COMMON CARRIERS AND PUBLIC SERVICE: DEFINITION AND LIABILITY

CASE NAME FACTS RULING NOTES

CARO vs While located at No. 1049 R. Hidalgo Street, Manila, and ISSUE: W.N Rilloraza was petitioner’s employee within the purview of the
RILLORAZA 102 belonging to Mrs. Carmen Prieto de Caro, but managed by Workmen’s Compensation Act?
Phil 91 her husband, petitioner Ramon Caro, as administrator of
their conjugal partnership, and President and General Petitioner argues that Rillaroza was hired by one Daniel de la Cruz, who,
Manager of Ramcar Inc., allegedly, is an independent contractor. This pretense was rejected, how ever, by
the Workmen's Compensation Commission which held that De la Cruz was, at
On August 4, 1953, at about 4:00 p.m., Lucas Rilloraza, a least, "merely an intermediary" and that petitioner is the "real employer" of
carpenter by occupation, was constructing the window Rilloraza.
railing of a building. He fell to the ground and broke his
leg, as the wooden platform on which he and another SC RULING: Daniel is not an independent contractor.
carpenter were working collapsed. - However, the Court said that Exhibit A refers to the work of changing
the "soleras" or floor joists, whereas, at the time of the occurrence,
According to Dr. Fidel Guilateo, of the Workmen's Rilloraza was constructing a "window railing", which is not
Compensation Commission, said injury produced covered by said contract.
temporary total disability for a period of six (6) months, and - Moreover, De la Cruz spoke only for himself in the exhibits
permanent partial disability of five (5%) per cent of said leg.| aforementioned. He did not represent Rilloraza, and had no authority
to represent him therein.
- The floor joists mentioned in said contract were to be changed under
the direction and control of Mr. Caro or his representative, and in
the manner or by the method designated by either. In other words,
Daniel de la Cruz was not an independent contractor, within the
purview of the Workmen's Compensation Act. I
- Daniel seem to be merely a free lancing carpenter (not uncommon in
Manila), with some experience in carpentry work, who goes around
looking for minor repair or construction jobs, for he has — like the
intermediary in the Andoyo case — "no capital or money to pay his
laborers or to comply with his obligations to them."
- In the light of these facts, we fail to see how De la Cruz could possibly
be regarded an "independent" contractor. Indeed, there is nothing to
indicate that he could pay the compensation prescribed in Republic
Act 772

In the Worker’s Compensation Act, the owner or lessee of a factory or place

of work or the owner or manager of the business therein carried on, may be
bound to pay the compensation, despite the intervention of an "independent
contractor."

Although the owner of the factory is not the direct employer of the laborers
employed therein because there is an independent contractor in the factory, the
owner of the factory is nevertheless to be considered for the purposes of the
Workmen's Compensation Act as the employer of the laborers working under
the independent contractor, but that is true only with respect to laborers doing
work which is in the usual course of the owner's business."

ERIKS VS CA Petitioner Eriks Pte. Ltd. is a non-resident foreign
267 SCRA 567 corporation engaged in the manufacture and sale of
elements used in sealing pumps, valves and pipes for
industrial purposes, valves and control equipment used for
industrial fluid control and PVC pipes and fittings for
industrial uses
.
TRANSPO ISSUE:
In Mansal case: we held that a laborer, who had been injured while stacking
lumber in a lumber yard belonging to the defendant company, was entitled to
compensation from the latter, although he had been employed by a contractor
who undertook to do the stacking of lumber in said yard at a given rate. In the
same case we said:
"The case at bar is similar or parallel to that of stevedores unloading cargo
from a ship. The fact that the stevedores work under the control of a
contractor, who pays them, and that they may seek other work under different
carriers, and their work covers a very short period of time as to each carrier, does
not exempt the carrier who had employed them in the unloading of the
cargo from paying compensation for death or injuries received by them
because the unloading of the cargo is an ordinary part of a carrier's duty.
'There is not the least shadow of doubt that the deceased was a laborer in the
legal sense. He had been recruited by order of the captain of the ship and he was
engaged in the work of unloading the ship's cargo at the time of the accident.
There can be no dispute that this kind of work is included in the business in
which the appellee is engaged. That the deceased had been recruited or engaged
by a contractor is of no moment because the latter, for purposes of the law, was
an agent or representative of the ship's captain who in turn, represents the
appellee.'"
The building in which R. worked is intended or used for rental (business)
purposes and petitioner had control of such building, as manager of Ramcar,
Inc., and administrator, not only of his paraphernal properties, but also, of those
of his wife C.P., which properties had been incorporated with those of Prieto
Hermanos. Obviously, the repair of said building is part of the usual business of
the administration of said properties, so that the same may be suitable for the
gainful purpose above referred to. Consequently, even if R., who did the repair
work thereof , were a casual laborer, engaged directly by D.C., acting as an
independent contractor, which he is not, R would still be an employee of
petitioner, within the purview of the Workmen's Compensation Act, and hence,
would be entitled to demand compensation from him.
IN SUM: Is a foreign corporation which sold its products sixteen times over a
five-month period to the same Filipino buyer without first obtaining a license
to do business in the Philippines, prohibited from maintaining an action to collect
payment therefor in Philippine courts? In other words, is such foreign
corporation doing business in the Philippines without the required license and
thus barred access to our court system?
It is a corporation duly organized and existing under the laws
of the Republic of Singapore.
It is not licensed to do business in the Philippines and i(s)
not so engaged and is suing on an isolated transaction for
which it has capacity to sue
Private respondent Delfin Enriquez, Jr., doing business
under the name and style of Delrene EB Controls Center
and/or EB Karmine Commercial, ordered and received
from petitioner various elements used in sealing pumps,
valves, pipes and control equipment. The ordered
materials were delivered via airfreight.
The transfers of goods were perfected in Singapore, for
private respondents account, F.O.B. Singapore, with a 90-
day credit term. Subsequently, demands were made by
petitioner upon private respondent to settle his account, but
the latter failed/refused to do so.
Petitioner corporation filed with the Regional Trial
Court of Makati, Branch 138,4 Civil Case No. 91-2373
entitled Eriks Pte. Ltd. vs. Delfin Enriquez, Jr. for the
recovery of S$41,939.63
Private respondent responded with a Motion to Dismiss,
contending that petitioner corporation had no legal capacity
to sue.
TC: dismissed the action on the ground that petitioner is a
foreign corporation doing business in the Philippines
without a license.
CA: affirmed the ruling of the TC
Petition is denied.
The Corporation Code provides:
"Sec. 133. Doing business without a license. — No foreign corporation
transacting business in the Philippines without a license, or its successors or
assigns, shall be permitted to maintain or intervene in any action, suit or
proceeding in any court or administrative agency of the Philippines; but such
corporation may be sued or proceeded against before Philippine courts or
administrative tribunals on any valid cause of action recognized under
Philippine laws."
The aforementioned provision prohibits, not merely absence of the prescribed
license, but it also bars a foreign corporation "doing business" in the
Philippines without such license access to our courts.
However, there is no definitive rule on what constitutes "doing," "engaging in,"
or "transacting" business.
the phrase 'doing business' shall include ……. and any other act or acts that
imply a continuity of commercial dealings or arrangements, and
contemplate to that extent the performance of acts or works, or the exercise of
some of the functions normally incident to, and in progressive prosecution of,
commercial gain or of the purpose and object of the business organization:
The true test, however, seems to be whether the foreign corporation is
continuing the body or substance of the business or enterprise for which it
was organized or whether it has substantially retired from it and turned it
over to another.
The term implies a continuity of commercial dealings and arrangements, and
contemplates, to that extent, the performance of acts or works or the exercise of
some of the functions normally incident to, and in progressive prosecution of,
the purpose and object of its organization
It should be kept in mind that the purpose of the law is to subject the foreign
corporation doing business in the Philippines to the jurisdiction of our
courts.
It is not to prevent the foreign corporation from performing single or isolated
acts, but to bar it from acquiring a domicile for the purpose of business
without first taking the steps necessary to render it amenable to suits in the local
courts.
The trial court held that petitioner-corporation was doing business without a
license, finding that:
"The invoices and delivery receipts covering the period of (sic) from January
17, 1989 to August 16, 1989 cannot be treated to mean a singular and isolated
business transaction that is temporary in character. G
, the transaction cannot be considered as an isolated one. Note that there were 17
orders and deliveries (only sixteen per our count) over a four- month period.
The appellee (private respondent) made separate orders at various dates. The
transactions did not consist of separate deliveries for one single order. In the case
at bar, the transactions entered into by the appellant with the appellee are a series
of commercial dealings which would signify an intent on the part of the
appellant (petitioner) to do business in the Philippines and could not by any
stretch of the imagination be considered an isolated one, thus would fall
under the category of 'doing business'.

Even if We were to view, as contended by the appellant, that the transactions

which occurred between January to August 1989, constitute a single act or
isolated business transaction, this being the ordinary business of appellant
corporation, it can be said to be illegally doing or transacting business without a
license. . . Here it can be clearly gleaned from the four-month period of
transactions between appellant and appellee that it was a continuing business
relationship, which would, without doubt, constitute doing business without a
license. For all intents and purposes, appellant corporation is doing or transacting
business in the Philippines without a license and that, therefore, in accordance
with the specific mandate of Section 144 of the Corporation Code, it has no
capacity to sue."

Thus, the sale by petitioner of the items covered by the receipts, which are part
and parcel of its main product line, was actually carried out in the progressive
prosecution of commercial gain and the pursuit of the purpose and object of its
business, pure and simple. Further, its grant and extension of 90-day credit
terms to private respondent for every purchase made, unarguably shows an
intention to continue transacting with private respondent, since in the usual
course of commercial transactions, credit is extended only to customers in good
standing or to those on whom there is an intention to maintain long-term
relationship.

