardo alighted and the other passengers requested defendant to
allow them to ride with him up to Davao because there was then no available bus that they could
take in going to that place. Defendant again accommodated the passengers.
When they continued their trip, the sitting arrangement of the passengers remained the same,
Lara being seated on a bag in the middle with his arms on a suitcase and his head covered by a
jacket. Upon reaching Km. 96, barrio Catidtuan, Lara accidentally fell from the pick-up and as a
result he suffered serious injuries. Valencia stopped the pick-up to see what happened to Lara.
He sought the help of the residents of that place and applied water to Lara but to no avail. They
brought Lara to the nearest place where they could find a doctor and not having found any they
took him to St. Joseph’s Clinic of Kidapawan. But when Lara arrived he was already dead.
ISSUE: Whether or not the respondent failed to exercise the ordinary required?
HELD: Yes.
The owner and driver of a vehicle owes to accommodation passengers or invited guests merely
the duty to exercise reasonable care so that they may be transported safely to their destination.
Thus, “The rule is established by weight of authority that the owner or operator of an
automobile owes the duty to an invited guest to exercise reasonable care in its operation,
and not unreasonably to expose him to danger and injury by increasing the hazard of
travel.
The owner of the vehicle in the case at bar is only required to observe ordinary care, and is not
in duty bound to exercise extraordinary diligence as required by our law.
A passenger must observe the diligence of a father of a family to avoid injury to himself which
means that if the injury to the passenger has been proximately caused by his own negligence,
the carrier cannot be held liable.
All things considered, we are persuaded to conclude that the accident occurred not due to the
negligence of defendant but to circumstances beyond his control and so he should be exempt
from liability.
2. Who are bound?
 Contracting Parties – is an individual or business who enters into a binding agreement
with another contracting party, thus accepting the obligations, responsibilities, and
benefits specified within the agreement.
Baliwag Transit Inc. v. CA, G.R. No. 57493, 07 January 1987;

FACTS: Martinez, claiming to be an employee of two bus lines operating under different
grants of franchise but were issued only one ID Number: “Baliwag Transit” owned and
operated by the late Tuazon and “Baliwag Transit Inc” (BTI) owned by de Tengco,
(Martinez) filed a petition with the Social Security Commission to compel BTI to remit his
premium contributions to SSS.
BTI denied ever employing Martinez, and alleges that he was in fact employed by Tuason
who operated a separate and distinct bus line from BTI.
The Social Security Commission granted Martinez’s petition.
On appeal, the CA reversed the decision of the commission, finding that Tuason was operating
under the kabit system; that while Tuason was the owner and operator, his buses were not
registered with the Public Service Commission in his own name; and thus ordered BTI to
remit Martinez’ premiums to SSS.
ISSUE: W/N the issuance by SSS of one ID Number to the two bus lines necessarily indicates
that one of them is operating under the kabit system?
HELD: No.
The “Kabit System” has been defined by the Supreme Court as an arrangement “whereby a
person who has been granted a certificate of convenience allows another person who owns motor
vehicles to operate under such franchise for a fee.”
The determining factor, therefore, is the possession of a franchise to operate which negates the
existence of the “Kabit System” and not the issuance of one SSS ID Number for both bus lines
from which the existence of said system was inferred.
Thus, it is evident that both bus lines operated under their own franchises but opted to retain the
firm name “Baliwag Transit” with slight modification, by the inclusion of the word “Inc.” in the
case of herein petitioner, obviously to take advantage of the goodwill such firm name enjoys
with the riding public.
Conversely, the conclusion of the Court of Appeals that the late Pascual Tuazon, during the time
material to this case operated his buses under the “Kabit System” on the ground that while he
was actually the owner and operator, his buses were not registered with the Public Service
Commission (now the Bureau of Land Transportation) in his own name, is not supported by
the records.
EXCEPTIONS:
Cargador –
Sulpicio Lines, Inc. v. CA and Jacinta Pamalaran, G.R. No. 106279, 14 July 1995;
This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court to reverse
the Decision dated April 8, 1992 of the Court of Appeals in CA-G.R. CV No. 21919, affirming
the decision of the Regional Trial Court of Bohol, Branch 2, Tagbilaran City, which awarded the
claim for damages filed by private respondent against CBL Timber Corporation (CBL), AGO
Lumber Company (ALC), Sulpicio Lines, Inc. (SLI) and Ernie Santiago (Civil Case No. 2864).
We deny the petition.
I. A contract of carriage was entered into between petitioner and ALC for the transport of the
latter's timber from Pugad, Lianga, Surigao del Sur.
On March 17, 1976, petitioner sent its tugboat "MT Edmund" and barge "Solid VI" to
Lianga to pick up ALC's timber.
However, no loading could be made because of the heavy downpour. The next morning,
several stevedores of CBL, who were hired by ALC, boarded the "Solid VI" and opened its
storeroom.
The stevedores were warned of the gas and heat generated by the copra stored in the holds of
the ship. Not heeding the warning, a stevedore entered the storeroom and fell unconscious.
Two other stevedores followed, one of whom was Leoncio L. Pamalaran. He also lost
consciousness and eventually died of gas poisoning.
Thus, Civil Case No. 2864 for damages was filed with the Regional Trial Court of Bohol, Branch
2, Tagbilaran by Pamalaran's heirs against petitioner CBL, ALC and its manager, Ernie Santiago.
The TRIAL COURT ruled in favor of plaintiffs, disposing as follows:
On appeal, the COURT OF APPEALS in its Decision dated April 8, 1992 in CA-G.R. No. CV
No. 21919, AFFIRMED the lower court's decision, the dispositive portion of which reads:
ISSUE: Petitioner raises the following arguments:
1. Pamalaran was never a passenger of petitioner. Therefore, it is not liable as a common carrier;
2. Petitioner and its employees were not negligent in the series of events which led to the death
of Pamalaran;
3. Petitioner is not liable under Article 2180 of the New Civil Code;
4. It is CBL and/or ALC which should be held liable for the death of the victim; and,
5. Petitioner should have been granted its just and valid counterclaims and cross claims.
We agree with the Court of Appeals that although Pamalaran was never a passenger of
petitioner, still the latter is liable as a common carrier for his death.
The Court of Appeals relied on Canas v. Dabatos, Court of Appeals Report 918 (1965).
In said case, 13 persons were on board the vessel of defendant not as passengers but as
'cargadores' of the shipper's goods. They were there with the consent and knowledge of
the owner of the vessel. Despite the absence of a passenger-carrier relationship between
them, the appellate court, just the same, held the patron thereof liable as a common
carrier.
ALC had a contract of carriage with petitioner. The presence of the stevedores sent by ALC
on board the barge of petitioner was called for by the contract of carriage.
For how else would its lumber be transported unless it is placed on board? And by whom? Of
course, the stevedores. Definitely, petitioner could not expect the shipper itself to load the
lumber without the aid of the stevedores. Furthermore, petitioner knew of the presence and role
of the stevedores in its barge and thus consented to their presence. Hence, petitioner was
responsible for their safety while on board the barge.
Petitioner next claims that its employees even warned the stevedores and tried to prevent their
entry into the storeroom. Such argument, again, is demolished by the findings of the Court of
Appeals, thus:
. . . . However, appellant failed to prove that its employees were actually trained or
given specific instructions to see to it that the barge is fit and safe not only in
transporting goods but also for people who would be loading the cargo into the
bodega of the barge. It is not enough that appellant's employees have warned the
laborers not to enter the barge after the hatch was opened.
Appellant's employees should have been sufficiently instructed to see to it that the hatch of the
barge is not opened by any unauthorized person and that the hatch is not easily opened by
anyone. At the very least, precautionary measures should have been observed by appellant's
employees to see to it that no one could enter the bodega of the barge until after they have made
sure that it is safe for anyone to enter the same. Failing to exercise due diligence in the
supervision of its employees, the lower court was correct in holding appellant liable for damages
(Rollo, pp. 31-32; Emphasis supplied).
Inasmuch as the findings of the Court of Appeals are merely an affirmance of the findings of the
trial court, which findings are supported by the evidence, we do not find any reason to reverse
the same.
There is no quarrel that ALC and CBL are also liable as they were in fact held liable by both the
trial and appellate courts.
Both the counterclaims and cross claims of petitioner are without legal basis. The counterclaims
and cross claims were based on the assumption that the other defendants are the ones solely
liable.
However, inasmuch as its solidary liability with the other defendants has clearly been established
by both the trial and the appellate courts, which we find to be in order, we cannot make a
different conclusion contrary to that of the said courts.
Finally, the indemnity for the death of Leoncio L. Pamalaran is increased from P40,000.00 to
P50,000.00 in accordance with our ruling in People v. Flores, 237 SCRA 653 (1994).
WHEREFORE, the Decision of the Court of Appeals is AFFIRMED with the MODIFICATION
that the award of actual and compensatory damages is increased to P50,000.00.
Co-pilot –
Philippines Airlines v. CA and Jesus Samson, G.R. No. L-46558, 31 July 1981;
Lessons Applicable: Exceptions to Contracting Parties (Transportation)
FACTS: December 1950, Jesus V. Samson complained to PAL through its authorized official
about the slow reaction and poor judgment of Captain Bustamante. Notwithstanding said
complaint, defendant allowed the pilot to continue flying.
January 8, 1951: Jesus V. Samson flew as co-pilot on a regular flight from Manila to Legaspi
with stops at Daet, Camarines Norte and Camarines Sur, with Captain Bustamante as
commanding pilot of a PAL C-47 plane.
On attempting to land the plane at Daet airport, Captain Bustamante due to his very slow
reaction and poor judgment overshot the airfield and as a result, notwithstanding the diligent
efforts of the Samson to avert an accident, the airplane crashlanded beyond the runway; that the
jolt caused the head of the plaintiff to hit and break through the thick front windshield of the
airplane causing him severe brain concussion, wounds and abrasions on the forehead with
intense pain.
Instead of expert and proper medical treatment called for by the nature and severity of his
injuries, PAL simply referred him to a company physician, a general medical practitioner, who
limited the treatment to the exterior injuries without examining the severe brain concussion.
Several days after the accident, PAL called back the Samson to active duty as co-pilot, and was
never given any examination.
He had been having periodic dizzy spells and had been suffering from general debility and
nervousness.
December 21, 1953: he was discharged due to his physical disability.
CFI: PAL to pay the Samson;

