Digest Transpo PDF

Transportation Law
Class Digests
Submitted to: Atty. Timoteo B. Aquino
3JD1
Submitted to:
Atty. Timoteo B. Aquino
University of Asia and the Pacific

Institute of Law
S.Y. 2021-2022
Table of Contents
Cases Person Assigned

NATURE AND COMMON CARRIER
1) First Philippines Industrial Corporation v. Court of Appeals, G.R. No.
125948, 12/29/1988 Alico, Princess
2) Fabre, Jr. v. Court of Appeals, G.R. No. 111127, July 26, 1996 Arugay, Andrea D.
Balce, Analoreine
3) De Guzman v. Court of Appeals, G.R. No. L-47822, December 22, 1988 D.
4) Spouses Perena v. Spouses Nicolas G.R. No. 157917, August 29, 2012, 679 Balina, Namiel
SCRA 208 Maverick
Bartilad, Martha
5) Spouses Cruz v. Sun Holidays, Inc, G.R. No. 186312, June 29, 2010 Jasmine D.
6) Westwind Shipping Corp. v. UCPB General Insurance Co., Inc., G.R. No. Buday, Clarisse
200289, November 25, 2013 Faith
Buendia, Hariette
7) Sanico v. Colipano, G.R. No. 209969, September 27, 2017 Joy
8) Oriental Assurance Corp. v. Ong, G.R. No. 189524, October 11, 2017. Canapi, Patricia A.
9) Philam Insurance Co. v. Heung-A Shipping Corp., G.R. No. 187701, July De Leon, Jeremiah
23, 2014 C.
10) Federal Phoenix Assurance Co., Ltd. v. Fortune Sea Carrier, Inc., G.R. No.
200289, November 25, 2013 Dimayuga, Gia
11) Torres-Madrid Brokerage, Inc. v. FEB Mitsui Marine Insurance Co., Inc., Eder. Benilda
G.R. No. 194121, [July 11, 2016] Cristina C.
12) Asian Terminals, Inc. v. Allied Guarantee Insurance, Co., Inc., G.R. No. Fong, Michaela
182208, [October 14, 2015 Miles C.
13) LTFRB v. Valenzuela, G.R. No. 242860. March 11, 2019 Jickain, Luke T.
14) Heirs of Mendoza v. ES Trucking and Forwarders, G.R. No. 243237 , Jiz, Aronne
2/17/2020 Dominic
REGISTERED OWNER RULE
Lagmay, Denzel
15) Filcar Transport Services v. Espinas, G.R. No. 174156, June 20, 2012 John
16) Greenstar Express, Inc. v. Universal Robina Corporation, G.R. No. 205090, Landong, Jemima
October 17, 2016 D.
PERFECTION OF CONTRACT OF CARRIAGE
17) Light Rail Transit Authority v. Navidad, G.R. No. 145805, February 6, Lapus, Tristan
2003 Patrick
OBLIGATIONS OF THE PARTIES IN CONTRACT OF CARRIAGE.
Montano,
18) Annie Tan v. Great Harvest Enterprises, G.R. No. 220400. March 20, 2019 Josephine Edrhea P.
Rayo, Dan Leonard
19) Manay, Jr. v. Cebu Air, Inc., G.R. No. 210621,April 4, 2016 L.
Sandoval, Ma.
20) Eastern Shipping Lines, Inc. v. BPI/MS Insurance Corp., G.R. No. 193986, Minella Christine
January 15, 2014 R.
21) Central Shipping Co., Inc. v. Insurance Co. of North America September Tagudar, Val
20, 2004, 438 SCRA 511 Laurence
22) Nocum v. Laguna Tayabas Bus Company, G.R. No. L-23733, October Tangan, Alyssa
31,1969 Nicole
23) La Mallorca v. Court of Appeals, G.R. No. L-20761, July 27, 1966, 17 Tizon, Monique
SCRA 739 Reilly C.
24) Aboitiz Shipping Corp., v. Court of Appeals, G.R. No. 84458, November 6, Tomines, Nica
1989 Margarette G.
25) Regional Container Lines of Singapore v. The Netherlands Insurance Co. Tres Reyes, Camille
(Philippines), Inc., G.R. No. 168151, September 4, 2009 Joy
Uy, Vanessa Marie
26) Mariano, Jr. v. Callejas, G.R. No. 166640, July 31, 2009 C.
27) Heirs of Jose Marcial K. Ochoa v. G.& S Transport Corp., G.R. No. 170071 Viceo, Curt Joshua
& 170125, March 9, 2011 A.
28) Asian Terminals, Inc. v. Simon Enterprises, G.R. No. 177116, February 27, Villalon, Maria
2013 Andrea
29) G.V. Florida Transport, Inc. v. Heirs of Battung, Jr., G.R. No. 208802,
[October 14, 2015 Alico, Princess
30) Sulpicio Lines v. Sesante, G.R. No. 172682, July 27, 2016. Arugay, Andrea D.
31) Loadstar Shipping Company v. Malayan Insurance Company, Inc., G.R. Balce, Analoreine
No. 185565, April 26, 2017 D.
Balina, Namiel
32) Air France v. Zani, G.R. No. 199767. March 13, 2019 (Resolution) Maverick
33) Spouses Fernando v. Northwest Airlines, Inc., G.R. No. 212038, February Bartilad, Martha
8, 2017 Jasmine D.
Buday, Clarisse
34) Cacho et. al. v. Manahan, et. al., G.R. No. 203081. January 17, 2018 Faith
35) Unitrans International Forwarder, Inc. v. Insurance Company of North Buendia, Hariette
America, G.R. No. 203865. March 13, 2019 Joy
DEFENSES
36) Sealoader Shipping Corporation v. Grand Cement Manufacturing, G.R.
Nos.
167363 and 177466, December 15, 2010. Canapi, Patricia A.
37) Transimex Co. v. Mafre Asian Insurance Corp., G.R. No. 190271,
[September 14, 2016 De Leon
38) Keihin Everett Forwarding Company, Inc. v. Tokio Marine Malayan
Insurance
Co., Inc., G.R. No. 212107. January 28, 2019 Dimayuga
39) Fortune Express, Inc. v. Court of Appeals, G.R. No. 119756, March 18, Eder. Benilda
1999 Cristina C.
Fong, Michaela
40) Gacal v. Philippine Airlines, Inc., G.R. No. 55300, March 15, 1990 Miles C.
41) Pilapil v. Court of Appeals, G.R. No. 52150, December 22, 1989 Jickain, Luke T.
CONCURRENCE OF CAUSES OF ACTION
Jiz, Aronne
42) People v. Go, G.R. No. 210816. December 10, 2018 Dominic
43) Orient Freight International, Inc. v. Keihin-Everett Forwarding Company, Lagmay, Denzel
G.R. No. 191937, August 9, 2017 John
DAMAGES
44) Spouses Estrada v. Philippine Rabbit Bus Lines, Inc., G.R. No. 203902, July Landong, Jemima
19, 2017 D.
Lapus, Tristan
45) Darines v. Quinones, G.R. No. 206468 August 2, 2017 Patrick
Montano,
46) Sulpicio Lines, Inc. v. Karaan, G.R. No. 208590. October 3, 2018 Josephine Edrhea P.
47) Philippine Rabbit Bus Lines, Inc. v. Lim, G.R. No. 212252. February 28, Rayo, Dan Leonard
2018 L.
BILL OF LADING.
Sandoval, Ma.
48) Ace Navigation Co., Inc. v. FGU Insurance Corp., G.R. No. 171591, June Minella Christine
25, 2011 R.
49) Designer Baskets, Inc. v. Air Sea Transport, Inc., G.R. No. 184513, March
9, Tagudar, Val
2016 Laurence
NOTICE OF CLAIM AND PRESCRIPTION.
50) Tsuneishi Heavy Industries (Cebu) Inc. v. MIS Maritime Corp., G.R. No. Tangan, Alyssa
193572, April 4, 2018 Nicole
51) UCPB General Insurance Co., Inc. v. Aboitiz Shipping Corp., et al., G.R. Tizon, Monique
No. 168433, February 10, 2009. Reilly C.
52) Benjamin Cua v. Wallem Philippine Shippine, Inc., G.R. No. 171337, July Tomines, Nica
11, 2012 Margarette G.
53) Insurance Company of North America v. Asian Terminals, Inc., G.R. No. Tres Reyes, Camille
180784, February 15, 2012 Joy
54) Vector Shipping Corp. v. American Home Assurance Co., G.R. No.
159213, Uy, Vanessa Marie
July 3, 2013 C.
55) Asian Terminals, Inc. v. Philam Insurance Co., Inc., G.R. Nos. 181163, Viceo, Curt Joshua
181262 & 181319, July 24, 2013 A.
Villalon, Maria
56) Pioneer Insurance v. APL Co. Pte. Ltd., G.R. No. 226345, August 2, 2017 Andrea
AVIATION LAWS AND WARSAW CONVENTION
57) Lhuiller v. British Airways, G.R. No. 171092, March 15, 2010 Alico, Princess
58) Northwest Airlines, Inc. v. Heshan, G.R. No. 179117, February 3, 2010 Arugay, Andrea D.
Balce, Analoreine
59) Cathay Pacific Airways v. Reyes, G.R. No. 185891, June 26, 2013 D.
60) Spouses Fernando v. Northwest Airlines, G.R. Nos. 212038 and 212043, Balina, Namiel
February 8, 2017. Maverick
MARITIME LAW
Bartilad, Martha
61) Phil-Nippon Kyoei Corp., v. Gudelosao G.R. No. 181375, July 13, 2016 Jasmine D.
Buday, Clarisse
62) De la Torre v. The Hon. Court of Appeals, G.R. No. 160088, July 13, 2011 Faith
63) Ace Navigation, Co., Inc. v. FGU Insurance Corp., G.R. No. 171591, June Buendia, Hariette
25, 2012 Joy
PUBLIC UTILITIES LAWS
64) LTFRB v. G.V. Florida Transport, Inc., G.R. No. 213088. June 28, 2017 Canapi, Patricia A.
65) Tawang Multi-Purpose Cooperative v. La Trinidad Water District, G.R.
No.
166471, March 22, 2011 De Leon
66) ABS-CBN Broadcasting Corp. v. Philippine Multi-Media System, Inc., G.R.
Nos. 175769-70, January 19, 2009 Dimayuga
67) Surigao Del Norte Electric Coop., Inc. v. ERC, G.R. No. 183626, October Eder. Benilda
4, 2010. Cristina C.
68) Initiatives For Dialouge and Empowerment Through Alternative Legal
Services, Inc. (IDEALS, Inc.) v. Power Sector Assets and Liabilities Fong, Michaela
Management Corp., G.R. No. 192088, October 9, 2012. Miles C.
UA&P 3JD1 – Transportation Law | S.Y. 2021-2022
1. First Philippines Industrial Corporation v. Court of Appeals

G.R. No. 125948. December 29, 1988
Prepared by: Alico, Princess, J.
Student Number: 194042
MAIN TOPIC: NATURE AND COMMON CARRIER
DOCTRINE: Four factors that constitute the test for determining whether a party is a common carrier of goods:
(1) he must be engaged in the business of carrying goods for others as a public employment and must hold himself
out as ready to engage in the transportation of goods for person generally as a business and not as a casual occupation;
(2) he must undertake to carry goods of the kind to which his business is confined; (3) he must undertake to carry by
the method by which his business is conducted and over his established roads; and (4) The transportation must be for
hire. Another doctrine set out by the Supreme Court in this case is that “the Civil Code makes no distinction as to the
means of transporting, as long as it is by land, water, or air.
FACTS: First Philippine Industrial Corporation (FPIC) was grantee of a pipeline concession under RA No. 387. In
January 1995, FPIC applied for a mayor’s permit but before it could be issued, the City Treasurer of Batangas City
required the petitioner to pay local tax based on its gross receipts for the fiscal year 1993 pursuant to the Local
Government Code (LGC). FPIC paid the tax under protest and filed a letter-protest arguing that it is exempted from
paying tax on gross receipts because it is engaged in the business of transporting petroleum products.
However, the protest was denied by the City Treasurer on the ground that it cannot be considered engaged in
transportation business and hence, it is not exempt under Sec. 133 (j) of the LGC. FPIC filed with the RTC a complaint
for tax refund against respondents– the City of Batangas and the City Treasurer. FPIC contends that the imposition of
the tax on the gross receipts is in violation of the LGC and that the term “contractors” exclude transportation
contractors. On the contrary, the respondents posit that pipelines are not included in the term common carrier because
it refers solely to ordinary carriers like trucks, trains, ships, etc. They also contend that the term “common carrier”
pertains to the mode or manner by which a product is delivered to its destination.
The RTC dismissed the complaint and ruled that FPIC is not a common carrier but a special carrier which extends
its services and facilities to a single specific customer under a special contract. The CA affirmed the RTC’s decision.
Hence, the petition before the Supreme Court.
ISSUE:
● Whether or not FPIC is a common carrier or a transportation contractor.
RULING:
● YES, FPIC is a common carrier. The Supreme Court defined a common carrier as one who holds himself out
to the public as engaged in the business of transporting persons or property from place to place for
compensation, offering his services to the public generally. Moreover, the Court held that the test to determine
whether a party is a common carrier of goods is: (1) he must be engaged in the business of carrying goods
for others as a public employment and must hold himself out as ready to engage in the transportation of goods
for person generally as a business and not as a casual occupation; (2) he must undertake to carry goods of the
kind to which his business is confined; (3) he must undertake to carry by the method by which his business
is conducted and over his established roads; and (4) the transportation must be for hire.
In the case at bar, there is no doubt that FPIC is a common carrier based on the aforementioned definition
and requisites enumerated. It is engaged in the business of transporting or carrying of goods (i.e., petroleum
products) for hire as a public employment. It also undertakes to carry for all persons indifferently, that is, to
all persons who choose to employ its services, and transports the goods by land and for compensation. The
fact that petitioner has a limited clientele does not exclude it from the definition of a common carrier.
The Court also cited the case of De Guzman vs. CA, where it was held that Art. 1732 of the New Civil Code
(NCC) does not distinguish between one whose principal business is carrying of persons or goods and one
who does it only as an ancillary activity. There is also no 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 said article make any distinction between a carrier offering its services to
the "general public," and one who offers services or solicits business only from a narrow segment of the
general population.
Moreover, the definition of "common carriers" in the NCC makes no distinction as to the means of
transporting, as long as it is by land, water or air. Neither does the NCC provide that the transportation of the
passengers or goods should be by motor vehicle. Lastly, based on Art. 86 of the Petroleum Act of the
Philippines, FPIC is considered a common carrier as provided in Art. 86.
Thus, in light of the foregoing, FPIC is a common carrier and the CA’s decision, which affirmed the RTC, is
overruled.
2. SPOUSES FABRE v. COURT OF APPEALS

G.R. No. 111127. July 26, 1996.
Prepared by: Arugay, Andrea D.
MAIN TOPIC: Nature and Common Carrier
DOCTRINE: One does not have to be engaged in the business of public transportation for the provisions of the Civil
Code on Common Carriers to apply to them. Article 1732 makes no distinction between one whose principal business
activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity (in
local idiom, “a sideline”). The provision also avoids making any distinction between a person or enterprise offering
transportation services on a regular basis and one offering on an occasional or episodic basis. Further, it also avoids a
distinction between a carrier offering its services to the general public and one who offers from a narrow segment of
the general population.
FACTS:
Engracio Fabre and his wife were owners of a Mazda minibus used principally in connection with a bus
service for school children which they operated in Manila. Word for the World Christian Fellowship Inc. (WWCF)
arranged with spouses Fabre for the transportation of 33 members of its Young Adults Ministry from La Union and
back. The hired driver of the couple, Cabil, was forced to take a detour through an unfamiliar area because the usual
route was under repair. At 11:30 at night, the bus, which was running at the speed of 50kmph, met an accident and
several passengers were injured. Cabil claimed that he did not see the sharp curve on the highway until it was too late.
A case was filed against the spouses Fabre and Cabil pursuant to Article 2176 and 2180 of the Civil Code for
damages. The trial court rendered judgment against the spouses and Cabil as there was no convincing evidence was
shown that the minibus was properly checked for travel and evidence has shown the negligent act of the spouses and
Cabil which ultimately resulted to the accident subject of the case. Further, only WWCF and Ms. Antonio are entitled
to the award of damages because they were the only ones who adduced evidence in support of their claims.
The Court of Appeals affirmed the decision of the trial court with respect to Antonio but dismissed it with
respect to the other plaintiffs on the ground that they failed to prove their respective claims and exercise due care and
precaution in the operation of his vehicle and considering the time and the place of the accident. The CA held that the
Fabres were presumptively negligent.
The spouses filed an appeal before the SC, adding that the increase of the award to Antonio were
unconscionable
ISSUE: Whether or not the spouses and the driver Cabil are jointly and severally liable for breach of contract of
carriage.
RULING: YES, the spouses and Cabil, the carrier and the driver respectively, are jointly and severally liable because
their separate and distinct acts concurred to produce the same injury. As repeatedly held by the Supreme Court on
facts similar to those in this case, the carrier and the driver may be held jointly and severally liable for damages for
injuries suffered by a passenger.
The Spouses Fabre, as common carriers, were bound to exercise extraordinary diligence for the safe
transportation of the passengers to their destination. Therefore, it is insufficient to excuse this duty of care by simply
by proving that they exercised the diligence of a good father of a family.
Further, as to Cabil, given the conditions of the road and considering that the trip was his first one outside of
Manila, he should have driven his vehicle at a moderate speed. Considering the foregoing and the fact that it was
raining, thus the road was slippery and dark, the drove the bus at 50kmph and he was unfamiliar with the terrain, Cabil
was grossly negligent and should be held liable for the injuries suffered by Antonio.
Pursuant to Art. 2176 and 2180 of the Civil Code, Cabil’s negligence gave rise to the presumption that his
employers, the Fabres, were themselves negligent in the selection and supervision of their employee. Due diligence
in selection of employees is not satisfied by finding that the applicant possessed a professional driver's license. The
employer should also examine the applicant for his qualifications, experience and record of service. Due diligence in
supervision, on the other hand, requires the formulation of rules and regulations for the guidance of employees and
the issuance of proper instructions as well as actual implementation and monitoring of consistent compliance with the
rules.
Lastly, the spouses Fabre did not have to be engaged in the business of public transportation for the
provisions of the Civil Code on common carriers to apply to them. Article 1732 makes no distinction between
between one whose principal business activity is the carrying of persons or goods or both, and one who does such
carrying only as an ancillary activity (in local idiom, “a sideline”). 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. Therefore, the spouses Fabre are
liable although they are not engaged in the business of public transporation.
3. De Guzman v. Court of Appeals

G.R. No. L-47822. December 22, 1988
Prepared by: Balce, Analoreine, D.
DOCTRINE:
● Article 1732 of NCC provides that “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.” This article makes no distinction between one whose
principal business activity is the carrying of persons or goods or both, and one who does such carrying only
as an ancillary activity. Article 1732 also carefully avoids making any distinction between a person or
enterprise offering transportation 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.
● Under Article 1745 (6) of NCC, a common carrier is held responsible — and will not be allowed to divest
or to diminish such responsibility — even for acts of strangers like thieves or robbers, except where such
thieves or robbers in fact acted "with grave or irresistible threat, violence or force." The Court held that the
limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the
goods are lost as a result of a robbery which is attended by "grave or irresistible threat, violence or force."
FACTS:
Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and scrap metal in Pangasinan.
Upon gathering sufficient quantities of such scrap material, Cendana would bring such material to Manila for resale.
Cendana utilized two six-wheeler trucks which he owned for hauling the material to Manila. On the return trip to
Pangasinan, respondent would load his vehicles with cargo which various merchants wanted delivered to differing
establishments in Pangasinan. For that service, Cendana charged freight rates which were commonly lower than
regular commercial rates. He was contracted by De Guzman, an authorized dealer of General Milk Company, to haul
750 cartons of milk from its warehouse in Makati to its establishment in Urdaneta. 150 cartons were loaded on a truck
driven by Cendana, while 600 cartons were placed on the other truck driven by his driver and employee. However,
600 boxes of milk were not delivered because the truck, while on its way to Pangasinan, was hijacked somewhere
along the MacArthur Highway, by armed men who took with them the truck, its driver, his helper and the cargo. De
Guzman commenced action against Cendana, demanding payment of the value of the lost merchandise, damages and
attorney’s fees. De Guzman argued that Cendana, being a common carrier, and having failed to exercise the
extraordinary diligence required of him by the law, should be held liable for the value of the undelivered goods.
Cendana, however, denied that he was a common carrier and argued that he could not be held responsible for the value
of the lost goods, such loss having been due to force majeure.
ISSUE:
● Whether or not Cendana is a common carrier.
● Whether or not Cendana is liable for the value of the lost goods, such loss having been due to force
majeure.
RULING:
● YES. Article 1732 of NCC provides that “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.” This article makes no distinction between one whose
principal business activity is the carrying of persons or goods or both, and one who does such carrying only
as an ancillary activity. Article 1732 also carefully avoids making any distinction between a person or
enterprise offering transportation 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. In the case at bar, Cendana is
properly characterized as a common carrier even though he merely "back-hauled" goods for other merchants
from Manila to Pangasinan, although such back-hauling was done on a periodic or occasional rather than
regular or scheduled manner, and even though private respondent's principal occupation was not the carriage
of goods for others. There is no dispute that private respondent charged his customers a fee for hauling their
goods; that fee frequently fell below commercial freight rates is not relevant here. Hence, Cendana is a
common carrier.
● NO. Under Article 1745 (6) of NCC, a common carrier is held responsible — and will not be allowed to
divest or to diminish such responsibility — even for acts of strangers like thieves or robbers, except where
such thieves or robbers in fact acted "with grave or irresistible threat, violence or force." The Court held that
the limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the
goods are lost as a result of a robbery which is attended by "grave or irresistible threat, violence or force." In
the case at bar, armed men held up the second truck owned by private respondent which carried petitioner's
cargo. The hold-uppers were later convicted for robbery, acting with grave, if not irresistible, threat, violence
or force as three of the five hold-uppers were armed with firearms. Hence, Cendana, the common carrier, is
not liable for the value of the lost goods as the occurrence of the loss was reasonably be regarded as quite
beyond the control of the common carrier and properly regarded as a fortuitous event.
ADDITIONAL NOTE:
● A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code
provisions governing common carriers. That liability arises the moment a person or firm acts as a common
carrier, without regard to whether or not such carrier has also complied with the requirements of the
applicable regulatory statute and implementing regulations and has been granted a certificate of public
convenience or other franchise. To exempt private respondent from the liabilities of a common carrier
because he has not secured the necessary certificate of public convenience, would be offensive to sound
public policy; that would be to reward private respondent precisely for failing to comply with applicable
statutory requirements.

4. SPOUSES PEREÑA V. SPOUSES NICOLAS
G.R. No. 157917. August 29, 2012
Prepared by: Balina, Namiel Maverick D.
DOCTRINE:
A carrier is a person or corporation who undertakes to transport or convey goods or persons from one place to another,
gratuitously or for hire.
The true test for a common carrier is not the quantity or extent of the business actually transacted, or the number and
character of the conveyances used in the activity, but whether the undertaking is a part of the activity engaged in by
the carrier that he has held out to the general public as his business or occupation.
FACTS:
Spouses Teodoro and Nanette Pereña were engaged in the business of transporting students from their respective
residences in Parañaque City to Don Bosco in Pasong Tamo, Makati City, and back. They employed Clemente Alfaro
as driver of the van. Spouses Nicolas and Teresita Zarate contracted the Pereñas to transport their son Aaron to and
from Don Bosco. Considering that the students were due at Don Bosco by 7:15 a.m., and that they were already
running late because of the heavy vehicular traffic on the South Superhighway, Alfaro took the van to an alternate
route at about 6:45 a.m. by traversing the narrow path underneath the Magallanes Interchange. The railroad crossing
in the narrow path had no railroad warning signs, or watchmen, or other responsible persons manning the crossing. In
fact, the bamboo barandilla was up, leaving the railroad crossing open to traversing motorists. At about the time the
van was to traverse the railroad crossing, PNR Commuter No. 302 (train), was in the vicinity of the Magallanes
Interchange travelling northbound. As the train neared the railroad crossing, Alfaro drove the van eastward across the
railroad tracks, closely tailing a large passenger bus. His view of the oncoming train was blocked because he overtook
the passenger bus on its left side. The train blew its horn to warn motorists of its approach. The passenger bus
successfully crossed the railroad tracks, but the van driven by Alfaro did not. The impact threw nine of the 12 students
in the rear, including Aaron, out of the van. Aaron landed in the path of the train, which dragged his body and severed
his head, instantaneously killing him. Thus, the Zarates sued the Pereña for breach of contract of carriage and the PNR
for quasi-delict. The RTC ruled in favor of the Zarates. On appeal, the CA affirmed the findings of the RTC.
ISSUE:
Whether the Petitioners are considered a common carrier.
RULING:
Yes. The petitioners were considered a common carrier. The Court ruled that the operator of a school bus service is a
common carrier in the eyes of the law. He is bound to observe extraordinary diligence in the conduct of his business.
He is presumed to be negligent when death occurs to a passenger. His liability may include indemnity for loss of
earning capacity even if the deceased passenger may only be an unemployed high school student at the time of the
accident. The concept of a common carrier embodied in Article 1732 of the Civil Code coincides neatly with the
notion of public service under the Public Service Act, which supplements the law on common carriers found in the
Civil Code. The true test for a common carrier is not the quantity or extent of the business actually transacted, or the
number and character of the conveyances used in the activity, but whether the undertaking is a part of the activity
engaged in by the carrier that he has held out to the general public as his business or occupation. Applying these
considerations to the said case, there is no question that the Pereñas as the operators of a school bus service were: (a)
engaged in transporting passengers generally as a business, not just as a casual occupation; (b) undertaking to carry
passengers over established roads by the method by which the business was conducted; and (c) transporting students
for a fee. Despite catering to a limited clientèle, the Pereñas operated as a common carrier because they held
themselves out as a ready transportation indiscriminately to the students of a particular school living within or near
where they operated the service and for a fee.

5. Spouses Cruz v. Sun Holidays, Inc
G.R. No. 186312, June 29, 2010
Prepared by: Bartilad, Martha Jasmine D.
DOCTRINE:
The definition of common carriers in the Civil Code makes no distinction between one whose principal
business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary
activity. There is no such 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.
FACTS:
This stemmed from the petition filed by Spouses Dante and Leonora Cruz (petitioners) against Sun Holidays,
Inc (respondent) for damages arising from the death of the son Ruelito C. Cruz (Ruelito) who perished with his wife
on September 11, 2000 on board the boat M/B Coco Beach III that capsized en route to Batangas from Puerto Galera,
Oriental Mindoro where the couple stayed at a resort owned and operated by respondent. Ruelito and his wife stayed
at the resort by virtue of a tour package contract with respondent that included transportation to and from the resort
and the point of departure in Batangas.
According to the testimony of one of the survivors, Miguel C. Matute, he was initially set to leave in the
afternoon of September 10, 2000, but was advised to stay for another night because of strong winds and heavy rains.
The next day, Matute and the other guests, including Ruelito and his wife boarded M/B Coco Beach III, which was to
ferry them to Batangas. However, after the boat sailed, it started to rain which only got stronger as it moved farther
away from Puerto Galera. Thereafter, M/B Coco Beach III capsized after being hit by two big waves. The passengers
struggled to get out of the boat. Unfortunately, eight passengers, including Ruelito and his wife, died during the
incident.
Spouses Cruz, by a demand letter, demanded indemnification from the respondent for the death of their son.
However, respondent denied any responsibility for the incident because it considered the same to be a fortuitous event.
It nevertheless offered, as an act of commiseration, the amount of P10,000 to petitioners upon their signing of a waiver.
But the petitioner’s declined the offer and thereafter filed a complaint as mentioned above.
The complaint alleged that the respondent, as a common carrier, was guilty of negligence in allowing M/B
Coco Beach III to sail notwithstanding storm warning bulletins issued by the Philippine Atmospheric, Geophysical
and Astronomical Services Administration (PAGASA). Meanwhile, respondents denied being a common carrier,
alleging that its boats are not available to the general public as they only ferry Resort guests and crew members.
Nonetheless, it claimed that it exercised the utmost diligence in ensuring the safety of its passengers.
The Regional Trial Court dismissed the complaint. Further, upon appeal, the same was denied by the Court
of Appeals holding, among other things, that the trial court correctly ruled that respondent is a private carrier which
is only required to observe ordinary diligence; that respondent in fact observed extraordinary diligence in transporting
its guests on board M/B Coco Beach III; and that the proximate cause of the incident was a squall, a fortuitous event.
Hence, this petition.
ISSUE:
● Whether or not Sun Holidays is a common carrier
● Whether or not Sun Holidays exercised the required diligence when it allowed M/B Coco Beach III to sail on
September 11, 2000
RULING:
● YES. As held in the case of De Guzman v. Court of Appeals, the definition of common carriers in the Civil
Code makes no distinction between one whose principal business activity is the carrying of persons or goods or
both, and one who does such carrying only as an ancillary activity. There is no such 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. Consequently, the concept of common carrier
may be seen to coincide with the notion of public service
Hence, Sun Holidays is a common carrier. Its ferry services are so intertwined with its main business as to be
properly considered ancillary thereto. The constancy of respondent's ferry services in its resort operations is
underscored by its having its own Coco Beach boats. And the tour packages it offers, which include the ferry
services, may be availed of by anyone who can afford to pay the same. These services are thus available to the
public.
● NO. Under the Civil Code, common carriers, from the nature of their business and for reasons of public policy,
are bound to observe extraordinary diligence for the safety of the passengers transported by them, according to
all the circumstances of each case. They are bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances.
When a passenger dies or is injured in the discharge of a contract of carriage, it is presumed that the common
carrier is at fault or negligent. There is no need for the court to make an express finding of fault or negligence
on the part of the common carrier. This statutory presumption may only be overcome by evidence that the carrier
exercised extraordinary diligence.
However, the respondent failed to show that it exercised extraordinary diligence. The evidence shows that public
weather forecasts and tropical cyclone warnings were issued advising tropical depressions affecting the province
of Mindoro. As such, a very cautious person exercising the utmost diligence would thus not brave such stormy
weather and put other people's lives at risk. The extraordinary diligence required of common carriers demands
that they take care of the goods or lives entrusted to their hands as if they were their own. This respondent failed
to do so.

6. WESTWIND SHIPPING CORP. V. UCPB GENERAL INSURANCE CO.,
INC.
G.R. No. 200289, November 25, 2013
Prepared by: Buday, Clarisse Faith G.
DOCTRINE: As a common carrier, a customs broker is mandated to observe, under Article 1733 of the Civil Code,
extraordinary diligence in the vigilance over the goods it transports according to the peculiar circumstances of each
case. The extraordinary responsibility of the common carrier lasts until the time the goods are actually or
constructively delivered by the carrier to the consignee or to the person who has a right to receive them. There is actual
delivery in contracts for the transport of goods when possession has been turned over to the consignee or to his duly
authorized agent and a reasonable time is given him to remove the goods.
FACTS:
Kinsho-Mataichi Corporation shipped from the port of Kobe, Japan, 197 metal containers/skids of tin-free
steel for delivery to the consignee, San Miguel Corporation. The shipment was loaded and received clean on board
M/V Golden Harvest Voyage No. 66, a vessel owned and operated by Westwind Shipping Corporation (Westwind).
SMC insured the cargoes against all risks with UCPB General Insurance Co., Inc. The shipment arrived in Manila,
Philippines and was discharged in the custody of the arrastre operator, Asian Terminals, Inc. (ATI).
During the unloading operation, six containers/skids sustained dents and punctures from the forklift used by
the stevedores of Ocean Terminal Services, Inc. (OTSI) in centering and shuttling the containers/skids. As a
consequence, the local ship agent of the vessel, Baliwag Shipping Agency, Inc., issued two Bad Order Cargo Receipts
dated September 1, 1993. Orient Freight International, Inc. (OFII), the customs broker of SMC, withdrew from ATI
the 197 containers/skids, including the six in damaged condition, and delivered the same at SMC’s warehouse in
Calamba, Laguna through J.B. Limcaoco Trucking (JBL). It was discovered upon discharge that additional nine
containers/skids were also damaged due to the forklift operations; thus, making the total number of 15 containers/skids
in bad order.
After a year, SMC filed a claim against UCPB, Westwind, ATI, and OFII to recover the amount
corresponding to the damaged 15 containers/skids. When UCPB paid the total sum of ₱292,732.80, SMC signed the
subrogation receipt. Thereafter, in the exercise of its right of subrogation, UCPB instituted on August 30, 1994, a
complaint for damages against Westwind, ATI, and OFII.
The RTC dismissed UCPB’s complaint and the counterclaims of Westwind, ATI, and OFII. The RTC opined
that Westwind was not liable, since the discharging of the cargoes was performed by ATI personnel using forklifts,
and there was no allegation that Westwind had a hand in the conduct of the stevedoring operations.
On appeal, the CA ruled in favor of UCPB, ordering Westwind and OFII to pay UCPB. The CA rendered a
contrary view as regards the liability of Westwind and OFII. For the CA, Westwind, not ATI, was responsible for the
six damaged containers/skids at the time of its unloading. In its rationale, which substantially followed Philippines
First Insurance Co Inc v Wallem Philippines Shipping Inc.,1 it concluded that the common carrier, not the arrastre
operator, is responsible during the unloading of the cargoes from the vessel, and that it is not relieved from liability,
and is still bound to exercise extraordinary diligence at the time, in order to see to it that the cargoes under its
possession remain in good order and condition. Westwind and OFII appealed to the Supreme Court.
ISSUE:
1
GR No 165647, 26 March 2009, 582 SCRA 457
Whether Westwind and OFII, as common carriers, are liable instead of ATI. the arrastre operator
RULING:
Yes. Westwind and OFII, as common carriers, are liable instead of ATI. the arrastre operator.
Cargoes, while being unloaded, generally remain under the custody of the carrier. In Philippines First
Insurance Co., Inc. v. Wallem Phils. Shipping, Inc.,2 the court held that “[c]ommon carriers, from the nature of their
business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods
transported by them. Subject to certain exceptions enumerated under Article 1734 of the Civil Code, common carriers
are responsible for the loss, destruction, or deterioration of the goods.
The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally
placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the person who has a right to receive them.” There is actual
delivery in contracts for the transport of goods when possession has been turned over to the consignee or to his duly
authorized agent and a reasonable time is given to remove the goods.
In this case, since the discharging of the containers/skids, which were covered by only one bill of lading, had
not yet been completed at the time the damage occurred, there is no reason to imply that there was already delivery,
actual or constructive, of the cargoes to ATI. OFII is likewise liable as a customs broker has been regarded as a
common carrier because transportation of goods is an integral part of its business. OFFI, for undertaking the transport
of cargoes from ATI to SMC's warehouse, is thus considered a common carrier.
Thus. Westwind and OFII, as common carriers, are liable for the respective cargoes damaged.
2
G.R. No. 165647, March 26, 2009, 582 SCRA 457
7. SANICO v. COLIPANO
G.R. No. 209969. September 27, 2017
Prepared by: Buendia, Hariette Joy S.
DOCTRINE: Since the cause of action is based on a breach of a contract of carriage, the liability of Sanico is
direct as the contract is between him and Colipano. Castro, being merely the driver of Sanico's jeepney, cannot be
made liable as he is not a party to the contract of carriage.
FACTS:
Colipano filed a complaint for breach of contract of carriage and damages against Sanico and Castro. It was
alleged that she and her daughter who were paying passengers in the jeepney operated by Sanico and driven by Castro,
were made to sit on an empty beer case at the edge of the rear entrance/exit of the jeep. In an uphill incline, the jeepney
slid backwards. Colipano pushed both her feet against the step board to prevent herself and her child from being
thrown out of the exit, but because the step board was wet, her left foot slipped and got crushed between the step board
and a coconut tree which the jeepney bumped. Colipano’s leg was amputated due to the severe injuries. In their answer,
Sanico and Castro claimed that they instructed everyone not to panic but Colipano tried to disembark and her foot got
caught in between the step board and the coconut tree. Sanico also claimed that upon paying Colipano’s hospital and
medical expenses, Colipano freely and voluntarily executed an Affidavit of Desistance and Release of Claim. The
RTC found that Sanico and Castro breached the contract of carriage and awarded actual and compensatory damages
in favor of Colipano. The CA affirmed this decision but it reduced the award of compensatory damages for loss of
income.
ISSUE:
1. Whether or not Sanico and Castro breached the contract of carriage with Colipano
2. Whether or not the Affidavit of Desistance and Release of Claim is binding on Colipano
RULING:
1. Only Sanico breached the contract of carriage because only Sanico was the party to the contract of carriage
with Colipano. Since the cause of action is based on a breach of a contract of carriage, the liability of
Sanico is direct as the contract is between him and Colipano. Castro, being merely the driver of Sanico's
jeepney, cannot be made liable as he is not a party to the contract of carriage. The elements of a contract of
carriage existed between Colipano and Sanico: consent, as shown when Castro, as employee of Sanico,
accepted Colipano as a passenger when he allowed Colipano to board the jeepney, and as to Colipano,
when she boarded the jeepney; cause or consideration, when Colipano, for her part, paid her fare; and,
object, the transportation of Colipano from the place of departure to the place of destination. Being an
operator and owner of a common carrier, Sanico was required to observe extraordinary diligence in safely
transporting Colipano. When Colipano's leg was injured while she was a passenger in Sanico's jeepney, the
presumption of fault or negligence on Sanico's part arose and he had the burden to prove that he exercised
the extraordinary diligence required of him. He failed to do this. The defense of engine failure, instead of
exonerating Sanico, only aggravated his already precarious position. There is also no question here that
making Colipano sit on the empty beer case was a clear showing of how Sanico contravened the tenor of
his obligation to safely transport Colipano from the place of departure to the place of destination as far as
human care and foresight can provide, using the utmost diligence of very cautious persons, and with due
regard for all the circumstances.
2. NO. As correctly held by the RTC and the CA, the Affidavit of Desistance and Release of Claim is not
binding on plaintiff Colipano in the absence of proof that the contents thereof were sufficiently translated
and explained to her. Sanico cannot understand English and in her pressing need, she may have been easily
convinced to sign the document.
For there to be a valid waiver, the following requisites are essential: (1) that the person making the waiver
possesses the right, (2) that he has the capacity and power to dispose of the right, (3) that the waiver must
be clear and unequivocal although it may be made expressly or impliedly, and (4) that the waiver is not
contrary to law, public policy, public order, morals, good customs or prejudicial to a third person with a
right recognized by law. While the first two requirements can be said to exist in this case, the third and
fourth requirements are, however, lacking.
8. Oriental Assurance Corp. v. Ong