Thus, we hold that the series of transactions in question could not have been
isolated or casual transactions. What is determinative of "doing business" is
not really the number or the quantity of the transactions, but more importantly,
the intention of an entity to continue the body of its business in the country.
The number and quantity are merely evidence of such intention. The phrase
"isolated transaction" has a definite and fixed meaning, i.e. a transaction or series
of transactions set apart from the common business of a foreign enterprise in the
sense that there is no intention to engage in a progressive pursuit of the
purpose and object of the business organization. Whether a foreign corporation
is "doing business" does not necessarily depend upon the frequency of its
transactions, but more upon the nature and character of the transactions. 14

Torres-Madrid A shipment of various electronic goods from Thailand and
Brokerage v FEB Malaysia arrived at the Port of Manila for Sony Philippines,
Mitsui, GR Inc. (Sony). Previous to the arrival, Sony had engaged the
194121, services of TMBI to facilitate, process, withdraw, and
7/11/2016 deliver the shipment from the port to its warehouse in
Binan, Laguna
TMBI - who did not own any delivery trucks - subcontracted
the services of Benjamin Manalastas' company, BMT
Trucking Services (BMT), to transport the shipment from
the port to the Binan warehouse. Incidentally, TMBI
notified Sony who had no objections to the arrangement.
Four BMT trucks picked up the shipment from the port at
about 11:00 a.m. of October 7, 2000. However, BMT could
not immediately undertake the delivery because of the
truck ban and because the following day was a Sunday.
Thus, BMT scheduled the delivery on October 9, 2000.
In the early morning of October 9, 2000, the four trucks left
BMT's garage for Laguna. However, only three trucks
arrived at Sony's Binan warehouse.
At around 12:00 noon, the truck driven by Rufo Reynaldo
Lapesura was found abandoned along the Diversion Road in
Filinvest, Alabang, Muntinlupa City. Both the driver and the
shipment were missing.
Later that evening, BMT's Operations Manager Melchor
Manalastas informed Victor Torres, TMBI's General
Manager, of the development.
Victor Torres also filed a complaint with the National
Bureau of Investigation (NBI) against Lapesura for
"hijacking." The complaint resulted in a recommendation
Given the facts of this case, we cannot see how petitioner's business dealings
will fit the category of "isolated transactions" considering that its intention to
continue and pursue the corpus of its business in the country had been clearly
established.
By this judgment, we are not foreclosing petitioner's right to collect payment.
Res judicata does not set in a case dismissed for lack of capacity to sue, because
there has been no determination on the merits. 16 Moreover, this Court has ruled
that subsequent acquisition of the license will cure the lack of capacity at the
time of the execution of the contract.
Whether or not a brokerage may be considered a common carrier if it also
undertakes to deliver the goods for its customers? YES.
Whether or not hijacking is a fortuitous event? NO.
Consequently, Whether or not TMBI is liable? YES.
Whether or not TMBI and BMT are solidary liable to Mitsui? NO.
Whether or not a 3rd party may recover from a common carrier for QD? YES.
Brokerage is a Common Carrier
In A.F. Sanchez Brokerage Inc. v. Court of Appeals, the Court held that a
customs broker - whose principal business is the preparation of the correct
customs declaration and the proper shipping documents - is still considered a
common carrier if it also undertakes to deliver the goods for its customers. The
law does not distinguish between one whose principal business activity is the
carrying of goods and one who undertakes this task only as an ancillary activity.
Despite TMBI's present denials, the Court find that the delivery of the goods is
an integral, albeit ancillary, part of its brokerage services. TMBI admitted that it
was contracted to facilitate, process, and clear the shipments from the customs
authorities, withdraw them from the pier, then transport and deliver them to
Sony's warehouse in Laguna.
That TMBI does not own trucks and has to subcontract the delivery of its clients'
goods, is immaterial. As long as an entity holds itself to the public for the
transport of goods as a business, it is considered a common carrier regardless of
whether it owns the vehicle used or has to actually hire one.
Lastly, TMBI's customs brokerage services - including the transport/delivery of
the cargo - are available to anyone willing to pay its fees. Given these
circumstances, we find it undeniable that TMBI is a common carrier.
Hijacking not a Fortuitous Event
by the NBI to the Manila City Prosecutor's Office to
prosecute Lapesura for qualified theft.
TMBI notified Sony of the loss through a letter. It also sent
BMT a letter demanding payment for the lost shipment.
BMT refused to pay, insisting that the goods were
"hijacked."
In the meantime, Sony filed an insurance claim with the
Mitsui, the insurer of the goods. After evaluating the merits
of the claim, Mitsui paid Sony PHP7,293,386.23
corresponding to the value of the lost goods.
After being subrogated to Sony's rights, Mitsui sent TMBI a
demand letter for payment of the lost goods. TMBI refused
to pay Mitsui's claim. As a result, Mitsui filed a complaint
against TMBI.
At the trial, it was revealed that BMT and TMBI have been
doing business with each other since the early 80's. It also
came out that there had been a previous hijacking incident
involving Sony's cargo in 1997, but neither Sony nor its
insurer filed a complaint against BMT or TMBI.
TMBI Argument
TMBI insists that the hijacking of the truck was a
fortuitous event. It contests the CA's finding that neither
force nor intimidation was used in the taking of the cargo.
Considering Lapesura was never found, the Court should not
discount the possibility that he was a victim rather than a
perpetrator.
TMBI denies being a common carrier because it does not
own a single truck to transport its shipment and it does not
offer transport services to the public for compensation. It
emphasizes that Sony knew TMBI did not have its own
vehicles and would subcontract the delivery to a third-party.
TMBI solely blames BMT as it had full control and custody
of the cargo when it was lost. BMT, as a common carrier, is
presumed negligent and should be responsible for the loss.
BMT Argument
The theft or the robbery of the goods is not considered a fortuitous event or
a force majeure. Nevertheless, a common carrier may absolve itself of liability
for a resulting loss:
(1) if it proves that it exercised extraordinary diligence in transporting and
safekeeping the goods; or
(2) if it stipulated with the shipper/owner of the goods to limit its liability for
the loss, destruction, or deterioration of the goods to a degree less than
extraordinary diligence.
However, a stipulation diminishing or dispensing with the common carrier's
liability for acts committed by thieves or robbers who do not act with grave
or irresistible threat, violence, or force is void under Article 1745 of the Civil
Code for being contrary to public policy.
Jurisprudence, too, has expanded Article 1734's five exemptions.
De Guzman v. Court of Appeals interpreted Article 1745 to mean that a robbery
attended by "grave or irresistible threat, violence or force" is a fortuitous
event that absolves the common carrier from liability.
In the present case, the shipper, Sony, engaged the services of TMBI, a common
carrier, to facilitate the release of its shipment and deliver the goods to its
warehouse. In turn, TMBI subcontracted a portion of its obligation - the delivery
of the cargo - to another common carrier, BMT.
Despite the subcontract, TMBI remained responsible for the cargo. Under
Article 1736, a common carrier's extraordinary responsibility over the shipper's
goods lasts from the time these goods are unconditionally placed in the
possession of, and received by, the carrier for transportation, until they are
delivered, actually or constructively, by the carrier to the consignee.
That the cargo disappeared during transit while under the custody of BMT -
TMBI's subcontractor - did not diminish nor terminate TMBIs responsibility
over the cargo. Article 1735 of the Civil Code presumes that it was at fault.
Instead of showing that it had acted with extraordinary diligence, TMBI simply
argued that it was not a common carrier bound to observe extraordinary
diligence. Its failure to successfully establish this premise carries with it the
presumption of fault or negligence, thus rendering it liable to Sony/Mitsui for
breach of contract.
TMBI's current theory - that the hijacking was attended by force or
intimidation - is untenable.
BMT insists that it observed the required standard of care.
Like the petitioner, BMT maintains that the hijacking was
a fortuitous event - a force majeure - that exonerates it from
liability. It points out that Lapesura has never been seen
again and his fate remains a mystery. BMT likewise argues
that the loss of the cargo necessarily showed that the taking
was with the use of force or intimidation. If there was any
attendant negligence, BMT points the finger on TMBI who
failed to send a representative to accompany the shipment.
Mitsui Argument
Mitsui counters that neither TMBI nor BMT alleged or
proved during the trial that the taking of the cargo was
accompanied with grave or irresistible threat, violence, or
force. Hence, the incident cannot be considered "force
majeure" and TMBI remains liable for breach of contract.
Mitsui emphasizes that TMBI's theory - that force or
intimidation must have been used because Lapesura was
never found - was only raised for the first time before this
Court. It also discredits the theory as a mere conjecture for
lack of supporting evidence.
First, TMBI alleged in its Third Party Complaint against BMT that Lapesura was
responsible for hijacking the shipment. Further, Victor Torres filed a criminal
complaint against Lapesura with the NBI. These actions constitute direct and
binding admissions that Lapesura stole the cargo. Justice and fair play dictate
that TMBI should not be allowed to change its legal theory on appeal.
Second, neither TMBI nor BMT succeeded in substantiating this theory through
evidence. Thus, the theory remained an unsupported allegation no better than
speculations and conjectures. The CA therefore correctly disregarded the
defense of force majeure.
TMBI and BMT not Solidarily Liable
TMBI's liability to Mitsui does not stem from a quasi-delict (culpa aquiliana)
but from its breach of contract (culpa contractual). The tie that binds TMBI
with Mitsui is contractual, albeit one that passed on to Mitsui as a result of
TMBI's contract of carriage with Sony to which Mitsui had been subrogated as
an insurer who had paid Sony's insurance claim. The legal reality that results
from this contractual tie precludes the application of quasi-delict based Article
2194.
3rd Party may recover from Common Carrier for Quasi-Delict
While it is undisputed that the cargo was lost under the actual custody of BMT
(whose employee is the primary suspect in the hijacking or robbery of the
shipment), no direct contractual relationship existed between Sony/Mitsui
and BMT. If at all, Sony/Mitsui's cause of action against BMT could only arise
from quasi-delict, as a third party suffering damage from the action of another
due to the latter's fault or negligence, pursuant to Article 2176 of the Civil Code.
In the present case, Mitsui's action is solely premised on TMBl's breach of
contract. Mitsui did not even sue BMT, much less prove any negligence on its
part. If BMT has entered the picture at all, it 'is because TMBI sued it for
reimbursement for the liability that TMBI might incur from its contract of
carriage with Sony/Mitsui. Accordingly, there is no basis to directly hold BMT
liable to Mitsui for quasi-delict.
BMT liable to TMBI for Breach of Contract
By subcontracting the cargo delivery to BMT, TMBI entered into its own
contract of carriage with a fellow common carrier.
The cargo was lost after its transfer to BMT's custody based on its contract of
carriage with TMBI. Following Article 1735, BMT is presumed to be at fault.
Since BMT failed to prove that it observed extraordinary diligence in the