P1988,000.00 as unearned income or damages
P50,000.00 for moral damages
P20,000.00 as attorney’s fees
P5,000.00 as expenses of litigation
CA: modified entitled to the legal rate of interest on unearned income.
ISSUE: W/ PAL was negligent and was liable?
HELD: YES. affirmed with slight modification in that the correct amount of compensatory
damages is P204,000.00.
Even the doctors presented by PAL admit vital facts about the brain injury. Dr. Bernardo and Dr.
Reyes admits that due to the incident, the plaintiff continuously complained of his fainting spells,
dizziness and headache everytime he flew as a co-pilot and everytime he went to the clinic no
less than 25 times.
We also find the imputation of gross negligence by respondent court to PAL for having
allowed Capt. Delfin Bustamante to fly on that fateful day of the accident on January 8,
1951 to be correct.
Bustamante was sick. He admittedly had tumor of the nasopharynx (nose).
The fact that the complaint was not in writing does not detract anything from the seriousness
thereof, considering that a miscalculation would not only cause the death of the crew but also of
the passengers.
One month prior to the crash-landing, when the pilot was preparing to land in Daet, plaintiff
warned him that they were not in the vicinity of Daet but above the town of Ligao. The plane hit
outside the airstrip. In another instance, the pilot would hit the Mayon Volcano had not Samson
warned him.
At least, the law presumes the employer negligent imposing upon it the burden of proving that it
exercised the diligence of a good father of a family in the supervision of its employees.
PAL would want to tie Samson to the report he signed about the crash-landing. The report
was prepared by his pilot and because the latter pleaded that he had a family too and
would have nowhere to go if he lost his job, Samson’s compassion would not upturn the
truth about the crash-landing
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 the vigilance over the goods is further expressed in
Articles 1734, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety
of the passengers is further set forth in articles 1755 and 1756.
Art. 1755. A common carrier is bound to carry the passenger 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.
Art. 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.
Article 2205 of the New Civil Code of the Philippines “damages may be recovered for
loss or impairment of earning capacity in cases of temporary or permanent personal
injury."
Art. 1711. Owners of enterprises and other employers are obliged to pay compensation
for the death or injuries to their laborers, workmen, mechanics or other employees, even
though the event may have been purely accidental or entirely due to a fortuitous cause, if
the death or personal injury arose out of and in the course of the employment.
The employer is also liable for compensation if the employee contracts any illness or
disease caused by such employment or as the result of the nature of the employment.
If the mishap was due to the employee’s own notorious negligence, or voluntary act, or
drunkenness, the employer shall not be liable for compensation.
When the employee’s lack of due care contributed to his death or injury, the
compensation shall be equitably reduced.
Art. 1712. If the death or injury is due to the negligence of a fellow-worker, the latter and
the employer shall be solidarily liable for compensation. If a fellow-worker’s intentional
or malicious act is the only cause of the death or injury, the employer shall not be
answerable, unless it should be shown that the latter did not exercise due diligence in the
selection or supervision of the plaintiffs fellow-worker.
Articles 1169, 2209 and 2212 of the Civil Code govern when interest shall be computed.
The correct amount of compensatory damages upon which legal interest shall accrue from the
filing of the complaint is P204,000.00 as herein computed and not P198,000.00.
3. Ancillary contracts;
Arrastre – A person/entity who/which performs portside cargo handling operations, e.g.

receiving, handling, custody, security and delivery of cargo passing over piers, quays or
wharves, transit sheds/warehouses and open storages within the jurisdictional area of
responsibility of the authorized contractor/operator.
Delgado Brothers, Inc. v. Home Insurance Company and the Court of Appeals, G.R. No. L-
16567, 27 March 1961;
Lessons Applicable: Ancillary Contracts (Transportation)
FACTS: February 17, 1955: Victor Bijou & Co. shipped at New York for Manila aboard the
vessel S.S. Leoville and consigned to the Judy Philippines, Inc. of Manila, a shipment of 1 case
Linen Handkerchiefs and 2 cases cotton piece goods, for which, the New York agent of said
vessel, the Barber Steamship Lines, Inc., issued Bill of Lading No. 119.
Shipment was insured with Home Insurance, Inc. by the shipper and/or consignee.
March 30, 1955: vessel arrived at the Port of Manila and delivered 1 case of Linen
Handkerchiefs in bad order, with a shortage of 503 yards of Linen Print Handkerchiefs, to the
prejudice, loss and damage of shipper and or consignee in the sum of P1,287.20 so they filed a
claim against Home Insurance Inc.
March 7, 1956: Home Insurance Inc. filed against contractor Delgado Brothers Inc.
TRIAL COURT: dismissed the case in
Since no claim was filed within the 15-day period from the date of the arrival of the goods
before they could file a suit in the court of proper jurisdiction within 1 year from the date of said
arrival at the Port of Manila, it is completely relieved and released of any and all liability for loss
or damage under the law and in accordance with the pertinent provisions of the management
Contract with the Bureau of Customs, covering the operation of the Arrastre Service for the Port
of Manila; and that petitioner in no way acts as an agent of the carrying vessel or of the importer
or consignee.
CA: reversed because of lack of jurisdiction it being a maritime contract should be handled by
the Municipal Court.
ISSUE: W/N the case has prescribed according to maritime law (arrastre being a maritime case)?
HELD: NO.
In case of controversy involving both maritime and nonmaritime subject matter, where the
principal matter involved belongs to the jurisdiction of a court of common law or of equity,
admiralty will not take cognizance of incidental maritime matters connected therewith but will
relegate the whole controversy to the appropriate tribunal.
Both as to the nature of the functions and the place of their performance (upon wharves and piers
shipside), Brother's services are clearly not maritime but arrastre services.
They are no different from those of a depositary or warehouseman.
To give admiralty jurisdiction over a contract as maritime, such contract must relate to the trade
and business of the sea; it must be essentially and fully maritime in its character; it must provide
for maritime services, maritime transactions, or maritime casualties.
Delgado Brothers, Inc. has nothing to do with the loading or unloading of cargoes to and from
the ships. Its operation on and its responsibility for the merchandise and goods begins from the
time they are placed upon the wharves or piers or delivered along sides of ships.
Court of First Instance of Manila has jurisdiction in cases where suit is brought directly against
the carrier or shipowner.
Respondent cannot invoke the rule against multiplicity of suits, for the simple reason that said
rule has to be subservient to the superior requirement that the court must have jurisdiction
Insurance - Mayer Steel Pipe Corp. v. CA, G.R. No. 124050, 19 June 1997;
Lessons Applicable: Ancillary Contracts (transportation)
FACTS: 1983: Hongkong Government Supplies Department (Hongkong) contracted Mayer