G.R. No. 189524. October 11, 2017
Prepared by: Canapi, Patricia Joy, A.
DOCTRINE: The Court of Appeals found that 11 of the coils were already damaged before they were loaded in Ong's
trucks. Hence, the legal presumption of negligence applies against Asian Terminals unless it is able to prove that it
exercised extraordinary diligence in the handling of the cargo. The Court of Appeals held that as an arrastre operator,
Asian Terminals was bound to observe the same degree of care required of common carriers.
FACTS:
JEA Steel Industries Inc., imported from South Korea 72 aluminum zinc alloy-coated steel sheets in coils. These steel
sheets were transported to Manila on board the vessel M/V Dooyang Glory. Upon arrival of the vessel in Manila, the
72 coils were discharged and stored under the custody of the arrastre contractor, Asian Terminals, Inc. (ATI). The
coils were then loaded on the trucks of Ong for delivery to JEA Steel's plant. 11 of these coils were found to be in
damaged condition, dented or deformed. JEA Steel filed a claim with Oriental for the value of the 11 damaged coils.
The consignee's claim letter dated July 2, 2002 was received 17 days from the last delivery of the coils. Oriental paid
JEA Steel. As such, Oriental demanded indemnity from Ong and ATI but they refused to pay. ATI, for its part, argues
that Oriental's claim was barred for the latter's failure to file a notice of claim within the 15-day period provided in the
Gate Pass and in Article VII, Section 7.01 of the Contract for Cargo Handling Services (Management Contract)
between the Philippine Ports Authority and ATI. ATI added that its liability, if any, should not exceed ₱5,000.00,
pursuant to said Section 7.01.
ISSUE:
● Whether or not Ong should be held liable for the damage of the cargo. (NO)
● Whether or not Oriental’s claim should be barred for the latter's failure to file a notice of claim within the
15-day period provided in the Management Contract. (NO)
RULING:
• Both the CA and the RTC found that the 11 coils were already damaged before the coils were loaded on Ong's
truck. Hence, Ong could not be responsible for the damaged shipment. The assertion of Oriental that Ong should
be held solidarily liable with ATI for acting in bad faith when it did not apprise JEA Steel or ATI about the damaged
is untenable. This issue was never raised in the lower courts. In fact, Ong and ATI were sued in the alternative
because it uncertain against whom it was entitled for relief. There was also no proof of Ong's bad faith. Ong's
assertion that the loading of the cargo on the trucks was undertaken by ATI and the unloading of the same cargo
was undertaken by JEA Steel at its warehouse remains unrebutted. ATI even caused the inspection of the shipment
before they were loaded on Ong's trucks.At the consignee's warehouse, the inspection was done in the presence of
JEA Steel’s authorized representative. Thus, Ong is not obliged to inform the consignee or ATI about the damaged
coils as they would have presumably known about them.
• Under the express terms of the Management Contract, the consignee had 30 days from receipt of the cargo to
request for a certificate of loss from the arrastre operator. Upon receipt of such request, the arrastre operator would
have 15 days to issue a certificate of loss, either actually or constructively. From the date of issuance of the
certificate of loss or where no certificate was issued, from the expiration of the 15-day period, the consignee has
15 days within which to file a formal claim with the arrastre operator. In other words, the consignee had 45 to 60
days from the date of last delivery of the goods within which to submit a formal claim to the arrastre operator.
Specifically in this case, JEA Steel's claim letter was received by ATI 17 days from the last delivery of the goods.
This is within the prescribed 30-day period to request a certificate of loss, damage, or injury from the ATI. In the
case at bar, the consignee's claim letter is regarded as substantial compliance with the condition precedent set forth
in the Management Contract. The Court adopts a reasonable interpretation of the stipulations in the said contract.
It must be noted that whether JEA Steel files a claim letter or requests for a certificate of loss or bad order
examination, the effect would be the same. Either would afford the arrastre contractor knowledge that the shipment
has been damaged and an opportunity to examine the nature and extent of the injury. Under the Management
Contract, the 30-day period is considered reasonable for the contractor to make an investigation of a claim.

9. Philam Insurance Company, Inc. vs. Heung-A Shipping Corporation
G.R. No. 187812 July 23, 2014
Prepared by: De Leon, Jeremiah C.
Student No: 194169
DOCTRINE:
Common carriers are required to render service with the greatest skill and foresight and to use all reasonable
means to ascertain the nature and characteristics of the goods tendered for shipment, and to exercise due care in the
handling and stowage, including such methods as their nature requires.
FACTS:
Novartis imported from Jinsuk in South Korea, 19 pallets of 200 rolls of Ovaltine Power 18 Laminated plastic
packaging material. To ship the goods to the Philippines, Jinsuk engaged the services of ProTop, a freight forwarder
likewise based in South Korea, to forward the goods to Novartis.
Based on ProTop’s Bill of Lading, the cargo was on freight prepaid basis and on "shipper’s load and count".
Likewise stated in the bill of lading is the name Sagawa, designated as the entity in the Philippines which will obtain
the delivery contract.
Protop shipped the cargo through Dongnama, which in turn loaded the same on M/V Heung-A owned and
operated by Heung-A, a Korean corporation, pursuant to a ‘slot charter agreement’ whereby a space in the latter’s
vessel was reserved for the exclusive use of the former. Wallem is the ship agent of Heung-A in the Philippines.
Novartis insured the shipment with Philam Insurance under “All Risk Marine Open Insurance Policy” against all loss,
damage, liability, or expense before, during transit and even after the discharge of the shipment from the carrying
vessel until its complete delivery to the consignee’s premises. The vessel arrived at the port of Manila, South Harbor,
in 2000 and the subject shipment contained in Sea Van Container was discharged without exception into the
possession, custody and care of Asian Terminals, as the customs arrastre operator.
The shipment was thereafter withdrawn, by Novartis’ appointed broker Stephanie. The shipment reached
their premises and was thereupon inspected by the company’s Senior Laboratory Technician, Caparoso where he
found that the boxes of the shipment were wet and damp, the boxes on one side of the van were in disarray while
others were opened or damaged due to the dampness, parts of the container van were damaged and rusty, and there
were also water droplets on the walls and the floor was wet. Caparaso rejected the entire shipment.
Novartis demanded indemnification for the lost/damaged shipment from ProTop, Sagawa, Asian Terminals
and Stephanie but was denied. Insurance claims were, thus, filed with PHILAM which paid the insured value of the
shipment. Claiming that after such payment, it was subrogated to all the rights and claims of Novartis against the
parties liable for the lost/damaged shipment, Philam Insurance filed, a complaint for damages against ProTop, its ship
agent in the Philippines, Sagawa, consignee, Asian terminals and Stephanie.
Those accused by Novartis denied liability for the lost/damaged shipment. Wallem averred that any liability
which may be imputed to it is limited only to 8,500.00 US dollars. pursuant to the Carriage of Goods by Sea Act
(COGSA)
The lower court held that ProTop, Heung-A, and Wallem solidary liable to the amount of 1,9M. Asian
Terminals and Stephanie was exonerated from liability.
The Court of Appeals modified the affirmed the ruling with modification that COGSA should apply and
limited the liability to 8,500 US dollars.
ISSUE:
● Whether or not the shipment sustained damage while in the possession and custody of HEUNG-A?
RULING:
● YES, the shipment sustained damage while in the possession and custody of HEUNG-A.
● The Supreme Court ruled that as the carrier of the subject shipment, HEUNG-A was bound to exercise
extraordinary diligence in conveying the same and its slot charter agreement with DONGNAMA did not
divest it of such characterization nor relieve it of any accountability for the shipment. Common carriers, as a
rule, are presumed to have been at fault or negligent if the goods they transported deteriorated or got lost or
destroyed.
● In this case, based on the testimony of Gonzales, WALLEM’s employee and witness, the charter party
between HEUNG-A and DONGNAMA was a contract of affreightment and not a bare boat or demise charter.
Also, HEUNG-A failed to rebut this prima facie presumption when it failed to give adequate explanation as
to how the shipment inside the container van was handled, stored and preserved to forestall or prevent any
damage or loss while the same was in its possession, custody and control.
● ProTop is solidarily liable with HEUNG-A for the lost/damaged shipment in view of the bill of lading the
former issued to Novartis.
● Therefore, the shipment sustained damage while in the possession and custody of HEUNG-A.

10. FEDERAL PHOENIX ASSURANCE V. FORTUNE SEA CARRIER
G.R. No. 188118. November 23, 2015
Prepared by: Dimayuga, Gianina Irma A.
DOCTRINE: The decisive factor in evaluating an agreement is the intention of the parties, as shown, not
necessarily by the terminology used in the contract. Despite the denomination as Time Charter by the parties, their
agreement undoubtedly reflected that their intention was to enter into a Bareboat Charter Agreement.
FACTS:
Fortune Sea agreed to lease its vessel M/V Ricky Rey to Northern Mindanao Transport Co., Inc. (Northern
Transport). The Time Charter Party agreement executed by the parties provides that the vessel shall be leased to
Northern Transport for 90 days to carry bags of cement to different ports of destination.
Northern Transport ordered 2,069 bales of abaca fibers to be shipped on board M/V Ricky Rey by shipper
Manila Hemp Trading Corporation, for delivery to consignee Newtech Pulp Inc. (Newtech) in Iligan City. The
shipment was covered by Bill of Lading No. 1 and was insured by petitioner Federal Phoenix Assurance Co.,.Ltd.
(Federal Phoenix).
Upon arrival of M/V Ricky Rey at the Iligan City port on June 16, 1994, the stevedores started to discharge
the abaca shipment the following clay. At about 3:00 p.m., however, on June 18, 1994, the stevedores noticed smoke
coming out of the cargo haul where the bales of abaca where located. Immediately, the lire was put off by the Iligan
City Fire Department. Upon investigation, it was discovered that 60 bales of abaca were damaged.
As a result of the losses, Newtech filed an insurance claim for P260,000.00 with Federal Phoenix. After
evaluation, Federal Phoenix paid Newtech P162,419.25 for the losses it incurred due to the damaged and
undelivered bales of abaca. Upon payment. Federal Phoenix was subrogated to the rights of Newtech and pursued its
claim against Fortune Sea. Despite several demands to Fortune Sea, Federal Phoenix's claims were not settled. As a
result, Federal Phoenix filed a Complaint for Sum of Money against Fortune Sea before the RTC of Makati.
For its defense, Fortune Sea insisted that it was acting as a private carrier at the time the incident occurred.
It alleged that the Time Charter Party agreement executed by the parties expressly provided that M/V Ricky Rey
shall be under the orders and complete control of Northern Transport.
The RTC ruled in favor of Federal Phoenix while the CA reversed the decision. Fortune Sea is a
corporation engaged in the business of transporting cargo by water and for compensation, offering its services to the
public, as such, it is a common carrier. However, Fortune Sea entered into a time-charter with Northern Transport.
Hence, the CA held that Fortune Sea was converted into a private carrier by virtue of the charter party agreement it
entered into with Northern Transport and that the contract was one of bareboat or demise.
ISSUE:
Whether or not M/V Ricky Rey was converted into a private carrier notwithstanding the existence of the time charter
party agreement.
RULING:
YES, M/V Ricky Rey was converted into a private carrier notwithstanding the existence of the time charter
party agreement.
In Aguirre v. CA, 380 Phil. 736, 741 (2000), citing Zamora v. CA, 328 Phil. 1106, 1115 (1996), the Court
ruled that, in determining the nature of a contract, courts are not bound by the title or name given by the parties. The
decisive factor in evaluating an agreement is the intention of the parties, as shown, not necessarily by the
terminology used in the contract but by their conduct, words, actions and deeds prior to, during and immediately
alter executing the agreement.
A perspicacious scrutiny of the Time Charter Party disclosed provisions evincing that Northern Transport
became the owner pro hac vice of M/V Ricky Rey during the whole period of the voyage. M/V Ricky Rey was
converted into a private carrier notwithstanding the existence of the Time Charter Party agreement with Northern
Transport since the said agreement was not limited to the ship only but extends even to the control of its crew.
Despite the denomination as Time Charter by the parties, their agreement undoubtedly reflected that their intention
was to enter into a Bareboat Charter Agreement.
Hence, M/V Ricky Rey was converted into a private carrier notwithstanding the existence of the time
charter party agreement.

11. Torres-Madrid Brokerage Inc., v. FEB Mitsui Marine Insurance Co.,
Inc.
G.R. No. 194121. July 11, 2016
Prepared by: Eder, Benilda Cristina, C.
DOCTRINE: As long as an entity holds itself out to the public for the transport of goods as a business, it is considered
a common carrier regardless of whether it owns a vehicle used or actually hire one.
FACTS: Sony engaged the services of Torres-Madrid Brokerage, Inc. (TMBI) to facilitate, process and deliver its
shipment of electronic goods from Thailand and Malaysia to its warehouse at Biñan, Laguna. TMBI does not have its
own trucks to transport Sony’s shipment, so it entered a subcontract with BMT Trucking Service (BMT). Despite the
arrival of Sony’s shipment, BMT was not able to immediately deliver the shipment because of the truck ban and the
next day was a Sunday. On Monday, BMT’s four trucks left, but only three were able to arrive at Sony’s warehouse.
After, the missing truck was found abandoned, but the driver and the shipment were missing. Consequently, TMBI’s
general manager filed a complaint with NBI against the driver for hijacking. TMBI notified the loss to Sony and the
latter filed an insurance claim with Mitui over the loss shipment. Once Mitsui subrogated the rights of Sony, it
demanded the payment of the lost shipment to TMBI. In turn, TMBI refused to pay for the loss shipment on the ground
that it was BMT that should be responsible for the loss. The RTC ruled that TMBI and BMT are solidarily liable to
pay for the loss of the shipment. On appeal with the CA, TMBI claimed that it is not a common carrier and that it is
absolved from liability to pay for the loss of the shipment because the hijacking of the truck is considered a fortuitous
event. While BMT claimed that it exercised extraordinary diligence and that it is also absolved from liability due to
the hijacking. However, the CA affirmed the decision of the RTC.
ISSUE:
● Whether or not TMBI is a common carrier?
● As a subcontractor, is BMT liable for breach of contract of carriage with Sony?
RULING:
● YES. TMBI is a common carrier. Under Article 1732 of the New Civil Code, common carriers are defined
as persons, corporations, firms, or associations engaged in the business of transporting goods or passengers,
or both by land, air or water for compensation offering their service to the public. By the nature of its business
and public policy, the law requires common carrier to exercise extraordinary diligence in transporting the
goods or passengers. The law on common carriers does not distinguish between one that undertakes
transportation as a principal business or as an ancillary activity. Moreover, the fact that an entity holds itself
out to the public for the transport of goods as a business is a common carrier regardless of whether it owned
used vehicles or not. In this case, TMBI is a common carrier even though it is engaged in a brokerage business
because it is also involved in the transport or delivery of goods as an ancillary part of its business. Even
though it entered into a subcontract with BMT due to not owning any trucks, it remains to be a common
carrier since it obligates itself to transport Sony’s shipment to the latter’s warehouse. Therefore, TMBI is a
common carrier.
● NO. BMT is not liable for breach of contract of carriage with Sony. Based on the Supreme Court’s ruling, a
subcontractor is not a principal party of the contract of carriage. There is no direct contractual relationship
with BMT and Sony. Mitsui may recovery from BMT by filing an action for quasi-delict unless there is a
clear showing of negligence on the part of BMT. However, BMT is engaged in a contract of carriage with
TMBI because it expressly undertakes to transport the shipment of Sony on behalf of TMBI. Moreover,
TMBI has the right to seek reimbursement from BMT. Therefore, BMT is not liable for breach of contract
of carriage with Sony.

12. Asian Terminals, Inc. v. Allied Guarantee Insurance Co., Inc.
G.R. No. 182208. October 14, 2015
Prepared by: Fong, Michaela Miles, C.
DOCTRINE:
In the performance of its obligations, an arrastre operator should observe the same degree of diligence as that
required of a common carrier and a warehouseman. Being the custodian of the goods discharged from a vessel,
an arrastre operator’s duty is to take good care of the goods and to turn them over to the party entitled to their
possession. With such a responsibility, the arrastre operator must prove that the losses were not due to its
negligence or to that of its employees.
The signature by a customs broker’s representative of “receipt in good order” does not foreclose the consignee’s
or its subrogee’s right or remedy to prove that additional loss or damage to the subject shipment occurred
while the same was under the custody, control and possession of the arrastre operator.
FACTS:
San Miguel Corporation (SAN MIGUEL), through its customs broker, Dynamic Brokerage (DYNAMIC) had a
shipment of 72K lbs. of kraft linear board from the United States. The vessel used was M/V Nicole, which was
operated by a foreign corporation, Transocean Marine, Inc. (TRANSOCEAN) and was represented by Transmarine
Carrier, Inc. (PHILIPPINE TRANSMARINE).
On April 8, 1989, M/V Nicole arrived in Manila and was offloaded from the vessel by its Arrastre operator Marina
Port Services, Inc. (MARINA). It was assessed that 158 rolls of goods were damaged during shipping and that
additional 54 rolls were damaged upon withdrawal from MARINA and upon delivery to DYNAMIC.
Allied Guarantee Insurance, Co. (ALLED) was the insurer of SAN MIGUEL. ALLIED paid SAN MIGUEL a total of
P756K for the 212 damaged rolls. Afterwards, ALLIED filed a complaint for maritime damages against
TRANSOCEAN, MARINA, and DYNAMIC. MARINA denied the allegations and maintained that the 158 rolls were
already in the bad order condition when it was turned over to them. Meanwhile, TRANSOCEAN and PHILIPPINE
TRANSMARINE denied the allegations and alleged that a large portion of the shipment was already torn/scuffed
before it was loaded to their vessel.
The RTC-Makati City held that TRANSOCEAN was liable for the 158 damaged rolls due to its failure to observe the
necessary precautions and extraordinary diligences as common carrier to prevent such damage. Then, MARINA and
DYNAMIC are liable for the additional 54 damaged rolls.
MARINA changed its name to Asian Terminals, Inc. (ATI) and elevated the case to the CA. ATI maintained that it is
not liable for the 54 additional damaged rolls because these were only discovered to be damaged when the rolls arrived
at SAN MIGUEL’s warehouse and that it was the DYNAMIC’s responsibility.
The CA affirmed the RTC’s decision. The CA held that TRANSOCEAN and PHILIPPINE TRANSMARINE were
liable because they were unable to overcome the presumption of negligence while in custody of the goods. ATI
(formerly MARINA) and DYNAMIC were found liable for the additional 54 damaged rolls because they failed to
prove the exercise of the amount of diligence required in safekeeping.
ATI (formerly MARINA) argued that the CA erroneously failed to note the Turn Over Survey of Bad Order Cargoes
and the Requests for Bad Order Survey which supposedly could have absolved it from liability for the damaged
shipment.
ISSUE:
(1) Were ATI (formerly MARINA) and DYNAMIC both liable for the 54 rolls that were damaged?
(2) Was ATI correct that the Turn Over Survey of Bad Order Cargoes and the Requests for Bad Order
Survey can absolve it from being liable for the additional 54 damaged rolls?
RULING:
(1) YES.
The Supreme Court held that the nature of the work of an arrastre operator covers the handling of cargoes at piers and
wharves. Hence, the legal relationship between the consignee and the arrastre operator is akin to that of a depositor
and the warehouseman. The relationship betwene the consignee and the common carrier is similar to that of the
consignee and the arrastre operator.
The trial court correctly held that DYNAMIC cannot alone be held liable for the additional 54 rolls of damaged goods
since such damage occurred during the following instances:
(1) While the goods were in the custody of the arrastre ATI;
(2) When they were in transition from ATI’s custody to that of DYNAMIC (during loading to DYNAMIC’s
trucks);
(3) During DYNAMIC’s custody.
The court could not determine with pinpoint accuracy who among the two caused which particular damages and in
what proportion and quantity, it was clear that both ATI and DYNAMIC failed to discharge the burden of proving
that the damage on the 54 rolls did not occur during their custody.
Further, the arrastre operator’s principal work is that of handling cargo, so that its drivers/operators or employees
should observe the standards and measures necessary to prevent losses and damage to shipments under its custody. In
the performance of its obligations, an arrastre operator should observe the same degree of diligence as that required
of a common carrier and a warehouseman. Being the custodian of the goods discharged from a vessel, an arrastre
operator’s duty is to take good care of the goods and to turn them over to the party entitled to their possession. With
such a responsibility, the arrastre operator must prove that the losses were not due to its negligence or to that of its
employees. And to prove the exercise of diligence in handling the subject cargoes, ATI (formerly MARINA) must do
more than merely show the possibility that some other party could be responsible for the loss or the damage. It must
prove that it exercised due care in the handling of the cargoes.
Therefore, ATI and DYNAMIC are both liable for the additional 54 damaged rolls.
(2) NO.
The Supreme Court held that the signature by a customs broker’s representative of “receipt in good order” does not
foreclose the consignee’s or its subrogee’s right or remedy to prove that additional loss or damage to the subject
shipment occurred while the same was under the custody, control and possession of the arrastre operator. Since the
relationship of an arrastre operator and a consignee is akin to that between a warehouseman and a depositor, in
instances when the consignee claims any loss, the burden of proof is on the arrastre operator to show that it complied
with the obligation to deliver the goods and that the losses were not due to its negligence or that of its employees.
ATI failed to dislodge this burden. The non-presenation of ATI of the so-called inspectors who prepared the Requests
for Bad Order Survey further proved detrimental to its case. The inspectors could have verified on direct and cross-
examination when the additional damage was sustained and by whose fault. Instead, all the ATI presented were the
Requests for Bad Order Survey, which being private documents that had not been authenticated by the inspectors who
prepared them, were correctly disregarded by the trial court and appellate court. Private documents whose authenticity
and due execution was not established may not be received in evidence and are hearsay.
Therefore, ATI is liable for the 54 additional damaged rolls.

13. LTFRB v. Valenzuela

G.R. No. 242860. March 11, 2019
Prepared by: Jickain, Luke, T.
DOCTRINE:
FACTS:
On May 26, 2016, DBDOYC, Inc. registered its business with the Securities and Exchange Commission (SEC), and
subsequently, in December 2016, launched an online and on-demand common carrier, "Angkas.” The said service is
a mobile application is a motorcycle-hailing platform that pairs drivers of motorcycles with potential passengers.
However, Ankas failed to obtain the mandatory certificate of Transport Network Companies (TNC) accreditation from
the Land Transportation Franchising and Regulatory Board (LTFRB). In this regard, DBDOYC accredited Angkas
drivers and allowed them to offer their transport services to the public despite the absence of Certificate of Public
Convenience (CPCs). Cognizant of the foregoing, the LTFRB issued a press release on January 27, 2017 informing
the riding public that DBDOYC, which is considered as a TNC, cannot legally operate. Despite such warning,
however, DBDOYC continued to operate and offer its services to the riding public sans any effort to obtain a certificate
of TNC accreditation. In response, DBDOYC, on July 4, 2018, filed a Petition for Declaratory Relief with Application
for Temporary Restraining Order/Writ of Preliminary Injunction against petitioners before the RTC alleging that: (a)
it is not a public transportation provider since Angkas app is a mere tool that connects the passenger and the motorcycle
driver; (b) Angkas and its drivers are not engaged in the delivery of a public service; (c) alternatively, should it be
determined that it is performing a public service that requires the issuance of a certificate of accreditation and/or CPC,
then DO 2017-11 should be declared invalid because it violates Section 7 of Republic Act No. (RA) 4136 or the "Land
and Transportation Traffic Code," which does not prohibit motorcycles from being used as a PUV; and (d) neither the
LTFRB nor the DOTr has jurisdiction to regulate motorcycles for hire.
ISSUE:
● Are motorcycles in Angkas classified as private carriers and not offering public service?
RULING:
● NO, Angkas falls under the classification of common carrier and it offers public service. The Supreme
Court in the case of De Guzman v. Court of Appeals, the Court discussed the relation between Article
1732 of the Civil Code and Section 13 (b) of the Public Service Act, explaining that Article 1732 of the
Civil Code does not distinguish between a carrier who offers its services to the general public and one
who offers services or solicits business only from a narrow segment of the general population: The above
article makes no distinction between one whose principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as an ancillary activity (in local idiom, as "a
sideline"). 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. Moreover, based on the way the app
works, it appears that there is really no contractual discretion between the Angkas bikers and would-be
passengers because the app automatically pairs them up based on algorithmic procedures. Whether or
not the parties once paired with each other have the choice to freely accept, reject, or modify the terms
of their engagement based solely on their discretion is a matter which appears to have not yet been
traversed in the proceedings below. Verily, the absence of any true choice on these material contractual
points apparently contradicts the postulation that the Angkas app merely facilitates a purely private
arrangement between the biker and his passenger.

14. Hiers of Catalina P. Mendoza v. ES Trucking
G.R. No. 243237. February 17, 2020
Prepared by: Jiz, Aronne Dominic, C.
DOCTRINE: A common carrier cannot be excused simply because it is not registered with the LTFRB and it is a
private company. The common carrier cannot be exonerated from liability and benefit from its own violation of the
laws and rules governing trucks for hire.
FACTS:
On the noon of June 13, 2013, Catalina was walking along Sta. Maria Road after visiting a lotto outlet. While being
at the center of the road and attempting to cross, she was sideswiped by a 14- wheeler prime mover. The said vehicle
is registered under the name of ES Trucking and forwarders (ES Trucking) with Sumami Asper Ruste as its sole
proprietor. The vehicle was driven by Timtim, holder of profession driver’s license. Timtim claimed that moments
before the incident, he stopped the vehicle at the crossing lane as the tricycle in front of the prime mover truck stopped
and only began to accelerate once the tricycle started moving. Catalina died after the incident. The heirs of Catalina
sent a demand letter to ES Trucking seeking reimbursement for the actual expenses incurred. P470, 197.05 as moral
damages, and attorney’s fees equivalent to 10% of the total claim. Certificate to File Action was issued the parties
failed to reach settlement. A criminal case for Reckless Imprudence resulting to Homicide was filed against the driver.
The MTCC found Timtim guilty of Reckless Imprudence resulting to homicide. The RTC dismiss the case for
insufficient evidence and want to case of action against ES trucking. The CA affirmed RTC’s decision.
ISSUE:
● Whether or not ES Trucking is a common carrier required by law to observe extraordinary diligence in the
carriage of passengers and goods.
RULING:
● YES. The Supreme Court held that ES Trucking is considered a common carrier required to secure a
Certificate of Public Convenience. Article 1732 of the Civil Code defines common carriers as persons,
corporations, firms or associations engaged in the business of carrying or transporting passengers or goods,
or both, by land, water, or air, for compensation, offering their services to the public. In the case at bar, ES
Trucking is engaged in a truck for hire business, offering their vehicles to transport the cargo of its customers.
Hence, ES Trucking cannot be excused simply because it is not registered with the LTFRB and it is a private
company. ES Trucking cannot be exonerated from liability and benefit from its own violation of the laws and
rules governing trucks for hire. Lastly, although the employer is not the actual tortfeasor, the law makes the
employer vicariously liable on the basis of the principle of paterfamilias for failure to exercise due care and
vigilance over the acts of one’s subordinate to prevent damage to another.

15. FILCAR TRANSPORT SERVICES v. JOSE A. ESPINAS
G.R. No. 174156 June 20, 2012
Prepared by: Lagmay, Denzel John Brawner
MAIN TOPIC: Registered Owner Rule
DOCTRINE:
Whether there is an employer-employee relationship between the registered owner and the driver is irrelevant
in determining the liability of the registered owner who the law holds primarily and directly responsible for any
accident, injury or death caused by the operation of the vehicle in the streets and highways.
FACTS:
Jose Espinas was driving his car along Leon Guinto Street in Manila. Upon reaching the intersection of Leon
Guinto and P. Quirino Street and after the stop light had turned green, Jose drove forward and upon reaching the
middle of the intersection, Espinas’ car was hit by a driver of Filcar’s secretary. The car driven by Espinas turned
turtle but Espinas was able to obtain the plate number of the car that hit him. Upon his research, he learned that the
car was registered to Petitioner Filcar.
Jose wrote a letter to Filcar regarding the incident and demanded Filcar to pay for the damage done. Filcar
denied the request and stated that the driver was not their employee and that it was the personal driver of their
Corporate Secretary, Atty. Flor.
Jose filed a complaint against Filcar in the MeTC for damages. The MeTC ruled in favor of Jose and declared
that Filcar is the employer of the driver pursuant to the Registered Owner Rule. On appeal, the RTC dismissed Filcar’s
petition and held that the registered owner of a vehicle is directly and primarily liable for the damages sustained by
third persons as a consequence of the negligent or careless operation of a vehicle registered under their name. On
appeal, the Court of Appeals modified its ruling but maintained that Filcar was the employer and was thus liable under
Art. 2176 of the Civil Code. Hence, this appeal.
ISSUE:
Wether or not Filcar is the employer of the personal driver of Atty. Flor and thus, liable to Jose Espinas for damages.
RULING: YES
The Court held that the defense of Filcar that the driver was not their employee holds no water. It is well
settled that in case of motor vehicle mishaps, the registered owner of the motor vehicle is considered as the employer
of the tortfeasor-driver, and is made primarily liable for the tort committed by the latter under Article 2176, in relation
with Article 2180, of the Civil Code. The Supreme Court, in citing Equitable Leasing v. Suyom ruled that in so far as
third persons are concerned, the registered owner of the motor vehicle is the employer of the negligent driver, and the
actual employer is considered merely as an agent of such owner. Moreover, for the purpose of holding the registered
owner of the motor vehicle primarily and directly liable for damages under Article 2176, in relation with Article 2180,
of the Civil Code, the existence of an employer-employee relationship, as it is understood in labor relations law, is not
required. It is sufficient to establish that Filcar is the registered owner of the motor vehicle causing damage in order
that it may be held vicariously liable under Article 2180 of the Civil Code.
In the instant case, Filcar, being the registered owner, is liable to Jose Espinas regardless whether it is driven
by their employee or not. Filcar’s liability is solidary with the actual tortfeasor. However, Filcar is not without recourse
as they may claim reimbursement from the tortfeasor-driver.
Dispositive: The petition is Denied. The Court of Appeals decision is AFFIRMED.

16. GREENSTAR EXPRESS, INC. V. UNIVERSAL ROBINA
CORPORATION
G.R. No. 205090. October 17, 2016
Prepared by: Landong, Jemima D.
MAIN TOPIC: Registered Owner Rule
DOCTRINE: It is imperative to apply the registered-owner rule in a manner that harmonizes it with Articles 2176
and 2180 of the Civil Code. Rules must be construed in a manner that will harmonize them with other rules so as to
form a uniform and consistent system of jurisprudence. In light of this, the words used in Del Carmen are particularly
notable. There, this court stated that Article 2180 'should defer to' the registered-owner rule. It never stated that Article
2180 should be totally abandoned.
The doctrine of last clear chance provides that where both parties are negligent but the negligent act of one is
appreciably later in point of time than that of the other, or where it is impossible to determine whose fault or negligence
brought about the occurrence of the incident, the one who had the last clear opportunity to avoid the impending harm
but failed to do so, is chargeable with the consequences arising therefrom. Stated differently, the rule is that the
antecedent negligence of a person does not preclude recovery of damages caused by the supervening negligence of
the latter, who had the last fair chance to prevent the impending harm by the exercise of due diligence
FACTS:
Petitioner Greenstar Express, Inc. is a domestic corporation engaged in the business of public transportation, while
petitioner Fruto L. Sayson, Jr. (Sayson) is one of its bus drivers. Respondents Universal Robina Corporation (URC)
and Nissin Universal Robina Corporation (NURC) are domestic corporations engaged in the food business. NURC is
a subsidiary of URC. URC is the registered owner of a Mitsubishi L-300 van (URC van).
At about 6:50 a.m, on February 25, 2003, which was then a declared national holiday, petitioner's bus, which was then
being driven toward the direction of Manila by Sayson, collided head-on with a van owned by URC, which was then
being driven Quezon province-bound by NURC 's Operations Manager, Renante Bicomong who died on the spot
while the colliding vehicles sustained considerable damage.
ISSUE:
Whether respondents are liable to petitioners for the damages they sustained considering that the accident was
attributed to the negligence of Bicomong.
RULING:
NO. The Supreme Court held that the appropriate approach is that in cases where both the registered-owner rule and
Article 2180 apply, the plaintiff must first establish that the employer is the registered owner of the vehicle in question.
Once this has been proven, there arises a disputable presumption that the requirements of Article 2180 have been
proven. As a consequence, the burden of proof shifts to the defendant to show that no liability under Article 2180 has
arisen.
In the present case, it has been established that on the day of the collision, URC was the registered owner of the URC
van; that Bicomong was the Operations Manager of NURC and assigned to the First Cavite Industrial Estate; that
there was no work as the day was declared a national holiday; that Bicomong was on his way home to his family in
Quezon province; that the URC van was not assigned to Bicomong as well, and there is no other NURC plant in the
provinces of Quezon, Laguna or Bicol. In proving the liability under Art. 2180 of the respondent as registered owner,
the court enumerated that respondents should provide proof of any of the following: 1) absence of employment
relationship with Bicomong, 2) Bicomong acted outside the scope of his assigned tasks; or 3) that they exercised the
diligence of a good father of a family in the selection and supervision of Bicomong. Respondents presented evidence
that on the day of the collision, Bicomong was on his way home to Quezon on a personal undertaking, and that the
vehicle he was driving was not an NURC vehicle, nor was it assigned to him, but was registered to URC and assigned
to its Logistics Manager, Soro-Soro.
Moreover, the evidence suggests that the collision could have been avoided if Sayson exercised care and prudence,
given the circumstances and information that he had immediately prior to the accident. If Sayson took defensive
measures, the point of impact should have occurred further inside his lane or not at the front of the bus - but at its side,
which should have shown that Sayson either slowed down or swerved to the right to avoid a collision.
Hence, the Supreme Court denied the petition.