LTFRB v RTC issued a write of preliminary injunction in favor of
Valenzuela, GR respondent DBDOYC that enjoined petitioners DOTR
242860, from regulating DBDOYC’s business operations conducted
3/11/2019 through the Angkas mobile app.
DOTR issued a department order adding 2 new
classficiations for public transport conveyances that is
used as a basis for the issuances of a CPC for public utilty
vehicles. Namely:
1. Transportation Network Companies (TNC) -
organization whether a corporation, partnership, sole
proprietor, or other form, that provides pre-arranged
transportation services for compensation using an online-
enabled application or platform technology to connect
passengers with drivers using their personal vehicles."
2. Transportation Network Vehicles (TNVCs) - "a PUV
accredited with a TNC, which is granted authority or
franchise by the LTFRB to run a public transport service."
LTFRB declared that a TNC is treated as a transport
provider, whose accountability commences from the
acceptance by its TNVS while online. On the other hand, the
accountability of the TNVS, as a common carrier, attaches
from the time the TNVS is online and offers its services to
the riding public.
DBDOYC registered its business launched "Angkas," an
online and on-demand motorcycle-hailing mobile
application (Angkas or Angkas app) that pairs drivers of
motorcycles with potential passengers without, however,
obtaining the mandatory certificate of TNC accreditation
from the LTFRB.
LTFRB issued a press release saying that DBDOYC, which
is considered as a TNC, cannot legally operate. Despite
such warning, however, DBDOYC continued to operate
performance of its obligation to TMBI, it is liable to TMBI for breach of
their contract of carriage.
In these lights, TMBI is liable to Sony (subrogated by Mitsui) for breaching the
contract of carriage. In turn, TMBI is entitled to reimbursement from BMT due
to the latter's own breach of its contract of carriage with TMBI. The proverbial
buck stops with BMT who may either: (a) absorb the loss, or (b) proceed after
its missing driver, the suspected culprit, pursuant to Article 2181
ISSUE: W/N the RTC was correct in issuing a writ of preliminary injunction?
NO.
The first and foremost requisite in the issuance of a writ of preliminary
injunction is the existence of a clear legal right. The writ of preliminary
injunction must establish that he or she has a present and unmistakable right to
be protected. Thus, where the plaintiff's right is doubtful or disputed, a
preliminary injunction is not proper.
These CPC issuances may be traced to Commonwealth Act No. 146, otherwise
known as the "Public Service Act,"
The term "public service" includes every person that now or hereafter may own,
operate, manage, or control in the Philippines, for hire or compensation, with
general or limited clientele, whether permanent, occasional or accidental, and
done for general business purposes, any common carrier, railroad, street railway,
traction railway, sub-way motor vehicle, either for freight or passenger, or both
with or without fixed route and whatever may be its classification
Section 15 of the same law requires that, except for certain exemptions, no
public service shall operate in the Philippines without possessing a CPC.
The Civil Code defines "common carriers" in the following terms: Article 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.
De Guzman v. Court of Appeals: Article 1732 also carefully avoids making any
distinction between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on an occasional,
episodic or unscheduled basis. 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. We think that Article
[1732] deliberately refrained from making such distinctions.
So understood, the concept of "common carrier" under Article 1732 may be
seen to coincide neatly with the notion of "public service”
and offer its services to the riding public sans any effort to
obtain a certificate of TNC accreditation.
DBDOYC filed for a TRO/Writ of Preliminary Injunction
against petitioners before the RTC which was granted on the
ground that DBDOYC's business is not subject to any
regulation nor prohibited under existing law.
PETITIONERS ARGUMENT: DBDOYC is a
transportation provider and its accredited drivers are
common carriers engaged in rendering public service
which is subject to their regulation.
RESPONDENT (DOBYC): its technology only allows a
biker willing to give a ride and a passenger willing to pay
the set price to meet and contract with each other. Under
this set-up, an Angkas biker does not offer his/her service
to an indefinite public. They may not compel an Angkas
driver to pick up a potential passenger even after the latter
confirms a booking because as between the biker and the
passenger, there is but a purely private contractual
arrangement."
As the DBDOYC itself describes, Angkas is a mobile application which seeks
to "pair an available and willing Angkas biker with a potential passenger, who
requested for a motorcycle ride, relying on geo-location technology."
Accordingly, it appears that it is practically functioning as a booking agent, or
at the very least, acts as a third-party liaison for its accredited bikers.
Irrespective of the application's limited market scope, i.e., Angkas users, it
remains that, on the one hand, these bikers offer transportation services to wiling
public consumers, and on the other hand, these services may be readily accessed
by anyone who chooses to download the Angkas app.
As the Court observes, the genius behind the Angkas app is that it removes the
inconvenience of having to physically hail for public transportation by
creating a virtual system wherein practically the same activity may now be done
at the tip of one's fingers.
As such, the fact that its drivers are not physically hailed on the street does
not automatically render Angkas- accredited drivers as private carriers.
While DBDOYC further claims that another distinguishing factor of its business
is that "[its] drivers may refuse at any time any legitimate demand for service by
simply not going online or not logging in to the online platform," still when they
do so log-in, they make their services publicly available. In other words, when
they put themselves online, their services are bound for indiscriminate public
consumption.
Moreover, based on the way the app works, it appears that there is really no
contractual discretion between the Angkas bikers and would- be passengers
because the app automatically pairs them up based on algorithmic procedures.
The absence of any true choice on these material contractual points apparently
contradicts the postulation that the Angkas app merely facilitates a purely
private arrangement between the biker and his passenger.
At any rate, even if it is assumed that Angkas-accredited bikers are not treated
as common carriers and hence, would not make DBDOYC fall under the "public
service" definition, it does not necessarily mean that the business of holding
out private motorcycles for hire is a legitimate commercial venture.
That being said, the Court therefore concludes that no clear and
unmistakable right exists in DBDOYC's favor; hence, the RTC gravely
abused its discretion in issuing the assailed injunctive writ.

BA Finance v BA Finance owned a 10-wheeler truck and leased it to Rock
CA, 215 SCRA Component. The truck figured in an accident.
715
Rogelia Amare, the driver of the Isuzu ten-wheeler truck,
was at fault for the accident, and he was found guilty beyond
reasonable doubt reckless imprudence resulting in triple
homicide with multiple physical injuries with damage to
property by RTC Bulacan.
Petitioner BA Finance Corp. was held liable for damages as
the truck was registered in its name during the incident. In
the same breadth, Rock Component Philippines, Inc. was
ordered to reimburse BA Finance for any amount that the
latter may be adjudged liable to pay respondents Carlos
Ocampo, Moises Ocampo, Nicolas Cruz and Inocencio
Turla, Sr. (victims/plaintiffs) or their heirs.
This is because the reimbursement is expressly stipulated
in the contract of lease between BA Finance and Rock
Component. Moreover, the trial court applied Article 2194
of the new Civil Code to both of them on solidary
accountability of joint tortfeasors insofar as the liability of
the driver.
BA Finance argues that it was not the employer of the
negligent driver, the driver was under the control and
supervision of Lino Castro at the time of the accident.
Therefore, Art. 2180 of Civil Code on vicarious liability
should not apply to it as there was no employer-employee
relationship. Further, the physical possession was with
Rock Component by virtue of the lease.
NOTE: It is thus beyond the power of the Court to determine the ultimate rights
and obligations of the parties, else it unduly prejudges the main case for
declaratory relief which is still pending before the court a quo. While the Court
acknowledges the contemporary relevance of the topic at hand, it remains self-
aware of this case's procedural and jurisdictional parameters. Accordingly,
the definitive resolution of the issue of regulating ride-booking or ride-sharing
applications must await the proper case therefor.
Whether BA Finance can be held responsible to the victims even if the truck was
leased when the incident occurred? YES.
The Court held that the ruling in Erezo, et. al. v. Jepte is still good law, thus:
“In previous decisions, We already have held that the registered owner
of a certificate of public convenience is liable to the public for the injuries
or damages suffered by passengers or third persons caused by the operation
of said vehicle, even though the same had been transferred to a third person.
The principle upon which this doctrine is based is that in dealing with vehicles
registered under the Public Service Law, the public has the right to assume or
presume that the registered owner is the actual owner thereof, for it would
be difficult for the public to enforce the actions that they may have for
injuries caused to them by the vehicles being negligently operated if the public
should be required to prove who the actual owner is.
Under the same principle the registered owner of any vehicle, even if not
used fora public service, should primarily be responsible to the public or to
third persons for injuries caused the latter while the vehicle is being driven on
the highways or streets. The members of the Court are in agreement that the
defendant-appellant should be held liable to plaintiff-appellee for the injuries
occasioned to the latter because of the negligence of the driver, even if the
defendant-appellant was no longer the owner of the vehicle at the time of the
damage because he had previously sold it to another.
The basis for the liability is there is a presumption that the owner of the
guilty vehicle is the defendant appellant as he is the registered owner in the
Motor Vehicles Office.
The Revised Motor vehicles Law (Act No. 3992, as amended) provides
that no vehicle may be used or operated upon any public highway unless the
same is properly registered. It has been stated that the system of licensing and
the requirement that each machine must carry a registration number,
conspicuously displayed, is one of the precautions taken to reduce the danger
of injury to pedestrians and other travelers from the careless management
of automobiles. Further, dealers in motor vehicles shall furnish the Motor
Vehicles Office a report showing the name and address of each purchaser of
 motor vehicle during the previous month and the manufacturer's serial number
and motor number.