Steel Pipe Corporation (Mayer) to manufacture and supply various steel pipes and fittings.
August to October, 1983: Mayer shipped the pipes and fittings to Hongkong as evidenced by
Invoice Nos. MSPC-1014, MSPC-1015, MSPC-1025, MSPC-1020, MSPC-1017 and MSPC-
1022.
Prior to the shipping, Mayer insured the pipes and fittings against all risks with South Sea
Surety and Insurance Co., Inc. (South Sea) and Charter Insurance Corp. (Charter).
South Sea: Invoice Nos. MSPC-1014, 1015 and 1025 for US$212,772.09.
Charter: Invoice Nos. 1020, 1017 and 1022 for US$149,470.00.
Mayer and Hongkong jointly appointed Industrial Inspection (International) Inc. as third-party
inspector to examine whether the pipes and fittings are manufactured in accordance with the
specifications in the contract.
Industrial Inspection certified all the pipes and fittings to be in good order condition before they
were loaded in the vessel.
When the goods reached Hongkong, it was discovered that a substantial portion thereof was
damaged.
Mayer and Hongkong a claim against private respondents for indemnity under the insurance
contract.
Charter paid petitioner Hongkong the amount of HK$64,904.75, demanded payment of the
balance of HK$299,345.30 which was refused.
April 17, 1986: filed an action to recover HK$299,345.30.
Defense: insurance surveyor's report allegedly showed that the damage is a factory defect.
TRIAL COURT: in favor of Mayer and Hongkong.
CA: reversed.
affirmed the finding of the trial court that the damage is not due to factory defect and that it was
covered by the "all risks" insurance policies.
BUT held that Section 3(6) of the Carriage of Goods by Sea Act provides that "the carrier and
the ship shall be discharged from all liability in respect of loss or damage unless suit is brought
within one year after delivery of the goods or the date when the goods should have been
delivered applies not only to the carrier but also to the insurer.
ISSUE: W/N Section 3(6) of the Carriage of Goods by Sea also applies to insurer?
HELD: NO. Petition is granted. CA reversed. RTC reinstated.
Section 3(6) of the Carriage of Goods by Sea Act states that the carrier and the ship shall be
discharged from all liability for loss or damage to the goods if no suit is filed within one year
after delivery of the goods or the date when they should have been delivered.
Under this provision, only the carrier's liability is extinguished if no suit is brought within one
year. But the liability of the insurer is not extinguished because the insurer's liability is
based not on the contract of carriage but on the contract of insurance - governed by the
Insurance Code.
An insurance contract is a contract whereby one party, for a consideration known as the
premium, agrees to indemnify another for loss or damage which he may suffer from a specified
peril.
"all risks" insurance policy covers all kinds of loss other than those due to willful and
fraudulent act of the insured prescribes in ten years, in accordance with Article 1144 of the New
Civil Code.
Repairs –
The Government of the Philippine Islands v. The Insular Maritime Co., G.R. No. L21495,
18 March 1924;
The Government of the Philippine Islands seeks by this action to recover from The Insular
Maritime Company the sum of P30,437.91 for repairs made by the Bureau of Commerce and
Industry on the motor ship Insular.
The Insular Maritime Company was organized with a capital of P150,000. It became the owner
of one vessel only, the Insular, valued at P150,000.
On October 29, 1919, The Insular Maritime Company asked the Bureau of Commerce and
Industry to perform certain repairs on the Insular. The Government consented and
terminated said repairs on November 29 of the same year. Subsequent thereto, on April 15,
1920, the Insular suffered a total loss by fire.
The bill prepared by the chief accountant of the Bureau of Commerce and Industry for work
done on the motor ship Insular in the amount of P30,437.91, was dated July 31, 1920. Collection
of the claim was attempted pursuant to formal demand made by the Acting Insular Auditor of
date April 30, 1921.
It will thus be noted, as was emphasized by the defense and by His Honor, the trial judge, that no
steps were taken by the Government to secure payment for the repairs until after the loss of the
vessel Insular.
The first error assigned by the Attorney-General addressed to this finding of fact is accordingly
without merit.
The trial judge further found in effect, as a legal conclusion, that the loss of the vessel Insular
extinguished the obligation. The Attorney-General challenges the correctness of this view.
The decision of the trial judge was predicated on his understanding of the provisions of article
591 of the Code of Commerce in relation with other articles of the same Code, and with the
decision of this court in the case of Philippine Shipping Co. vs. Garcia Vergara ([1906], 6
Phil., 281).
As to the applicability of article 591 of the Code of Commerce, there is nothing in the language
to denote that the liability of the owners of a vessel is wiped out by the loss of that vessel.
As to the applicability of the decision in the case of Philippine Shipping Co. vs. Garcia
Vergara, supra, the facts are not the same.
There, the owners and agents of a vessel causing the loss of another vessel by collision were held
"not liable beyond the vessel itself causing the collision," but were "not required to pay such
indemnification for the reason that the obligation thus incurred has been extinguished on account
of the loss of the thing bound for the payment thereof."
Here; there is a contractual relation which remains unaffected by the loss of the thing
concerned in the contract and which is governed principally by the provisions of the Civil
Code.
The rights and liabilities of owners of ships are in many respects essentially the same as in the
case of other owners of things.
As a general rule, the owners of a vessel and the vessel itself are liable for necessary repairs.
Naturally the total destruction of the vessel extinguishes a maritime lien, as there is no
longer any res to which it can attach.
But the total destruction of the vessel does not affect the liability of the owners for repairs on the
vessel completed before its loss.
It is but fair to say that what has been stated in this decision more accurately expresses the
consensus of opinion in the court than it does the views of the writer, who sees more in the
appellee's case than do his colleagues in the court.
The trial court was accordingly right in its exposition of the fact but not in its application of the
law.
Judgment must therefore be as it is hereby reversed, and in lieu of the judgment appealed from,
another shall be entered here in favor of the plaintiff and against the defendant for the sum of
P30,437.91 with legal interest from July 20, 1921, when the complaint was presented, until
payment. Without special findings as to costs in either instance, it is so ordered.
4. Imbued with public interest - Welfare of the general public (in contrast to the selfish interest
of a person, group, or firm) in which the whole society has a stake and which warrants
recognition, promotion, and protection by the government and its agencies.
Air France v. Carrascoso, G.R. No. No. L-21438, 28 September 1966;
FACTS: On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine
Air Lines, Inc., issued to plaintiff a “first class” round trip airplane ticket from Manila to Rome.
From Manila to Bangkok, plaintiff travelled in “first class”, but at Bangkok, the Manager of the
defendant airline forced plaintiff to vacate the “first class” seat that he was occupying because
there was a “white man”, who, the Manager alleged, had a “better right” to the seat. When asked
to vacate his “first class” seat, the plaintiff, as was to be expected, refused, and told defendant’s
Manager that his seat would be taken over his dead body; a commotion ensued, and they came
all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man” and
plaintiff reluctantly gave his “first class” seat in the plane.
ISSUE: W/N there is a breach of contract of carriage between Air France and Carrascoso that
would hold Air France liable for damages?
HELD: Yes.
Petitioner’s contract with Carrascoso is one attended with public duty. The stress of Carrascoso’s
action as we have said, is placed upon his wrongful expulsion. This is a violation of public duty
by the petitioner air carrier — a case of quasi-delict. Damages are proper.
COMMON CARRIERS
Arts 1732 to 1766, Civil Code;
Art. 1732. Common carriers are persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public.
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 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 the
passengers is further set forth in Articles 1755 and 1756.
SUBSECTION 2. - Vigilance Over Goods
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.
Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding
article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have
been at fault or to have acted negligently, unless they prove that they observed extraordinary
diligence as required in Article 1733.
Art. 1736. The extraordinary responsibility of the common carrier lasts from the time the goods
are unconditionally placed in the possession of, and received by the carrier for transportation
until the same are delivered, actually or constructively, by the carrier to the consignee, or to the
person who has a right to receive them, without prejudice to the provisions of Article 1738.
Art. 1737. The common carrier's duty to observe extraordinary diligence over the goods remains
in full force and effect even when they are temporarily unloaded or stored in transit, unless the
shipper or owner has made use of the right of stoppage in transitu.
Art. 1738. The extraordinary liability of the common carrier continues to be operative even
during the time the goods are stored in a warehouse of the carrier at the place of destination, until
the consignee has been advised of the arrival of the goods and has had reasonable opportunity
thereafter to remove them or otherwise dispose of them.
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 flood, 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. The same duty is incumbent upon
the common carrier in case of an act of the public enemy referred to in Article 1734, No. 2.
Art. 1740. If the common carrier negligently incurs in delay in transporting the goods, a natural
disaster shall not free such carrier from responsibility.
Art. 1741. If the shipper or owner merely contributed to the loss, destruction or deterioration of
the goods, the proximate cause thereof being the negligence of the common carrier, the latter
shall be liable in damages, which however, shall be equitably reduced.
Art. 1742. Even if the loss, destruction, or deterioration of the goods should be caused by the
character of the goods, or the faulty nature of the packing or of the containers, the common
carrier must exercise due diligence to forestall or lessen the loss.
Art. 1743. If through the order of public authority the goods are seized or destroyed, the
common carrier is not responsible, provided said public authority had power to issue the order.
Art. 1744. A stipulation between the common carrier and the shipper or owner limiting the
liability of the former for the loss, destruction, or deterioration of the goods to a degree less than
extraordinary diligence shall be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the service rendered by the common
carrier; and
(3) Reasonable, just and not contrary to public policy.
Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust
and contrary to public policy:
(1) That the goods are transported at the risk of the owner or shipper;
(2) That the common carrier will not be liable for any loss, destruction, or deterioration of
the goods;
(3) That the common carrier need not observe any diligence in the custody of the goods;
(4) That the common carrier shall exercise a degree of diligence less than that of a good
father of a family, or of a man of ordinary prudence in the vigilance over the movables
transported;
(5) That the common carrier shall not be responsible for the acts or omission of his or its
employees;
(6) That the common carrier's liability for acts committed by thieves, or of robbers who
do not act with grave or irresistible threat, violence or force, is dispensed with or
diminished;
(7) That the common carrier is not responsible for the loss, destruction, or deterioration of
goods on account of the defective condition of the car, vehicle, ship, airplane or other
equipment used in the contract of carriage.
Art. 1746. An agreement limiting the common carrier's liability may be annulled by the shipper
or owner if the common carrier refused to carry the goods unless the former agreed to such
stipulation.
Art. 1747. If the common carrier, without just cause, delays the transportation of the goods or
changes the stipulated or usual route, the contract limiting the common carrier's liability cannot
be availed of in case of the loss, destruction, or deterioration of the goods.
Art. 1748. An agreement limiting the common carrier's liability for delay on account of strikes
or riots is valid.
Art. 1749. A stipulation that the common carrier's liability is limited to the value of the goods
appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding.
Art. 1750. A contract fixing the sum that may be recovered. by the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if it is reasonable and just under the
circumstances, and has been fairly and freely agreed upon.
Art. 1751. The fact that the common carrier has no competitor along the line or route, or a part
thereof, to which the contract refers shall be taken into consideration on the question of whether
or not a stipulation limiting the common carrier's liability is reasonable, just and in consonance
with public policy.
Art. 1752. Even when there is an agreement limiting the liability of the common carrier in the
vigilance over the goods, the common carrier is disputably presumed to have been negligent in
case of their loss, destruction or deterioration.
Art. 1753. The law of the country to which the goods are to be transported shall govern the
liability of the common carrier for their loss, destruction or deterioration.
Art. 1754. The provisions of Articles 1733 to 1753 shall apply to the passenger's baggage which
is not in his personal custody or in that of his employee. As to other baggage, the rules in
Articles 1998 and 2000 to 2003 concerning the responsibility of hotel-keepers shall be
applicable.
SUBSECTION 3. - Safety of Passengers
Art. 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.
Art. 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.
Art. 1757. The responsibility of a common carrier for the safety of passengers as required in
Articles 1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting of
notices, by statements on tickets, or otherwise.
Art. 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier's
liability for negligence is valid, but not for wilful acts or gross negligence.
The reduction of fare does not justify any limitation of the common carrier's liability.
Art. 1759. Common carriers are liable for the death of or injuries to passengers through the
negligence or wilful acts of the former's employees, although such employees may have acted
beyond the scope of their authority or in violation of the orders of the common carriers.
This liability of the common carriers does not cease upon proof that they exercised all the
diligence of a good father of a family in the selection and supervision of their employees.
Art. 1760. The common carrier's responsibility prescribed in the preceding article cannot be
eliminated or limited by stipulation, by the posting of notices, by statements on the tickets or
otherwise.
Art. 1761. The passenger must observe the diligence of a good father of a family to avoid injury
to himself.
Art. 1762. The contributory negligence of the passenger does not bar recovery of damages for
his death or injuries, if the proximate cause thereof is the negligence of the common carrier, but
the amount of damages shall be equitably reduced.
Art. 1763. A common carrier is responsible for injuries suffered by a passenger on account of
the wilful 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.
SUBSECTION 4. - Common Provisions
Art. 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title
XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a
passenger caused by the breach of contract by a common carrier.
Art. 1765. The Public Service Commission may, on its own motion or on petition of any
interested party, after due hearing, cancel the certificate of public convenience granted to any
common carrier that repeatedly fails to comply with his or its duty to observe extraordinary
diligence as prescribed in this Section.
Art. 1766. In all matters not regulated by this Code, the rights and obligations of common
carriers shall be governed by the Code of Commerce and by special laws.
4. The relevant factor in determining the status of a common carrier:
Public use - traditionally understood as strictly limited to actual "use by the public" has
already been abandoned. "Public use" has now been held to be synonymous with "public
interest," "public benefit," and "public convenience."
United States v. Tan Piaco, G.R. No. L-15122. March 10, 1920;
1. PUBLIC UTILITY, CONTROL BY PUBLIC UTILITY COMMISSION; CRIMINAL

