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and THEODORE LARDIZABAL y MALECDAN, petitioners, vs. COURT OF APPEALS, INOCENCIA CUDIAMAT, EMILIA CUDIAMAT BANDOY, FERNANDO CUDLAMAT, MARRIETA CUDIAMAT, NORMA CUDIAMAT, DANTE CUDIAMAT, SAMUEL CUDIAMAT and LIGAYA CUDIAMAT, all Heirs of the late Pedrito Cudiamat represented by Inocencia Cudiamat, respondents. Francisco S. Reyes Law Office for petitioners. Antonio C. de Guzman for private respondents.
REGALADO, J.:p On May 13, 1985, private respondents filed a complaint 1 for damages against petitioners for the death of Pedrito Cudiamat as a result of a vehicular accident which occurred on March 25, 1985 at Marivic, Sapid, Mankayan, Benguet. Among others, it was alleged that on said date, while petitioner Theodore M. Lardizabal was driving a passenger bus belonging to petitioner corporation in a reckless and imprudent manner and without due regard to traffic rules and regulations and safety to persons and property, it ran over its passenger, Pedrito Cudiamat. However, instead of bringing Pedrito immediately to the nearest hospital, the said driver, in utter bad faith and without regard to the welfare of the victim, first brought his other passengers and cargo to their respective destinations before banging said victim to the Lepanto Hospital where he expired. On the other hand, petitioners alleged that they had observed and continued to observe the extraordinary diligence required in the operation of the transportation company and the supervision of the employees, even as they add that they are not absolute insurers of the safety of the public at large. Further, it was alleged that it was the victim's own carelessness and negligence which gave rise to the subject incident, hence they prayed for the dismissal of the complaint plus an award of damages in their favor by way of a counterclaim. On July 29, 1988, the trial court rendered a decision, effectively in favor of petitioners, with this decretal portion: IN VIEW OF ALL THE FOREGOING, judgment is hereby pronounced that Pedrito Cudiamat was negligent, which negligence was the proximate cause of his death. Nonetheless, defendants in equity, are hereby ordered to pay the heirs of Pedrito Cudiamat the sum of P10,000.00 which approximates the amount
defendants initially offered said heirs for the amicable settlement of the case. No costs.
SO ORDERED. 2
Not satisfied therewith, private respondents appealed to the Court of Appeals which, in a decision 3 in CA-G.R. CV No. 19504 promulgated on August 14, 1990, set aside the decision of the lower court, and ordered petitioners to pay private respondents: 1. The sum of Thirty Thousand (P30,000.00) Pesos by way of indemnity for death of the victim Pedrito Cudiamat; 2. The sum of Twenty Thousand (P20,000.00) by way of moral damages; 3. The sum of Two Hundred Eighty Eight Thousand (P288,000.00) Pesos as actual and compensatory damages;
4. The costs of this suit. 4
Petitioners' motion for reconsideration was denied by the Court of Appeals in its resolution dated October 4, 1990,5 hence this petition with the central issue herein being whether respondent court erred in reversing the decision of the trial court and in finding petitioners negligent and liable for the damages claimed. It is an established principle that the factual findings of the Court of Appeals as a rule are final and may not be reviewed by this Court on appeal. However, this is subject to settled exceptions, one of which is when the findings of the appellate court are contrary to those of the trial court, in which case a reexamination of the facts and evidence may be undertaken. 6 In the case at bar, the trial court and the Court of Appeal have discordant positions as to who between the petitioners and the victim is guilty of negligence. Perforce, we have had to conduct an evaluation of the evidence in this case for the proper calibration of their conflicting factual findings and legal conclusions. The lower court, in declaring that the victim was negligent, made the following findings:
This Court is satisfied that Pedrito Cudiamat was negligent in trying to board a moving vehicle, especially with one of his hands holding an umbrella. And, without having given the driver or the conductor any indication that he wishes to board the bus. But defendants can also be found wanting of the necessary diligence. In this connection, it is safe to assume that when the deceased Cudiamat attempted to board defendants' bus, the vehicle's door was open instead of being closed. This should be so, for it is hard to believe that one would even attempt to board a vehicle (i)n motion if the door of said vehicle is closed. Here lies the defendant's lack of diligence. Under such circumstances, equity demands that there must be something given to the heirs of the victim to assuage their feelings. This, also considering that initially, defendant common carrier had made overtures to amicably settle the case. It did offer a certain monetary consideration to the victim's heirs. 7
However, respondent court, in arriving at a different opinion, declares that:
From the testimony of appellees'own witness in the person of Vitaliano Safarita, it is evident that the subject bus was at full stop when the victim Pedrito Cudiamat boarded the same as it was precisely on this instance where a certain Miss Abenoja alighted from the bus. Moreover, contrary to the assertion of the appellees, the victim did indicate his intention to board the bus as can be seen from the testimony of the said witness when he declared that Pedrito Cudiamat was no longer walking and made a sign to board the bus when the latter was still at a distance from him. It was at the instance when Pedrito Cudiamat was closing his umbrella at the platform of the bus when the latter made a sudden jerk movement (as) the driver commenced to accelerate the bus.
Evidently, the incident took place due to the gross negligence of the appellee-driver in prematurely stepping on the accelerator and in not waiting for the passenger to first secure his seat especially so when we take into account that the platform of the bus was at the time slippery and wet because of a drizzle. The defendants-appellees utterly failed to observe their duty and obligation as common carrier to the end that they should observe extra-ordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them according to the circumstances of each case (Article 1733, New Civil Code). 8
After a careful review of the evidence on record, we find no reason to disturb the above holding of the Court of Appeals. Its aforesaid findings are supported by the testimony of petitioners' own witnesses. One of them, Virginia Abalos, testified on cross-examination as follows: Q It is not a fact Madam witness, that at bunkhouse 54, that is before the place of the incident, there is a crossing? A The way going to the mines but it is not being pass(ed) by the bus. Q And the incident happened before bunkhouse 56, is that not correct?
A It happened between 54 and 53 bunkhouses. 9
The bus conductor, Martin Anglog, also declared: Q When you arrived at Lepanto on March 25, 1985, will you please inform this Honorable Court if there was anv unusual incident that occurred? A When we delivered a baggage at Marivic because a person alighted there between Bunkhouse 53 and 54. Q What happened when you delivered this passenger at this particular place in Lepanto? A When we reached the place, a passenger alighted and I signalled my driver. When we stopped we went out because I saw an umbrella about a split second and I signalled again the driver,
12 Further. hence the finding of the Court of Appeals that the bus was at full stop when the victim boarded the same is correct. A public utility bus. The victim herein. 14 An ordinarily prudent person would have made the attempt board the moving conveyance under the same or similar circumstances. once it stops. sir. every time the bus stops. including common carriers by railroad train. by stepping and standing on the platform of the bus. for one attempt to board a train or streetcar which is moving slowly. As clearly explained in the testimony of the aforestated witness for petitioners. Pedrito Cudiamat. it cannot be said that the deceased was guilty of negligence. Under such circumstances. Q How far away was this certain person. was it at the front or at the back? A At the back.) The foregoing testimonies show that the place of the accident and the place where one of the passengers alighted were both between Bunkhouses 53 and 54. to stop their conveyances a reasonable length of time in order to afford passengers an opportunity to board and enter. even assuming that the bus was moving. The premature acceleration of the bus in this case was a breach of such duty. the act of the victim in boarding the same cannot be considered negligent under the circumstances.so the driver stopped and we went down and we saw Pedrito Cudiamat asking for help because he was lying down. it becomes the duty of the driver and the conductor. 13 It is not negligence per se. The fact that passengers board and alight from slowly moving vehicle is a matter of common experience both the driver and conductor in this case could not have been unaware of such an ordinary practice. is already considered a passenger and is entitled all the rights and protection pertaining to such a contractual relation. When the bus is not in motion there is no necessity for a person who wants to ride the same to signal his intention to board. does not merit consideration. to do no act that would have the effect of increasing the peril to a passenger while he was attempting to board the same. . or motorbus. streetcar. Virginia Abalos. as shown by the physical evidence on where he was thereafter found in relation to the bus when it stopped. the bus had "just started" and "was still in slow motion" at the point where the victim had boarded and was on its platform. 11 It is the duty of common carriers of passengers. since the latter had supposedly not manifested his intention to board the same. The contention of petitioners that the driver and the conductor had no knowledge that the victim would ride on the bus. when you saw him lying down — from the bus how far was he? A It is about two to three meters. or as a matter of law. They further confirm the conclusion that the victim fell from the platform of the bus when it suddenly accelerated forward and was run over by the rear right tires of the vehicle. Q On what direction of the bus was he found about three meters from the bus. is in effect making a continuous offer to bus riders. Hence. and they are liable for injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their conveyances while they are doing so. 10 (Emphasis supplied.
COURT: Q Why did you ask somebody to call the family of Mr. It has also been repeatedly held that in an action based on a contract of carriage. it was only after the refrigerator was unloaded that one of the passengers thought of sending somebody to the house of the victim.. but its driver instead opted to first proceed to Bunk 70 to allow a passenger to alight and to deliver a refrigerator. The pretension of the appellees that the delay was due to the fact that they had to wait for about twenty minutes for Inocencia Cudiamat to get dressed deserves scant consideration. The evidence shows that after the accident the bus could have forthwith turned at Bunk 56 and thence to the hospital. It defies understanding and can even be stigmatized as callous indifference. Common carriers. and any injury that might be suffered by the passenger is right away attributable to the fault or negligence of the carrier. the circumstances under which the driver and the conductor failed to bring the gravely injured victim immediately to the hospital for medical treatment is a patent and incontrovertible proof of their negligence. Cudiamat. In fact. the court need not make an express finding of fault or negligence on the part of the carrier in order to hold it responsible to pay the damages sought by the passenger. This is an exception to the general rule that negligence must be proved. By contract of carriage. It is rather scandalous and deplorable for a wife whose husband is at the verge of dying to have the luxury of dressing herself up for about twenty minutes before attending to help her distressed and helpless husband. Cudiamat? . what happened to your refrigerator at that particular time? A I asked them to bring it down because that is the nearest place to our house and when I went down and asked somebody to bring down the refrigerator. The vacuous reason given by petitioners that it was the wife of the deceased who caused the delay was tersely and correctly confuted by respondent court: . Moreover. the carrier assumes the express obligation to transport the passenger to his destination safely and observe extraordinary diligence with a due regard for all the circumstances. using the utmost diligence very cautious persons. with a due regard for all the circumstances. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide. it cannot be said that the main intention of petitioner Lardizabal in going to Bunk 70 was to inform the victim's family of the mishap. are bound to observe extraordinary diligence for the safety of the passengers transported by the according to all the circumstances of each case. since it was not said bus driver nor the conductor but the companion of the victim who informed his family thereof. I also asked somebody to call the family of Mr. to wit: Q Why.Hence. as shown by the testimony of Virginia Abalos again.. 19 Further. it has been held that the duty which the carrier passengers owes to its patrons extends to persons boarding cars as well as to those alighting therefrom. despite the serious condition of the victim. and it is therefore incumbent upon the carrier to prove that it has exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code. from the nature of their business and reasons of public policy.
In adjudicating the actual or compensatory damages. respondents. Melencio-Herrera (Chairperson). rectified and reduced to P216. are to be considered. the total of the earnings less expenses necessary in the creation of such earnings or income and minus living and other incidental expenses. SO ORDERED. in accordance with prevailing jurisprudence. said award must be. Using the gross annual income as the basis. Paras. only net earnings. WHEREFORE. respondent court found that the deceased was 48 years old. No. the challenged judgment and resolution of respondent Court of Appeals are hereby AFFIRMED in all other respects. Cudiamat? A No sir.00 a year.. but rather the loss of that portion of the earnings which the beneficiary would have received. however.00 a month or P6. G.A Because Mr. 21 With respect to the award of damages. it accordingly awarded P288. an oversight was. 1994 KOREAN AIRLINES CO. Cudiamat met an accident.000. LAPUZ. concur. vs. in good health with a remaining productive life expectancy of 12 years. so I ask somebody to call for the family of Mr. However. 114061 August 3. subject to the above modifications. JJ.000. Padilla and Sarmiento.00. 113842 August 3. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R.000.000. COURT OF APPEALS and JUANITO C.00 a year. Applying the aforestated rule on computation based on the net earnings.. not gross earnings. 1994 . petitioner.00. that is. and then earning P24.. The rule is that the amount recoverable by the heirs of a victim of a tort is not the loss of the entire earnings.R. No. Cudiamat. Q But nobody ask(ed) you to call for the family of Mr. We are of the opinion that the deductible living and other expense of the deceased may fairly and reasonably be fixed at P500. the death indemnity is hereby increased to P50.000. LTD. and multiplying the same by 12 years. as it hereby is. In other words. committed by respondent Court of Appeals in computing the actual damages based on the gross income of the victim.
However. LTD.160.: Sometime in 1980. he rode in the shuttle bus and proceeded to the ramp of the KAL aircraft for boarding. he was unable to report for his work in Saudi Arabia within the stipulated 2-week period and so lost his employment. When he later asked for another booking. Aguinaldo and Associates for Korean Airlines Co. Ltd. 157 of KAL Flight No. Inc. Initially... in view of the foregoing consideration. M. LAPUZ. 1 adjudged KAL liable for damages. vs. Lapuz was supposed to leave on November 8. the Regional Trial Court of Manila. Lapuz and another person by the name of Perico were given the two unclaimed seats. pursuant to the earlier agreement that Perico was to be given priority. The agent of Pan Pacific. judgment is hereby rendered sentencing the defendant Korean Air Lines to pay plaintiff Juanito C. on the other hand. According to Lapuz. his ticket was canceled by KAL. When two of such passengers did not appear.00) PESOS as actual/compensatory damages. Jimmie Joseph. Lapuz the following: 1. coordinated with KAL for the departure of 30 contract workers. . he was allowed to check in with one suitcase and one shoulder bag at the check-in counter of KAL. J. he alone was allowed to board.A. disposing as follows: WHEREFORE. Pan Pacific Recruiting Services Inc..JUANITO C. with legal interest thereon from the date of the filing of the complaint until fully paid. KAL. alleged that on November 8. of whom only 21 were confirmed and 9 were wait-listed passengers. when he was at the third or fourth rung of the stairs. Camacho and Associates for Juanito Lapuz. petitioner. via Korean Airlines. who was one of the supervisors of the hiring company in Saudi Arabia. The other seat was won through lottery by Lapuz. gave priority to Perico. an automotive electrician. a KAL officer pointed to him and shouted "Down! Down!" He was thus barred from taking the flight. was contracted for employment in Jeddah. 1980. only one seat became available and so. 1980. Lapuz. CRUZ. However. for a period of one year through Pan Pacific Overseas Recruiting Services. The amount of TWO HUNDRED SEVENTY-TWO THOUSAND ONE HUNDRED SIXTY (P272. Together with the other passengers. after being informed that there was a possibility of having one or two seats becoming available. He passed through the customs and immigration sections for routine check-up and was cleared for departure as Passenger No. KE 903. Consequently. he was "wait-listed. COURT OF APPEALS and KOREAN AIRLINES CO." which meant that he could only be accommodated if any of the confirmed passengers failed to show up at the airport before departure. respondents. Branch 30. After trial. Juanito C. Saudi Arabia.
000. 4. Ltd. That the Court of Appeals abused its discretion in awarding moral and exemplary damages in the amount of P100.. R. the present petitions for review which have been consolidated because of the identity of the parties and the similarity of the issues. Inc. are likewise dismissed. Hence. 5. No.00 and defendant-appellant is hereby ordered to pay plaintiff-appellant the sum of One Hundred Thousand Pesos (P100. KAL and Lapuz filed their respective motions for reconsideration. this decision was modified by the Court of Appeals 2 as follows: WHEREFORE.00) by way of moral and exemplary damages. The case is hereby dismissed with respect to defendant Pan Pacific Overseas Recruiting Services. 2. in view of all the foregoing. The costs of suit. The sum of TWENTY-FIVE THOUSAND (P25. In G.000.00 in favor of private respondent notwithstanding its lack of basis and private respondent did not state such amount in his complaint nor had private respondent proven the said damages. KAL assails the decision of the appellate court on the following grounds: 1. The counterclaims and cross-claim of defendant Korean Air Lines Co.000. That the Court of Appeals erred in dismissing the counterclaims.000.00) PESOS as and for attorney's fees. That the Court of Appeals erred in concluding that petitioner committed a breach of contract of carriage notwithstanding lack of proper. 114061. at 6% interest per annum from the date of the filing of the Complaint until fully paid. which were both denied for lack of merit. On appeal. competent and sufficient evidence of the existence of such contract. That the Court of Appeals erred in concluding that the standby passenger status of private respondent Lapuz was changed to a confirmed status when his name was entered into the passenger manifest. .2. 3. the appealed judgment is hereby AFFIRMED with the following modifications: the amount of actual damages and compensatory damages is reduced to P60. and 3. That the Court of Appeals erred in not according the proper evidentiary weight to some evidence presented and the fact that private respondent did not have any boarding pass to prove that he was allowed to board and to prove that his airline ticket was confirmed.
6.00. instead of courteously informing Lapuz of his being a "wait-listed" passenger. KE 903. c) moral damages of not less than P1 million and exemplary damages of not less than P500. all with legal interest from the filing of the complaint until fully paid. The contract of air carriage generates a relation attended with a public duty. That the Court of Appeals erred in dismissing the counterclaim of petitioner against Pan Pacific. indignities and abuses from such employees.000 paid to the recruiting agency. 113842. 7. In fact. KAL thus committed a breach of the contract of carriage between them when it failed to bring Lapuz to his destination. 4 So it is that any discourteous conduct on the part of these employees toward a passenger gives the latter an action for damages against the carrier. the factual conclusions of the appellate court must be affirmed. injurious language. R. In G. No. subject to certain exceptions. His clearance through immigration and customs clearly shows that he had indeed been confirmed as a passenger of KAL in that flight. 3 The business of the carrier is mainly with the traveling public. boarded the shuttle bus and proceeded to the ramp of KAL's aircraft. KAL argues that "the evidence of confirmation of a chance passenger status is not through the entry of the name of a chance passenger in the passenger manifest nor the clearance from the Commission on Immigration and Deportation. The evidence presented by Lapuz shows that he had indeed checked in at the departure counter. Lapuz seeks: (a) the setting aside of the decision of the Court of Appeals insofar as it modifies the award of damages. Passengers have the right to be treated by the carrier's employees with kindness. The breach of contract was aggravated in this case when. and d) attorney's fees in the sum equivalent to 30% of the award of damages. because they are merely means of facilitating the boarding of a chance passenger in case his status is confirmed.600 Saudi rials at the current conversion rate plus the cost of baggage and personal belongings worth P2. It is evident that the issues raised in these petitions relate mainly to the correctness of the factual findings of the Court of Appeals and the award of damages. to be . They are entitled to be protected against personal misconduct. It invites people to avail themselves of the comforts and advantages it offers." We are not persuaded. passed through customs and immigration. The status of Lapuz as standby passenger was changed to that of a confirmed passenger when his name was entered in the passenger manifest of KAL for its Flight No. his baggage had already been loaded in KAL's aircraft. The Court has consistently affirmed that the findings of fact of the Court of Appeals and the other lower courts are as a rule binding upon it. thus causing him embarrassment and public humiliation. This Court has held that a contract to transport passengers is different in kind and degree from any other contractual relation.000 and the service fee of P3. both with interest at 6% per annum from the filing of the complaint. b) actual and compensatory damages in the sum equivalent to 5 years' loss of earnings based on the petitioner's monthly salary of 1. As nothing in the record indicates any of such exceptions. a KAL officer rudely shouted "Down! Down!" while pointing at him. That the Court of Appeals erred in ruling that the 6% per annum legal interest on the judgment shall be computed from the filing of the complaint.000. respect. courtesy and due consideration.
The well-entrenched principle is that moral damages depend upon the discretion of the court based on the circumstances of each case.000.00 as moral and exemplary damages is inadequate is not acceptable either. disregard of plaintiff-appellant's rights as passenger laid the basis and justification of an award for moral damages. even though not so expressly pleaded in the complaint (Kapoe vs. 6 Damages are not intended to enrich the complainant at the expense of the defendant. The contract of carriage between him and KAL had already been perfected when he was summarily and insolently prevented from boarding the aircraft. reckless. 7 There is no hard-and-fast rule in the determination of what would be a fair amount of moral damages since each case must be governed by its own peculiar facts. thus entitling plaintiff-appellant to moral damages. exemplary damages may be awarded. His prayer for moral damages of not less than P1 million and exemplary damages of not less than P500. xxxx Considering that the plaintiff-appellant's entitlement to moral damages has been fully established by oral and documentary evidence. Masa. 5 This discretion is limited by the principle that the "amount awarded should not be palpably and scandalously excessive" as to indicate that it was the result of prejudice or corruption on the part of the trial court. KAL's allegation that the respondent court abused its discretion in awarding moral and exemplary damages is also not tenable. in our view.000 as moral and exemplary damages in his favor is. Lapuz's claim that the award of P100. oppressive or malevolent manner when it "bumped off" plaintiff-appellant on November 8. .000.00 is overblown. 1980. The assessment of P100. They are awarded only to alleviate the moral suffering that the injured party had undergone by reason of the defendant's culpable action. In fact. fraudulent. to provide an example for the public good. xxxx In the instant case. supra). On the other hand." which clearly shows malice and bad faith. A review of the record of this case shows that the injury suffered by Lapuz is not so serious or extensive as to warrant an award of P1. an award of exemplary damages is also proper (Armovit vs. exemplary damages may be awarded. we find that defendant-appellant Korean Air Lines acted in a wanton. Court of Appeals.flown with him to Jeddah. and in addition treated him rudely and arrogantly as a "patay gutom na contract worker fighting Korean Air Lines. The Court of Appeals granted moral and exemplary damages because: The findings of the court a quo that the defendant-appellant has committed breach of contract of carriage in bad faith and in wanton. reasonable and realistic.5 million. 134 SCRA 231). By the same token.
therefore. Plaintiff-appellant's contention that in computing his lost earnings. though not specifically raised in the pleading in the appellate court. 203 SCRA 126). Although plaintiff-appellant intends to renew his contract.. i. entitled only to his lost earnings for one year. Thus. on the date when the legal interest should commence to run. Hence.00. considering that in his Complaint. Plaintiff-appellant is. defendant-appellant's liability is limited to the one year contract only. 1980. representing lost earnings for five years prayed for in the Complaint. as the challenged decision correctly observed: A perusal of the plaintiff-appellant's contract of employment shows that the effectivity of the contract is for only one year. if they are questions raised in the trial court and are matters of record having some bearing on the issue submitted which the parties failed to raise or the lower court ignored. if it finds that their consideration is necessary in arriving at a just decision of the case. is untenable. such renewal will still be subject to his foreign employer. hence. which is 1/5 of P300. there was enough evidence to warrant the reduction of the original award. even if they are not assigned as errors in their appeal. We disagree with the respondent court. The rule is that only errors specifically assigned and properly argued in the brief will be considered except errors affecting jurisdiction over the subject matter and plain as well as clerical errors. renewable every year for five years. The rule is that the legal interest of six percent (6%) on the amounts adjudged in favor of Lapuz should resume from the time of the rendition of the trial court's decision instead of November 28. Court of Appeals 10 in this wise: Issues. .000. . the current rate of the Saudi Rial to the Philippine Peso at the time of payment should be used. P60. there can be no basis as to whether his contract will be renewed by his foreign employer or not. .Lapuz likewise claims that the respondent court could not rule upon the propriety of the award of actual damages because it had not been assigned as an error by KAL.00. Furthermore. however. as the Court held in Vda. the date of the filing of the complaint. plaintiff-appellant has quantified in Philippine Peso his lost earnings for five years. Not so.e. The Court of Appeals was therefore justified in decreasing the award of actual damages even if the issue was not assigned as an error by KAL. the damages representing the loss of earnings of plaintiff-appellant in the renewal of the contract of employment is at most speculative. [T]he Court is clothed with ample authority to review matters. Damages may not be awarded on the basis of speculation or conjecture (Gachalian vs. be properly considered by said court in deciding a case. Plaintiffappellant had not yet started working with his foreign employer. Delim. the total amount of actual damages. Court of Appeals: 9 . A similar pronouncement was made in Baquiran vs.000. 8 But this is not without qualification for. Consideration of this question was necessary for the just and complete resolution of the present case. may. in the interest of justice. de Javellana vs.
for until the net amount of the debtor's liability has been determined.. Quiason and Kapunan. The parties shall bear their own costs. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G. 12 Finally. concur. No. this time by the airline supposed to bring the passenger to his foreign assignment. the direct protection of our laws. the appealed judgment is AFFIRMED. Bellosillo.R. This is still another case of the maltreatment of our overseas contract workers. 2003 LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN. interest should be from the date of the decision. vs. when so declared. J.On this matter. petitioners. 145804 February 6. the contention might be tenable. where they are deprived of the company of their loved ones.. . Jr. but with the modification that the legal interest on the damages awarded to private respondent should commence from the date of the decision of the trial court on November 14. assessed and determined by the courts after proof. we find that the respondent court did not err in sustaining the trial court's dismissal of KAL's counterclaim against Pan Pacific Overseas Recruiting Services Inc. the Court has held: If suit were for payment of a definite sum of money. and the comfort of our own native culture and way of life.. Davide. However. JJ. is on official leave. whose responsibility ended with the confirmation by KAL of Lapuz as its passenger in its Flight No. This Court shall exert every effort to vindicate their rights when they are abused and shall accord them the commensurate reparation of their injuries consistent with their dignity and worth as members of the working class. 11 xxxx The obligation to pay interest on a sum filed in a judgment exists from the date of the sentence.. if it is for damages. he cannot he considered delinquent in the fulfillment of his obligation to pay the debt with interest thereon. WHEREFORE. unliquidated and not known until definitely ascertained. 903. Our OCW's sacrifice much in seeking employment abroad. SO ORDERED. 1990.
in its answer. Rodolfo Roman. respectively.520. about half an hour past seven o’clock in the evening. filed a demurrer contending that Navidad had failed to prove that Escartin was negligent in his assigned task. herein respondent Marjorie Navidad. While Navidad was standing on the platform near the LRT tracks. No evidence. entitled "Marjorie Navidad and Heirs of the Late Nicanor Navidad vs. 3) Indemnity for the death of Nicanor Navidad in the sum of P50. the LRTA. it adjudged: "WHEREFORE. Branch 266. the trial court rendered its decision. On 14 October 1993. along with her children. judgment is hereby rendered in favor of the plaintiffs and against the defendants Prudent Security and Junelito Escartin ordering the latter to pay jointly and severally the plaintiffs the following: "a) 1) Actual damages of P44. instead of presenting evidence. delivered the first blow or how Navidad later fell on the LRT tracks. CV No. the widow of Nicanor.00.R. Junelito Escartin. then drunk. and he was killed instantaneously. exonerating Prudent Security Agency (Prudent) from liability and finding Light Rail Transit Authority (LRTA) and Rodolfo Roman liable for damages on account of the death of Nicanor Navidad. Navidad was struck by the moving train. Nicanor Navidad. 60720. Pasig City. respondents.00. . DECISION VITUG. Inc." which has modified the decision of 11 August 1998 of the Regional Trial Court.830. entered the EDSA LRT station after purchasing a "token" (representing payment of the fare). Heirs of the Late NICANOR NAVIDAD & PRUDENT SECURITY AGENCY. "b) Moral damages of P50.MARJORIE NAVIDAD. LRTA and Roman filed a counterclaim against Navidad and a cross-claim against Escartin and Prudent.: The case before the Court is an appeal from the decision and resolution of the Court of Appeals. however..000. operated by petitioner Rodolfo Roman. the Metro Transit Organization.00. in CA-G. J. was adduced to indicate how the fight started or who. the security guard assigned to the area approached Navidad. et. an LRT train. between the two. At the exact moment that Navidad fell.000. Rodolfo Roman. denied liability and averred that it had exercised due diligence in the selection and supervision of its security guards. A misunderstanding or an altercation between the two apparently ensued that led to a fist fight. Prudent. 2) Compensatory damages of P443. was coming in. (Metro Transit). al. filed a complaint for damages against Junelito Escartin.00. and Prudent for the death of her husband. The LRTA and Roman presented their evidence while Prudent and Escartin. On 08 December 1994. promulgated on 27 April 2000 and 10 October 2000. On 11 August 1998.
c) P50. a contract of carriage theretofore had already existed when the victim entered the place where passengers were supposed to be after paying the fare and getting the corresponding token therefor.000. the assailed judgment is hereby MODIFIED. the court stressed that there was nothing to link the security agency to the death of Navidad."2 The appellate court ratiocinated that while the deceased might not have then as yet boarded the train.00 as indemnity for the death of the deceased. "The complaint against defendants LRTA and Rodolfo Roman are dismissed for lack of merit. instead.000. the appellate court promulgated its now assailed decision exonerating Prudent from any liability for the death of Nicanor Navidad and. The appellate court denied petitioners’ motion for reconsideration in its resolution of 10 October 2000. In exempting Prudent from liability. THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY DISREGARDING THE FINDINGS OF FACTS BY THE TRIAL COURT "II. d) P50. the following amounts: a) P44. holding the LRTA and Roman jointly and severally liable thusly: "WHEREFORE.00 as actual damages.000. Instead. b) P50. In their present recourse.000. On 27 August 2000. appellees Rodolfo Roman and the Light Rail Transit Authority (LRTA) are held liable for his death and are hereby directed to pay jointly and severally to the plaintiffs-appellees."1 Prudent appealed to the Court of Appeals."c) Attorney’s fees of P20. viz: "I. by exonerating the appellants from any liability for the death of Nicanor Navidad. Jr.00 as nominal damages. The appellate court faulted petitioners for their failure to present expert evidence to establish the fact that the application of emergency brakes could not have stopped the train. "d) Costs of suit. . It said that Navidad failed to show that Escartin inflicted fist blows upon the victim and the evidence merely established the fact of death of Navidad by reason of his having been hit by the train owned and managed by the LRTA and operated at the time by Roman. "The compulsory counterclaim of LRTA and Roman are likewise dismissed. petitioners recite alleged errors on the part of the appellate court. and e) P20.00 as and for attorney’s fees.000.830.00 as moral damages.