Registration is required not to make said registration the operative act by

which ownership in vehicles is transferred… but to permit the use and
operation of the vehicle upon any public highway. The main aim of motor
vehicle registration is to identify the owner so that if any accident happens,
or that any damage or injury is caused by the vehicle on the public highways,
responsibility therefor can be fixed on a definite individual, the registered
owner. Identification of the vehicle and the operator may act as a deterrent from
lax observance of the law and of the rules of conservative and safe operation.

Should the registered owner be allowed at the trial to prove who the actual
owner is? We hold with the trial court that the law does not allow him to do so;
the law, with its aim and policy in mind, does not relieve him directly of the
responsibility that the law fixes and places upon him as an incident or
consequence of registration. Were a registered owner allowed to evade
responsibility by proving who the supposed transferee or owner is, it would
be easy for him, by collusion with others or otherwise, to escape said
responsibility and transfer the same to an indefinite person, or to one who
possesses no property with which to respond financially for the damage or injury
done. The protection that the law aims to extend to him would become
illusory were the registered owner given the opportunity to escape liability
by disproving his ownership.

The above policy and application of the law may appear quite harsh and
would seem to conflict with truth and justice. We do not think it is so. A
registered owner who has already sold or transferred a vehicle has the
recourse to a third-party complaint, in the same action brought against him
to recover for the damage or injury done, against the vendee or transferee
of the vehicle. The inconvenience of the suit is no justification for relieving him
of liability; said inconvenience is the price he pays for failure to comply with the
registration that the law demands and requires.”

The same rationale is applied in this case. The cases of Duavit and
Duquillo does not apply here because in those two cases, the vehicles were stolen
from their respective owners.

Occidental The case began with the collision of a Ford Fiera and a W/N TC erred in taking judicial notice of the previous case? NO That at about 4:50 o'clock in
Transport v CA, Carina Express No. C-24 passenger bus in Bunawan, W/N TC Erred in not holding the ford fiesta exclusively responsible? Are you the morning of November
220 SCRA 167 Calamba, Misamis Occidental on November 25, 1975 at f****** serious????? NO 25, 1975, Trencio
about six o'clock a.m. As a result of this, the Ford Fiera W/N TC Erred in not holding that the ford fiesta did not belong to Trencio Almedilla, who was the
was thrown into the canal on the right side of the road. Almedilla NO real owner of the Ford
Pacifico Carbajosa, the driver, was pinned to the steering Fiera, but attached to the
wheel and was severely burnt where he died from his The petition is devoid of merit. Sevilla Lines of dependant
injuries. Trencio Almedilla, the owner of the vehicle No error was committed by the respondent court when it upheld the findings of William Sevilla, left for
registered under Sevilla Line, and Alberto Pingkian were the trial court in Civil Case No. 2728. Ozamis City, on board his
injured. The bus did not stop and just proceeded to Ford Fiera, to buy textiles,
continue on. The reasons advanced by the respondent court in taking judicial notice of Civil together with Alberto
Case No. 3156 are valid and not contrary to law. As a general rule, "courts are Pingkian who wanted to
The owner of the Carina passenger bus, Occidental Land not authorized to take judicial notice in the adjudication of cases pending before visit his aunt at Ozamis City.
Transportation Company filed a case for damages against them, of the contents of the records of other cases, even when such have been
Sevilla Line and/or William Sevilla, the registered owner of tried or are pending in the same court, and notwithstanding the fact that both Reaching Dipolog City,
the Ford Fiera, which case was docketed as Civil Case No. cases may have been heard or are actually pending before the same judge." Trencio Almedilla, came
3156 before the Court of First Instance, Branch III, upon Pacifico Carbajosa,
Oroquieta City. The exceptions are: 'in the absence of objection,' 'with the knowledge of the who wants (sic) to load fish
opposing party,' or 'at the request or with the consent of the parties,' the case is in the Ford Fiera for Ozamis
Trencio Almedilla and Alberto Pingkian also filed a civil clearly referred to or 'the original or part of the records of the case are City. As it was an opportune
suit for damages against Occidental Land Transportation actually withdrawn from the archives' and 'admitted as part of the record of occasion, Trencio agreed to
Company, Inc. and the driver of the Carina bus, Edgardo the case then pending load the fish of Pacifico for
Enerio. Later the heirs of Pacifico Carbajosa filed a a freight of P130.00. So they
complaint-in- intervention. This case was docketed as Civil The Court in Tabuena ruled that the conditions necessary for the exception to be loaded the fish of Pacifico at
Case No. 2728 before the Regional Trial Court of applicable were not established, such as that ". . ., (t)he petitioner was completely Miputak, then got gasoline
Zamboanga del Norte, Branch VI, Dipolog City. (KEEP unaware that his testimony in Civil Case No. 1327 was being considered by the at a Caltex Station and
NOTE 2 CASES WERE FILED) trial court in the case then before it. As the petitioner puts it, the matter was never proceeded towards Ozamis
taken up at the trial and was 'unfairly sprung' upon him, leaving him no City.
On July 30, 1977, Judge Rodolfo A. Ortiz of the Oroquieta opportunity to counteract."
court rendered a decision in Civil Case No. 3156 finding Trencio, was driving his
the driver of the Carina passenger bus and not the driver The same is not true in the instant case. Civil Case No. 3156, which the lower Ford Fiera, was running
of the Ford Fiera, as negligent. court in Civil Case No. 2728 took judicial notice of, decided the issue of slowly as Pacifico alias
negligence between the driver of the two vehicles involved in the subject "Balodoy" told him not to go
On March 11, 1986, more than ten years after the collision. It was therefore a matter of convenience, to consider the decision fast so that his fish will not
inception of the case, Judge Daniel B. Bernaldez rendered rendered in that case. get destroyed. After passing
the decision in Civil Case No. 2728 against Occidental Sapang Dalaga, at Misamis
Land Transportation Company, Inc. and Edgardo Enerio. And unlike the factual situation in Tabuena v. CA, the decision in Civil Case Occidental, Trencio
They gave damages to Trencio and Alberto. No. 3156 formed part of the records of the instant case (Civil Case No. 2728) developed stomach ache. At
with the knowledge of the parties and in the absence of their objection. this, "Balodoy" requested
What is crucial to note is that in Case No 2728, facts were that Trencio allow him to
adopted from the facts of Case 3156. This being the case, petitioners were aware that Exhibit "O" (Decision in Civil drive the Ford Fiera as he
Case No. 3156) had formed part of the records of the case and would thereby be was an experienced driver.
considered by the trial court in its decision. Trencio agreed. And so,
with "Balodoy" on the
The lower court did not merely "adopt by reference" the findings of fact of the wheels of the Ford Fiera,
Oroquieta court, but used it in its discourse to obtain the conclusions pronounced they proceeded slowly for
in its decision. fear that the fish will get
damaged. Reaching
Third Issue: TRANSPO Bunawan at Calamba, and
Petitioner alleges that the Ford Fiera did not belong to Trencio Almedilla, but to while negotiating a curb at
its registered owner — Sevilla Lines, and therefore the grant of damages for the descending portion of
the asphalted national
its repair was improperly awarded to private respondent Almedilla. This highway, which was get, as
factual matter has already been decided upon in the trial court. it was raining, a Carina
passenger bus was running
The fact that the Fiera was owned by Almedilla though registered with Sevilla fast in an ascent,
Line, will not alter the conclusion arrived at by the lower court. The party who zigzagging towards them.
stands to benefit or suffer from the decision is admittedly private Because of this, the Ford
respondent Almedilla and not Sevilla Lines. William Sevilla admitted that the Fiera went towards the
real owner of the vehicle was Trencio Almedilla, in the case for damages by extreme right of the road
Occidental Land Transportation against Sevilla Lines and/or William Sevilla.17 with its right front and rear
Having thus been settled in the lower court, petitioner is now no longer in any tires already running at (sic)
position to question the ownership of the Fiera or the award of damages to the ground shoulder, but
private respondent Almedilla. even as the Ford Fiera tried
to avoid the zigzagging
Carina Express No. C-24,
the said Carina bus jerked
towards the left, hitting as
a result, the Ford Fiera at
the left fender and hood,
throwing it to the canal at
the right side, with engine
burning. The Carina
passenger bus continued to
swerve towards the left until
it turn about, facing towards
the direction of Ozamis
City.

Balodoy was pinned by the

steering wheel to his driver's
seat and was seriously
injured, Pingkian and
Trencio were also injured,
but they were well enough to
try to help to extricate
Balodoy, not until Genito
Compania got a piece of
wood from his house
nearby, which he used as a
lever to pry out Balodoy.
The driver of Carina
passenger bus, which had
three (3) passengers, at
that time, did not help
Balodoy. Instead it
proceeded towards Sapang
Dalaga.

The accident was reported to

the police authorities of
Calamba, as a result of
which Acting Station
Commander Arceno of
Calamba Police Station,
Police
District No. II, made a
Police Report dated
November 25 1975 as
follows: 'POLICE REPORT

At about 0645 Hrs More or

less 25, Nov. Sevilla Line
bearing plate No. 8-B940
which was driven by
Pacifico Carbajosa y
Gemillan, 40 years old,
married and a resident of
398 Martines St., Dipolog
City, said driver was burned
and injured seriously when
on the way at Bunawan this
Municipality, due to a
bumping incident.

Bus Line marked Carina

bearing Plate No. 939 driven
by Edgardo Enerio y
Paglinawan of Sapang
Dalaga, Misamis
Occidental, Hit and run and
surrendered to Sapang
Dalaga office of the Station
Commander.