LIABILITY OF OWNER OF AUTOMOBILE. TRUCK OPERATED UNDER SPECIAL
CONTRACT AND NOT FOR GENERAL PUBLIC BUSINESS. — The owner of an
automobile truck who operates the same under a special contract for carrying passengers and
freight, in each case, and has not held himself out to carry all passengers and freight for all
persons who might offer, is not a public utility and is not criminally liable for his failure to
obtain a license from the Public Utility Commissioner. If the use is merely optional with the
owner, or the public benefit is merely accidental, it is not a public use, authorizing the exercise of
the jurisdiction of the public utility commission. The true criterion by which to judge of the
character of the use is whether the public may enjoy it by right or only by permission.
Said defendants were charged with a violation of the Public Utility Law (Act No. 2307 as
amended by Acts Nos. 2362 and 2694), in that they were operating a public utility without
permission from the Public Utility Commissioner.
Upon the complaint presented each of said defendants were arrested and brought to trial. After
hearing the evidence the Honorable Cayetano Lukban, Judge, found that the evidence was
insufficient to support the charges against Ventura Estuya, Pedro Homeres, Maximino
Galsa and Emilio Leopando, and absolved them from all liability under the complaint and
discharged them from the custody of the law.
The LOWER COURT found the defendant Tan Piaco guilty of the crime charged in the
complaint and sentence him to pay a fine of P100, and, in case of insolvency, to suffer subsidiary
imprisonment, and to pay one- fifth part of the costs. : From that sentence Tan Piaco appealed to
this court.
The facts proved during the trial of the cause may be stated as follows:
The appellant rented two automobile trucks and was using them upon the highways of the
Province of Leyte for the purpose of carrying some passengers and freight; that he carried
passengers and freight under a special contract in each case; that he had not held himself out to
carry all passengers and all freight for all persons who might offer passengers and freight.
The Attorney-General, in a carefully prepared brief, says: "The question is whether the appellant,
under the above facts, was a public utility under the foregoing definitions," and was therefore
subject to the control and regulation of the Public Utility Commission. "We have not found
anything in the evidence showing that the appellant operated the trucks in question for public
use. These trucks, so far as indicated by the evidence and as far as the appellant is concerned,
furnished service under special agreements to carry particular persons and property. . . For all
that we can deduce from the evidence, these passengers, or the owners of the freight, may have
controlled the whole vehicles ’both as to contents, direction, and time of use,’ which facts, under
all the circumstances of the case, would, in our opinion, take away the defendant’s business
from the provisions of the Public Utility Act."
In support of the conclusion of the Attorney-General, he cites the case of Terminal Taxicab Co.
v. Kutz (241 U. S., 252).
In that case the Terminal Taxicab Co. furnished automobiles from its central garage on
special orders and did not hold itself out to accommodate any and all persons. The
plaintiff reserved to itself the right to refuse service. The Supreme Court of the United
States, speaking through Mr. Justice Holmes, said: "The bargains made by the plaintiff
are individual, and however much they may tend towards uniformity in price, probably
have not the mechanical fixity of charges that attend the use of taxicabs from the stations
to the hotels.
The court is of the opinion that that part of the business is not to be regarded as a public
utility. It is true that all business, and, for the matter of that, every life in all its details,
has a public aspect, some bearing upon the welfare of the country in which it is passed."
The court held that by virtue of the fact that said company did not hold itself out to serve
any and all persons, it was not a public utility and was not subject to the jurisdiction of
the public utility commission.
Upon the facts adduced during the trial of the cause, and for the foregoing reasons, the Attorney-
General recommends that the sentence of the lower court be revoked and that the appellant be
absolved from all liability under the complaint.
Section 14 of Act No. 2307, as amended by section 9 of Act No. 2694, provides that: "The
Public Utility Commission or Commissioners shall have general supervision and regulation of,
jurisdiction and control over, all public utilities. . . The term ’public utility’ is hereby defined to
include every individual, copartnership, association, corporation or joint stock company, etc.,
etc., that now or hereafter may own, operate, manage, or control any common carrier, railroad,
street railway, etc., etc., engaged in the transportation of passengers, cargo, etc., etc., for public
use."
Under the provisions of said section, two things are necessary: (a) The individual,
copartnership, etc., etc., must be a public utility; and (b) the business in which such individual,
copartnership, etc., etc., is engaged must be for public use. So long as the individual or
copartnership, etc., etc., is engaged in a purely private enterprise, without attempting to render
service to all who may apply, he can in no sense be considered a public utility, for public use.
"Public use" means the same as "use by the public." The essential feature of the public use is that
it 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 of the
character of the use is whether the public may enjoy it by right or only by permission.
For all of the foregoing reasons, we agree with the Attorney-General that the appellant was not
operating a public utility, for public use, and was not, therefore, subject to the jurisdiction of the
Public Utility Commission.
Therefore, the sentence of the lower court is hereby revoked, and it is hereby ordered and
decreed that the complaint be dismissed and that the defendant be absolved from all liability
under the same, and that he be discharged from the custody of the law, without any finding as to
cost. So ordered.
Asia Lighterage and Shipping, Inc., v. CA, G.R. No. 147246. Aug. 19, 2003;
On appeal is the Court of Appeals' May 11, 2000 Decision1 in CA-G.R. CV No. 49195 and
February 21, 2001 Resolution affirming with modification the April 6, 1994 Decision of the
Regional Trial Court of Manila which found petitioner liable to pay private respondent the
amount of indemnity and attorney's fees.
First, the facts.
On June 13, 1990, 3,150 metric tons of Better Western White Wheat in bulk, valued at
US$423,192.354 was shipped by Marubeni American Corporation of Portland, Oregon on board
the vessel M/V NEO CYMBIDIUM V-26 for delivery to the consignee, General Milling
Corporation in Manila, evidenced by Bill of Lading No. PTD/Man-4.5 The shipment was insured
by the private respondent Prudential Guarantee and Assurance, Inc. against loss or damage for
P14,621,771.75 under Marine Cargo Risk Note RN 11859/90.6
On July 25, 1990, the carrying vessel arrived in Manila and the cargo was transferred to the
custody of the petitioner Asia Lighterage and Shipping, Inc. The petitioner was contracted by the
consignee as carrier to deliver the cargo to consignee's warehouse at Bo. Ugong, Pasig City.
On August 15, 1990, 900 metric tons of the shipment was loaded on barge PSTSI III, evidenced
by Lighterage Receipt No. 03647 for delivery to consignee. The cargo did not reach its
destination.
It appears that on August 17, 1990, the transport of said cargo was suspended due to a warning of
an incoming typhoon. On August 22, 1990, the petitioner proceeded to pull the barge to
Engineering Island off Baseco to seek shelter from the approaching typhoon. PSTSI III was tied
down to other barges which arrived ahead of it while weathering out the storm that night. A few
days after, the barge developed a list because of a hole it sustained after hitting an unseen
protuberance underneath the water. The petitioner filed a Marine Protest on August 28, 1990.8 It
likewise secured the services of Gaspar Salvaging Corporation which refloated the barge.The
hole was then patched with clay and cement.
The barge was then towed to ISLOFF terminal before it finally headed towards the consignee's
wharf on September 5, 1990. Upon reaching the Sta. Mesa spillways, the barge again ran
aground due to strong current. To avoid the complete sinking of the barge, a portion of the goods
was transferred to three other barges.
The next day, September 6, 1990, the towing bits of the barge broke. It sank completely,
resulting in the total loss of the remaining cargo. A second Marine Protest was filed on
September 7, 1990.12
On September 14, 1990, a bidding was conducted to dispose of the damaged wheat retrieved and
loaded on the three other barges. The total proceeds from the sale of the salvaged cargo was
P201,379.75.14
On the same date, September 14, 1990, consignee sent a claim letter to the petitioner, and
another letter dated September 18, 1990 to the private respondent for the value of the lost cargo.
On January 30, 1991, the private respondent indemnified the consignee in the amount of
P4,104,654.22.15 Thereafter, as subrogee, it sought recovery of said amount from the petitioner,
but to no avail.
On July 3, 1991, the private respondent filed a complaint against the petitioner for recovery of
the amount of indemnity, attorney's fees and cost of suit.16 Petitioner filed its answer with
counterclaim.17
The REGIONAL TRIAL COURT ruled in favor of the private respondent. The dispositive
portion of its Decision states:
WHEREFORE, premises considered, judgment is hereby rendered ordering defendant

Asia Lighterage & Shipping, Inc. liable to pay plaintiff Prudential Guarantee &
Assurance Co., Inc. the sum of P4,104,654.22 with interest from the date complaint was
filed on July 3, 1991 until fully satisfied plus 10% of the amount awarded as and for
attorney's fees. Defendant's counterclaim is hereby DISMISSED. With costs against
defendant.18
Petitioner appealed to the Court of Appeals insisting that it is not a common carrier. The
appellate court affirmed the decision of the trial court with modification. The dispositive portion
of its decision reads:
WHEREFORE, the decision appealed from is hereby AFFIRMED with modification in