17. LRTA V. Navidad
G.R. No. 145804. February 6, 2003
Prepared by: Lapus, Tristan Patrick P.
MAIN TOPIC: PERFECTION OF CONTRACT OF CARRIAGE
DOCTRINE: The law requires common carriers to carry passengers safely using the utmost diligence of very
cautious persons with due regard for all circumstances. Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip but for so long as the passengers are within its
premises and where they ought to be in pursuance to the contract of carriage.
FACTS:
On October 14, 1993, 7:30 p.m. A Drunk Nicanor Navidad (Nicanor) entered the EDSA LRT station after purchasing
a “token”. While Nicanor was standing at the platform near the LRT tracks, the guard Junelito Escartin approached
him. Due to a misunderstanding, they had a fist fight and Nicanor fell on the tracks and killed instantaneously upon
being hit by a moving train operated by Rodolfo Roman
On December 8, 1994, The widow of Nicanor, along with her children, filed a complaint for damages against Escartin,
Roman, LRTA, Metro Transit Org. Inc. and Prudent (agency of security guards) for the death of her husband. LRTA
and Roman filed a counter-claim against Nicanor and a cross-claim against Escartin and Prudent.
Prudent denied liability and averred that it had exercised due diligence in the selection and surpervision of its security
guards. Prudent and Escartin filed a demurrer contending that Navidad had failed to prove that Escartin was negligent
in his assigned task.
The RTC ruled in favour of widow and against Prudent and Escartin, complaint against LRT and Roman were
dismissed for lack of merit. The CA reversed the decision of the RTC by exonerating Prudent and held LRTA and
Roman liable.
ISSUE:
1. Whether or not there was a perfected contract of carriage
2. Whether or not LRTA should be liable as per the contract of carriage
RULING:
1. YES. Contract of carriage was deemed created from the moment Navidad paid the fare at the LRT station and
entered the premises of the latter, entitling Navidad to all the rights and protection under a contractual relation. The
law requires common carriers to carry passengers safely using the utmost diligence of very cautious persons with
due regard for all circumstances.5 Such duty of a common carrier to provide safety to its passengers so obligates it
not only during the course of the trip but for so long as the passengers are within its premises and where they ought
to be in pursuance to the contract of carriage.
2. YES.
Law and jurisprudence dictate that a common carrier, both from the nature of its business and for reasons of public
policy, is burdened with the duty of exercising utmost diligence in ensuring the safety of passengers. The Civil
Code, governing the liability of a common carrier for death of or injury to its passengers, provides:
"Article 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.
"Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733
and 1755."
The foundation of LRTA’s liability is the contract of carriage and its obligation to indemnify the victim arises from
the breach of that contract by reason of its failure to exercise the high diligence required of the common carrier. In
the discharge of its commitment to ensure the safety of passengers, a carrier may choose to hire its own employees
or avail itself of the services of an outsider or an independent firm to undertake the task. In either case, the common
carrier is not relieved of its responsibilities under the contract of carriage.
Thus, LRTA is liable under the contract of carriage.

18. Annie Tan v. Great Harvest Enterprises
G.R. No.220400 March 20, 2019
Prepared by: Montano, Josephine Edrhea P.
MAIN TOPIC: Extraordinary diligence

DOCTRINE:
● Common carriers are obligated to exercise extraordinary diligence over the goods entrusted to their
care. This is due to the nature of their business, with the public policy behind it geared toward
achieving allocative efficiency and minimizing the inherently inequitable dynamics between the
parties to the transaction.
● Article 1734 of the Civil Code holds a common carrier fully responsible for the goods entrusted to
him or her, unless there is enough evidence to show that the loss, destruction, or deterioration of the
goods falls under any of the enumerated exceptions:
ARTICLE 1734. Common carriers are responsible for the loss, destruction, or deterioration
of the goods, unless the same is due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority
FACTS:
Great Harvest hired Tan to transport 430 bags of soya beans worth P230,000.00 from Tacoma Integrated
Port Services, Inc. (Tacoma) in Port Area, Manila to Selecta Feeds in Camarin, Novaliches, Quezon City. One a
fateful day, the bags of soya beans were loaded into Tan's hauling truck. Her employee, Cabugatan, then delivered
the goods to Selecta Feeds. At Selecta Feeds, however, the shipment was rejected. Upon learning of the rejection,
Great Harvest instructed Cabugatan to deliver and unload the soya beans at its warehouse in Malabon. Yet, the truck
and its shipment never reached Great Harvest's warehouse. Tan reported her missing truck to the Western Police
District Anti-Carnapping Unit and the National Bureau of Investigation (NBI). The NBI informed Tan that her
missing truck had been found in Cavite.
However, the truck had been cannibalized and had no cargo in it. Great Harvest, through counsel, sent Tan
a letter demanding full payment for the missing bags of soya beans but she refused to pay for the missing shipment
or settle the matter with Great Harvest. Thus, Great Harvest filed a Complaint for sum of money against Tan. In her
Answer, Tan denied that she entered into a hauling contract with Great Harvest, insisting that she merely
accommodated it. Tan also pointed out that since Great Harvest instructed her driver to change the point of delivery
without her consent, it should bear the loss brought about by its deviation from the original unloading point. Great
Harvest through its counsel sent a demand letter to Tan for the full payment of the lost cargo. However, Tan refused
to pay.
Thus, Great Harvest was constraint to file a Complaint for sum of money against Tan with the Regional
Trial Court. The RTC granted Great Harvest’s complaint for sum of money. Tan moved for reconsideration but
denied. On appeal, the Court of Appeal affirmed the decision of the RTC. Thus, this Petition for Review on
Certiorari.
ISSUE:
● Whether or not petitioner Annie Tan should be held liable for the value of the lost cargo
RULING:
● YES. The Court held that Common carriers are obligated to exercise extraordinary diligence over the goods
entrusted to their care. This is due to the nature of their business, with the public policy behind it geared
toward achieving allocative efficiency and minimizing the inherently inequitable dynamics between the
parties to the transaction.The Civil Code defines common carriers as "persons, corporations, firms or
associations engaged in the business of carrying or transporting passengers or goods or both, by land, water
or air, for compensation, offering their services to the public." The Civil Code outlines the degree of
diligence required of common carriers in Articles 1733, 1755, and 1756: ARTICLE 1733. Common
carriers, from the nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case. A common carrier is bound to carry the passengers
safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons,
with a due regard for all the circumstances.

19. Manay, Jr. v. Cebu Air Inc.
G.R. No.210621, April 4, 2016
Prepared by: Rayo, Dan Leonard L.
MAIN TOPIC: Obligations of the Parties in a Contract of Carriage

DOCTRINE:
The duty of an airline to disclose all the necessary information in the contract of carriage does not
remove the correlative obligation of the passenger to exercise ordinary diligence in the conduct of his or her
affairs.
FACTS:
Carlos S. Jose purchased 20 Cebu Pacific round-trip tickets from Manila to Palawan for himself and on behalf
of his relatives and friends. Jose alleged that he specified to "Alou," the Cebu Pacific ticketing agent, that his preferred
date and time of departure from Manila to Palawan should be on July 20, 2008 at 8:20 a.m. and that his preferred date
and time for their flight back to Manila should be on July 22, 2008 at 4:15 p.m. He alleged that after paying for the
tickets, Alou printed the tickets, which consisted of three (3) pages, and recapped only the first page to him. Since the
first page contained the details he specified to Alou, he no longer read the other pages of the flight information. On
July 20, 2008, Jose and his 19 companions boarded the 8:20am Cebu Pacific flight to Palawan and had an enjoyable
stay. On the afternoon of July 22, 2008, the group proceeded to the airport for their flight back to Manila. During the
processing of their boarding passes, they were informed by Cebu Pacific personnel that nine (9) of them could not be
admitted because their tickets were for the 10:05 a.m. flight earlier that day Upon checking the tickets, they learned
that only the first two (2) pages had the schedule Jose specified. They were left with no other option but to rebook
their tickets.
Jose and his companions filed a Complaint for Damages against Cebu Pacific before the MTC of
Mandaluyong where the latter ordered Cebu Pacific to pay Jose and his companions actual damages. Cebu Pacific
appealed to the RTC, but the RTC affirmed the findings of the Metropolitan Trial Court.
On appeal, the Court of Appeals rendered the Decision granting the appeal and reversing the Decisions of
the Metropolitan Trial Court and the Regional Trial Court.
ISSUE:
Whether or not Cebu Air is liable for damages to petitioners under the contract of carriage.
RULING:
No. Petitioners, in failing to exercise the necessary care in the conduct of their affairs, were without a doubt
negligent. Thus, they are not entitled to damages. Common carriers are required to exercise extraordinary diligence in
the performance of its obligations under the contract of carriage. This extraordinary diligence must be observed not
only in the transportation of goods and services but also in the issuance of the contract of carriage, including its
ticketing operations.
The common carrier's obligation to exercise extraordinary diligence in the issuance of the contract of carriage
is fulfilled by requiring a full review of the flight schedules to be given to a prospective passenger before payment.
The duty of an airline to disclose all the necessary information in the contract of carriage does not remove the
correlative obligation of the passenger to exercise ordinary diligence in the conduct of his or her affairs. The passenger
is still expected to read through the flight information in the contract of carriage before making his or her purchase. If
he or she fails to exercise the ordinary diligence expected of passengers, any resulting damage should be borne by the
passenger.
20. Eastern Shipping Lines, Inc. v. BPI/MS Insurance Corp.

G.R. No. 193986, January 15, 2014
Prepared by: Sandoval, Ma. Minella Christine R.
MAIN TOPIC: Obligations Of The Parties In Contract Of Carriage
DOCTRINE:
Common carriers are responsible for the loss, destruction, or deterioration of the goods. The extraordinary
responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and
received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the
consignee, or to the person who has a right to receive them.
FACTS:
Sumitomo Corporation shipped through vessels of Eastern Shipping Lines various steel sheets in coil in favor of the
consignee Calamba Steel. The cargoes were then turned over to Asian Terminals, Inc. (ATI) for stevedoring, storage
and safekeeping pending Calamba Steel’s withdrawal of the goods. When ATI delivered the cargo to Calamba Steel,
the latter rejected its damaged portion for being unfit for its intended purpose.It was found out that the damage
amounted to US$4,598.85 prompting Calamba Steel to reject the damaged shipment for being unfit for the intended
purpose.
ESLI assigns as error the appellate court’s finding and reasoning that the package limitation under the COGSA is
inapplicable even if the bills of lading covering the shipments only made reference to the corresponding invoices.
Noticeably, the invoices specified among others the weight, quantity, description and value of the cargoes, and bore
the notation “Freight Prepaid” and “As Arranged.” ESLI argues that the value of the cargoes was not incorporated in
the bills of lading and that there was no evidence that the shipper had presented to the carrier in writing prior to the
loading of the actual value of the cargo, and, that there was a no payment of corresponding freight. Finally, despite
the fact that ESLI admits the existence of the invoices, it denies any knowledge either of the value declared or of any
information contained therein.
ISSUE:
Is Eastern Shipping solidarily liable with ATI on account of the damage incurred by the goods?
RULING:
Yes. The Court held that both Eastern Shipping and ATI were negligent in handling and transporting the goods.
Subject to certain exceptions enumerated under Article 1734 of the Civil Code, common carriers are responsible for
the loss, destruction, or deterioration of the goods. The extraordinary responsibility of the common carrier lasts from
the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until
the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to
receive them. Verily, it is settled in maritime law jurisprudence that cargoes while being unloaded generally remain
under the custody of the carrier. As hereinbefore found by the RTC and affirmed by the CA based on the evidence
presented, the goods were damaged even before they were turned over to ATI. Such damage was even compounded
by the negligent acts of petitioner and ATI which both mishandled the goods during the discharging operations. Thus,
it bears stressing unto petitioner that common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence in the vigilance over the goods transported by them.
21. Central Shipping Co., Inc. v. Insurance Co. of North America
G.R. No. 156978. September 20, 2004
Prepared by: Tagudar, Val Laurence P.
MAIN TOPIC: OBLIGATIONS OF THE PARTIES IN CONTRACT OF CARRIAGE.
DOCTRINE:
Common carriers are bound to observe extraordinary diligence over the goods they transport, according to all the
circumstances of each case. The defense of a fortuitous event cannot be made when the injury could have been avoided
by human precaution.
FACTS:
Central Shipping received on board vessel M/V Central Bohol 376 pieces of Philippine Apitong Round Logs and
transported it to Manila for delivery to Alaska Lumber Co. The vessel left Palawan and commenced the voyage to
Manila, but on the way to Manila, the vessel sank resulting in total loss.
The Insurance company alleged that the loss of the shipment was due to the fault and negligence of Central Shipping
and the ship captain, hence it should be liable for damages worth P3M. Central Shipping interposed that the ship was
seaworthy and the vessel master exercised due diligence to prevent the loss. The proximate cause of the sinking of the
vessel was a natural disaster which was a tropical storm.
RTC held Central shipping to be liable applying the rule of presumptive fault or negligence against the carrier. The
CA affirmed the decision of the RTC stating that the monsoon was not unforeseeable given the seasonal nature of the
rains and monsoons. Moreover, the shifting of the logs which could have resulted from improper stowage was also a
cause in the sinking of the vessel.
ISSUE:
Whether the carrier is liable for the loss of the cargo?
RULING:
Yes, Central Shipping is liable for the loss of the cargo. Common carriers are bound to observe extraordinary diligence
over the goods they transport. In the event of loss, destruction, or deterioration of insured goods, common carriers are
responsible unless it is proven that the loss was due to flood, storm, earthquake, or other natural calamity. In all cases
not specified under Art. 1734 of the Civil Code, the common carriers are presumed to have been at fault or to have
acted negligently unless it was proven that they observed extraordinary diligence.
In this case, it was contended by Central shipping that the sinking of the vessel was due to a storm, however as found
by the CA, what they encountered was not a storm but a southwestern monsoon. The weather condition did not fall
under the definition of a storm contemplated under Art. 1734(1) of the civil code. Even if the weather encountered by
the vessel was a natural disaster, Central failed to show that it was the proximate and only cause as human agency
should be excluded from the cause of the injury or loss. If the common carrier fails to exercise due diligence to prevent
or minimize the loss, before, during, and after the occurrence of the natural disaster, then the carrier shall be deemed
to have been negligent. Moreover, the loss of the vessel was also due to the shifting of the logs on hold due to improper
stowage. Southwest monsoons were common occurrences and the officers and crew should have expected it and have
taken extra precaution in stowing the logs pursuant to their duty of observing extraordinary diligence. Therefore,
Central Shipping was liable as it did not exercise extraordinary diligence.
22. Nocum v. Laguna Tayabas Bus Company
G.R. No. L-23733, October 31,1969
Prepared by: Tangan, Alyssa Nicole.
MAIN TOPIC: OBLIGATIONS OF THE PARTIES IN CONTRACT OF CARRIAGE
DOCTRINE: Article 1733 of Civil Code construed; Extraordinary diligence must be according to all the
circumstances of each case.
FACTS:
Nocum, who was a passenger in Laguna Tayabas Bus Co's Bus No. 120 then making a trip within the barrio of Dita,
Municipality of Bay, Laguna, was injured as a consequence of the explosion of firecrackers, contained in a box, loaded
in said bus and declared to its conductor as containing clothes and miscellaneous items by a co passenger. PC
investigation report states that thirty seven (37) passengers were injured. The conductor of the bus stated that the box
belonged to a passenger whose name he does not know and who told him that it contained miscellaneous items and
clothes. Further, the Dispatcher added that they were not authorized to open the baggage of passengers because
instruction from the management was to call the police if there were packages containing articles which were against
regulations.
The lower court ruled in favor of Nocum sentencing LTBC to pay Nocum, ruling that LTBC did not observe the
extraordinary or utmost diligence of a very cautious person required by Art. 1733 of the Civil Code. Hence, this appeal
by LTBC.
ISSUE:
● Whether LTBC should be liable?
RULING:
● No. LTBC should not be liable. Indeed, in approving the said draft, Congress must have concurred with the
Commission that by requiring the highest degree of diligence from common carriers in the safe transport of
their passengers and by creating a presumption of negligence against them, the recklessness of their drivers
which is a common sight even in crowded areas and, particularly, on the highways throughout the country
may, somehow, if not in a large measure, be curbed. We are not convinced, however, that the exacting
criterion of said provisions has not been met by appellant in the circumstances of this particular case.
● Here, it is undisputed that before the box containing the firecrackers were allowed to be loaded in the bus by
the conductor, inquiry was made with the passenger carrying the same as to what was in it, since its "opening
was folded and tied with abaca." Article 1733 is not as unbending, for it reasonably qualifies the extraordinary
diligence required of common carriers for the safety of the passengers transported by them to be "according
to all the circumstances of each case." ln fact, Article 1755 repeats this same qualification: "A common carrier
is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with due regard for all the circumstances" It must be considered that
while it is true the passengers should not be made to suffer for something over which they had no control,
fairness demands that in measuring a common carrier's duty towards its passengers, allowance must be given
to the reliance that should be reposed on the sense of responsibility of all the passengers in regard to their
common safety, It is to be presumed that a passenger will not take with him anything dangerous to the lives
and limbs of his co-passengers, not to speak of his own. Not to be lightly considered must be the right to
privacy to which each passenger is entitled. He cannot be subjected to any unusual search. In other words,
inquiry may be verbally made as to the nature of a passenger's baggage when such is not outwardly
perceptible, but beyond this, constitutional boundaries are already in danger of being transgressed. Hence,
LTBC should not be liable to Nocum since it has succeeded in rebutting the presumption of negligence by
showing that it has exercised extraordinary diligence for the safety of its passengers, "according to the
circumstances of each case”.

23. La Mallorca v. Court of Appeals
G.R. No. L-20761. July 27, 1966
Prepared by: Tizon, Monique Reilly C.
MAIN TOPIC: Obligations of Parties in Contract of Carriage
DOCTRINE:
The rule is that the relation of carrier and passenger does not cease at the moment the passenger alights from the
carrier’s vehicle at a place selected by the carrier at the point of destination, but continues until the passenger has
had a reasonable time or opportunity to leave the carrier’s premises.
FACTS:
Mariano Beltran and his family boarded a bus on December 20, 1950 carrying with them four baggages.
The conductor of the bus issued three tickets covering full fares, with the exception for the 2-year old daughter in
accordance with the bus company’s rules and regulations.
In Anao, the family got off the bus and gathered their belongings, leaving one baggage behind. Mariano
went back to the bus to get the remaining baggage, unknowing that one of his daughters followed him. While
Mariano was getting the baggage, the bus started to move even if the conductor has not given the driver the signal to
start, as he is still handing over the left baggage to Mariano.
It turned out that his daughter was ran over by the moving bus, lying on the ground lifeless.
Mariano filed a complaint against the bus company.
ISSUE:
● Whether or not the bus company is liable for damages on breach of contract of carriage given that they
have already alighted when the incident happened
RULING:
● YES. The Supreme Court held that the bus company is liable for the damages of the death of the child.
Although the family, including the child, has alighted from the bus at a place designated for disembarking or
unloading of passengers, it was also established that the father had to return to the vehicle to get one of his bags or
bayong that was left under one of the seats of the bus. When Mariano returned to the bus, the relation between him
and the owner of the bus remained subsisting. The relationships of the carrier and passenger does not necessarily
cease where the passenger, after alighting from the car, aids the carrier’s employee in removing his baggage from
the car.
The rule is that the relation of carrier and passenger does not cease at the moment the passenger alights
from the carrier’s vehicle at a place selected by the carrier at the point of destination, but continues until the
passenger has had a reasonable time or opportunity to leave the carrier’s premises.
The Court said that in this case, the carrier’s agent cannot be claimed that had exercised the utmost
diligence of a very cautious person required under Article 1755 of the Civil Code to be observed by a common
carrier in the discharge of its obligation to transport safely its passengers. The driver did not put off the engine. He
also started to run even before the bus conductor gave him the signal to go while the conductor was still unloading
baggages. The presence of the passengers near the bus was not unreasonable as they are still considered passengers
of the carrier, entitled to the protection under the contract of carriage.
Further, even if the contract of carriage has been terminated, which is not what happened in this present
case, the Court explained that the owner of the bus will still be liable for the negligence of the driver under a quasi-
delict.

24. ABOITIZ SHIPPING CORPORATION VS. COURT OF APPEALS
G.R. No. 84458. November 6, 1989
Prepared by: Tomines, Nica Margarette G.
Student Number: 19-4009
MAIN TOPIC: Obligations of the Parties in Contract of Carriage
DOCTRINE: A carrier is duty bound not only to bring its passengers safely to their destination but also to afford
them a reasonable time to claim their baggage.
FACTS:
In 1975, one Anacleto Viana boarded the vessel M/V Antonia bound for Manila, owned by Aboitiz Shipping
Corporation. An hour after the vessel has landed and Anacleto has already disembarked, Anacleto went back for his
cargoes that were still loaded in the vessel. It was at this time that the crane hit him, pinning him between the side of
the vessel and the crane. He died 3 days later. For his hospitalization, medical, burial and other miscellaneous
expenses, his wife spent a total of Php 9,800.00. His wife and his parents who depended on him for support filed a
complaint for damages against Aboitiz for breach of contract of carriage. Aboitiz then filed a third-party complaint
against Pioneer Stevedoring Corporation, imputing liability thereto for Anacleto’s death. Aboitiz alleged that the death
was caused by the negligence of the Pioneer’s crane operator. The trial court ordered Aboitiz to pay the Vianas for
damages incurred, and Pioneer to reimburse Aboitiz for whatever amount was paid to the Vianas. Upon motion for
reconsideration, the trial court absolved Pioneer from liability for failure to preponderantly establish a case of
negligence against the crane operator. The CA affirmed, with modification as to the award of damages, the ruling of
the trial court. Hence, this petition. Aboitiz contends that since 1 hour had already passed from the time Anacleto
disembarked from the vessel, he was given more than ample opportunity to unload his cargoes prior to the operation
of the crane. His presence on the vessel, therefore, was no longer reasonable, and consequently, he ceased to be a
passenger.
ISSUE: Whether or not Anacleto ceased to be a passenger at the time of his death
RULING: NO. The Supreme Court held that reasonableness of time should be made to depend on the attending
circumstances of each case, such as the kind of common carrier, the nature of its business, the customs of the place,
and so forth.
It is a well-known rule that the relation of carrier and passenger does not cease at the moment the passenger alights
from the carrier's vehicle at a place selected by the carrier at the point of destination, but continues until the passenger
has had a reasonable time or a reasonable opportunity to leave the carrier's premises.
● What is a reasonable time or a reasonable delay within this rule is to be determined from the circumstances
of each case.
By the very nature of Aboitiz’s business as a shipper, the passengers of vessels are allotted a longer period of time to
disembark from the ship than other common carriers such as a passenger bus. With respect to the bulk of cargoes and
the number of passengers it can load, such vessels are capable of accommodating more than a regular commuter bus.
Consequently, a ship passenger will need at least an hour as is the usual practice, to disembark from the vessel and
claim his baggage.
● The Court held that the victim Anacleto was still a passenger at the time of the incident as when the accident
occurred, Anacleto was unloading his cargoes, which he had every right to do, from Aboitiz’s vessel.
Moreover, Aboitiz was unable to rebut the presumption established by law that in case of a passenger's death or injury,
the operator of the vessel was at fault or negligent, having failed to exercise extraordinary diligence.
● There was no showing that Aboitiz was extraordinarily diligent in requiring precautionary measures to be
strictly and actually enforced in order to subserve their purpose of preventing entry into the forbidden area.
25. Regional Container Lines of Singapore v. The Netherlands Insurance

Co
G.R. No. 168151, September 4, 2009
Prepared by: Tres Reyes, Camille Joy, M.
DOCTRINE:
A common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary vigilance over
the goods it transported. When the goods shipped are either lost or arrived in damaged condition, a presumption arises
against the carrier of its failure to observe that diligence, and there need not be an express finding of negligence to
hold it liable. To overcome the presumption of negligence, the common carrier must establish by adequate proof that
it exercised extraordinary diligence over the goods. It must do more than merely show that some other party could be
responsible for the damage.
FACTS:
Cartons of Epoxy Molding Compound were consigned to be shipped from Singapore to Manila for Temic Telefunken
Microelectronics Philippines. U-Freight Singapore PTE Ltd. a forwarding agent based in Singapore, contracted the
services of Pacific Eagle Lines PTE. Ltd. to transport the subject cargo. The cargo was packed, stored, and sealed by
Pacific Eagle in its Refrigerated Container. As the cargo was highly perishable, the inside of the container had to be
kept at a temperature of 0º Celsius. Pacific Eagle then loaded the refrigerated container on board the M/V Piya Bhum,
a vessel owned by RCL, with which Pacific Eagle had a slot charter agreement. RCL duly issued its own Bill of Lading
in favor of Pacific Eagle.
On October 25, 1995, the M/V Piya Bhum docked in Manila. After unloading the refrigerated container, it was plugged
to the power terminal of the pier to keep its temperature constant. Fidel Rocha, Vice-President for Operations of
Marines Adjustment Corporation, accompanied by two surveyors, conducted a protective survey of the cargo. They
found that based on the temperature chart, the temperature reading was constant from October 18, 1995 to October
25, 1995 at 0º Celsius. However, at midnight of October 25, 1995 – when the cargo had already been unloaded from
the ship – the temperature fluctuated with a reading of 33º Celsius. Rocha believed the fluctuation was caused by the
burnt condenser fan motor of the refrigerated container. On November 9, 1995, Temic received the shipment. It found
the cargo completely damaged.
ISSUE:
● Whether or not RCL and EDSA Shipping are liable as common carriers under the theory of presumption of
negligence
RULING:
● YES. A common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary
vigilance over the goods it transported. When the goods shipped are either lost or arrived in damaged
condition, a presumption arises against the carrier of its failure to observe that diligence, and there need not
be an express finding of negligence to hold it liable. To overcome the presumption of negligence, the common
carrier must establish by adequate proof that it exercised extraordinary diligence over the goods. It must do
more than merely show that some other party could be responsible for the damage.
● RCL and EDSA Shipping failed to prove that they did exercise that degree of diligence required by law over
the goods they transported. Indeed, there is sufficient evidence showing that the fluctuation of the temperature
in the refrigerated container van, as recorded in the temperature chart, occurred after the cargo had been
discharged from the vessel and was already under the custody of the arrastre operator, ICTSI. This evidence,
however, does not disprove that the condenser fan – which caused the fluctuation of the temperature in the
refrigerated container – was not damaged while the cargo was being unloaded from the ship. It is settled in
maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the
carrier; RCL and EDSA Shipping failed to dispute this.
● To exculpate itself from liability for the loss/damage to the cargo under any of the causes, the common carrier
is burdened to prove any of the causes in Article 1734 of the Civil Code claimed by it by a preponderance of
evidence. If the carrier succeeds, the burden of evidence is shifted to the shipper to prove that the carrier is
negligent. RCL and EDSA Shipping, however, failed to satisfy this standard of evidence and in fact offered
no evidence at all on this point; a reversal of a dismissal based on a demurrer to evidence bars the defendant
from presenting evidence supporting its allegations.

26. Mariano, Jr. v. Callejas
G.R. No. 166640, July 31, 2009
Prepared by: Uy, Vanessa Marie C.
111991
MAIN TOPIC: OBLIGATIONS OF THE PARTIES IN CONTRACT OF CARRIAGE.
DOCTRINE:
While the law requires the highest degree of diligence from common carriers in the safe transport of their passengers
and creates a presumption of negligence against them, it does not make the carrier an insurer of the absolute safety of
its passengers. Its liability for personal injuries sustained by its passenger rests upon its negligence, its failure to
exercise the degree of diligence that the law requires.
The presumption of fault or negligence on the part of the common carrier when its passenger is injured is rebuttable
by proof that the common carrier had exercised extraordinary diligence as required by law in the performance of its
contractual obligation, or that the injury suffered by the passenger was solely due to a fortuitous event.
FACTS:
Petitioner Herminio Mariano, Jr., the surviving spouse of Dr. Frelinda Mariano who was a passenger of a Celyrosa
Express bus bound for Tagaytay when she met her death. Callejas is the registered owner of Celyrosa Express, while
respondent Edgar de Borja was the driver of the bus on which the deceased was a passenger. Along Aguinaldo
Highway, Dasmarinas, Cavite, the Celyrosa Express bus, collided with an Isuzu truck with trailer. The trailer truck
bumped the passenger bus on its left middle portion causing the bus to fell on its right side on the right shoulder of the
highway and caused the death of Dr. Mariano and physical injuries to four other passengers.
Petitioner filed a complaint for breach of contract of carriage and damages against respondents for their failure to
transport his wife safely to her destination. Respondents denied liability for the death of Dr. Mariano. They claimed
that the proximate cause of the accident was the recklessness of the driver of the trailer truck which bumped their bus.
In the case filed against Arcilla (truck driver), the court held him liable to pay Callejas for damages. While in the
criminal case, the truck driver was convicted of the crime of reckless imprudence resulting to homicide, multiple slight
physical injuries and damage to property. Also, the trial court held that Callejas and De Borja are guilty of breach of
contract of carriage.
CA reversed the decision absolving Callejas and De Borja from any liability for the death of Dr. Frelinda Mariano
stating that the injury sustained by the Dr. Mariano was in no way due to negligence in its duty to transport the
passenger.
ISSUE:
Whether or not Callejas and Edgar de Borja (owner and driver of the bus) are guilty of breach of contract of carriage
and thus liable to the plaintiff.-
RULING:
NO. The Supreme Court held that while the law requires the highest degree of diligence from common carriers in the
safe transport of their passengers and creates a presumption of negligence against them, it does not make the carrier
an insurer of the absolute safety of its passengers.
Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and precaution in the carriage of
passengers by common carriers to only such as human care and foresight can provide. What constitutes compliance
with said duty is adjudged with due regard to all the circumstances.
Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the common carrier
when its passenger is injured, merely relieves the latter, for the time being, from introducing evidence to fasten the
negligence on the former, because the presumption stands in the place of evidence. Being a mere presumption,
however, the same is rebuttable by proof that the common carrier had exercised extraordinary diligence as required
by law in the performance of its contractual obligation, or that the injury suffered by the passenger was solely due to
a fortuitous event.
Thus, it is clear that neither the law nor the nature of the business of a transportation company makes it an insurer of
the passenger's safety, but that its liability for personal injuries sustained by its passenger rests upon its negligence, its
failure to exercise the degree of diligence that the law requires.
In this case, petitioner cannot succeed in his contention that respondents failed to overcome the presumption of
negligence against them. The totality of evidence shows that the death of petitioner's spouse was caused by the reckless
negligence of the driver of the Isuzu trailer truck which lost its brakes and bumped the Celyrosa Express bus. The
evidence showed that passenger bus was cruising on its rightful lane when the trailer truck coming from the opposite
direction, on full speed, suddenly swerved and encroached on its lane, and bumped the passenger bus on its left middle
portion. Respondent driver De Borja had every right to expect that the trailer truck coming from the opposite direction
would stay on its proper lane. He was not expected to know that the trailer truck had lost its brakes.. Secondly, any
doubt as to the culpability of the driver of the trailer truck ought to vanish when he pleaded guilty to the charge of
reckless imprudence resulting to multiple slight physical injuries and damage to property in Criminal Case, involving
the same incident. Therefore, Callejas and Edgar de are not guilty of breach of contract of carriage.

27. HEIRS OF JOSE MARCIAL K. OCHOA VS. G.&S TRANSPORT
CORP.
G.R. No. 170071 and 170125. March 9, 2011
Prepared by: Viceo, Curt Joshua A.
DOCTRINE:
"In a contract of carriage, it is presumed that the common carrier is at fault or is negligent when a passenger dies or is
injured. In fact, there is even no need for the court to make an express finding of fault or negligence on the part of the
common carrier. This statutory presumption may only be overcome by evidence that the carrier exercised
extraordinary diligence."
FACTS:
Jose Marcial K. Ochoa (Ochoa) died on March 10,1995 while he was on board an Avis Taxicab operated by G&S
Transport Corporation (G&S), a common carrier. At the night of Ochoa’s death, he rode the taxicab which was driven
by the employee of G&S, Bibiano Padilla, Jr. (Padilla), to Ochoa’s house in Quezon City. The taxivab was driving
along EDSA at high speed. When the driver was going up the Santolan fly-over, he tried to overtake another taxicab,
vehicle and a ten-wheeler truck. Padilla turned the wheel to the left to avoid colliding with the truck. Due to unfortunate
events, the taxicab driven by Padilla threw itself off the fly-over and fell on the middle surface of EDSA below it.
Because of that, Ochoa and Padilla were rushed to the hospital. However, Ochoa died.
Ochoa’s spouse demanded to be indemnified for an amount of Php 15,000,000.00. G&S failed to heed the demand,
therefore, a Complaint for damages were filed. The heirs of Ochoa alleged in the complaint that G & S, as a common
carrier, is under legal obligation to observe and exercise extraordinary diligence in transporting its passengers to their
destination safely and securely. However, G & S failed to observe and exercise this extraordinary diligence because
its employee failed to transport Jose Marcial to his destination safely. In fact, they alleged that there was a breach of
contract of common carriage. However in its Answer with Compulsory Counterclaims, G & S posited that the
proximate cause of Jose Marcial’s death is a fortuitous event and/or the fault or negligence of the driver of the delivery
van that hit the taxicab. It likewise claimed that it exercised the diligence required of a good father of a family in the
selection and supervision of its employees including Padilla.
RTC ruled in favor of the heirs of Ochoa and it claimed that the vehicular mishap was not caused by a fortuitous event.
Hence, the trial court declared G&S civilly liable to the heirs. However, for lack of receipts or any proof of funeral
expenses and other actual damages, the trial court denied the heirs’ claim for actual damages. On appeal, the CA
maintained the ruling of the RTC.
Hence, this appeal.
ISSUE:
● Whether or not there was a contract of carriage, therefore G&S had the obligation to carry its passengers
safely to Ochoa’s destination.
RULING:
Yes.
It is clear from the records that there existed a contract of carriage between G & S, as the owner and operator of the
Avis taxicab, and Jose Marcial, as the passenger of said vehicle. As a common carrier, G & S "is bound to carry Jose
Marcial safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons,
with due regard for all the circumstances." However, Jose Marcial was not able to reach his destination safely as he
died during the course of the travel. "In a contract of carriage, it is presumed that the common carrier is at fault or is
negligent when a passenger dies or is injured. In fact, there is even no need for the court to make an express finding
of fault or negligence on the part of the common carrier. This statutory presumption may only be overcome by evidence
that the carrier exercised extraordinary diligence." Unfortunately, G & S miserably failed to overcome this
presumption. Both the trial court and the CA found that the accident which led to Jose Marcial’s death was due to the
reckless driving and gross negligence of G & S’ driver, Padilla, thereby holding G & S liable to the heirs of Jose
Marcial for breach of contract of carriage.
28. ASIAN TERMINALS INC. v. SIMON ENTERPRISES INC.