"III." "Article 1759. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RODOLFO ROMAN IS AN EMPLOYEE OF LRTA. supporting the decision of the appellate court. The LRTA would add that the appellate court’s conclusion on the existence of an employer-employee relationship between Roman and LRTA lacked basis because Roman himself had testified being an employee of Metro Transit and not of the LRTA. is burdened with the duty of exercising utmost diligence in ensuring the safety of passengers."3 Petitioners would contend that the appellate court ignored the evidence and the factual findings of the trial court by holding them liable on the basis of a sweeping conclusion that the presumption of negligence on the part of a common carrier was not overcome." "Article 1763. both from the nature of its business and for reasons of public policy. which caused the latter to fall on the tracks. Respondents." . with a due regard for all the circumstances. Petitioners would insist that Escartin’s assault upon Navidad. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide. governing the liability of a common carrier for death of or injury to its passengers. "Article 1756. "This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees. common carriers are presumed to have been at fault or to have acted negligently.THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT PETITIONERS ARE LIABLE FOR THE DEATH OF NICANOR NAVIDAD. Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former’s employees. provides: "Article 1755. In case of death of or injuries to passengers. using the utmost diligence of very cautious persons. unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755. was an act of a stranger that could not have been foreseen or prevented. and that the appellate court had correctly held LRTA and Roman liable for the death of Navidad in failing to exercise extraordinary diligence imposed upon a common carrier. JR. 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. 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. entitling Navidad to all the rights and protection under a contractual relation.4 The Civil Code. contended that a contract of carriage was deemed created from the moment Navidad paid the fare at the LRT station and entered the premises of the latter. although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. Law and jurisprudence dictate that a common carrier.
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.6 The statutory provisions render a common carrier liable for death of or injury to passengers (a) through the negligence or wilful acts of its employees or b) on account of wilful acts or negligence of other passengers or of strangers if the common carrier’s employees through the exercise of due diligence could have prevented or stopped the act or omission.7 In case of such death or injury, a carrier is presumed to have been at fault or been negligent, and8 by simple proof of injury, the passenger is relieved of the duty to still establish the fault or negligence of the carrier or of its employees and the burden shifts upon the carrier to prove that the injury is due to an unforeseen event or to force majeure.9 In the absence of satisfactory explanation by the carrier on how the accident occurred, which petitioners, according to the appellate court, have failed to show, the presumption would be that it has been at fault,10 an exception from the general rule that negligence must be proved.11 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. Should Prudent be made likewise liable? If at all, that liability could only be for tort under the provisions of Article 217612 and related provisions, in conjunction with Article 2180,13 of the Civil Code. The premise, however, for the employer’s liability is negligence or fault on the part of the employee. Once such fault is established, the employer can then be made liable on the basis of the presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection and supervision of its employees. The liability is primary and can only be negated by showing due diligence in the selection and supervision of the employee, a factual matter that has not been shown. Absent such a showing, one might ask further, how then must the liability of the common carrier, on the one hand, and an independent contractor, on the other hand, be described? It would be solidary. A contractual obligation can be breached by tort and when the same act or omission causes the injury, one resulting in culpa contractual and the other in culpa aquiliana, Article 219414 of the Civil Code can well apply.15 In fine, a liability for tort may arise even under a contract, where tort is that which breaches the contract.16 Stated differently, when an act which constitutes a breach of contract would have itself constituted the source of a quasidelictual liability had no contract existed between the parties, the contract can be said to have been breached by tort, thereby allowing the rules on tort to apply.17 Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the late Nicanor Navidad, this Court is concluded by the factual finding of the Court of Appeals that "there is nothing to link (Prudent) to the death of Nicanor (Navidad), for the reason that the negligence of its employee, Escartin, has not been duly proven x x x." This finding of the appellate court is not without substantial justification in our own review of the records of the case. There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of any culpable act or omission, he must also be absolved from liability. Needless to say, the contractual tie between the LRT and Navidad is not itself a juridical relation between the latter and Roman; thus, Roman can be made liable only for his own fault or negligence.
The award of nominal damages in addition to actual damages is untenable. 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.18 It is an established rule that nominal damages cannot co-exist with compensatory damages. 19 WHEREFORE, the assailed decision of the appellate court is AFFIRMED with MODIFICATION but only in that (a) the award of nominal damages is DELETED and (b) petitioner Rodolfo Roman is absolved from liability. No costs. SO ORDERED. Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio and Azcuna, JJ., concur.
Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. L-47822 December 22, 1988 PEDRO DE GUZMAN, petitioner, vs. COURT OF APPEALS and ERNESTO CENDANA, respondents. Vicente D. Millora for petitioner. Jacinto Callanta for private respondent.
FELICIANO, J.: 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, respondent would bring such material to Manila for resale. He utilized two (2) 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, respondent charged freight rates which were commonly lower than regular commercial rates. Sometime in November 1970, petitioner Pedro de Guzman a merchant and authorized dealer of General Milk Company (Philippines), Inc. in Urdaneta, Pangasinan, contracted with respondent for the hauling of 750 cartons of Liberty filled milk from a warehouse of General Milk in Makati,
Rizal, to petitioner's establishment in Urdaneta on or before 4 December 1970. Accordingly, on 1 December 1970, respondent loaded in Makati the merchandise on to his trucks: 150 cartons were loaded on a truck driven by respondent himself, while 600 cartons were placed on board the other truck which was driven by Manuel Estrada, respondent's driver and employee. Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes never reached petitioner, since the truck which carried these boxes was hijacked somewhere along the MacArthur Highway in Paniqui, Tarlac, by armed men who took with them the truck, its driver, his helper and the cargo. On 6 January 1971, petitioner commenced action against private respondent in the Court of First Instance of Pangasinan, demanding payment of P 22,150.00, the claimed value of the lost merchandise, plus damages and attorney's fees. Petitioner argued that private respondent, 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. In his Answer, private respondent 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. On 10 December 1975, the trial court rendered a Decision 1 finding private respondent to be a common carrier and holding him liable for the value of the undelivered goods (P 22,150.00) as well as for P 4,000.00 as damages and P 2,000.00 as attorney's fees. On appeal before the Court of Appeals, respondent urged that the trial court had erred in considering him a common carrier; in finding that he had habitually offered trucking services to the public; in not exempting him from liability on the ground of force majeure; and in ordering him to pay damages and attorney's fees. The Court of Appeals reversed the judgment of the trial court and held that respondent had been engaged in transporting return loads of freight "as a casual occupation — a sideline to his scrap iron business" and not as a common carrier. Petitioner came to this Court by way of a Petition for Review assigning as errors the following conclusions of the Court of Appeals: 1. that private respondent was not a common carrier; 2. that the hijacking of respondent's truck was force majeure; and 3. that respondent was not liable for the value of the undelivered cargo. (Rollo, p. 111) We consider first the issue of whether or not private respondent Ernesto Cendana may, under the facts earlier set forth, be properly characterized as a common carrier. The Civil Code defines "common carriers" in the following terms:
freight or carrier service of any class. We think that Article 1733 deliberaom making such distinctions. wharf or dock. or both. water. operate. Common carriers are persons. occasional or accidental. 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. as amended) which at least partially supplements the law on common carriers set forth in the Civil Code. episodic or unscheduled basis. railroad." under the Public Service Act (Commonwealth Act No." i. although such back-hauling was done on a periodic or occasional rather than regular or scheduled manner. and done for general business purposes.. manage. . the general community or population. irrigation system. any common carrier. for hire or compensation. express service. gas. either for freight or passenger. Under Section 13. with or without fixed route and whatever may be its classification. The Court of Appeals referred to the fact that private respondent held no certificate of public convenience. or control in the Philippines. canal. corporations. every person that now or hereafter may own.. steamboat. and even though private respondent'sprincipal occupation was not the carriage of goods for others.. water supply and power petroleum. engaged in the transportation of passengers or freight or both. pontines. and one who offers services or solicits business only from a narrow segment of the general population.. ferries and water craft. or air for compensation. The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both. wire or wireless broadcasting stations and other similar public services.. 1416. heat and power. wire or wireless communications systems. with general or limited clientele. and one who does such carrying only as an ancillary activity (in local Idiom as "a sideline"). paragraph (b) of the Public Service Act. that fee frequently fell below commercial freight rates is not relevant here. ice-refrigeration plant. offering their services to the public. by land. marine repair shop.Article 1732. firms or associations engaged in the business of carrying or transporting passengers or goods or both. That liability arises the moment a person or firm acts as a common carrier. (Emphasis supplied) It appears to the Court that private respondent is properly characterized as a common carrier even though he merely "back-hauled" goods for other merchants from Manila to Pangasinan. shipyard. "public service" includes: . traction railway. ice plant. There is no dispute that private respondent charged his customers a fee for hauling their goods. and concluded he was not a common carrier. electric light. or steamship line. subway motor vehicle. Neither does Article 1732 distinguish between a carrier offering its services to the "general public. whether permanent. the concept of "common carrier" under Article 1732 may be seen to coincide neatly with the notion of "public service. This is palpable error.e. To exempt private respondent from the liabilities of a common carrier because he has not secured the necessary certificate of . sewerage system. 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. A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers. street railway. So understood.
public convenience. "unless the same is due to any of the following causes only: (1) Flood. (2) Act of the public enemy in war. destruction or deterioration of the goods which they carry. in other words. The law imposes duties and liabilities upon common carriers for the safety and protection of those who utilize their services and the law cannot allow a common carrier to render such duties and liabilities merely facultative by simply failing to obtain the necessary permits and authorizations. storm. would be offensive to sound public policy. that the hijacking of the carrier's vehicle must be dealt with under the provisions of Article 1735. we note firstly that the specific cause alleged in the instant case — the hijacking of the carrier's truck — does not fall within any of the five (5) categories of exempting causes listed in Article 1734.1735 and 1745. common carriers are presumed to have been at fault or to have acted negligently. (4) The character-of the goods or defects in the packing or-in the containers. whether international or civil. 2. and (5) Order or act of competent public authority. therefore. however. may be overthrown by proof of extraordinary diligence on the part of private respondent. 4 and 5 of the preceding article. 3. unless they prove that they observed extraordinary diligence as required in Article 1733. according to Article 1733. Petitioner insists that private respondent had not observed extraordinary diligence in the care of petitioner's goods. We turn then to the liability of private respondent as a common carrier. (Emphasis supplied) Applying the above-quoted Articles 1734 and 1735. destroyed or deteriorated. "by the nature of their business and for reasons of public policy" 2 are held to a very high degree of care and diligence ("extraordinary diligence") in the carriage of goods as well as of passengers. Common carriers. if the goods are lost. Causes falling outside the foregoing list. earthquake. Article 1734 establishes the general rule that common carriers are responsible for the loss. that would be to reward private respondent precisely for failing to comply with applicable statutory requirements. It would follow. which provides as follows: In all cases other than those mentioned in numbers 1. The business of a common carrier impinges directly and intimately upon the safety and well being and property of those members of the general community who happen to deal with such carrier. This presumption. even if they appear to constitute a species of force majeure fall within the scope of Article 1735. lightning or other natural disaster or calamity. 6 and 7" of the Civil Code. Petitioner argues that in the circumstances of this case. (3) Act or omission of the shipper or owner of the goods. destruction or deterioration which exempt the common carrier for responsibility therefor. numbers 5. that the private respondent as common carrier is presumed to have been at fault or to have acted negligently. It is important to point out that the above list of causes of loss. "further expressed in Articles 1734. The specific import of extraordinary diligence in the care of goods transported by a common carrier is. private respondent should have hired a security guard presumably to ride with the truck carrying the 600 cartons of . is a closed list.
We do not believe. numbers 4. Branch 2. violence or force. Oscar Oria and one John Doe. threat. The record shows that an information for robbery in band was filed in the Court of First Instance of Tarlac. As noted earlier. violence or force.Liberty filled milk. destruction or deterioration of goods on account of the defective condition of the car vehicle. 198 entitled "People of the Philippines v. The precise issue that we address here relates to the specific requirements of the duty of extraordinary diligence in the vigilance over the goods carried in the specific context of hijacking or armed robbery. is dispensed with or diminished. (6) that the common carrier's liability for acts committed by thieves. 3 Three (3) of the five (5) hold-uppers were armed with firearms." We believe and so hold 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. ship. or of robbers who donot act with grave or irresistible threat. violence or force. Napoleon Presno. however." There. The robbers not only took away the truck and its cargo but also kidnapped the driver and his helper. 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. Armando Mesina. violence or force." In the instant case. detaining them for several days and later releasing them in another province (in Zambales). except where such thieves or robbers in fact acted "with grave or irresistible threat. The . if not irresistible. (Emphasis supplied) Under Article 1745 (6) above. 5 and 6. The decision of the trial court shows that the accused acted with grave. the accused were charged with willfully and unlawfully taking and carrying away with them the second truck. airplane or other equipment used in the contract of carriage. driven by Manuel Estrada and loaded with the 600 cartons of Liberty filled milk destined for delivery at petitioner's store in Urdaneta. in Criminal Case No. Pangasinan. under Article 1733. Felipe Boncorno. that in the instant case. Article 1745 provides in relevant part: Any of the following or similar stipulations shall be considered unreasonable. the duty of extraordinary diligence in the vigilance over goods is. the standard of extraordinary diligence required private respondent to retain a security guard to ride with the truck and to engage brigands in a firelight at the risk of his own life and the lives of the driver and his helper. unjust and contrary to public policy: xxx xxx xxx (5) that the common carrier shall not be responsible for the acts or omissions of his or its employees. given additional specification not only by Articles 1734 and 1735 but also by Article 1745. armed men held up the second truck owned by private respondent which carried petitioner's cargo. and (7) that the common carrier shall not responsible for the loss.
BELLOSILLO. Jr. the Petition for Review on certiorari is hereby DENIED and the Decision of the Court of Appeals dated 3 August 1977 is AFFIRMED. and are not held liable for acts or events which cannot be foreseen or are inevitable. vs. 101503 September 15.respondents. Jimenez & Associates for petitioner. INC. JJ. SO ORDERED. 1993 PLANTERS PRODUCTS. We.J. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.. provided that they shall have complied with the rigorous standard of extraordinary diligence. J. It is necessary to recall that even common carriers are not made absolute insurers against all risks of travel and of transport of goods.. SORIAMONT STEAMSHIP AGENCIES AND KYOSEI KISEN KABUSHIKI KAISHA. Sinense. Siguion Reyna. No. C. petitioner.hijacked truck was subsequently found by the police in Quezon City. COURT OF APPEALS. 4 In these circumstances.: . The Court of First Instance convicted all the accused of robbery. Bidin and Cortes. Gutierrez. therefore. ACCORDINGLY.R. we hold that the occurrence of the loss must reasonably be regarded as quite beyond the control of the common carrier and properly regarded as a fortuitous event.. concur. Montecillo & Ongsiako Law Office for private respondents. Fernan. agree with the result reached by the Court of Appeals that private respondent Cendana is not liable for the value of the undelivered merchandise which was lost because of an event entirely beyond private respondent's control.. though not of robbery in band. Gonzales. No pronouncement as to costs.
raining occasionally while the discharge was in progress. 7 Each time a dump truck was filled up. San Fernando. 16 to 40 were attached to the pre-printed agreement. Addenda Nos. to Poro Point. then tied with steel bonds. 20th. Tarpaulins and GI sheets were placed in-between and alongside the trucks to contain spillages of the ferilizer. At loading port. 8 The petitioner's warehouse was made of corrugated galvanized iron (GI) sheets. 6 The hatches remained open throughout the duration of the discharge. Inc. certain portions of the route to the warehouse were sandy and the weather was variable. clause). a time charter-party on the vessel M/V "Sun Plum" pursuant to the Uniform General Charter 2 was entered into between Mitsubishi as shipper/charterer and KKKK as shipowner.S. . notice of readiness to be accomplished by certificate from National Cargo Bureau inspector or substitute appointed by charterers for his account certifying the vessel's readiness to receive cargo spaces. .I. Alaska. covered with three (3) layers of tarpaulin.. On 17 May 1974. its load of Urea was covered with tarpaulin before it was transported to the consignee's warehouse located some fifty (50) meters from the wharf. 2. 5 Upon arrival of the vessel at her port of call on 3 July 1974.329. in Tokyo. 16 of the charter-party which reads: 16.S. . respectively. Philippines. U. or prior to its voyage. (PPI). 9 . the steel pontoon hatches were opened with the use of the vessel's boom.Does a charter-party 1 between a shipowner and a charterer transform a common carrier into a private one as to negate the civil law presumption of negligence in case of loss or damage to its cargo? Planters Products. The port area was windy.7069 metric tons (M/T) of Urea 46% fertilizer which the latter shipped in bulk on 16 June 1974 aboard the cargo vessel M/V "Sun Plum" owned by private respondent Kyosei Kisen Kabushiki Kaisha (KKKK) from Kenai. with an opening at the front where the dump trucks entered and unloaded the fertilizer on the warehouse floor. Midway to the warehouse.S. using metal scoops attached to the ship. 9. four (4) of her holds 4 were all presumably inspected by the charterer's representative and found fit to take a load of urea in bulk pursuant to par. Petitioner unloaded the cargo from the holds into its steelbodied dump trucks which were parked alongside the berth. 3 and 4 to the charter-party were also subsequently entered into on the 18th. the trucks were made to pass through a weighing scale where they were individually weighed for the purpose of ascertaining the net weight of the cargo. the steel hatches were closed with heavy iron lids.. pursuant to the terms and conditions of the charter-partly (which provided for an F. Before loading the fertilizer aboard the vessel. The hatches remained closed and tightly sealed throughout the entire voyage. 1.A. as evidenced by Bill of Lading No. Japan. (emphasis supplied) After the Urea fertilizer was loaded in bulk by stevedores hired by and under the supervision of the shipper. La Union. The vessel's hold to be properly swept. 3 Riders to the aforesaid charterparty starting from par. KP-1 signed by the master of the vessel and issued on the date of departure. U. 21st and 27th of May 1974.O. cleaned and dried at the vessel's expense and the vessel to be presented clean for use in bulk to the satisfaction of the inspector before daytime commences. purchased from Mitsubishi International Corporation (MITSUBISHI) of New York.A.
KKKK. Even if the provisions of the charter-party aforequoted are deemed valid. After that. the resident agent of the carrier.969. 12 Consequently. Prescinding from the provision of the law that a common carrier is presumed negligent in case of loss or damage of the goods it contracts to transport. 14th and 18th). By this omission. having been polluted with sand. PPI sent a claim letter dated 18 December 1974 to Soriamont Steamship Agencies (SSA). by taking draft readings of the vessel prior to and after discharge." 14Hence. coupled with their failure to destroy the presumption of negligence against them. v. it was still incumbent upon them to prove that the shortage or contamination sustained by the cargo is attributable to the fault or negligence on the part of the shipper or consignee in the loading. PPI filed an action for damages with the Court of First Instance of Manila. 16 Relying on the 1968 case of Home Insurance Co. common or private he may be. for P245. was hired by PPI to determine the "outturn" of the cargo shipped. American Steamship Agencies.839 M/T and about 23 M/T were rendered unfit for commerce. . Cargo Superintendents Company Inc. 11The survey report submitted by CSCI to the consignee (PPI) dated 19 July 1974 revealed a shortage in the cargo of 106.726 M/T and that a portion of the Urea fertilizer approximating 18 M/T was contaminated with dirt. In the absence of such presumption. according to them. and that this "request" was denied by them because they "had nothing to do with the discharge of the shipment. all that a shipper has to do in a suit to recover for loss or damage is to show receipt by the carrier of the goods and to delivery by it of less than what it received.31 representing the cost of the alleged shortage in the goods shipped and the diminution in value of that portion said to have been contaminated with dirt. stowing. On appeal. . . 13 Respondent SSA explained that they were not able to respond to the consignee's claim for payment because. the Civil Code provisions on common carriers which set forth a presumption of negligence do not find application in the case at bar. rust and dirt. respondent Court of Appeals reversed the lower court and absolved the carrier from liability for the value of the cargo that was lost or damaged. Thus — . the defendants are liable (emphasis supplied). The court a quo however sustained the claim of the plaintiff against the defendant carrier for the value of the goods lost or damaged when it ruled thus: 15 . on 18 July 1975. what they received was just a request for shortlanded certificate and not a formal claim.. trimming and discharge of the cargo. Accordingly. from 5 July to 18 July 1974 (except July 12th. (CSCI).It took eleven (11) days for PPI to unload the cargo. it was incumbent upon the plaintiffappellee to adduce sufficient evidence to prove the negligence of the defendant . . The defendant carrier argued that the strict public policy governing common carriers does not apply to them because they have become private carriers by reason of the provisions of the charter-party. and the defendants considered private carriers. The same results were contained in a Certificate of Shortage/Damaged Cargo dated 18 July 1974 prepared by PPI which showed that the cargo delivered was indeed short of 94. Inc. 17 the appellate court ruled that the cargo vessel M/V "Sun Plum" owned by private respondent KKKK was a private carrier and not a common carrier by reason of the time charterer-party. the burden of proving that the loss or damage was due to any of the causes which exempt him from liability is shipted to the carrier.10 A private marine and cargo surveyor. This they failed to do.
carrier as alleged in its complaint. It is an old and well settled rule that if the plaintiff, upon whom rests the burden of proving his cause of action, fails to show in a satisfactory manner the facts upon which he bases his claim, the defendant is under no obligation to prove his exception or defense (Moran, Commentaries on the Rules of Court, Volume 6, p. 2, citing Belen v. Belen, 13 Phil. 202).
But, the record shows that the plaintiff-appellee dismally failed to prove the basis of its cause of action, i.e. the alleged negligence of defendant carrier. It appears that the plaintiff was under the impression that it did not have to establish defendant's negligence. Be that as it may, contrary to the trial court's finding, the record of the instant case discloses ample evidence showing that defendant carrier was not negligent in performing its obligation . . . 18 (emphasis supplied).
Petitioner PPI appeals to us by way of a petition for review assailing the decision of the Court of Appeals. Petitioner theorizes that the Home Insurance case has no bearing on the present controversy because the issue raised therein is the validity of a stipulation in the charter-party delimiting the liability of the shipowner for loss or damage to goods cause by want of due deligence on its part or that of its manager to make the vessel seaworthy in all respects, and not whether the presumption of negligence provided under the Civil Code applies only to common carriers and not to private carriers. 19 Petitioner further argues that since the possession and control of the vessel remain with the shipowner, absent any stipulation to the contrary, such shipowner should made liable for the negligence of the captain and crew. In fine, PPI faults the appellate court in not applying the presumption of negligence against respondent carrier, and instead shifting the onus probandi on the shipper to show want of due deligence on the part of the carrier, when he was not even at hand to witness what transpired during the entire voyage. As earlier stated, the primordial issue here is whether a common carrier becomes a private carrier by reason of a charter-party; in the negative, whether the shipowner in the instant case was able to prove that he had exercised that degree of diligence required of him under the law. It is said that etymology is the basis of reliable judicial decisions in commercial cases. This being so, we find it fitting to first define important terms which are relevant to our discussion. A "charter-party" is defined as a contract by which an entire ship, or some principal part thereof, is let by the owner to another person for a specified time or use; 20 a contract of affreightment by which the owner of a ship or other vessel lets the whole or a part of her to a merchant or other person for the conveyance of goods, on a particular voyage, in consideration of the payment of freight; 21 Charter parties are of two types: (a) contract of affreightment which involves the use of shipping space on vessels leased by the owner in part or as a whole, to carry goods for others; and, (b) charter by demise or bareboat charter, by the terms of which the whole vessel is let to the charterer with a transfer to him of its entire command and possession and consequent control over its navigation, including the master and the crew, who are his servants. Contract of affreightment may either be time charter, wherein the vessel is leased to the charterer for a fixed period of time, or voyage charter, wherein the ship is leased for a single voyage. 22 In both cases, the charter-party provides for the hire of vessel only, either for a determinate period of time or for a single or consecutive voyage, the shipowner to supply the ship's stores, pay for the wages of the master and the crew, and defray the expenses for the maintenance of the ship. Upon the other hand, the term "common or public carrier" is defined in Art. 1732 of the Civil Code. 23 The definition extends to carriers either by land, air or water which hold themselves out as ready to engage in carrying goods or transporting passengers or both for compensation as a
public employment and not as a casual occupation. The distinction between a "common or public carrier" and a "private or special carrier" lies in the character of the business, such that if the undertaking is a single transaction, not a part of the general business or occupation, although involving the carriage of goods for a fee, the person or corporation offering such service is a private carrier. 24 Article 1733 of the New Civil Code mandates that common carriers, by reason of the nature of their business, should observe extraordinary diligence in the vigilance over the goods they carry. 25 In the case of private carriers, however, the exercise of ordinary diligence in the carriage of goods will suffice. Moreover, in the case of loss, destruction or deterioration of the goods, common carriers are presumed to have been at fault or to have acted negligently, and the burden of proving otherwise rests on them. 26 On the contrary, no such presumption applies to private carriers, for whosoever alleges damage to or deterioration of the goods carried has the onus of proving that the cause was the negligence of the carrier. It is not disputed that respondent carrier, in the ordinary course of business, operates as a common carrier, transporting goods indiscriminately for all persons. When petitioner chartered the vessel M/V "Sun Plum", the ship captain, its officers and compliment were under the employ of the shipowner and therefore continued to be under its direct supervision and control. Hardly then can we charge the charterer, a stranger to the crew and to the ship, with the duty of caring for his cargo when the charterer did not have any control of the means in doing so. This is evident in the present case considering that the steering of the ship, the manning of the decks, the determination of the course of the voyage and other technical incidents of maritime navigation were all consigned to the officers and crew who were screened, chosen and hired by the shipowner. 27 It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the whole or portion of a vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a time-charter or voyage-charter. It is only when the charter includes both the vessel and its crew, as in a bareboat or demise that a common carrier becomes private, at least insofar as the particular voyage covering the charter-party is concerned. Indubitably, a shipowner in a time or voyage charter retains possession and control of the ship, although her holds may, for the moment, be the property of the charterer. 28 Respondent carrier's heavy reliance on the case of Home Insurance Co. v. American Steamship Agencies, supra, is misplaced for the reason that the meat of the controversy therein was the validity of a stipulation in the charter-party exempting the shipowners from liability for loss due to the negligence of its agent, and not the effects of a special charter on common carriers. At any rate, the rule in the United States that a ship chartered by a single shipper to carry special cargo is not a common carrier, 29 does not find application in our jurisdiction, for we have observed that the growing concern for safety in the transportation of passengers and /or carriage of goods by sea requires a more exacting interpretation of admiralty laws, more particularly, the rules governing common carriers. We quote with approval the observations of Raoul Colinvaux, the learned barrister-at-law 30 — As a matter of principle, it is difficult to find a valid distinction between cases in which a ship is used to convey the goods of one and of several persons. Where the ship herself is let to a charterer, so that he takes over the charge and control of her, the case is different; the shipowner is not then a carrier. But where her
services only are let, the same grounds for imposing a strict responsibility exist, whether he is employed by one or many. The master and the crew are in each case his servants, the freighter in each case is usually without any representative on board the ship; the same opportunities for fraud or collusion occur; and the same difficulty in discovering the truth as to what has taken place arises . . . In an action for recovery of damages against a common carrier on the goods shipped, the shipper or consignee should first prove the fact of shipment and its consequent loss or damage while the same was in the possession, actual or constructive, of the carrier. Thereafter, the burden of proof shifts to respondent to prove that he has exercised extraordinary diligence required by law or that the loss, damage or deterioration of the cargo was due to fortuitous event, or some other circumstances inconsistent with its liability. 31 To our mind, respondent carrier has sufficiently overcome, by clear and convincing proof, the prima faciepresumption of negligence. The master of the carrying vessel, Captain Lee Tae Bo, in his deposition taken on 19 April 1977 before the Philippine Consul and Legal Attache in the Philippine Embassy in Tokyo, Japan, testified that before the fertilizer was loaded, the four (4) hatches of the vessel were cleaned, dried and fumigated. After completing the loading of the cargo in bulk in the ship's holds, the steel pontoon hatches were closed and sealed with iron lids, then covered with three (3) layers of serviceable tarpaulins which were tied with steel bonds. The hatches remained close and tightly sealed while the ship was in transit as the weight of the steel covers made it impossible for a person to open without the use of the ship's boom. 32 It was also shown during the trial that the hull of the vessel was in good condition, foreclosing the possibility of spillage of the cargo into the sea or seepage of water inside the hull of the vessel. 33 When M/V "Sun Plum" docked at its berthing place, representatives of the consignee boarded, and in the presence of a representative of the shipowner, the foreman, the stevedores, and a cargo surveyor representing CSCI, opened the hatches and inspected the condition of the hull of the vessel. The stevedores unloaded the cargo under the watchful eyes of the shipmates who were overseeing the whole operation on rotation basis. 34 Verily, the presumption of negligence on the part of the respondent carrier has been efficaciously overcome by the showing of extraordinary zeal and assiduity exercised by the carrier in the care of the cargo. This was confirmed by respondent appellate court thus — . . . Be that as it may, contrary to the trial court's finding, the record of the instant case discloses ample evidence showing that defendant carrier was not negligent in performing its obligations. Particularly, the following testimonies of plaintiffappellee's own witnesses clearly show absence of negligence by the defendant carrier; that the hull of the vessel at the time of the discharge of the cargo was sealed and nobody could open the same except in the presence of the owner of the cargo and the representatives of the vessel (TSN, 20 July 1977, p. 14); that the cover of the hatches was made of steel and it was overlaid with tarpaulins, three layers of tarpaulins and therefore their contents were protected from the weather (TSN, 5 April 1978, p. 24); and, that to open these hatches, the seals would have to be broken, all the seals were found to be intact (TSN, 20 July 1977, pp. 15-16) (emphasis supplied).
free from all risk and expense to the carrier. or when it comes in contact with water. or the inherent defect of the goods. provided that the temperature inside the hull does not exceed eighty (80) degrees centigrade. not when the same is done by the consignee or stevedores under the employ of the latter. up to and until the vessel reached its destination and its hull was reexamined by the consignee. nonetheless. some of its particles dissolve. as against him. Mr. described Urea as a chemical compound consisting mostly of ammonia and carbon monoxide compounds which are used as fertilizer. But the salvaged portion which is in liquid form still remains potent and usable although no longer saleable in its original market value.S. Chupungco further added that in unloading fertilizer in bulk with the use of a clamped shell." The primary cause of these spillages is the clamped shell which does not seal very tightly. When Urea is drenched in water. shall be for the account and risk of the shipper. 36 Article 1734 of the New Civil Code provides that common carriers are not responsible for the loss. The probability of the cargo being damaged or getting mixed or contaminated with foreign particles was made greater by the fact that the fertilizer was transported in "bulk. destruction or deterioration of the goods if caused by the charterer of the goods or defects in the packaging or in the containers. Mr. trimming and discharge of the cargo was to be done by the charterer." thereby exposing it to the inimical effects of the elements and the grimy condition of the various pieces of equipment used in transporting and hauling it. The evidence of respondent carrier also showed that it was highly improbable for sea water to seep into the vessel's holds during the voyage since the hull of the vessel was in good condition and her hatches were tightly closed and firmly sealed. If there was loss or contamination of the cargo. either fresh or saline. Also. that the loading. and therefore under his control and supervision. is caused either by an extremely high temperature in its place of storage. 37 The carrier.I. it was more likely to have occurred while the same was being transported from the . a chemical engineer working with Atlas Fertilizer. making the M/V "Sun Plum" in all respects seaworthy to carry the cargo she was chartered for. 38 Respondent carrier presented a witness who testified on the characteristics of the fertilizer shipped and the expected risks of bulk shipping. This is clear from the limitation clause agreed upon by the parties in the Addendum to the standard "GENCON" time charter-party which provided for an F. a shipowner is liable for damage to the cargo resulting from improper stowage only when the stowing is done by stevedores employed by him. meaning. shall be liable for the loss and damage resulting from the preceding causes if it is proved..The period during which private respondent was to observe the degree of diligence required of it as a public carrier began from the time the cargo was unconditionally placed in its charge after the vessel's holds were duly inspected and passed scrutiny by the shipper. force majeure. The Code of Commerce also provides that all losses and deterioration which the goods may suffer during the transportation by reason of fortuitous event.O. nitrogen and ammonia do not normally evaporate even on a long voyage. the wind tends to blow away some of the materials during the unloading process. and that proof of these accidents is incumbent upon the carrier. The dissipation of quantities of fertilizer. during storage. losses due to spillage during such operation amounting to one percent (1%) against the bill of lading is deemed "normal" or "tolerable. or its daterioration in value. stowing. Urea also contains 46% nitrogen and is highly soluble in water. that they arose through his negligence or by reason of his having failed to take the precautions which usage has established among careful persons. 35 Moreover. However. but prior to unloading. Estanislao Chupungco.