the sense that the salvage value of P201,379.75 shall be deducted from the amount of
P4,104,654.22. Costs against appellant.
SO ORDERED.
Petitioner's Motion for Reconsideration dated June 3, 2000 was likewise denied by the appellate
court in a Resolution promulgated on February 21, 2001.
Hence, this petition. Petitioner submits the following errors allegedly committed by the appellate
court, viz:19
(1) THE COURT OF APPEALS DECIDED THE CASE A QUO IN A WAY NOT IN
ACCORD WITH LAW AND/OR WITH THE APPLICABLE DECISIONS OF THE
SUPREME COURT WHEN IT HELD THAT PETITIONER IS A COMMON CARRIER.
SUPREME COURT WHEN IT AFFIRMED THE FINDING OF THE LOWER COURT A
QUO THAT ON THE BASIS OF THE PROVISIONS OF THE CIVIL CODE APPLICABLE
TO COMMON CARRIERS, "THE LOSS OF THE CARGO IS, THEREFORE, BORNE BY
THE CARRIER IN ALL CASES EXCEPT IN THE FIVE (5) CASES ENUMERATED."
SUPREME COURT WHEN IT EFFECTIVELY CONCLUDED THAT PETITIONER FAILED
TO EXERCISE DUE DILIGENCE AND/OR WAS NEGLIGENT IN ITS CARE AND
CUSTODY OF THE CONSIGNEE'S CARGO.
The issues to be resolved are:
(1) Whether the petitioner is a common carrier; and,
(2) Assuming the petitioner is a common carrier, whether it exercised extraordinary diligence in
its care and custody of the consignee's cargo.
On the first issue, we rule that petitioner is a common carrier.
Article 1732 of the Civil Code 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 contends that it is not a common carrier but a private carrier. Allegedly, it has no fixed
and publicly known route, maintains no terminals, and issues no tickets. It points out that it is not
obliged to carry indiscriminately for any person. It is not bound to carry goods unless it consents.
In short, it does not hold out its services to the general public.
We disagree.
In De Guzman vs. Court of Appeals, we held that the definition of common carriers in Article
1732 of the Civil Code makes no distinction between one whose principal business activity is
the carrying of persons or goods or both, and one who does such carrying only as an ancillary
activity. We also did not distinguish 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. Further, we ruled that Article 1732 does not distinguish between a carrier
offering its services to the general public, and one who offers services or solicits business only
from a narrow segment of the general population.
In the case at bar, the principal business of the petitioner is that of lighterage and drayage22 and
it offers its barges to the public for carrying or transporting goods by water for compensation.
Petitioner is clearly a common carrier.
In De Guzman,
We considered private respondent Ernesto Cendaña to be a common carrier even if his
principal occupation was not the carriage of goods for others, but that of buying used
bottles and scrap metal in Pangasinan and selling these items in Manila.
We therefore hold that petitioner is a common carrier whether its carrying of goods is done
on an irregular rather than scheduled manner, and with an only limited clientele. A
common carrier need not have fixed and publicly known routes. Neither does it have to
maintain terminals or issue tickets.
To be sure, petitioner fits the test of a common carrier as laid down in Bascos vs. Court of
Appeals.24 The test to determine a common carrier is "whether the given undertaking is a part
of the business engaged in by the carrier which he has held out to the general public as his
occupation rather than the quantity or extent of the business transacted."
In the case at bar, the petitioner admitted that it is engaged in the business of shipping and
lighterage,26 offering its barges to the public, despite its limited clientele for carrying or
transporting goods by water for compensation.27
On the second issue, we uphold the findings of the lower courts that petitioner failed to exercise
extraordinary diligence in its care and custody of the consignee's goods.
Common carriers are bound to observe extraordinary diligence in the vigilance over the goods
transported by them. They are presumed to have been at fault or to have acted negligently if the
goods are lost, destroyed or deteriorated.29 To overcome the presumption of negligence in the
case of loss, destruction or deterioration of the goods, the common carrier must prove that it
exercised extraordinary diligence. There are, however, exceptions to this rule. Article 1734 of
the Civil Code enumerates the instances when the presumption of negligence does not
attach:
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;
(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;
In the case at bar, the barge completely sank after its towing bits broke, resulting in the total
loss of its cargo. Petitioner claims that this was caused by a typhoon, hence, it should not be held
liable for the loss of the cargo. However, petitioner failed to prove that the typhoon is the
proximate and only cause of the loss of the goods, and that it has exercised due diligence before,
during and after the occurrence of the typhoon to prevent or minimize the loss.
The evidence show that, even before the towing bits of the barge broke, it had already previously
sustained damage when it hit a sunken object while docked at the Engineering Island. It even
suffered a hole. Clearly, this could not be solely attributed to the typhoon. The partly-submerged
vessel was refloated but its hole was patched with only clay and cement. The patch work was
merely a provisional remedy, not enough for the barge to sail safely. Thus, when petitioner
persisted to proceed with the voyage, it recklessly exposed the cargo to further damage. A
portion of the cross-examination of Alfredo Cunanan, cargo-surveyor of Tan-Gatue Adjustment
Co., Inc., states:
This is not all. Petitioner still headed to the consignee's wharf despite knowledge of an incoming
typhoon. During the time that the barge was heading towards the consignee's wharf on
September 5, 1990, typhoon "Loleng" has already entered the Philippine area of responsibility. A
part of the testimony of Robert Boyd, Cargo Operations Supervisor of the petitioner, reveals:
Accordingly, the petitioner cannot invoke the occurrence of the typhoon as force majeure to
escape liability for the loss sustained by the private respondent. Surely, meeting a typhoon head-
on falls short of due diligence required from a common carrier. More importantly, the
officers/employees themselves of petitioner admitted that when the towing bits of the vessel
broke that caused its sinking and the total loss of the cargo upon reaching the Pasig River, it was
no longer affected by the typhoon. The typhoon then is not the proximate cause of the loss of the
cargo; a human factor, i.e., negligence had intervened.
IN VIEW THEREOF, the petition is DENIED. The Decision of the Court of Appeals in CA-
G.R. CV No. 49195 dated May 11, 2000 and its Resolution dated February 21, 2001 are hereby
AFFIRMED. Costs against petitioner.
5. Which factors are not relevant in determining the status of a common carrier?
- Whether it is a regular or occasional business, or whether it is a principal or

ancillary activity.
Occasional Business - occurring, appearing, or done infrequently and irregularly.
Ancillary Business - providing necessary support to the primary activities or operation of

an organization, institution, industry, or system. (sideline)
Pedro De Guzman v. CA and Ernesto Cendana, G.R. No. L-47822, 22 December 1988;
FACTS: Respondent Ernesto Cendana, a junk dealer, owned two trucks for hauling scrap
materials to Manila. The trucks, on their return trip, were loaded with cargoes contracted with
various merchants to be delivered to different establishments in Pangasinan. Respondent
charged freight rates which were commonly lower than regular commercial rates.
He was contracted by petitioner, an authorized dealer of General Milk Company to haul 750
cartons of milk from its warehouse in Makati. 150 cartons were loaded on a truck driven by
respondent himself, while 600 cartons were placed on the other truck respondent’s driver and
employee. However, 600 boxes of milk were not delivered because the truck, while on its way
to Pangasinan, was held up by armed men and the driver and his helper were kidnapped.
RTC’s finding: Respondent a common carrier.

CA’s decision: Respondent was not liable for the value of the undelivered cargo. The transport
of return loads of freight is “a casual occupation — a sideline to his scrap iron business” and was
not engaged as a common carrier. The hijacking of respondent’s truck was force majeure
ISSUES:
1. Is the owner of the truck a common carrier?
2. Is he liable for the undelivered goods?
HELD:
SC affirmed the decision of the CA that the truck owner, although found to be a common
carrier, is not liable for the value of the undelivered merchandise which was lost because the
robbery is attended by grave or irresistible threat, violence or force and he had complied with the
rigorous standard of extraordinary diligence.
Article 1732 of the Civil Code 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.
This article makes no distinction between one whose principal business activity is the carrying of
persons or goods or both, and one who does such carrying only as an ancillary activity or as a
mere “sideline”. It makes no distinction between a person or enterprise offering transportation
or unscheduled basis.
Neither it distinguishes between a carrier offering its services to the “general public,” i.e., the
general community or population, and one who offers services or solicits business only from a
narrow segment of the general population.
If the goods are lost, destroyed or deteriorated, and the cause was not one of those enumerated in
Article 1734, the respondent is presumed to have been at fault or to have acted negligently but
this presumption may be overthrown by proof of extraordinary diligence on the part of
private respondent. He must proved that he observed extraordinary diligence as required by the
nature of their business and for reasons of public policy.
Under Article 1745 (6) a stipulation that the common carrier’s liability for acts committed by
thieves, or of robbers who do not act with grave or irresistible threat, violence or force, is
dispensed with or diminished is considered unreasonable, unjust and contrary to public policy.
In these circumstances, we hold that the occurrence of the loss must reasonably be regarded as
quite beyond the control of the common carrier and properly regarded as a fortuitous event. It is
necessary to recall that even common carriers are not made absolute insurers against all risks of
travel and of transport of goods, and are not held liable for acts or events which cannot be
foreseen or are inevitable, provided that they shall have complied with the rigorous standard of
extraordinary diligence.
NOTES:
Article 1734. Common carriers may be exempted from liability under the following causes only:
(1) Flood, storm, earthquake, lightning or other natural disaster or calamity;
(3) Act or omission of the shipper or owner of the goods;
(4) The character-of the goods or defects in the packing or-in the containers; and
Whether there is a general or limited clientele –
First Philippine Industrial Corp. v. CA, G.R. No. 125948. Dec. 29, 1998;
FACTS: Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime
in January 1995, petitioner applied for mayor’s permit in Batangas. However, the Treasurer
required petitioner to pay a local tax based on gross receipts amounting to P956,076.04 pursuant
to the Local Government Code. In order not to hamper its operations, petitioner paid the taxes for
the first quarter of 1993 amounting to P239,019.01 under protest.
On January 20, 1994, petitioner filed a letter-protest to the City Treasurer, claiming that it is
exempt from local tax since it is engaged in transportation business. The respondent City
Treasurer denied the protest, thus, petitioner filed a complaint before the Regional Trial Court of
Batangas on June 15, 1994 for tax refund. Respondents assert that pipelines are not included in
the term “common carrier” which refers solely to ordinary carriers or motor vehicles. The trial
court dismissed the complaint, and such was affirmed by the Court of Appeals.
ISSUE: Whether a pipeline business is included in the term “common carrier” so as to entitle the
petitioner to the exemption?
HELD:
Article 1732 of the Civil Code defines a “common carrier” as “any person, corporation, firm
or association engaged in the business of carrying or transporting passengers or goods or both, by
land, water, or air, for compensation, offering their services to the public.”
The test for determining whether a party is a common carrier of goods is:
(1) He must be engaged in the business of carrying goods for others as a public
employment, and must hold himself out as ready to engage in the transportation of goods
for person generally as a business and not as a casual occupation;
(2) He must undertake to carry goods of the kind to which his business is confined;
(3) He must undertake to carry by the method by which his business is conducted and
over his established roads; and
(4) The transportation must be for hire.
Based on the above definitions and requirements, there is no doubt that petitioner is a common
carrier. It is engaged in the business of transporting or carrying goods, i.e. petroleum products,
for hire as a public employment.
It undertakes to carry for all persons indifferently, that is, to all persons who choose to employ its
services, and transports the goods by land and for compensation. The fact that petitioner has a
limited clientele does not exclude it from the definition of a common carrier.
7. Applicable law in determining the status of a common carrier
- The law of the destination –
National Development Company v. CA and Development & Surety Corporation, G.R. No.
L-49407, 19 August 1988;
Hierarchy of Philippine Transportation Laws –
Eastern Shipping Lines, Inc. v. IAC and Development Insurance & Surety Corporation,
G.R. No. L-69044, 29 May 1987;
FACTS: En route from Kobe, Japan to Manila, M/S Asiatica, the vessel owned by petitioner
carrier, Eastern Shipping Lines caught fire and sank, resulting in the total loss of ship and cargo.
The crew did not know what caused the fire. When they noticed the smoke, there was already a
big fire which might have started twenty-four (24) hours before they became aware of it. The
respective respondent Insurers paid the corresponding marine insurance values to the consignees
concerned and were thus subrogated unto the rights of the latter as the insured.
See details below:
G.R. No. L-69044

Insurer 1 – Development Insurance and Surety Corporation
Cargo and Consignee 1a – 5,000 pieces of calorized lance pipes in 28 packages valued at
P256,039.00 consigned to Philippine Blooming Mills Co., Inc.
Cargo and Consignee 1b – 7 cases of spare parts valued at P92,361.75, consigned to Central
Textile Mills, Inc.
G.R. No. 71478

Insurer 2 – Nisshin Fire & Marine Insurance Co
Cargo and Consignee 2 – 128 cartons of garment fabrics and accessories, in two (2) containers,
consigned to Mariveles Apparel Corporation
Insurer 3 – Dowa Fire & Marine Insurance Co., Ltd.