G.R. No. 177116. February 27, 2013.
Prepared by: Villalon, Maria Andrea Patricia D.R.
DOCTRINE:
Even though the defendant has the burden to prove its extraordinary diligence, the plaintiff must still prove
that the subject shipment suffered actual shortage.
FACTS:
Contiquincybunge Export Company (CEC) loaded 6,843.7 metric tons of U.S. Soybean Meal in Bulk on
board the vessel M/V “Sea Dream” at the Port of Darrow, Louisiana USA, for the delivery to the Port of Manila to
respondent Simon Enterprises. When the vessel arrived in Manila, the shipment was discharged to the receiving
barges of petitioner Asian Terminals Inc (ATI), the arrastre operator. Simon received the shipment but claimed
having received only 6,825.144 metric tons of US Soybean Meal, which is short of 18.566 metric tons valued at Php
186,743.20. CEC made another shipment to Simon Enterprises and allegedly loaded on board the vessel M/V “Tern”
at the same port in Louisiana. 3,300 metric tons of US Soybean Meal in Bulk were delivered to Manila. Upon arrival
to Manila and discharged by ATI, Simon Enterprises alleged that they only received 3,100.137 metric tons of US
Soybean Meal, short of 199.863 metric tons valued at Php 100,025. Simon filed for a claim for shortage but was
denied. Therefore, Simon filed an action for damages with the RTC against ATI. The issue with M/V Sea Dream
was settled, but the issue with M/V Tern and ATI remained unresolved. ATI prayed for dismissal of the complaint
for lack of cause of action and prescription. ATI alleged that it exercised the required diligence in handling the
subject shipment.
RTC held ATI and its co-defendants solidarily liable to Simon Enterprises for damages arising from the shortage.
The losses were incurred prior to its receipt of the goods. As such, it was ATI’s burden to prove it has exercised
extraordinary diligence in handling the goods. However, they have failed to do so.
CA affirmed the RTC decision stating that there is no justification to disturb the factual findings of the trial court as
they were supported with substantial evidence. ATI failed to prove it has exercised extraordinary diligence in
transporting the goods or exercised due diligence to forestall or lessen the loss. Hence, ATI as the arrastre operator
should be jointly and severally liable with the carrier. Motion for reconsideration was filed but was denied.
Hence this petition.
ISSUE:
● Whether or not ATI is solidarily liable with its co-defendants for the shortage incurred in the shipment
RULING:
● NO, ATI is not solidarily liable with its co-defendants for the shortage incurred in the shipment.
● First, ATI is correct in arguing that Simon Enterprises failed to prove that the subject shipment suffered
actual shortage, as there was no competent evidence to prove that it actually weighed 3,300 metric tons at
the port of origin. Even though the defendant must prove its extraordinary diligence, the plaintiff must still
prove that the subject shipment suffered actual shortage. This can only be done if the weight of the
shipment at the port of origin and its subsequent weight at the port of arrival have been proven by a
preponderance of evidence.
● In this case, Simon Enterprises failed to prove that the shipment suffered shortage, for it was not able to
establish that the subject shipment was weighed at the port of origin at Louisiana and the actual shipping
weight was 3,300 metric tons.
● The Berth Term Grain Bill of Lading, Proforma Invoice, and Packing List used by Simon Enterprises to
prove the weight of the shipment do not help its cause. In the Berth Term Grain Bill of Lading, it states that
it was transported with the carrier having been oblivious of weight, quantity, and quality of the cargo. In
Wallen v Prudential, the court ruled that if the contract of carriage was under the “said to weigh” clause,
the shipper is solely responsible for the loading while the carrier is oblivious of the contents of the
shipment. In ICTSI v. Prudential, the Court explained the clause analogous to shipper’s weight, quantity
and quality unknown as “the arrastre operator is subject to the qualifications as may have validly imposed
in the contract between the parties. The arrastre operator was not required to verify the contents of the
container received and compare them with those declared by the shipper because the cargo was at
the shipper’s load and count.”
● Moreover, in Bankers & Manufacturer Assurance Corp. v. CA, the court ruled that the recital of the bill of
lading that declares a “shipper’s load and count” is only prima facie evidence of the amount or quantity. A
shipment under this arrangement is not inspected or inventoried by the carrier whose duty is only to
transport and deliver the containers in the same condition as when the carrier received and accepted the
containers for transport.
● Also, the the genuineness and the due execution of the Packing List, Berth Term Grain Bill of Lading, and
Proforma Invoice were not established.
● Second, the shortage may have been due to the inherent nature of the subject shipment or its packaging
since the cargo was shipped in bulk and had a moisture content of 12.5%. Soybean meal tends to settle or
consolidate over time. It will either lose or gain moisture from the surrounding air.
● Third, Simon Enterprises failed to prove any negligence on the part of ATI. There would be no showing
that there was any incident or negligence during the discharging operations.
● Wherefore, the petition for review of certiorari is GRANTED. ATI is not solidarily liable with the co-
defendants.
29. G.V. Florida Transport, Inc. v. Heirs of Battung, Jr.

G.R. No. 208802. October 14, 2015
DOCTRINE: There would be no issue regarding the common carrier’s negligence in its duty to provide safe and
suitable care, as well as competent employees in relation to its transport business where the injury sustained by the
passenger was in no way due (1) to any defect in the means of transport or in the method of transporting, or (2) to the
negligent or willful acts of the common carrier’s employees with respect to the foregoing — such as when the injury
arises wholly from causes created by strangers which the carrier had no control of or prior knowledge to prevent. As
such, the presumption of fault/negligence foisted under Article 1756 of the Civil Code should not apply.
If death was caused by a co-passenger, the applicable provision is Article 1763 of the Civil Code, which states that “a
common carrier is responsible for injuries suffered by a passenger on account of the willful acts or negligence of other
passengers or of strangers, if the common carrier’s employees through the exercise of the diligence of a good father
of a family could have prevented or stopped the act or omission.” Notably, for this obligation, the law provides a lesser
degree of diligence, i.e., diligence of a good father of a family, in assessing the existence of any culpability on the
common carrier’s part.
Nocum v. Laguna Tayabas Bus Company, has held that common carriers should be given sufficient leeway in
assuming that the passengers they take in will not bring anything that would prove dangerous to himself, as well as
his co-passengers, unless there is something that will indicate that a more stringent inspection should be made.
FACTS: Romeo Battung (Romeo) boarded Florida Bus on March 22, 2003 in Delfin Albano, Isabela, bound for
Manila. Battung was seated in the first row behind the driver and slept during the ride. When the bus reached the
Philippine Carabao Center in Muñoz, Nueva Ecija, the driver stopped the bus and alighted to check the tires. At this
point, a man who was seated in the bus’ fourth row stood up, shot Battung in the head and then left with a companion.
The bus conductor notified the driver of the incident and thereafter, brought Romeo to the hospital, but the latter was
pronounced dead on arrival. Romero’s Heirs (Heirs of Battung, respondents) filed a complaint for damages in the
aggregate amount of P1,826,000 based on a breach of contract of carriage against petitioner, driver, and conductor
(petitioner, et al.) before the RTC.
Respondents contended that as a common carrier, petitioner and its employees are bound to observe extraordinary
diligence in ensuring the safety of passengers; and in case of injuries and/or death on the part of a passenger, they are
presumed to be at fault and, thus, responsible thereof. Consequently, petitioner, et al. should be held civilly liable for
Battung’s death. In their defense, petitioner, et al. maintained that they had exercised the extraordinary diligence
required by law from common carriers. In this relation, they claimed that a common carrier is not an absolute insurer
of its passengers and that Battung’s death should be properly deemed a fortuitous event. Thus, the dismissal of the
complaint was prayed for, as well as the payment of their counterclaims for damages and attorney’s fees.
The RTC ruled in favor of the Heirs of Battung and awarded P1,586,000 for compensatory damages; P50,000 for
actual damages; and P50,000 for moral damages. The RTC found that petitioner, et al. were unable to rebut the
presumed liability of common carriers in case of injuries/death to its passengers due to their failure to show that they
implemented the proper security measures to prevent passengers from carrying deadly weapons inside the bus which,
in this case, resulted in the killing of Battung.
The CA, in affirming the RTC’s ruling in toto, held that the killing of Battung cannot be deemed as a fortuitous event,
because such killing happened right inside petitioner’s bus and that petitioner, et al. did not take any safety measures
in ensuring that no deadly weapon would be smuggled inside the bus.
ISSUES:
● (1) Whether or not Florida Transport is liable for the death of Battung on the ground of culpa contractual.
(2) Whether or not Florida is liable for the acts of Battung’s co-passenger (i.e., the killer).
RULING:
● (1) NO, Florida is not liable for Battung’s death based on culpa contractual. On liability as a common carrier
for death of a passenger, extraordinary diligence is required. The law exacts from common carriers (i.e., those
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) the highest
degree of diligence (i.e.extraordinary diligence) in ensuring the safety of its passengers. Articles 1733 and
1755 of the Civil Code state: Art. 1733. Common carriers, from the nature of their business and for reasons
of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the
safety of the passengers transported by them, according to all the circumstances of each case. Art. 1755. A
common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using
the utmost diligence of very cautious persons, with a due regard for all the circumstances.
In this relation, Article 1756 of the Civil Code provides that “[i]n case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed in Articles 1733 and 1755.” This disputable presumption may
also be overcome by showing that the accident was caused by a fortuitous event.
The foregoing provisions notwithstanding, it should be pointed out that the law does not make the common
carrier an insurer of the absolute safety of its passengers. In Pilapil v. CA, the Court clarified that where the
injury sustained by the passenger was in no way due (1) to any defect in the means of transport or in the
method of transporting, or (2) to the negligent or willful acts of the common carrier’s employees with respect
to the foregoing— such as when the injury arises wholly from causes created by strangers which the carrier
had no control of or prior knowledge to prevent — there would be no issue regarding the common carrier’s
negligence in its duty to provide safe and suitable care, as well as competent employees in relation to its
transport business; as such, the presumption of fault/negligence foisted under Article 1756 of the Civil Code
should not apply In this case, Battung’s death was neither caused by any defect in the means of transport or
in the method of transporting, or to the negligent or willful acts of petitioner’s employees, namely, that of
Duplio and Daraoay, in their capacities as driver and conductor, respectively.
Instead, the case involves the death of Battung wholly caused by the surreptitious act of a co-passenger who,
after consummating such crime, hurriedly alighted from the vehicle. Thus, there is no proper issue on
petitioner’s duty to observe extraordinary diligence in ensuring the safety of the passengers transported by it,
and the presumption of fault/negligence against petitioner under Article 1756 in relation to Articles 1733 and
1755 of the Civil Code should not apply.
(2) NO, FLORIDA is not liable for acts of co-passenger of Battung. On liability of a common carrier for acts
of co-passengers; only diligence of a good father of a family is required. On the other hand, since Battung’s
death was caused by a co-passenger, the applicable provision is Article 1763 of the Civil Code, which states
that “a common carrier is responsible for injuries suffered by a passenger on account of the willful acts or
negligence of other passengers or of strangers, if the common carrier’s employees through the exercise of the
diligence of a good father of a family could have prevented or stopped the act or omission.”
Notably, for this obligation, the law provides a lesser degree of diligence, i.e., diligence of a good father of a
family, in assessing the existence of any culpability on the common carrier’s part. In ruling on this case, the
CA cited Fortune Express, Inc. v. Court of Appeals Fortune) in ascribing negligence on the part of petitioner,
ratiocinating that it failed to implement measures to detect if its passengers were carrying firearms or deadly
weapons which would pose a danger to the other passengers. However, in Fortune, the common carrier had
already received intelligence reports from law enforcement agents that certain lawless elements were
planning to hijack and burn some of its buses; and yet, it failed to implement the necessary precautions to
ensure the safety of its buses and its passengers. A few days later, one of the company’s buses was indeed
hijacked and burned by the lawless elements pretending to be mere passengers, resulting in the death of one
of the bus passengers.
Accordingly, the Court held that the common carrier’s failure to take precautionary measures to protect the
safety of its passengers despite warnings from law enforcement agents showed that it failed to exercise the
diligence of a good father of a family in preventing the attack against one of its buses.
Pertinently, the Court, in Nocum v. Laguna Tayabas Bus Company, has held that common carriers should be
given sufficient leeway in assuming that the passengers they take in will not bring anything that would prove
dangerous to himself, as well as his co-passengers, unless there is something that will indicate that a more
stringent inspection should be made In contrast, no similar danger was shown to exist in this case so as to
impel petitioner or its employees to implement heightened security measures to ensure the safety of its
passengers. There was also no showing that during the course of the trip, Battung’s killer made suspicious
actions which would have forewarned petitioner’s employees of the need to conduct thorough checks on him
or any of the passengers.
In this case, records reveal that when the bus stopped at San Jose City to let four (4) men ride petitioner’s bus
(two of which turned out to be Battung’s murderers), the bus driver, Duplio, saw them get on the bus and even
took note of what they were wearing. Moreover, Duplio made the bus conductor, Daraoay, approach these
men and have them pay the corresponding fare, which Daraoay did. During the foregoing, both Duplio and
Daraoay observed nothing which would rouse their suspicion that the men were armed or were to carry out an
unlawful activity. With no such indication, there was no need for them to conduct a more stringent search (i.e.,
bodily search) on the aforesaid men.
Therefore, Florida is not liable on the ground of culpa contractual nor for acts of co-passenger because it
showed diligence of a good father of a family.

30. SULPICIO LINES v. SESANTE
G.R. No. 172682. July 27, 2016.
DOCTRINE: Although Article 1174 may free a common carrier from liability, the provision still requires exclusion
of human agency from the cause of injury or loss. It is not enough that the accident was caused by a fortuitous
event–– the common carrier must still prove that it did not contribute to the occurrence of the incident due to its own
or its employees' negligence.
FACTS: The M/V Princess of the Orient, a passenger vessel owned and operated by Sulpicio Lines, sank near Fortune
Island in Batangas. Napoleon Sesante was one of the passengers who survived the sinking, as 150 of 388 recorded
passengers were lost. He then sued Sulpicio Lines for breach of contract and damages on the ground that he suffered
tremendous hunger, thirst, pain, fear, shock, serious anxiety, and mental anguish as he had been carried by the waves
to the coastline of Cavite and Batangas until he had been rescued. He averred that Sulpicio lines committed bad faith
in allowing the vessel to sail despite the storm signal. In its defense, Sulpicio Lines insisted that the seaworthiness of
the M/V Princess of the Orient was cleared by the proper authorities, that the sinking was due to force majeure, it was
not negligent and that its officers and crew had prepared to abandon the vessel because they had launched life rafts
and had provided the passengers assistance in that regard.
The RTC rendered judgment in favor of Sesante on the ground that pursuant to Art. 1739 and 1759 of the
Civil Code, Sulpicio failed to establish its due diligence in the selection and supervision of the vessel crew and that
the officers and ship captain failed to discharge their respective duties in sending signals, maneuvering the vessel, and
calling for their “abandon ship” protocol. The CA sustained the RTC’s ruling with lowering of the temperate damages.
Sulpicio Lines argue that although Article 1759 only provides for a presumption of negligence, it does not
envision automatic liability; and that it was not guilty of bad faith considering that the sinking of M/V Princess of the
Orient had been due to a fortuitous event, an exempting circumstance under Article 1174 of the Civil Code.
ISSUE: Whether or not Sulpicio Lines is liable for damages under Art. 1759 of the Civil Code, particularly as a
common carrier through the negligence or willful acts of the former's employees.
RULING: YES, Suplicio Lines is liable for breach of contract of carriage. Ruling that the argument of Sulpicio
Lines has no substance, the Court held that Article 1759 of the Civil Code does not establish a presumption of
negligence because it explicitly makes the common carrier liable in the event of death or injury to passengers due to
the negligence or fault of the common carrier's employees. The liability of common carriers under this provision is
demanded by the duty of extraordinary diligence required of common carriers in safely carrying their
passengers.
The trial court is not required to make an express finding of the common carrier’s fault or negligence. So
long as it is proven that there is a contract of carriage and the injury took place during the existence of such contract,
the presumption of negligence applies and the burden shifts to the common carrier to prove its observance of
extraordinary diligence and that an unforeseen event or force majeure had caused the injury.
Although Article 1174 may free a common carrier from liability, the provision still requires exclusion of
human agency from the cause of injury or loss. It is not enough that the accident was caused by a fortuitous event–
– the common carrier must still prove that it did not contribute to the occurrence of the incident due to its own or its
employees' negligence.
According to the evidence provided, even assuming the seaworthiness of the M/V Princess of the Orient,
Sulpicio Lines could not escape liability considering that, as borne out by the aforequoted findings of the BMI, the
immediate and proximate cause of the sinking of the vessel had been the gross negligence of its captain in
maneuvering the vessel.

31. LOADSTAR SHIPPING COMPANY V. MALAYAN INSURANCE
COM.
G.R. No. 185565. April 16, 2017
MAIN TOPIC: OBLIGATIONS OF THE PARTIES IN THE CONTRACT OF CARRIAGE
DOCTRINE:
As common carriers, the petitioners are bound to observe extraordinary diligence in their vigilance over the goods
they transport, as required by the nature of their business and for reasons of public policy.
Common carriers are defined, under Article 1732 of the Civil Code, as persons, corporations, firms, or associations
engaged in the business of carrying or transporting passenger or goods, or both by land, water or air for compensation,
offering their services to the public. As such, they are mandated from the nature of their business and for reasons of
public policy, to observe the extraordinary diligence in the vigilance over the goods transported by them according to
all the circumstances of such case, as required by Article 1733 of the same Code. Furthermore, Article 1735 of the
Civil Code provides that, in all cases other than those mentioned under Article 1734 thereof, if the goods are lost,
destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless
they prove that they observed extraordinary diligence as required in Article 1733.
FACTS:
This resolves the Motion for Reconsideration of the Decision dated November 26, 2014 of the Court in the above-
captioned case filed by respondent Malayan Insurance Company, Incorporated. Malayan alleges that in ruling in favor
of Loadstar Shipping Company, Incorporated and Loadstar International Shipping Company, Incorporated
(petitioners), the Court disregarded the conclusion of the Court of Appeals that the petitioners acted as a common
carrier, that there was a breach of the contract of affreightment and that the petitioners failed to produce evidence of
a calamity to be exculpated from liability. In their Comment, the petitioners contend that the grounds raised by
Malayan are no longer relevant because as found by the Court, Malayan did not adduce proof of pecuniary loss to the
insured Philippine Associated Smelting and Refining Corporation (PASAR). PASAR has not established by an iota
of evidence the amount of loss or actual damage it suffered by reason of seawater wettage of the 777.29 metric tons
of copper concentrates. In spite of no proof of loss, Malayan, with seeming hastiness paid the claim of PASAR in the
amount of P33,934,948.75.6 According to the petitioners, Malayan cannot make them answerable for its mistake in
indemnifying PASAR. On June 10, 2015, Malayan filed a Motion to Refer the Case to the Court en banc alleging that
the Decision dated November 26, 2014 of the Third Division deviated from the doctrine enunciated in Delsan
Transport Lines, Inc., v. CA. Malayan contends that in Delsan, the Court held that upon payment by the insurance
company of the insurance claim, the insurance company should be subrogated to the rights of the insured and it is not
even necessary to present the insurance policy because subrogation is a matter of equity.
ISSUE:
1. Whether the petitioners did not observe extraordinary diligence in their vigilance over the goods they
transport, as required by the nature of their business and for reasons of public policy.
2. Whether Malayan Insurance Company should be awarded nominal damages
RULING:
1. Yes. The petitioners failed to exercise extraordinary diligence in the performance of their duty. The Court
held that ss common carriers, the petitioners are bound to observe extraordinary diligence in their vigilance
over the goods they transport, as required by the nature of their business and for reasons of public policy.
“Extraordinary diligence is that extreme measure of care and caution which persons of unusual prudence and
circumspection use for securing and preserving their own property or rights.” When the copper concentrates
delivered were contaminated with seawater, the petitioners have failed to exercise extraordinary diligence in
the carriage thereof.
2. Yes. The Court deems it proper to award nominal damages to Malayan. This is in recognition of the
breach of contract committed by the petitioners. “So long as there is a violation of the right of the
plaintiff — whether based on law, contract or other sources of obligations — an award of nominal
damages is proper.” Articles 2221 and 2222 of the Civil Code provides that nominal damages are
adjudicated in order that a right of the plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff
for any loss suffered by him and the court may award nominal damages in every obligation arising
from any source enumerated in Article 1157, or in every case where any property right has been
invaded.
32. Air France v. Zani

G.R. No. 199767. March 13, 2019
DOCTRINE:
In the case of Philippine Airlines, Incorporated v. Court of Appeals, the Court held that when an airline
issues a ticket to a passenger, confirmed for a particular flight on a certain date, a contract of carriage
arises. The passenger has every right to expect that he be transported on that flight and on that date, and it
becomes the airline's obligation to carry him and his luggage safely to the agreed destination without delay.
If the passenger is not so transported or if in the process of transporting, he dies or is injured, the carrier
may be held liable for a breach of contract of carriage.
FACTS:
Petitioner, Air France and respondent, Raymond M. Zani executed a credit agreement allowing respondent
to purchase airline tickets on credit and at a fixed price from petitioner. The terms of the agreement are: (1)
tickets purchased from the 1st to the 15th of the month is due and payable at the end of the month and (2)
tickets purchased form the 16th of the month to the end of the month is due and payable on the 15th of the
following month. Despite the payment terms, Zani had an outstanding balance of PhP1,738,180, prompting
Air France to send a demand letter to Zani, informing him that he will be refused carriage on any of Air
France’s network or flights until Zani settles his outstanding balance. Due to respondent's failure to pay, Air
France filed in the RTC a collection case against Zani. The RTC ruled in favor of petitioner, which the CA
affirmed. The SC also affirmed the CA’s decision. Meanwhile, respondent purchased and booked flights
through ANSCOR Travel Corporation, covering his trip from July 12-24, 2000; for different destinations;
and involved several airlines, including petitioner. For his July 18, 2000 flight from Mahe Island to Paris,
Zani rebooked his confirmed flight to an earlier date, July 16, 2000, which was communicated with Air
France’s Paris office and got confirmation via telephone. Zani also went to Air France’s office in Mahe Island
and personally received another confirmation, for which a confirmation sticker was placed on his ticket.
However, on July 15, 2000, petitioner's manager in Mahe Island informed respondent via telephone call that
he will not be allowed embarkation on the confirmed flight the following day. Air France’s manager in Mahe
Island executed a written document which said that the reason for the refusal of embarkation is linked to
Article 7 of the general terms and condition of transportation, stating that the airline may refuse the boarding
of a passenger the applicable air-fare or all due expenses or taxes have not been paid. Zani filed a complaint
for damages against Air France. He claims that Air France’s refusal was a breach of contract of carriage. Air
France, however, argued that at the time of the incident, Zani was indebted to it, which is a clear violation of
their credit arrangement. Hence, when Air France refused carriage to respondent, it was merely enforcing its
rights under Article VII(1)(g) of the General Conditions of Carriage, Passenger and Baggage.
ISSUE:
● Whether or not Air France breached its contract of carriage with Zani.
RULING:
● YES. In the case of Philippine Airlines, Incorporated v. Court of Appeals, the Court held that when an airline
issues a ticket to a passenger, confirmed for a particular flight on a certain date, a contract of carriage arises.
The passenger has every right to expect that he be transported on that flight and on that date, and it becomes
the airline's obligation to carry him and his luggage safely to the agreed destination without delay. If the
passenger is not so transported or if in the process of transporting, he dies or is injured, the carrier may be
held liable for a breach of contract of carriage. In the case at bar, a contract of carriage existed between
petitioner and respondent. Respondent carried confirmed tickets covering several flights with petitioner.
Further to their contract, respondent had the right to expect that he would fly from Mahe Island to Paris on
July 16, 2000. Since petitioner refused to transport him, petitioner evidently breached their contract of
carriage and respondent had every right to sue petitioner for this breach. Petitioner can only refuse carriage
due to nonpayment of the fare or credit arrangement when what remains unpaid, or the credit arrangement
which remains unsettled, is the fare for that particular ticket or flight, in this case, the July 16, 2000 flight
from Mahe Island to Paris. Hence, Air France breached its contract of carriage with Zani.
33. Spouses Fernando v. Northwest Airlines, Inc

G.R. No. 212038, February 8, 2017
DOCTRINE:
Passengers do not contract merely for transportation. They have a right to be treated by the carrier's
employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal
misconduct, injurious language, indignities and abuses from such employees.
FACTS:
Spouses Jesus and Elizabeth S. Fernando (“Fernandos”) are frequent flyers of Northwest Airlines, Inc
(“Northwest”). They are holders of Elite Platinum World Perks Card, the highest category given to frequent flyers of
the carrier. They filed this case for breach of contract of carriage against Northwest. This stemmed from two incidents
in December 2001 and in January 2002.
Sometime in December 2001, Jesus Fernando arrived at the LA Airport via Northwest Airlines flight. When
Jesus Fernando presented his documents at the immigration counter, he was asked by the Immigration Officer to have
his return ticket verified and validated. Thereafter, he approached a Northwest personnel, later identified as Linda
Puntawongdaycha, but the latter merely glanced at his ticket without checking its status with the computer and
peremptorily said that the ticket had been used and could not be considered as valid. He explained that the ticket
remains unused and perfectly valid. He also gave his Elite Platinum World Perks Card for the latter to access the ticket
control record but Puntawongdaycha refused to check the validity of the ticket and instead informed the Immigration
Officer that the ticket is not valid because it had been used. Thus, Fernando was brought to the interrogation room of
the Immigration and Naturalization Services (INS) where he was asked humiliating questions for more than two (2)
hours. When he was finally cleared by the Immigration Officer, he was granted only a twelve (12)-day stay in the
United States (US), instead of the usual six (6) months.
Thereafter, in January 2002, the Fernandos were about to board the plane on their way back to the Philippines
but when they reached the gate area where boarding passes need to be presented, Northwest supervisor Linda Tang
stopped them and demanded for the presentation of their paper tickets (coupon type). They failed to present the same
since, according to them, Northwest issued electronic tickets (attached to the boarding passes) which they showed to
the supervisor. In the presence of the other passengers, Linda Tang rudely pulled them out of the queue. They were
also told that if they wanted to board the plane, they should produce their credit cards and pay for their new tickets,
otherwise Northwest would order their luggage off-loaded from the plane. They went to the Northwest Airline Ticket
counter to clarify and were informed that the electronic tickets were valid and they were issued coupon tickets. But
when the Fernandos reached the boarding gate, the plane had already departed. They were able to depart, instead, the
day after, or on January 30, 2002, and arrived in the Philippines on January 31, 2002.
The Regional Trial Court issued a Decision in favor of the plaintiffs and against the defendant ordering the
latter to pay moral and actual damages. Both parties filed respective appeals which were dismissed by the Court of
Appeals. Hence, this petition.
ISSUE:
● Whether or not there was breach of contract of carriage and whether it was done in a wanton, malevolent or
reckless manner amounting to bad faith
RULING:
● YES. The Fernandos' cause of action against Northwest stemmed from a breach of contract of carriage. Further,
as held in jurisprudence, when an airline issues a ticket to a passenger confirmed for a particular flight on a
certain date, a contract of carriage arises. The passenger then has every right to expect that he would fly on that
flight and on that date. If he does not, then the carrier opens itself to a suit for breach of contract of carnage.
Thus, when Northwest confirmed the reservations of the Fernandos, it bound itself to transport the Fernandos
on their flight on 29 January 2002.
It is likewise well established that in an action based on a breach of contract of carriage, the aggrieved party does
not have to prove that the common carrier was at fault or was negligent. All that he has to prove is the existence
of the contract and the fact of its non-performance by the carrier. As the aggrieved party, the Fernandos only had
to prove the existence of the contract and the fact of its non-performance by Northwest, as carrier, in order to be
awarded compensatory and actual damages. Having proven the existence of a contract of carriage between
Northwest and the Fernandos, and the fact of non-performance by Northwest of its obligation as a common
carrier, it is clear that Northwest breached its contract of carriage with the Fernandos. Thus, Northwest opened
itself to claims for compensatory, actual, moral and exemplary damages, attorney's fees and costs of suit.
Moreover, as provided in the Civil Code, common carriers are bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the passengers transported by them, according to all the
circumstances of each case. In the present case, Northwest committed a breach of contract "in failing to provide
the spouses with the proper assistance to avoid any inconvenience" and that the actuations of Northwest in both
subject incidents "fall short of the utmost diligence of a very cautious person expected of it". Considering that
the Fernandos are not just ordinary passengers but, in fact, frequent flyers of Northwest, the latter should have
been more courteous and accommodating to their needs so that the delay and inconveniences they suffered could
have been avoided. Northwest was remiss in its duty to provide the proper and adequate assistance to them.
.
Further, the Court held that the actions of Northwest personnel in both subject incidents are constitutive of bad
faith. Passengers do not contract merely for transportation. They have a right to be treated by the carrier's
employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against
personal misconduct, injurious language, indignities and abuses from such employees. So it is that any rule or
discourteous conduct on the part of employees towards a passenger gives the latter an action for damages against
the carrier. In requiring compliance with the standard of extraordinary diligence, a Standard which is, in fact,
that of the highest possible degree of diligence, from common carriers and in creating a presumption of
negligence against them, the law seeks to compel them to control their employees, to tame their reckless instincts
and to force them to take adequate care of human beings and their property.
Hence, there was breach of contract of carriage and bad faith in the actions of the Northwest personnel which
entitles the petitioners to file an action for damages against the carrier.
34. CACHO ET. AL. V. MANAHAN, ET. AL.

G.R. No. 203081. January 17, 2018

DOCTRINE: Given the nature of the business and for reasons of public policy, the common carrier is bound “to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.” Common carriers should carefully observe the statutory
standard of extraordinary diligence in respect of their passengers, such diligence should similarly benefit pedestrians
and the owners and passengers of other vehicles who are equally entitled to the safe and convenient use of our roads
and highways.
FACTS:
A complaint for damages was filed by the petitioners, wife and children of Bismark Cacho against Gerardo
Manahan, Dagupan Bus Co., Renato de Vera, the owner of De Vera Construction.
On June 30, 1999, at around 5AM, a vehicular accident occurred along the national highway in Pangasinan,
near the Embarcadero Bridge. Cacho was driving a Nissan Sentra when it collided with a Dagupan Bus, traversing on
the opposite lane. The car had already crossed the bridge when it collided with the bus which was just about to enter
the bridge. The collision caused heavy damage to the front of the bus, the death of Cacho, and multiple injuries to 3
passengers inside the car.
The complaint alleges that Cacho’s car was hit by a bus because the latter swerved to the left lane as it tried
to avoid a pile of boulders placed on the shoulder of the road. The petitioners claim that these boulders were negligent
placed by De Vera Construction who was assigned to some work on the bridge.
Dagupan Bus, its owner, and Manahan, the driver of the bus jointly claimed that it was Cacho who drove fast
coming from the bridge and bumped into the bus that was on full stop. They further argued that the proximate cause
of the accident was because of De Vera Construction’s negligence, for leaving the boulders on both shoulders of the
highway.
De Vera Construction counters that he ensured the safety of the road by piling the boulders in a safe place to
make sure they did not encroach upon the road.
The RTC ruled that Manahan was negligent in driving the bus because it was traversing at the speed of 80-
100 KM/H and was about to enter a very narrow bridge. It did not believe that the bus was on full stop and that Cacho
caused the collision. It further ruled that since the bus is higher than the Nissan Sentra, the bus could have noticed the
car with its lights on and could have had the last clear chance to avoid the car.
The CA reversed and dismissed the complaint for damages. The CA did not believe that the bus was running
very fast. It held that the proximate cause of the accident was clearly the negligence of Cacho in driving the Nissan
Sentra. De Vera Construction did not appeal the decision of the RTC.
ISSUE:
Whether or not Dagupan Bus, a common carrier, and its driver are negligent, and thus should be held liable
for damages
RULING:
Yes. Dagupan Bus and its driver are negligent, and thus should be held liable for damages.
In Picart v. Smith, the Supreme Court laid down the test by which to determine the existence of negligence:
The test by which to determine the existence of negligence in a particular case may be stated as follows: Did the
defendant in doing the alleged negligent act use that reasonable care and caution which an ordinary prudent person
would have used in the same situation? If not, then he is guilty of negligence.
The law here in effect adopts the standard supposed to be supplied by the imaginary conduct of the discreet
paterfamilias of the Roman law. The existence of negligence in a given case is not determined by reference to the
personal judgment of the actor in the situation before him. The law considers what would be reckless, blameworthy,
or negligent in the man of ordinary intelligence and prudence and determines liability by that. The question as to what
would constitute the conduct of a prudent man in a given situation must always be determined in the light of human
experience and in view of the facts involved in the particular case.
Using this test, Manahan was clearly negligent when he was relatively driving fast on a narrow highway and
approaching a similarly narrow bridge. We must bear in mind that a bus is a significantly large vehicle which would
be difficult to maneuver and stop if it were traveling at a high speed. On top of this, the time of the accident was on
or about sunrise when visibility on the road was compromised. Manahan should have been more prudent and careful
in his driving the bus especially considering that Dagupan Bus is a common carrier. Given the nature of the business
and for reasons of public policy, the common carrier is bound "to observe extraordinary diligence in the vigilance over
the goods and for the safety of the passengers transported by them, according to all the circumstances of each case."
Moreover, we can also say that Manahan was legally presumed negligent under Article 2185 of the Civil
Code, which provides: "unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has
been negligent if at the time of the mishap, he was [in violation of] any traffic regulation." Based on the place and
time of the accident, Manahan was actually violating a traffic rule found in R.A. No. 4136, otherwise known as the
Land Transportation and Traffic Code.
Based on the foregoing, Dagupan Bus and its driver are negligent, and thus should be held liable for damages.
35. UNITRANS v. INSURANCE COMPANY OF NORTH AMERICA

G.R. No. 203865. March 13, 2019
MAIN TOPIC: Obligations of the parties in contract of carriage

DOCTRINE: When the goods shipped are either lost or arrived in damaged condition, a presumption arises against
the carrier of its failure to observe that diligence, and there need not be an express finding of negligence to hold it
liable. To overcome the presumption of negligence, the common carrier must establish by adequate proof that it
exercised extraordinary diligence over the goods. It must do more than merely show that some other party could be
responsible for the damage.
FACTS:
ICNA filed a complaint for sum of money arising from marine insurance coverage on two (2) musical
instruments imported from Australia. It was instituted against SEACOL and the unknown owner/charterer of the vessel
M/S Buxcrown, both doing business in the Philippines through its local ship agent Unitrans. Unitrans denied being a
ship agent of the two and claimed that BTILogistics, a foreign freight forwarded, engaged its services as delivery or
receiving agent in connection to the subject shipment. As such, its obligations were e limited to receiving and handling
the bill of lading sent to it by BTI Logistics, prepare an inward cargo manifest, notify the party indicated of the arrival
of the subject shipment, and release the bill of lading upon order of the consignee or its representative so that the
subject shipment could be withdrawn from the pier/customs. The RTC granted the Complaint and held Unitrans liable
to ICNA. It held that Unitrans is a common carrier and it failed to observe its obligation to exercise due diligence to
forestall or lessen the loss. The CA affirmed the RTC decision.
ISSUE:
● Whether or not Unitrans is liable to ICNA
RULING:
● YES. Emphasis must be placed on the fact that Unitrans itself admitted, through its own witness and general
manager, Del Rosario, that in handling the subject shipment and making sure that it was delivered to the
consignee's premises in good condition as the delivery/forwarding agent, Unitrans was acting as a freight
forwarding entity and an accredited non-vessel operating common carrier.
● Article 1735 of the Civil Code states that if the goods are lost, destroyed or deteriorated, common carriers
are presumed to have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as required in Article 1733. In turn, Article 1733 states that common carriers, from
the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in
the vigilance over the goods and for the safety of the passengers transported by them, according to all the
circumstances of each case.
● In the instant case, considering that it is undisputed that the subject goods were severely damaged, the
presumption of negligence on the part of the common carrier, i.e., Unitrans, arose. Hence, it had to discharge
the burden, by way of adequate proof, that it exercised extraordinary diligence over the goods; it is not enough
to show that some other party might have been responsible for the damage. Unitrans failed to discharge this
burden. Hence, it cannot escape liability.
36. Sealoader Shipping Corporation v. Grand Cement Manufacturing