Civil Case No.ship to the dump trucks and finally to the consignee's warehouse. is on leave. April 7. J. as well as the inadequacy of its packaging which further contributed to the loss. and Quiason. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. JJ. The assailed decision of the Court of Appeals. of Manila should be. WHEREFORE. Indeed. Costs against petitioner. the petition is DISMISSED. Davide. Cruz. respondent carrier has sufficiently proved the inherent character of the goods which makes it highly vulnerable to deterioration. This may be gleaned from the testimony of the marine and cargo surveyor of CSCI who supervised the unloading. which reversed the trial court.. No. 98623 of the then Court of the First Instance. concur. now Regional Trial Court. Clearly. It rained from time to time at the harbor area while the cargo was being discharged according to the supply officer of PPI. is AFFIRMED. took no part. 101089.. This is a risk the shipper or the owner of the goods has to face. SO ORDERED. On the other hand. J. The Court notes that it was in the month of July when the vessel arrived port and unloaded her cargo.. as it is hereby DISMISSED. . He explained that the 18 M/T of alleged "bar order cargo" as contained in their report to PPI was just an approximation or estimate made by them after the fertilizer was discharged from the vessel and segregated from the rest of the cargo.R. Jr. More so. we agree with respondent carrier that bulk shipment of highly soluble goods like fertilizer carries with it the risk of loss or damage. no proof was adduced by the petitioner showing that the carrier was remise in the exercise of due diligence in order to minimize the loss or damage to the goods it carried. Griño-Aquino. 1993. Consequently. who also testified that it was windy at the waterfront and along the shoreline where the dump trucks passed enroute to the consignee's warehouse. with a variable weather condition prevalent during its unloading. as was the case at bar.
ESTRELLITA M. BASCOS, petitioners, vs. COURT OF APPEALS and RODOLFO A. CIPRIANO, respondents. Modesto S. Bascos for petitioner. Pelaez, Adriano & Gregorio for private respondent. SYLLABUS 1. CIVIL LAW; COMMON CARRIERS; DEFINED; TEST TO DETERMINE COMMON CARRIER. — Article 1732 of the Civil Code defines a common carrier as "(a) person, corporation or firm, or association engaged in the business of carrying or transporting passengers or goods or both, by land, water or air, for compensation, offering their services to the public." The test to determine a common carrier is "whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business transacted." . . . The holding of the Court in De Guzman vs. Court of Appeals is instructive. In referring to Article 1732 of the Civil Code, it held thus: "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 distinguished 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." 2. ID.; ID.; DILIGENCE REQUIRED IN VIGILANCE OVER GOODS TRANSPORTED; WHEN PRESUMPTION OF NEGLIGENCE ARISES; HOW PRESUMPTION OVERCAME; WHEN PRESUMPTION MADE ABSOLUTE. — Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods transported by them. Accordingly, they are presumed to have been at fault or to have acted negligently if the goods are lost, destroyed or deteriorated. There are very few instances when the presumption of negligence does not attach and these instances are enumerated in Article 1734. In those cases where the presumption is applied, the common carrier must prove that it exercised extraordinary diligence in order to overcome the presumption . . . The presumption of negligence was raised against petitioner. It was petitioner's burden to overcome it. Thus, contrary to her assertion, private respondent need not introduce any evidence to prove her negligence. Her own failure to adduce sufficient proof of extraordinary diligence made the presumption conclusive against her. 3. ID.; ID.; HIJACKING OF GOODS; CARRIER PRESUMED NEGLIGENT; HOW CARRIER ABSOLVED FROM LIABILITY. — In De Guzman vs. Court of Appeals, the Court held that hijacking, not being included in the provisions of Article 1734, must be dealt with under the provisions of Article 1735 and thus, the common carrier is presumed to have been at fault or negligent. To exculpate the carrier from liability arising from hijacking, he must prove that the robbers or the hijackers acted with grave or irresistible threat, violence, or force. This is in accordance with Article 1745 of the Civil Code which provides: "Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy . . . (6) That the common carrier's liability for acts committed by thieves, or of robbers who do not
act with grave or irresistible threat, violences or force, is dispensed with or diminished"; In the same case, the Supreme Court also held that: "Under Article 1745 (6) above, 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 of irresistible threat, violence of force," We believe and so hold 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." 4. REMEDIAL LAW; EVIDENCE; JUDICIAL ADMISSIONS CONCLUSIVE. — In this case, petitioner herself has made the admission that she was in the trucking business, offering her trucks to those with cargo to move. Judicial admissions are conclusive and no evidence is required to prove the same. 5. ID.; ID.; BURDEN OF PROOF RESTS WITH PARTY WHO ALLEGES A FACT. — Petitioner presented no other proof of the existence of the contract of lease. He who alleges a fact has the burden of proving it. 6. ID.; ID.; AFFIDAVITS NOT CONSIDERED BEST EVIDENCE IF AFFIANTS AVAILABLE AS WITNESSES. — While the affidavit of Juanito Morden, the truck helper in the hijacked truck, was presented as evidence in court, he himself was a witness as could be gleaned from the contents of the petition. Affidavits are not considered the best evidence if the affiants are available as witnesses. 7. CIVIL LAW; OBLIGATIONS AND CONTRACTS; CONTRACT IS WHAT LAW DEFINES IT TO BE. — Granting that the said evidence were not self-serving, the same were not sufficient to prove that the contract was one of lease. It must be understood that a contract is what the law defines it to be and not what it is called by the contracting parties. DECISION CAMPOS, JR., J p: This is a petition for review on certiorari of the decision ** of the Court of Appeals in "RODOLFO A. CIPRIANO, doing business under the name CIPRIANO TRADING ENTERPRISES plaintiffappellee, vs. ESTRELLITA M. BASCOS, doing business under the name of BASCOS TRUCKING, defendant-appellant," C.A.-G.R. CV No. 25216, the dispositive portion of which is quoted hereunder: "PREMISES considered, We find no reversible error in the decision appealed from, which is hereby affirmed in toto. Costs against appellant." 1 The facts, as gathered by this Court, are as follows: Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE for short) entered into a hauling contract 2 with Jibfair Shipping Agency Corporation whereby the former bound itself to haul the latter's 2,000 m/tons of soya bean meal from Magallanes Drive, Del Pan, Manila to the warehouse of Purefoods Corporation in Calamba, Laguna. To carry out its obligation, CIPTRADE, through Rodolfo Cipriano, subcontracted with Estrellita Bascos (petitioner) to transport and to deliver 400 sacks of soya bean meal worth P156,404.00 from the Manila Port
Area to Calamba, Laguna at the rate of P50.00 per metric ton. Petitioner failed to deliver the said cargo. As a consequence of that failure, Cipriano paid Jibfair Shipping Agency the amount of the lost goods in accordance with the contract which stated that: "1. CIPTRADE shall be held liable and answerable for any loss in bags due to theft, hijacking and non-delivery or damages to the cargo during transport at market value, . . ." 3 Cipriano demanded reimbursement from petitioner but the latter refused to pay. Eventually, Cipriano filed a complaint for a sum of money and damages with writ of preliminary attachment 4 for breach of a contract of carriage. The prayer for a Writ of Preliminary Attachment was supported by an affidavit 5 which contained the following allegations: "4. That this action is one of those specifically mentioned in Sec. 1, Rule 57 the Rules of Court, whereby a writ of preliminary attachment may lawfully issue, namely: "(e) in an action against a party who has removed or disposed of his property, or is about to do so, with intent to defraud his creditors;" 5. That there is no sufficient security for the claim sought to be enforced by the present action; 6. That the amount due to the plaintiff in the above-entitled case is above all legal counterclaims;" The trial court granted the writ of preliminary attachment on February 17, 1987. In her answer, petitioner interposed the following defenses: that there was no contract of carriage since CIPTRADE leased her cargo truck to load the cargo from Manila Port Area to Laguna; that CIPTRADE was liable to petitioner in the amount of P11,000.00 for loading the cargo; that the truck carrying the cargo was hijacked along Canonigo St., Paco, Manila on the night of October 21, 1988; that the hijacking was immediately reported to CIPTRADE and that petitioner and the police exerted all efforts to locate the hijacked properties; that after preliminary investigation, an information for robbery and carnapping were filed against Jose Opriano, et al.; and that hijacking, being a force majeure, exculpated petitioner from any liability to CIPTRADE. After trial, the trial court rendered a decision *** the dispositive portion of which reads as follows: "WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendant ordering the latter to pay the former: 1. The amount of ONE HUNDRED FIFTY-SIX THOUSAND FOUR HUNDRED FOUR PESOS (P156,404.00) as an (sic) for actual damages with legal interest of 12% per cent per annum to be counted from December 4, 1986 until fully paid; 2. The amount of FIVE THOUSAND PESOS (P5,000.00) as and for attorney's fees; and 3. The costs of the suit.
Bascos Trucking. NEVERTHELESS. EX GRATIA ARGUMENTI. Maximo Sanglay. representing CIPTRADE.M. NAMELY. both courts appreciated the following pieces of evidence as indicators that petitioner was a common carrier: the fact that the truck driver of petitioner. Thus. and (2) was the hijacking referred to a force majeure? The Court of Appeals. 10 She also stated that: she was not catering to the general public. Bascos Trucking and that said admission dispensed with the presentation by private respondent. SO ORDERED. offering her trucks for lease to those who have cargo to move." 6 Petitioner appealed to the Court of Appeals but respondent Court affirmed the trial court's judgment. These affidavits were made by Jesus Bascos 8 and by petitioner herself. of proofs that petitioner was a common carrier. to wit: "I. GRANTING. Juanito Morden. found that she admitted in her answer that she did business under the name A. In disputing the conclusion of the trial and appellate courts that petitioner was a common carrier. petitioner filed this petition where she makes the following assignment of errors. she said that she does business under the same style of A. THE RESPONDENT COURT ERRED IN HOLDING THAT THE CONTRACTUAL RELATIONSHIP BETWEEN PETITIONER AND PRIVATE RESPONDENT WAS CARRIAGE OF GOODS AND NOT LEASE OF CARGO TRUCK. 1987 filed by defendant is DENIED for being moot and academic. Moreover. The respondent Court also adopted in toto the trial court's decision that petitioner was a common carrier. Consequently. and the fact that control of the cargo was placed in petitioner's care. received the cargo consisting of 400 bags of soya bean meal as evidenced by a cargo receipt signed by Maximo Sanglay.M. the fact that the truck helper. 9 She further averred that Jesus Bascos confirmed in his testimony his statement that the contract was a lease contract. THE RESPONDENT COURT ERRED IN AFFIRMING THE FINDING OF THE TRIAL COURT THAT PETITIONER'S MOTION TO DISSOLVE/LIFT THE WRIT OF PRELIMINARY ATTACHMENT HAS BEEN RENDERED MOOT AND ACADEMIC BY THE DECISION OF THE MERITS OF THE CASE. III. she alleged in this petition that the contract between her and Rodolfo A. THAT THE FINDING OF THE RESPONDENT COURT THAT THE CONTRACTUAL RELATIONSHIP BETWEEN PETITIONER AND PRIVATE RESPONDENT WAS CARRIAGE OF GOODS IS CORRECT. She cited as evidence certain affidavits which referred to the contract as "lease". was also an employee of petitioner. IT ERRED IN FINDING PETITIONER LIABLE THEREUNDER BECAUSE THE LOSS OF THE CARGO WAS DUE TO FORCE MAJEURE.The "Urgent Motion To Dissolve/Lift preliminary Attachment" dated March 10. Rodolfo Cipriano. was lease of the truck. in her answer to the amended complaint." 7 The petition presents the following issues for resolution: (1) was petitioner a common carrier?. Cipriano. HIJACKING. in holding that petitioner was a common carrier. II. not to the general public but to a few customers only in view of the fact that it is only a small business. 11 .
18 There are very few instances when the presumption of negligence does not attach and these instances are enumerated in Article 1734. In this case. water or air. Neither does Article 1732 distinguish between a carrier offering its services to the "general public. granting that the said evidence were not selfserving. We think that Article 1732 deliberately refrained from making such distinctions. offering her trucks to those with cargo to move. must be dealt with under the ." i. petitioner presented no other proof of the existence of the contract of lease.. and one who offers services or solicits business only from a narrow segment of the general population. they are presumed to have been at fault or to have acted negligently if the goods are lost. and one who does such carrying only as an ancillary activity (in local idiom. 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. did not object to the presentation of affidavits by petitioner where the transaction was referred to as a lease contract. episodic or unscheduled basis. He who alleges a fact has the burden of proving it. We affirm the holding of the respondent court that the loss of the goods was not due to force majeure. 17 Accordingly. as a "sideline"). Regarding the first contention. Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods transported by them. offering their services to the public. corporation or firm. the general community or population. Yet. 20 the Court held that hijacking. In De Guzman vs. the holding of the Court in De Guzman vs. or association engaged in the business of carrying or transporting passengers or goods or both. Court of Appeals. Court of Appeals 14 is instructive. plaintiffs in the lower court. for compensation. both the trial and appellate courts have dismissed them as self-serving and petitioner contests the conclusion. In referring to Article 1732 of the Civil Code. by land. the same were not sufficient to prove that the contract was one of lease." The test to determine a common carrier is "whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business transacted. Judicial admissions are conclusive and no evidence is required to prove the same." Regarding the affidavits presented by petitioner to the court. 13 But petitioner argues that there was only a contract of lease because they offer their services only to a select group of people and because the private respondents. the common carrier must prove that it exercised extraordinary diligence in order to overcome the presumption. It must be understood that a contract is what the law defines it to be and not what it is called by the contracting parties. Article 1732 of the Civil Code defines a common carrier as "(a) person.We agree with the respondent Court in its finding that petitioner is a common carrier. 15 Furthermore. petitioner herself has made the admission that she was in the trucking business. it held thus: "The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both.e. petitioner alleged that hijacking constituted force majeure which exculpated her from liability for the loss of the cargo. not being included in the provisions of Article 1734. destroyed or deteriorated. We are bound by the appellate court's factual conclusions." 12 In this case. 16 Likewise. 19 In those cases where the presumption is applied.
violence. Having affirmed the findings of the respondent Court on the substantial issues involved." In the same case. 25 The subsequent filing of the information for carnapping and robbery against the accused named in said affidavits did not necessarily mean that the contents of the affidavits were true because they were yet to be determined in the trial of the criminal cases. the common carrier is presumed to have been at fault or negligent. or force. 21 the Supreme Court also held that: "Under Article 1745 (6) above. While it had been admitted in court for lack of objection on the part of private respondent. violence or force. Her own failure to adduce sufficient proof of extraordinary diligence made the presumption conclusive against her. Thus. 22 Jesus Bascos' affidavit. violence or force. unjust and contrary to public policy. he must prove that the robbers or the hijackers acted with grave or irresistible threat. In the light of the foregoing analysis. This is in accordance with Article 1745 of the Civil Code which provides: "Art. the respondent Court had discretion in assigning weight to such evidence. We believe and so hold 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. The presumption of negligence was raised against petitioner. It was petitioner's burden to overcome it. private respondent need not introduce any evidence to prove her negligence. he himself was a witness as could be gleaned from the contents of the petition. We find no reason to disturb the conclusion that the motion to lift/dissolve the writ of preliminary attachment has been rendered moot and academic by the decision on the merits. However. petitioner presented her accusatory affidavit. Secondly." To establish grave and irresistible force. the affidavit of Jesus Bascos did not dwell on how the hijacking took place. To exculpate the carrier from liability arising from hijacking. 23 and Juanito Morden's 24 "Salaysay". while the affidavit of Juanito Morden. The petition is DISMISSED and the decision of the Court of Appeals is hereby AFFIRMED. We are bound by the conclusion of the appellate court. We are not to determine the probative value of evidence but to resolve questions of law. contrary to her assertion. is dispensed with or diminished. xxx xxx xxx (6) That the common carrier's liability for acts committed by thieves. Thirdly. both the trial court and the Court of Appeals have concluded that these affidavits were not enough to overcome the presumption. It was not a first-hand account. Affidavits are not considered the best evidence if the affiants are available as witnesses. it is Our opinion that the petitioner's claim cannot be sustained. 1745. the truck helper in the hijacked truck. Any of the following or similar stipulations shall be considered unreasonable. 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. . was presented as evidence in court.provisions of Article 1735 and thus. In a petition for review on certiorari. or of robbers who do not act with grave or irresistible threat. violences or force. Petitioner's affidavit about the hijacking was based on what had been told her by Juanito Morden.
. ROSAMARIA T. EDWARD TAN. AMYLINE ANTONIO. which affirmed with modification the decision of the Regional Trial Court of Makati. MORTIZ. JOCELYN GARCIA. ARLENE Y.000. JJ . GONZALO GONZALES. GARCIA. ENGRACIO FABRE. ARLENE GOJOCCO. MARIETTA C. whom they hired in 1981. LOPES.00. and its resolution which denied petitioners' motion for reconsideration for lack of merit. Petitioners Engracio Fabre. No. ROSARIO MA. MELINDA TORRES. TESS PLATA. 1996 MR. Padilla. ROSARIO MARA-MARA. MARELLA MIJARES. J. Jr. CARLOS RANARIO. (WWCF) arranged with petitioners for the transportation of 33 members of its Young Adults Ministry from Manila to La Union and back in consideration of which private respondent paid petitioners the amount of P3. JULIUS CAESAR. FRANCIS NORMAN O. . QUE. JR. JOSEFA CABATINGAN. The couple had a driver. His job was to take school children to and from the St. ORTIZ. 28245... On November 2. RICHARD BAUTISTA. & MRS. ordering petitioners jointly and severally to pay damages to private respondent Amyline Antonio. Scholastica's College in Malate. dated September 30. JOHN RICHARDS. ERNESTO NARCISO. NOEL ROQUE. respondents. and his wife were owners of a 1982 model Mazda minibus. MARA NADOC.J . DIANE MAYO. CLAVO. INC. vs.R. V. JR. COURT OF APPEALS. Manila. and PORFIRIO CABIL. after trying him out for two weeks. ALBERTO ROXAS CORDERO.. THE WORD FOR THE WORLD CHRISTIAN FELLOWSHIP. 1984 private respondent Word for the World Christian Fellowship Inc. ICLI CORDOVA. 1992. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. Porfirio J.SO ORDERED. RADOC and BERNADETTE FERRER. Narvasa. Branch 58.:p This is a petition for review on certiorari of the decision of the Court of Appeals 1 in CA-GR No. They used the bus principally in connection with a bus service for school children which they operated in Manila. ENRIQUETA LOCSIN. Regalado and Nocon. VICENTE V. MAYETTE JOCSON. YOLANDA CORDOVA. LIZA MAYO. C . concur. TERESITA REGALA. petitioners. 111127 July 26. Cabil. MENDOZA. ELVIE SENIEL.
brought this case in the RTC of Makati. Niño Hospital. Several passengers were injured. causing the bus. 1984. as several members of the party were late. running on a south to east direction. who was unfamiliar with the area (it being his first trip to La Union). He said that he saw the curve when he was already within 15 to 30 meters of it. The driver. . she was taken to the Nazareth Hospital in Baay. petitioner Cabil came upon a sharp curve on the highway. La Union was through Carmen. Metro Manila. first to the Philippine General Hospital and later to the Makati Medical Center where she underwent an operation to correct the dislocation of her spine. In its decision dated April 17." The road was slippery because it was raining. coming to a full stop only after a series of impacts.The group was scheduled to leave on November 2. At 11:30 that night. all the evidence presented have shown the negligent act of the defendants which ultimately resulted to the accident subject of this case. to skid to the left road shoulder. at 5:00 o'clock in the afternoon. sot hat petitioner Cabil. During the trial she described the operations she underwent and adduced evidence regarding the cost of her treatment and therapy. She was in great pain and could not move. He said he was not familiar with the area and he could not have seen the curve despite the care he took in driving the bus. then turned over and landed on its left side. On the basis of their finding they filed a criminal complaint against the driver. Immediately after the accident. The bus hit the left traffic steel brace and sign along the road and rammed the fence of one Jesus Escano. petitioner Cabil. the trial court found that: No convincing evidence was shown that the minibus was properly checked for travel to a long distance trip and that the driver was properly screened and tested before being admitted for employment. Porfirio Cabil. An x-ray was taken and the damage to her spine was determined to be too severe to be treated there. 1989. but it was too late. was forced to take a detour through the town of Baay in Lingayen. He allegedly slowed down to 30 kilometers per hour. It took three persons to safely remove her from this portion. Petitioner Porfirio Cabil drove the minibus. Amyline Antonio. which was running at the speed of 50 kilometers per hour. claimed he did not see the curve until it was too late. The case was later filed with the Lingayen Regional Trial Court. As a result of the accident. As this hospital was not adequately equipped. However. the bridge at Carmen was under repair. November 3. the bus did not leave the Tropical Hut at the corner of Ortigas Avenue and EDSA until 8:00 o'clock in the evening. because it was dark and there was no sign on the road. Petitioners Fabre paid Jesus Escano P1. where she was given sedatives. she was transferred to the Sto. However. Pangasinan. A coconut tree which it had hit fell on it and smashed its front portion. 1984. also in the town of Ba-ay. She was therefore brought to Manila. The Lingayen police investigated the incident the next day. The bus came to rest off the road. Lingayen.00 for the damage to the latter's fence.500. which he described as "siete. Indeed. she is now suffering from paraplegia and is permanently paralyzed from the waist down. On the basis of Escano's affidavit of desistance the case against petitioners Fabre was dismissed. Private respondent Amyline Antonio was thrown on the floor of the bus and pinned down by a wooden seat which came down by a wooden seat which came off after being unscrewed. Pangasinan. who was seriously injured. The usual route to Caba.
premises considered. Jr. this petition. & Mrs.Accordingly. 4) P20.657.000. Amyline Antonio were the only ones who adduced evidence in support of their claim for damages.00 as the reasonable amount of loss of earning capacity of plaintiff Amyline Antonio.00 as attorney's fees. the Court hereby renders judgment against defendants Mr. and Porfirio Cabil y Jamil pursuant to articles 2176 and 2180 of the Civil Code of the Philippines and said defendants are ordered to pay jointly and severally to the plaintiffs the following amount: 1) P93. . WHETHER OR NOT PETITIONERS WERE NEGLIGENT. Engracio Fabre. 4) P20.00 as moral damages. and 5) 25% of the recoverable amount as attorney's fees. 3) P20. 5) P10.11 as actual damages.657.000. 6) Costs of suit. the Court is therefore not in a position to award damages to the other plaintiffs.00 as moral damages. 2) P600.000. WHEREFORE.00 as exemplary damages.000. The Court of Appeals modified the award of damages as follows: 1) P93. The Court of Appeals affirmed the decision of the trial court with respect to Amyline Antonio but dismissed it with respect to the other plaintiffs on the ground that they failed to prove their respective claims.000. 2) P500. 3) P50.00 as exemplary damages. and 6) Costs of suit. it gave judgment for private respondents holding: Considering that plaintiffs Word for the World Christian Fellowship.11 as compensatory and actual damages. The Court of Appeals sustained the trial court's finding that petitioner Cabil failed to exercise due care and precaution in the operation of his vehicle considering the time and the place of the accident.00 as compensatory damages.000. and Ms. SO ORDERED.000. Hence. Petitioners raise the following issues: I. Inc. The Court of Appeals held that the Fabres were themselves presumptively negligent.
the award of P600. the road was slippery. UP TO WHAT EXTENT. it was admitted by Cabil that on the night in question. Given the conditions of the road and considering that the trip was Cabil's first one outside of Manila. supported as they are by the evidence." earning P1. considering Amyline Antonio's earnings. failed to exercise the diligence of a good father of the family in the selection and supervision of their employee is fully supported by the evidence on record." nevertheless "the act that breaks the contract may be also a tort.000. so that at 50 kilometers per hour." 2 In either case.000. that it was dark. who owned the bus.II. 2176 and 2180 of the Civil Code his negligence gave rise to the presumption that his employers. Pursuant to Arts. He averred these facts to justify his failure to see that there lay a sharp curve ahead. is without factual basis as there is no assurance that she would be regularly earning these amounts. Indeed. III WHETHER OR NOT DAMAGES CAN BE AWARDED AND IN THE POSITIVE. First. Amyline Antonio testified that she was a casual employee of a company called "Suaco. that he drove his bus at 50 kilometers an hour when even on a good day the normal speed was only 20 kilometers an hour.00. earning an average of P1. it is undisputed that Cabil drove his bus at the speed of 50 kilometers per hour and only slowed down when he noticed the curve some 15 to 30 meters ahead. the petition is devoid of merit.00 a month. it was raining. With the exception of the award of damages. Due diligence in selection of employees is not satisfied by finding that the applicant possessed a professional driver's license. WHETHER OF NOT PETITIONERS WERE LIABLE FOR THE INJURIES SUFFERED BY PRIVATE RESPONDENTS. the question is whether the bus driver. There is testimony 4that the vehicles passing on that portion of the road should only be running 20 kilometers per hour.000. 3 By then it was too late for him to avoid falling off the road. Cabil was running at a very high speed. The employer should also examine the applicant for his . Petitioners challenge the propriety of the award of compensatory damages in the amount of P600.00 monthly. and it was dark. Considering the foregoing — the fact that it was raining and the road was slippery.650. However. The finding that Cabil drove his bus negligently. petitioner Porfirio Cabil. Cabil should have driven his vehicle at a moderate speed. were themselves negligent in the selection and supervisions of their employee. Cabil was grossly negligent and should be held liable for the injuries suffered by private respondent Amyline Antonio. while his employer. These factual findings of the two courts we regard as final and conclusive. and that he was unfamiliar with the terrain. it is unnecessary for our purpose to determine whether to decide this case on the theory that petitioners are liable for breach of contract of carriage or culpa contractual or on the theory of quasi delict or culpa aquiliana as both the Regional Trial Court and the Court of Appeals held. the Fabres. was negligent.00 is unconscionable and highly speculative. on the assumption that petitioners are liable an award of P600. Petitioners contend that as casual employees do not have security of tenure. It is insisted that. for although the relation of passenger and carrier is "contractual both in origin and nature.000. and a dealer of Avon products. the Fabres. and as a consequence.00.