Cargo and Consignee 3 – Two cases of surveying instruments consigned to Aman Enterprises
and General Merchandise.
ISSUES:
1. Which law is applicable, the Civil Code provisions on Common Carriers or the Carriage of
Goods by Sea Act?
2. Who has the burden of proof to show negligence of the carrier? It is petitioner-carrier’s
contention that in accordance with COGSA, when loss of fire is established, burden of proof on
negligence shifts to the shipper.
3. Will loss caused by fire exempt the carrier from liability?
4. What is the extent of carrier’s liability?
RULING:
1. The law of the country to which the goods are to be transported governs the liability of the
common carrier in case of their loss, destruction or deterioration. As the cargoes were
transported from Japan to the Philippines, the liability of petitioner-carrier is governed primarily
by the Civil Code. However, in all matters not regulated by the Civil Code, the rights and
obligations of common carrier shall be governed by the Code of Commerce and by special laws.
Thus, the Carriage of Goods by Sea Act, a special law, is suppletory to the provisions of the
Civil Code.
2. In accordance with the New Civil Code, the burden of proving that it has exercised the
extraordinary diligence required by law, after finding that transported good were lost caused by
fire falls upon the carrier.
3. No. Fire may not be considered a natural disaster or calamity like those enumerated in Article
1734 as it arises almost invariably from some act of man or by human means. It does not fall
within the category of an act of God unless caused by lightning or by other natural disaster or
calamity.
If fire were to be considered a “natural disaster” within the meaning of Article 1734 of the Civil
Code, it is required under Article 1739 that the “natural disater” 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.
4. Since there was actual fault on the part of the carrier, it is liable for the loss. Article 1749
allows the limitation of liability. Although the Code expressly permits a stipulation limiting the
liability of a carrier it does not of itself limit the liability to a fixed amount per package. Thus,
the COGSA which is suppletory to the provisions of the Civil Code, supplements by establishing
a statutory provision limiting the carrier’s liability in the absence of a declaration of a higher
value of goods, which should not exceed US$500 per package.
NOTES:
Carriage Of Goods By Sea Act (COGSA)

APPLICATION
As a general rule, COGSA only applies to foreign trade. But it may also apply to domestic trade
when there is a paramount clause in the contract.
PARAMOUNT CLAUSE – It is a clause which attracts the application of another law to govern
the rights and obligations of the parties. Hence, the parties can stipulate that the COGSA will
apply to the contract of carriage and not the Civil Code or Code of Commerce.
HIERARCHY OF LAWS
A. If the COMMON carrier is coming to the Philippines:
1st: Civil Code

2nd: COGSA (in foreign trade)
3rd: Code of Commerce
B. If the PRIVATE carrier is coming to the Philippines:

1st: COGSA
2nd: Code of Commerce
3rd: Civil Code (excluding rules on common carriers)
C. If the private or common carrier is from the Philippines to a foreign country:

8. Legal Effects of being deemed a common carrier
Duty to perform transport or deliver without death or injury, damage or loss;
Isaac v. A. L. Ammen Transportation Co., Inc., G.R. No. L-9671, 23 August 1957;
FACTS: Cesar Isaac boarded Bus No. 31 from Ligao, Albay bound for Pili, Camarines Sur and
seated himself on the left side resting his left arm on the window and with his left elbow outside
the window.Before reaching his destination, a pick-up car at full speed and was running outside
of its proper lane came from the opposite direction.
The driver of the bus swerved the bus to the very extreme right of the road until its front and rear
wheels have gone over the pile of stones or gravel situated on the rampart of the road. He was
rushed to a hospital in Iriga, Camarines Sur where he was given blood transfusion to save his
life.After four (4) days, he was transferred to another hospital in Tabaco, Albay. Where he
underwent treatment for 3 months. He incurred expenses of Php623.40, excluding medical fees
which were paid by A.L. Ammen Trans. Co.
ISSUE: W/N there is no negligence on the part of the common carrier since the accident
resulting in injuries is due to causes which are inevitable and which could not have been avoided
or anticipated notwithstanding the exercise of that high degree of care and skill which the carrier
is bound to exercise for for the safety of its passengers neither the common carrier nor the driver
is liable therefore.
HELD: Yes.
Considering all the circumstances, we are persuaded to conclude that the driver of the bus has
done what a prudent man could have done to avoid the collision. It is true that Isaac’s
contributory negligence cannot relieve A.L. Ammen of its liability but will only entitle it to a
reduction of the amount of damage caused (Article 1762, new Civil Code), but this is a
circumstance which further militates against the position taken by Isaac.
Where a carrier’s employee is confronted with a sudden emergency, the fact that he is obliged to
act quickly and without a chance for deliberation must be taken into account, and he is held to
the some degree of care that he would otherwise be required to exercise in the absence of such
emergency but must exercise only such care as an ordinary prudent person would exercise under
like circumstances and conditions, and the failure on his part to exercise the best judgment the
case renders possible does not establish lack of care and skill on his part.
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.
4. the carrier is not an insurer against all risks of travel.
CALVO V. UCPB GENERAL INSURANCE CO., INC., G.R. NO. 148496, 19 MARCH
2002;
FACTS: Petitioner Virgines Calvo is the owner of Transorient Container Terminal Services, Inc.
(TCTSI), a sole proprietorship customs broker. She entered into a contract with San Miguel
Corporation (SMC) for the transfer of 114 reels of semi-chemical fluting paper and 124 reels of
kraft liner board from the Port Area in Manila to SMC’s warehouse in Ermita, Manila. The cargo
was insured by respondent UCPB General Insurance Co., Inc. Upon delivery, the goods were
inspected and 15 reels of the semi-chemical fluting paper and 3 reels of kraft liner board were
found damaged.
ISSUE:
1. W/N a customs broker or warehouseman who offers his services to select clients a common
carrier?
2. W/N petitioner liable for the damage of the goods?
HELD:
1. Pursuant to Article 1732, petitioner is a common carrier as transportation of goods is an
integral part of her business. Article 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. This article
makes no distinction between one whose principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as an ancillary activity . . . Article 1732 also
carefully avoids making any distinction between a person or enterprise offering transportation
or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its
services to the “general public,” i.e., the general community or population, and one who offers
services or solicits business only from a narrow segment of the general population.
2. Petitioner is liable because she failed to prove that she exercised extraordinary diligence in the
carriage of goods, the presumption of negligence as provided under Art. 1735 applies. Under
Article 1735 of the Civil Code, if the goods are proved to have been lost, destroyed or
deteriorated, common carriers are presumed to have been at fault or to have acted negligently,
unless they prove that they have observed the extraordinary diligence required by law. The
burden of the plaintiff is to prove merely that the goods he transported have been lost, destroyed
or deteriorated. Thereafter, the burden is shifted to the carrier to prove that he has exercised the
extraordinary diligence required by law. Thus, it has been held that the mere proof of delivery of
goods in good order to a carrier, and of their arrival at the place of destination in bad order,
makes out a prima facie case against the carrier, so that if no explanation is given as to how the
injury occurred, the carrier must be held responsible.
NOTES:
Extraordinary diligence in the vigilance over goods, meaning