G.R. Nos. 167363 and 177466 December 15, 2010
MAIN TOPIC: Defenses
DOCTRINE: The common carrier has the responsibility to inform itself of the prevailing weather conditions in the
areas where its vessel was set to sail. It cannot merely rely on other vessels for weather updates and warnings on
approaching storms. Common sense and reason dictates this. To do so would be to gamble with the safety of its own
vessel, putting the lives of its crew under the mercy of the sea, as well as running the risk of causing damage to the
property of third parties for which it would necessarily be liable.
FACTS:
Sealoader Shipping Corporation (Sealoader) is a domestic corporation engaged in the business of shipping and hauling
cargo from one point to another using sea-going inter-island barges. Grand Cement Manufacturing Corporation (now
Taiheiyo Cement Philippines, Inc.), on the other hand, is a domestic corporation engaged in the business of
manufacturing and selling cement through its authorized distributors and, for which purposes, it maintains its own
private wharf in San Fernando, Cebu, Philippines. On March 24, 1993, Sealoader executed a Time Charter Party
Agreement with Joyce Launch and Tug Co., Inc. (Joyce Launch), a domestic corporation, which owned and operated
the motor tugboat M/T Viper. By virtue of the agreement, Sealoader chartered the M/T Viper in order to tow the
former's unpropelled barges. Subsequently, Sealoader entered into a contract with Grand Cement for the loading of
cement clinkers and the delivery thereof to Manila. On March 31, 1994, Sealoader's barge, the D/B Toploader, arrived
at the wharf of Grand Cement tugged by the M/T Viper. The D/B Toploader, however, was not immediately loaded
with its intended cargo as the employees of Grand Cement were still loading another vessel, the Cargo Lift Tres. On
April 4, 1994, Typhoon Bising struck the Visayas area, with maximum recorded winds of 120 kilometers per hour.
Public storm signal number 3 was raised over the province of Cebu. The D/B Toploader was, at that time, still docked
at the wharf of Grand Cement. In the afternoon of said date, as the winds blew stronger and the waves grew higher,
the M/T Viper tried to tow the D/B Toploader away from the wharf. The efforts of the tugboat were foiled, however,
as the towing line connecting the two vessels snapped. This occurred as the mooring lines securing the D/B Toploader
to the wharf were not cast off. The following day, the employees of Grand Cement discovered the D/B Toploader
situated on top of the wharf, apparently having rammed the same and causing significant damage thereto. Grand
Cement filed a complaint for damages since Sealoader ignored its demands. The RTC rendered judgment in favor of
Grand Cement holding the two companies liable since there was complete disregard of the storm signal, the captain
of the vessel was not present and the vessel was not equipped with a radio or any navigational facility, which is
mandatory. On appeal, the CA affirmed the decision but on Motion for Reconsideration, it partly reversed its decision
finding Grand Cement to be guilty of contributory negligence since it was found that it was still loading the other
vessel at the last minute just before the storm hit, hence Sealoader’s vessel did not move.
ISSUE:
● Who, among the parties in this case, should be liable for the damage sustained by the wharf of Grand
Cement.
RULING:
The Supreme Court found that Sealoader was guilty of negligence. Sealoader was negligent for the lack of a radio or
any navigational communication facility aboard the D/B Toploader. Furthermore, it cannot pass the responsibility of
casting off the mooring lines because the people at the wharf could not just cast off the mooring lines without any
instructions from the crew of the vessel. It should have taken the initiative to cast off the mooring lines early on. With
regard to Grand Cement’s contributory negligence, the court found that it was not guilty thereof. It had timely informed
the barge of the impending typhoon and directed the vessels to move to a safer place. Sealoader had the responsibility
to inform itself of the prevailing weather conditions in the areas where its vessel was set to sail. Sealoader cannot
merely rely on other vessels for weather updates and warnings on approaching storms, as what apparently happened
in this case. Common sense and reason dictates this. To do so would be to gamble with the safety of its own vessel,
putting the lives of its crew under the mercy of the sea, as well as running the risk of causing damage to the property
of third parties for which it would necessarily be liable.
37. Transimex Co. v. Mafre Asian Insurance Corporation

G.R. No. 190271, September 14, 2016
194169

DOCTRINE:
According to the New Civil Code, the law of the country to which the goods are to be transported shall govern
the liability of the common carrier for their loss, destruction or deterioration. The Code takes precedence as the primary
law over the rights and obligations of common carriers with the Code of Commerce and COGSA applying
suppletorily.
The strong winds accompanying the southwestern monsoon could not be classified as a "storm." Such winds
are the ordinary vicissitudes of a sea voyage.
Strong winds and waves are not automatically deemed perils of the sea, if these conditions are not unusual
for that particular sea area at that specific time, or if they could have been reasonably anticipated or foreseen.
FACTS:
This case involves a money claim filed by an respondent insurance company against the petitioner ship agent
of a common carrier. The dispute stemmed from an alleged shortage in a shipment of fertilizer delivered by the carrier
to a consignee. Before this Court, the ship agent insists that the shortage was caused by bad weather, which must be
considered either a storm under Article 1734 of the Civil Code or a peril of the sea under the Carriage of Goods by
Sea Act ( COGSA ). Petitioner is the local ship agent of the vessel, while respondent is the subrogee of Fertiphil
Corporation (Fertiphil), the consignee of a shipment of Prilled Urea Fertilizer transported by M/V Meryem Ana.
M/V Meryem Ana received a shipment of Prilled Urea Fertilizer from Ukraine. The ship sailed on to Tabaco,
Albay, to unload the cargo. The fertilizer unloaded at Albay appeared to have a gross weight of 7,700 metric tons. As
soon as the vessel docked at the Tabaco port, the fertilizer was bagged and stored inside a warehouse by employees
of the consignee. When the cargo was subsequently weighed, it was discovered that only 7,350.35 metric tons of
fertilizer had been delivered. Because of the alleged shortage of 349.65 metric tons, Fertiphil filed a claim with
respondent for Pl,617,527.37, which was found compensable.
After paying the claim of Fertiphil, respondent demanded reimbursement from petitioner based on the right
of subrogation. The claim was denied, prompting respondent to file a Complaint with the RTC for recovery of sum of
money. In support of its claim, respondent presented a Report of Survey and a Certification from David Cargo Survey
Services to prove the shortage. In the report, the adjuster also stated that the shortage was attributable to the melting
of the fertilizer while inside the hatches, when the vessel took on water because of the bad weather experienced at sea.
The RTC ruled in favor of respondent and ordered petitioner to pay the claim of Pl,617,527.37. The CA
affirmed the ruling of the RTC.
ISSUE:
● Whether or not the transaction governed by the provisions of the Civil Code on common carriers or by the
provisions of COGSA.
● Whether or not the petitioner liable for the loss or damage sustained by the cargo because of bad weather.
RULING:
● YES, the transaction governed by the provisions of the Civil Code on common carriers or by the provisions
of COGSA.
● The Supreme Court ruled that the provisions of the Civil Code on common carriers are applicable. As
expressly provided in Article 1753 of the Civil Code, "the law of the country to which the goods are to be
transported shall govern the liability of the common carrier for their loss, destruction or deterioration."
● In this case, since the cargo was transported from Odessa, Ukraine, to Tabaco, Albay, the liability of
petitioner for the alleged shortage must be determined in accordance with the provisions of the Civil Code
on common carriers.
● In Eastern Shipping Lines, Inc. v. BPI/MS Insurance Corp., the Court declared:
“According to the New Civil Code, the law of the country to which the goods are to be transported shall
govern the liability of the common carrier for their loss, destruction or deterioration. The Code takes
precedence as the primary law over the rights and obligations of common carriers with the Code of Commerce
and COGSA applying suppletorily.”
● Therefore, the transaction governed by the provisions of the Civil Code on common carriers or by the
provisions of COGSA.
● YES, the petitioner is liable for the loss or damage sustained by the cargo because of bad weather.
● The Supreme Court ruled that petitioner’s assertion that the shortage was caused by bad weather, must be
considered either a storm under Article 1734 of the Civil Code or a peril of the sea under the Carriage of
Goods by Sea Act (COGSA).
● The Court found that petitioner failed to prove the existence of a storm or a peril of the sea within the context
of Article 1734(1) of the Civil Code or Section 4(2)( c) of COGSA.
● It must be emphasized that not all instances of bad weather may be categorized as "storms" or "perils of the
sea" within the meaning of the provisions of the Civil Code and COGSA on common carriers.
● With respect to storms, this Court has explained the difference between a storm and ordinary weather
conditions in Central Shipping Co. Inc. v. Insurance Company of North America: According to PAGASA, a
storm has a wind force of 48 to 55 knots, equivalent to 55 to 63 miles per hour or 10 to 11 in the Beaufort
Scale. The second mate of the vessel stated that the wind was blowing around force 7 to 8 on the Beaufort
Scale. Consequently, the strong winds accompanying the southwestern monsoon could not be classified as a
"storm." Such winds are the ordinary vicissitudes of a sea voyage. The phrase "perils of the sea" carries the
same connotation. Although the term has not been definitively defined in Philippine jurisprudence, courts in
the United States of America generally limit the application of the phrase to weather that is "so unusual,
unexpected and catastrophic as to be beyond reasonable expectation." Accordingly, strong winds and waves
are not automatically deemed perils of the sea, if these conditions are not unusual for that particular sea area
at that specific time, or if they could have been reasonably anticipated or foreseen.
● In this case, the documentary and testimonial evidence cited by petitioner indicate that M/V Meryem Ana
faced winds of only up to 40 knots while at sea. This wind force clearly fell short of the 48 to 55 knots
required for "storms" under Article 1734(1) of the Civil Code based on the threshold established by PAG
ASA. Petitioner also failed to prove that the inclement weather encountered by the vessel was unusual,
unexpected, or catastrophic. In particular, the strong winds and waves, which allegedly assaulted the ship,
were not shown to be worse than what should have been expected in that particular location during that time
of the year. Consequently, this Court cannot consider these weather conditions as "perils of the sea" that
would absolve the carrier from liability. Even assuming that the inclement weather encountered by the vessel
amounted to a "storm" under Article 1734(1) of the Civil Code, there are two other reasons why this Court
cannot absolve petitioner from liability for loss or damage to the cargo under the Civil Code. First, there is
no proof that the bad weather encountered by M/V Meryem Ana was the proximate and only cause of damage
to the shipment. Second, petitioner failed to establish that it had exercised the diligence required from
common carriers to prevent loss or damage to the cargo.
● Therefore, the petitioner is liable for the loss or damage sustained by the cargo because of bad weather.
38. KEIHIN EVERETT FORWARDING COMPANY, INC.

V. TOKIO MARINE MALAYAN INSURANCE
G.R. No. 212107. January 28, 2019
DOCTRINE:
Under Article 1736 of the Civil Code, 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, or to the person
who has a right to receive them.
A common carrier has a right of reimbursement from a subcontractor who had custody of the cargo that
was lost.
FACTS:
In 2005, Honda Trading Phils. Ecozone Corporation (Honda Trading) ordered 80 bundles of Aluminum
Alloy Ingots from PT Molten Aluminum Producer Indonesia (PT Molten). PT Molten loaded the goods in two
container vans with Serial Nos. TEXU 389360-5 and GATU 040516-3 which were, in turn, received in Jakarta,
Indonesia by Nippon Express Co., Ltd. for shipment to Manila.
Aside from insuring the entire shipment with Tokio Marine & Nichido Fire Insurance Co., Inc. (TMNFIC)
under Policy No. 83-00143689, Honda Trading also engaged the services of Keihin-Everett to clear and withdraw
the cargo from the pier and to transport and deliver the same to its warehouse at the Laguna Technopark in Biñan,
Laguna. Meanwhile, Keihin-Everett had an Accreditation Agreement with respondent Sunfreight Forwarders
whereby the Sunfreight undertook to render common carrier services for the Keihin-Everett and to transport inland
goods within the Philippines.
The shipment arrived in Manila on November 3, 2005 and was, accordingly, offloaded from the ocean liner
and temporarily stored at the CY Area of the Manila International Port pending release by the Customs Authority.
On November 8, 2005, the shipment was caused to be released from the pier by Keihin-Everett and turned over to
Sunfreight Forwarders for delivery to Honda Trading. En route to the latter's warehouse, the truck carrying the
containers was hijacked and the container van with Serial No. TEXU 389360-5 was reportedly taken away.
Although said container van was subsequently found in the vicinity of the Manila North Cemetery and later towed to
the compound of the Metro Manila Development Authority (MMDA), it appears that the contents thereof were no
longer retrieved. Only the container van with Serial No. GATU 040516-3 reached the warehouse. As a consequence,
Honda Trading suffered losses in the total amount of P2,121,917.04, representing the value of the lost 40 bundles of
Aluminum Alloy Ingots.
Claiming to have paid Honda Trading's insurance claim for the loss it suffered, respondent Tokio Marine
commenced the instant suit on October 10, 2006 with the filing of its complaint for damages against petitioner
Keihin-Everett. Respondent Tokio Marine maintained that it had been subrogated to all the rights and causes of
action pertaining to Honda Trading.
Served with summons, petitioner Keihin-Everett denied liability for the lost shipment on the ground that
the loss thereof occurred while the same was in the possession of respondent Sunfreight Forwarders. Hence,
petitioner Keihin-Everett filed a third-party complaint against the latter, who, in turn, denied liability on the ground
that it was not privy to the contract between Keihin-Everett and Honda Trading. If at all, respondent Sunfreight
Forwarders claimed that its liability cannot exceed the P500,000.00 fixed in its Accreditation Agreement with
petitioner Keihin-Everett.
ISSUE:
● 1. Whether or not Keihin-Everett is not absolved from liability as a common carrier even if the cargoes
were lost when it was in the custody of Sunfreight Forwarders.
● 2. Whether or not Keihin-Everett must shoulder the entire loss.
RULING:
● 1. YES, Keihin-Everett is not absolved from liability as a common carrier even if the cargoes were
lost when it was in the custody of Sunfreight Forwarders.
Under Article 1736 of the Civil Code, 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, or to the person who has a right to receive them.
At the time Keihin-Everett turned over the custody of the cargoes to Sunfreight Forwarders for inland
transportation, it is still required to observe extraordinary diligence in the vigilance of the goods. There was
no privity of contract between Honda Trading (to whose rights Tokio Marine was subrogated) and
Sunfreight Forwarders.
Hence, Keihin-Everett, as the common carrier, is presumed to be at fault for the lost cargoes and
remained liable to Honda Trading for breach of contract.
● 2. No, Keihin-Everett must not shoulder the entire loss.
In Torres-Madrid Brokerage, Inc. v. FEB Mitsui Marine Insurance Co., Inc., where the carrier
entered into another contract of carriage with a fellow common carrier or subcontractor, the carrier has the
right to be reimbursed by the subcontractor where the cargo was lost under the custody of the
subcontractor.
In the same manner, Keihin-Everett has a right to be reimbursed based on its Accreditation
Agreement with Sunfreight Forwarders and in effect entered into a contract of carriage with a fellow
common carrier, Sunfreight Forwarders.
Hence, Keihin-Everett must not shoulder the entire loss.
39. Fortune Express, Inc. v. Court of Appeals

G.R. No. 119756. March 18, 1999

DOCTRINE: A common carrier can be held liable for failing to prevent a hijacking by frisking passengers and
inspecting their baggages (Gacal v. Philippine Airlines, Inc.)
For an event to be considered fortutious, the Court held in Yobido v. CA it is necessary that:
(1) The cause of the breach of the obligation must be independent of the human will;
(2) The event must be either unforeseeable or unavoidable;
(3) The occurrence must be such as to render it impossible for the debtor to fulfill the obligation in a
normal manner; and
(4) The obligor must be free of participation in, or aggravation of, the injury to the creditor.
A common carrier was liable for its failure to take of the necessary precautions against an approaching
typhoon, of which it was warned, resulting in the loss of the lives of several passengers. The event was
foreseaable, and thus, the second requisite was not fulfilled (Vasquez v. CA).
FACTS:
On November18, 1989, one of the buses of Fortune Express, Inc. (FEI) met an accident with a jeepney in Kauswagan,
Lanao del Norte. Several passengers of the jeepney died including two Maranaos. An investigation was conducted by
Crisanto Generalao of the Constabulary Regional Security Unit and it was found out that the owner of the jeepney
was a Maranao and that certain Maranaos were planning to take revenge on FEI by burning some of its buses.
On November 22, 1989 at 6:45 p.m., three (3) armed Maranaos that pretended to be passengers, seized an FEI bus that
was on its way to Iligan City. Bashier Mananggolo (MANANGGOLO), leader of the group, ordered the driver of the
said bus to stop on the side of the highway. MANANGGOLO shot the driver’s arm and started pouring gas inside the
bus. The passengers, including Atty. Caorong, stepped out of the bus and went behind the bushes. Atty. Caorong went
back to the bus to retrieve something from the overhead rack. Upon seeing that the armed men were pouring gasoline
on the head of the driver, Atty. Caorong pleaded to spare the driver’s life. Atty. Caorong was shot by the armed men
and then burned the bus. Some of the passengers were able to pull Atty. Caorong of the burning bus and were able to
rush him to the hospital but Atty. Caorong died during the operation.
Atty. Caorong’s wife, Pauli Caorong, and his minor children Yasser King, Rose Heinni, and Prince Alexander
(CAORONGS) filed a suit for breach of contract of carriage with the RTC-Iligan City. The RTC dismissed the case
because the law does not require common carriers to include posting of security guards in buses and that such
obligation belongs to the State.
On appeal, the CA reversed the RTC’s decision. The CA held that FEI never adopted even a single security measure
to prevent the execution of the threat.
ISSUE:
(1) Did FEI commit a breach of contract of carriage that resulted to Atty. Caorong’s death?
(2) Was FEI correct that hijacking can be considered a fortuitous event?
(3) Were the CAORONGS entitled to recover from FEI?
RULING:
(1) YES.
Article 1763 of the Civil Code provides that a common carrier is responsible for the injuries suffered by a passenger
on account of the willful acts of other passengers, if the employees of the common carrier could have prevented the
act through the exercise of the diligence of a good father of the family.
In this case, it is clear that the because of the negligence of FEI’s employees, the seizure of the bus by
MANANGGOLO and his men were made possible.
Further, in Gacal v. Philippine Airlines, Inc., a common carrier can be held liable for failing to prevent a hijacking by
frisking passengers and inspecting their baggages. Had FEI and its employees been vigilant, they would not have
failed to see that the malefactors had a large quantity of gasoline with them. Under the circumstances, simple
precautionary measures to protect the safety of the passengers, such as frisking passengers and inspecting their
baggages with non-intrusive gadgets such as metal detectors before allowing them on board could have been employed
without violating the passenger’s constitutional rights.
(2) NO.
Article 1174 of the Civil Code defines a fortuitous event as an occurrence which could not be foreseen or which though
foreseen, is inevitable.
For an event to be considered fortuitous, the Court held in Yobido v. CA it is necessary that:
(1) The cause of the breach of the obligation must be independent of the human will;
(2) The event must be either unforeseeable or unavoidable;
(3) The occurrence must be such as to render it impossible for the debtor to fulfill the obligation in a normal
manner; and
(4) The obligor must be free of participation in, or aggravation of, the injury to the creditor.
A common carrier was liable for its failure to take of the necessary precautions against an approaching typhoon, of
which it was warned, resulting in the loss of the lives of several passengers. The event was foreseaable, and thus, the
second requisite was not fulfilled (Vasquez v. CA).
Despite the report of the PC agent Generalo that the Maranaos were going to attack its buses, FEI took no steps to
safeguard the lives and properties of its passengers. The seizure of FEI’s bus was foreseeable, and therefore, was not
a fortuitous event which could exempt FEI from liability.
(3) YES.
(a) Indemnity for death and Compensation for Loss of Earning Capacity; under Article 1764 of the Civil Code
in relation to Article 2206 provides for the payment of indemnity for the death of passengers caused by the
breach of contract of carriage by a common carrier;
(b) Actual damages; under Article 2199 of the Civil Code, one is entitled to an adequate compensation only for
the pecuniary loss suffered by him as he has duly proved. The trial court found that the CAORONGS spent
P30K for the wake and burial of Atty. Caorong;
(c) Moral damages; under Article 2206 of the Civil Code, the spouse, legitimate and illegitimate descendants
and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the
deceased. The trial court found that Mrs. CAORONG suffered pain from the death of her husband and worry
how to provide support for their minor children;
(d) Exemplary damages; under Article 2232 of the Civil Code, in quasi-contracts and quasi-contracts, the court
may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or
malevolent manner. Despite the warning that the Maranaos were planning to take revenge against FEI, FEI
did nothing to protect the safety of the passengers;
(e) Attorney’s fees; under Article 2208.
The Court held that FEI is liable in the amount of P2.12M.
40. Gacal v. Philippine Airlines, Inc.

G.R. No. L-55300, March 15, 1990

DOCTRINE:
A common carrier overcomes the presumption of negligence and is exempt from liability where there is caso
fortuito or force majeure, where the following elements must concur: (a) the cause of the breach of the obligation must
be independent of the human will (the will of the debtor or the obligor); (b) the event must be either unforeseeable or
unavoidable; (c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal
manner; and (d) the debtor must be free from any participation in, or aggravation of the injury to the creditor.
FACTS:
Gacal and his wife, Anislag and his wife, and Elma de Guzman were passengers boarding PAL’s lane at Davao Airport
for a flight to Manila, not knowing that on the same flight, members of the Moro National Liberation Front (MNLF)
were their co-passengers, three (3) armed with grenades, two (2) with .45 caliber pistols, and one with a .22 caliber
pistol. Ten (10) minutes after take off, the hijackers brandishing their respective firearms announced the hijacking of
the aircraft and directed its pilot to fly to Libya. With the pilot explaining to them the inherent fuel limitations of the
plane and that they are not rated for international flights, the hijackers directed the pilot to fly to Sabah. With the same
explanation, they relented and directed the aircraft to land at Zamboanga Airport, Zamboanga City for refueling. The
aircraft landed at Zamboanga Airport. When the plane began to taxi at the runway, it was met by two armored cars of
the military with machine guns pointed at the plane, and it stopped there. The rebels thru its commander demanded
that a DC-aircraft take them to Libya with the President of PAL as hostage and that they be given $375,000 and six
(6) armalites, otherwise they will blow up the plane if their demands will not be met by the government and Philippine
Air Lines. Meanwhile, the passengers were not served any food nor water and it was only two days after the plane
landed that they were served 1/4 slice of a sandwich and 1/10 cup of PAL water. After that, relatives of the hijackers
were allowed to board the plane but immediately after they alighted therefrom, an armored car bumped the stairs. That
commenced the battle between the military and the hijackers which led ultimately to the liberation of the surviving
crew and the passengers, with the final score of ten (10) passengers and three (3) hijackers dead on the spot and three
(3) hijackers captured. Gacal and Anislag were unhurt but their wives suffered injuries that led to their hospitalization
and De Guzman died because of the battle.
ISSUE:
● Whether or not hijacking or air piracy during martial law and under the circumstances obtaining herein, is
a caso fortuito or force majeure which would exempt an aircraft from payment of damages to its passengers
whose lives were put in jeopardy and whose personal belongings were lost during the incident
RULING:
● YES. Under Article 1174, a common carrier, which is presumed to be negligent, is exempt from liability
where there is caso fortuito or force majeure, where the following elements must concur: (a) the cause of the
breach of the obligation must be independent of the human will (the will of the debtor or the obligor); (b) the
event must be either unforeseeable or unavoidable; (c) the event must be such as to render it impossible for
the debtor to fulfill his obligation in a normal manner; and (d) the debtor must be free from any participation
in, or aggravation of the injury to the creditor. The Supreme Court found that it was impossible for PAL to
perform its obligations in a nominal manner and obviously it cannot be faulted with negligence in the
performance of duty taken over by the Armed Forces of the Philippines to the exclusion of the former because
the incident occurred during Martial Law where there was a military take-over of airport security including
the frisking of passengers and the inspection of their luggage preparatory to boarding domestic and
international flights. Thus, the Court held that the existence of force majeure has been established exempting
PAL from the payment of damages to its passengers.
41. Pilapil v. Court of Appeals

G.R. No. 52159. December 22, 1989
Prepared by: Jickain, Luke, T.

DOCTRINE: Under Article 1763 it is to be noted that when the violation of the contract is due to the willful acts of
strangers, the degree of care essential to be exercised by the common carrier for the protection of its passenger is only
that of a good father of a family.
FACTS:
Petitioner Pilapil, while on board respondent’s bus was hit above his eye by a stone hurled by an unidentified
bystander. Respondent’s personnel lost no time in bringing him to a hospital, but eventually petitioner partially lost
his left eye’s vision and sustained a permanent scar. Thus, Petitioner lodged an action for recovery of damages before
the Court of First Instance of Camarines Sur which the latter granted. On appeal, the Court of Appeals reversed said
decision. Petitioner’s Contention: Petitioner argues that the nature of the business of a transportation company requires
the assumption of certain risks, and the stoning of the bus by a stranger resulting in injury to petitioner-passenger is
one such risk from which the common carrier may not exempt itself from liability.
ISSUE:
● Whether or not a common carrier liable for a tort committed by a stranger which causes injury to its
passenger?
RULING:
● NO. The Supreme Court held that inn consideration of the right granted to it by the public to engage in the
business of transporting passengers and goods, a common carrier does not give its consent to become an
insurer of any and all risks to passengers and goods. It merely undertakes to perform certain duties to the
public as the law imposes and holds itself liable for any breach thereof. While the law requires the highest
degree of diligence from common carriers in the safe transport of their passengers and creates a presumption
of negligence against them, it does not, however, make the carrier an insurer of the absolute safety of its
passengers. Under Article 1763, a common carrier is responsible for injuries suffered by a passenger on
account of the wilful acts or negligence of other passengers or of strangers, if the common carrier's employees
through the exercise of the diligence of a good father of a family could have prevented or stopped the act or
omission. Clearly under the above provision, a tort committed by a stranger which causes injury to a
passenger does not accord the latter a cause of action against the carrier. The negligence for which a common
carrier is held responsible is the negligent omission by the carrier's employees to prevent the tort from being
committed when the same could have been foreseen and prevented by them. Further, under the same
provision, it is to be noted that when the violation of the contract is due to the willful acts of strangers, as in
the instant case, the degree of care essential to be exercised by the common carrier for the protection of its
passenger is only that of a good father of a family.
42. People v. Go
G.R. No. 210816. December 10, 2018
Prepared by: Jiz, Aronne Dominic, C.
MAIN TOPIC: Concurrence of Causes of Action
DOCTRINE: The shipowner’s liability for breach of contract of carriage is separate and distinct from the criminal
liability of those who are found negligent.
FACTS: The vessel named M/V Princess of Stars (Stars) owned by Sulpicio Lines, Inc. (SLI) was expected to depart
from the Port of Manila to Cebu City. Prior to the Stars’ departure, PAGASA issued a Severe Weather Bulletin (SWB)
which gave a warning that there is a Storm Warning Signal (SWS) No. 1 forecasting that Typhoon Frank was located
northeast of Eastern Samar but would move northwest. Consequently, the SLI Manila Port Captain met with Captain
Marimon, the master of the vessel for a pre-departure conference concerning the SWB. Thereafter, they decided to
wait for the next SWB considering that the typhoon in the previous forecast would not affect the regular route. Then,
the Philippine Coastguard (PCG) Boarding Officer boarded the Stars to inspect its documents and safety equipment.
Then, the officer informed Captain Marimon that there was another SWB which contained a SWS No. 3 over Masbate
which is along the regular route. In response, Captain Marimon presented a new voyage plan which included an
alternative route which would not be affected by SWS No. 3. Afterwards, the officer gave clearance, and the Stars
began its departure. While the Stars was traveling along the regular route, the SLI radio operator was informed about
another SWB which forecasted that the typhoon is moving northwest. In effect, the SLI ship officers are confident
that the vessel is traveling safely. Then, the radio operator received a new SWB which forecasted that the typhoon is
moving westward instead of northwest. Despite this news, Captain Marimon remained to travel along the regular
route.
Unfortunately, the vessel was at the center of the typhoon and eventually sank. Then, a complaint for reckless
imprudence was filed with the DOJ for reckless imprudence against SLI, its officers, and Captain Marimon finding
that they failed to keep track of the weather conditions and for their decision to proceed with the scheduled departure
despite the SWBs warning about the typhoon. The complaint was instituted before the Regional Trial Court since the
DOJ found that there is probable cause that Captain Marimon, Go, and SLI for reckless imprudence. After, Go filed a
petition for review with the DOJ Secretary. Meanwhile, the Department of Transportation and Communications
Secretary issued a resolution finding that Captain Marimon is solely liable for negligence for the sinking of the vessel.
Nevertheless, the DOJ Secretary denied Go’s petition. On appeal with the Court of Appeals, the court dismissed the
criminal complaint against Go finding that there was no sufficient evidence showing that he has the power to direct
the vessel to sea and that such authority belongs to the Master Captain.
ISSUE:
● Whether or not the DOJ committed a grave abuse of discretion in finding probable cause against Go for
reckless imprudence despite the resolution of the Department of Transportation and Communications which
finds that Captain Marimon is solely liable?
RULING:
● No. The DOJ did not commit a grave abuse of discretion in finding probable cause against Go for reckless
imprudence. The Supreme Court ruled that the DOJ had validly found probable cause to institute a complaint
for reckless imprudence against Go as SLI’s safety officer since all the elements of reckless imprudence were
present in this matter based on the evidence presented through the course of the preliminary investigation.
However, the Supreme Court clarified that a criminal action filed against the negligent employee is separate
and distinct from a civil action filed against the shipowner. As such, criminal negligence under Article 365
of the Revised Penal Code refers to the negligent act that is punishable as a felony with civil liability being a
mere consequence of guilt. While a civil action against the shipowner as a common carrier for failure to
exercise extraordinary diligence in accordance with Article 1755, 1756, and 1759 of the New Civil Code
refers to one based on another source of obligation such as contract. Moreover, the obligation of the common
carrier to indemnify for the injury or death of its passengers is based on the contract of carriage and not based
on an act or omission charged as a felony. In this case, the criminal action for reckless imprudence against
Go is based on his criminal negligence as a safety officer of SLI. While the civil action for breach of contract
against SLI as shipowner is separate and does not prevent a separate criminal action against its employees.
Therefore, the DOJ did not commit a grave abuse of discretion in finding probable cause against Go for
reckless imprudence.
43. Orient Freight International v. Keihin-Everett Forwarding

G.R. No. 191937 August 9, 2017
Prepared by: Lagmay, Denzel John Brawner
MAIN TOPIC: Concurrence of Causes of Action
DOCTRINE:
A negligent act may either result in culpa aquiliana or culpa contractual. Culpa aquiliana is the wrongful or
negligent act or omission which creates vinculum juris and gives rise to an obligation between two persons not
formally bound by another obligation. Culpa contractual is the fault or negligence incident in the performance of an
obligations which already existed which increases the liability from such already existing obligation.
FACTS:
Keihin-Everett and Matsushita signed a Trucking Service Agreement on October 16, 2001. Keihin-Everett
would supply trucking services for Matsushita under the Trucking Service Agreement. Keihin-Everett subcontracted
these services to Orient Freight through their own Trucking Service Agreement, which was signed on the same day.
When Keihin-Everett and Matsushita's trucking service agreement expired on December 31, 2001, Keihin-
Everett signed an In-House Brokerage Service Agreement for Matsushita's Philippine Economic Zone Authority
export activities. Orient Freight, which subcontracted its operations to Schmitz Transport and Brokerage Corporation,
continued to work for Keihin-Everett. In April 2002, Matsushita called Keihin-Everett about a column in the issue of
the tabloid newspaper Tempo. This news narrated the April 17, 2002 interception by Caloocan City police of a stolen
truck filled with shipment of video monitors and CCTV systems owned by Matsushita. When approached by Keihin-
Everett about the story, Orient Freight said that the tabloid publication exaggerated the situation. They claimed that
the incident was simply a breakdown and towing of Keihin-Everett investigated the matter independently. However,
upon the arrival of the goods in Japan, Matsushita discovered that there were missing goods from its shipment leading
to their inference that there was indeed a highway robbery which Orient Freight neglected to disclose. This led
Matsushita to terminate its agreement with Keihin-Everett.
Keihin-Everett demanded the indemnity of Php 2,500,000.00 as loss of profits from Orient Freight which the
latter refused to pay. Hence, Keihin-Everett filed a complaint for damages. The RTC held for Keihin-Everett on the
that Orient Freight was "negligent in failing to investigate properly the incident and make a factual report to Keihin [-
Everett] and Matsushita. Orient Freight appealed the said Decision to the Court of Appeals. The Court of Appeals
issued its Decision affirming the trial court's decision.
ISSUE:
Wether or not Orient Freight is liable to Keihin-Everett under Art. 2176 of the Civil Code.
RULING: NO.
The Supreme Court held that the doctrine “that act that breaks the contract may also be a tort” which the RTC
relied in rendering its decision is not applicable in the case at Bar. While Orient is indeed negligent in informing those
parties concerned about the true incident. Orient is still bound by a contract with Keihin-Everett. This means that
Article 1170, 1172, and 1173 of the Civil Code is controlling because it governs the liability of negligent person in
the performance of an obligation.
Under Article 1170 of the Civil Code, liability for damages arises when those in the performance of their
obligations are guilty of negligence, among others. Negligence here has been defined as "the failure to observe that
degree of care, precaution and vigilance that the circumstances just demand, whereby that other person suffers injury."
If the law or contract does not provide for the degree of diligence to be exercised, then the required diligence is that
of a good father of a family. The test to determine a party's negligence is if the party used "the reasonable care and
caution which an ordinarily prudent person would have used in the same situation" when it performed the negligent
act. If the party did not exercise reasonable care and caution, then it is guilty of negligence.
In the instant case, both the Regional Trial Court and the Court of Appeals found that petitioner was negligent
in failing to adequately report the April 17, 2002 hijacking incident to respondent and not conducting a thorough
investigation despite being directed to do so. Thus, both the Regional Trial Court and Court of Appeals erred in finding
petitioner's negligence of its obligation to report to be an action based on a quasi-delict Petitioner's negligence did not
create the vinculum juris or legal relationship with the respondent, which would have otherwise given rise to a quasi-
delict. Petitioner's duty to respondent existed prior to its negligent act. When respondent contacted petitioner regarding
the news report and asked it to investigate the incident, petitioner's obligation was created. Thereafter, petitioner was
alleged to have performed its obligation negligently, causing damage to respondent. Unfortunately for the petitioner,
the Supreme Court still adjudged them guilty of negligence and denied its petition and affirmed the Court of Appeals’
decision.
Dispositive: The petition is Denied. The Court of Appeals decision is AFFIRMED.
44. SPOUSES ESTRADA V. PHILIPPINE RABBIT BUS LINES

G.R. No. 203902. July 19, 2017
Prepared by: Landong, Jemima D.
MAIN TOPIC: Damages
DOCTRINE:
Moral damages, as a general rule, are not recoverable in an action for damages predicated on breach of contract. As
an exception, such damages are recoverable [in an action for breach of contract:] (1) in cases in which the mishap
results in the death of a passenger, as provided in Article 1764, in relation to Article 2206 (3)of the Civil Code; and
(2) in cases in which the carrier is guilty of fraud or bad faith, as provided in Article 2220.
Temperate damages in lieu of actual damages for loss of earning capacity may be awarded where earning capacity is
plainly established but no evidence was presented to support the allegation of the injured party's actual income.
FACTS:
A mishap occurred along the national highway in Pangasinan, between the passenger bus, driven by [respondent]
Eduardo Saylan and owned by [respondent] Philippine Rabbit Bus, Lines, Inc., and an Isuzu truck. Before the collision,
the bus was following closely a jeepney. When the jeepney stopped, the bus suddenly swerved to the left encroaching
upon the rightful lane of the Isuzu truck, which resulted in the collision of the two (2) vehicles. The [petitioner]
Dionisio Estrada, who was among the passengers of the Philippine Rabbit bus, as evidenced by the ticket issued to
him, was injured on the [right] arm as a consequence of the accident. His injured right arm was amputated at the
Villaflor Medical Doctor's Hospital in Dagupan City. For the treatment of his injury, he incurred expenses as evidenced
by various receipts. Dionisio filed a complaint for damages against Philippine Rabbit and respondent Eduardo R.
Saylan (Eduardo) wherein he prayed for the following awards: moral damages of ₱500,000.00 actual damages of
₱60,000.00, and attorney's fees of ₱25,000.00. The RTC awarded moral damages because of “The emotional anguish
and suffering of Dionisio Estrada as a consequence of the injury and amputation of his right arm due to the reckless
driving of Eduardo, which resulted in the accident. The CA held that moral damages are not recoverable in actions for
damages predicated on a breach of contract, unless death of a passenger results, or it is proved that the carrier was
guilty of fraud or bad faith, even if death does not result. There was no evidence on record indicative of fraud or bad
faith on Philippine Rabbit's part.
ISSUES:
1. Whether petitioner is entitled to moral damages.
2. Whether temperate damages in lieu of actual damages for loss of earning capacity may be awarded where
earning capacity is plainly established but no evidence was presented to support the allegation of the
injured party's actual income.
RULING:
1. NO. The Supreme Court held that Moral damages are not recoverable in this case. Since breach of contract
is not one of the items enumerated under Article 2219, moral damages, as a general rule, are not recoverable
in actions for damages predicated on breach of contract. As an exception, such damages are recoverable [in
an action for breach of contract:] (1) in cases in which the mishap results in the death of a passenger, as
provided in Article 1764,34 in relation to Article 2206(3) of the Civil Code; and (2) in cases in which the
carrier is guilty of fraud or bad faith, as provided in Article 2220. The present case does not come under the
first of the abovementioned exceptions since Dionisio did not die in the mishap but merely suffered an injury.
With regard to the presence of fraud or bad faith, the Court finds no persuasive proof. There is no showing
that Philippine Rabbit induced Dionisio to enter into a contract of carriage with the former through insidious
machination. Neither is there any indication or even an allegation of deceit or concealment or omission of
material facts by reason of which Dionisio boarded the bus owned by Philippine Rabbit. Likewise, it was not
shown that Philippine Rabbit's breach of its known duty, which was to transport Dionisio from Urdaneta to
La Union, was attended by some motive, interest, or ill will. From these, no fraud or bad faith can be attributed
to Philippine Rabbit.
2. YES. The court may award temperate damages when actual damages for loss/impairment of earning capacity
are also not recoverable. Damages for loss [or impairment] of earning capacity is in the nature of actual
damages which need to be presented with documentary evidence. Despite the absence of documentary
evidence, it may be awarded, by way of exception, when (1) the deceased [or the injured] was self-employed
and earning less than the minimum wage under current labor laws, in which case, judicial notice may be
taken of the fact that in the deceased's line of work no documentary evidence is available; or (2) the deceased
was employed as a daily worker earning less than the minimum wage under current labor laws. Dionisio does
not fall under any of the two exceptions aforementioned. Hence, there is no competent proof substantiating
his actual income and because of this, an award for actual damages for loss/ impairment of earning capacity
cannot be made. However, since it was established that Dionisio lost his right arm, temperate damages in lieu
of actual damages for loss/impairment of earning capacity may be awarded in his favor. Under Article 2224,
"temperate or moderate damages, which are more than nominal but less than compensatory damages, may
be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from
the nature of the case, be proved with certainty." Hence, spouses Estrada were declared entitled to temperate
damages of ₱500,000.00; (2) the award of actual damages is set at the amount of ₱57,658.25; and (3) all
damages awarded are subject to legal interest of 6% per annum.
45. Darines v. Quinones