Neither of these contentions hold water. 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. corporations. this case actually involves a contract of carriage. but exercises no other control over the conduct of the driver. caused by the negligence or the automobile driver. is not responsible for acts of negligence of the latter or prevented from recovering for injuries suffered from a collision between the automobile and a train. from their homes to the St. water. The hour of departure had not been fixed. especially considering that the trip to La Union was his first. We think that Article 1732 deliberately refrained from making such distinctions. They had tested him for certain matters. 1732. As this Court has held: 10 Art.e. They had hired him only after a two-week apprenticeship.. With respect to the second contention.qualifications. As common carriers. and one who offers services or solicits business only from a narrow segment of the general population. or air for compensation. on the other hand. Even if it had been. episodic or unscheduled basis. requires the formulation of rules and regulations for the guidance of employees and issuance of proper instructions as well as actual implementation and monitoring of consistent compliance with the rules." i. 6 In the case at bar. The existence of hiring procedures and supervisory policies cannot be casually invoked to overturn the presumption of negligence on the part of an employer. Common carriers are persons. the Fabres. it was held in an early case that: [A] person who hires a public automobile and gives the driver directions as to the place to which he wishes to be conveyed. apparently did not consider the fact that Cabil had been driving for school children only. and one who does such carrying only as an ancillary activity (in local idiom. offering their services to the public. the general community or population. the delay did not bear directly on the cause of the accident. firms or associations engaged in the business of carrying or transporting passengers or goods or both. 5 Due diligence in supervision. such as whether he could remember the names of the children he would be taking to school. experience and record of service. which were irrelevant to his qualification to drive on a long distance travel. by land. This duty of care is not excused by proof that they exercise the diligence of a good father of . Petitioners. Scholastica's College in Metro Manila. as "a sideline"). the WWCF was directly responsible for the conduct of the trip. 8 Petitioners argue that they are not liable because (1) an earlier departure (made impossible by the congregation's delayed meeting) could have a averted the mishap and (2) under the contract. 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. 7 They had hired him only after a two-week apprenticeship. in allowing Cabil to drive the bus to La Union. The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both. Neither does Article 1732 distinguish between a carrier offering its services to the "general public. the Fabres were found to exercise "extraordinary diligence" for the safe transportation of the passengers to their destination. 9 As already stated. the Fabres.
The same circumstances detailed above. 1755 and 1759 of the Civil Code. 2176 and 2180 for quasi delict. supporting the finding of the trial court and of the appellate court that petitioners are liable under Arts. we find that they are nevertheless supported by evidence in the records of this case. we hold that it was also error for it to increase the award of moral damages and reduce the award of attorney's fees. 14 on facts similar to those in this case. may be made to respond jointly and severally to private respondent. the award of moral damages is authorized by Art. while the decisions of the trial court and the Court of Appeals do not sufficiently indicate the factual and legal basis for them. Co. As Art. 11 To the contrary. Court of Appeals. Viewed as an action for quasi delict. inasmuch as private respondents. The award of exemplary damages and attorney's fees was also properly made. have not appealed. However. we think the Court of Appeals erred in increasing the amount of compensatory damages because private respondents did not question this award as inadequate. Secondly. since Cabil's gross negligence amounted to bad faith. We hold that they may be. 1759 of the Code provides: Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former's employees although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. Court of Appeals 15 a driver found negligent in failing to stop the bus in order to let off passengers when a . The question is whether. In Dangwa Trans. the award of P500. 2219(2) providing for the payment of moral damages in cases of quasi delict.the family in the selection and supervision of their employee. 1733. this Court held the bus company and the driver jointly and severally liable for damages for injuries suffered by a passenger. as the two courts below held. in whose favor the awards were made. 12 Amyline Antonio's testimony. the decision of the Court of Appeals can be sustained either on the theory of quasi delict or on that of breach of contract. v. On the theory that petitioners are liable for breach of contract of carriage. This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees. Again. for the same reason that it was error for the appellate court to increase the award of compensatory damages. who are the owners and driver of the bus. 13 As above stated. as well as the testimonies of her father and copassengers. petitioners. Inc. With respect to the other awards. Inc. v. fully justify findings them guilty of breach of contract of carriage under Arts.00 for compensatory damages which the Regional Trial Court made is reasonable considering the contingent nature of her income as a casual employee of a company and as distributor of beauty products and the fact that the possibility that she might be able to work again has not been foreclosed. in relation to Art. 1764. we sustain the award of damages in favor of Amyline Antonio. fully establish the physical suffering and mental anguish she endured as a result of the injuries caused by petitioners' negligence. 2220. this case falls squarely within the purview of Art.000. However. In fact she testified that one of her previous employers had expressed willingness to employ her again. inBachelor Express.
it was permitted for them to allege alternative causes of action and join as many parties as may be liable on such causes of action 23 so long as private respondent and her coplaintiffs do not recover twice for the same injury. Intermediate Appellate Court. 19 thus: Nor should it make any difference that the liability of petitioner [bus owner] springs from contract while that of respondents [owner and driver of other vehicle] arises from quasidelict. even if such breach be due to the negligence of his driver (see Viluan v. However. that in case of injury to a passenger due to the negligence of the driver of the bus on which he was riding and of the driver of another vehicle.fellow passenger ran amuck. the contract of carriage is between the carrier is exclusively responsible therefore to the passenger. The Court of Appeals. 20 It is true that in Philippine Rabbit Bus Lines. thus causing an accident. 16 SCRA 742). April 29. What is clear from the cases is the intent of the plaintiff there to recover from both the carrier and the driver. Firstly.657. much less on that of breach of contract alone. 56 Phil. The rationale behind this is readily discernible. Some members of the Court. . 1966. L-21477-81. its ruling that spouses Mangune and Carreon are jointly and severally liable with Manalo is erroneous. the operator of the other vehicle and the driver of the vehicle were jointly and severally held liable to the injured passenger or the latters' heirs. are of the view that under the circumstances they are liable on quasi-delict. private respondents in this case and her coplaintiffs did not stake out their claim against the carrier and the driver exclusively on one theory. WHEREFORE. its driver. though. Nos. 22 As in the case of BLTB. As this Court there explained: The trial court was therefore right in finding that Manalo (the driver) and spouses Mangune and Carreon (the jeepney owners) were negligent. 18 the bus company. Buño. we already ruled inGutierrez vs. 17 and Metro Manila Transit Corporation v. justifying the holding that the carrier and the driver were jointly and severally liable because their separate and distinct acts concurred to produce the same injury. Court of Appeals 21 this Court exonerated the jeepney driver from liability to the injured passengers and their families while holding the owners of the jeepney jointly and severally liable. but that is because that case was expressly tried and decided exclusively on the theory of culpa contractual. In Anuran v. as a result of which the passengers jumped out of the speeding bus and suffered injuries. Gutierrez. Court of Appeals.R. G. was held also jointly and severally liable with the bus company to the injured passengers. As early as 1913. The basis of this allocation of liability was explained in Viluan v. Inc. the decision of the Court of Appeals is AFFIRMED with MODIFICATION as to award of damages. v. thus. The same rule of liability was applied in situations where the negligence of the driver of the bus on which plaintiff was riding concurred with the negligence of a third party who was the driver of another vehicle. 16 Batangas Laguna Tayabas Bus Co. 2) P500.000. et al. v.00 as the reasonable amount of loss of earning capacity of plaintiff Amyline Antonio. The driver cannot be held jointly and severally liable with carrier in case of breach of the contract of carriage.. Petitioners are ORDERED to PAY jointly and severally the private respondent Amyline Antonio the following amounts: 1) P93. the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. 177.11 as actual damages. Court of Appeals. After all.
SO ORDERED. 5) 25% of the recoverable amount as attorney's fees. Jr. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. HONORABLE PATERNO V. J. The original pipeline concession was granted in 1967 1 and renewed by the Energy Regulatory Board in 1992. vs. 4) P20. The . 36801. 125948 December 29. ARELLANO. in her official capacity as City Treasurer of Batangas. 1995. No. Regalado.3) P20. 2 Sometime in January 1995. petitioner applied for a mayor's permit with the Office of the Mayor of Batangas City. SP No. JJ. the respondent City Treasurer required petitioner to pay a local tax based on its gross receipts for the fiscal year 1993 pursuant to the Local Government Code 3. Puno and Torres. before the mayor's permit could be issued.R. 387. and 6) costs of suit.. petitioner. install and operate oil pipelines. COURT OF APPEALS. Branch 84. affirming the decision of the Regional Trial Court of Batangas City. TAC-AN.000. MARTINEZ. Petitioner is a grantee of a pipeline concession under Republic Act No.00 as moral damages.R. However. 1998 FIRST PHILIPPINE INDUSTRIAL CORPORATION. in Civil Case No. to contract. 4293. which dismissed petitioners' complaint for a business tax refund imposed by the City of Batangas.000.00 as exemplary damages. respondents..: This petition for review on certiorari assails the Decision of the Court of Appeals dated November 29. BATANGAS CITY and ADORACION C. as amended. concur. Romero. in CA-G.
petitioner filed with the Regional Trial Court of Batangas City a complaint 6 for tax refund with prayer for writ of preliminary injunction against respondents City of Batangas and Adoracion Arellano in her capacity as City Treasurer.respondent City Treasurer assessed a business tax on the petitioner amounting to P956. the respondents argued that petitioner cannot be exempt from taxes under Section 133 (j) of the Local Government Code as said exemption applies only . (2) the authority of cities to impose and collect a tax on the gross receipts of "contractors and independent contractors" under Sec. 131 (h). 4 On March 8.04 payable in four installments based on the gross receipts for products pumped at GPS-1 for the fiscal year 1993 which amounted to P181. Paragraph (h) of the Local Government Code. As such.01 for the first quarter of 1993. Therefore.681. Hence. inspection. petitioner alleged. The imposition and assessment cannot be categorized as a mere fee authorized under Section 147 of the Local Government Code. Paragraph (e) of the Local Government Code does not include the power to levy on transportation contractors. . to Sucat and JTF Pandacan Terminals. (3) the City Treasurer illegally and erroneously imposed and collected the said tax. The fee is already a revenue raising measure. On January 20.01 per quarter) is not commensurate to the cost of regulation. the pertinent portion of which reads: Please note that our Company (FPIC) is a pipeline operator with a government concession granted under the Petroleum Act. Transportation contractors are not included in the enumeration of contractors under Section 131. that: (1) the imposition and collection of the business tax on its gross receipts violates Section 133 of the Local Government Code. 1994. 7 Traversing the complaint. assuming arguendo that FPIC is liable for the license fee. In its complaint. The amount of P956. our Company is exempt from paying tax on gross receipts under Section 133 of the Local Government Code of 1991 . 5 On June 15. It is engaged in the business of transporting petroleum products from the Batangas refineries. .019.076. the authority to impose tax "on contractors and other independent contractors" under Section 143. . 1994. as defined under Sec. the imposition thereof based on gross receipts is violative of the aforecited provision. and licensing. Moreover. petitioner paid the tax under protest in the amount of P239.151. thus meriting the immediate refund of the tax paid. In order not to hamper its operations. inter alia. inspection and licensing. the term "contractors" excludes transportation contractors. petitioner filed a letter-protest addressed to the respondent City Treasurer. the respondent City Treasurer denied the protest contending that petitioner cannot be considered engaged in transportation business.019. and not a mere regulatory imposition. via pipeline.00. thus it cannot claim exemption under Section 133 (j) of the Local Government Code. and.076. 1994. 141 (e) and 151 does not include the authority to collect such taxes on transportation contractors for. The said section limits the imposition of fees and charges on business to such amounts as may be commensurate to the cost of regulation.04 (P239.
Plaintiff is not a common carrier. 9 Petitioner assailed the aforesaid decision before this Court via a petition for review. . ships and the like. 133 (j) encompasses onlycommon carriers so as not to overburden the riding public or commuters with taxes. Yet neither said law nor the deed of concession grant any tax exemption upon the plaintiff. . On February 27. 137 of the Local Tax Code. Plaintiff claims that it is a grantee of a pipeline concession under Republic Act 387. . . the exemption to tax claimed by the plaintiff has become unclear. 1995. Petitioner's motion for reconsideration was denied on July 18. 12 . Such being the situation obtained in this case (exemption being unclear and equivocal) resort to distinctions or other considerations may be of help: 1. . taxes being the lifeblood of the government. . 1995. we referred the case to the respondent Court of Appeals for consideration and adjudication." 2. Even the Local Government Code imposes a tax on franchise holders under Sec. So. That the exemption granted under Sec. . 8 On October 3. (Exhibit A) whose concession was lately renewed by the Energy Regulatory Board (Exhibit B). 143 (e) and 151 of the Code. Respondents further posit that the term "common carrier" under the said code pertains to the mode or manner by which a product is delivered to its destination. consistent with this policy even franchise grantees are taxed (Sec. 137) and contractors are also taxed under Sec. . trains.to "transportation contractors and persons engaged in the transportation by hire and common carriers by air. Exemption may therefore be granted only by clear and unequivocal provisions of law. 1996. ruling in this wise: ." Respondents assert that pipelines are not included in the term "common carrier" which refers solely to ordinary carriers such as trucks. but a special carrier extending its services and facilities to a single specific or "special customer" under a "special contract. the trial court rendered a decision dismissing the complaint. the respondent court rendered a decision 11 affirming the trial court's dismissal of petitioner's complaint. to make them economically and financially viable to serve the people and discharge their functions with a concomitant obligation to accept certain devolution of powers. 1994. Plaintiff is either a contractor or other independent contractor. The Local Tax Code of 1992 was basically enacted to give more and effective local autonomy to local governments than the previous enactments. It is a rule that tax exemptions are to be strictly construed against the taxpayer. land and water. 10On November 29.
that is. Article 1732 . as a "sideline"). He must be engaged in the business of carrying goods for others as a public employment. offering his services to the public generally. offering their services to the public. 3. 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. It is engaged in the business of transporting or carrying goods. for compensation. It undertakes to carry for all persons indifferently. There is merit in the petition. 1732. In De Guzman vs. Civil Code) makes no distinction between one whose principal business activity is the carrying of persons or goods or both. firm or association engaged in the business of carrying or transporting passengers or goods or both. 1996. there is no doubt that petitioner is 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. Petitioner claims that the respondent Court of Appeals erred in holding that (1) the petitioner is not a common carrier or a transportation contractor. corporation.e. 2. He must undertake to carry by the method by which his business is conducted and over his established roads. Thus." The test for determining whether a party is a common carrier of goods is: 1.Hence. water. . The fact that petitioner has a limited clientele does not exclude it from the definition of a common carrier. avoids making any distinction between a person or enterprise offering transportation . 15 Based on the above definitions and requirements. by land. the petition was reinstated. and (2) the exemption sought for by petitioner is not clear under the law. for compensation. He must undertake to carry goods of the kind to which his business is confined. petroleum products. the petition was denied due course in a Resolution dated November 11. The transportation must be for hire. this petition. 13 Petitioner moved for a reconsideration which was granted by this Court in a Resolution 14 of January 22. At first. broadly. and 4. . A "common carrier" may be defined. Art. 1997. and one who does such carrying only as an ancillary activity (in local idiom. i. to all persons who choose to employ its services. and transports the goods by land and for compensation. 1732 of the Civil Code defines a "common carrier" as "any person. for hire as a public employment. or air. Court of Appeals 16 we ruled that: The above article (Art.
electric light heat and power. with general or limited clientele. wire or wireless communications systems. respondent's argument that the term "common carrier" as used in Section 133 (j) of the Local Government Code refers only to common carriers transporting goods and passengers through moving vehicles or vessels either by land. occasional or accidental. manage. for hire or compensation." under the Public Service Act (Commonwealth Act No. steamboat. railroad. as long as it is by land. water supply and power petroleum. is erroneous. any common carrier. with or without fixed route and whatever may be its classification. in the United States. the general community or population. ice-refrigeration plant. freight or carrier service of any class. and one who offers services or solicits business only from a narrow segment of the general population. 1416. either for freight or passenger. sewerage system. engaged in the transportation of passengers or freight or both. In fact. ice plant. episodic or unscheduled basis. shipyard. canal. irrigation system gas. street railway. operate. pontines. Under Section 13. the concept of "common carrier" under Article 1732 may be seen to coincide neatly with the notion of "public service. or control in the Philippines. 17 . as amended) which at least partially supplements the law on common carriers set forth in the Civil Code. It does not provide that the transportation of the passengers or goods should be by motor vehicle. and done for general business purposes. or both. traction railway. ferries and water craft. "public service" includes: every person that now or hereafter may own. wire or wireless broadcasting stations and other similar public services. Neither does Article 1732 distinguish between a carrier offering its services to the "general public. We think that Article 1877 deliberately refrained from making such distinctions. sea or water.e.. whether permanent. As correctly pointed out by petitioner. subway motor vehicle." i.service on a regular or scheduled basis and one offering such service on an occasional. wharf or dock. or steamship line. (Emphasis Supplied) Also. So understood. express service. marine repair shop. paragraph (b) of the Public Service Act. water or air. the definition of "common carriers" in the Civil Code makes no distinction as to the means of transporting. oil pipe line operators are considered common carriers.
therefore. (Emphasis Supplied) The Bureau of Internal Revenue likewise considers the petitioner a "common carrier. storage. Pertinent portion of Article 7 thereof provides: that everything relating to the exploration for and exploitation of petroleum . the exercise of the taxing powers of provinces. . of the Local Government Code. . and everything relating to the manufacture. petitioner is considered a "common carrier. as amended. 133. cities." Thus. . Article 86 thereof provides that: Art. it declared: . or transportation by special methods of petroleum. Pipe line concessionaire as common carrier. and to charge without discrimination such rates as may have been approved by the Secretary of Agriculture and Natural Resources. From the foregoing disquisition. — Unless otherwise provided herein. 13-78. — A pipe line shall have the preferential right to utilize installations for the transportation of petroleum owned by him. refining.Under the Petroleum Act of the Philippines (Republic Act 387). is hereby declared to be a public utility. . Republic Act 387 also regards petroleum operation as a public utility." In BIR Ruling No. 86. 069-83. to wit: Sec. Such being the case. since [petitioner] is a pipeline concessionaire that is engaged only in transporting petroleum products. it is not subject to withholding tax prescribed by Revenue Regulations No. 387 . it is considered a common carrier under Republic Act No. exempt from the business tax as provided for in Section 133 (j). . . and barangays shall not extend to the levy of the following: xxx xxx xxx (j) Taxes on the gross receipts of transportation contractors and persons engaged in the transportation of passengers or freight by hire and common . . there is no doubt that petitioner is a "common carrier" and. municipalities. Common Limitations on the Taxing Powers of Local Government Units. but is obligated to utilize the remaining transportation capacity pro rata for the transportation of such other petroleum as may be offered by others for transport.
AQUINO (A. 131). .). AQUINO (A). Now. So. Mr. Still on page 95.carriers by air. Local government units may impose taxes on top of what is already being imposed by the National Internal Revenue Code which is the so-called "common carriers tax. Speaker. transportation contractors who are enjoying a franchise would be subject to tax by the province. Thank you for that clarification. Speaker. subparagraph 5. . Mr. The deliberations conducted in the House of Representatives on the Local Government Code of 1991 are illuminating: MR. line 1. 18 It is clear that the legislative intent in excluding from the taxing power of the local government unit the imposition of business tax against common carriers is to prevent a duplication of the so-called "common carrier's tax. so we just provided for an exception under Section 125 [now Sec. JAVIER (E. Speaker. Mr. except as otherwise provided in this code." . Thank you Mr. . It states that local government units may not impose taxes on the business of transportation." . What we want to guard against here. . Thank you. . Speaker. May we know the reason why the transportation business is being excluded from the taxing powers of the local government units? MR. 131]. MR. if the Gentleman would care to go to page 98 of Book II. 121 [now Sec. there is an exception contained in Section 121 (now Sec. It states: "SEC. one can see there that provinces have the power to impose a tax on business enjoying a franchise at the rate of not more than one-half of 1 percent of the gross annual receipts. land or water. That is the exception. MR. Mr. on taxes on the business of transportation. Speaker. paragraph 5. This appears to be one of those being deemed to be exempted from the taxing powers of the local government units. is the imposition of taxes by local government units on the carrier business.).). line 16. except as provided in this Code. Speaker. 137] that a province may impose this tax at a specific rate. Common Limitations on the Taxing Powers of Local Government Units. we would like to proceed to page 95. AQUINO (A. Speaker. Mr. Mr." We do not want a duplication of this tax. Mr. Speaker.
ordering LOADSTAR to pay private respondent Manila Insurance Co. in Civil Case No. the petition is hereby GRANTED. and the costs of the suit. Inc. JJ.. 19 To tax petitioner again on its gross receipts in its transportation of petroleum business would defeat the purpose of the Local Government Code. The facts are undisputed. 1âwphi1.: Petitioner Loadstar Shipping Co. 36401. which affirmed the decision of 4 October 1991 2 of the Regional Trial Court of Manila. SO ORDERED. INC.J.000 as attorney's fees. 1995 in CA-G. vs. CV No. seeks to reverse and set aside the following: (a) the 30 January 1997 decision 1 of the Court of Appeals in CA-G. Branch 16. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.Petitioner is already paying three (3%) percent common carrier's tax on its gross sales/earnings under the National Internal Revenue Code. and (b) its resolution of 19 November 1997. 3 denying LOADSTAR's motion for reconsideration of said decision. JR. nêt On 19 November 1984. No.178. concur. with legal interest from the filing of the compliant until fully paid.. SP No. petitioner.067.. The decision of the respondent Court of Appeals dated November 29. Puno and Mendoza. (hereafter LOADSTAR). 1999 LOADSTAR SHIPPING CO. the vessel) the following goods for shipment: .R. P8. 36801 is REVERSED and SET ASIDE. C. COURT OF APPEALS and THE MANILA INSURANCE CO. INC. DAVIDE. respondents. in this petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure. Bellosillo.. LOADSTAR received on board its M/V "Cherokee" (hereafter. (hereafter MIC) the amount of P6....R. 131621 September 28.R. 85-29110. WHEREFORE.
067. On 20 November 1984. was insured by Prudential Guarantee & Assurance. 5 . was not duly proven at the trial. but because it was not seaworthy. when the condition of the sea was moderate. not the Civil Code.and c) 49 bundles of mouldings R & W (3) Apitong Bolidenized. MIC filed a complaint against LOADSTAR and PGAI. If it had been seaworthy. In dismissing LOADSTAR's appeal.178. which should be applied in determining the rights and liabilities of the parties. Agusan del Norte. said amount to be deducted from MIC's claim from LOADSTAR. alleging that the sinking of the vessel was due to the fault and negligence of LOADSTAR and its employees. is not applicable considering that. The goods. it could have withstood the "natural and inevitable action of the sea" on 20 November 1984. In any event. 4 2) As a common carrier. The court noted that the charter of the vessel was limited to the ship. it is the Code of Commerce. agreed with the trial court and affirmed its decision in toto. PGAI. the appellate court made the following observations: 1) LOADSTAR cannot be considered a private carrier on the sole ground that there was a single shipper on that fateful voyage. along with its cargo. As a result of the total loss of its shipment. ignored the same. not because offorce majeure.075. Inc. In its answer. The "limited liability" rule. b) 27 boxes and crates of tilewood assemblies and the others . and the latter executed a subrogation receipt therefor. on its way to Manila from the port of Nasipit. prompting LOADSTAR to elevate the matter to the court of Appeals. The vessel sank. on the other hand. As the insurer. MIC paid P6. there was an actual finding of negligence on the part of the carrier. LOADSTAR'S allegation that the sinking was probably due to the "convergence of the winds. amounting to P6. averred that MIC had no cause of action against it. however. the court a quo rendered judgment in favor of MIC. It also prayed that PGAI be ordered to pay the insurance proceeds from the loss the vessel directly to MIC. PGAI was later dropped as a party defendant after it paid the insurance proceeds to LOADSTAR. the vessel. (hereafter PGAI) for P4 million. As stated at the outset." The vessel. the consignee made a claim with LOADSTAR which.a) 705 bales of lawanit hardwood. therefore. in turn. LOADSTAR denied any liability for the loss of the shipper's goods and claimed that sinking of its vessel was due to force majeure." as stated by a PAGASA expert. but LOADSTAR retained control over its crew. in this case. 3) The vessel was not seaworthy because it was undermanned on the day of the voyage. were insured for the same amount with MIC against various risks including "TOTAL LOSS BY TOTAL OF THE LOSS THE VESSEL. LOADSTAR being the party insured.000 to the insured in full settlement of its claim. which. sank off Limasawa Island. however. On 4 February 1985.
it then devolves upon the shipowner to both allege and prove that the goods were damaged by reason of some fact which legally exempts him from liability. 361 (of the Code of Commerce) has been judicially construed to mean that when goods are delivered on board a ship in good order and condition. the provisions of the Bill of Lading do not apply because said provisions bind only the shipper/consignee and the carrier. it is barred by estoppel. 8 LOADSTAR also maintains that the vessel was seaworthy. force majeure. there could be no other conclusion . and the burden of proving otherwise devolved upon MIC. who certified that the ship was fit to undertake a voyage. licensed and unquestionably competent." In refutation." Neither was there any "special arrangement" between LOADSTAR and the shipper regarding the shipment of the cargo. it was also carrying passengers as part of its regular business. and there was only "one shipper. it did not have a regular trip or schedule nor a fixed route. While it is true that the vessel had on board only the cargo of wood products for delivery to one consignee. LOADSTAR argues that as a private carrier. As regards the second error. Before the fateful voyage on 19 November 1984. The singular fact that the vessel was carrying a particular type of cargo for one shipper is not sufficient to convert the vessel into a private carrier. the vessel was allegedly dry docked at Keppel Philippines Shipyard and was duly inspected by the maritime safety engineers of the Philippine Coast Guard. Regarding the first issue. or the inherent nature and defects of the goods. LOADSTAR. it was subrogated to the latter's rights as against the carrier. hence. With all these precautions. 6) "Art. LOADSTAR submits that the vessel was a private carrier because it was not issued certificate of public convenience. 6 5) There was a clear breach of the contract of carriage when the shipper's goods never reached their destination. Moreover.4) Between MIC and LOADSTAR. the bills of lading in this case made no mention of any charter party but only a statement that the vessel was a "general cargo carrier. LOADSTAR's defense of "diligence of a good father of a family" in the training and selection of its crew is unavailing because this is not a proper or complete defense in culpa contractual. Its crew at the time was experienced. one consignee for a special cargo. unless otherwise proved." Transportation of the merchandise at the risk and venture of the shipper means that the latter bears the risk of loss or deterioration of his goods arising from fortuitous events. it cannot be presumed to have been negligent. but not those caused by the presumed negligence or fault of the carrier. When MIC paid the shipper for the goods insured. and the shipowner delivers them to the shipper in bad order and condition. MIC argues that the issue as to the classification of the M/V "Cherokee" was not timely raised below. 7 The errors assigned by LOADSTAR boil down to a determination of the following issues: (1) Is the M/V "Cherokee" a private or a common carrier? (2) Did LOADSTAR observe due and/or ordinary diligence in these premises.
Tapel also testified that the convergence of winds brought about by these two typhoons strengthened wind velocity in the area. Agusan del Norte. naturally producing strong waves and winds. In support of its position. Thirdly. We find no merit in this petition.. damage. being a private carrier. "WELFRING" and "YOLING." LOADSTAR was not liable for any loss or damage to the same. Any stipulation in the charter party absolving the owner from liability for loss due to the negligence of its agent is void only if the strict policy . It points out that when the vessel left Nasipit. 10 Finally. claims that LOADSTAR was liable. Stolt-Nielsen Phils. 1 was declared over Eastern Visayas. in turn. American Steamship Agencies. MIC. on 19 November 1984. notwithstanding that the loss of the cargo was due toforce majeure. we hold that LOADSTAR is a common carrier. v. It is not necessary that the carrier be issued a certificate of public convenience. the same must be deemed waived. signal no. episodic or unscheduled. fully established the existence of two typhoons. Therefore.. occasional. hence. and not to the insurer of the goods. the weather was fine until the next day when the vessel sank due to strong waves. In fact. or non-delivery of shipment shall be instituted within sixty days from the accrual of the right of action. Anent the first assigned error. the " limited liability " theory is not applicable in the case at bar because LOADSTAR was at fault or negligent.. the Court of Appeals erred in holding that the provisions of the bills of lading apply only to the shipper and the carrier. such loss being due to force majeure. and this public character is not altered by the fact that the carriage of the goods in question was periodic. any agreement limiting its liability. Inc. because the same concurred with LOADSTAR's fault or negligence. the case for recovery was filed only on 4 February 1985. Gracelia Tapel." inside the Philippine area of responsibility. 11 where this Court held that a common carrier transporting special cargo or chartering the vessel to a special person becomes a private carrier that is not subject to the provisions of the Civil Code. LOADSTAR did not raise the issue of prescription in the court below. and because it failed to maintain a seaworthy vessel. The vessel sank on 20 November 1984. is valid. which includes Limasawa Island. LOADSTAR goes on to argue that.except that LOADSTAR exercised the diligence of a good father of a family in ensuring the vessel's seaworthiness. Secondly. v. LOADSTAR avers that MIC's claim had already prescribed. Since the cargo was being shipped at "owner's risk.. such as what transpired in this case. LOADSTAR relied on the 1968 case of Home Insurance Co. LOADSTAR further claims that it was not responsible for the loss of the cargo. Paul Fire & Marine Co. Inc. Authorizing the voyage notwithstanding its knowledge of a typhoon is tantamount to negligence. on 20 November 1984. 9 and National Union Fire Insurance Company of Pittsburgh v. MCI's witness. yet. on the other hand. Macondray & Co. Inc. causing the vessel to list and eventually sink. which conclusion runs counter to the Supreme Court's ruling in the case of St. the case having been instituted beyond the period stated in the bills of lading for instituting the same — suits based upon claims arising from shortage.