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 sale, 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.
Duty to observe extraordinary diligence
Cangco v. Manila Railroad Co., G.R. No. L-12191, 14 October 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; and in coming daily by train to the company’s office in the city of Manila
where he worked, he used a pass, supplied by the company, which entitled him to ride upon the
company’s trains free of charge.
During his ride in the train he arose from his seat and makes his way to the exit while the train is
still on travel. When the train has proceeded a little farther Jose Cangco step down into the
cement platform but unfortunately step in to a sack of watermelon, fell down and rolled under
the platform and was drawn under the moving car which resulting to his arm to be crashed and
lacerated. He was rushed to the hospital and sued the company and the employee who put the
sack of watermelon in the platform.
The accident occurred between 7 and 8 o’ clock on the dark night. It is that time of the year that
may we considered as season to harvest watermelon explaining why there are sacks of
watermelon in the platform. The plaintiff contends that it is the negligence of the Manila
Railroad Co. on why they let their employees put a hindrance in the platform that may cause
serious accident. The defendant answered that it is the lack of diligence on behalf of the plaintiff
alone on why he did not wait for the train to stop before alighting the train.
ISSUE: W/N the company is liable or there is a contributory negligence on behalf of the
plaintiff?
HELD:
There is no contributory negligence on behalf of the plaintiff. The Supreme Court provides some
test that may find the contributory negligence of a person. Was there anything in the
circumstances surrounding the plaintiff at the time he alighted from the train which would have
admonished a person of average prudence that to get off the train under the conditions then
existing was dangerous? If so, the plaintiff should have desisted from alighting; and his failure so
to desist was contributory negligence.
Alighting from a moving train while it is slowing down is a common practice and a lot of people
are doing so every day without suffering injury. Cangco has 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. He was also ignorant of the fact that
sacks of watermelons were there as there were no appropriate warnings and the place was dimly
lit.
Article 1173, first paragraph: The fault or negligence of the obligor consists in the omission of
that diligence which is required by the nature of the obligation and corresponds with the
circumstances of that persons, of the time and of the place. When negligence shows bad faith, the
provisions of Article 1171 and 2201, paragraph 2, shall apply.
In the case the proximate cause of the accident is the lack of diligence of the company to inform
their employees to not put any hindrance in the platform like sacks of watermelon. The contract
of defendant to transport plaintiff carried with it, by implication, the duty to carry him in safety
and to provide safe means of entering and leaving its trains (civil code, article 1258). That duty,
being contractual, was direct and immediate, and its non-performance could not be excused by
proof that the fault was morally imputable to defendant’s servants. Therefore, the company is
liable for damages against Cangco.
Trans-Asia Shipping Lines, Inc. v. CA and Atty. Renato Arroyo, G.R. No. 118126, 04
March
1996;
FACTS: Respondent Atty. Renato Arroyo, a public attorney, bought a ticket from herein
petitioner for the voyage of M/V Asia Thailand vessel to Cagayan de Oro City from Cebu City
on November 12, 1991.
At around 5:30 in the evening of November 12, 1991, respondent boarded the M/V Asia
Thailand vessel during which he noticed that some repairs were being undertaken on the engine
of the vessel. The vessel departed at around 11:00 in the evening with only one (1) engine
running.
After an hour of slow voyage, the vessel stopped near Kawit Island and dropped its anchor
thereat. After half an hour of stillness, some passengers demanded that they should be allowed to
return to Cebu City for they were no longer willing to continue their voyage to Cagayan de Oro
City. The captain acceded to their request and thus the vessel headed back to Cebu City.
In Cebu City, plaintiff together with the other passengers who requested to be brought back to
Cebu City, were allowed to disembark. Thereafter, the vessel proceeded to Cagayan de Oro City.
Petitioner, the next day, boarded the M/V Asia Japan for its voyage to Cagayan de Oro City,
likewise a vessel of defendant.
On account of this failure of defendant to transport him to the place of destination on November
12, 1991, respondent Arroyo filed before the trial court “an action for damage arising from bad
faith, breach of contract and from tort,” against petitioner. The trial court ruled only for breach of
contract. The CA reversed and set aside said decision on appeal.
ISSUE: Whether or not the petitioner Trans-Asia was negligent?
HELD: Yes.
Before commencing the contracted voyage, the petitioner undertook some repairs on the cylinder
head of one of the vessel’s engines. But even before it could finish these repairs, it allowed the
vessel to leave the port of origin on only one functioning engine, instead of two. Moreover, even
the lone functioning engine was not in perfect condition as sometime after it had run its course, it
conked out. This caused the vessel to stop and remain adrift at sea, thus in order to prevent the
ship from capsizing, it had to drop anchor. Plainly, the vessel was unseaworthy even before the
voyage began. For a vessel to be seaworthy, it must be adequately equipped for the voyage and
manned with a sufficient number of competent officers and crew.[21] The failure of a common
carrier to maintain in seaworthy condition its vessel involved in a contract of carriage is a clear
breach of is duty prescribed in Article 1755 of the Civil Code.
Negros Navigation Co., Inc. v. CA, G.R. No. 110398, 07 November 1997
FACTS: Private respondent Ramon Miranda purchased from the Negros Navigation Co., Inc.
four special cabin tickets. The tickets were for Voyage No. 457-A of the M/V Don Juan, leaving
Manila and going to Bacolod.
Subsequently, the Don Juan collided off the Tablas Strait in Mindoro, with the M/T Tacloban
City, an oil tanker owned by the Philippine National Oil Company (PNOC) and the PNOC
Shipping and Transport Corporation (PNOC/STC). As a result, the M/V Don Juan sank. Several
of her passengers perished in the sea tragedy. The bodies of some of the victims were found and
brought to shore, but the four members of private respondents’ families were never found.
Private respondents filed a complaint against the Negros Navigation, the Philippine National Oil
Company (PNOC), and the PNOC Shipping and Transport Corporation (PNOC/STC), seeking
damages for the death. Petitioner, however, denied that the four relatives of private respondents
actually boarded the vessel as shown by the fact that their bodies were never recovered.
Petitioner further averred that the Don Juan was seaworthy and manned by a full and competent
crew, and that the collision was entirely due to the fault of the crew of the M/T Tacloban City.
In finding petitioner guilty of negligence and in failing to exercise the extraordinary diligence
required of it in the carriage of passengers, both the trial court and the appellate court relied on
the findings of this Court in Mecenas v. Intermediate Appellate Court, which case was brought
for the death of other passengers. In Mecenas, SC found petitioner guilty of negligence in (1)
allowing or tolerating the ship captain and crew members in playing mahjong during the voyage,
(2) in failing to maintain the vessel seaworthy and (3) in allowing the ship to carry more
passengers than it was allowed to carry. Petitioner is, therefore, clearly liable for damages to the
full extent.
Petitioner criticizes the lower court’s reliance on the Mecenas case, arguing that, although this
case arose out of the same incident as that involved in Mecenas, the parties are different and trial
was conducted separately. Petitioner contends that the decision in this case should be based on
the allegations and defenses pleaded and evidence adduced in it or, in short, on the record of this
case.
ISSUES:
1. Whether the ruling in Mecenas v. Court of Appeals, finding the crew members of petitioner to
be grossly negligent in the performance of their duties, is binding in this case;
2. Whether the award for damages in Mecenas v. Court of Appeals is applicable in this case.
HELD:
1. No. The contention is without merit.
Adherence to the Mecenas case is dictated by this Court’s policy of maintaining stability in
jurisprudence. Where, as in this case, the same questions relating to the same event have been
put forward by parties similarly situated as in a previous case litigated and decided by a
competent court, the rule of stare decisis is a bar to any attempt to relitigate the same issue.
2. No, it is not applicable.
Petitioner contends that, assuming that the Mecenas case applies, private respondents should be
allowed to claim only P43,857.14 each as moral damages because in the Mecenascase, the
amount of P307,500.00 was awarded to the seven children of the Mecenas couple. Here is where
the principle of stare decisis does not apply in view of differences in the personal circumstances
of the victims. For that matter, differentiation would be justified even if private respondents had
joined the private respondents in the Mecenas case.
The doctrine of stare decisis works as a bar only against issues litigated in a previous case.
Where the issue involved was not raised nor presented to the court and not passed upon by the
court in the previous case, the decision in the previous case is not stare decisis of the question
presently presented.
The Mecenas case cannot be made the basis for determining the award for attorney’s fees. The
award would naturally vary or differ in each case.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED with modification and
petitioner is ORDERED to pay private respondents damages.
Basis of liability of common carrier
Maranan v. Perez, G.R. No. L-22272, 26 June 1967
FACTS: Rogelio Corachea, on October 18, 1960, was a passenger owned and operated by
Pascual Perez, was stabbed and killed by the driver, Simeon Valenzuela. Valenzuela was found
guilty for homicide by the Court of First Instance and was sentenced to suffer imprisonment and
to indemnify the heirs of the deceased in the sum of P6,000. While pending appeal, mother of
deceased filed an action in the Court of First Instance of Batangas to recover damages from
Perez and Valenzuela. Defendant Perez claimed that the death was “caso fortuito” for which the
carrier was not liable. The court a quo, after trial, found for the plaintiff and awarded her P3,000
as damages against the defendant Perez. The claim against Valenzuela was dismissed. From this
ruling, both plaintiff and defendant Perez appealed to this court, the former asking for more
damages and the latter insisting on non-liability. Defendant-appellant relied solely on the ruling
enunciated in Gillaco vs. Manila Railroad Co. that the carrier is under no absolute liability for
assaults of its employees upon the passengers.
ISSUE: W/N Perez should be held liable for the death of the passenger?
HELD: Yes.
The basis of the carrier’s liability for assaults on passengers committed by its drivers rests on the
principle that it is the carrier’s implied duty to transport the passenger safely. As between the
carrier and the passenger, the former must bear the risk of wrongful acts or negligence of the
carrier’s employees against passengers, since it, and not the passengers, has power to select and
remove them. Common carriers are liable for the death of or injuries to passengers through the
negligence or willful acts of the former’s employees, although such employees may have acted
beyond the scope of their authority or in violation of the orders of the common carriers. The
liability of the common carriers does not cease upon proof that they exercised all the diligence of
a good father of the family in the selection and supervision of their employees. (Art. 1759)
The attendant facts and controlling law of that case and the one at bar were very different. In the
Gillaco case, the passenger was killed outside the scope and the course of duty of the guilty
employee. The Gillaco case was decided under the provision of the Civil Code of 1889 which,
unlike the present Civil Code, did not impose upon common carriers absolute liability for the
safety of passengers against willful assaults or negligent acts committed by their employees. The
death of the passenger in the Gillaco case was truly a fortuitous event which exempted the carrier
from liability. It is true that Art. 1105 of the old Civil Code on fortuitous event has been
substantially reproduced in Art. 1174 of the Civil Code of the Philippines but both articles
clearly remove from their exempting effect the case where the law expressly provides for
liability in spite of the occurrence of force majeure. The Civil Code provisions on the subject
common carriers are new and were taken from Anglo-American law. The basis of the carrier’s
liability for assaults on passengers committed by its drivers rested either on the doctrine or
respondent superior or the principle that it was the carrier’s implied duty to transport the
passenger safely. Under the second view, upheld by the majority and also by the later cases, it
was enough that the assault happens within the course of the employee’s duty. It was no defense
for the carrier that the act was done in excess of authority or in disobedience of the carrier’s
orders. The carrier’s liability here was absolute in the sense that it practically secured the
passengers from assaults committed by its own employees.
Primary liability to pay damages in case of breach
Philippine Rabbit Bus Lines, Inc. v. IAC;

FACTS: On December 24, 1966,passengers boarded the jeepney owned by spouses Isidro
Mangune and Guillerma Carreon and driven by Tranquilino Manalo at Pampanga bound for
Pangasinan for P24.00. Upon reaching Tarlac, the right rear wheel of the jeepney detached
causing it to run in an unbalanced position. Driver Manalo stepped on the brake, causing the
jeepney to make a U-turn, invading and eventually stopping on the opposite lane of the road (the
jeepney’sfront faced the south (from where it came) and its rear faced the north (towards where it
was going).The jeepney occupied and blocked the greater portion of the western lane, which is
the right of way of vehicles coming from the north.
Petitioner Phil. Rabbit Bus Lines claims that almost immediately after the sudden U-turn the
busbumped the right rear portion of the jeep. Defendants, on the other hand, claim that the bus
stoppeda few minutes before hitting the jeepney. Either way, as a result of the collision, three
passengers of the jeepney (Catalina Pascua, Erlinda Meriales and Adelaida Estomo) died while
the other jeepneypassengers sustained physical injuries.A criminal complaint was filed against
the two drivers for Multiple Homicide. The case against delosReyes (driver of Phil. Rabbit) was
dismissed for insufficieny of evidence. Manalo (jeepney driver) was convicted and sentenced to
suffer imprisonment.
Three complaints for recovery of damages were then filed before the CFI of Pangasinan: (1)
SpousesCasiano Pascua and Juana Valdez sued as heirs of Catalina Pascua while Caridad Pascua
sued in her behalf; (2) Spouses Manuel Millares and Fidencia Arcica sued as heirs of Erlinda
Meriales; and (3) spouses Mariano Estomo and Dionisia Sarmiento sued as heirs of Adelaida
Estomo. All three cases impleaded spouses Mangune and Carreon, Manalo (jeepney owners),
Rabbit and delos Reyes as defendants. Plaintiffs anchored their suits against spouses Mangune
andCarreon and Manalo on their contractual liability. As against Rabbit and delos Reyes,
plaintiffs basedtheir suits on their culpability for a quasi-delict.
The respondent court applied primarily (1) the doctrine of last clear chance, (2) the presumption
that drivers who bump the rear of another vehicle guilty and the cause of the accident unless
contradicted by other evidence, and (3) the substantial factor test concluded that delos Reyes was
negligent.
ISSUE: W/N the doctrine of last clear chance is applicable in this case?
HELD: No. The doctrine is not applicable.