The Driver of Sevilla Line

with his two companions
were rushed to the Calamba
Community Hospital for
treatment. The scene of the

Benedicto v IAC, Greenhills bound itself to sell and deliver to Blue Star
187 SCRA 554 (from Madella to Valenzuela) sawn lumber with an initial
delivery on 15 May 1980.
Licuden, the driver of a cargo truck, was contracted by
Greenhills to make the delivery.
This cargo truck was registered in the name of Benedicto
the proprietor of a business enterprise engaged in
hauling freight.
In a letter dated 18 May 1980, Blue Star's administrative and
personnel manager formally informed Greenhills' president
and general manager that Blue Star still had not received
the sawn lumber and because of this delay, "they were
constrained to look for other suppliers."
Greenhills filed a criminal case against driver Licuden
for estafa. Greenhills also filed a case for recovery of the
value of the lost sawn lumber plus damages against
petitioner Benedicto.
Benedicto claims she sold the subject truck to Benjamin
Tee, on 28 February 1980. She claimed that the truck had
remained registered in her name because the latter had
not fully paid the agreed price. However, she averred that
Tee had been operating the said truck in Central Luzon from
that date (28 February 1980) onwards, and that, therefore,
Licuden was Tee's employee and not hers.
incident was investigated by
F/Sgt. Pagalaran, Sr.'
Whether or not Benedicto, being the registered owner of the carrier, should be
held liable for the value of the undelivered or lost sawn lumber? YES.
Benedicto’s claim: Benedicto urges that she could not be held answerable for
the loss of the cargo, because the doctrine which makes the registered owner of
a common carrier vehicle answerable to the public for the negligence of the
driver despite the sale of the vehicle to another person, applies only to cases
involving death of or injury to passengers. What applies in the present case,
according to Benedicto, is the rule that a contract of carriage requires proper
delivery of the goods to and acceptance by the carrier. Thus, Benedicto contends
that the delivery to a person falsely representing himself to be an agent of the
carrier prevents liability from attaching to the registered owner.
DOCTRINE: The prevailing doctrine on common carriers makes the
registered owner liable for consequences flowing from the operations of the
carrier, even though the specific vehicle involved may already have been
transferred to another person. This doctrine rests upon the principle that in
dealing with vehicles registered under the Public Service Law, the public has
the right to assume that the registered owner is the actual or lawful owner
thereof. It would be very difficult and often impossible as a practical matter, for
members of the general public to enforce the rights of action that they may have
for injuries inflicted by the vehicles being negligently operated if they should be
required to prove who the actual owner is. The registered owner is not allowed
to deny liability by proving the identity of the alleged transferee.
SC Ruling: There is no dispute that Benedicto has been holding herself out to
the public as engaged in the business of hauling or transporting goods for hire or
compensation. Benedicto is a common carrier. Thus, contrary to Benedicto's
claim, Greenhills is not required to go beyond the vehicle's certificate of
registration to ascertain the owner of the carrier. In this regard, the letter
presented by Benedicto allegedly written by Benjamin Tee admitting that
Licuden was his driver, had no evidentiary value not only because Benjamin
Tee was not presented in court to testify on this matter but also because of
the aforementioned doctrine.
To permit the ostensible or registered owner to prove who the actual owner is,
would be to set at naught the purpose or public policy which infuses that
doctrine. In fact, Greenhills had no reason at all to doubt the authority of
Licuden to enter into a contract of carriage on behalf of the registered
owner. It appears that, earlier, in the first week of May 1980, Greenhills had
contracted Licuden who was then driving the same cargo truck to transport
and carry a load of sawn lumber from the Maddela sawmill to Dagupan
City. No one came forward to question that contract or the authority of Licuden
to represent the owner of the carrier truck.

Benedicto’s claim: Benedicto insists that the said principle should apply only to
cases involving negligence and resulting injury to or death of passengers, and
not to cases involving merely carriage of goods.

DOCTRINE: A common carrier, both from the nature of its business and
for insistent reasons of public policy, is burdened by the law with the duty
of exercising extraordinary diligence not only in ensuring the safety of
passengers but also in caring for goods transported by it. The loss or
destruction or deterioration of goods turned over to the common carrier for
conveyance to a designated destination, raises instantly a presumption of fault
or negligence on the part of the carrier, save only where such loss, destruction
or damage arises from extreme circumstances such as a natural disaster or
calamity or act of the public enemy in time of war, or from an act or omission of
the shipper himself or from the character of the goods or their packaging or
container.

This presumption may be overcome only by proof of extraordinary diligence on

the part of the carrier. Clearly, to permit a common carrier to escape its
responsibility for the passengers or goods transported by it by proving a prior
sale of the vehicle or means of transportation to an alleged vendee would be to
attenuate drastically the carrier's duty of extraordinary diligence.

SC Ruling: The thrust of the public policy here involved is as sharp and real in
the case of carriage of goods as it is in the transporting of human beings. Thus,
to sustain Benedicto's contention, that is, to require the shipper to go behind a
certificate of registration of a public utility vehicle, would be utterly subversive
of the purpose of the law and doctrine.

Benedicto’s claim: Benedicto further insists that there was no perfected contract
of carriage for the reason that there was no proof that her consent or that of Tee
had been obtained; no proof that the driver, Licuden, was authorized to bind the
registered owner; and no proof that the parties had agreed on the freightage to
be paid.

SC Ruling: Once more, we are not persuaded. Driver Licuden was entrusted
with possession and control of the freight truck by the registered owner
(and by the alleged secret owner, for that matter). Driver Licuden, under the
circumstances, was clothed with at least implied authority to contract to carry
goods and to accept delivery of such goods for carriage to a specified destination.
That the freight to be paid may not have been fixed before loading and
carriage, did not prevent the contract of carriage from arising, since the

Equitable v On July 17, 1994, a Fuso Road Tractor driven by Raul
Suyon, GR Tutor rammed into the house cum store of Myrna Tamayo
143360, 7/5/2002 in Tondo, Manila. A portion of the house was destroyed
which caused death and injury. Tutor was charged with and
later convicted of reckless imprudence resulting in
multiple homicide and multiple physical injuries.
Upon verification with the Land Transportation Office, it
was known that the registered owner of the tractor was
Equitable Leasing Corporation/leased to Edwin Lim. On
April 15, 1995, respondents filed against Raul Tutor,
Ecatine Corporation (Ecatine) and Equitable Leasing
Corporation (Equitable) a Complaint for damages.
The petitioner alleged that the vehicle had already been
sold to Ecatine and that the former was no longer in
possession and control thereof at the time of the incident. It
also claimed that Tutor was an employee, not of Equitable,
but of Ecatine.
Whether or not the petitioner was liable for damages based
on quasi delict for the negligent act?
The Lease Agreement between petitioner and Edwin Lim
stipulated that it is the intention of the parties to enter into a
finance lease agreement. Ownership of the subject tractor
was to be registered in the name of petitioner, until the
value of the vehicle has been fully paid by Edwin Lim.
Lim completed the payments to cover the full price of the
tractor. Thus, a Deed of Sale over the tractor was executed
by petitioner in favor of Ecatine represented by Edwin Lim.
However, the Deed was not registered with the LTO.
Petitioner is liable for the deaths and the injuries
complained of, because it was the registered owner of the
tractor at the time of the accident. The Court has
consistently ruled that, regardless of sales made of a
motor vehicle, the registered owner is the lawful operator
insofar as the public and third persons are concerned.
Since Equitable remained the registered owner of the tractor,
it could not escape primary liability for the deaths and the
injuries arising from the negligence of the driver.
freight was at least determinable if not fixed by the tariff schedules in
petitioner's main business office.
In negligence cases, the aggrieved party may sue the negligent party under (1)
Article 10 of the Revised Penal Code, for civil liability ex delicto; or under
Article 2176 of the Civil Code, for civil liability ex quasi delicto.
Furthermore, under Article 103 of the Revised Penal Code, employers
may be held subsidiarily liable for felonies committed by their employees in the
discharge of the latter's duties. This liability attaches when the employees who
are convicted of crimes committed in the performance of their work are found
to be insolvent and are thus unable to satisfy the civil liability adjudged.
On the other hand, under Article 2176 in relation to Article 2180 of the
Civil Code, an action predicated on quasi delict may be instituted against the
employer for an employee's act or omission. The liability for the negligent
conduct of the subordinate is direct and primary, but is subject to the defense of
due diligence in the selection and supervision of the employee.
The enforcement of the judgment against the employer for an action based on
Article 2176 does not require the employee to be insolvent, since the liability of
the former is solidary -- the latter being statutorily considered a joint tortfeasor.
To sustain a claim based on quasi delict, the following requisites must be proven:
(a) damage suffered by the plaintiff,
(b) fault or negligence of the defendant, and
(c) connection of cause and effect between the fault or negligence of the
defendant and the damage incurred by the plaintiff.
In this case, respondents -- having failed to recover anything in the criminal
case -- elected to file a separate civil action for damages, based on quasi delict
under Article 2176 of the Civil Code. The evidence is clear that the deaths and
the injuries suffered by respondents and their kins were due to the fault of
the driver of the Fuso tractor.
Ownership of the subject tractor was to be registered in the name of petitioner,
until the value of the vehicle has been fully paid by Edwin Lim.[34] Further, in
the "Lease Schedule," the monthly rental for the tractor was stipulated, and the
term of the Lease was scheduled to expire on December 4, 1992. After a few
months, Lim completed the payments to cover the full price of the tractor. Thus,
on December 9, 1992, a Deed of Sale over the tractor was executed by petitioner
in favor of Ecatine represented by Edwin Lim. However, the Deed was not
registered with the LTO.
The Court has consistently ruled that, regardless of sales made of a motor
vehicle, the registered owner is the lawful operator insofar as the public and