LOADSTAR also cited Valenzuela Hardwoodand Industrial Supply. and one who offers services or solicits business only from a narrow segment of the general population. offering their services to the public. 1732." on the date in question.: The Civil Code defines "common carriers" in the following terms: Art. In the case of De Guzman v. We think that Article 1733 deliberately refrained from making such distinctions. water. especially where. .. Under the facts and circumstances obtaining in this case. the general community or population. 15 the Court juxtaposed the statutory definition of "common carriers" with the peculiar circumstances of that case. but only a general provision to the effect that the M/V"Cherokee" was a "general cargo carrier." 14 Further.e. as in the case of a ship totally chartered for the use of a single party. Inc. the bare fact that the vessel was carrying a particular type of cargo for one shipper. 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. Court of Appeals 12 and National Steel Corp. and one who does such carrying only as ancillary activity (in local idiom. LOADSTAR fits the definition of a common carrier under Article 1732 of the Civil Code. The bills of lading failed to show any special arrangement. it was shown that the vessel was also carrying passengers. undertook to carry a special cargo or was chartered to a special person only." i. although such backhauling was done on a periodic or occasional rather than regular or scheduled manner. xxx xxx xxx It appears to the Court that private respondent is properly characterized as a common carrier even though he merely "back-hauled" goods for other merchants from Manila to Pangasinan. The records do not disclose that the M/V "Cherokee. episodic or unscheduled basis. is not reason enough to convert the vessel from a common to a private carrier. and eventhough private respondent's principal occupation was not the carriage of goods for others. There was no charter party. The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both. Court of Appeals. Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional. as "a sideline". 13 both of which upheld the Home Insurance doctrine. by land. Common carriers are persons. corporations. v. Court of Appeals. These cases invoked by LOADSTAR are not applicable in the case at bar for the simple reason that the factual settings are different.governing common carriers is upheld. firms or associations engaged in the business of carrying or transporting passengers or goods or both. or air for compensation. Neither does Article 1732 distinguish between a carrier offering its services to the "general public. Such policy has no force where the public at is not involved. which appears to be purely coincidental. v. as in this case. viz.
and concluded he was not a common carrier. Inc. it did not sink because of any storm that may be deemed as force majeure. the cases relied on by LOADSTAR involved a limitation on the carrier's liability to an amount fixed in the bill of lading which the parties may enter into. "For a vessel to be seaworthy. a suit by the insurer as subrogee is necessarily subject to the same limitations and restrictions. it must be adequately equipped for the voyage and manned with a sufficient number of competent officers and crew. Stolt-Nielsen Phils. the carrier is not liable for any loss or damage to shipments made at "owner's . Moving on to the second assigned error. 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. In the first place.The Court of Appeals referred to the fact that private respondent held no certificate of public convenience. Co. LOADSTAR cannot hide behind the "limited liability" doctrine to escape responsibility for the loss of the vessel and its cargo." 16 Neither do we agree with LOADSTAR's argument that the "limited liability" theory should be applied in this case. that is. 17 LOADSTAR was at fault or negligent in not maintaining a seaworthy vessel and in having allowed its vessel to sail despite knowledge of an approaching typhoon. A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers.. in utter disregard of this Court's pronouncements in St. that is. Since the right of the assured in case of loss or damage to the goods is limited or restricted by the provisions in the bills of lading. it can recover only the amount that may. in turn. be recovered by the latter. v. Macondray & Co. that would be to reward private respondent precisely for failing to comply with applicable statutory requirements The business of a common carrier impinges directly and intimately upon the safety and well being and property of those members of the general community who happen to deal with such carrier. The law imposes duties and liabilities upon common carriers for the safety and protection of those who utilize their services and the law cannot allow a common carrier to render such duties and liabilities merely facultative by simply failing to obtain the necessary permits and authorizations. LOADSTAR also claims that the Court of Appeals erred in holding it liable for the loss of the goods.. In any event.. The failure of a common carrier to maintain in seaworthy condition its vessel involved in a contract of carriage is a clear breach of its duty prescribed in Article 1755 of the Civil Code. the stipulation in the case at bar effectively reduces the common carrier's liability for the loss or destruction of the goods to a degree less than extraordinary (Articles 1744 and 1745). we find that the M/V "Cherokee" was not seaworthy when it embarked on its voyage on 19 November 1984. That liability arises the moment a person or firm acts as a common carrier. 19 It was ruled in these two cases that after paying the claim of the insured for damages under the insurance policy. Inc. provided that the same was freely and fairly agreed upon (Articles 1749-1750). The vessel was not even sufficiently manned at the time. On the other hand. The doctrine of limited liability does not apply where there was negligence on the part of the vessel owner or agent. 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. We do not agree. Paul Fire & Marine Ins. inasmuch as the wind condition in the performance of its duties. This is palpable error. 18 andNational Union Fire Insurance v. the insurer is subrogated merely to the rights of the assured.
" Such stipulation is obviously null and void for being contrary to public policy. 1âwphi1. INC. 23 it must. According to an almost uniform weight of authority. concur. nêt SO ORDERED. INC. No. 36401 is AFFIRMED. freight. Co. or damage to. CV No. The second is one providing for an unqualified limitation of such liability to an agreed valuation.. it follows that when MIC paid the shipper. a stipulation reducing the one-year period is null and void.. JJ. the period for filing the action for recovery has not yet elapsed. petitioner. WHEREFORE. The first one exempting the carrier from any and all liability for loss or damage occasioned by its own negligence. (formerly Allied Guarantee Ins. 22 In this case.) respondent.: .risk. cargoes sustained during transit — may be applied suppletorily to the case at bar. This one-year prescriptive period also applies to the insurer of the goods. be struck down. J. but the third is valid and enforceable. Moreover. Pardo and Ynares-Santiago." 20 It has been said: Three kinds of stipulations have often been made in a bill of lading. And the third is one limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of.. 2002 VIRGINES CALVO doing business under the name and style TRANSORIENT CONTAINER TERMINAL SERVICES. the first and second kinds of stipulations are invalid as being contrary to public policy.R. vs. accordingly. Costs against petitioner. Inc. Kapunan. Puno. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. MIC's cause of action had not yet prescribed at the time it was concerned. it was subrogated to all the rights which the latter has against the common carrier. the instant petition is DENIED and the challenged decision of 30 January 1997 of the Court of Appeals in CA-G. the Carriage of Goods by Sea Act (COGSA) — which provides for a one-year period of limitation on claims for loss of.. 21 Since the stipulation in question is null and void. Neither is there merit to the contention that the claim in this case was barred by prescription. LOADSTAR.R. MENDOZA. 148496 March 19. UCPB GENERAL INSURANCE CO. Inasmuch as neither the Civil Code nor the Code of Commerce states a specific prescriptive period on the matter.
1995. Inc.1 dated May 31.. Ms. The damage was placed at P93.00. Defendant by reason of the nature of [her] business should have devised ways and means in order to prevent the damage to the cargoes which it is under obligation to take custody of and to forthwith deliver to the consignee. arrived in Manila on board "M/V Hayakawa Maru" and. as subrogee of SMC. a sole proprietorship customs broker. The trial court held: It cannot be denied . Makati City. On July 14. classified as "TED" and "TSN". 25% thereof as attorney's fees. pursuant to her contract with SMC.This is a petition for review of the decision. SMC collected payment from respondent UCPB under its insurance contract for the aforementioned amount. "F") with entries appearing therein. Defendant did not present any evidence on what precaution [she] performed to prevent [the] said incident. petitioner. Makati City.112. .. . affirming the decision2 of the Regional Trial Court. were unloaded from the vessel to the custody of the arrastre operator. 1âwphi1. who found that 15 reels of the semi-chemical fluting paper were "wet/stained/torn" and 3 reels of kraft liner board were likewise torn. petitioner entered into a contract with San Miguel Corporation (SMC) for the transfer of 114 reels of semi-chemical fluting paper and 124 reels of kraft liner board from the Port Area in Manila to SMC's warehouse at the Tabacalera Compound. 1990. Inc." is a finding which cannot be traversed and overturned. 1990. .nêt The facts are as follows: Petitioner Virgines Calvo is the owner of Transorient Container Terminal Services. .00 with legal interest. From July 23 to July 25. which the claims processor. Evidence such as the Warehouse Entry Slip (Exh. The evidence adduced by the defendants is not enough to sustain [her] defense that [she is] are not liable. Branch 148. contained in 30 metal vans. withdrew the cargo from the arrastre operator and delivered it to SMC's warehouse in Ermita. coupled with the Marine Cargo Survey Report (Exh. Manila. Manila. claimed to be tearrage at the end and tearrage at the middle of the subject damaged cargoes respectively. respondent. of the Court of Appeals. and the cost of the suit. Inc. Manila Port Services. (TCTSI). Agrifina De Luna.112. representing the value of damaged cargo handled by petitioner. the Damage Report (Exh. In turn. On July 25. after 24 hours. as subrogee. "H" ."H-4-A") confirms the fact of the damaged condition of the subject cargoes. 2001. . which ordered petitioner to pay respondent. rendered judgment finding petitioner liable to respondent for the damage to the shipment. the goods were inspected by Marine Cargo Surveyors. which provides among others that: " . we opine that damages sustained by shipment is attributable to improper handling in transit presumably whilst in the custody of the broker . "H-4-A") in particular. "E"). Romualdez St. which. At the time material to this case. the shipment in question. Ermita. The cargo was insured by respondent UCPB General Insurance Co. on December 20. . the amount of P93. 1990. The surveyor[s'] report (Exh. Branch 148. brought suit against petitioner in the Regional Trial Court. that the subject cargoes sustained damage while in the custody of defendants. . .
the trial court ordered petitioner to pay the following amounts -1. is to prove merely that the goods he transported have been lost. it has been held that the mere proof of delivery of goods in good order to a carrier.00 plus interest. then she . hence the extraordinary responsibility 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 the right to receive the same. 25% thereof as lawyer's fee. Generally speaking under Article 1735 of the Civil Code. The burden of the plaintiff. Thus. p. so that if no explanation is given as to how the injury occurred.. Costs of suit. THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR [IN] DECIDING THE CASE NOT ON THE EVIDENCE PRESENTED BUT ON PURE SURMISES. warehouseman and at the same time a common carrier is supposed [to] exercise [the] extraordinary diligence required by law. Hence this petition for review on certiorari. destroyed or deteriorated. unless they prove that they have observed the extraordinary diligence required by law." (cited in Commercial Laws of the Philippines by Agbayani. II. 31. the carrier must be held responsible.3 Accordingly. and of their arrival at the place of destination in bad order.112.) Defendant..5 It will be convenient to deal with these contentions in the inverse order. THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR IN CLASSIFYING THE PETITIONER AS A COMMON CARRIER AND NOT AS PRIVATE OR SPECIAL CARRIER WHO DID NOT HOLD ITS SERVICES TO THE PUBLIC. 1989 Ed. makes out a prima facie case against the carrier. the burden is shifted to the carrier to prove that he has exercised the extraordinary diligence required by law. although both the trial court and the Court of Appeals held otherwise. 2. for if petitioner is not a common carrier. 3. being a customs brother. The sum of P93.hence the presumption is that the moment the defendant accepts the cargo [she] shall perform such extraordinary diligence because of the nature of the cargo. therefore. common carriers are presumed to have been at fault or to have acted negligently. . if the goods are proved to have been lost..4 The decision was affirmed by the Court of Appeals on appeal. SPECULATIONS AND MANIFESTLY MISTAKEN INFERENCE. IV. destroyed or deteriorated. Petitioner contends that: I. Vol. It is incumbent upon the carrier to prove that the loss was due to accident or some other circumstances inconsistent with its liability. Thereafter.
" i. or steamship line. or both. railroad. . steamboat. would require. freight or carrier service of any class. thus The Civil Code defines "common carriers" in the following terms: "Article 1732. So understood. Common carriers are persons. traction railway. subway motor vehicle. 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. either for freight or passenger. sewerage system. offering their services to the public." under the Public Service Act (Commonwealth Act No.. street railway. ice-refrigeration plant. engaged in the transportation of passengers or freight or both. In De Guzman v. whether permanent. by land. shipyard. Petitioner contends that contrary to the findings of the trial court and the Court of Appeals. wire or wireless communications systems. and done for general business purposes. the general community or population.e. manage. 1416. Court of Appeals. for hire or compensation. operate.7 the Court dismissed a similar contention and held the party to be a common carrier. wharf or dock. electric light." The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both. occasional or accidental.6 Consequently. ferries and water craft. canal. To uphold petitioner's contention would be to deprive those with whom she contracts the protection which the law affords them . or air for compensation.is indeed not liable beyond what ordinary diligence in the vigilance over the goods transported by her. as amended) which at least partially supplements the law on common carriers set forth in the Civil Code. "public service" includes: " x x x every person that now or hereafter may own. pontines. paragraph (b) of the Public Service Act. as a customs broker and warehouseman. Neither does Article 1732 distinguish between a carrier offering its services to the "general public. The contention has no merit. ice plant. We think that Article 1732 deliberately refrained from making such distinctions. firms or associations engaged in the business of carrying or transporting passengers or goods or both. marine repair shop. the concept of "common carrier" under Article 1732 may be seen to coincide neatly with the notion of "public service. wire or wireless broadcasting stations and other similar public services. episodic or unscheduled basis. express service. . with general or limited clientele. any common carrier. with or without fixed route and whatever may be its classification. corporations. heat and power. or control in the Philippines. she does not indiscriminately hold her services out to the public but only offers the same to select parties with whom she may contract in the conduct of her business. she is not a common carrier but a private carrier because. x x x" 8 There is greater reason for holding petitioner to be a common carrier because the transportation of goods is an integral part of her business. any damage to the cargo she agrees to transport cannot be presumed to have been due to her fault or negligence. and one who does such carrying only as an ancillary activity . and one who offers services or solicits business only from a narrowsegment of the general population. Under Section 13. gas. water. water supply and power petroleum. irrigation system.
the damage to the cargo could not have taken place while these were in her custody. 1998 notwithstanding the fact that some of the containers were deformed. She claims that the "spoilage or wettage" took place while the goods were in the custody of either the carrying vessel "M/V Hayakawa Maru. or otherwise damaged. or destruction of the goods entrusted to it for sale. as to petitioner's liability.9 the meaning of "extraordinary diligence in the vigilance over goods" was explained thus: The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to. her driver. Now. . . to whom the goods were unloaded and who allegedly kept them in open air for nine days from July 14 to July 23. Ricardo Nazarro. . and to exercise due care in the handling and stowage. according to all the circumstances of each case. carriage and delivery." which transported the cargo to Manila. Thus. which is a mere thirty-minute drive from the Port Area where the cargo came from. H). Manila. is part and parcel of petitioner's business. as noted in the Marine Survey Report (Exh. including such methods as their nature requires. are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them. Court of Appeals. or the arrastre operator.10 rain gutter deformed/cracked left side rubber gasket on door distorted/partly loose with pinholes on roof panel right portion wood flooring we[t] and/or with signs of water soaked with dent/crack on roof panel rubber gasket on left side/door panel partly detached In addition. as already noted. petitioner claims that Marine Cargo Surveyor Ernesto Tolentino testified that he has no personal knowledge on whether the container vans were first stored in petitioner's warehouse prior to their delivery to the consignee.11 . immediately delivered the cargo to SMC's warehouse in Ermita. It requires common carriers to render service with the greatest skill and foresight and "to use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment. petitioner denies liability for the damage to the cargo. cracked." In the case at bar. She likewise claims that after withdrawing the container vans from the arrastre operator.notwithstanding the fact that the obligation to carry goods for her customers. to wit: MAXU-2062880 ICSU-363461-3 PERU-204209-4 TOLU-213674-3 MAXU-201406-0 ICSU-412105-0 loosened. Art. In Compania Maritima v. from the nature of their business and for reasons of public policy. 1733 of the Civil Code provides: Common carriers.
containerized onto 30' x 20' secure metal vans. .. petitioner must do more than merely show the possibility that some other party could be responsible for the damage. 1990. the defendant-appellant would report it immediately to the consignee or make an exception on the delivery receipt or note the same in the Warehouse Entry Slip (WES). these containers were deemed to have [been] received in good condition. Except for slight dents and paint scratches on side and roof panels. Transfer/Delivery: On July 23. covered by clean EIRs. Manila on 14 July 1990.. these were covered by clean Equipment Interchange Report (EIR) and. cracked. Manila from July 23/25. if the container vans were deformed. . shipment housed onto 30' x 20' cargo containers was [withdrawn] by Transorient Container Services.12 As found by the Court of Appeals: From the [Survey Report]. Whenever the thing is lost (or damaged) in the possession of the debtor (or obligor). Ermita. The cargoes were withdrawn by the defendant-appellant from the arrastre still in good order and condition as the same were received by the former without exception. in good order and condition as evidenced by clean Equipment Interchange Reports (EIRs). [The cargo] was finally delivered to the consignee's storage warehouse located at Tabacalera Compound. No proof was proffered to rebut this legal presumption and the presumption of negligence attached to a common carrier in case of loss or damage to the goods. It must prove that it used "all . . there would have been a report to that effect made by the arrastre operator. without exception. provided with our protective supervision was noted discharged ex vessel to dock of Pier #13 South Harbor. The Survey Report pertinently reads -Details of Discharge: Shipment.Contrary to petitioner's assertion. unless there is proof to the contrary. H) of the Marine Cargo Surveyors indicates that when the shipper transferred the cargo in question to the arrastre operator. it [is] clear that the shipment was discharged from the vessel to the arrastre.13 Anent petitioner's insistence that the cargo could not have been damaged while in her custody as she immediately delivered the containers to SMC's compound. Had there been any damage to the shipment. Surely. Marina Port Services Inc. distorted or dented. We can only conclude that the damages to the cargo occurred while it was in the possession of the defendant-appellant. To put it simply. the defendantappellant received the shipment in good order and condition and delivered the same to the consignee damaged. without any report of damage or loss.. None of these took place. when petitioner's employees withdrew the cargo from the arrastre operator. the Survey Report (Exh. Romualdez Street. it shall be presumed that the loss (or damage) was due to his fault. . that is. Inc. they did so without exception or protest either with regard to the condition of container vans or their contents.. 1990. suffice it to say that to prove the exercise of extraordinary diligence.
destruction. 2003 ASIA LIGHTERAGE AND SHIPPING. is/are known to the carrier or his employees or apparent upon ordinary observation.. the rule is that if the improper packing or. dated May 31. 2000 Decision1 in CA-G. in this case. Quisumbing.reasonable means to ascertain the nature and characteristic of goods tendered for [transport] and that [it] exercise[d] due care in the handling [thereof]. COURT OF APPEALS and PRUDENTIAL GUARANTEE AND ASSURANCE. nêt Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. the presumption of negligence as provided under Art. JJ. the defect/s in the container. . INC. respondents. 147246 August 19. No. Hence. Bellosillo. for failure of petitioner to prove that she exercised extraordinary diligence in the carriage of goods in this case or that she is exempt from liability... is AFFIRMED. petitioner.: On appeal is the Court of Appeals' May 11. 173515 holds. petitioner accepted the cargo without exception despite the apparent defects in some of the container vans. CV No. Jr.R.R. and De Leon.. he is not relieved of liability for damage resulting therefrom. 1âwphi1. SO ORDERED. concur. Buena. PUNO.. 49195 and February 21. vs.. WHEREFORE. unless the same is due to any of the following causes only: ." Petitioner failed to do this. (4) The character of the goods or defects in the packing or in the containers. Nor is there basis to exempt petitioner from liability under Art. 1734(4). or deterioration of the goods. 2001. 1994 Decision3 of the . J. INC. but he nevertheless accepts the same without protest or exception notwithstanding such condition.. 2001 Resolution2 affirming with modification the April 6. which provides -Common carriers are responsible for the loss.... For this provision to apply. the decision of the Court of Appeals.14 In this case.
1990. evidenced by Lighterage Receipt No.354 was shipped by Marubeni American Corporation of Portland. On August 22. valued at US$423. consignee sent a claim letter to the petitioner. The petitioner filed a Marine Protest on August 28. the private respondent indemnified the consignee in the amount of P4. Inc. the barge developed a list because of a hole it sustained after hitting an unseen protuberance underneath the water.104. Upon reaching the Sta. the facts.Regional Trial Court of Manila which found petitioner liable to pay private respondent the amount of indemnity and attorney's fees. 1990.75 under Marine Cargo Risk Note RN 11859/90. General Milling Corporation in Manila. it sought recovery of said amount from the petitioner. The petitioner was contracted by the consignee as carrier to deliver the cargo to consignee's warehouse at Bo.150 metric tons of Better Western White Wheat in bulk. the transport of said cargo was suspended due to a warning of an incoming typhoon. Pasig City.5 The shipment was insured by the private respondent Prudential Guarantee and Assurance. To avoid the complete sinking of the barge.8 It likewise secured the services of Gaspar Salvaging Corporation which refloated the barge.6 On July 25. On June 13. 1990 to the private respondent for the value of the lost cargo. 1991. 1990. First. the barge again ran aground due to strong current.621.379. the towing bits of the barge broke. PSTSI III was tied down to other barges which arrived ahead of it while weathering out the storm that night. On January 30. On August 15. September 6. the petitioner proceeded to pull the barge to Engineering Island off Baseco to seek shelter from the approaching typhoon.11 A second Marine Protest was filed on September 7. 900 metric tons of the shipment was loaded on barge PSTSI III. Inc.654.10 The next day.12 On September 14. The barge was then towed to ISLOFF terminal before it finally headed towards the consignee's wharf on September 5. September 14. 1990. 1990. 15 Thereafter. a portion of the goods was transferred to three other barges. 1990. It sank completely. Oregon on board the vessel M/V NEO CYMBIDIUM V-26 for delivery to the consignee. A few days after.192.75. 1990. 1990. evidenced by Bill of Lading No. 1990.9 The hole was then patched with clay and cement. Ugong. but to no avail. It appears that on August 17. 03647 for delivery to consignee. a bidding was conducted to dispose of the damaged wheat retrieved and loaded on the three other barges. . the carrying vessel arrived in Manila and the cargo was transferred to the custody of the petitioner Asia Lighterage and Shipping. 3. 1990. Mesa spillways. and another letter dated September 18.14 On the same date.13 The total proceeds from the sale of the salvaged cargo was P201. against loss or damage for P14. as subrogee.22. PTD/Man-4.771. 1990. The cargo did not reach its destination. resulting in the total loss of the remaining cargo.
the private respondent filed a complaint against the petitioner for recovery of the amount of indemnity. BORNE BY THE CARRIER IN ALL CASES EXCEPT IN THE FIVE (5) CASES ENUMERATED. Petitioner submits the following errors allegedly committed by the appellate court. 1991. (2) THE COURT OF APPEALS DECIDED THE CASE A QUO IN A WAY NOT IN ACCORD WITH LAW AND/OR WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT AFFIRMED THE FINDING OF THE LOWER COURT A QUO THAT ON THE BASIS OF THE PROVISIONS OF THE CIVIL CODE APPLICABLE TO COMMON CARRIERS.654. Petitioner's Motion for Reconsideration dated June 3. the decision appealed from is hereby AFFIRMED with modification in the sense that the salvage value of P201." (3) THE COURT OF APPEALS DECIDED THE CASE A QUO IN A WAY NOT IN ACCORD WITH LAW AND/OR WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT EFFECTIVELY CONCLUDED THAT PETITIONER FAILED TO EXERCISE DUE DILIGENCE AND/OR WAS NEGLIGENT IN ITS CARE AND CUSTODY OF THE CONSIGNEE'S CARGO. With costs against defendant. premises considered. Costs against appellant. Hence.75 shall be deducted from the amount of P4. liable to pay plaintiff Prudential Guarantee & Assurance Co. . The dispositive portion of its Decision states: WHEREFORE. attorney's fees and cost of suit.17 The Regional Trial Court ruled in favor of the private respondent. SO ORDERED. 2000 was likewise denied by the appellate court in a Resolution promulgated on February 21. the sum of P4. viz:19 (1) THE COURT OF APPEALS DECIDED THE CASE A QUO IN A WAY NOT IN ACCORD WITH LAW AND/OR WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT HELD THAT PETITIONER IS A COMMON CARRIER. and.22 with interest from the date complaint was filed on July 3. "THE LOSS OF THE CARGO IS.. The dispositive portion of its decision reads: WHEREFORE. this petition. The issues to be resolved are: (1) Whether the petitioner is a common carrier.104. The appellate court affirmed the decision of the trial court with modification.On July 3.18 Petitioner appealed to the Court of Appeals insisting that it is not a common carrier. judgment is hereby rendered ordering defendant Asia Lighterage & Shipping. Inc.654.379.16 Petitioner filed its answer with counterclaim. 2001. THEREFORE. Inc. 1991 until fully satisfied plus 10% of the amount awarded as and for attorney's fees.104.22. Defendant's counterclaim is hereby DISMISSED.
In the case at bar. petitioner fits the test of a common carrier as laid down in Bascos vs. Court of Appeals. In short. On the first issue.28 They are presumed to have been at fault or to have acted negligently if . we rule that petitioner is a common carrier. but that of buying used bottles and scrap metal in Pangasinan and selling these items in Manila. maintains no terminals. and issues no tickets. In De Guzman. Article 1732 of the Civil Code defines common carriers as persons. Allegedly. and with an only limited clientele.21 we held that the definition of common carriers in Article 1732 of the Civil Code makes no distinction between one whose principal business activity is the carrying of persons or goods or both.24 The test to determine a common carrier is "whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business transacted. or air. it has no fixed and publicly known route. A common carrier need not have fixed and publicly known routes. we ruled that Article 1732 does not distinguish between a carrier offering its services to the general public. for compensation.27 On the second issue. We therefore hold that petitioner is a common carrier whether its carrying of goods is done on an irregular rather than scheduled manner. Neither does it have to maintain terminals or issue tickets. firms or associations engaged in the business of carrying or transporting passengers or goods or both. In De Guzman vs. it does not hold out its services to the general public. and one who does such carrying only as an ancillary activity. we uphold the findings of the lower courts that petitioner failed to exercise extraordinary diligence in its care and custody of the consignee's goods."25 In the case at bar. and one who offers services or solicits business only from a narrow segment of the general population. Common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported by them. offering their services to the public. 26 offering its barges to the public. Further. the petitioner admitted that it is engaged in the business of shipping and lighterage. To be sure. supra. It is not bound to carry goods unless it consents. We also did not distinguish between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional.(2) Assuming the petitioner is a common carrier. Petitioner is clearly a common carrier. by land. It points out that it is not obliged to carry indiscriminately for any person. Petitioner contends that it is not a common carrier but a private carrier. Court of Appeals. water. corporations.23 we considered private respondent Ernesto Cendaña to be a common carrier even if his principal occupation was not the carriage of goods for others. whether it exercised extraordinary diligence in its care and custody of the consignee's cargo. episodic or unscheduled basis. despite its limited clientele for carrying or transporting goods by water for compensation. the principal business of the petitioner is that of lighterage and drayage22 and it offers its barges to the public for carrying or transporting goods by water for compensation.20 We disagree.
Petitioner claims that this was caused by a typhoon. now this time the barge totally hitting something in the course.You said there was another accident.the goods are lost. even before the towing bits of the barge broke..After the first accident. they tried to pull it to the consignee's warehouse. destruction. lightning. resulting in the total loss of its cargo. now while on route another accident occurred. There are. and bring it to the anchor terminal for safety. cargo-surveyor of Tan-Gatue Adjustment Co. the common carrier must prove that it exercised extraordinary diligence. or deterioration of the goods. In the case at bar. states: CROSS-EXAMINATION BY ATTY. not enough for the barge to sail safely. earthquake. or other natural disaster or calamity.. (2) Act of the public enemy in war. However. Article 1734 of the Civil Code enumerates the instances when the presumption of negligence does not attach: Art. DONN LEE:31 xxx q xxx xxx Can you tell us what else transpired after that incident? a . Thus. unless the same is due to any of the following causes only: (1) Flood. q . whether international or civil. exceptions to this rule. it should not be held liable for the loss of the cargo. The patch work was merely a provisional remedy. . the barge completely sank after its towing bits broke. this could not be solely attributed to the typhoon. hence. storm. during and after the occurrence of the typhoon to prevent or minimize the loss. it had already previously sustained damage when it hit a sunken object while docked at the Engineering Island. through the initiative of the barge owners. (4) The character of the goods or defects in the packing or in the containers. sir. however. Inc. can you tell the court the nature of the second accident? a The sinking. destroyed or deteriorated. A portion of the cross-examination of Alfredo Cunanan. The partly-submerged vessel was refloated but its hole was patched with only clay and cement. (3) Act or omission of the shipper or owner of the goods. it recklessly exposed the cargo to further damage. and that it has exercised due diligence before. It even suffered a hole.30 The evidence show that. when petitioner persisted to proceed with the voyage. then after deciding if the vessel is stabilized. (5) Order or act of competent public authority. 1734. petitioner failed to prove that the typhoon is the proximate and only cause of the loss of the goods. they tried to pull out the barge from the place of the accident. Clearly. Common carriers are responsible for the loss. destruction or deterioration of the goods.29 To overcome the presumption of negligence in the case of loss.
reveals: DIRECT-EXAMINATION BY ATTY. The typhoon would be coming and it would be dangerous if we are in the vicinity of Manila Bay.Now.32 A part of the testimony of Robert Boyd. .Mostly it was related to the first accident because there was already a whole (sic) on the bottom part of the barge. if you know what caused the sinking? a . Witness. did it not occur to you it might be safer to just allow the Barge to lie where she was instead of towing it? a . Cargo Operations Supervisor of the petitioner. xxx xxx xxx This is not all. . q a And this is the reason why you towed the Barge as you did? Yes. in the morning.And then from ISLOFF Terminal you proceeded to the premises of the GMC? Am I correct? a . LEE:33 xxx xxx xxx q .The next day. GMC (General Milling Corporation.Since that time that the Barge was refloated. Mr. sir. can you tell the court. xxx xxx xxx CROSS-EXAMINATION BY ATTY. It was needed badly by the consignee. the consignee) as I have said was in a hurry for their goods to be delivered at their Wharf since they needed badly the wheat that was loaded in PSTSI-3. IGNACIO:34 xxx xxx xxx q .q . q But the fact is.It is already in an inner portion of Pasig River. the typhoon was incoming? Yes or no? . Petitioner still headed to the consignee's wharf despite knowledge of an incoming typhoon. q Despite of the threats of an incoming typhoon as you testified a while ago? a .Can you tell the nature . we hired for additional two (2) tugboats as I have stated. typhoon "Loleng" has already entered the Philippine area of responsibility. During the time that the barge was heading towards the consignee's wharf on September 5. 1990.