G.R. No. 206468 August 2, 2017
Prepared by: Lapus, Tristan Patrick P.
MAIN TOPIC: CONCURRENCE OF CAUSES OF ACTION
DOCTRINE:
An action for breach of contract of carriage, moral damages may be awarded only in case;
(1) an accident results in the death of a passenger; or
(2) the carrier is guilty of fraud or bad faith, is pursuant to Article 1764, in relation to Article 2206(3) of the Civil
Code, and Article 2220 thereof.
To award moral damages for breach of contract, therefore, without proof of bad faith or malice on the part of the
defendant, as required by [Article 2220 of the Civil Code], would be to violate the clear provisions of the law, and
constitute unwarranted judicial legislation
FACTS:
Judith D. Darines and her daughter, Joyce D. Darines alleged in their that they boarded the Amianan Bus Line as
paying passengers en route from Carmen, Rosales, Pangasinan to Baguio City. Respondent Rolando M. Quitan was
the driver of the bus. While travelling on Camp 3, Tuba, Benguet along Kennon Road, the bus crashed into a truck
which was parked on the shoulder of Kennon Road. As a result, both vehicles were damaged; two passengers of the
bus died; and the other passengers, including petitioners, were injured. Joyce suffered cerebral concussion while Judith
had an eye wound which required an operation.
Petitioners argued that Quitan and respondent Eduardo Quinones, the operator of Amianan Bus Line, breached their
contract of carriage as they failed to bring them safely to their destination. They also contended that Quitan's reckless
and negligent driving caused the collision. Consequently, they prayed for actual, moral, exemplary and temperate
damages, and costs of suit.
For their part, Quinones and Quitan disputed that, during the incident, Quitan was driving in a careful, prudent, and
dutiful manner at the normal speed of 40 kilometers per hour. According to them, the proximate cause of the incident
was the negligence of the truck driver, who parked the truck at the roadside right after the curve without having
installed any early warning device.
The RTC awarded moral and exemplary damages grounded plus attorney’s fees.
The CA reversed and set aside the RTC Decision stressing that respondents did not dispute that they were liable for
breach of contract of carriage; in fact, they paid for the medical and hospital expenses of petitioners. Nonetheless, the
CA deleted the award of moral damages because petitioners failed to prove that respondents acted fraudulently or in
bad faith, as shown by the fact that respondents paid petitioners' medical and hospitalization expenses. The CA held
that, since no moral damages was awarded, then there was no basis to grant exemplary damages. Finally, it ruled that
because moral and exemplary damages were not granted, then the award of attorney's fees must also be deleted.
ISSUE:
Whether or not award of moral and exemplary damages and attorney’s fees may be recovered in this case.
RULING:
NO.
To stress, this case is one for breach of contract of carriage (culpa contractual) where it is necessary to show the
existence of the contract between the parties, and the failure of the common carrier to transport its passenger safely to
his or her destination. An action for breach of contract differs from quasi-delicts (also referred as culpa aquiliana or
culpa extra contractual) as the latter emanate from the negligence of the tort feasor including such instance where a
person is injured in a vehicular accident by a party other than the carrier where he is a passenger.
The principle is that, in an action for breach of contract of carriage, moral damages may be awarded only in case (1)
an accident results in the death of a passenger; or (2) the carrier is guilty of fraud or bad faith, is pursuant to Article
1764, in relation to Article 2206(3) of the Civil Code, and Article 2220 thereof, as follows:
Article 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book,
concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a
common carrier. (Emphasis supplied)
Article 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos,
even though there may have been mitigating circumstances. In addition:
(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral
damages for mental anguish by reason of the death of the deceased.
Article 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that,
under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant
acted fraudulently or in bad faith. (Emphasis supplied)
The Court declared that "to award moral damages for breach of contract, therefore, without proof of bad faith or malice
on the part of the defendant, as required by [Article 2220 of the Civil Code], would be to violate the clear provisions
of the law, and constitute unwarranted judicial legislation. Unless it is fully established (and not just lightly inferred)
that negligence in an action for breach of contract is so gross as to amount to malice, then the claim of moral damages
is without merit.
Here, Petitioners propounded on the negligence of respondents, but did not discuss or impute fraud or bad faith, or
such gross negligence which would amount to bad faith, against respondents. There being neither allegation nor proof
that respondents acted in fraud or in bad faith in performing their duties arising from their contract of carriage, they
are then not liable for moral damages.
Hence Pursuant to Articles 2229 and 2234 of the Civil Code, since petitioners are not entitled to either moral,
temperate, liquidated, or compensatory damages, then their claim for exemplary damages is bereft of merit.
Also considering the absence of any of the circumstances under Article 2208 of the Civil Code where attorney's fees
may be awarded, the same cannot be granted to petitioners.
In conclusion, the CA correctly ruled that petitioners are not entitled to moral and exemplary damages as well as
attorney's fees.
46. Sulpicio Lines, Inc. v. Karaan

G.R. No. 208590. October 3, 2018
Prepared by: Montano, Josephine Edrhea P.
MAIN TOPIC: Death of a Passenger; Actual/Compensatory Damages

DOCTRINE:
● The Civil Code, in Article 1764 thereof, expressly makes Article 2206 applicable "to the death of a
passenger caused by the breach of contract by a common carrier." Accordingly, a common carrier is
liable for actual or compensatory damages under Article 2206 in relation to Article 1764 of the Civil
Code for deaths of its passengers caused by the breach of the contract of transportation.
FACTS:
Tito and his three-year old daughter boarded M/V Dona Marilyn bringing with them several pieces of
luggage. While in transit, M/V Dona Marilyn encountered a stormy weather due to Typhoon Unsang. Instead of
taking shelter at the nearest port, the ship captain ordered to proceed to Tacloban although a Storm Signal No. 3 was
already declared by PAGASA (thereby failing to exercise the required extraordinary diligence). Eventually, the
vessel was capsized throwing Tito, his daughter, and the other passengers off the sea. Tito survived but their
daughter did not. Tito and Angelina filed a claim for damages against Sulpicio Lines. The trial court granted them
P27,580.00 as actual damages, P30,000.00 for the death of their daughter, P100,000.00 as moral damages,
P50,000.00 as exemplary damages, and P50,000.00 as attorney's fees, and costs.
ISSUE:
● Whether or not a common carrier is liable for the death of its passengers resulting from culpa contractual.
RULING:
● Yes. It is true that under Article 2206 of the Civil Code of the Philippines, only deaths caused by a crime as
quasi delict are entitled to actual and compensatory damages without the need of proof of the said damages.
Said Article provides:
The amount of damages for death caused by a crime or quasi delict shall be at least Three
Thousand Pesos, even though there may have been mitigating circumstances. . . .
Deducing alone from said provision, one can conclude that damages arising from culpa contractual are not
compensable without proof of special damages sustained by the heirs of the victim.
However, the Civil Code, in Article 1764 thereof, expressly makes Article 2206 applicable "to the death of
a passenger caused by the breach of contract by a common carrier." Accordingly, a common carrier is liable
for actual or compensatory damages under Article 2206 in relation to Article 1764 of the Civil Code for
deaths of its passengers caused by the breach of the contract of transportation.
The trial court awarded an indemnity of P30,000.00 for the death of the daughter of private respondents.
The award of damages under Article 2206 has been increased to P50,000.00 (People v. Flores, 237 SCRA
653 [1994]).
On basis for actual damages

There is no basis. The trial court merely mentioned the fact of the loss and the value of the contents of the
pieces of baggage without stating the evidence on which it based its findings. There is no showing that the
value of the contents of the lost pieces of baggage was based on the bill of lading or was previously
declared by respondent Tito D. Tabuquilde before he boarded the ship. Hence, there can be no basis to
award actual damages in the amount of P27,850.00.
On whether or not Sulpicio Lines acted in a manner warranting the grant of exemplary damages
Yes. Article 2232 of the Civil Code of the Philippines gives the Court the discretion to grant said damages
in breach of contract when the defendant acted in a wanton, fraudulent and reckless manner.
A common carrier is obliged to transport its passengers to their destinations with the utmost diligence of a
very cautious person (Laguna Tayabas Bus Co. v. Tiongson, 16 SCRA 940 [1966]). The trial court found
that the petitioner failed to exercise the extraordinary diligence required of a common carrier, which
resulted in the sinking of the M/V Dona Marilyn. The trial court correctly concluded that the sinking of
M/V Dona Marilyn was due to gross negligence.
47. Philippine Rabbit Bus Lines, Inc. v. Lim

G.R. No. 212252. February 28, 2018
Prepared by: Rayo, Dan Leonard L.
MAIN TOPIC: Damages
DOCTRINE:
Article 1732 of the Civil Code - As a common carrier, it is bound to observe extraordinary diligence in the carriage of
goods and passengers and any neglect or malfeasance on the part of the carrier's employees may be a ground for an
action for damages.
FACTS:
Aurora A. Lim, Vice President for Operations of Central Philippine University (CPU), was on her way to Baguio City
to inspect the condition of the cottages owned by CPU. She was accompanied by CPU Physician Dra. Gallon and
Prof. Declarador. They were paying passengers of Bus No. 917, owned and operated by Philippine Rabbit Bus Lines
and driven by Virgilio Magno. Magno steered the bus while negotiating a curve, thus, the bus made a sudden
movement, which caused the seat occupied by respondent to topple over. As a result, respondent fell sidewards and
lost consciousness. Respondent and her companions requested the bus conductor, Edgardo Cancino, to bring them to
the nearest hospital but the bus driver ignored the request and proceeded to the Baguio City terminal. Upon arrival at
the bus terminal, Dra. Gallon went down from the bus and informed the management of petitioner about the incident.
During her entire stay in Baguio City, respondent continued to suffer aches and pains due to the injuries she sustained
from the incident. Respondent also took a leave of absence from work for a week because of the pain. Even after
returning to work, she experienced difficulty in moving and could not normally do her usual daily activities.
respondent, through her lawyer, sent a letter to petitioner demanding compensation in the amount of One Million
Pesos (P1,000,000.00) due to the suffering and pain she underwent because of the incident. Respondent filed with the
RTC of Iloilo City, a civil case for "damages due to quasi-delict."
ISSUE:
Is Philippine Rabbit Bus Line liable for the damages that Lim suffered?
RULING:
Yes. As a general rule, moral damages are not recoverable in actions for damages predicated on a breach of contract.
However, moral damages may be recovered when the defendant acted in bad faith or was guilty of gross negligence
(amounting to bad faith) or in wanton disregard of contractual obligations and when the act of breach of contract itself
constitutes the tort that results in physical injuries. the Court emphasizes that petitioner was pronounced by the RTC
to be liable for breach of contract of carriage (culpa contractual). This is important to note because in an action for
breach of contract of carriage, moral damages may be awarded only in case (1) an accident results in the death of a
passenger; or (2) the carrier is guilty of fraud or bad faith. common carriers liable for breach of contract of carriage
were held liable for moral damages in favor of the injured passengers on the ground that they committed gross
negligence, which amounted to bad faith.Thus, moral damages may be awarded in cases of breach of contract of
carriage when the negligence is so gross that that it amounts to bad faith or when it is in wanton disregard of contractual
obligations.
48. Ace Navigation Co., Inc. v. FGU Insurance Corp.

G.R. No. 171591. June 25, 2011
Prepared by: Sandoval, Ma. Minella Christine R..
MAIN TOPIC: BILL OF LADING
DOCTRINE:
A bill of lading is defined as an instrument in writing, signed by a carrier or his agent, describing the freight so as to
identify it, stating the name of the consignor, the terms of the contract for carriage, and agreeing or directing that the
freight to be delivered to the order or assigned of a specified person at a specified place. A bill of lading operates both
as a receipt and contract.
FACTS:
Cardia Limited (CARDIA) shipped on board the vessel M/V Pakarti Tiga at Shanghai Port China, 165,200 bags of
Grey Portland Cement to be discharged at the port of Manila and delivered to the consignee, Heindrich trading Corp
(HEINDRICH). The vessel is owned by P.T Pakarti Tata (PAKARTI) which was chartered to Shinwa Kaiun Kaisha
Ltd. (SHINWA). SHINWA, representing itself as the owner of the vessel, entered into a charter party contract with
Sky International (SKY), an agent of Kee Yeh Maritime (KEE YEH), and further chartered it to Regency Express
Line (REGENCY). REGENCY dealt directly with the consignee HEINDRICH.
When the vessel arrived at the port of Manila, it was found by HEINDRICH and Ace Navigation Co. (ACENAV),
agent of CARDIA, that the bags of cement were in bad order and condition. Since FGU Insurance and Pioneer
Insurance were not able to collect from CARDIA and REGENCY, they paid HEINRICH. Due to this, the insurance
companies filed a complaint for damages against REGENCY, PAKARTI, and/or ACENAV. It was contended by
PAKARTI and SHINWA that they were not parties to the bill of lading and that the suits against them could not
prosper. The same defense was raised by ACENAV and denied that it was a local ship agent of REGENCY, but an
agency of the shipper CARDIA.
The RTC dismissed the complaint. However, the CA found the parties liable and held that the parties entered into a
time charter party and not a bareboat charter where the owner shall completely and exclusively relinquish possession,
command, and navigation to the charterer. It also held CARDIA and ACENAV liable since the damage was due to
the inferior packing of the cargo.
ISSUE:
Whether ACENAV is a party to the bill of lading and should be held accountable for the damages sought by FGU
Insurance Corp.?
RULING:
No, ACENAV as a mere agent could not be held liable for the damage caused by the principal. A bill of lading operates
both as a receipt and a contract, and as such, it shall only be binding upon the parties who make them as well as their
assigns and heirs. As a receipt, the details such as the date and place of shipment, quantity, weight, dimensions,
identification marks and condition, quality, and value is indicated. While as a contract, the parties are named including
the consignee, the routes, destination, freight rates or charges, and the rights and obligations assumed by the parties.
In this case, the original parties stipulated in the bill of lading are (1) shipper CARDIA, (2) carrier PAKARTI, and (3)
consignee HEINDRICH. However, due to the relationship with PAKARTI under the separate charter agreements,
SHINWA, KEE YEH, and the agent SKY also became a party to the bill of lading. The agent of CARDIA, ACENAV,
also became a party to the contract. However, the obligation of ACENAV was only limited to informing HEINDRICH
of the arrival of the vessel. Its participation was only to assume responsibility over the cargo when it was unloaded
from the vessel. As a mere agent, ACENAV cannot be made responsible for the damage caused by the principal.
CARDIA was also not impleaded in the case and its liability held by the CA cannot be shouldered by ACENAV.
Hence, the Court reversed the decision and found that the CA ruling was incorrect in holding that ACENAV is jointly
and severally liable with CARDIA to pay damages.
49. Designer Baskets, Inc. v. Air Sea Transport, Inc.

G.R. No. 184513, March 9, 2016
Prepared by: Tagudar, Val Laurence P.
MAIN TOPIC: BILL OF LADING
DOCTRINE:
● A bill of lading is defined as “a written acknowledgment of the receipt of goods and an agreement to transport
and to deliver them at a specified place to a person named or on his order.”
● Under Article 350 of the Code of Commerce, “the shipper as well as the carrier of the merchandise or goods
may mutually demand that a bill of lading be made.”
● A carrier is allowed by law to release the goods to the consignee even without the latter’s surrender of the
bill of lading.
● The general rule is that upon receipt of the goods, the consignee surrenders the bill of lading to the carrier
and their respective obligations are considered canceled; Exceptions. (1) When the bill of lading gets lost or
(2) for other cause. In either case, the consignee must issue a receipt to the carrier upon the release of the
goods. Such receipt shall produce the same effect as the surrender of the bill of lading.
● The non-surrender of the original bill of lading does not violate the carrier’s duty of extraordinary diligence
over the goods.
FACTS:
DBI is a domestic corporation engaged in the production of housewares and handicraft items for export. Ambiente, a
foreign- based company, ordered from DBI5 223 cartons of assorted wooden items (the shipment). Ambiente
designated ACCLI as the forwarding agent that will ship out its order from PH to US. ACCLI is a domestic corporation
acting as agent of ASTI, a US-based corporation engaged in carrier transport business, in the Philippines. Thereafter,
DBI delivered the shipment to ACCLI for sea transport from Manila and delivery to Ambiente. To acknowledge
receipt and to serve as the contract of sea carriage, ACCLI issued to DBI triplicate copies of ASTI Bill of Lading,
retained possession of the originals of the bills of lading pending the payment of the goods by Ambiente. Ambiente
and ASTI entered into an Indemnity Agreement which obligated ASTI to deliver the shipment to it or to its order
“without the surrender of the relevant bill(s) of lading due to the non-arrival or loss thereof.” In exchange, Ambiente
undertook to indemnify and hold ASTI and its agent free from any liability as a result of the release of the shipment.
Thereafter, ASTI released the shipment to Ambiente without the knowledge of DBI, and without it receiving payment
for the total cost of the shipment. DBI then made several demands to Ambiente for the payment of the shipment, but
to no avail. Thus, DBI filed a complaint against ASTI and ACCLI AND and ACCLI’s incorporators-stockholders and
later on impleading Ambiente as a new defendant and praying that it be held solidarily liable with ASTI, ACCLI, and
ACCLI’s incorporators- stockholders for the payment of the value of the shipment.
RTC ruled in favor of DBI finding ASTI, ACCLI, and Ambiente solidarily liable to DBI for the value of the shipment.
Upon appeal, CA affirmed the RTC’s finding that Ambiente is liable to DBI, but absolved ASTI and ACCLI from
liability. Hence, this appeal.
ISSUES:
● Whether the law requires that the bill of lading be surrendered by the buyer/consignee before the carrier can
release the goods to the former.
● Whether ASTI and ACCLI may be held solidarily liable to DBI for the value of the shipment.
RULING:
● No. The law does not requires that the bill of lading be surrendered by the buyer/consignee before the carrier
can release the goods to the former. A common carrier may release the goods to the consignee even without
the surrender of the bill of lading. A bill of lading is defined as “a written acknowledgment of the receipt of
goods and an agreement to transport and to deliver them at a specified place to a person named or on his
order.” It may also be defined as “an instrument in writing, signed by a carrier or his agent, describing the
freight so as to identify it, stating the name of the consignor, the terms of the contract of carriage, and agreeing
or directing that the freight be delivered to bearer, to order or to a specified person at a specified place.
Under Article 350 of the Code of Commerce, “the shipper as well as the carrier of the merchandise or goods
may mutually demand that a bill of lading be made.” A bill of lading, when issued by the carrier to the
shipper, is the legal evidence of the contract of carriage between the former and the latter. It defines the rights
and liabilities of the parties in reference to the contract of carriage. The stipulations in the bill of lading are
valid and binding unless they are contrary to law, morals, customs, public order or public policy. Here,
ACCLI, as agent of ASTI, issued Bill of Lading to DBI. This bill of lading governs the rights, obligations
and liabilities of DBI and ASTI. DBI claims that Bill of Lading contains a provision stating that ASTI and
ACCLI are “to release and deliver the cargo/shipment to the consignee, only after the original copy or copies
of the said Bill of Lading is or are surrendered to them; otherwise they become liable to [DBI] for the value
of the shipment.” Quite tellingly, however, DBI does not point or refer to any specific clause or provision on
the bill of lading supporting this claim. The language of the bill of lading shows no such requirement. There
is no obligation, therefore, on the part of ASTI and ACCLI to release the goods only upon the surrender of
the original bill of lading. Further, a carrier is allowed by law to release the goods to the consignee even
without the latter’s surrender of the bill of lading under Art. 353 of the Code of Commerce. The general rule
is that upon receipt of the goods, the consignee surrenders the bill of lading to the carrier and their respective
obligations are considered canceled. The law, however, provides two exceptions where the goods may be
released without the surrender of the bill of lading because the consignee can no longer return it. These
exceptions are when the bill of lading gets lost or for other cause. In either case, the consignee must issue a
receipt to the carrier upon the release of the goods. Such receipt shall produce the same effect as the surrender
of the bill of lading. Clearly, law and jurisprudence is settled that the surrender of the original bill of lading
is not absolute; that in case of loss or any other cause, a common carrier may release the goods to the
consignee even without it. Here, Ambiente could not produce the bill of lading covering the shipment not
because it was lost, but for another cause: the bill of lading was retained by DBI pending Ambiente’s full
payment of the shipment.
● No. ASTI and ACCLI may not be held solidarily liable to DBI for the value of the shipment. The argument
of DBI that the carrier released the goods pursuant to it, notwithstanding the carrier’s knowledge that the bill
of lading should first be surrendered and its claim that ASTI and ACCLI are liable for damages because they
failed to exercise extraordinary diligence in the vigilance over the goods pursuant to Articles 1733, 1734, and
1735 of the Civil Code is not tenable. Articles 1733, 1734, and 1735 speak of the common carrier’s
responsibility over the goods. They refer to the general liability of common carriers in case of loss, destruction
or deterioration of goods and the presumption of negligence against them. This responsibility or duty of the
common carrier lasts from the time the goods are unconditionally placed in the possession of, and received
by the carrier for transportation, until the same are delivered, actually or constructively, by the carrier to the
consignee, or to the person who has a right to receive them. Here, it is undisputed that the goods were timely
delivered to the proper consignee or to the one who was authorized to receive them. DBI’s only cause of
action against ASTI and ACCLI is the release of the goods to Ambiente without the surrender of the bill of
lading, purportedly in violation of the terms of the bill of lading. We have already found that Bill of Lading
No. AC/MLLA601317 does not contain such express prohibition. Without any prohibition, therefore, the
carrier had no obligation to withhold release of the goods. Articles 1733, 1734, and 1735 do not give ASTI
any such obligation.
50. Tsuneishi Heavy Industries (Cebu) Inc. v. MIS Maritime Corp

G.R. No. 193572. April 4, 2018
Prepared by: Tangan, Alyssa Nicole.
MAIN TOPIC: Notice of Claim and Prescription
DOCTRINE: The mere fact of failure to pay after the obligation to do so has become
due and despite several demands is not enough to warrant the issuance of a writ of preliminary attachment. Or that
the refusal to pay amounts to fraud. Allegations of fraud should be with sufficient specificity.
FACTS:
MIS Maritime Corporation contracted Tsuneishi to dry dock and repair its vessels through an Agreement
on March 22, 2006. On March 23,2006, the vessel dry docketed in Tsuneishi’s shipyard, with the latter rendering the
required services. After a month and while the vessel was still dry docketed, Tsuneishi conducted an engine test on
the M/T MIS-1 and the vessels engine emitted smoke. It was discovered that this was caused by a burnt crank
journal. The crankpin also showed hairline cracks due to detective lubrication or deterioration. Tsuneishi insists that
the damage was not its fault. As an act of good will though, Tsuneishi paid for the vessel’s new engine crankshaft,
crankpin, and main bearings, and billed for MIS for the payment of its repair and dry docking services. MIS refused
to pay the amount and demanded that Tsuneishi pay the amount equivalent to the income that the vessel lost in the
six months that it was not operational and dry docketed.
It also requested that its claim be used to set off against the amount billed by Tsuneishi as payment for its
services. Further, Tsuneishi claims that MIS caused a vessel owned by Cattleya Shipping to stop its payment for the
services rendered by Tsuneishi.
Tsuneishi contends that under Section 21 of the Ship Mortgage Decree, a maritime lien is provided in favor
of a person who furnishes repair or provides use of a dry dock for a vessel. Thus lien, as argued, grants Tsuneishi the
right to take possession, control, custody of the vessel in case of default of payment.
Further, it argues that it can dispose of the vessel and apply the proceeds to the unpaid repair bill. Further, it argues
that the issuance of a writ of preliminary attachment is justified, invoking a provision on its contract with MIS
regarding default of payment. Lastly, it contends that the failure to comply of MIS to pay its obligation does not
arise from ere inability to pay but due to fraud.
On the other hand, MIS contends that it did not abscond its obligation to pay but rather has the right to
demand for the indemnification of its lost revenue due to Tsunaeishi’s negligence.
ISSUE:
1. Whether or not a maritime lien under Section 21 of the Ship Mortgage Decree may be enforced through a
writ of preliminary injunction
2. Whether or not Tsuneishi complied with the needed requirements for the claim of payment against MIS
RULING:
1. No. The Court explained by differentiating a maritime lien with a writ of preliminary injunction. Under the
decree, the holder of the lien has the right to bring an action to seek the sale of the vessel and the application of the
proceeds of the sale to the outstanding obligation. In this action, the lienholder must establish that the obligation and
the corresponding lien exist before one can demand that the property subject to the lien by sold for the payment of
the obligation. A lien functions as a form of security for an obligation.
On the other hand, a writ of preliminary injunction is a provisional remedy issued by a court where an action is
pending which allows the levy of a property which shall then be held by the sheriff. The property will stand as
security for the satisfaction of the judgement that the court may render in favor of the attaching party. In principle,
the writ of preliminary attachment functions as a lien.
But the court explained that a maritime lien, the party in whose favor the lien was established may ask the court to
enforce it, while the writ of preliminary attachment is issued precisely to create a lien.
Thus, the Court explained that Tsuneishi should have just filed a proper action in court for the enforcement of the
lien.
2. The Court reiterated its ruling that the mere fact of failure to pay after the obligation to do so has become
due and despite several demands is not enough to warrant the issuance of a writ of preliminary attachment. Or that
the refusal to pay amounts to fraud. Allegations of fraud should be with sufficient specificity. Records also provide
that Tsuneishi released the vessel in September 2006. MIS signed the Agreement of the Final Price only in
November 2006. Tsuneishi agreed to release the vessel even before MIS signed the document. It appears in the
record that the reason for MIS’ refusal to pay its claims that its obligation should be set off against Tsuneishi’s
liability for the losses that MIS incurred for the unwarranted delay in the turn over of the vessel.
51. UCPB Insurance v. Aboitiz Shipping

G.R. No.168433. Feb. 10, 2009
Prepared by: Tizon, Monique Reilly C.

DOCTRINE:
The requirement to give notice of loss or damage to the goods is not an empty formalism. The fundamental
reason or purpose of such a stipulation is not to relieve the carrier from just liability, but reasonably to inform it that
the shipment has been damaged and that it is charged with liability therefor, and to give it an opportunity to examine
the nature and extent of the injury.
FACTS:
San Miguel Corporation (SMC) purchased 3 units of waste water treatment plant with accessories from
Super Max Engineering Enterprises of Taipei, Taiwan. Upon arrival at the port of Manila (carried by East Asiatic
Co. Ltd as agent of DAMCO as inter-island carrier from a foreign carrier), it was transferred again to Cebu
(carried by Aboitiz Shipping Corp. and the Eagle Express line as agents of the owner of the cargo in facilitating
the transshipment). The goods were delivered to and received by SMC but discovered that one electrical motor
was damaged.
Pursuant to insurance agreement, SMC was subrogated by the UCPB, and paid the value of the loss
suffered. Consequently, this complaint was filed to recover the amount from the defendants.
The RTC ruled that the defendants are solidarily liable to pay the UCPB of the amount of recovery.
East Asiatic filed an appeal on the ground of prescription, which was given due course by the CA and set aside
the lower court’s decision, and the same became final and executory.
As to Aboitiz and Eagle Express, the lower court’s decision is still enforced, thus, it prompts their appeal on the
ground that there is no more cause of action since pursuant to Art. 366 of Code of Commerce, consignee made
no claim against them (the carrier) within twenty-four (24) hours following the receipt of the cargo regarding the
condition in which said cargo was delivered. They have only learned of the claim upon receipt of the complaint.
The CA ruled in favor of the defendants. Hence this petition.
ISSUE:
Whether the UCPB can recover the amount as a subrogee to the shipper when it fails to meet the condition
precedent of Art. 366 of the code of Commerce.
RULING:
NO. The Supreme Court ruled that the notice of claim was not timely made or relayed to respondent in
accordance with Art. 366 of the Code of Commerce. The requirement to give notice of loss or damage to the goods
is to protect the carrier by affording it an opportunity to make an investigation of a claim while the matter is still
fresh and easily investigated so as to safeguard itself from false and fraudulent claims. The Court have construed the
24-hour claim requirement as a condition precedent to the accrual of a right of action against a carrier for loss of, or
damage to, the goods. The shipper or consignee must allege and prove the fulfillment of the condition. Otherwise,
no right of action against the carrier can accrue in favor of the former. The shipment in this case was received by
SMC. However, as found by the Court of Appeals, the claims were more than three months from receipt of the
shipment and, at that, even after the extent of the loss had already been determined by SMC's surveyor. The claim
was, therefore, clearly filed beyond the 24-hour time frame prescribed by Art. 366 of the Code of Commerce.
52. BENJAMIN CUA vs. WALLEM PHILIPPINES SHIPPING, INC.

G.R. No. 171337. July 11, 2012
Prepared by: Tomines, Nica Margarette G.
Student Number: 19-4009
DOCTRINE: An allegation of an agreement extending the period to file an action is deemed admitted if not
specifically denied by the party claiming prescription.
FACTS:
In 1990, Benjamin Cua filed an action for damages against Wallem Philippines Shipping and Advance
Shipping before the RTC. Cua sought the payment of Php 2,030,303.52 for damage to 218 tons and for a shortage of
50 tons of shipment of Brazilian Soyabean consigned to him. Wallem then filed a motion to dismiss on the ground of
prescription. According to Section 3 of the Carriage of Goods by Sea Act (COGSA), “the carrier and the ship shall be
discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the
goods.” Cua opposed Wallem's motion to dismiss, denying the latter's claim of prescription by referring to a telex
message sent by the manager of the UK P&I Club, which stated that Advance Shipping agreed to extend the
commencement of suit for 90 days.
The RTC rendered a decision in favor of Cua, ordering Wallem and Advance jointly and severally liable to
pay as damages. The CA, however, ruled that there was no basis for the RTC to conclude that the prescriptive period
was extended by the parties' agreement. It set aside the decision of the RTC and dismissed Cua's complaint. Hence,
this petition.
ISSUE: Whether or not Cua's claim for payment of damages against Wallem and Advance Shipping has prescribed
RULING: NO. The Supreme Court held that what is decisive is whether the pleadings and the evidence support a
finding that Cua's claim has prescribed. It was at this point that the Supreme Court disagrees with the findings of the
CA. The CA failed to appreciate the admissions made by Wallem and Advance Shipping in their pleadings that negate
a finding of prescription of Cua's claim.
● Wallem and Advance Shipping had already admitted the agreement extending the period to file the claim.
Although COGSA provides that the carrier is discharged from liability for loss or damage to the cargo unless the suit
is brought within one year after delivery of the goods, jurisprudence has recognized the validity of an agreement
between the carrier and the shipper/consignee extending the one year period to file a claim.
The allegation of an agreement extending the period to file an action in Cua's complaint is a material averment that
must be specifically denied by Wallem and Advance Shipping. Otherwise, the allegation is deemed admitted.
● A review of the pleadings submitted by Wallem and Advance Shipping discloses that they failed to
specifically deny Cua's allegation of an agreement extending the period to file an action. Therefore, such
allegation is deemed admitted.
● The Supreme Court considers the extension of the period as an admitted fact.
53. Insurance Company of North America v. Asian Terminals, Inc.