Vlasons Shipping MV Vlasons I is a vessel which renders tramping
v CA, GR service and, does not transport cargo or shipment for
112350, the general public.
12/12/1997
Its services are available only to specific persons who
enter into a special contract of charter party with its
owner.
It is undisputed that the ship is a private carrier.
It is in this capacity that its owner, Vlasons Shipping,
Inc., entered into a contract of affreightment or
contract of voyage charter hire with National Steel
Corporation
NSC as Charterer and VSI as owner entered into a
CONTRACT OF VOYAGE CHARTER Hire whereby
third persons are concerned; consequently, it is directly and primarily
responsible for the consequences of its operation.[39] In contemplation of law,
the owner/operator of record is the employer of the driver, the actual operator
and employer being considered as merely its agent. The same principle applies
even if the registered owner of any vehicle does not use it for public service.
Since Equitable remained the registered owner of the tractor, it could not escape
primary liability for the deaths and the injuries arising from the negligence of
the driver
True, the LTO Certificate of Registration, dated "5/31/91," qualifies the name of
the registered owner as "EQUITABLE LEASING CORPORATION/Leased
to Edwin Lim." But the lease agreement between Equitable and Lim has been
overtaken by the Deed of Sale on December 9, 1992, between petitioner and
Ecatine. While this Deed does not affect respondents in this quasi delict suit,
it definitely binds petitioner because, unlike them, it is a party to it.
We must stress that the failure of Equitable and/or Ecatine to register the sale
with the LTO should not prejudice respondents, who have the legal right to
rely on the legal principle that the registered vehicle owner is liable for the
damages caused by the negligence of the driver. Petitioner cannot hide behind
its allegation that Tutor was the employee of Ecatine. This will effectively
prevent respondents from recovering their losses on the basis of the inaction or
fault of petitioner in failing to register the sale. The non-registration is the fault
of petitioner, which should thus face the legal consequences thereof.
W/N VSI is a common carrier or private carrier? – Private carrier.
VSI did not offer its services to the general public. It carried passengers
or goods only for those it chose under a "special contract of charter
party.
W/N MV Vlasons I is seaworthy? – YES. It was drydocked and harbored
by the Philippine Coast Guard before it proceeded to Iligan City for its
voyage to Manila under the contract of voyage charter hire.
Who were negligent, the seamen or the stevedores? – Stevedores. Such
negligence is evident in the stevedores hired by NSC, not closing the
hatch of MV 'VLASONS I' when rains occurred during the discharging
of the cargo thus allowing rainwater and seawater spray to enter the
hatches and to drift to and fall on the cargo.
W/N the failure to insure the cargo will affect NSC’s right to file an
action? – NO. This obligation is separate from the contractual responsibility
that may be incurred by VSI for damages.
NSC hired VSI's vessel, the MV 'VLASONS I' to make
one (1) voyage to load steel products at Iligan City
and discharge them at North Harbor, Manila under
conditions
FOIST- Freight In and Out including Stevedoring and
Trading: means that the handling, loading and
unloading of the cargoes are the responsibility of the
Charterer.
The NANYOZAI Charter Party is incorporated in their
contract. Under Paragraph 5 of the NANYOZAI Charter
Party, it states, 'Charterers to load, stow and discharge
the cargo free of risk and expenses to owners.
The MV 'VLASONS I' loaded at NSC’s pier at Iligan
City, the NSC's shipment of 1,677 skids of tin plates
and 92 packages of hot rolled sheets or a total of
1,769 packages with a total weight of about 2,481.19
metric tons for carriage to Manila. The shipment was
placed in the 3 hatches of the ship.
The vessel arrived with the cargo at Pier 12, North
Harbor, Manila. The following day, when the vessel's 3
hatches containing the shipment were opened by NSC’s
agents, nearly all the skids of tin plates and hot rolled
sheets were allegedly found to be wet and rusty. The
cargo was discharged and unloaded by stevedores
hired by the Charterer. Unloading was completed,
incurring a delay of eleven (11) days due to the heavy
rain which interrupted the unloading operations.
MASCO (surveyor) found wetting and rusting of the
packages of hot rolled sheets and metal covers of the
tin plates; that tarpaulin hatch covers were noted torn
at various extents; that container/metal casings of the
skids were rusting all over.
MASCO opined that 'rusting of the tin-plates was
caused by contact with SEA WATER sustained while
still on board the vessel as a consequence of the
heavy weather and rough seas encountered while en
route to destination.
W/N NSC is liable for demurrage? – NO. The four-day laytime allowed
it did not lapse, having been tolled by unfavorable weather conditions in
view of the WWDSHINC qualification agreed upon by the parties.
Common Carrier or Private Carrier?
- Generally, private carriage is undertaken by special agreement and
the carrier does not hold himself out to carry goods for the
general public.
- The most typical, although not the only form of private carriage,
is the charter party, a maritime contract by which the charterer,
a party other than the shipowner, obtains the use and service of
all or some part of a ship for a period of time or a voyage or
voyages.
- VSI did not offer its services to the general public.
Consequently, the rights and obligations of VSI and NSC, including their
respective liability for damage to the cargo, are determined primarily by
stipulations in their contract of private carriage or charter party.
Extent of VSI's Responsibility and Liability Over NSC's Cargo
It is clear from the parties' Contract of Voyage Charter Hire that VSI
"shall not be responsible for losses except on proven willful negligence
of the officers of the vessel."
- The NANYOZAI Charter Party: shipowner shall not be liable for
loss of or damage to the cargo arising or resulting from
unseaworthiness, unless the same was caused by its lack of
due diligence to make the vessel seaworthy or to ensure that
the same was "properly manned, equipped and supplied," and
to "make the holds and all other parts of the vessel in which
cargo [was] carried, fit and safe for its reception, carriage and
preservation."
- owners shall not be responsible for split, chafing and/or any damage
unless caused by the negligence or default of the master or crew.
Burden of Proof
In view of the contractual stipulations, NSC must prove that the damage
to its shipment was caused by VSI's willful negligence or failure to
exercise due diligence in making MV Vlasons I seaworthy and fit for
holding, carrying and safekeeping the cargo. Ineluctably, the burden of
proof was placed on NSC by the parties' agreement.
Art. 361 of the Code of Commerce.
Merchandise shall be transported at the risk and venture of the shipper, if
the contrary has not been expressly stipulated.
Further, based on the testing of samples, “The analysis
of bad order samples of packing materials shows that
wetting was caused by contact with SEA WATER'.
NSC filed with the VSI its claim for damages.
NSC formally demanded payment but VSI refused. NSC
filed its complaint.
NSC claimed that it sustained losses in the amount of
P941,145.18 as a result of the act, neglect and default
of the master and crew in the management of the vessel
as well as the want of due diligence of VSI to make
the vessel seaworthy and to make the holds and all
other parts of the vessel in which the cargo was carried,
fit and safe for its reception, carriage and preservation
— all in violation of VSI’s undertaking under their
Contract of Voyage Charter Hire.
VSI ARGUMENT:
denied liability claiming that the MV 'VLASONS I'
was seaworthy;
vessel was not a 'common carrier' inasmuch as she
was under voyage charter contract with the plaintiff as
charterer under the charter party
In the course of the voyage from Iligan City to Manila,
the MV 'VLASONS I' encountered very rough seas,
strong winds and adverse weather condition, causing
strong winds and big waves to continuously pound
against the vessel and seawater to overflow on its deck
and hatch covers; that
under the Contract of Voyage Charter Hire, VSI shall
not be responsible for losses/damages except on proven
willful negligence of the officers of the vessel, that the
officers of said MV 'VLASONS I' exercised due
diligence and proper seamanship and were not willfully
negligent;
the Voyage Charter Party provides that loading and
discharging of the cargo was on FIOST terms which
means that the vessel was free of risk and expense in
connection with the loading and discharging of the cargo;
that the damage was due to the inherent defect, quality
or vice of the cargo or to the insufficient packing thereof
or to latent defect of the cargo not discoverable by due
diligence;
that the stevedores of plaintiff who discharged the cargo
in Manila were negligent and did not exercise due care
Therefore, the damage and impairment suffered by the goods during the
transportation, due to fortuitous event, force majeure, or the nature and
inherent defect of the things, shall be for the account and risk of the
shipper.
The burden of proof of these accidents is on the carrier.
"Art. 362. The carrier, however, shall be liable for damages arising from
the cause mentioned in the preceding article if proofs against him show
that they occurred on account of his negligence or his omission to take
the precautions usually adopted by careful persons, unless the shipper
committed fraud in the bill of lading, making him to believe that the
goods were of a class or quality different from what they really were."
Because the MV Vlasons I was a private carrier, the shipowner's
obligations are governed by the Code of Commerce and not by the Civil
Code.
It is a hornbook doctrine that: "In an action against a private carrier for
loss of, or injury to, cargo, the burden is on the plaintiff to prove that
the carrier was negligent or unseaworthy, and the fact that the goods
were lost or damaged while in the carrier's custody does not put the
burden of proof on the carrier.
Where the action is based on the shipowner's warranty of seaworthiness,
the burden of proving a breach thereof and that such breach was the
proximate cause of the damage rests on plaintiff, and proof that the goods
were lost or damaged while in the carrier's possession does not cast on
it the burden of proving seaworthiness. Where the contract of carriage
exempts the carrier from liability for unseaworthiness not discoverable by
due diligence, the carrier has the preliminary burden of proving the exercise
of due diligence to make the vessel seaworthy.
Was MV Vlasons I seaworthy?
VSI exercised due diligence to make the ship seaworthy and fit for the
carriage of NSC's cargo of steel and tin plates.
This is shown by the fact that it was drydocked and harbored by the
Philippine Coast Guard before it proceeded to Iligan City for its voyage
to Manila under the contract of voyage charter hire. The vessel's voyage
from Iligan to Manila was the vessel's first voyage after drydocking.
The Philippine Coast Guard Station in Cebu cleared it as seaworthy, fitted
and equipped; it met all requirements for trading as cargo vessel.
Who was Negligent: Seamen or Stevedores?
in the discharge of the cargo; and that the cargo was