CV No. So. you have to secure a sort of Certification to determine the weather condition. respondents. SANCHEZ BROKERAGE INC. 2004 A. more or less.F. vs. you had the knowledge of the incoming typhoon. the officers/employees themselves of petitioner admitted that when the towing bits of the vessel broke that caused its sinking and the total loss of the cargo upon reaching the Pasig River. Surely.e. 49195 dated May 11. 147079 December 21. The typhoon then is not the proximate cause of the loss of the cargo.a - Yes.. meeting a typhoon head-on falls short of due diligence required from a common carrier. SO ORDERED. J. petitioners. sir. q . More importantly.R. the petitioner cannot invoke the occurrence of the typhoon as force majeure to escape liability for the loss sustained by the private respondent. The Decision of the Court of Appeals in CA-G. the petition is DENIED. Accordingly. it was no longer affected by the typhoon. G. sir. Costs against petitioner.R. THE HON. right? Yes. 2001 are hereby AFFIRMED. And yet you proceeded to the premises of the GMC? a . it is a safe place to tow upstream. 2000 and its Resolution dated February 21. COURT OF APPEALS and FGU INSURANCE CORPORATION.ISLOFF Terminal is far from Manila Bay and anytime even with the typhoon if you are already inside the vicinity or inside Pasig entrance. a human factor.: . am I correct? a q a q Yes. i. DECISION CARPIO MORALES. negligence had intervened.And yet as a standard operating procedure of your Company.. IN VIEW THEREOF. No.
93-76B which dismissed the complaint of respondent FGU Insurance Corporation (FGU Insurance) against petitioner A. Germany oral contraceptives consisting of 86. Wyeth-Pharma GMBH shipped on board an aircraft of KLM Royal Dutch Airlines at Dusseldorf.5 it was discharged "without exception"6 and delivered to the warehouse of the Philippine Skylanders. WyethSuaco engaged the services of Sanchez Brokerage which had been its licensed broker since 1984.3 Wyeth-Suaco insured the shipment against all risks with FGU Insurance which issued Marine Risk Note No.19 Upon inspection. Sison. 2000 reversing and setting aside the judgment of Branch 133. 016992. bearing No. On July 8.F.10 was issued. Inc. discovered that 44 cartons containing Femenal and Nordiol tablets were in bad order. 1992. Wyeth-Suaco Laboratories.11 acknowledged that he received the cargoes consisting ofthree pieces in good condition.18 On July 31. On the receipt.12 Wyeth-Suaco being a regular importer. another representative of Sanchez Brokerage. Mitzi Morales and Ernesto Mendoza. in Antipolo City for quality control check.4 Upon arrival of the shipment on July 11. (PSI) located also at the NAIA for safekeeping. Regional Trial Court of Makati City. paid PSI storage fee amounting to P8. a marine and cargo surveyor and insurance claim adjusters firm engaged by Wyeth-Suaco on behalf of FGU Insurance. (Sanchez Brokerage).Before this Court on a petition for Certiorari is the appellate court’s Decision1 of August 10.000 Blisters Trinordiol tablets for delivery to Manila in favor of the consignee.35 a receipt for which. in Civil Case No.20 He thus placed a note above his signature on the . 4995 pursuant to Marine Open Policy No. 07037 dated July 29. Sanchez Brokerage calculates and pays the customs duties.7 In order to secure the release of the cargoes from the PSI and the Bureau of Customs. the cargoes were delivered to Hizon Laboratories Inc.000 Blisters Nordiol tablets and 42. (Elite Surveyors). indicated that the delivery consisted of one container with 144 cartons of Femenal and Nordiol and 1 pallet containing Trinordiol. together with Ruben Alonzo of Elite Surveyors.16 employees of Elite Adjusters and Surveyors Inc.8 As its customs broker. 14. 1992. however. Ronnie Likas. representatives of Sanchez Brokerage. 1992 at the Ninoy Aquino International Airport (NAIA). 138. Upon instructions of Wyeth-Suaco.572.17 The delivery receipt. while the Trinordial tablets were packed in two pallets. 1992.800 Blisters Femenal tablets.9 On July 29.15 Among those who witnessed the release of the cargoes from the PSI warehouse were Ruben Alonso and Tony Akas. the customs examiner did not inspect the cargoes13 which were thereupon stripped from the aluminum containers14 and loaded inside two transport vehicles hired by Sanchez Brokerage. each of which contained 30 cartons. acknowledged the delivery of the cargoes by affixing his signature on the delivery receipt.2 The Femenal tablets were placed in 124 cartons and the Nordiol tablets were placed in 20 cartons which were packed together in one (1) LD3 aluminum container. M. Official Receipt No. Sanchez Brokerage. Inc. Inc. taxes and storage fees for the cargo and thereafter delivers it to Wyeth-Suaco. 1992. a representative of Wyeth-Suaco. he.
delivery receipt stating that 44 cartons of oral contraceptives were in bad order.. On demand by FGU Insurance for payment of the amount of P181."28 Wyeth-Suaco later demanded. As the Sanchez Brokerage refused to heed the demand. about the condition of the cargoes but that the latter advised to still deliver them to Hizon Laboratories where an adjuster would assess the damage.384. 1992.431.431. from Sanchez Brokerage the payment of P191. Wyeth-Suaco filed an insurance claim against FGU Insurance which paid Wyeth-Suaco the amount ofP181. dismissed the complaint.22 The Elite Surveyors later issued Certificate No.32 prompting its (Sanchez Brokerage’s) representative Morales to inform the Import-Export Assistant of Wyeth-Suaco. 1992 stating that 41 cartons of Femenal tablets and 3 cartons of Nordiol tablets were "wetted" (sic). they were inspected and found to be in "apparent good condition. On August 5.35 On appeal. The trial court. Wyeth-Suaco issued a Notice of Materials Rejection27 of 38 cartons of Femenal and 3 cartons of Nordiol on the ground that they were "delivered to Hizon Laboratories with heavy water damaged (sic) causing the cartons to sagged (sic) emitting a foul order and easily attracted flies. Sanchez Brokerage. 3 x 700 blister packs of Femenal tablets and 3 x 700 blister packs of Nordiol tablets were heavily damaged with water and emitted foul smell. by letter29 of August 25. by Decision34 of July 29.25 representing the value of its loss arising from the damaged tablets. it holding that the Sanchez Brokerage engaged not only in the business of customs brokerage but also in the .49 it paid Wyeth-Suaco. disclaimed liability for the damaged goods. 1992. along with Ronnie Likas. that when the sealed containers were opened outside the PSI warehouse. the Hizon Laboratories Inc."24 Also noted was that at the time of delivery to the warehouse of Hizon Laboratories Inc. issued a Destruction Report26 confirming that 38 x 700 blister packs of Femenal tablets. 1996.25 On August 4. the filing by FGU Insurance of a complaint for damages before the Regional Trial Court of Makati City against the Sanchez Brokerage. 1992. Wyeth-Suaco thus issued Subrogation Receipt30 in favor of FGU Insurance. positing that the damage was due to improper and insufficient export packaging. holding that the Survey Report prepared by the Elite Surveyors is bereft of any evidentiary support and a mere product of pure guesswork. by letter31 of January 7. slight to heavy rains fell.49 in settlement of its claim under Marine Risk Note Number 4995. the appellate court reversed the decision of the trial court. Ramir Calicdan. The remaining 160 cartons of oral contraceptives were accepted as complete and in good order. a survey report21 dated July 31. 1993. it was discovered that some of the loose cartons were wet.33 Hence. which could account for the wetting of the 44 cartons of Femenal and Nordiol tablets. Ruben Alonzo thus prepared and signed. CS-0731-1538/9223 attached to which was an "Annexed Schedule" whereon it was indicated that prior to the loading of the cargoes to the broker’s trucks at the NAIA.
2001. 431. a common carrier within the context of Article 1732 of the New Civil Code.40 .49. The Appellee is hereby ordered to pay to the Appellant the amount of P20. final orders or resolutions of the Court of Appeals in any case.transportation and delivery of the cargo of its clients. it comes to this Court on petition for certiorari filed on March 6. which would be but a continuation of the appellate process over the original case. it being documented that petitioner withdrew from the warehouse of PSI the subject shipment entirely in good order and condition. the appeal of the Appellant is GRANTED.00 as and by way of attorney’s fees. until the said amount is paid in full. 38 Sanchez Brokerage’s Motion for Reconsideration having been denied by the appellate court’s Resolution of December 8. hence.37 The appellate court thus disposed: IN THE LIGHT OF ALL THE FOREGOING. from the date of the Decision of the Court.36 Noting that Wyeth-Suaco adduced evidence that the cargoes were delivered to petitioner in good order and condition but were in a damaged state when delivered to Wyeth-Suaco. On the merits. Respondent FGU Insurance avers in its Comment that the proper course of action which petitioner should have taken was to file a petition for review on certiorari since the sole office of a writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction and does not include correction of the appellate court’s evaluation of the evidence and factual findings thereon. Another Decision is hereby rendered in favor of the Appellant and against the Appellee as follows: 1. In the main. 2000 which was received by petitioner on January 5. regardless of the nature of the action or proceedings involved. The Decision of the Court a quo is REVERSED. with interest thereupon at the rate of 6% per annum. 2. The Appellee is hereby ordered to pay the Appellant the principal amount of P181. The counterclaims of the Appellee are DISMISSED. petitioner asserts that the appellate court committed grave and reversible error tantamount to abuse of discretion when it found petitioner a "common carrier" within the context of Article 1732 of the New Civil Code. failed to overcome the presumption of negligence.e. the appellate court held that Sanchez Brokerage is presumed negligent and upon it rested the burden of proving that it exercised extraordinary negligence not only in instances when negligence is directly proven but also in those cases when the cause of the damage is not known or unknown. and 3. may be appealed to this Court by filing a petition for review. Rule 45 is clear that decisions. 2001.000.39 The petition fails. respondent FGU Insurance contends that petitioner.. i. as a common carrier.
not of jurisdiction. In another vein. a customs broker. 2001 cannot serve as a substitute for the lost remedy of appeal. corporations. we prepare the entry together for processing and claims from customs and finally deliver the goods to the warehouse of the importer. we calculate the taxes that has to be paid in cargos. of petitioner that it is not a common carrier but a customs broker whose principal function is to prepare the correct customs declaration and proper shipping documents as . by land. 1732. to be also a common carrier. 2000 was received by petitioner on January 5. which is properly the subject of an ordinary appeal.43 Article 1732 does not distinguish between one whose principal business activity is the carrying of goods and one who does such carrying only as an ancillary activity. the rule is well settled that in a petition for certiorari. The filing by petitioner of a petition for certiorari on March 6. Anacleto F. the appellate court’s decision had become final and executory. water. for compensation. Jr. Since petitioner failed to appeal within 15 days or on or before January 20. FLORES: Q: What are the functions of these license brokers. offering their services to the public. ATTY. 2001.The Resolution of the Court of Appeals dated December 8. or air. 2001. therefore. 2000 denying the motion for reconsideration of its Decision of August 10. the petition still fails. firms or associations engaged in the business of carrying or transporting passengers or goods or both. What petitioner is ascribing is an error of judgment.41 The supervisory jurisdiction of this Court to issue a cert writ cannot be exercised in order to review the judgment of lower courts as to its intrinsic correctness. The appellate court did not err in finding petitioner..42 Procedural technicalities aside. himself testified that the services the firm offers include the delivery of goods to the warehouse of the consignee or importer. the petitioner must prove not merely reversible error but also grave abuse of discretion amounting to lack or excess of jurisdiction. Petitioner alleges that the appellate court erred in reversing and setting aside the decision of the trial court based on its finding that petitioner is liable for the damage to the cargo as a common carrier. Sanchez. and those upon approval of the importer. the Manager and Principal Broker of Sanchez Brokerage. either upon the law or the facts of the case. as defined under Article 1732 of the Civil Code. license customs broker? WITNESS: As customs broker. to wit: Art. Where the issue or question involves or affects the wisdom or legal soundness of the decision – not the jurisdiction of the court to render said decision – the same is beyond the province of a petition for certiorari.44The contention. Common carriers are persons.
Court of Appeals:47 The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to. In the event that the goods are lost. were found to be wet. showed to the warehouseman the damage. and to exercise due care in the handling and stowage. unless it proves that it observed extraordinary diligence. But it made no such protest or reservation. and that it should not be faulted for following the instructions of Calicdan of Wyeth-Suaco to proceed with the delivery despite information conveyed to the latter that some of the cartons. 56 If the claim of petitioner that some of the cartons were already damaged upon delivery to it were true. it was established that petitioner received the cargoes from the PSI warehouse in NAIA in good order and condition. It requires common carriers to render service with the greatest skill and foresight and "to use all reasonable means to ascertain the nature and characteristics of goods tendered for shipment. including such methods as their nature requires.required by law is bereft of merit. petitioner posits that they were damaged due to the fault or negligence of the shipper for failing to properly pack them and to the inherent characteristics of the goods53. the rule is that if the improper packing is known to the carrier or his employees or is apparent upon ordinary observation.54 While paragraph No. extraordinary diligence in the vigilance over the goods it transports according to all the circumstances of each case. In this light. some of the cargoes were found to be in bad order. 4 of Article 173455 of the Civil Code exempts a common carrier from liability if the loss or damage is due to the character of the goods or defects in the packing or in the containers. petitioner would have presented. the employees of the PSI from whom Morales and Domingo took .57 Moreover.. and demanded then and there for Bad Order documents or a certification confirming the damage. under Article 173345 of the Civil Code. as witness. and as indicated in the Survey Report of Elite Surveyors51 and the Destruction Report of Hizon Laboratories. he is not relieved of liability for the resulting damage.49 and that upon delivery by petitioner to Hizon Laboratories Inc."48 In the case at bar. if indeed petitioner’s employees only examined the cargoes outside the PSI warehouse and found some to be wet.46 The concept of "extra-ordinary diligence" was explained in Compania Maritima v. destroyed or deteriorated. they would certainly have gone back to PSI. it is presumed to have been at fault or to have acted negligently. as noted in the Delivery Receipt50 issued by petitioner. on examination outside the PSI warehouse. It suffices that petitioner undertakes to deliver the goods for pecuniary consideration. Inc. as observed by the appellate court. petitioner as a common carrier is mandated to observe.52 In an attempt to free itself from responsibility for the damage to the goods. or destruction of the goods entrusted to it for sale. then it should naturally have received the cargo under protest or with reservations duly noted on the receipt issued by PSI. but he nevertheless accepts the same without protest or exception notwithstanding such condition. carriage and delivery.58 Or.
FLORES: Q: Was there any instance that a shipment of this nature. there was a time that we experienced that there was a cartoon (sic) wetted (sic) up to the bottom are wet specially during rainy season. The possibility on the other hand that. a portion thereof was found to be in bad order. the oral contraceptives were damaged by rainwater while in transit to Antipolo City is more likely then. Sanchez himself testified that in the past. it asserts that some of the cargoes were already wet on delivery by PSI outside the PSI warehouse but such notwithstanding Calicdan directed Morales to proceed with the delivery to Hizon Laboratories. ATTY.. Inc. While Calicdan testified that he received the purported telephone call of Morales on July 29. it is not determinable. As to whether the call was made at the PSI warehouse when the shipment was stripped from the airport containers. . It did not. indeed.62 Since petitioner received all the cargoes in good order and condition at the time they were turned over by the PSI warehouseman. no witness having identified it and interpreted the technical terms thereof. that arrived at the NAIA were damaged and claimed by the Wyeth-Suaco without any question? WITNESS: A: Yes sir. there was an instance that one cartoon (sic) were wetted (sic) but WyethSuaco did not claim anything against us. however.delivery of the cargo to prove that. Inc. as found by Hizon Laboratories. Inc. FLORES: Q: HOW IS IT? WITNESS: A: We experienced. damaged or in bad condition. part of the cargoes was already damaged when the container was allegedly opened outside the warehouse. no rain fell that day. 1992. Instead. ATTY. he failed to specifically declare what time he received the call. Aside from that phone call. there was a similar instance when the shipment of Wyeth-Suaco was also found to be wet by rain. its presumed negligence under Article 1735 of the Civil Code remains unrebutted. or when the cargoes were already in transit to Antipolo. a part of it was wet. petitioner admitted that it had no documentary evidence to prove that at the time it received the cargoes. Hence.59 Petitioner goes on to posit that contrary to the report of Elite Surveyors. it was incumbent on petitioner to prove that it exercised extraordinary diligence in the carriage of the goods. oral contraceptives.60 The 4-page weather data furnished by PAGASA61 on request of Sanchez Brokerage hardly impresses. and upon their delivery to Hizon Laboratories.
. Costs against petitioner. in turn engaged the services of TVI to send a barge and tugboat at shipside. 1991 during which the weather condition had become inclement due to an . RESPONDENTS. represented by its ship agent Inchcape Shipping Inc.R. also of October 26.WHEREFORE. 2001 denying the motion for reconsideration. 2000 Decision of the Court of Appeals is hereby AFFIRMED. 2001 Decision of the Court of Appeals.. No. Singapore shipped from the port of Ilyichevsk. 92-63132 holding petitioner Schmitz Transport Brokerage Corporation (Schmitz Transport).m. VS. AND BLACK SEA SHIPPING AND DODWELL NOW INCHCAPE SHIPPING SERVICES. At 9:00 p. LTD. as well as its Resolution dated September 28. commenced to unload 37 of the 545 coils from the vessel unto the barge.m. J. TVI’s tugboat “Lailani” towed the barge “Erika V” to shipside. Russia on board M/V “Alexander Saveliev” (a vessel of Russian registry and owned by Black Sea) 545 hot rolled steel sheets in coil weighing 6. 1991. Â solidarily liable for the loss of 37 hot rolled steel sheets in coil that were washed overboard a barge. DECISION CARPIO-MORALES. INC. By 7:00 p.m. INDUSTRIAL INSURANCE COMPANY. Rizal. and to deliver them to its (the consignee’s) warehouse at Cainta. The vessel arrived at the port of Manila on October 24. SO ORDERED. were insured against all risks with Industrial Insurance Company Ltd. SYTCO Pte Ltd. 1991. together with Black Sea Shipping Corporation (Black Sea). THIRD DIVISION [G. whose services the consignee engaged to secure the requisite clearances. April 22. around 4:30 p. Schmitz Transport. 1991. of October 27. the August 10. and Transport Venture (TVI).: On petition for review is the June 27. after positioning the barge alongside the vessel. On September 25. 150255. PETITIONER. On October 26. left and returned to the port terminal. arrastre operator Ocean Terminal Services Inc. 2005] SCHMITZ TRANSPORT & BROKERAGE CORPORATION. Little Giant Steel Pipe Corporation (Little Giant). 1991 and the Philippine Ports Authority (PPA) assigned it a place of berth at the outside breakwater at the Manila South Harbor.m.992. to receive the cargoes from the shipside. which affirmed that of Branch 21 of the Regional Trial Court (RTC) of Manila in Civil Case No.450 metric tons. (Industrial Insurance) under Marine Policy No. The cargoes. TRANSPORT VENTURE. the tugboat. (Inchcape). By 12:30 a. which were to be discharged at the port of Manila in favor of the consignee. M-91-3747-TIS...
000. the defendants Schmitz Transport and TVI filed a joint motion for reconsideration assailing the finding that they are common carriers and the award of excessive attorney’s fees of more than P1. by decision of June 27.000.m. 1997. TVI.11 with interest from the date the complaint was filed until fully satisfied.. the unloading unto the barge of the 37 coils was accomplished.Â The counterclaims and cross claims of defendants are hereby DISMISSED for lack of [m]erit. premises considered.Â And they argued that they were not motivated by gross or evident bad faith and that the incident was caused by a fortuitous event. Industrial Insurance faulted the defendants for undertaking the unloading of the cargoes while typhoon signal No. the crew of the barge abandoned it and transferred to the vessel. Industrial Insurance later filed a complaint against Schmitz Transport. ordering the defendants to pay plaintiff jointly and severally the sum of P5. as well as the sum of P5. 1998.113. attorney’s fees.Â Little Giant thereupon executed a subrogation receiptin favor of Industrial Insurance.” The defendants’ respective motions for reconsideration having been denied by Resolution of September . Earnest efforts on the part of both the consignee Little Giant and Industrial Insurance to recover the lost cargoes proved futile. At 7:00 a.  By resolution of February 4.000.246.11. In holding all the defendants solidarily liable. the appellate court held that “although defendants obviously had nothing to do with the force of nature. the appellate court ruled that “each one was essential such that without each other’s contributory negligence the incident would not have happened and so much so that the person principally liable cannot be distinguished with sufficient accuracy. where discharge will take place and even when the discharging will commence. No tugboat pulledÂ Â Â the barge back to the pier.  All the defendants appealed to the Court of Appeals which. and Black Sea through its representative Inchcape (the defendants) before the RTC of Manila. Little Giant thus filed a formal claim against Industrial Insurance which paid it the amount of P5. washing the 37 coils into the sea. 1 was raised in Metro Manila.m. a tugboat finally arrived to pull the already empty and damaged barge back to the pier. and litigation expenses. for the recovery of the amount it paid to Little Giant plus adjustment fees. The dispositive portion of the decision reads: WHEREFORE. At around 5:30 a. of October 27. 2001.246. the Court renders judgment in favor of the plaintiff. due to strong waves.  it finding that all the defendants were common carriers — Black Sea and TVI for engaging in the transport of goods and cargoes over the seas as a regular business and not as an isolated transaction. however.” In discrediting the defense of fortuitous event. the trial court denied the motion for reconsideration. Branch 21 of the RTC held all the defendants negligent for unloading the cargoes outside of the breakwater notwithstanding the storm signal. The barge pitched and rolled with the waves and eventually capsized. To the trial court’s decision.approaching storm. affirmed in toto the decision of the trial court. and Schmitz Transport for entering into a contract with Little Giant to transport the cargoes from ship to port for a fee. they however had control of where to anchor the vessel. By Decision of November 24.113. 1991.00 representing the adjustment fee plus the sum of 20% of the amount recoverable from the defendants as attorney’s fees plus the costs of suit.
hence.28. Petitioner asserts that in chartering the barge and tugboat of TVI. it cannot be faulted. 1 was hoisted over Metro Manila on October 23-31. It thus concluded that the proximate cause of the loss was Black Sea’s negligence in deciding to unload the cargoes at an unsafe place and while a typhoon was approaching. states that while typhoon signal No. [T]he principle embodied in the act of God doctrine strictly requires that the act must be occasioned solely by the violence of nature.Â Human intervention is to be excluded from creating or entering into the cause of the mischief. Industrial Insurance and Black Sea. petitioner and TVI. or the failure of the debtor to comply with his obligation. When a fortuitous event occurs. 2002. By its Comment. there is no indication that there was greater risk in loading the cargoes outside the breakwater. 2001. it was acting for its principal. For its part. the whole occurrence is then humanized and removed from the rules applicable to the acts of God. From a review of the records of the case. no person shall be responsible for those events which could not be foreseen. Schmitz Transport (hereinafter referred to as petitioner) filed the present petition against TVI. instead of inside the breakwater.11:00 p. Article 1174 of the Civil Code absolves any party from any and all liability arising therefrom: ART. it having had no control and supervision thereover. or when it is otherwise declared by stipulation. herein respondents Industrial Insurance. while a storm signal was up constitutes negligence. the transportation contract was by and between Little Giant and TVI.m. of October . or when the nature of the obligation requires the assumption of risk. must be independent of human will. 1174. or which though foreseen. The weather data report. were inevitable. The appellate court. furnished and verified by the Chief of the Climate Data Section of PAG-ASA and marked as a common exhibit of the parties.Â As the defendants proffered.Â When the effect is found to be in part the result of the participation of man. 1991 remained normal with moderate sea condition such that port operations continued and proceeded normally. however. the weather on October 26. and (2) If there was negligence. and TVI were required to file their respective Comments. 1991. .m. By Resolution of January 23. (2) it must be impossible to foresee the event which constitute the caso fortuito. the sea condition at the port of Manila at 5:00 p. Black Sea argued that the cargoes were received by the consignee through petitioner in good order. In order.Â Except in cases expressly specified by the law. Black Sea. whether due to his active intervention or neglect or failure to act. independent of any act of negligence on the part of petitioner Black Sea and TVI. or if it can be foreseen it must be impossible to avoid. hence. (3) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in any manner. TVI maintained that it acted as a passive party as it merely received the cargoes and transferred them unto the barge upon the instruction of petitioner. to be considered a fortuitous event. and (4) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor. In issue then are: (1) Whether the loss of the cargoes was due to a fortuitous event. (1) the cause of the unforeseen and unexpected occurrence. whether liability for the loss may attach to Black Sea. held that unloading outside the breakwater. consignee Little Giant. in affirming the finding of the trial court that human intervention in the form of contributory negligence by all the defendants resulted to the loss of the cargoes.
as did the appellate court. causing it to sink along with the cargoes. the testimony of its own Vice-President and General Manager Noel Aro that part of the services it offers to its clients as a brokerage firm includes the transportation of cargoes reflects so.Â We [are] also in-charged of the delivery of the goods to their warehouses. Aro: Well.Â “as long as a person or corporation holds [itself] to the public for the purpose of transporting goods as [a] business. what precisely [was] your agreement with this Little Giant Steel Pipe Corporation with regards to this shipment? What work did you do with this shipment? A: We handled the unloading of the cargo[es] from vessel to lighter and then the delivery of [the] cargo[es] from lighter to BASECO then to the truck and to the warehouse. Had the barge been towed back promptly to the pier. a material fact which the appellate court failed to properly consider and appreciate — the proximate cause of the loss of the cargoes.Â But the barge was left floating in open sea until big waves set in at 5:30 a. if you can recall? A:Â Since 1990. be said that the defendants were negligent in not unloading the cargoes upon the barge on October 26. in connection with this work which you are doing.Â I also handle the various division heads of the company for operation matters.26. Sir.m. [it] is already considered a common carrier regardless if [it] owns the vehicle to be used or has to hire one. will you please tell the Honorable Court if you came to know the company by the name Little Giant Steel Pipe Corporation? A: Yes. therefore.Â For it undertook to transport the cargoes from the shipside of “M/V Alexander Saveliev” to the consignee’s warehouse at Cainta.” The proximate cause of the loss having been determined. Actually. Sir. and all other related functions that the President may assign to me from time to time. finds that petitioner is a common carrier. we used the barges for the ship side operations. The loss thus falls outside the “act of God doctrine. what equipment do (sic) you require or did you use in order to effect this unloading. Rizal. we are the brokerage firm of that Company.Â What work or duty did you perform in behalf of this company? A: We handled the releases (sic) of their cargo[es] from the Bureau of Customs. transfer and delivery to the warehouse? A: Actually. xxx Q: Now. Q: Now. who among the parties is/are responsible therefor? Contrary to petitioner’s insistence. the deteriorating sea conditions notwithstanding. the loss could have been avoided. I oversee the entire operation of the brokerage and transport business of the company. Witness. Q: Now. Q: Now.Â We also handled the clearances of their shipment at the Bureau of Customs. Â It cannot. and on . Q: And since when have you been the brokerage firm of that company. however. That no tugboat towed back the barge to the pier after the cargoes were completely loaded by 12:30 in the morning is. Jubay: Will you please tell us what [are you] functions x x x as Executive Vice-President and General Manager of said Company? Mr. this Court.Â As the appellate court put it. 1991 was moderate. in connection [with] your duties and functions as you mentioned.” That petitioner is a common carrier. Sir. this unloading [from] vessel to lighter. Sir.. Sir. 1991 inside the breakwater. you said that you are the brokerage firm of this Company. you are supposed to perform. Atty. Mr.
