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CASE NO. 11
G.R. NO. 147246, 19 AUGUST 2003

ASIA LIGHTERAGE AND SHIPPING, INC., Petitioners v. COURT OF

APPEALS, ET AL., Respondents

FACTS:
Marubeni American Corporation ( MAC) of Portland, Oregon shipped 3,150
metric tons of Better Western White Wheat in bulk. This was insured by private
respondent Prudential Guarantee and Assurance, Inc. ( PGA). The cargo is to be
delivered to consignee, General Milling Corporation ( GMC) in Manila as evinced
by B.L No. PTD/MAN-4.
After arrival in Manila and the cargo was transferred to petitioner Asia
Litherage and Shipping Inc (ALS) which was contracted by consignee as carrier to
deliver the cargo to its warehouse in Pasig City. 900 metric tons of cargo was
loaded on barge PSTSI III as evinced by a receipt for delivery to consignee.
The transport was suspended due to a warning of an incoming typhoon
which prompted petitioner to seek for shelter in Engineering Island of Baseco.
PSTSI III was tied down to other barges while weathering the storm. After a few
days, it developed a list because of a hole it sustained after hitting an unseen
protuberance underneath the water. Petitioner filed a Marine protest, had the barge
refloated and patched it up with cement and clay.
The barge was towed to ISLOFF terminal before it finally headed to
consignee’s wharf. While on transit, the barge again ran aground due to strong
current. To avoid complete sinking, a portion of the goods was transferred to three
other barges. The next day, the towing bits of the barge broke, and it completely
sank resulting to total loss of the cargo. A second marine protest was filed. The
barge was salvaged, and a bidding was conducted to dispose of the damaged wheat
which resulted in a sale of P 201, 379.75.

ISSUE:
1. Whether petitioner is a common carrier
2. Assuming that it is, whether it exercised extraordinary diligence in its care
and custody of the consignee’s cargo.
HELD:
1. YES. Article 1732 of the Civil code defines common carriers as persons,
corporations, firms and 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 definition does not
make a distinction between one whose principal business is the carrying of
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persons or goods or both and one who does such carrying only as an
ancillary activity. It also does not distinguish between a person or enterprise
offering transportation service on a regular or scheduled basis and one
offering such services on an occasional, episodic or unscheduled basis.
Furthermore, it 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 public. Corollary, petitioner fits the test of
a common carrier as laid down in Basco v. CA. The principle business of
petitioner is that of litherage and drayage and it offers its barges to the public
for carrying or transporting goods by water for compensation. Clearly, it is a
common carrier.

2. NO. It failed to exercise extraordinary diligence in its care and custody of

the consignee’s goods. Common carriers are presumed to have been at fault
or have acted negligently of the goods are lost, destroyed, or deteriorated. To
overcome the presumption, it must prove that it exercised extraordinary
diligence. The exception to this is provided in Article 1734 which provides
excuses loss, destruction, or deterioration due to flood, storm earthquakes,
lighting, or other natural disaster or calamity. Petitioner failed to prove that
the typhoon is the proximate and only cause of the loss and that it has
exercised extraordinary diligence before, during and after the occurrence of
the typhoon to prevent and minimize the loss. Evidence shows that even
before the towing bits of the barge broke, it had already sustained damage
when it hit the sunken object while docked at the Engineering Island which
resulted in a hole. The patch work was merely a provisional remedy, not
enough for the barge to sail safely. Thus, when petitioner persisted, it
recklessly exposed the cargo to further damage. Corollary, the Pasig River
was no longer affected by the typhoon when they resumed voyage. Thus, it
is not the proximate and only cause of the loss of the cargo, human
negligence had intervened.

NOTE:
Basco v. CA; Test of Common Carrier: 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.