exposed to rain and seawater spray while on the pier or
in transit from the pier to NSC’s warehouse after
discharge from the vessel.
The trial court ruled in favor of VSI and dismissed the
complaint and awarded demurrage to VSI.
RTC made the following findings:
- The MV 'VLASONS I' is a vessel of Philippine
registry engaged in the tramping service and is
available for hire only under special contracts
of charter party as in this particular case.
- the MV 'VLASONS I' was covered by the
required seaworthiness certificates. Being a
vessel engaged in both overseas and coastwise
trade, the MV 'VLASONS I' has a higher
degree of seaworthiness and safety.
- underwent drydocking in Cebu and was
thoroughly inspected by the Philippine Coast
Guard. In fact, the subject voyage was the
vessel's first voyage after the drydocking. The
MV 'VLASONS I' was seaworthy and properly
manned, equipped and supplied when it
undertook the voyage.
- The cargo/shipment was securely stowed in 3
hatches of the ship. The hatch openings were
covered by hatch boards which were in turn
covered by two or double tarpaulins. The
hatch covers were water tight. Furthermore,
under the hatch boards were steel beams to give
support.
- The provisions of the Civil Code on common
carriers are not applicable.
- As to the damage to the tin plates which was
allegedly due to the wetting and rusting thereof,
there is unrebutted testimony of witness
Angliongto that tin plates 'sweat' by themselves
when packed even without being in contract
(sic) with water from outside especially when
the weather is bad or raining. The rust caused
by sweat or moisture on the tin plates may be
considered as a loss or damage but then, VSI
cannot be held liable for it pursuant to
Article 1734 of the Civil Case which exempts
NSC had the burden of proving that the damage to the cargo was caused
by the negligence of the officers and the crew of MV Vlasons I in making
their vessel seaworthy and fit for the carriage of tinplates. NSC failed to
discharge this burden.
NSC argues that MV Vlasons I had used an old and torn tarpaulin or
canvas to cover the hatches through which the cargo was loaded into the
cargo hold of the ship. It faults the Court of Appeals for failing to
consider such claim as an "uncontroverted fact and denies that MV Vlasons
I "was equipped with new canvas covers in tandem with the old ones as
indicated in the Marine Protest..."
SC DISAGREED
The records sufficiently support VSI's contention that the ship used the
old tarpaulin, only in addition to the new one used primarily to make
the ship's hatches watertight.
The foregoing are clear from the marine protest of the master of the MV
Vlasons I, Antonio C. Dumlao, and the deposition of the ship's boatswain,
Jose Pascua.
That due diligence was exercised by the officers and the crew of the MV
Vlasons I was further demonstrated by the fact that, despite encountering
rough weather twice, the new tarpaulin did not give way and the ship's
hatches and cargo holds remained waterproof.
It was the stevedores of NSC who were negligent in unloading the cargo
from the ship.
The stevedores employed only the tent-like material to cover the hatches
when strong rains occasioned by a passing typhoon disrupted the
loading of the cargo.
This tent-like covering, however, was clearly inadequate for keeping rain
and seawater away from the hatches of the ship. Vicente Angliongto, an
officer of VSI, testified.
NSC attempts to discredit the testimony of Angliongto by questioning his
failure to complain immediately about the stevedores' negligence on the
first day of unloading, pointing out that he wrote his letter to petitioner
only seven days later. The Court is not persuaded.
Angliongto's candid answer in his testimony satisfactorily explained the
delay. Seven days lapsed because he first called the attention of the
stevedores, then the NSC's representative, about the negligent and defective
 the carrier from responsibility for loss or
damage arising from the 'character of the
goods...' All the 1,769 skids of the tin plates
could not have been damaged by water. The
tin plates themselves were wrapped in kraft
paper lining and corrugated cardboards
could not be affected by water from outside.
- The stevedores hired by NSC to discharge the
cargo of tin plates were negligent . They set up
temporary tents to cover the hatch openings
in case of rain so that it would be easy for
them to resume work when the rains stopped
by just removing the tent or canvas.
- Pursuant to paragraph 5 of the NANYOSAI [sic]
Charter Party which was expressly made part
of the Contract of Voyage Charter Hire, the
loading, stowing and discharging of the
cargo is the sole responsibility of the plaintiff
charterer and defendant carrier has no
liability for whatever damage may occur or
maybe [sic] caused to the cargo in the
process.
- The vessel encountered rough seas and bad
weather while en route from Iligan City to
Manila causing sea water to splash on the
ship's deck on account of which the master
filed a 'Marine Protest' which can be invoked
as a force majeure.
- NSC did not comply with the requirement in
paragraph 9 of the Voyage Charter Hire
contract that it was to insure the cargo. NSC
also violated the charter party contract when
it loaded not only 'steel products', i.e. steel
bars, angular bars and the like but also tin
plates and hot rolled sheets which are high
grade cargo commanding a higher freight.
Thus NSC was able to ship high grade cargo at a lower
freight rate.
As regards VSI’s counterclaim, the contract of voyage
charter hire under paragraph 4 thereof, fixed the freight
at P30.00 per metric ton payable to defendant carrier
upon presentation of the bill of lading within fifteen (15)
days. NSC has not paid the total freight due of
procedure adopted in unloading the cargo. This series of actions constitutes
a reasonable response in accord with common sense and ordinary human
experience. Angliongto could not be blamed for calling the stevedores'
attention first and then the NSC's representative on location before
formally informing NSC of the negligence he had observed, because he
was not responsible for the stevedores or the unloading operations. In
fact, he was merely expressing concern for NSC which was ultimately
responsible for the stevedores it had hired and the performance of their
task to unload the cargo.
Such negligence is evident in the stevedores hired by NSC, not closing
the hatch of MV 'VLASONS I' when rains occurred during the
discharging of the cargo thus allowing rainwater and seawater spray to
enter the hatches and to drift to and fall on the cargo.
The stevedores merely set up temporary tents or canvas to cover the
hatch openings when it rained during the unloading operations so that it
would be easier for them to resume work after the rains stopped by
just removing said tents or canvass.
It has also been shown that VSI President Vicente Angliongto wrote NSC
calling attention to the manner the stevedores hired by NSC were
discharging the cargo on rainy days and the improper closing of the
hatches which allowed continuous heavy rain water to leak through and
drip to the tin plates' covers and Angliongto also suggesting that due to 4
days continuous rains with strong winds that the hatches be totally closed
down and covered with canvas and the hatch tents lowered. This letter
was received by NSC while discharging operations were still going on.
The fact that NSC actually accepted and proceeded to remove the
cargo from the ship during unfavorable weather will not make VSI
liable for any damage caused thereby.
The NSC may seek indemnification from the stevedoring company at fault
in the discharge operations. "A. stevedore company engaged in discharging
cargo... has the duty to load the cargo ... in a prudent manner, and it is
liable for injury to, or loss of, cargo caused by its negligence ... and where
the officers and members and crew of the vessel do nothing and have no
responsibility in the discharge of cargo by stevedores ... the vessel is not
liable for loss of, or damage to, the cargo caused by the negligence of
the stevedores..."
Do Tin Plates sweat?
A discussion of this issue appears inconsequential and unnecessary.
P75,000.00 despite demands. NSC was required and
bound under paragraph 7 of the same Voyage Charter
Hire contract to pay demurrage of P8,000.00 per day of
delay in the unloading of the cargoes. The delay
amounted to eleven (11) days thereby making NSC liable
to pay the defendant for demurrage in the amount of
P88,000.00.
CA modified the RTC decision by reducing the
demurrage from P88,000.00 to P44,000.00 and deleting
the award of attorney's fees and expenses of litigation
The damage to the tin plates was occasioned not by airborne moisture but
by contact with rain and seawater which the stevedores negligently allowed
to seep in during the unloading.
Effect of NSC's Failure to Insure the Cargo
The obligation of NSC to insure the cargo stipulated in the Contract of
Voyage Charter Hire is totally separate and distinct from the contractual
or statutory responsibility that may be incurred by VSI for damage to the
cargo caused by the willful negligence of the officers and the crew of
MV Vlasons I.
NSC's failure to insure the cargo will not affect its right, as owner and
real party in interest, to file an action against VSI for damages caused
by the latter's willful negligence.
We do not find anything in the charter party that would make the liability
of VSI for damage to the cargo contingent on or affected in any manner
by NSC's obtaining an insurance over the cargo.
Admissibility of Certificates Proving Seaworthiness
NSC argues that the certificates are hearsay for not having been presented
in accordance with the Rules of Court. It points out that Exhibits 3, 4
and 11 allegedly are "not written records or acts of public officers"; while
Exhibits 5, 6, 7, 8, 9, 11 and 12 are not "evidenced by official publications
or certified true copies" as required by Sections 25 and 26, Rule 132, of
the Rules of Court.
Exhibits 3, 4, 5, 6, 7, 8, 9 and 12 are inadmissible, for they have not
been properly offered as evidence. Exhibits 3 and 4 are certificates issued
by private parties, but they have not been proven by one who saw the
writing executed, or by evidence of the genuineness of the handwriting of
the maker, or by a subscribing witness. Exhibits 5, 6, 7, 8, 9, and 12 are
photocopies, but their admission under the best evidence rule have not
been demonstrated.
We find, however, that Exhibit 11 is admissible under a well-settled
exception to the hearsay rule per Section 44 of Rule 130 of the Rules of
Court, which provides that "(e)ntries in official records made in the
performance of a duty by a public officer of the Philippines, or by a
person in the performance of a duty specially enjoined by law, are prima
facie evidence of the facts therein stated." Exhibit 11 is an original
certificate of the Philippine Coast Guard in Cebu issued by Lieutenant
Junior Grade Noli C. Flores to the effect that "the vessel 'VLASONS
I', was drydocked... and PCG Inspectors were sent on board for
inspection... After completion of drydocking and duly inspected by PCG
Inspectors, the vessel 'VLASONS I', a cargo vessel, is in seaworthy
condition, meets all requirements, fitted and equipped for trading as a cargo
vessel was cleared by the Philippine Coast Guard and sailed for Cebu Port
on July 10, 1974." 4. At any rate, it should be stressed that NSC has the
burden of proving that MV Vlasons I was not seaworthy.