Â The contention. to the Honorable Court why is it you have to contract for the barges of Transport Ventures Incorporated in this particular operation? A: Firstly. therefore. Inc. Little Giant cannot directly sue TVI based thereon but it can maintain a cause of action for negligence. which [was] in-charged (sic) of the barges. or air. therefore. Sir. Inc. The Honorable Court of Appeals. as defined under Article 1732 of the Civil Code. of petitioner that it is not a common carrier but a customs broker whose principal function is to prepare the correct customs declaration and proper shipping documents as required by law is bereft of merit.. In the case of TVI. any negligence it committed was deemed the negligence of its principal. v.this we hired or we sub-contracted with [T]ransport Ventures.Â It suffices that petitioner undertakes to deliver the goods for pecuniary consideration. however.while Little Giant was named as the consignee. which did not have any barge or tugboat. 1732.Â Also.” As for petitioner’s argument that being the agent of Little Giant.Â In their Service Contract. held: The appellate court did not err in finding petitioner. a customs broker may be regarded as a common carrier. the customs broker is also a common carrier. to be also a common carrier. firms or associations engaged in the business of carrying or transporting passengers or goods or both. a customs broker. petitioner was the broker-agent of Little Giant in securing the release of the cargoes. Sir. is part and parcel of petitioner’s business. UCPB General Insurance Co. Art. offering their services to the public. engaged the services of TVI as handler to provide the barge and the tugboat. Inc. for compensation. it does not persuade. Inc. JUBAY: Will you please explain to us. in A. by land. to wit.Â Common carriers are persons. Q: And whose trucks do you use from BASECO compound to the consignee’s warehouse? A: We utilized of (sic) our own trucks and we have some other contracted trucks.Â (Emphasis supplied) It is settled that under a given set of facts. in BASECO compound we are leasing cranes to have the cargo unloaded from the barge to trucks. petitioner was discharging its own personal obligation under a contact of carriage. And in Calvo v. which is Transport Ventures. we don’t own any barges. it was still required to observe ordinary diligence to ensure the proper and careful handling.Â That is why we hired the services of another firm whom we know [al]ready for quite sometime. Not being a party to the service contract. Sanchez Brokerage.F. petitioner did not disclose that it was acting on commission and was chartering the vessel for Little Giant. this Court held that as the transportation of goods is an integral part of a customs broker. bound by the terms and conditions therein.Â Thus.Â For to declare otherwise “would be to deprive those with whom [it] contracts the protection which the law affords them notwithstanding the fact that the obligation to carry goods for [its] customers. water. xxx ATTY. this Court. [and] then we used trucks to deliver [the cargoes] to the consignee’s warehouse. True. while it acted as a private carrier for which it was under no duty to observe extraordinary diligence. Petitioner.  Â Little Giant did not thus automatically become a party to the Service Contract and was not. corporations. care .Â In effecting the transportation of the cargoes from the shipside and into Little Giant’s warehouse. xxx Article 1732 does not distinguish between one whose principal business activity is the carrying of goods and one who does such carrying only as an ancillary activity.
Â In fine. or delay. Was the reasonable care and caution which an ordinarily prudent person would have used in the same situation exercised by TVI? This Court holds not. Thus. are liable for damages. it should have summoned the same or another tugboat to extend help. the provisions of articles 1171 and 2202. and in the open sea. x x x[O]ne might ask further.Â Stated differently. the common carrier is not relieved of its responsibilities under the contract of carriage. While petitioner sent checkers and a supervisor on board the vessel to counter-check the operations of TVI. during and after the occurrence of the storm in order that it may be exempted from liability for the loss of the goods. If the law or contract does not state the diligence which is to be observed in the performance. Article 2194 of the Civil Code can well apply. for it to be relieved of liability. when an act which constitutes a breach of contract would have itself constituted the source of a quasi-delictual liability had no contract .Â The following pronouncement of the Supreme Court is instructive: 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. how then must the liability of the common carrier. before. TVI’s failure to promptly provide a tugboat did not only increase the risk that might have been reasonably anticipated during the shipside operation. Should Prudent be made likewise liable?Â If at all. on the other hand. where tort is that which breaches the contract.Â After noting that TVI failed to arrange for the prompt towage of the barge despite the deteriorating sea conditions. the members of the crew of a tugboat would be charging overtime pay did not excuse TVI from calling for one such tugboat. paragraph 2. and an independent contractor. following Article 1739 of the Civil Code. of the time and of the place. but it did not. Those who in the performance of their obligations are guilty of fraud. negligence.Â In the discharge of its commitment to ensure the safety of passengers. therefore. be described?Â It would be solidary. knowing that the barge does not have any power of its own and is totally defenseless from the ravages of the sea. a liability for tort may arise even under a contract. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons. it failed to take all available and reasonable precautions to avoid the loss. shall apply. 1170. but was theproximate cause of the loss.Â A contractual obligation can be breached by tort and when the same act or omission causes the injury. 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 conjunction with Article 2180 of the Civil Code.and discharge of the carried goods. Articles 1170 and 1173 of the Civil Code provide: ART.Â In either case. at such a precarious time. prove that it exercised due diligence to prevent or minimize the loss. As for petitioner. ART. it should.Â A man of ordinary prudence would not leave a heavily loaded barge floating for a considerable number of hours. one resulting in culpa contractual and the other in culpa aquiliana.Â That it was nighttime and. on one hand. that liability could only be for tort under the provisions of Article 2176 and related provisions. This Court holds then that petitioner and TVI are solidarily liable for the loss of the cargoes. 1173. and those who in any manner contravene the tenor thereof. that which is expected of a good father of a family shall be required.Â When negligence shows bad faith.
113. To award attorney’s fees to a party just because the judgment is rendered in its favor would be tantamount to imposing a premium on one’s right to litigate or seek judicial redress of legitimate grievances.Â While Industrial Insurance was compelled to litigate its rights. Respecting the award of attorney’s fees in an amount over P1. Court of Appealsthat when the demand cannot be reasonably established at the time the demand is made. Parties to a contract of carriage may. this Court sets it aside. PETITIONER. In fine. agree upon a definition of delivery that extends the services rendered by the carrier.11 with the MODIFICATION that interest at SIX PERCENT per annum of the amount due should be computed from the promulgation on November 24. always afloat. Bill of Lading No. v. it had discharged its duty. SECOND DIVISION [G. the contract can be said to have been breached by tort. however.000. Inc. Costs against petitioner. 161833. the same calls for modification following the ruling in Eastern Shipping Lines.000. WHEREFORE. for lack of factual and legal basis. and Transport Venture Incorporation jointly and severally liable for the amount of P5.Â Since Black Sea had constructively delivered the cargoes to Little Giant.Â For no sufficient showing of bad faith would be reflected in a party’s persistence in a case other than an erroneous conviction of the righteousness of his cause. for which reason the consignee contracted the services of petitioner. UNKNOWN OWNER . No. On the award of adjustment fees: The adjustment fees and expense of divers were incurred by Industrial Insurance in its voluntary but unsuccessful efforts to locate and retrieve the lost cargo. 2005] PHILIPPINE CHARTER INSURANCE CORPORATION. such fact by itself does not justify the award of attorney’s fees under Article 2208 of the Civil Code.Â They do not constitute actual damages. its duty as a common carrier extended only from the time the goods were surrendered or unconditionally placed in its possession and received for transportation until they were delivered actually or constructively to consignee Little Giant. SO ORDERED. 2 covering the shipment provides that delivery be made “to the port of dischargeor so near thereto as she may safely get. judgment is hereby rendered ordering petitioner Schmitz Transport & Brokerage Corporation. As for the court a quo’s award of interest on the amount claimed.existed between the parties. no liability may thus attach to Black Sea. VS. through petitioner.” The delivery of the goods to the consignee was not from “pier to pier” but from the shipside of “M/V Alexander Saveliev” and into barges.246.00 to Industrial Insurance.R. As for Black Sea.Â In the case at bar. July 08. 1997 of the decision of the trial court. the interest shall begin to run not from the time the claim is made judicially or extrajudicially but from the date the judgment of the court is made (at which the time the quantification of damages may be deemed to have been reasonably ascertained). thereby allowing the rules on tort to apply.
Ltd. injury or detriment to the goods. issued Bill of Lading No. 2004 of the Court of Appeals (CA) in CA-G. Philippines. Korea. on board the vessel M/V “National Honor.Â It contained the following articles: one (1) unit Lathe Machine complete with parts and accessories. Branch 37. quality. consigned to the order of Stamm International Inc.Â The shipment was for delivery to Manila. measure.Â The shipment had a total invoice value of US$90. The Antecedent On November 5.. represents and warrants that the goods are properly described. issued Bill of Lading No. Samhwa Inter-Trans Co. namely. contents. loaded a shipment of four units of parts and accessories in the port of Pusan. INC. NSGPBSML512565 in the name of the freight forwarder.Â Crate No.” represented in the Philippines by its agent. Philippines. and one (1) unit Milling Machine complete with parts and accessories. 95-73338. 2. The shipment was contained in two wooden crates. other property.Â The Lathe Machine was stuffed in the crate.00 C&F Manila. the ship or to persons. SR.. or value of the Goods and the Carrier shall be under no responsibility whatsoever in respect of such description or particulars. CV No. 1995. 2.. measured 10 cubic meters and weighed 2. DECISION CALLEJO. for its part. secured. covered by Commercial Invoice No.000. whether principal or agent. Binondo. nature. National Shipping Corporation of the Philippines (NSCP). condition. YJ-73564 DTD and a Packing List. SH9410306 in the name of the shipper consigned to the order of Metropolitan Bank and Trust Company with arrival notice in Manila to ultimate consignee Blue Mono International Company.Â Crate No. marked. noted of the total number of Containers or other packages or units enumerated overleaf.Â Â The shipper. Trading Co. ingredient or characteristic that may cause damage. 1 measured 24 cubic meters and weighed 3. ship. quantity. Korea. otherwise. of Seoul. quality.R. 1 and Crate No.Â No representation is made by the Carrier as to the weight. one (1) unit Surface Grinder complete with parts and accessories. Crate No.: This is a petition for review under Rule 45 of the 1997 Revised Rules of Civil Procedure assailing the Decision dated January 19.Â It is provided therein that: 12. in Civil Case No.620 kgs. any condition. or property or persons and guarantees the correctness of the particulars. NSCP. weight or each piece or package and description of the goods and agrees to ascertain and to disclose in writing on shipment.. 1997 of the Regional Trial Court (RTC) of Manila. Manila. Incorporated (BMICI).Â On the flooring of the wooden crates were three wooden battens placed side by side to support the weight of the cargo. Ltd. Â Freight forwarder. This Bill of Lading shall be prima facie evidence of the receipt of the Carrier in apparent good order and condition except as.Â It was . on the other hand. as shipper. numbers. descriptions or representations.060 kgs. and packed and may be handled in ordinary course without damage to the goods.” NATIONAL SHIPPING CORPORATION OF THE PHILIPPINES AND INTERNATIONAL CONTAINER SERVICES. J.Â The carrier shall be responsible as to the correctness of any such mark. complete and in good order condition. RESPONDENTS.OF THE VESSEL M/V “NATIONAL HONOR. and for the failure to do so the shipper agrees to be liable for and fully indemnify the carrier and hold it harmless in respect of any injury or death of any person and loss or damage to cargo or property. 13. Makati. J. marks. description.Â There were no markings on the outer portion of the crates except the name of the consignee. 57357 which affirmed the Decision dated February 17..Â Proof to the contrary shall be admissible when this Bill of Lading has been transferred to a third party acting in good faith.
 the exclusive arrastre operator of MICT.Â In Dauz’s experience. and its insurer. testified that the wooden battens placed on the wooden flooring of the crate was of good material but was not strong enough to support the weight of . for US$61. the ICTSI. as subrogee. for its part.740.” NSCP and ICTSI.Â It ruled out the possibility of taxes due to insufficiency of packing.Â They inspected the hatches. the safety inspector of ICTSI. this was a normal procedure. Jr. along with the crew and the surveyor of the ICTSI. Anthony Abarquez. conducted an inspection of the cargo.Â It opined that three to four pieces of cable or wire rope slings. Family Insurance and Investment Corporation. as defendants. among others – WHEREFORE. 1995. a Complaint for Damages against the “Unknown owner of the vessel M/V National Honor. On March 22. under Marine Risk NoteÂ No. Branch 35.Â The Mariners’ Adjustment Corporation hired by PCIC conducted a survey and declared that the packing of the shipment was considered insufficient.Cost of suit.50. filed with the RTC of Manila.634.500. considering that the crate contained heavy machinery. should have been used.740.Â When the other companies denied liability. the checker-inspector of the NSCP.00 with the Philippine Charter Insurance Corporation (PCIC) thru its general agent. about five feet high from the vessel’s twin deck. never by-passing the center of the crate.Â It prayed.Â The International Container Terminal Services.000..Â The following day. The M/V “National Honor” arrived at the Manila International Container Terminal (MICT) on November 14. insufficient packing or acts of the shipper.Attorney’s fees in the amount of P100.634. 1995. 3.00. Incorporated (ICTSI) was furnished with a copy of the crate cargo list and bill of lading. 1. a winchman from the ICTSI. 1994. checked the cargo and found it in apparent good condition.Â Upon receipt of the damaged shipment. and it knew the contents of the crate.547. PCIC alleged that the loss was due to the fault and negligence of the defendants. placed two sling cables on each end of Crate No.insured for P2. Denasto Dauz. took delivery of the cargo in such damaged condition. JRM Incorporated. it is respectfully prayed of this Honorable Court that judgment be rendered ordering defendants to pay plaintiff. the PCIC. the mid-portion of the wooden flooring suddenly snapped in the air. BMICI’s customs broker. ICTSI.Â The crane was operated by Olegario Balsa.Â Claudio Cansino. the stevedore of the ICTSI. BMICI found that the same could no longer be used for the intended purpose. 2. 68043 dated October 24.Â As the crate was being hoisted from the vessel’s hatch.Actual damages in the amount of P1. PCIC. BMICI subsequently filed separate claims against the NSCP. sending all its contents crashing down hard. resulting in extensive damage to the shipment. claiming that the loss/damage of the shipment was caused exclusively by the defective material of the wooden battens of the shipment. PCIC paid the claim and was issued a Subrogation Receipt for P1. the following: 1. At the trial.Â No sling cable was fastened on the mid-portion of the crate.270.50 plus legal interest at the time of the filing of this complaint until fully paid. the vessel started discharging its cargoes using its winch crane. held in all equal setting. filed its Answer with Counterclaim and Cross-claim against its co-defendant NSCP. jointly or in the alternative.00.
Inc. is AFFIRMED. Del Pan & Co. the ICTSI used only two cable slings on each side of the crate and would not place a sling cable in the mid-section. thus: WHEREFORE. the loss of the shipment contained in Crate No. The court of appeals committed serious error of law in not applying the statutory presumption of fault and negligence in the case at bar. The court of appeals committed serious error of law in not holding that respondent common carrier is liable for the damage sustained by the shipment in the possession of the arrastre operator. he placed the sling cables only on those portions of the crate where the arrow signs were placed. especially so where the evidence in support thereof is more than substantial. SO ORDERED. Branch 35.Â He declared that the crate fell from the cranes because the wooden batten in the mid-portion was broken as it was being lifted. the decision of the Regional Trial Court of Manila.Â The CA concluded that common carriers are not absolute insurers against all risks in the transport of the goods. and the respective counterclaims of the two defendants are dismissed. PCIC appealed to the CA which rendered judgment on January 19.J.Â He said that unless otherwise indicated by arrow signs. with costs against the plaintiff. that it was bound by the finding of facts of the RTC.. dated February 17. 2004 affirming in toto the appealed decision. According to the trial court. Hence.Â It blamed the shipper for its failure to use materials of stronger quality to support the heavy machines and to indicate an arrow in the middle portion of the cargo where additional slings should be attached. Not satisfied. The ICTSI adduced in evidence the report of the R.Â He averred that most stevedores did not know how to read and write. with this fallo – WHEREFORE.Â The middle wooden batten had a hole (bukong-bukong).Â He concluded that the loss/damage was caused by the failure of the shipper or its packer to place wooden battens of strong materials under the flooring of the crate. The trial court rendered judgment for PCIC and ordered the complaint dismissed. III. where it alleges that: I. that the damage to the cargo could be attributed to insufficient packing and unbalanced weight distribution of the cargo inside the crate as evidenced by the types and shapes of items found. 1997. stating that the shipment was properly packed and secured. the complaint of the plaintiff.the machines inside the crate. SO ORDERED. 1 was due to the internal defect and weakness of the materials used in the fabrication of the crates.Â It ratiocinated that the loss of the shipment was due to an excepted cause – “[t]he character of the goods or defects in the packing or in the containers” and the failure of the shipper to indicate signs to notify the stevedores that extra care should be employed in handling the shipment. the affiant not having testified.Â The trial court rejected the certification of the shipper. as in the case of fragile cargo. and to place a sign in its mid-term section where the sling cables would be placed. . inter alia. The appellate court held. hence. this petition by the PCIC. II. as mere hearsay and devoid of any evidentiary weight.
the boxes contained one lat[h]e machine.Â It claims that it is merely a depository and not a common carrier. Inc. it argues that if ever adjudged liable.Â Extra-care should have been made and extended in the discharge of the subject shipment.Â As an alternative. BMICI. falls solely upon the shoulder of respondent ICTSI.Â The respondent asserts that the testimony of Anthony Abarquez.Â It argues that in the performance of its obligations. they would have been nervous enough to place additional slings and cables to support those massive machines.Â It further avers that the “carrier cannot discharge directly to the consignee because cargo discharging is the monopoly of the arrastre. v.Â Had the respondent only bothered to check the list of its contents. it posits that respondents are liable in solidum to it. Respondent NSCP counters that if ever respondent ICTSI is adjudged liable. including the center portion of the crate to prevent damage to the cargo: … [A] simple look at the manifesto of the cargo and the bill of lading would have alerted respondents of the nature of the cargo consisting of thick and heavy machinery.Â It emphasizes that the respondents did not contest the contents of the bill of lading. its liability is limited only to P3. which were composed almost entirely of thick steel. The petition has no merit. and that the respondents knew that the manner and condition of the packing of the cargo was normal and barren of defects. it is not solidarily liable with it.Â As indicated in the list. which the Court of Appeals should have readily observed in its appreciation of the pertinent facts. it is not obliged to exercise extraordinary diligence. The petitioner posits that the loss/damage was caused by the mishandling of the shipment by therein respondent ICTSI. one milling machine and one grinding machine-all coming with complete parts and accessories. the petitioner is raising questions of facts.”Â Liability. improper under Rule 45 of the Rules of Court. improper in a petition for review oncertiorari. not one among the respondents were cautious enough. and their arrival at the place of destination in bad order makes out a prima facie case against it.Â Here lies the utter failure of the respondents to observed extraordinary diligence in the handling of the cargo in their custody and possession.Â It maintains that it behooved the respondent ICTSI to place three to four cables or wire slings in equal settings.Â It reiterates that the loss/damage was caused by the failure of the shipper or his packer to place a sign on the sides and middle portion of the crate that extra care should be employed in handling the shipment. should prevail over that of Rolando Balatbat. as shown by the fact that it was accepted on board the vessel and arrived in Manila safely.00 as expressed in the liability clause of Gate PassÂ CFS-BR-GP No. inasmuch as the discharging of cargoes from the vessel was its exclusive responsibility.Â Yet. Citing Eastern Shipping Lines. and that the middle wooden batten on the flooring of the crate had a hole. The petitioner asserts that the mere proof of receipt of the shipment by the common carrier (to the carrier) in good order. and not by its negligence. it is liable for the loss or damage to the cargo absent satisfactory explanation given by the carrier as to the exercise of extraordinary diligence. inasmuch as both are charged with the obligation to deliver the goods in good condition to its consignee. the respondent ICTSI should observe the same degree of diligence as that required of a common carrier under the New Civil Code of the Philippines. The petitioner insists that the respondents did not observe extraordinary diligence in the care of the goods. 319773. who conducted his investigation at the site of the incident. Respondent ICTSI avers that the issues raised are factual. Court of Appeals. therefore. clearly intended for heavy industries.Â Besides.500. the arrastre operator.Â The petitioner avers that the shipment was sufficiently packed in wooden boxes. in such case.the court of appeals grossly miscomprehended the facts in finding that the damage sustained by the [shipment] was due to its defective packing and not to the fault and negligence of the respondents. hence. hence. .
a lack or absence of something essential to completeness. (9) the Court of Appeals manifestly overlooked certain relevant and undisputed facts that. destruction or deterioration of the goods.Â When the goods shipped are either lost or arrive in damaged condition. Act or omission of the shipper or owner of the goods. the burden of evidence is shifted to the shipper to prove that the carrier is negligent. The character of the goods or defects in the packing or in the containers. if properly considered. however. and there need not be an express finding of negligence to hold it liable. (3) there is grave abuse of discretion. and (11) such findings are contrary to the admissions of both parties. inferior means of poor quality. (2) the inference is manifestly mistaken.Â To exculpate itself from liability for the loss/damage to the cargo under any of the causes. and to exercise due care in the handling and stowage. such as when (1) the conclusion is grounded on speculations. It bears stressing that the enumeration in Article 1734 of the New Civil Code which exempts the common carrier for the loss or damage to the cargo is a closed list.The well-entrenched rule in our jurisdiction is that only questions of law may be entertained by this Court in a petition for review on certiorari. according to all the circumstances of each case. a deficiency in something essential to the proper use for the purpose for which a thing is to be used. Flood. absurd or impossible. and received by.Â If the carrier succeeds. mediocre. under Article 1734 of the New Civil Code. the common carrier is burdened to prove any of the aforecited causes claimed by it by a preponderance of evidence.Â On the other hand.” The common carrier’s duty to observe the requisite diligence in the shipment of goods lasts from the time the articles are surrendered to or unconditionally placed in the possession of. (4) the judgment is based on a misapprehension of facts. (7) the findings of absence of facts are contradicted by the presence of evidence on record. We have reviewed the records and find no justification to warrant the application of any exception to the general rule. “Defect” is the want or absence of something necessary for completeness or perfection.Â To overcome the presumption of negligence in the case of loss. Order or act of competent public authority. Act of the public enemy in war.Â It requires common carriers to render service with the greatest skill and foresight and “to use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment. the carrier for transportation until delivered to. lightning or other natural disaster or calamity. is not ironclad and admits certain exceptions. 4. a presumption arises against the carrier of its failure to observe that diligence. whether international or civil. the common carrier must prove that it exercised extraordinary diligence. or destruction of the goods entrusted to it for sale. 2. 3. are mandated to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them. 5. or until the lapse of a reasonable time for their acceptance. (5) the findings of fact are conflicting. from the nature of their business and for reasons of public policy. would justify a different conclusion. (6) there is no citation of specific evidence on which the factual findings are based.  Â The Court has defined extraordinary diligence in the vigilance over the goods as follows: The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to. earthquake. storm. However. including such methods as their nature requires. carriage and delivery. (8) the findings of the Court of Appeals are contrary to those of the trial court. the presumption of negligence does not apply to any of the following causes: 1. (10) the findings of the Court of Appeals are beyond the issues of the case. or second .Â This rule. surmises or conjectures. by the person entitled to receive them. We agree with the contention of the petitioner that common carriers.
” In the present case. … Q: Now.rate. I ask the crane (sic) to haul it. 26.” which considerably affected. thus: The case at bar falls under one of the exceptions mentioned in Article 1734 of the Civil Code. the middle wooden batten gave way and collapsed. if any. The crate should have three solid and strong wooden batten placed side by side underneath or on the flooring of the crate to support the weight of its contents. particularly number (4) thereof. Upon examination of the records. which carried substantial volume of the weight of the crate’s contents. what do you do with the crates? A: Everyday with the crates. there is an arrow drawn where the sling is placed. . We find no compelling reason to depart from the factual findings of the trial court. Korea. they too simultaneously with the middle wooden battens gave way and collapsed (TSN. the loss of the shipment was caused by the negligence of the petitioner as the shipper: The same may be said with respect to defendant ICTSI. the trial court declared that based on the record. reduced and weakened its strength. Crate No. 1 was provided by the shipper of the machineries in Seoul. the character of the goods or defects in the packing or in the containers. “defectiveness” is not synonymous with “inferiority. The CA affirmed the ruling of the RTC.Â A thing may be of inferior quality but not necessarily defective. 1996. i. 1 and the total destruction of its contents were not imputable to any fault or negligence on the part of said defendant in handling the unloading of the cargoes from the carrying vessel. 1. Q: After you placed the slings. Claudio Cansino. 20-24). testified before the court their duties and responsibilities: “Q: With regard to crates. had a knot hole or “bukong-bukong. which caused the middle portion thereof to give way when it was lifted.Â Said defendant.Â However. pp.Â As the combined strength of the other two wooden battens were not sufficient to hold and carry the load. cannot be held as blame worthy for the loss of the machineries contained in Crate No.Â The trial court found that the breakage of the crate was not due to the fault or negligence of ICTSI.Â Because of the enormous weight of the machineries inside this crate. were written or were marked on the crate? A: The thing that was marked on the cargo is an arrow just like of a chain. although there were three wooden battens placed side by side on its flooring.e. Sept. the middle wooden batten. therefore. Ma’am. Ma’am.Â The breakage and collapse of Crate No. what do you do with the crates? A: After I have placed a sling properly. but was due solely to the inherent defect and weakness of the materials used in the fabrication of said crate. but to the inherent defect and weakness of the materials used in the fabrication of the said crate. Ma’am. what.Â In other words.Â There is nothing in the record which would indicate that defendant ICTSI had any role in the choice of the materials used in fabricating this crate. what do you do with these crates? A: A sling is placed on it.. Q: When the crates have arrows drawn and where you placed the slings. It appears that the wooden batten used as support for the flooring was not made of good materials. a stevedore of ICTSI.Â The shipper also failed to indicate signs to notify the stevedores that extra care should be employed in handling the shipment. in the case of the crate in dispute. Ma’am.
Q: How many arrows did you see? A: Four (4) on both sides. We agree with the trial and appellate courts. and. that the shipment was in apparent good condition. NSGPBSML512565 issued by the respondent NSCP and accepted by the petitioner. it is settled that factual findings of the lower courts are entitled to great weight and respect on appeal.”Â Absent any signs on the shipment requiring the placement of a sling cable in the mid-portion of the crate. in fact. under Bill of Lading No. accorded finality when supported by substantial evidence. … Q: Now.Â The shipper should have used materials of stronger quality to support the heavy machines. the issue of negligence is factual in nature and in this regard. that’s where I placed the slings. Mr.Â Not only did the shipper fail to properly pack the cargo. Ma’am.Â The petitioner failed to rebut the testimony of Dauz. quality or characteristic that may cause damage. Q: Now.Â On the other hand. Ma’am. or that it was not strong enough to bear the weight of the shipment. the fault should be attributed to the arrastre operator who mishandled the cargo. it also failed to indicate an arrow in the middle portion of the cargo where additional slings should be attached. The statement in the Bill of Lading. Ma’am.Â Case law has it that such statement will create a prima facie presumption only as to the external condition and not to that not open to inspection. IN LIGHT OF ALL THE FOREGOING. nature.Â The cargo fell while it was being carried only at about five (5) feet high above the ground. injury or detriment to the goods. the petition is DENIED for lack of merit. Ma’am. is without merit. Ma’am.” Appellant’s allegation that since the cargo arrived safely from the port of [P]usan. did you find any other marks on the crate? A: Nothing more. the respondent ICTSI was not obliged to do so. … Q: What did you do with the arrows? A: When I saw the arrows. that the crates were sealed and that the contents thereof could not be seen from the outside. is sufficient to sustain a finding of absence of defects in the merchandise. or that the three wooden battens under the flooring of the cargo were not defective or insufficient or inadequate. it cannot thereby be concluded that the respondents knew or should have known that the middle wooden batten had a hole. the latter represented and warranted that the goods were properly packed. Korea without defect. There is no showing in the Bill of Lading that the shipment was in good order or condition when the carrier received the cargo. .Â While it is true that the crate contained machineries and spare parts. Witness.Â It would not have so easily collapsed had the cargo been properly packed.Q: And where did you see or what parts of the crate did you see those arrows? A: At the corner of the crate.Â At any rate. would you place slings on the parts where there are no arrows? A: You can not place slings if there are no arrows. if there are no arrows. The petitioner failed to adduce any evidence to counter that of respondent ICTSI. and disclosed in writing the “condition.
Â Consequently.Â The RTC noted that the vessel had sunk because of the bad weather condition brought about by Typhoon Trining. resulting in the loss of the cargo.Â The challenged Decision disposed as follows: “WHEREFORE..Â In the present case. the trial court dismissed the Complaint. No. which refused to comply.Â Costs against the [herein petitioner].000 representing the amount that respondent had paid Vulcan. J.000. September 30. the appeal is GRANTED. upon finding that the cause of the loss was a fortuitous event.. 1999. THIRD DIVISION [G..Â On October 25. 1991. Malayan instituted a Complaint with the Regional Trial Court (RTC) of Manila on September 4.000.Â Consigned to Vulcan Industrial and Mining Corporation.: Common carriers are bound to observe extraordinary diligence in their vigilance over the goods entrusted to them. the silica sand was placed on board Judy VII. paid Vulcan the value of the lost cargo. The Case Before us is a Petition for Review under Rule 45 of the Rules of Court. 2003 Resolution of the Court of Appeals (CA) in CA-GR CV No.Â During the voyage. the evidence submitted by petitioner to overcome this presumption was sorely insufficient. a barge leased by Lea Mer. On October 7. Inc. DECISION PANGANIBAN. 92-63159 is hereby REVERSED and SET ASIDE. assailing the October 9. 1992.SO ORDERED. as required by the nature of their business and for reasons of public policy. The Facts Ilian Silica Mining entered into a contract of carriage with Lea Mer Industries. PETITIONER. as insurer.Â The December 7. the law presumes that common carriers are at fault or negligent for any loss or damage to the goods that they transport. INC. Inc. the vessel sank. MALAYAN INSURANCE CO. Branch 42 in Civil Case No.Â Consequently.. 1999 decision of the Regional Trial Court of Manila. the cargo was to be transported from Palawan to Manila.Â The court ruled that petitioner had no advance knowledge of the incoming .. Malayan Insurance Co..R.Â [Petitioner] is ordered to pay the [herein respondent] the value of the lost cargo in the amount of P565.” The assailed Resolution denied reconsideration.00. Malayan demanded reimbursement from Lea Mer. INC. VS. for the collection of P565. 161745. 2002 Decision and the December 29.Â To recover the amount paid and in the exercise of its right of subrogation.* RESPONDENT. 2005] LEA MER INDUSTRIES. 66028. for the shipment of 900 metric tons of silica sand valued at P565.