G.R. No. 180784, February 15, 2012
Prepared by: Tres Reyes, Camille Joy, M.
MAIN TOPIC: NOTICE OF CLAIM AND PRESCRIPTION
DOCTRINE: Under COGSA, the carrier and the ship may put up the defense of prescription if the action for damages
is not brought within one year after the delivery of the goods or the date when the goods should have been delivered.
It has been held that not only the shipper, but also the consignee or legal holder of the bill may invoke the prescriptive
period. However, the COGSA does not mention that an arrastre operator may invoke the prescriptive period of one
year; hence, it does not cover the arrastre operator.
FACTS:
Macro-Lite Korea Corporation shipped to San Miguel Corporation, through M/V "DIMI P" vessel, 185 packages
(231,000 sheets) of electrolytic tin free steel, complete and in good order condition and covered by a Bill of Lading.
The carrying vessel arrived at the port of Manila and when the shipment was discharged therefrom, it was noted that
seven packages thereof were damaged and in bad order. The shipment was then turned over to the custody of
respondent Asian Terminals, Inc. for storage and safekeeping pending its withdrawal by the consignee's authorized
customs broker, R.V. Marzan Brokerage Corp. After a joint inspection of the said cargo was conducted, it showed that
an additional five packages were found to be damaged and in bad order. The consignee, San Miguel Corporation, filed
separate claims against respondent and petitioner for the damage to 11,200 sheets of electrolytic tin free steel.
Petitioner engaged the services of an independent adjuster/surveyor, BA McLarens Phils., Inc., to conduct an
investigation and evaluation on the claim and to prepare the necessary report. BA McLarens Phils., Inc. noted that out
of the reported twelve damaged skids, nine of them were rejected and three skids were accepted by the consignee’s
representative as good order. The petitioner, as insurer of the said cargo, paid the consignee for the damage caused to
the shipment. Thereafter, the petitioner formally demanded reparation against the respondent. As respondent failed to
satisfy its demand, petitioner filed an action for damages. The trial court dismissed petitioner's complaint for actual
damages on the ground of prescription under the Carriage of Goods by Sea Act (COGSA).
ISSUE:
● Whether or not the one-year prescriptive period for filing a suit under the COGSA applies to this action for
damages against respondent arrastre operator
RULING:
● NO. Under COGSA, the carrier and the ship may put up the defense of prescription if the action for damages
is not brought within one year after the delivery of the goods or the date when the goods should have been
delivered. It has been held that not only the shipper, but also the consignee or legal holder of the bill may
invoke the prescriptive period. However, the COGSA does not mention that an arrastre operator may invoke
the prescriptive period of one year; hence, it does not cover the arrastre operator.
● Respondent arrastre operator's responsibility and liability for losses and damages are set forth in Section 7.01
of the Contract for Cargo Handling Services executed between the Philippine Ports Authority and Marina
Ports Services, Inc. (now Asian Terminals, Inc). Based on the Contract, the consignee has a period of thirty
(30) days from the date of delivery of the package to the consignee within which to request a certificate of
loss from the arrastre operator. From the date of the request for a certificate of loss, the arrastre operator has
a period of fifteen (15) days within which to issue a certificate of non-delivery/loss either actually or
constructively. Moreover, from the date of issuance of a certificate of non-delivery/loss, the consignee has
fifteen (15) days within which to file a formal claim covering the loss, injury, damage or non-delivery of
such goods with all accompanying documentation against the arrastre operator.
● In the instant case, the records show that the goods were deposited with the arrastre operator on November
21, 2002. The goods were withdrawn from the arrastre operator on November 22, 23 and 29, 2002. Prior to
the withdrawal on November 29, 2002, the broker of the importer, Marzan, requested for a bad order survey
in the presence of a Customs representative and other parties concerned. The joint inspection of cargo was
conducted and it was found that an additional five (5) packages were found in bad order as evidenced by the
document entitled Request for Bad Order Survey dated November 29, 2002, which document also contained
the examination report, signed by the Customs representative, Supervisor/Superintendent, consignee's
representative, and the ATI Inspector.
● Thus, as early as November 29, 2002, the date of the last withdrawal of the goods from the arrastre operator,
respondent ATI was able to verify that five (5) packages of the shipment were in bad order while in its
custody. The certificate of non-delivery referred to in the Contract is similar to or identical with the
examination report on the request for bad order survey. Like in the case of New Zealand Insurance Company
Ltd. v. Navarro, the verification and ascertainment of liability by respondent ATI had been accomplished
within thirty (30) days from the date of delivery of the package to the consignee and within fifteen (15) days
from the date of issuance by the Contractor (respondent ATI) of the examination report on the request for
bad order survey. Although the formal claim was filed beyond the 15-day period from the issuance of the
examination report on the request for bad order survey, the purpose of the time limitations for the filing of
claims had already been fully satisfied by the request of the consignee's broker for a bad order survey and by
the examination report of the arrastre operator on the result thereof, as the arrastre operator had become aware
of and had verified the facts giving rise to its liability.
● Hence, the arrastre operator suffered no prejudice by the lack of strict compliance with the 15-day limitation
to file the formal complaint.
54. VECTOR SHIPPING CORP. V. AMERICAN HOME ASSURANCE

CO.
G.R. No. 159213. July 3, 2013
Prepared by: Uy, Vanessa Marie C.
Student No: 111991
MAIN TOPIC: NOTICE OF CLAIM AND PRESCRIPTION
DOCTRINE:
Article 1144. The following actions must be brought within ten years from the time the cause of action accrues:
(1)Upon a written contract;

(2)Upon an obligation created by law;
(3)Upon a judgment.
FACTS:
Vector was the operator of the motor tanker M/T Vector, while Soriano was the registered owner of the M/T Vector.
Respondent is a domestic insurance corporation. Caltex entered a contract of Affreightment with Vector for the
transport of Caltex’s petroleum cargo through the M/T Vector. Caltex insured the petroleum cargo with respondent
for ₱7,455,421.08 under Marine Open Policy No. 34-5093-6. M/T Vector collided in open sea with M/V Dona Paz
that was operated by Sulpicio Lines, Inc., which caused both vessels to sink. The entire petroleum cargo of Caltex
on board the M/T Vector perished. On July 12, 1988, respondent, American Home Assurance Company,
indemnified Caltex for the loss of the petroleum cargo in the full amount of ₱7,455,421.08.
The respondent filed a complaint against Vector, Soriano, and Sulpicio Lines, Inc. to recover the full amount of
₱7,455,421.08 it paid to Caltex. However, the RTC dismissed the complaint. According to the RTC, the action is
upon a quasi-delict and as such must be commenced within four 4 years from the day they may be brought. "From
the day the action may be brought" means from the day the quasi-delict occurred. (Capuno v. Pepsi Cola, 13 SCRA
663) The tort complained of in this case occurred on 20 December 1987. The action arising therefrom would under
the law prescribe, unless interrupted, on 20 December 1991.
Moreover, the cross-claim of Sulpicio Lines against Vector Shipping and Francisco Soriano filed on 25 June 1992
had likewise prescribed. The letter of demand upon defendant Sulpicio Lines allegedly on 6 November 1991 did not
interrupt the tolling of the prescriptive period since there is no evidence that it was actually received by the
addressee. Under such circumstances, the action against Sulpicio Lines had likewise prescribed.
On Appeal to the CA, the court reverse the RTC decision. However, it absolved the liability of Sulpicio Lines, Inc.
to the respondent.
ISSUE:
● Whether or not the action of the respondent has already barred by prescription.
RULING:
No. The legal provision governing this case was not Article 1146 of the Civil Code, but Article 1144 of the Civil
Code, which states:
Article 1144. The following actions must be brought within ten years from the time the cause of action accrues:
(1)Upon a written contract;
(2)Upon an obligation created by law;
(3)Upon a judgment.
The Court found and held that that the present action was not upon a written contract, but upon an obligation created
by law. Hence, it came under Article 1144 (2) of the Civil Code. This is because the subrogation of respondent to
the rights of Caltex as the insured was by virtue of the express provision of law embodied in Article 2207 which
states:
Article 2207. If the plaintiff’s property has been insured, and he has received indemnity from the insurance company
for the injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall be
subrogated to the rights of the insured against the wrongdoer or the person who has violated the contract. If the
amount paid by the insurance company does not fully cover the injury or loss, the aggrieved party shall be entitled
to recover the deficiency from the person causing the loss or injury
The contract of affreightment that Caltex and Vector entered into did not give rise to the legal obligation of Vector
and Soriano to pay the demand for reimbursement by respondent because it concerned only the agreement for the
transport of Caltex’s petroleum cargo. As the Court has aptly put it in Pan Malayan Insurance Corporation v. Court
of Appeals, supra, respondent’s right of subrogation pursuant to Article 2207, was "not dependent upon, nor did it
grow out of, any privity of contract or upon written assignment of claim but accrued simply upon payment of the
insurance claim by the insurer.
Considering that the cause of action accrued as of the time respondent indemnified Caltex in the amount of
₱7,455,421.08 on July 12, 1988, the action was not yet barred by the time of the filing of its complaint on March 5,
1992, which was well within the 10-year period prescribed by Article 1144 of the Civil Code.
The insistence by Vector and Soriano that the running of the prescriptive period was not interrupted because of the
failure of respondent to serve any extrajudicial demand was rendered inconsequential by the finding that
respondent’s cause of action was not based on a quasi-delict that prescribed in four years from the date of the
collision on December 20, 1987, as the RTC misappreciated, but on an obligation created by law, for which the law
fixed a longer prescriptive period of ten years from the accrual of the action.
55. ASIAN TERMINALS INC v. PHILAM INSURANCE CO. INC.

G.R. Nos. 181163, 181262, 181319. July 24, 2013.
Prepared by: Viceo, Curt Joshua A.
DOCTRINE:
Failure to comply with the notice requirement shall not affect or prejudice the right of the shipper to bring suit
within one year after delivery of the goods. (Sec. 3, Par. 6, COGSA)
FACTS:
Nichimen Corp. shipped to Universal Motors Corp. 219 packages containing 120 units of brand new
Pickup Truck Double Cab 4x2 model, without engine, tires and batteries on board the vessel S/S “Calayan Iris” from
Japan to Manila. It was declared for a value of P29.5m and was insured with Philam against all risks under a Marine
policy.
The vessel arrived at port of Manila on April 20, 1995 and when it was unloaded by the staff of Asian
Terminals Inc. (ATI), it was found that the package marked as 03-245-42K/1 was in bad order. The Turn Over
Survey of Bad Order Cargoes identified 2 packages as being dented and broken. Thereafter, the cargoes were stored
for safekeeping in CFS Warehouse.
When the shipment was withdrawn, a bad order survey was conducted on the cargoes and it was found that
one Frame Axle Sub without LWR was deeply dented on the buffle plate while 6 Frame Assembly with Bush were
deformed and misaligned. Universal Motors declared them a total loss.
Universal Motors filed a formal claim of damages against Westwind, ATI and RF Revilla Customs
Brokerage Inc. When Universal Motors’ demands were not met, it sought reparation and was compensated by
Philam of P633,957.15. Universal Motors issued a subrogation receipt in favor of Philam.
Philam filed a complaint for damages against Westwind, ATI and RF Revilla before RTC.
RTC: RTC ruled in favor of Philam and ordered Westwind and ATI to jointly and severally pay Philam. It ruled that
there was sufficient evidence to establish the respective participation of Westwind and ATI in the discharge of the
shipment. It found that the cargoes were compressed while being hoisted using a cable that was too short and taut.
CA: CA affirmed with modification the ruling of RTC. Westwind failed its duty to observe extraordinary diligence.
ATI is also liable for the negligence of its employees who carried out the offloading of cargoes from the ship to the
pier. Citing Belgian Overseas v. PPFIC, CA held that Philam’s action for damages had not prescribed.
notwithstanding the absence of a notice of claim.
ISSUE:
● Whether or not Philam’s action for damages prescribed
● Whether or not Westwind and ATI are liable
RULING:
● 1. NO, Philam’s action for damages has not prescribed. The Carriage of Goods by Sea Act (COGSA) or PA
No. 521 of the 74th US Congress was accepted to be made applicable to all contracts for the carriage of
goods by sea to and from Philippine ports in foreign trade by virtue of CA 65.
● The prescriptive period for filing an action for the loss or damage of the goods under the COGSA is found
in paragraph 6, section 3 which states that the suit must be brought within 1 year after delivery of the goods
or the date when the goods should have been delivered; provided that if a notice of loss/damage is not given
as provided for by this section, the fact shall not affect or prejudice the right of the shipper to bring suit
within 1 year after the delivery of the goods or the date when the goods should have been delivered.
● In this case, Nichimen Corp. was found as the seller and Universal Motors as the buyer. Hence, the date of
delivery to Universal Motors is controlling for purposes of reckoning when notice of loss/damage should be
given to the carrier or its agent.
● Moreover, paragraph 6, section 3 of COGSA states that failure to comply with the notice requirement shall
not affect or prejudice the right of the shipper to bring suit within one year after delivery of the goods.
Philam filed a complaint for damages just 8 months after all the packages were delivered to Universal
Motors. Therefore, Philam’s action against petitioners Westwind and ATI was seasonably filed.
● 2. YES, Westwind and ATI are jointly and severally liable. Both Westwid and ATI should have observed
extraordinary diligence in handling the merchandise on account to their value and difficulty of acquisition.
● Both the RTC and CA found that ATI employees were the ones handling the unloading of the cargo, and
that they erroneously chose the inappropriate equipment. They used a sling to secure the cargo as it was too
taut and short, hence crushing the subject cargo. Westwind should also be liable because it has supervision
on the entire operation of ATI. Hence, they must be solidarily liable over the damages for its failure to
exercise extraordinary diligence. Hence, Philam is entitled to recover from ATI over the damaged cargo.
56. PIONEER INSURANCE AND SURETY CORPORATION v. APL CO.

PTE. LTD.
G.R. No. 226345, August 2, 2017
Prepared by: Villalon, Maria Andrea Patricia D.R.
MAIN TOPIC: NOTICE OF CLAIM AND PRESCRIPTION.
DOCTRINE:
In case of loss or damage of cargoes, the one-year prescriptive period under the COGSA applies.
FACTS:
Chillies Export House Limited, turned over to APL Co. Pte. Ltd. 250 bags of chili pepper for transport from the port
of Chennai, India, to Manila and was loaded on board M/V Wan Hai 262. BSFIL Technologies, Inc., as consignee,
insured the cargo with Pioneer Insurance and Surety Corporation. When it was delivered to BSFIL, it discovered that
76 bags were wet and heavily infested with molds. The shipment was declared unfit for human consumption and was
eventually declared as a total loss.
BSFIL made a formal claim against APL and Pioneer Insurance. The independent insurance adjuster found that the
shipment was wet because of the water which seeped inside the container van APL provided. Pioneer Insurance paid
BSFIL P195,505.65. Pioneer Insurance, as subrogee of BSFIL, sought payment from APL, but the latter refused. This
prompted Pioneer Insurance to file a complaint for sum of money against APL.
The MTC ordered APL to pay Pioneer Insurance. RTC concurred with the MTC. It agreed that APL was presumed to
have acted negligently because the goods were damaged while in its custody. In addition, the RTC stated that under
the Carriage of Goods by Sea Act (COGSA), lack of written notice shall not prejudice the right of the shipper to bring
a suit within one year after delivery of the goods. Further, the trial court stated that the shorter prescriptive period set
in the Bill of Lading could not apply because it is contrary to the provisions of the COGSA.
CA reversed the decisions of the trial courts and ruled that the present action was barred by prescription. The appellate
court noted that under Clause 8 of the Bill of Lading, the carrier shall be absolved from any liability unless a case is
filed within nine (9) months after the delivery of the goods. It explained that a shorter prescriptive period may be
stipulated upon, provided it is reasonable. The CA opined that the nine-month prescriptive period set out in the Bill
of Lading was reasonable and provided a sufficient period of time within which an action to recover any loss or
damage arising from the contract of carriage may be instituted. That as subrogee, Pioneer Insurance was bound by the
stipulations of the Bill of Lading, including the shorter period to file an action. Hence, this petition.
ISSUE:
● Whether or not petitioner’s claim is already barred by prescription.
RULING:
● NO. The court held that in case of loss or damage of cargoes, the one-year prescriptive period under the
COGSA applies. A reading of the Bill of Lading between the parties reveals that the nine-month prescriptive
period is not applicable in all actions or claims. As an exception, the nine-month period is inapplicable when
there is a different period provided by a law for a particular claim or action—unlike in Philippine American
where the Bill of Lading stipulated a prescriptive period for actions without exceptions. Thus, it is readily
apparent that the exception under the Bill of Lading became operative because there was a compulsory law
applicable which provides for a different prescriptive period. Hence, strictly applying the terms of the Bill of
Lading, the one-year prescriptive period under the COGSA should govern because the present case involves
loss of goods or cargo. The Court does not construe the Bill of Lading any further but merely applies its terms
according to its plain and literal meaning. Therefore, petitioner’s claim is not bared by prescription.
57. Lhuiller v. British Airways

G.R. No. 171092. March 15, 2010
MAIN TOPIC: AVIATION LAWS AND WARSAW CONVENTION
DOCTRINE: Article 1 of the Warsaw Convention provides: (1) this Convention applies to all international carriage
of persons, luggage or goods performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft
performed by an air transport undertaking; and (2) for the purposes of this Convention the expression "international
carriage" means any carriage in which, according to the contract made by the parties, the place of departure and the
place of destination, whether or not there be a break in the carriage or a transshipment, are situated either within the
territories of two High Contracting Parties, or within the territory of a single High Contracting Party, if there is an
agreed stopping place within a territory subject to the sovereignty, suzerainty, mandate or authority of another Power,
even though that Power is not a party to this Convention. A carriage without such an agreed stopping place between
territories subject to the sovereignty, suzerainty, mandate or authority of the same High Contracting Party is not
deemed to be international for the purposes of this Convention.
Under Article 28 (1) of the Warsaw Convention, the plaintiff may bring the action for damages before: (1) the court
where the carrier is domiciled; (2) the court where the carrier has its principal place of business; (3) the court where
the carrier has an establishment by which the contract has been made; or (4) the court of the place of destination.
FACTS: On April 28, 2005, petitioner Edna Diago Lhuillier filed a Complaint for damages against respondent British
Airways before the Regional Trial Court (RTC) of Makati City. She alleged that on February 28, 2005, she took
respondent's Flight 548 from London, UK to Rome, Italy. Once on board, she allegedly requested Julian Halliday, one
of the respondent's flight attendants, to assist her in placing her hand carried luggage in the overhead bin. However,
Halliday allegedly refused to help and assist her, and even sarcastically remarked that "If I were to help all 300
passengers in this flight, I would have a broken back!"
Petitioner further alleged that when the plane was about to land in Rome, another flight attendant, Nickolas Kerrigan,
singled her out from among all the passengers in the business class section to lecture on plane safety. Allegedly,
Kerrigan made her appear to the other passengers to be ignorant, uneducated, stupid, and in need of lecturing on the
safety rules and regulations of the plane. Affronted, petitioner assured Kerrigan that she knew the plane's safety
regulations being a frequent traveler. Thereupon, Kerrigan allegedly thrust his face a mere few centimeters away from
that of the petitioner and menacingly told her that "We don't like your attitude."
Upon arrival in Rome, petitioner complained to respondent's ground manager and demanded an apology. However,
the latter declared that the flight stewards were "only doing their job." Thus, petitioner filed the complaint for damages,
praying that respondent be ordered to pay P5 million as moral damages, P2 million as nominal damages, P1 million
as exemplary damages, P300,000.00 as attorney's fees, P200,000.00 as litigation expenses, and cost of the suit. On
May 16, 2005, summons, together with a copy of the complaint, was served on the respondent through Violeta
Echevarria, General Manager of Euro-Philippine Airline Services, Inc. On May 30, 2005, respondent, by way of
special appearance through counsel, filed a Motion to Dismiss on grounds of lack of jurisdiction over the case and
over the person of the respondent. Respondent alleged that only the courts of London, United Kingdom or Rome,
Italy, have jurisdiction over the complaint for damages pursuant to the Warsaw Convention, 5 Article 28 (1) of which
provides: an action for damages must be brought at the option of the plaintiff, either before the court of domicile of
the carrier or his principal place of business, or where he has a place of business through which the contract has been
made, or before the court of the place of destination. Thus, since respondent is domiciled in London, respondent's
principal place of business is in London. Petitioner bought her ticket in Italy (through Jeepney Travel S.A.S. in Rome)
and Rome, Italy is petitioner's place of destination, then it follows that the complaint should only be filed in the proper
courts of London, United Kingdom or Rome, Italy.
On October 14, 2005, the RTC of Makati City granted respondent's Motion to Dismiss. It ruled that: The Court
sympathizes with the alleged ill-treatment suffered by the plaintiff. However, our Courts have to apply the principles
of international law and are bound by treaty stipulations entered into by the Philippines which form part of the law of
the land. One of these is the Warsaw Convention. he Court finds no justifiable reason to deviate from the indicated
limitations as it will only run counter to the provisions of the Warsaw Convention. Said treaty stipulations must be
complied with in good faith following the time-honored principle of pacta sunt servanda. The MR was denied.
Petitioner now comes directly before the SC on a Petition for Review on Certiorari on pure questions of law. Petitioner
argues that her cause of action arose not from the contract of carriage, but from the tortious conduct committed by
airline personnel of respondent in violation of the provisions of the Civil Code on Human Relations. Since her cause
of action was not predicated on the contract of carriage, petitioner asserts that she has the option to pursue this case in
this jurisdiction pursuant to Philippine laws.
ISSUE:
● Whether or not the RTC had jurisdiction to take cognizance of the present case, notwithstanding Art. 28(1)
of the Warsaw Convention?
RULING:
● No. It is settled that the Warsaw Convention has the force and effect of law in this country. The Philippines
is a party to the Convention for the Unification of Certain Rules Relating to International Transportation by
Air, otherwise known as the Warsaw Convention. The Convention is thus a treaty commitment voluntarily
assumed by the Philippine government and, as such, has the force and effect of law in this country. Article 1
of the Warsaw Convention provides that this Convention applies to all international carriage of persons,
luggage or goods performed by aircraft for reward. It applies equally to gratuitous carriage by aircraft
performed by an air transport undertaking.
Under Article 28 (1) of the Warsaw Convention, the plaintiff may bring the action for damages before: (1)
the court where the carrier is domiciled; (2) the court where the carrier has its principal place of business; (3)
the court where the carrier has an establishment by which the contract has been made; or (4) the court of the
place of destination.
In the case at bar, it is not disputed that respondent is a British corporation domiciled in London, United
Kingdom with London as its principal place of business. Hence, under the first and second jurisdictional
rules, the petitioner may bring her case before the courts of London in the United Kingdom. In the passenger
ticket and baggage check presented by both the petitioner and respondent, it appears that the ticket was issued
in Rome, Italy. Consequently, under the third jurisdictional rule, the petitioner has the option to bring her
case before the courts of Rome in Italy. Finally, both the petitioner and respondent aver that the place of
destination is Rome, Italy, which is properly designated given the routing presented in the said passenger
ticket and baggage check. Accordingly, under the fourth jurisdictional rule, petitioner may bring her action
before the courts of Rome, Italy. The SC finds that the RTC of Makati correctly ruled that it does not have
jurisdiction over the case filed by the petitioner.
Furthermore, contrary to the contention of petitioner, Santos III v. Northwest Orient Airlines, is analogous
to the instant case because (1) the domicile of respondent is London, United Kingdom; 24 (2) the principal
office of respondent airline is likewise in London, United Kingdom; 25 (3) the ticket was purchased in Rome,
Italy; 26 and (4) the place of destination is Rome, Italy. Petitioner contends that in Santos III v. Northwest
Orient Airlines, the cause of action was based on a breach of contract while her cause of action arose from
the tortious conduct of the airline personnel and violation of the Civil Code provisions on Human Relations.
The Court disagrees with the position taken by the petitioner. In the said case, the allegation of willful
misconduct resulting in a tort is insufficient to exclude the case from the realm of the Warsaw Convention.
In fact, our ruling that a cause of action based on tort did not bring the case outside the sphere of the Warsaw
Convention was our ratio decidendi in disposing of the specific issue presented by Augusto Santos III.
Clearly, the contention of the petitioner that the said ruling is an obiter dictum and without basis.
58. NORTHWEST AIRLINES INC. V. HESHAN.

G.R. No. 179117. Feb. 03, 2010.
MAIN TOPIC: Aviation Laws and Warsaw Convention
DOCTRINE: A contract of carriage arises the moment an airline issues a ticket to a passenger, confirmed for a
particular flight on a certain date. Thus, the passenger has every right to expect that he will be transported on that
flight and on that certain date. Otherwise, the carrier opens itself to a suit for breach of contract of carriage.
FACTS:
Edward Heshan purchased three roundtrip tickets from Northwest Airlines, Inc. for him, his wife, and
daughter Dara for their trip from Manila to St. Louis, Missouri, USA and back to attend an ice-skating competition
where then seven year old Dara was to participate. When Dara’s participation in the ice-skating event ended, Heshans
proceeded to the airport to take the connecting flight from St. Louis to Memphis on their way to Los Angeles. At the
airport, the Heshans first checked-in their luggage at the airport’s “curbside check-in” near the entrance. Since they
arrived three hours early for their 6:05 p.m. flight, the Heshans passed time at a nearby coffee shop.
At 5:15 PM, when the check-in counter opened, Edward took to the line where he was second in the queue.
When his turn came and presented the tickets to Northwest’s customer service agent Ken Carns to get the boarding
passes, he was asked to step aside and wait to be called again. After all the other departing passengers were given their
boarding passes, the Heshans were told to board the plane without any boarding pass given to them and to just occupy
open seats therein. Inside the plane, the Heshans noticed that only one vacant passenger seat was available, which was
offered to Dara, while Edward and Nelia were directed to occupy two “folding seats” located at the rear portion of the
plane. However, the two folding seats were crew seats intended for the stewardesses. Upset that there were not enough
passenger seats for them, the Heshans complained to the cabin crew about the matter but were told that if they did not
like to occupy the seats, they were free to disembark from the plane. And disembark they did, complaining thereafter
to Carns about their situation. During all of this, Northwest’s plane then departed for Memphis without the Heshans
onboard. Hence, they filed breach of contract against the Northwest Airlines.
ISSUE: Whether or not Northwest Airlines is liable for breach of contract of carriage.
RULING:
Yes, they are liable. As cited in the case of Singapore Airlines v. Fernandez, when an airline issues a ticket
to a passenger, confirmed for a particular flight on a certain date, a contract of carriage arises. The passenger then has
every right to expect that he be transported on that flight and on that date. If he does not, then the carrier opens itself
to a suit for a breach of contract of carriage. In the case at bar, Northwest was not able to perform its duty to the
Heshans. In weighing the evidence of the parties, the trial court found the Heshan’s more credible. An examination
of the evidence presented by Northwest shows that it consisted only of depositions of its witnesses. It had in its
possession and disposition pertinent documents such as the flight manifest and the plane’s actual seating capacity and
layout which could have clearly refuted respondents’ claims that there were not enough passenger seats available for
them. Northwest inexplicably failed to offer even a single piece of documentary evidence. Also, Northwest failed to
satisfactorily explain why it did not issue boarding passes to respondents who were confirmed passengers, even after
they had checked-in their luggage three hours earlier. Further, the Court held that the fact that Northwest did not
reserve seats prior to checking-in did not excuse the non-issuance of boarding passes. Therefore, Northwest is liable
for breach of contract of carriage.
59. Cathay Pacific Airways v. Reyes

G.R. No. 185891. June 26, 2013
MAIN TOPIC: AVIATION LAWS AND WARSAW CONVENTION
DOCTRINE:
A contract of carriage is defined as one whereby a certain person or association of persons obligate
themselves to transport persons, things, or news from one place to another for a fixed price. Under Article
1732 of the Civil Code, this "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" is called a common carrier.
● The Court has held that when an airline issues a ticket to a passenger confirmed on a particular flight, on a
certain date, a contract of carriage arises, and the passenger has every right to expect that he would fly on
that flight and on that date. If he does not, then the carrier opens itself to a suit for breach of contract of
carriage.
FACTS:
Respondent Wilfredo Reyes (Wilfredo) made a travel reservation with Sampaguita Travel for his family’s
trip to Adelaide, Australia scheduled from 12 April 1997 to 4 May 1997. Their flight schedule was booked
and confirmed, and Wilfredo was issued four (4) Cathay Pacific round-trip airplane tickets for Manila-
HongKong-Adelaide-HongKong-Manila. On 12 April 1997, the Reyeses flew to Adelaide, Australia without
a hitch. One week before they were scheduled to fly back home, Wilfredo reconfirmed his family’s return
flight with the Cathay Pacific office in Adelaide. They were advised that the reservation was "still okay as
scheduled." On the day of their scheduled departure from Adelaide, when the airport check-in counter
opened, Wilfredo was informed by a staff from Cathay Pacific that the Reyeses did not have confirmed
reservations, and only Sixta’s flight booking was confirmed. Nevertheless, they were allowed to board the
flight to HongKong due to adamant pleas from Wilfredo. When they arrived in HongKong, they were again
informed of the same problem. Unfortunately this time, the Reyeses were not allowed to board because the
flight to Manila was fully booked. Only Sixta was allowed to proceed to Manila from HongKong. On the
following day, the Reyeses were finally allowed to board the next flight bound for Manila. Hence,
respondents filed a Complaint for damages against Cathay Pacific and Sampaguita Travel. RTC rendered
decision in favor of the defendants, finding that respondents were in possession of valid tickets but did not
have confirmed reservations for their return trip to Manila. The CA ordered Cathay Pacific to pay ₱25,000.00
each to respondents as nominal damages.
ISSUE:
1. Whether or not respondents entered into a contract of carriage with Cathay Pacific.
2. Whether or not Cathay Pacific breached its contract of carriage with respondents.
RULING:
1. YES. A contract of carriage is defined as one whereby a certain person or association of persons obligate
themselves to transport persons, things, or news from one place to another for a fixed price. Under Article
1732 of the Civil Code, this "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" is called a common carrier. In the case at bar, respondents entered into a contract of carriage
with Cathay Pacific. As far as respondents are concerned, they were holding valid and confirmed airplane
tickets. The ticket in itself is a valid written contract of carriage whereby for a consideration, Cathay Pacific
undertook to carry respondents in its airplane for a round-trip flight from Manila to Adelaide, Australia and
then back to Manila. In fact, Wilfredo called the Cathay Pacific office in Adelaide one week before his return
flight to re-confirm his booking. He was even assured by a staff of Cathay Pacific that he does not need to
reconfirm his booking. Hence, respondents entered into a contract of carriage with Cathay Pacific.
2. YES. The Court has held that when an airline issues a ticket to a passenger confirmed on a particular flight,
on a certain date, a contract of carriage arises, and the passenger has every right to expect that he would fly
on that flight and on that date. If he does not, then the carrier opens itself to a suit for breach of contract of
carriage. In the case at bar, Cathay Pacific disallowed the Reyeses to board the plane in Hong Kong going
to Manila on the date reflected on their tickets. Hence, Cathay Pacific breached its contract of carriage with
respondents.
ADDITIONAL NOTES:
● Under Article 2220 of the Civil Code of the Philippines, an award of moral damages, in breaches of
contract, is in order upon a showing that the defendant acted fraudulently or in bad faith. What the law
considers as bad faith which may furnish the ground for an award of moral damages would be bad faith
in securing the contract and in the execution thereof, as well as in the enforcement of its terms, or any
other kind of deceit. In the same vein, to warrant the award of exemplary damages, defendant must have
acted in wanton, fraudulent, reckless, oppressive, or malevolent manner.
● Nominal damages are recoverable where a legal right is technically violated and must be vindicated
against an invasion that has produced no actual present loss of any kind or where there has been a breach
of contract and no substantial injury or actual damages whatsoever have been or can be shown. Under
Article 2221 of the Civil Code, nominal damages may be awarded to a plaintiff whose right has been
violated or invaded by the defendant, for the purpose of vindicating or recognizing that right, not for
indemnifying the plaintiff for any loss suffered.
60. SPOUSES FERNANDO v. NORTHWEST AIRLINES

G.R. Nos. 212038 and 212043. February 8, 2017.
MAIN TOPIC: Aviation Laws and Warsaw Convention
DOCTRINE: As passengers, they do not merely contract for transportation as they are entitled to be protected against
personal misconduct, injurious language, indignities, and abuses from such employees. So, any rule or discourteous
conduct on the part of employees towards a passenger gives the latter an action for damages against the carrier.
It is important to note that an air-carrier has a business that is mainly with the travelling carrier and thus the contract
of air carriage generates a relation attended with a public duty. Thus, neglect or malfeasance of the carrier’s employees,
naturally, could give a ground for an action for damages.
FACTS:
Spouses Fernando are frequent flyers of Northwest Airlines and holders of Elite Platinum World Perks Card,
the highest category given to frequent flyers of the carrier. The Spouses filed a case for breach of contract of carriage
against Northwest based on two incidents: 1) when Jesus Fernando arrived at Los Angeles (LA) Airport on December
20, 2001, and 2) when the Fernandos were to depart from the LA Airport on January 29, 2002.
The first incident (December 20, 2001): When Jose Fernando arrived at the LA Airport via Northwest
Airlines, he was asked by the Immigration Officer at the Immigration Counter to have his return ticket verified and
validated. After Officers repeatedly said that the ticket has been used and therefore invalid, he was brought to the
interrogation room of the Immigration and Naturalization Services (INS) where he was humiliated for two hours of
interrogation. When he was finally cleared by the Immigration Officer, he was only granted a 12-day stay in the US,
instead of being granted the usual 6 month stay.
The second incident (January 29, 2002): When the Spouses Fernando were about to board the plane back to
the Philippines, Northwest supervisor Linda Tang stopped them and demanded the spouses to present their paper
tickets, which they failed to present because Northwest issued them electronic tickets attached to their boarding passes.
They were humiliated by Linda Tang when she rudely pulled them out of the queue in front of the other passengers.
They were told that they need to produce their credit cards and pay for new tickets, otherwise, Northwest would order
their luggage loaded off from the plain. After the Spouses were able to verify their ticket with the Northwest Airline
Ticket counter, the plane had already departed. Thus, they were only depart a day after.
The RTC rendered judgment against Northwest Airlines and the CA affirmed the decision. However, they
ruled out bad faith on the part of Northwest.
ISSUE:
● Whether or not Northwest Airlines is liable to the Spouses Fernando for breach of contract of carriage.
RULING:
Yes, Northwest Airlines is liable to the Spouses for breach of contract of carriage. As held in Alitalia Airways
v. CA, a contract of carriage arises the moment an airline issues a ticket to a passenger confirmed for a particular flight
on a certain date. Thus, the passenger has every right to expect that he would fly on that flight and on that date.
Otherwise, the carrier opens itself to a suit for breach of contract of carriage.
In a breach of contract of carriage, the aggrieved party only has to prove is the existence of the contract and
the fact of its non-performance by the carrier. In the case at bar, the Fernandos only had to prove the existence of
the contract and the fact of its non-performance by Northwest, as carrier, in order to be awarded compensatory and
actual damages. Hence, when Northwest confirmed the Fernandos as passengers on the February 29, 2002 flight, the
existence of a contract of carriage between the two parties were proven. Further, the fact of non-performance by
Northwest of its obligation as a common carrier was also proven.
However, there was bad faith on the part of Northwest Airlines. As passengers, they do not merely
contract for transportation as they are entitled to be protected against personal misconduct, injurious language,
indignities and abuses from such employees. So any rule or discourteous conduct on the part of employees towards
a passenger gives the latter an action for damages against the carrier. In the case at bar, during the first incident,
the failure to promptly verify the validity of the ticket connotes bad faith on the part of Northwest. Bad faith imports
a dishonest purpose or some moral obliquity and conscious doing of a wrong. It means breach of a known duty through
some motive, interest or ill will that partakes of the nature of fraud. A finding of bad faith entitles the offended party
to moral damages. As to the second incident, there was likewise fraud or bad faith on the part of Northwest when it
did not allow the Fernandos to board their flight for Manila on January 29, 2002, in spite of confirmed tickets. At the
presence of other passengers, Northwest Personnel refused to simply verify their electronic ticket in her computer and
instead requested them to pay for new tickets. However, after doing everything they were asked to do, the plane they
were supposed to board had already departed, therefore, delaying their arrival in the Philippines.
Therefore, a contract to transport passengers is quite different in kind and degree from any other contractual
relation because of the relation which an air-carrier sustains with the public as its business is mainly with the
travelling public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage,
therefore, generates a relation attended with a public duty. Neglect or malfeasance of the carrier's employees, naturally,
could give ground for an action for damages.
61. Phil-Nippon Kyoei Corp., v. Gudelosao