Demurrage
The contract of voyage charter hire provides inter alia:
2. Cargo : Full cargo of steel products of not less than 2,500 MT, 10%
more or less at Master's option.
6. Loading/Discharging Rate : 750 tons per WWDSHINC.
7. Demurrage/Dispatch : P8,000.00/P4,000.00 per day."

The Court defined demurrage in its strict sense as the compensation

provided for in the contract of affreightment for the detention of the
vessel beyond the laytime or that period of time agreed on for loading
and unloading of cargo.

It is given to compensate the shipowner for the nonuse of the vessel.

On the other hand, the following is well-settled: "Laytime runs according
to the particular clause of the charter party... If laytime is expressed in
'running days,' this means days when the ship would be run continuously,
and holidays are not excepted. A qualification of 'weather permitting'
excepts only those days when bad weather reasonably prevents the work
contemplated."

The contract of voyage charter hire provided for a four-day laytime;

it also qualified laytime as WWDSHINC or weather working days Sundays
and holidays included. The running of laytime was thus made subject to
the weather, and would cease to run in the event unfavorable weather
interfered with the unloading of cargo.

NSC may not be held liable for demurrage as the four-day laytime
allowed it did not lapse, having been tolled by unfavorable weather
condition in view of the WWDSHINC qualification agreed upon by the
parties.

It was an error for the trial court and the CA to have found and affirmed
respectively that NSC incurred eleven days of delay in unloading the cargo.
The trial court arrived at this erroneous finding by subtracting from the
twelve days, specifically August 13, 1974 to August 24, 1974, the only
day of unloading unhampered by unfavorable weather or rain which was
August 22, 1974.
Valenzuela Valenzuela Hardwood and Industrial Supply, Inc. (VHIS)
Hardwood v CA, entered into an agreement with the Seven Brothers
GR 102316, whereby the latter undertook to load on board its vessel M/V
6/30/1997 Seven Ambassador the former’s lauan round logs
numbering 940 at the port of Maconacon, Isabela for
shipment to Manila.
VHIS insured the logs against loss and/or damage with
South Sea Surety and Insurance Co. The contract between
the parties had a stipulation which says “owners (ship
owner) shall not be responsible for loss, split, short-
landing, breakages and any kind of damages to the
cargo.”
VHIS demanded payment from the insurer and the ship
owner. The said vessel sank resulting in the loss of VHIS’
insured logs. VHIS demanded from South Sea Surety the
payment of the proceeds of the policy but the latter denied
liability under the policy for non-payment of premium.
VHIS likewise filed a formal claim with Seven Brothers for
the value of the lost logs but the latter denied the claim.
The parties agree that the proximate cause of the sinking
of M/V Seven Ambassadors resulting in the loss of its
cargo was the "snapping of the iron chains and the
subsequent rolling of the logs to the portside due to the
negligence of the captain in stowing and securing the logs
on board the vessel and not due to fortuitous event."
VHIS alleges that it can still recover damages from
respondent because the stipulation in the contract is void for
being contrary to Article 586 and 587 of the Code of
Commerce and Articles 1170 and 1173 of the Civil Code.
Citing Article 1306 and paragraph 1, Article 1409 of the
Civil Code, petitioner is saying that the stipulation "gives no
duty or obligation to the private respondent to observe
the diligence of a good father of a family in the custody
and transportation of the cargo."
It should be noted at the outset that there is no dispute between the parties that
the proximate cause of the sinking of M/V Seven Ambassadors resulting in the
loss of its cargo was the "snapping of the iron chains and the subsequent
rolling of the logs to the portside due to the negligence of the captain in
stowing and securing the logs on board the vessel and not due to fortuitous
event." Likewise undisputed is the status of Private Respondent Seven Brothers
as a private carrier when it contracted to transport the cargo of Petitioner
Valenzuela.
Private carriage; parties may stipulate who is responsible for loss. In a
contract of private carriage, the parties may validly stipulate that responsibility
for the cargo rests solely on the charterer, exempting the shipowner from liability
for loss of or damage to the cargo caused even by the negligence of the ship
captain. Pursuant to Article 1306 of the Civil Code, such stipulation is valid
because it is freely entered into by the parties and the same is not contrary to
law, morals, good customs, public order, or public policy.
In a contract of private carriage, the parties may freely stipulate their duties and
obligations which perforce would be binding on them.
Difference with a common carrier. Unlike in a contract involving a common
carrier, private carriage does not involve the general public. Hence, the stringent
provisions of the Civil Code on common carriers protecting the general public
cannot justifiably be applied to a ship transporting commercial goods as a private
carrier. Consequently, the public policy embodied therein is not contravened by
stipulations in a charter party that lessen or remove the protection given by law
in contracts involving common carriers.
As held in a similar case of Home Insurance v. American Steamhsip, “x x x As
a private carrier, a stipulation exempting the owner from liability for the
negligence of its agent is not against public policy, and is deemed valid. x x
x The Civil Code provisions on common carriers should not be applied where
the carrier is not acting as such but as a private carrier. x x x Such policy has no
force where the public at large is not involved, as in this case of a ship totally
chartered for the use of a single party.”
Compared to a common carrier offering its services to the general public, a
charterer in a contract of private carriage is not similarly situated. It can — and
in fact it usually does — enter into a free and voluntary agreement. In
practice, the parties in a contract of private carriage can stipulate the carrier's
obligations and liabilities over the shipment which, in turn, determine the price
or consideration of the charter. Thus, a charterer, in exchange for convenience
and economy, may opt to set aside the protection of the law on common carriers.
When the charterer decides to exercise this option, he takes a normal business
risk.
Petitioner contends that the rule in Home Insurance is not applicable to the
present case because it "covers only a stipulation exempting a private carrier
from liability for the negligence of his agent, but it does not apply to a stipulation
exempting a private carrier like private respondent from the negligence of his
employee or servant which is the situation in this case." This contention of
petitioner is bereft of merit. The case of Home Insurance specifically dealt with
"the liability of the shipowner for acts or negligence of its captain and crew" and
a charter party stipulation which "exempts the owner of the vessel from any loss
or damage or delay arising from any other source, even from the neglect or fault
of the captain or crew or some other person employed by the owner on board,
for whose acts the owner would ordinarily be liable except for said paragraph."
Undoubtedly, Home Insurance is applicable to the case at bar.

The Supreme Court said that based on the discussion above, it is already enough
to deny the petition. However, it opted to discuss the other arguments of
petitioner for the benefit and satisfaction of all concerned.

Articles 586 and 587 of the Code of Commerce argument. Petitioner

Valenzuela insists that the charter party stipulation is contrary to Articles 586
and 587 of the Code of Commerce which confer on petitioner the right to recover
damages from the shipowner and ship agent for the acts or conduct of the captain.

The SC is not persuaded. Whatever rights petitioner may have under such
statutory provisions were waived when it entered into the charter party. Article
6 of the Civil Code provides that "(r)ights may be waived, unless the waiver is
contrary to law, public order, public policy, morals, or good customs, or
prejudicial to a person with a right recognized by law." As a general rule,
patrimonial rights may be waived as opposed to rights to personality and
family rights which may not be made the subject of waiver. Being patently
and undoubtedly patrimonial, petitioner's right conferred under said
articles may be waived. This, the petitioner did by acceding to the contractual
stipulation that it is solely responsible for any damage to the cargo, thereby
exempting the private carrier from any responsibility for loss or damage thereto.
Furthermore, as discussed above, the contract of private carriage binds petitioner
and private respondent alone; it is not imbued with public policy considerations
for the general public or third persons are not affected thereby.

Articles 1170 and 1173 of the Civil Code. Petitioner further argues that the
stipulation is void for being contrary to Articles 1170 and 1173 of the Civil Code.

The Court notes that the foregoing articles are applicable only to the obligor or
the one with an obligation to perform. In the instant case, Private Respondent
Seven Brothers is not an obligor in respect of the cargo, for this obligation to
bear the loss was shifted to petitioner by virtue of the charter party. This shifting
of responsibility, as earlier observed, is not void. The provisions cited by
petitioner are, therefore, inapplicable to the present case.

Moreover, the factual milieu of this case does not justify the application of the
second paragraph of Article 1173 of the Civil Code which prescribes the
standard of diligence to be observed in the event the law or the contract is silent.
In the instant case, Article 362 of the Code of Commerce provides the standard
of ordinary diligence for the carriage of goods by a carrier. The standard of
diligence under this statutory provision may, however, be modified in a contract
or private carriage as the petitioner and private respondent had done in their
charter party.

Cases cited by petitioner are inapplicable to the case at bar. Petitioner cites
Shewaram vs. Philippine Airlines, Inc. which, in turn, quoted Juan Ysmael &
Co. vs. Gabino Barreto & Co. and argues that the public policy considerations
stated there vis-a-vis contractual stipulations limiting the carrier's liability be
applied "with equal force" to this case. It also cites Manila Railroad Co. vs.
Compañia Transatlantica and contends that stipulations exempting a party from
liability for damages due to negligence "should not be countenanced" and should
be "strictly construed" against the party claiming its benefit.

The cases of Shewaram and Ysmael both involve a common carrier; thus, they
necessarily justify the application of such policy considerations and
concomitantly stricter rules. As already discussed above, the public policy
considerations behind the rigorous treatment of common carriers are absent in
the case of private carriers. Hence, the stringent laws applicable to common
carriers are not applied to private carriers. The case of Manila Railroad is also
inapplicable because the action for damages there does not involve a contract for
transportation. Furthermore, the defendant therein made a "promise to use due
care in the lifting operations" and, consequently, it was "bound by its
undertaking"; besides, the exemption was intended to cover accidents due to
hidden defects in the apparatus or other unforseeable occurrences" not caused by
its "personal negligence." This promise was thus construed to make sense
together with the stipulation against liability for damages. In the present case,
the private respondent made no such promise. The agreement of the parties to
exempt the shipowner from responsibility for any damage to the cargo and place
responsibility over the same to petitioner is the lone stipulation considered now
by the Court.

Effect of South Sea Resolution. South Sea was already held liable for losses to
petitioner. Private respondent now maintains that the petitioner cannot collect
twice for a single loss. It suffices to state that the Resolution of this Court dated
June 2, 1995 affirming the liability of South Sea does not, by itself, necessarily
preclude the petitioner from proceeding against private respondent. An
aggrieved party may still recover the deficiency from the person causing the loss
in the event the amount paid by the insurance company does not fully cover the
loss. Article 2207 of the Civil Code