PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY v PKS Shipping is a common carrier.

PKS Shipping is a common carrier. The factual findings indicate that PKS Shipping has
PKS SHIPPING COMPANY engaged itself in the business of carrying goods for others, although for a limited
G.R. No. 149038/ April 9, 2003 / VITUG, J./ Definition and test of common carrier concept clientele, undertaking to carry such goods for a fee. The regularity of its activities in this
NATURE Petition for Review area indicates more than just a casual activity on its part. Neither can the concept of a common
PETITIONERS Philippines American General Insurance Company carrier change merely because individual contracts are executed or entered into with patrons of
RESPONDENTS PKS Shipping Company the carrier. Such restrictive interpretation would make it easy for a common carrier to escape
liability by the simple expedient of entering into those distinct agreements with clients.
SUMMARY. Philippines American General Insurance Company (PAGIC), as the insurer of
Davao Uninion Marketing Corportion (DUMC) filed for claim for reimbursement against 2. WON PKS Shipping has observed the proper diligence (ordinary, if a private
PKS Shipping company for the sinking of 75,000 bags of cement that was under the care of carrier, or extraordinary, if a common carrier) required of it given the
PKS. PKS was found by the lower court to be not a common carrier and was not expected circumstances– YES.
to observe stringent and extraordinary diligence required of common carriers. SC held that The loss was due to a natural disaster or calamity thus PKS is exempted from liability of
PKS is indeed a common carrier but is still exempted from liabilities as the loss was cause loss. Article 1733 of the Civil Code requires common carriers to observe extraordinary
by a fortuitous event, and that nothing can be done to prevent it. diligence in the vigilance over the goods they carry. In case of loss, destruction or
deterioration of goods, common carriers are presumed to have been at fault or to have acted
DOCTRINE. The concept of a common carrier does not change merely because individual negligently, and the burden of proving otherwise rests on them. The provisions of Article
contracts are executed or entered into with patrons of the carrier. 1733, notwithstanding, common carriers are exempt from liability for loss, destruction, or
deterioration of the goods due to any of the following causes:
FACTS.
 Davao Union Marketing Corporation (DUMC) contracted the services of PKS Shipping (1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
Company (PKS) for the shipment to Tacloban City of 75,000 bags of cement worth (2) Act of the public enemy in war, whether international or civil;
P3.375.000 (3) Act or omission of the shipper or owner of the goods;
 DUMC insure the goods for its full value with Philippine American General Insurance (4) The character of the goods or defects in the packing or in the containers; and
Company (Philamgen) (5) Order or act of competent public authority.
 The goods were loaded aboard the dumb barge Limar I belonging to PKS
The appellate court ruled, gathered from the testimonies and sworn marine protests of the
 December 22, 1988 at around 9 pm: while Limar I was being towed by PKS’ tugboat MT
respective vessel masters of Limar I and MT Iron Eagle, that there was no way by which the
Iron Eagle, the barge sank a couple of miles off the coast of Dumagasa Point, in Zamboanga
barge’s or the tugboat’s crew could have prevented the sinking of Limar I. The vessel was
del Sur, bringing down with it the entire cargo of 75,000 bags of cement,
suddenly tossed by waves of extraordinary height of six (6) to eight (8) feet and buffeted by
 DUMC filed a formal claim of insurance with Philamgen for the full amount of the
strong winds of 1.5 knots resulting in the entry of water into the barge’s hatches. The official
insurance. Philamgen promptly made payment; it them sought reimbursement from PKS of
Certificate of Inspection of the barge issued by the Philippine Coastguard and the Coastwise
the sum paid to DUMC but the shipping company refused to pay so Philamgen filed a suit
Load Line Certificate would attest to the seaworthiness of Limar I and should strengthen the
against PKS Shipping.
factual findings of the appellate court. The appellate court did not err in its judgment absolving
 RTC dismissed the complaint after finding that the total loss of the cargo could have been PKS Shipping from liability for the loss of the DUMC cargo.
caused either by a fortuitous event, in which case the ship owner was not liable, or
through the negligence of the captain and crew of the vessel and that, under Article 587 DECISION.
of the Code of Commerce adopting the “Limited Liability Rule,” the ship owner could Petition Denied.
free itself of liability by abandoning, as it apparently so did, the vessel with all her
equipment and earned freightage.
 CA affirmed in toto and ruled PKS is not a common carrier since the evidence to
establish that PKS Shipping was a common carrier at the time it undertook to transport
the bags of cement was wanting because the peculiar method of the shipping company’s
carrying goods for others was not generally held out as a business but as a casual
occupation. It concluded that PKS Shipping, not being a common carrier, was not
expected to observe the stringent extraordinary diligence required of common carriers in
the care of goods. - found that the loss of the goods was sufficiently established as having
been due to fortuitous event, negating any liability on the part of PKS Shipping to the
shipper.

ISSUES & RATIO.

1. WON PKS Shipping is a common carrier – YES.