G.R. No. 181375, July 13, 2016
MAIN TOPIC: Maritime Law
DOCTRINE:
The limited liability rule is provided in Articles 587, 590 and 837 under Book III of the Code of Commerce.
These articles intend to limit the liability of the shipowner or agent to the value of the vessel, its appurtenances and
freightage earned in the voyage, provided that the owner or agent abandons the vessel. When the vessel is totally lost,
in which case abandonment is not required because there is no vessel to abandon, the liability of the shipowner or
agent for damages is extinguished. Nonetheless, the limited liability rule is not absolute and is without exceptions. It
does not apply in cases: (1) where the injury or death to a passenger is due either to the fault of the shipowner, or to
the concurring negligence of the shipowner and the captain; (2) where the vessel is insured; and (3) in workmen's
compensation claims.
FACTS:
Phil-Nippon Kyoei, Corp. (Petitioner), a domestic shipping corporation, purchased a "Ro-Ro"
passenger/cargo vessel "MV Mahlia" in Japan. For the vessel’s one month conduction voyage from Japan to the
Philippines, petitioner, as local principal, and Top Ever Marine Management Maritime Co., Ltd. (TMCL), as foreign
principal, hired Edwin C. Gudelosao, Virgilio A. Tancontian, and six other crew members.They were hired through
the local manning agency of TMCL, Top Ever Marine Management Philippine Corporation (TEMMPC).
Consequently, TEMMPC and eight crewmembers signed separate contracts of employment. Petitioner also secured a
Marine Insurance Policy from SSSICI over the vessel against loss, damage, and third party liability or expense, arising
from the occurrence of the perils of the sea for the voyage of the vessel from Onomichi, Japan to Batangas, Philippines.
The policy includes Personal Accident Policies for the eight crew members.
Sometime in February 2003, while still within Japanese waters, the vessel sank due to extreme bad weather
conditions. Only Chief Engineer Nilo Macasling survived the incident while the rest of the crewmembers, including
Gudelosao and Tancontian, perished. Hence, respondents, as heirs and beneficiaries of Gudelosao and Tancontian,
filed separate complaints for death benefits and other damages against petitioner, TEMMPC, Capt. Orbeta, TMCL,
and SSSICI with the Arbitration Branch of the National Labor Relations Commission (NLRC).
The Labor Arbiter rendered a decision finding solidary liability among petitioner, TEMMPC, TMCL and
Capt. Orbeta.The LA also found SSSICI liable to the respondents for the proceeds of the Personal Accident Policies
and attorney's fees. The LA, however, ruled that the liability of petitioner shall be deemed extinguished only upon
SSSICI's payment of the insurance proceeds.
On appeal, NLRC modified the LA Decision absolving the petitioner, TEMMPC and TMCL and Capt.
Orbeta from any liability based on the limited liability rule. It, however, affirmed SSSICI's liability after finding that
the Personal Accident Policies answer for the death benefit claims under the Philippine Overseas Employment
Administration Standard Employment Contract (POEA-SEC).
Upon filing a petition for certiorari before the Court of Appeals, the CA reinstated the LA decision. The
CAfound that the NLRC erred when it ruled that the obligation of petitioner, TEMMPC and TMCL for the payment
of death benefits under the POEA-SEC was ipso facto transferred to SSSICI upon the death of the seafarers. TEMMPC
and TMCL cannot raise the defense of the total loss of the ship because its liability under POEA-SEC is separate and
distinct from the liability of the shipowner.Further, the benefits being claimed are not dependent upon whether there
is total loss of the vessel, because the liability attaches even if the vessel did not sink. Thus, it was error for the NLRC
to absolve TEMMPC and TMCL on the basis of the limited liability rule
Hence, this petition.
ISSUE:
● Whether or not the doctrine of real and hypothecary nature of maritime law (also known as the limited liability
rule) applies in favor of petitioner.
RULING:
● NO. The limited liability rule is provided in Articles 587, 590 and 837 under Book III of the Code of Commerce.
These articles intend to limit the liability of the shipowner or agent to the value of the vessel, its appurtenances
and freightage earned in the voyage, provided that the owner or agent abandons the vessel. When the vessel is
totally lost, in which case abandonment is not required because there is no vessel to abandon, the liability of the
shipowner or agent for damages is extinguished. Nonetheless, the limited liability rule is not absolute and is
without exceptions. It does not apply in cases: (1) where the injury or death to a passenger is due either to the
fault of the shipowner, or to the concurring negligence of the shipowner and the captain; (2) where the vessel is
insured; and (3) in workmen's compensation claims.
As ruled in the case of Abueg v. San Diego, the limited liability rule found in the Code of Commerce is
inapplicable in a liability created by statute to compensate employees and laborers, or the heirs and dependents,
in cases of injury received by or inflicted upon them while engaged in the performance of their work or
employment. This is because such compensation has nothing to do with the provisions of the Code of Commerce
regarding maritime commerce. It is an item in the cost of production which must be included in the budget of
any well-managed industry.
In the present case, the benefits under the POEA-SEC are given when the employee dies due to a work-related
cause during the term of his contract. These death benefits under the POEA-SEC are intended to be separate and
distinct from, and in addition to, whatever benefits the seafarer is entitled to under Philippine laws, including
those benefits which may be claimed from the State Insurance Fund.
Thus, the claim for death benefits under the POEA-SEC is the same species as the workmen's compensation
claims under the Labor Code - both of which belong to a different realm from that of Maritime Law. Therefore,
the limited liability rule does not apply to petitioner's liability under the POEA-SEC.
62. DE LA TORRE V. THE HON. COURT OF APPEALS

G.R. No. 160088, July 13, 2011
Student Number:194043
DOCTRINE: The only person who could avail of the Limited Liability Rule is the shipowner – he is the very
person whom the Rule has been conceived to protect; charterers cannot invoke this as a defense.
FACTS:
Crisostomo G. Concepcion (Concepcion) owned the vessel LCT-Josephine. He entered into a Preliminary
Agreement with Roland de la Torre (Roland), wherein Concepcion agreed that the LCT Josephine would be chartered
after its dry-docking and repair. Concepcion and the Philippine Trigon Shipyard Corporation (PTSC), represented by
Roland, entered into a Contract of Agreement, wherein the latter would charter LCT-Josephine. Subsequently,
PTSC/Roland sub-chartered LCT Josephine to Trigon Shipping Lines (TSL), a single proprietorship owned by
Roland’s father, Agustin de la Torre (Agustin). TSL, this time represented by Roland per Agustin’s Special Power of
Attorney, sub-chartered LCT-Josephine to Ramon Larrazabal (Larrazabal) for the transport of cargo consisting of sand
and gravel to Leyte.
During the unloading of the vessel’s cargo in Leyte, LCT-Josephine sank. Concepcion demanded that
PTSC/Roland refloat LCT-Josephine. The latter assured Concepcion that negotiations were underway for the
refloating of his vessel, but this did not materialize. This prompted Concepcion to file a complaint for Sum of Money
and Damages against PTSC and Roland.
The Regional Trial Court (RTC) declared that the efficient cause of the sinking of the LCT-Josephine was
the improper lowering or positioning of the ramp, which was well within the charge or responsibility of the captain
and crew of the vessel. The Court of Appeals (CA) affirmed. The charterers and sub- charterers insist the application
of the Limited Liability Rule to them.
ISSUE:
1. Whether the Limited Liability rule applies to petitioner De La Torre
2. Whether petitioner Agustin De La Torre is solidarily liable with PTSC and Roland De La Torre for the loss
of the LCT Josephine
RULING:
1. No. The Limited Liability Rule does not apply to De La Torre as he is not an owner or co-owner of the LCT
Josephine.
The Limited Liability Rule under the Code of Commerce has been explained to be that of the real and
hypothecary doctrine in maritime law where the shipowner or ship agent’s liability is held as merely co-extensive with
his interest in the vessel such that a total loss thereof results in its extinction. In this jurisdiction, this rule is provided
in three articles of the Code of Commerce.
Article 837 specifically applies to cases involving collision which is a necessary consequence of the right to
abandon the vessel given to the shipowner or ship agent under Article 587. Similarly, Article 590 is a reiteration of
Article 587, only this time the situation is that the vessel is co-owned by several persons. Obviously, the forerunner
of the Limited Liability Rule under the Code of Commerce is Article 587. Now, the latter is quite clear on which
indemnities may be confined or restricted to the value of the vessel pursuant to the said Rule, and these are the
indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods which
he loaded on the vessel. Thus, what is contemplated is the liability to third persons who may have dealt with the
shipowner, the agent or even the charterer in case of demise or bareboat charter.
The only person who could avail of this is the shipowner, Concepcion. He is the very person whom the
Limited Liability Rule has been conceived to protect. The petitioners cannot invoke this as a defense. Concepcion, as
the real shipowner, is the one who is supposed to be supported and encouraged to pursue maritime commerce. Thus,
it would be absurd to apply the Limited Liability Rule against him who, in the first place, should be the one benefitting
from the said rule. Even if the contract is for a bareboat or demise charter where possession, free administration and
even navigation are temporarily surrendered to the charterer, dominion over the vessel remains with the shipowner.
Ergo, the charterer or the sub-charterer, whose rights cannot rise above that of the former, can never set up the Limited
Liability Rule against the very owner of the vessel.
Therefore, The Limited Liability Rule does not apply to De La Torre as he is not the owner of the vessel.
2. Yes. Agustin is solidarily liable with PTSC and Roland De La Tome for the loss of the vessel.
Article 1651 of the Civil Code provides: Without prejudice to his obligation toward the sublessor, the
sublessee is bound to the lessor for all acts which refer to the use and preservation of the thing leased in the manner
stipulated between the lessor and the lessee. (1551)
Although he was never privy to the contract between PTSC and Concepcion, he remained bound to preserve
the chartered vessel for the latter. Despite his non-inclusion in the complaint of Concepcion. it was deemed amended
so as to include him because, despite or in the absence of that formality of amending the complaint to include him, he
still had his day in court as he was in fact impleaded as a third-party defendant by Roland - the same person who
represented him in the Contract of Agreement with Larrazabal. Since the purpose of formally impleading a party is to
assure him a day in court, once due process of law has in fact been accorded a litigant, whatever the imperfection in
form, the real litigant may be held liable as a party.
Hence, Agustin De La Torre is jointly and severally liable for the loss of the vessel with the defendants in
this case.
63. ACE NAVIGATION v. FGU INSURANCE CORP.

G.R. No. 171591. June 25, 2012
DOCTRINE: By ship agent is understood the person entrusted with the provisioning of a vessel, or who
represents her in the port in which she may be found. ACENAV was not a ship agent but a mere agent of CARDIA.
An agent is not personally liable to the party with whom he contracts, unless he expressly binds himself or exceeds
the limits of his authority without giving such party sufficient notice of his powers.
FACTS:
Cardia shipped on board M/V Pakarti Tiga 165,200 bags of Grey Portland Cement to be delivered to its
consignee Heindrich. It was insured with FGU Insurance. The subject vessel is owned by Pakarti which it chartered
to Shinwa. Shinwa, representing itself as the owner of the vessel, entered into a charter party contract with Sky, an
agent of Kee Yeh Maritime, which further chartered it to Regency. Thus, it was REGENCY that directly dealt with
consignee HEINDRICH, and accordingly, issued Clean Bill of Lading No. SM-1. The vessel arrived but upon
inspection by Heindrich and Ace Navigation, as agent of Cardia, it was found that out of the 165,200 bags of cement,
43,905 bags were in bad order and condition. FGU paid Heindrich and became subrogated to the rights and causes of
actions accruing to Heindrich. Hence, it filed a complaint for damages against Regency, Pakarti, Sky, and Ace
Navigation. The RTC dismissed the complaint. On appeal, the CA found Pakarti, Shinwa, Kee Yeh, and Sky solidarily
liable for 70% of respondent’s claim, with the remaining 30% to be shouldered solidarity by CARDIA and its agent,
Ace Navigation. Before the SC, only the petition of Ace Navigation remained for the Court’s resolution. Maintaining
that it was not a party to the bill of lading, ACENAV asserts that it cannot be held liable for the damages sought to be
collected by the respondents. It also alleged that since its principal, CARDIA, was not impleaded as a party-
defendant/respondent in the instant suit, no liability can therefore attach to it as a mere agent.
ISSUE:
● Whether or not Ace Navigation may be held liable to the respondents for 30% of their claim
RULING:
● NO. Article 586 of the Code of Commerce provides: “xxx By ship agent is understood the person entrusted
with the provisioning of a vessel, or who represents her in the port in which she may be found.” Records
show that the obligation of ACENAV was limited to informing the consignee HEINDRICH of the arrival of
the vessel in order for the latter to immediately take possession of the goods. No evidence was offered to
establish that ACENAV had a hand in the provisioning of the vessel or that it represented the carrier, its
charterers, or the vessel at any time during the unloading of the goods. Clearly, ACENAV's participation was
simply to assume responsibility over the cargo when they were unloaded from the vessel. Hence, no
reversible error was committed by the courts a quo in holding that ACENAV was not a ship agent within the
meaning and context of Article 586 of the Code of Commerce, but a mere agent of CARDIA, the shipper.
An agent is not personally liable to the party with whom he contracts, unless he expressly binds himself or
exceeds the limits of his authority without giving such party sufficient notice of his powers.
64. LTFRB v. G.V. Florida Transport, Inc.,

G.R. No. 213088. June 28, 2017
MAIN TOPIC: Public Utilities Laws
DOCTRINE: The LTFRB has the power to suspend or revoke any certificate issued under the provisions of the Public
Service Act whenever the holder thereof has violated or willfully and contumaciously refused to comply with any
order rule or regulation of the Public Service Commission or any provision of the Public Service Act.
FACTS:
At around 7:20 in the morning of February 7, 2014, a vehicular accident occurred at Sitio Paggang, Barangay Talubin,
Bontoc, Mountain Province involving a public utility bus coming from Sampaloc, Manila, bound for Poblacion Bontoc
and bearing a "G.V. Florida" body mark with License Plate No. TXT-872. The mishap claimed the lives of fifteen
(15) passengers and injured thirty-two (32) others. An initial investigation report, which came from the Department
of Transportation and Communications of the Cordillera Administrative Region (DOTC-CAR), showed that based on
the records of the Land Transportation Office (LTO) and herein petitioner, License Plate No. TXT-872 actually
belongs to a different bus owned by and registered under the name of a certain Norberto Cue, Sr. (Cue) under
Certificate of Public Convenience (CPC) Case No. 2007-0407 and bears engine and chassis numbers LX004564 and
KN2EAM12PK004452, respectively; and that the bus involved in the accident is not duly authorized to operate as a
public transportation. Petitioner, pursuant to its regulatory powers, immediately issued an Order preventively
suspending, for a period not exceeding thirty (30) days, the operations of ten (10) buses of Cue under its CPC Case
No. 2007-0407, as well as respondent's entire fleet of buses, consisting of two hundred and twenty-eight (228) units,
under its twenty-eight (28) CPCs. Respondent and Cue were ordered to show cause why their respective CPCs should
not be suspended, canceled, or revoked due to the said accident. In its Incident Report, the DOTC stated that the
license plate number attached to the bus indeed belongs to a different unit owned by Cue; that the wrecked bus was
registered as private with license plate no. UDO 762; and that the registered owner is Dagupan Bus Co., Inc. while
the previous owner is respondent bus company. Dagupan Bus Co. filed its Answer claiming that it is not the owner of
the bus which was involved in the accident. It claimed that it entered into a Memorandum of Agreement with G.V.
Florida which facilitated the exchange of its CPC covering the Cagayan route for the CPC of Florida covering the
Bataan route; and that the subsequent registration of the subject bus in the name of Dagupan Bus is a mere preparatory
act on the part of respondent to substitute the old authorized units of Dagupan Bus plying the Cagayan route which
are being operated under the CPC which has been exchanged with respondent. Meanwhile, Cue filed his Position
Paper contending that the license plate was issued by the LTO to one among 10 public utility buses under CPC No.
2007-020 issued to him as operator of the Mountain Province Cable Tours; the application for the extension of the
validity of the said CPC is pending with petitioner; the subject CPC, together with all authorized units had been sold
to G.V. Florida; and Cue completely ceded the operation and maintenance of the subject buses in favor of respondent.
On the other hand, respondent alleged that it indeed bought Cue’s CPC and the 10 public utility buses operating under
the said CPC, including the one which bears License Plate No. TXT-872; since Cue’s buses were already old and
dilapidated, and not wanting to stop its operations to the detriment of the riding public, it replaced theses buses with
new units using license plates attached to the old buses, pending approval by petitioner of the sale and transfer of
Cue’s CPC in its favor; and it exercised utmost good faith in deciding to dispatch the ill-fated bus notwithstanding the
absence of prior adequate compliance with the requirements that will constitute its operation legal. Petitioner rendered
its Decision cancelling Cue’s CPC No. 2007-0407 and suspending the operation of respondent’s 186 buses under 28
of its CPCs for a period of 6 months. Respondent then filed a petition with the Court of Appeals. The CA partially
granted the petition. The penalty of suspension for a period of 6 months against all existing 28 CPCs of petitioner was
reversed and set aside. Hence, the present petition.
ISSUE:
● Whether or not LTFRB has the power to suspend the fleet of a public utility that violates the law, to the
damage of the public.
RULING:
YES. The LTFRB has the power to suspend the fleet of a public utility that violates the law, to the damage of the
public. The Public Service Act (Commonwealth Act No. 146) provides that the Commission shall have power to
suspend or revoke any certificate issued under the provisions of this Act whenever the holder thereof has violated or
willfully and contumaciously refused to comply with any order rule or regulation of the Commission or any provision
of this Act: Provided, That the Commission, for good cause, may prior to the hearing suspend for a period not to
exceed thirty days any certificate or the exercise of any right or authority issued or granted under this Act by order of
the Commission, whenever such step shall in the judgment of the Commission be necessary to avoid serious and
irreparable damage or inconvenience to the public or to private interests. Further, Section 5(b) of E.O. 202 states that
the LTFRB has the power to issue, amend, revise, suspend or cancel Certificates of Public Convenience or permits
authorizing the operation of public land transportation services provided by motorized vehicles, and to prescribe the
appropriate terms and conditions therefor. The law gives to the LTFRB ample power and discretion to decree or
refuse the cancellation of a CPC issued to an operator as long as there is evidence to support its action.
In the present case, respondent is guilty of several violations of the law, namely: lack of petitioner’s approval of the
sale and transfer of the CPC which respondent bought from Cue; operating the ill-fated bus under its name when the
same is registered under the name of Dagupan Bus Co., Inc.; attaching a vehicle license plate to the ill-fated bus when
such plate belongs to a different bus owned by Cue; and operating the subject bus under the authority of a different
CPC. The Court agreed with petitioner that its power to suspend the CPCs issued to public utility vehicles depends on
its assessment of the gravity of the violation, the potential and actual harm to the public, and the policy impact of its
own actions. In this regard, the Court gave due deference to petitioner's exercise of its sound administrative discretion
in applying its special knowledge, experience and expertise to resolve respondent's case. Lastly, the suspension of
respondent's CPCs finds relevance in light of the series of accidents met by different bus units owned by different
operators in recent events. This serves as a reminder to all operators of public utility vehicles that their franchises and
CPCs are mere privileges granted by the government. As such, they are sternly warned that they should always keep
in mind that, as common carriers, they bear the responsibility of exercising extraordinary diligence in the
transportation of their passengers. Moreover, they should conscientiously comply with the requirements of the law in
the conduct of their operations, failing which they shall suffer the consequences of their own actions or inaction.
_____________________________
65. Tawang Multi-Purpose Cooperative vs. La Trinidad Water District

G.R. No. 166471, March 22, 2011
Student No: 194169
MAIN TOPIC: Public Utilities Law
DOCTRINE:
The President, Congress and the Court cannot create directly franchises for the operation of a public utility
that are exclusive in character. The 1935, 1973 and 1987 Constitutions expressly and clearly prohibit the creation of
franchises that are exclusive in character. Plain words do not require explanation. The 1935, 1973 and 1987
Constitutions are clear — franchises for the operation of a public utility cannot be exclusive in character. The 1935,
1973 and 1987 Constitutions expressly and clearly state that, “nor shall such franchise be exclusive in character.”
There is no exception.
FACTS:
Tawang Multi-Purpose Cooperative is a cooperative, registered with the Cooperative Development
Authority, and organized to provide domestic water services in Barangay Tawang, La Trinidad, Benguet. La Trinidad
Water District, on the other hand, is a local water utility created under PD 198, authorized to supply water for
domestic, industrial and commercial purposes within the municipality of La Trinidad, Benguet.
TMPC filed with the National Water Resources Board (NWRB) an application for a certificate of public
convenience to operate and maintain a waterworks system in Barangay Tawang. LTWD opposed the application,
claiming that under Sec. 47 of PD 198, its franchise is exclusive. The NWRB approved TMPC’s application for a
CPC, holding that LTWD’s franchise cannot be exclusive since exclusive franchises are unconstitutional and found
that TMPC is legally and financially qualified to operate and maintain a waterworks system.
LTWD filed a motion for reconsideration but was denied. It appealed to the RTC.
The lower court cancelled TMPC’s CPC, holding that Sec. 47 is valid. The RTC held that Sec. 47 states that
the Constitution used the term “exclusive in character.” TMPC filed a motion for reconsideration but was denied.
Hence, this present petition.
ISSUE:
● Whether or not the lower court committed error in holding Section 47 of Presidential Decree 198’s validity.
RULING:
● YES, the lower court committed error in holding Section 47 of Presidential Decree 198’s validity.
● The Supreme Court ruled that the President, Congress, and the Court cannot create indirectly franchises that
are exclusive in character by allowing the Board of Directors (BOD) of a water district and the Local Water
Utilities Administration (LWUA) to create franchises that are exclusive in character.
● The Court also ruled that the 1935, 1973 and 1987 Constitutions expressly prohibit the creation of franchises
that are exclusive in character. They uniformly command that "nor shall such franchise be exclusive in
character." This constitutional prohibition is absolute and accepts no exception. On the other hand, PD No.
198, as amended, allows the BOD of LTWD and LWUA to create franchises that are exclusive in character.
Section 47 states that:
"No franchise shall be granted to any other person or agency unless and except to the extent that the board of
directors consents thereto subject to review by the Administration."
● Section 47 creates a glaring exception to the absolute prohibition in the Constitution. Clearly, it is patently
unconstitutional.
● In case of conflict between the Constitution and a statute, the Constitution always prevails because the
Constitution is the basic law to which all other laws must conform to. The duty of the Court is to uphold the
Constitution and to declare void all laws that do not conform to it.
● Therefore, the lower court committed error in holding Section 47 of Presidential Decree 198’s validity.
66. ABS-CBN BROADCASTING CORP. V.

PHILIPPINE MULTI-MEDIA SYSTEM INC. (PMSI)
G.R. No. 175769-70. January 19, 209
MAIN TOPIC: Public Utilities Laws
DOCTRINE: The imposition of the must-carry rule is within the NTC’s power to promulgate rules and regulations, as public
safety and interest may require, to encourage a larger and more effective use of communications, radio and television broadcasting
facilities, and to maintain effective competition among private entities in these activities whenever the Commission finds it
reasonably feasible
FACTS:
ABS-CBN is licensed under the laws of the Republic of the Philippines to engage in television and radio
broadcasting. It broadcasts television programs by wireless means to Metro Manila and nearby provinces, and by
satellite to provincial stations through Channel 2 on Very High Frequency (VHF) and Channel 23 on Ultra High
Frequency (UHF). The programs aired over Channels 2 and 23 are either produced by ABS-CBN or purchased from
or licensed by other producers.
Philippine Multi-Media System, Inc. (PMSI) is the operator of Dream Broadcasting System. It delivers
digital direct-to-home (DTH) television via satellite to its subscribers all over the Philippines. Herein individual
respondents, Cesar G. Reyes, Francis Chua, Manuel F. Abellada, Raul B. De Mesa, and Aloysius M. Colayco, are
members of PMSI’s Board of Directors.
PMSI was granted a legislative franchise under Republic Act No. 8630 on May 7, 1998 and was given a
Provisional Authority by the National Telecommunications Commission (NTC) on February 1, 2000 to install,
operate and maintain a nationwide DTH satellite service. When it commenced operations, it offered as part of its
program line-up ABS-CBN Channels 2 and 23, NBN, Channel 4, ABC Channel 5, GMA Channel 7, RPN Channel
9, and IBC Channel 13, together with other paid premium program channels.
However, on April 25, 2001, ABS-CBN demanded for PMSI to cease and desist from rebroadcasting
Channels 2 and 23. On April 27, 2001. ABS-CBN filed with the IPO a complaint and alleged that PMSI’s
unauthorized rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights and copyright.
PMSI filed with the IPO a Manifestation reiterating that it is subject to the must-carry rule under
Memorandum Circular No. 04-08-88. It also submitted a letter of the NTC Commissioner to PMSI stating that both
DTH pay television and cable television services are broadcast services, the only difference being the medium of
delivering such services (i.e. the former by satellite and the latter by cable). Both can carry broadcast signals to the
remote areas, thus enriching the lives of the residents thereof through the dissemination of social, economic,
educational information and cultural programs.
The Director-General of the IPO found that PMSI is not engaged in rebroadcasting and thus cannot be
considered to have infringed ABS-CBN’s broadcasting rights and copyright. PMSI’s services are similar to a cable
television system because the services it renders fall under cable “retransmission” under the IP Code.
Before the SC, ABS-CBN contends that PMSI’s unauthorized rebroadcasting of Channels 2 and 23 is an
infringement of its broadcasting rights and copyright under the Intellectual Property Code (IP Code) and that that
Memorandum Circular No. 04-08-88 excludes DTH satellite television operators.
PMSI contends that compliance with Memorandum Circular No. 04-08-88 should be considered
manifestation of lack of intent to commit infringement. The NTC, it its reply to a letter sent by PMSI, said that
PMSI is covered by the said circular. The mandatory coverage provision under Section 6.2 of said Memorandum
Circular, requires all cable television system operators, operating in a community within the Grade “A” or “B”
contours to “must-carry” the television signals of the authorized television broadcast stations.
The NTC explained that both DTH and cable television services are of a similar nature, the only difference
being the medium of delivering such services. They can carry broadcast signals to the remote areas and possess the
capability to enrich the lives of the residents thereof through the dissemination of social, economic, educational
information and cultural programs. Consequently, while the Memorandum Circular refers to cable television, it
should be understood as to include DTH television which provides essentially the same services.
ISSUE:
Whether or not the NTC has authority to decide that PMSI is covered by the “must-carry rule” under NTC
Memorandum Circular No. 4-08-88.
RULING:
YES, the NTC has authority to decide that PMSI is covered by the “must-carry rule” under NTC
In Eastern Telecommunications Philippines, Inc. v. International Communication Corporation, the Court
held that, the NTC, being the government agency entrusted with the regulation of activities coming under its special
and technical forte, and possessing the necessary rule-making power to implement its objectives, is in the best
position to interpret its own rules, regulations and guidelines. The Court has consistently yielded and accorded great
respect to the interpretation by administrative agencies of their own rules unless there is an error of law, abuse of
power, lack of jurisdiction or grave abuse of discretion clearly conflicting with the letter and spirit of the law.
In a letter to PMSI, the NTC said that the Memorandum Circular includes from its coverage DTH
television services such as those provided by PMSI. Section 6.2 of the Memorandum Circular or the “must-carry
rule” requires all cable television system operators operating in a community within Grade “A” or “B” contours to
carry the television signals of the authorized television broadcast stations.
Hence, the NTC has authority to decide that PMSI is covered by the “must-carry rule” under NTC
67. Surigao Del Norte Electricity Cooperative, Inc. (SURNECO) v. Energy

Regulatory Commission
G.R. No. 183626 October 4, 2010
DOCTRINE: The regulation of rates to be charged by public utilities is founded upon the police powers of the
State and statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof.
When private property is used for a public purpose and is affected with public interest, it ceases to be juris
privati only and becomes subject to regulation. The regulation is to promote the common good. Submission to
regulation may be withdrawn by the owner and discontinuing use; but as long as the use of property is
continued, the same is subject to public regulation (Republic of the Philippines v. Manila Electric Company).
FACTS:
Surigao Del Norte Electric Cooperative, Inc. (SURNECO) is a rural electric cooperative organized and existing by a
virtue of Presidential Decree No. 269. SURNECO together with other 33 rural cooperatives in Mindanao filed a
petition with the Energy Regulatory Board (ERB) for the approval of the formula for automatic cost adjustment and
adoption of the National Power Corporation (NAPOCOR) restructured rate adjustment to comply with RA No. 7832.
On February 19, 1997, the ERB granted SURNECO and other petitioners’ provisional authority to use and implement
the Purchased Power Adjustment (PPA) formula pursuant to the mandatory provisions of RA No. 7832 and its IRR.
The ERB directed the petitioners to submit relevant and pertinent documents for the Board’s review, verification and
confirmation.
The passage of RA No. 9136 led to the creation of the Energy Regulatory Commission (ERC), which replaced the
ERB. With that, all pending cases before the ERB were transferred to the ERC. On June 17, 2003, the ERC clarified
ERB’s earlier policy regarding the PPA formula. The petitioners filed their respective motions for clarification and/or
consideration. So the ERC issued an Order stating that the PPA was a cost-recovery mechanism, not a revenue
generating scheme and that the distribution utilities or the electric cooperatives must recover from their customers
only the actual cost of purchased power.
Afterwards, the ERC issued an Order mandating that the discounts earned by SURNECO from its power supplier be
deducted from the computation of the power cost. The ERC held that SURNECO had an over-recovery in the amount
of P18.19M. SURNECO was ordered to refund the amount of P0.0500/kwh to its Main Island customers starting the
next billing cycle.
SURNECO filed a petition for review with the CA. The CA denied SURNECO’s petition. SURNECO posited that
the National Electric Administration (NEA), through NEA Memorandum No. 1-A, authorized it to adopt a multiplier
scheme as the method to recover system loss. SURNECO claimed that this cannot be abrogated, revoked, or
superseded by any order, resolution, or issuance by the ERC prescribing a certain formula to implement the
recoverable rate of system loss under RA No. 7832.
ISSUE:
● Was SURNECO correct that it can adopt a multiplier scheme as the method to recover system loss pursuant
to NEA Memorandum No. 1-A?
RULING:
● NO.
The Supreme Court held in Republic of the Philippines v. Manila Electric Company that the regulation of rates to be
charged by public utilities is founded upon the police powers of the State and statutes prescribing rules for the control
and regulation of public utilities are a valid exercise thereof. When private property is used for a public purpose and
is affected with public interest, it ceases to be juris privati only and becomes subject to regulation. The regulation is
to promote the common good. Submission to regulation may be withdrawn by the owner and discontinuing use; but
as long as the use of property is continued, the same is subject to public regulation.
First, The ERC, in directing SURNECO to refund its over-recoveries based on PPA policies, which only ensured that
the PPA mechanism remains a purely cost-recovery mechanism and not a revenue-generating scheme for the electric
cooperatives, the ERC merely exercised its authority to regulate and approve the rates imposed by the electric
cooperatives on the consumers. The ERC simply performed its mandate to protect the public interest imbued in those
rates.
Second, assuming that the ERC issuances violated the NEA and the ADB covenant (regarding the loan contract that
NEA entered into with ADB, that the proceeds of such loan are intended for use of qualified electric cooperatives),
the contract had to yield to the greater authority of the State’s exercise of police power.
Third, the PPA formula provided in the IRR of RA No. 7832 was only a model to be used as a guide by the electric
cooperatives in proposing their own formula for approval by the ERB. The IRR left to the ERC, the authority to
approve and oversee the implementation of the electric cooperatives’ PPA formula in the exercise of its rate-making
power over them.
Fourth, the PPA confirmation necessitated a review of the electric cooperatives’ monthly documentary submissions
to substantiate their PPA charges. The cooperatives were duly informed of the need for other required supporting
documents and were allowed to submit them accordingly.
Therefore, SURNECO was not correct, regulation rates are subject to the State’s exercise of police power.
68. Initiatives For Dialogue and Empowerment Through Alternative Legal

Services, Inc. (IDEALS, Inc.) v. Power Sector Assets and Liabilities
Management Corp. (PSALM)
G.R. No. 192088. October 09, 2012
DOCTRINE: The electric power industry may be a business affected with public interest, but it is open for
privatization so it cannot be considered a public utility. Moreover, foreign investors are allowed to engage in such
industry.
FACTS:
PSALM is a government-owned and controlled corporation and it’s created by the Electric Power Industry Reform
Act of 2001 (EPIRA) with the purpose to manage the orderly disposition of the sale and privatization of the generation
assets and other assets of the National Power Corporation (NPC). The objective of PSALM is to liquidate NPC’s
financial obligations in order to improve its electric power industry. Then, PSALM started the privatization of the
2460megawatt (MW) AHEPP which is a hydroelectric powerplant adjacent to the Angat Dam and built as a part of
the Angat Complex. Due to its multi-operational design of the Angat Complex, the following government agencies
are involved: the NPC, the National Water Resources Board (NWRB), the Metropolitan Waterworks and Sewerage
System (MWSS), the National Irrigation Administration (NIA), and the Philippine Atmospheric, Geophysical, and
Astronomical Services Administration (PAG-ASA). The Board of Directors of PSALM made a bidding package
requiring the highest bidder to (1) observe the priority of water usage under Philippine Law: (2) enter into operations
and maintenance agreement with PSALM for Non-Power components; and (3) enter into the water protocol agreement
with PSALM and the other various government agencies involved. Thereafter, the Board of Directors of PSALM
approved the bidding procedures of AHEPP and eventually, K-Water, a foreign corporation won as the highest bidder.
When the Board of Directors approved the issuance of the notice of award to K-Water, IDEALS, Inc., and other
petitioners filed a petition for temporary restraining order with the Supreme Court against the bidding of AHEPP to
K-water on the following grounds: (1) violating the constitutional right to have access over public information by not
disclosing the bidding process of AHEPP; (2) not offering the sale of AHEPP to MWSS which is the co-owner of
AHEPP, and (3) violating the constitutional provisions concerning the Filipino citizen’s rights over the utilization and
appropriation of water as a natural resource given that the highest bidder, K-Water is a foreign Corporation. Then, the
Supreme Court granted the status quo ante order. In response, PSALM filed its comment with urgent motion to lift
the status quo ante order denying the grounds by claiming that the sale of the AHEPP is necessary for the privatization
of NPC’s assets and that the water rights under the 1987 Constitution remains to be protected despite the highest
bidder is a foreign corporation since the sale involved is a hydroelectric powerplant. The Angat Dam remains to be
owned and controlled by the various government agencies mentioned.
ISSUE:
● Whether or not the bidding of AHEPP to K-Water violates the 1987 Constitution specifically on the
preferential rights of the Filipinos over the appropriation and utilization of water as a natural resource?
RULING:
● No. The bidding of AHEPP to K-Water does not violate the 1987 Constitution specifically on the preferential
rights of the Filipinos over the appropriation and utilization of water as a natural resource. The Supreme
Court cited Section 47 of the EPIRA which clearly authorizes PSALM to have the discretion in pursuing the
privatization of NPC’s assets including to take title to and possession of those assets transferred to it.
However, the EPIRA provided that PSALM cannot privatize the Angus and Pulangui Complexes in
Mindanao. In this matter, PSALM did not commit grave abuse of discretion in proceeding with the bidding
of AHEPP. Importantly, the Supreme Court clarified that the bidding of AHEPP which is a hydroelectric
powerplant does not involve the grant of water rights as provided under the Water Code. As such, the term
“appropriating water” as defined under the Water Code does not include the use of the water extracted from
the Angat Dam to generate electric power. In this matter, the business of generating electric power under the
EPIRA has been opened to the private sector so it cannot be considered a public utility despite being affected
with public interest. Moreover, the law does not prohibit foreign investors to engage in the electric power
industry in the Philippines. Therefore, the bidding of AHEPP to K-Water does not violate the 1987
Constitution specifically on the preferential rights of the Filipinos over the appropriation and utilization of
water as a natural resource.

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Transportation Law

University of Asia and the Pacific

Cases Person Assigned

1. First Philippines Industrial Corporation v. Court of Appeals

MAIN TOPIC: NATURE AND COMMON CARRIER

2. SPOUSES FABRE v. COURT OF APPEALS

MAIN TOPIC: Nature and Common Carrier

3. De Guzman v. Court of Appeals

MAIN TOPIC: NATURE AND COMMON CARRIER

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: NATURE AND COMMON CARRIER

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: Nature and Common Carrier

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: Nature and Common Carrier

MAIN TOPIC: Nature and Common Carrier

8. Oriental Assurance Corp. v. Ong

MAIN TOPIC: Nature and Common Carrier

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: Nature and Common Carrier

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: Nature and Common Carrier

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: Nature and Common Carrier

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: Nature and Common Carrier

Therefore, ATI is liable for the 54 additional damaged rolls.

13. LTFRB v. Valenzuela

MAIN TOPIC: Nature and Common Carrier

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: Nature and Common Carrier

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: Registered Owner Rule

Dispositive: The petition is Denied. The Court of Appeals decision is AFFIRMED.

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: Registered Owner Rule

Hence, the Supreme Court denied the petition.

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: PERFECTION OF CONTRACT OF CARRIAGE

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: Extraordinary diligence

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: Obligations of the Parties in a Contract of Carriage

20. Eastern Shipping Lines, Inc. v. BPI/MS Insurance Corp.

MAIN TOPIC: Obligations Of The Parties In Contract Of Carriage

MAIN TOPIC: OBLIGATIONS OF THE PARTIES IN CONTRACT OF CARRIAGE.

MAIN TOPIC: OBLIGATIONS OF THE PARTIES IN CONTRACT OF CARRIAGE

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: Obligations of Parties in Contract of Carriage

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: Obligations of the Parties in Contract of Carriage

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

25. Regional Container Lines of Singapore v. The Netherlands Insurance

MAIN TOPIC: OBLIGATIONS OF THE PARTIES IN CONTRACT OF CARRIAGE

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: OBLIGATIONS OF THE PARTIES IN CONTRACT OF CARRIAGE.

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

MAIN TOPIC: OBLIGATIONS OF THE PARTIES IN CONTRACT OF CARRIAGE

Hence, this appeal.

UA&P 3JD1 – Transportation Law | S.Y. 2021-2022

28. ASIAN TERMINALS INC. v. SIMON ENTERPRISES INC.

MAIN TOPIC: Obligations of the Parties in Contract of Carriage

Hence this petition.