The principle about “the last clear” chance, would call for application in a suit between the
owners and drivers of the 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 of the jeepney and its owners on the ground that the other driver
was likewise guilty of negligence.” This was the ruling in Anuran, et al. v. Buño et al., G.R. Nos.
L-21353 and L-21354, May 20, 1966, 17 SCRA 224. Thus, the respondent court erred in
applying said doctrine.
On the presumption that drivers who bump the rear of another vehicle guilty and the cause of the
accident, unless contradicted by other evidence, the respondent court said:
. . . the jeepney had already executed a complete turnabout and at the time of impact was
already facing the western side of the road. Thus the jeepney assumed a new frontal
position vis a vis, the bus, and the bus assumed a new role of defensive driving. The spirit
behind the presumption of guilt on one who bumps the rear end of another vehicle is for
the driver following a vehicle to be at all times prepared of a pending accident should the
driver in front suddenly come to a full stop, or change its course either through change of
mind of the front driver, mechanical trouble, or to avoid an accident. The rear vehicle is
given the responsibility of avoiding a collision with the front vehicle for it is the rear
vehicle who has full control of the situation as it is in a position to observe the vehicle in
front of it.
The above discussion would have been correct were it not for the undisputed fact that the U-turn
made by the jeepney was abrupt.The jeepney, which was then traveling on the eastern shoulder,
making a straight, skid mark of approximately 35 meters, crossed the eastern lane at a sharp
angle, making a skid mark of approximately 15 meters from the eastern shoulder to the point of
impact (Exhibit “K” Pascua). Hence, delos Reyes could not have anticipated the sudden U-turn
executed by Manalo. The respondent court did not realize that the presumption was rebutted by
this piece of evidence.
Casiano Pascua, et al., G.R. No 66102-04, 30 August 1990
FACTS: On the eve of Christmas 1966, seven passengers boarded a jeepney bound for
Pangasinan via Dau. Manalo drove the jeep owned by Magune and Carreon. Reaching Tarlac,
the right wheel of the jeep was detached resulting to its 180 degree turn invading the other lane
with the jeep’s front facing south.
The bus driven by Del Rosario collided with the jeepney resulting in the death of three
passengers and physical injuries to some. Manalo was convicted of Multiple Homicide and
Serious Physical Injuries. Manalo did not appeal. Three Civil Cases fro Damages docketed 1136;
39-40 was filed anchored on the contractual liability of the jeepney owner and Philippine
Rabbit’s liability based on quasidelict.
Trial court decided against the jeepney operator as well as the joint liability of his Insurance
Agency for Actual and Moral Damages.
The Trial Court based its decisions on the following: (1)Testimony of passenger Pascua alleging
that the driver was running really fast. (2) Unrebutted testimony of Police Inspector on the sharp
angle track marks of the jeep; the observation of the skid marks. (3) Manalo’s Conviction on the
Criminal Compalint (4)Application of Res Ipsa Loquitor, attesting to the collision happening on
the right of way of the bus.
CA reversed decision. It ordered Plaintiff bus operator and driver to pay jointly and severally the
damages awarded.
It based its decisions primarily on 1.) the doctrine of last clear chance. 2.) presumption of the
responsibility of the vehicle on the rear end to avoid collision with the vehicle in front. 3.) the
substantial test concluding Bus driver negligent by not making an effort to avoid accident and
being the physical force causing the injury and death of passengers.
ISSUE: Who has liability over the injuries and death of victims?
HELD: The proximate cause of the accident was the negligence of the jeepney operator for
failure to exercise precautions needed. The carrier is presumed to have been at fault unless it is
caso fortuito or that he has observed extra-ordinary diligence as provided in Articles 1733,55-56.
Negligence was proven based on the testimony-evidences adduced by the trial court.Last clear
chance cannot be applied. It does not aride where a passenger demands responsibility under
culpa contractual. A negligent driver and its owner cannot be exempted on the ground that the
other party was likewise guilty of negligence.
The substantial factor test is testing whether the actor’s conduct is a substantial factor in bringing
about harm to another. THE FACT THAT THE ACTOR NEITHER FORESAW NOR
SHOULD HAVE FORESEEN THE EXTENT OF HARM OR MANNER IN WHICH THE
EVENT OCCURRED DOES NOT PREVENT HIS LIABILITY.
However, this test does not apply. The court does not fault Reyes for not having avoided such
sicne no other options are available to him. The other lane even though empty was narrow and
covered with tall grass. The wheels of the bus were also clear of the roadwasy except the outher
left that hit the jeep. This clearly shows the attempt to hit the jeep. Inability to avoid the jeep
must have been due to the limitations of options.IAC decision is set aside.
The Trial Court decision is Reinstated with Modification that only the Operator and the
Insurance Company is liable for the victims and heirs. The driver cannot be held jointly and
severally liable with the carrier in Breach of Contract as provided in Article 2180 and to make
driver jointly and severally liable is to make the carrier’s liability a personal one and not explicit.
EXCEPTION: Solidary liability when tort leads to breach of contract
FABRE V. CA, ET AL., G.R. No. 111127, 26 July 1996;

FACTS: Petitioners were owners of 1982 model Mazda minibus. They are the bus principally in
connection with a bus service for their children which they operated in Manila. They hired Cabil
as their driver. On November 2, 1982, private respondent word for the World Christian
Fellowship (WWCF) arranged with petitioners for the transportation of members of young adult
ministry from Manila to La Union and back. The usual route to la Union was through Carmen
Pangasinan but unfortunately, the bridge of Carmen was under repair so that the driver was
forced to take the detour through Lingayen. At the right, they met an accident, the bus hit a
fence and a coconut tree that caused passengers to be injured including respondent Antonio. The
latter filed a criminal complaint against the driver, the trial court decided in favor of respondents.
All evidence presented have shown the negligent set of the defendants, which ultimately resulted
to the accident. Court of Appeals affirmed the decision of the Trial Court, hence this petition.
ISSUE: W/N petitioners were negligent and liable for the injuries suffered by respondents?
HELD:
Petitioners failed to exercise due negligence in the operation of which considering the time and
the place of the accident. The fact that he was driving so fast, it was raining so dark, the driving
was going negligent and should be liable for the injuries suffered by respondents.

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EXCEPTION:

Accommodation passengers – invited guest.

DAMAGES; AUTOMOBILE; INVITED GUEST; OWNERS DUTY TO EXERCISE

LIABILITY OF CARRIER; PASSENGERS INJURY ON HIS OWN NEGLIGENCE. — A

Baliwag Transit Inc. v. CA, G.R. No. 57493, 07 January 1987;

The Social Security Commission granted Martinez’s petition.

We deny the petition.

The TRIAL COURT ruled in favor of plaintiffs, disposing as follows:

ISSUE: Petitioner raises the following arguments:

Lessons Applicable: Exceptions to Contracting Parties (Transportation)

December 21, 1953: he was discharged due to his physical disability.

CFI: PAL to pay the Samson;

CA: modified entitled to the legal rate of interest on unearned income.

ISSUE: W/ PAL was negligent and was liable?

Bustamante was sick. He admittedly had tumor of the nasopharynx (nose).

Arrastre – A person/entity who/which performs portside cargo handling operations, e.g.

Lessons Applicable: Ancillary Contracts (Transportation)

TRIAL COURT: dismissed the case in

They are no different from those of a depositary or warehouseman.

Lessons Applicable: Ancillary Contracts (transportation)

FACTS: 1983: Hongkong Government Supplies Department (Hongkong) contracted Mayer

Charter: Invoice Nos. 1020, 1017 and 1022 for US$149,470.00.

April 17, 1986: filed an action to recover HK$299,345.30.

TRIAL COURT: in favor of Mayer and Hongkong.

HELD: NO. Petition is granted. CA reversed. RTC reinstated.

Air France v. Carrascoso, G.R. No. No. L-21438, 28 September 1966;

Arts 1732 to 1766, Civil Code;

SUBSECTION 2. - Vigilance Over Goods

(2) Act of the public enemy in war, whether international or civil;

(3) Act of omission of the shipper or owner of the goods;

(5) Order or act of competent public authority.

(1) In writing, signed by the shipper or owner;

(3) Reasonable, just and not contrary to public policy.

SUBSECTION 3. - Safety of Passengers

SUBSECTION 4. - Common Provisions

1. PUBLIC UTILITY, CONTROL BY PUBLIC UTILITY COMMISSION; CRIMINAL

First, the facts.

WHEREFORE, premises considered, judgment is hereby rendered ordering defendant

WHEREFORE, the decision appealed from is hereby AFFIRMED with modification in

The issues to be resolved are:

(1) Whether the petitioner is a common carrier; and,

On the first issue, we rule that petitioner is a common carrier.

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

(2) Act of the public enemy in war, whether international or civil;

(3) Act or omission of the shipper or owner of the goods;

(5) Order or act of competent public authority.

- Whether it is a regular or occasional business, or whether it is a principal or

Occasional Business - occurring, appearing, or done infrequently and irregularly.

Ancillary Business - providing necessary support to the primary activities or operation of

RTC’s finding: Respondent a common carrier.

(4) The transportation must be for hire.

See details below:

G.R. No. L-69044

G.R. No. 71478

Insurer 3 – Dowa Fire & Marine Insurance Co., Ltd.

4. What is the extent of carrier’s liability?

Carriage Of Goods By Sea Act (COGSA)

1st: Civil Code

B. If the PRIVATE carrier is coming to the Philippines:

C. If the private or common carrier is from the Philippines to a foreign country:

Principles governing the liability of a common carrier:

Extraordinary diligence in the vigilance over goods, meaning

Cangco v. Manila Railroad Co., G.R. No. L-12191, 14 October 1918;