Rosa Barba y Saliente. firms or associations engaged in the business of carrying or transporting passengers or goods. First Issue: Liability for Loss of Cargo Question of Fact The resolution of the present case hinges on whether the loss of the cargo was due to a fortuitous event. Engr. and (2) whether the survey report of Jesus Cortez is admissible in evidence. but found no reason to reverse the CA. “C.when this service is offered to the public for compensation. to the effect that typhoon ‘Trining’ did not hit Metro Manila or Palawan. Hence. Ms.by land. Court of Appeals. water. “B. Whether or not the survey report of the cargo surveyor. Whether or not the respondent. Jesus Cortez.” In the main.typhoon.Â The present case serves as an exception to this rule. The Court’s Ruling The Petition has no merit. the CA held that the vessel was not seaworthy when it sailed for Manila. Ruling of the Court of Appeals Reversing the trial court. corporations. . this recourse. had committed serious error and grave abuse of discretion in disregarding the testimony of the witness from the MARINA. notwithstanding petitioner’s claim that it pertains only to a question of law. to the effect that the vessel ‘Judy VII’ was seaworthy at the time of incident and further in disregarding the testimony of the PAG-ASA weather specialist. questions of fact may not be raised in a petition for review.Â This Court meticulously reviewed the records. the loss of the cargo was occasioned by petitioner’s fault. Jacinto Lazo y Villegal. The Issues Petitioner states the issues in this wise: “A. Rule on Common Carriers Common carriers are persons.Â As a general rule. Court of Appeals. had validly or legally reversed the finding of fact of the Regional Trial Court which clearly and unequivocally held that the loss of the cargo subject of this case was caused by fortuitous event for which herein petitioner could not be held liable. Whether or not the respondent. or air -. the issues are as follows: (1) whether petitioner is liable for the loss of the cargo. because the factual findings of the appellate and the trial courts vary. because it offers to the public its business of transporting goods through its vessels.Â Thus.Â Petitioner is clearly a common carrier. not by a fortuitous event.Â This issue involves primarily a question of fact. or both -. who had not been presented as a witness of the said report during the trial of this case before the lower court can be admitted in evidence to prove the alleged facts cited in the said report. and that the vessel had been cleared by the Philippine Coast Guard to travel from Palawan to Manila.
the charterer will generally be considered as owner for the voyage or service stipulated. earthquake.Â The charterer mans the vessel with his own people and becomes. and (d) the obligor must have been free from any participation in the aggravation of the resulting injury to the creditor. the owner of a vessel must completely and exclusively relinquish possession.” The distinction is significant. as required by the nature of their business and for reasons of public policy. Extraordinary Diligence Required Common carriers are bound to observe extraordinary diligence in their vigilance over the goods and the safety of the passengers they transport. because a demise or bareboat charter indicates a business undertaking that is private in character. “(2) Act of the public enemy in war.”Â Thus.” Rule on Fortuitous Events Article 1174 of the Civil Code provides that “no person shall be responsible for a fortuitous event which could not be foreseen. lightning. “(3) Act or omission of the shipper or owner of the goods. storm. whether international or civil. “(4) The character of the goods or defects in the packing or in the containers.Â To create a demise. the owner pro hac vice. as shown by the fact that it was petitioner’s crew that manned the tugboat M/V Ayalit and controlled the bargeJudy VII.Â Necessarily. anything short of such a complete transfer is a contract of affreightment (time or voyage charter party) or not a charter party at all. To excuse the common carrier fully of any liability. petitioner was a common carrier. a common carrier is exempted from liability.Thus. the fortuitous event must have been the proximate and only cause of the loss.Â Moreover. the Court corrects the trial court’s finding that petitioner became a private carrier when Vulcan chartered it. Â Consequently. the rights and obligations of the parties to a contract of private carriage are governed principally by their stipulations. (c)Â the occurrence must have been such as to render it impossible for the debtors to fulfill their obligation in a normal manner. though foreseen. or which. Common carriers are presumed to have been at fault or to have acted negligently for loss or damage to the goods that they have transported. was inevitable. or that the loss or damage was occasioned by any of the following causes: “(1) Flood.Â Charter parties are classified as contracts of demise (or bareboat) and affreightment. impossible to avoid. or other natural disaster or calamity. in effect. The Contract in the present case was one of affreightment.Â Extraordinary diligence requires rendering service with the greatest skill and foresight to avoid damage and destruction to the goods entrusted for carriage and delivery.Â This presumption can be rebutted only by proof that they observed extraordinary diligence. if foreseeable. which are distinguished as follows: “Under the demise or bareboat charter of the vessel. (b) the event that constituted the caso fortuito must have been impossible to foresee or. “(5) Order or act of competent public authority. not by the law on common carriers. if the loss or damage was due to such an event. and the pertinent law governs the present factual circumstances. it should have exercised due diligence to prevent or minimize the loss . Jurisprudence defines the elements of a “fortuitous event” as follows:Â (a) the cause of the unforeseen and unexpected occurrence. command and navigation thereof to the charterer. must have been independent of human will. subject to liability to others for damages caused by negligence. or the failure of the debtors to comply with their obligations.
Â Its witness.Â Respondent was able to prove that. It was precisely this circumstance that petitioner cited to escape liability. petitioner presented no evidence that it had attempted to minimize or prevent the loss before. during and after the occurrence of the fortuitous event.” The evidence presented by petitioner in support of its defense of fortuitous event was sorely insufficient.Â This fact was confirmed during his cross-examination.Â There is a preponderance of evidence that the barge was not seaworthy when it sailed for Manila. Baldovino. what I am asking [relates to the] action taken by the officers and crew of tugboat Ayalit and barge Judy VIIÂ Â Â Â x x x to prevent the sinking of barge Judy VII? x x xÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â x x xÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â x x x Court: Mr. during or after the alleged fortuitous event. did the captain of that tugboat give any instruction on how to save the barge Judy VII? Joey Draper: I can no longer remember sir.Â It had to show that it was free from any fault -. testified that the barge was in “tip-top” or excellent condition. petitioner bore the burden of proving that it had exercised extraordinary diligence to avoid the loss. Luna.before. Domingo A. Jr. testified that he could no longer remember whether anything had been done to minimize loss when water started entering the barge. because that happened [a] long time ago. Jr.Â Evidence was presented to show that petitioner had not been informed of the incoming typhoon.Â As the common carrier. or that the loss had been occasioned by a fortuitous event -. First. where the storm warning was only “Signal No. 1. it was not enough for the common carrier to show that there was an unforeseen or unexpected occurrence. Joey A.: Your Honor.Â As required by the pertinent law.Â On October 25.Â Lea Mer claimed that the loss of the cargo was due to the bad weather condition brought about by Typhoon Trining. in the hull of the barge. Typhoon Trining was allegedly far from Palawan. Loss in the Instant Case There is no controversy regarding the loss of the cargo in the present case. that they did not aggravate the sinking.Â Because the presumption of negligence or fault applied to petitioner.Â Its witness. if there were. as shown by the following brief exchange: ”Atty. the date on which the voyage commenced and the barge sank. Draper.but that he had not personally inspected it when it .: Other than be[a]ching the barge Judy VII. were there other precautionary measure[s] exercised by you and the crew of Judy VII so as to prevent the los[s] or sinking of barge Judy VII? x x xÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â x x xÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â x x x Atty. and that the Philippine Coast Guard had given it clearance to begin the voyage. the alleged fortuitous event was not the sole and proximate cause of the loss. it was incumbent upon it to show that there were no holes. Baldovino.” Second.a fact it miserably failed to prove. 1991. or.an exempting circumstance. there were holes that might have caused or aggravated the sinking. Petitioner offered no evidence to rebut the existence of the holes. witness.
did not conclusively prove that the barge was seaworthy. of the statements.Â Manlapig testified that he had prepared that Report after taking into account the findings of the surveyor.Â Well-settled is the rule that. not merely by Cortez’ Survey Report.Â Moreover. except as otherwise provided in these rules. a cargo marine surveyor and the vice-president of Toplis and Harding Company.” On this basis.left Palawan. unless the affiant is presented as a witness. from which we quote: “Section 36. dated July 31. Second Issue: Admissibility of the Survey Report Petitioner claims that the Survey Report prepared by Jesus Cortez.Â The Court partly agrees. 1991. –A witness can testify only to those facts which he knows of his personal knowledge. and that their testimonies must be confined to personal knowledge is required by the rules on evidence.Â Evidently.Â The regularity of the issuance of the Certificate is disputably presumed. this evidence did not necessarily take into account the actual condition of the vessel at the time of the commencement of the voyage. then the Report that he had prepared was hearsay and therefore inadmissible for the purpose of proving the truth of its contents.Â The admissibility of that Report as part of the testimonies of the witnesses was correctly ruled upon by the trial court.Â Because he did not testify during the trial. the hearsay rule does not apply. that is.Â Testimony generally confined to personal knowledge. The submission of the Philippine Coast Guard’s Certificate of Inspection of Judy VII. the trial court correctly refused to admit Jesus Cortez’s Affidavit. At any rate.Â Independent of the truth or the falsity of the statement given in the report. An exception to the foregoing rule is that on “independently relevant statements. an affidavit is considered hearsay. In the instant case. it was the existence of the Survey Report that was testified to.Â The final Report showed that the barge was not seaworthy because of the existence of the holes.Â It could be contradicted by competent evidence. and Federico S. hearsay excluded.Â The referral to Cortez’s Report was in relation to Manlapig’s final Adjustment Report. as well as the pictures and the sketches of the place where the sinking occurred.”Â A report made by a person is admissible if it is intended to prove the tenor. which are derived from his own perception. should not have been admitted in evidence. the existence of the holes was proved by the testimonies of the witnesses. the fact that it has been made is relevant. Soriano. Manlapig. petitioner has already failed to overcome the presumption of . which respondent offered. the cargo surveyor.Â Here. the challenged Survey Report prepared by Cortez was admitted only as part of the testimonies of respondent’s witnesses.Â Soriano testified that the Survey Report had been used in preparing the final Adjustment Report conducted by their company. Rule on Independently Relevant Statement That witnesses must be examined and presented during the trial. which respondent had offered as evidence. not the truth. even without the Survey Report. The Survey Report Not the Sole Evidence The facts reveal that Cortez’s Survey Report was used in the testimonies of respondent’s witnesses -Charlie M.Â Evidently.
ordered the vessel to be forced aground. 1984. SO ORDERED. It holds office at 1294 Romualdez St. Branch 8 in Civil Case No. MOP-006 dated September 17. Loadstar entered into a voyage-charter with Northern Mindanao Transport Company. On June 6. PIONEER ASIA INSURANCE CORP.. INC.000 bags of cement from Iligan City to Manila. 1984. at 4:31 in the morning of June 25. Respondent. 67. JJ. for the carriage of 65. the Petition is DENIED and the assailed Decision and Resolution areAFFIRMED.fault that applies to common carriers.Â Costs against petitioner. the entire shipment of .. Corona. and Garcia. master of M/V Weasel.000. Manila. Petitioner. vs. 157481 January 24. G.R. 1984. 40999. 86-37957. 1980. M/V Weasel left Iligan City for Manila in good weather.. The shipment was covered by petitioner’s Bill of Lading 4 dated June 23. 2006 LOADSTAR SHIPPING CO. of the Court of Appeals in CA-G. concur.400.R. CV No. Inc. 2003. The shipper was Iligan Cement Corporation. (Loadstar for brevity) is the registered owner and operator of the vessel M/V Weasel. for which respondent issued Marine Open Policy No. Captain Vicente C. Inc. Consequently. 1984. However. Montera.: For review on certiorari are (1) the Decision 1 dated October 15. 1993 of the Regional Trial Court of Manila. On June 24. 5 At 12:50 in the afternoon of June 24. which affirmed with modification the Decision 3 dated February 15. Sandoval-Gutierrez. while the consignee in Manila was Market Developers. The pertinent facts are as follows: Petitioner Loadstar Shipping Co. the consignee insured the shipment of cement with respondent Pioneer Asia Insurance Corporation for P1.. Prior to the voyage. WHEREFORE.. Paco. Inc. DECISION QUISUMBING. No.. covering all shipments made on or after September 30. Carpio Morales. 2002 and (2) the Resolution 2 dated February 27. J. 1984. 1980.500 bags of cement were loaded on board M/V Weasel and stowed in the cargo holds for delivery to the consignee.
1984 to 8:00 a.000. in view of the foregoing. It alleged that: (1) the M/V Weasel was not seaworthy at the commencement of the voyage. (2) the weather and sea conditions then prevailing were usual and expected for that time of the year and as such. Branch 8. respondent insurance company paid the consignee P1. The RTC called attention to the PAG-ASA report that at the time of the incident. 6 The RTC reasoned that petitioner. Inc. ordering the latter to pay as follows: 1. The consignee demanded from petitioner full reimbursement of the cost of the lost shipment. The trial court explained that in case of loss or destruction of the goods. and (3) petitioner was negligent in the selection and supervision of its agents and employees then manning the M/V Weasel. Nonetheless. and. respondent filed a complaint docketed as Civil Case No. Petitioner. Negros Occidental from 8:00 p. IT IS SO ORDERED. In its Answer. 1986. records showed that the sea and weather conditions in the area of Hinubaan. Petitioner thus failed to deliver the goods to the consignee in Manila.. the value of the lost shipment of cement. against petitioner with the Regional Trial Court of Manila. petitioner alleged that no fault nor negligence could be attributed to it because it exercised due diligence to make the ship seaworthy. Petitioner claimed it could not be held liable for an act or omission not directly attributable to it.00 with legal rate of interest per annum from date of complaint until fully paid. 1985. on October 15. Hence. Petitioner’s defense of force majeure was found bereft of factual basis. 3. 1993. as a common carrier. Petitioner insisted that the failure to deliver the subject cargo to the consignee was due to force majeure. To pay the sum equal to 25% of the claim as and for attorney’s fees and litigation expenses.400.900. bears the burden of proving that it exercised extraordinary diligence in its vigilance over the goods it transported. In return. To pay the costs of suit. Further. To pay plaintiff the sum of P1.cement was good as gone due to exposure to sea water. was an ordinary peril of the voyage for which the M/V Weasel should have been normally able to cope with. the RTC rendered a Decision in favor of respondent. tropical storm "Asiang" had moved away from the Philippines. judgment is hereby rendered in favor of plaintiff and against defendant Loadstar Shipping Co. as well as properly manned and equipped. 8637957.000.m. the next day were . refused to reimburse the consignee despite repeated demands. to wit: WHEREFORE. On February 15. the consignee executed a Loss and Subrogation Receipt in favor of respondent concerning the latter’s subrogation rights against petitioner. of June 24.m. however. a statutory presumption arises that the common carrier was negligent unless it could prove that it had observed extraordinary diligence. 2.000 plus an additional amount of P500. on March 11.
. Thus. 86-37957 is hereby AFFIRMED with the MODIFICATION that the appellant shall only pay the sum of 10% of the total claim as and for attorney’s fees and litigation expenses. THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE PROXIMATE CAUSE OF THE LOSS OF CARGO WAS NOT A FORTUITOUS EVENT BUT WAS ALLEGEDLY DUE TO THE FAILURE OF PETITIONER TO EXERCISE EXTRAORDINARY DILIGENCE. petitioner insists that it had exercised extraordinary diligence and that the proximate cause of the loss of the cargo was a fortuitous event. III THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE AWARD BY THE TRIAL COURT OF ATTORNEY’S FEES AND LITIGATION EXPENSES IN FAVOR OF HEREIN RESPONDENT. Branch 8. 2002. the Court of Appeals affirmed the RTC Decision with modification that Loadstar shall only pay the sum of 10% of the total claim for attorney’s fees and litigation expenses. the presumption of negligence against common carriers could not apply. petitioner contends that at the time of the voyage the carrier’s voyage-charter with the shipper converted it into a private carrier. 7 Petitioner’s Motion for Reconsideration was denied. the Decision dated February 15. premises considered. Petitioner further avers that the stipulation in the voyage-charter holding it free from liability is valid and binds the respondent. In its Decision dated October 15. 1993. petitioner points out that the award of attorney’s fees and litigation expenses appeared only in the dispositive portion of the RTC Decision with nary a justification. Costs against the appellant. Petitioner appealed to the Court of Appeals. In any event. but gross negligence of petitioner. Petitioner maintains that the Court of Appeals thus erred in affirming the award. WHEREFORE. of the Regional Trial Court of Manila. 8 The instant petition is anchored now on the following assignments of error: I THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER IS A COMMON CARRIER UNDER ARTICLE 1732 OF THE CIVIL CODE. the trial court concluded that the cause of the loss was not tropical storm "Asiang" or any other force majeure. Thus. It ruled. SO ORDERED. National Capital Judicial Region. in Civil Case No.slight and smooth. With regard to the third issue. II ASSUMING ARGUENDO THAT PETITIONER IS A COMMON CARRIER. 9 On the first and second issues.
petitioner remains a common carrier notwithstanding the existence of the charter agreement with the Northern Mindanao Transport Company. Indubitably. As elucidated in Planters Products. provided the charter is limited to the ship only. Respondent further counters that the Court of Appeals was correct when it held that petitioner was a common carrier despite the charter of the whole vessel. since the said charter is limited to the ship only and does not involve both the vessel and its crew. However. is petitioner a common or a private carrier? and (2) In either case. offering their services to the public. Now. 12 Conformably. did not in any way convert the common carrier into a private carrier. Inc.. Common carriers are persons. although her holds may. when affirmed by the Court of Appeals. Inc. we stress that the finding of fact by the trial court. had the voyage-charter converted petitioner into a private carrier? We think not. firms or associations engaged in the business of carrying or transporting passengers or goods or both. for the moment. Thus. offering its services indiscriminately to the public. for compensation. or air. The voyage-charter agreement between petitioner and Northern Mindanao Transport Company. notwithstanding the charter of the whole or portion of a vessel by one or more persons. the extraordinary diligence of a common carrier or the ordinary diligence of a private carrier? Article 1732 of the Civil Code defines a "common carrier" as follows: Article 1732. as in the case of a time-charter or voyage-charter. Petitioner is a corporation engaged in the business of transporting cargo by water and for compensation. 10 The threshold issues in this case are: (1) Given the circumstances of this case. Prefatorily. v. Inc. We have already resolved this issue with finality in Planters Products. since the charter was limited to the ship only. without doubt. Court of Appeals 11 where we ruled that: It is therefore imperative that a public carrier shall remain as such. . be the property of the charterer. However. a shipowner in a time or voyage charter retains possession and control of the ship. its charter is only a voyage-charter. respondent dismisses as factual issues the inquiry on (1) whether the loss of the cargo was due to force majeure or due to petitioner’s failure to exercise extraordinary diligence. water. not a bareboat charter. petitioner entered into a voyage-charter with the Northern Mindanao Transport Company. it is a common carrier. Inc.For its part. at least insofar as the particular voyage covering the charter-party is concerned. is not reviewable by this Court in a petition for review on certiorari. did petitioner exercise the required diligence i.e. by land. as in a bareboat or demise that a common carrier becomes private. the conclusions derived from such factual finding are not necessarily pure issues of fact when they are inextricably intertwined with the determination of a legal issue. corporations. It is only when the charter includes both the vessel and its crew. and (2) whether respondent is entitled to recover attorney’s fees and expenses of litigation. the conclusions made may be raised in a petition for review before this Court. In such instances.
" 16 Article 1734 enumerates the instances when a carrier might be exempt from liability for the loss of the goods. whether international or civil. or other natural disaster or calamity. Inc. 15 we said: … it is incumbent upon the common carrier to prove that the loss. American Steamship Agencies. . These are: (1) Flood. earthquake.As a common carrier. petitioner is required to observe extraordinary diligence in the vigilance over the goods it transports. Moreover. not a common carrier. The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to. including such methods as their nature requires. (3) Act or omission of the shipper or owner of the goods. Inc. On the contrary. its claim is not substantiated. Court of Appeals. instead of the usual route. Court of Appeals. 14 In Compania Maritima v.. 18 and Valenzuela Hardwood and Industrial Supply. or destruction of the goods entrusted to it for safe carriage and delivery. lightning. 13 When the goods placed in its care are lost. Petitioner therefore has the burden of proving that it observed extraordinary diligence in order to avoid responsibility for the lost cargo. Records show that in the evening of June 24. petitioner is presumed to have been at fault or to have acted negligently. . the sea and weather conditions in the vicinity of Negros Occidental were calm. Yet. Petitioner heavily relies on Home Insurance Co. It requires common carriers to render service with the greatest skill and foresight and "to use all reasonable means to ascertain the nature and characteristics of goods tendered for shipment. the issue in both cases is not the effect of a voyage-charter on a common carrier. and to exercise due care in the handling and stowage. v. and (5) Order or act of competent public authority. (2) Act of the public enemy in war. deterioration or destruction was due to accident or some other circumstances inconsistent with its liability. Petitioner has only itself to blame for its misjudgment. but the validity of a stipulation absolving the private carrier from liability in case of loss of the cargo attributable to the negligence of the private carrier. which exposed the voyage to unexpected hazard. 17 Petitioner claims that the loss of the goods was due to a fortuitous event under paragraph 1. v. 1984.. 19The said cases involved a private carrier. (4) The character of the goods or defects in the packing or in the containers. we find supported by evidence on record the conclusion of the trial court and the Court of Appeals that the loss of the entire shipment of cement was due to the gross negligence of petitioner. The records reveal that petitioner took a shortcut route. storm.
attorney’s fees and expenses of litigation shall be limited to only ten percent (10%) of the total monetary award. 2002 and the Resolution dated February 27. Negros Occidental for transport to and discharge at Tagoloan. petitioner Cebu Salvage Corporation (as carrier) and Maria Cristina Chemicals Industries. CV No. Makati. Petitioner. No. 2001 decision2 and September 17.R. Inc. PHILIPPINE HOME ASSURANCE CORPORATION. Given the circumstances of this case. Inc. of the Court of Appeals in CA-G. 2007 CEBU SALVAGE CORPORATION. are AFFIRMED. The assailed Decision dated October 15.: May a carrier be held liable for the loss of cargo resulting from the sinking of a ship it does not own? This is the issue presented for the Court’s resolution in this petition for review on certiorari1 assailing the March 16.R. 1984. 40473 which in turn affirmed the December 27. 1984. SO ORDERED. Branch 145. 150403 January 25. we find consistent with law and prevailing jurisprudence the Court of Appeals’ award of attorney’s fees and expenses of litigation equivalent to ten percent (10%) of the total claim.100 metric tons of silica quartz on board the M/T Espiritu Santo which left Ayungon for Tagoloan the next day. 2001 resolution3 of the Court of Appeals (CA) in CA-G. 40999. WHEREFORE.Lastly. on the third issue. Costs against petitioner. we deem the said amount just and equitable. On November 12. [MCCII] (as charterer) entered into a voyage charter6 wherein petitioner was to load 800 to 1. G.8 Pursuant to the contract.5 The pertinent facts follow. petitioner received and loaded 1. however.. because the M/T Espiritu Santo . DECISION CORONA.100 metric tons of silica quartz on board the M/T Espiritu Santo7 at Ayungon.R. the petition is DENIED.9 The shipment never reached its destination. Metro Manila. Respondent. J. Misamis Oriental to consignee Ferrochrome Phils. vs. 1989 decision4 of the Regional Trial Court (RTC). on December 23. The contract between the parties in this case contained a stipulation that in case of suit. 2003. CV No.
attorney’s fees equivalent to 25% of the award and costs of suit. command and navigation of the ship.22 In the event of loss of the goods.10 MCCII filed a claim for the loss of the shipment with its insurer. this petition. All throughout its dealings with MCCII. On appeal. It actively negotiated and solicited MCCII’s account. it could not be held liable for the loss of the shipment caused by the sinking of a ship it did not own.19 Thus. its master and crew. It had control over what vessel it would use.15 An owner who retains possession of the ship remains liable as carrier and must answer for loss or non-delivery of the goods received for transportation.12 Thereafter. the RTC rendered judgment in favor of respondent.23 In all other cases. the charterer or freighter merely having use of the space in the vessel in return for his payment of freight.16 Petitioner argues that the CA erred when it affirmed the RTC finding that the voyage charter it entered into with MCCII was a contract of carriage. the CA affirmed the decision of the RTC. ALS Timber Enterprises (ALS). Hence. resulting in the total loss of the cargo.500 plus legal interest. At the time of the loss of the cargo. it represented itself as a . common carriers are bound to observe extraordinary diligence over the goods they transport according to the circumstances of each case. Misamis Oriental. common carriers are responsible.21 From the nature of their business and for reasons of public policy. unless they can prove that this was brought about by the causes specified in Article 1734 of the Civil Code. Based on the agreement signed by the parties and the testimony of petitioner’s operations manager. it is clear that it was a contract of carriage petitioner signed with MCCII. Petitioner and MCCII entered into a "voyage charter. it filed a case in the RTC13 against petitioner for reimbursement of the amount it paid MCCII. We disagree. it was engaged in the business of carrying and transporting goods by water.sank in the afternoon of December 24. unless they prove that they observed extraordinary diligence.20 There is no dispute that petitioner was a common carrier.11 Respondent paid the claim in the amount of P211.17 It insists that the agreement was merely a contract of hire wherein MCCII hired the vessel from its owner.18 Not being the owner of the M/T Espiritu Santo. for compensation." also known as a contract of affreightment wherein the ship was leased for a single voyage for the conveyance of goods.500 and was subrogated to the rights of MCCII. respondent Philippine Home Assurance Corporation.24 Petitioner was the one which contracted with MCCII for the transport of the cargo. offered its services to ship the silica quartz and proposed to utilize the M/T Espiritu Santo in lieu of the M/T Seebees or the M/T Shirley (as previously agreed upon in the voyage charter) since these vessels had broken down. and offered its services to the public. common carriers are presumed to be at fault or to have acted negligently. the shipowner retains the possession.14 Under a voyage charter. After trial. 1984 off the beach of Opol. petitioner did not have control and supervision over the vessel. in consideration of the payment of freight. It ordered petitioner to pay respondent P211.
for the contract is the Charter Party. we disagree. in fact. It would also open the door to collusion between the carrier and the supposed owner and to the possible shifting of liability from the carrier to one without any financial capability to answer for the resulting damages. therefore. it is also dangerous. "the bill of lading operates as the receipt for the goods. The MCCII (respondent’s subrogor) could not be reasonably expected to inquire about the ownership of the vessels which petitioner carrier offered to utilize. and is the law between the parties who are bound by its terms and condition provided that these are not contrary to law. It could not exculpate the carrier from liability for the breach of its contract of carriage. Certainly." The Bill of Lading becomes. While it is true that a bill of lading may serve as the contract of carriage between the parties. the voyage charter itself denominated petitioner as the "owner/operator" of the vessel. It says that a carrier that enters into a contract of carriage is not liable to the charterer or shipper if it does not own the vessel it chooses to use. 30 Finally.29 it cannot prevail over the express provision of the voyage charter that MCCII and petitioner executed: [I]n cases where a Bill of Lading has been issued by a carrier covering goods shipped aboard a vessel under a charter party. The law. The fact that it did not own the vessel it decided to use to consummate the contract of carriage did not negate its character and duties as a common carrier. The voyage charter here being a contract of affreightment. and the charterer is also the holder of the bill of lading. public order and public policy.25 In fact. prohibits it and condemns it as unjust and contrary to public policy.28 This is consistent with the fact that MCCII did not contract directly with ALS.34 . morals. As a practical matter.27 Again. loss or non-delivery of the cargo was proven. the cargo was loaded on board the vessel. but not as varying the contract between the charterer and the shipowner. only a receipt and not the contract of carriage in a charter of the entire vessel. MCCII never dealt with ALS and yet petitioner insists that MCCII should sue ALS for reimbursement for its loss. it is very difficult and often impossible for the general public to enforce its rights of action under a contract of carriage if it should be required to know who the actual owner of the vessel is.26 Petitioner next contends that if there was a contract of carriage.31 This deserves scant consideration. then it was between MCCII and ALS as evidenced by the bill of lading ALS issued. the carrier was answerable for the loss of the goods received for transportation. as in fact it was simply signed by the supercargo of ALS.common carrier. in this case. and petitioner failed to prove that it exercised extraordinary diligence to prevent such loss or that it was due to some casualty or force majeure. to permit a common carrier to escape its responsibility for the goods it agreed to transport (by the expedient of alleging nonownership of the vessel it employed) would radically derogate from the carrier's duty of extraordinary diligence. a contract of carriage of goods was shown to exist. good customs. petitioner asserts that MCCII should be held liable for its own loss since the voyage charter stipulated that cargo insurance was for the charterer’s account.32 To summarize. The bill of lading was merely a receipt issued by ALS to evidence the fact that the goods had been received for transportation. It was not signed by MCCII.33 The idea proposed by petitioner is not only preposterous. and as document of title passing the property of the goods. This simply meant that the charterer would take care of having the goods insured.
consigned to San Miguel Brewery. the petition is hereby DENIED. as full settlement of the claim. No. plus attorney's fees. AMERICAN STEAMSHIP AGENCIES. INC.85. as subrogee to the consignee. owner and operator of SS Crowborough. defendant-appellant. filed against them on March 6. there were shortages amounting to P12.WHEREFORE.. AMERICAN STEAMSHIP AGENCIES.. and LUZON STEVEDORING CORPORATION.R. INC.. Having been refused reimbursement by both the Luzon Stevedoring Corporation and American Steamship Agencies. 1963. arrived in Manila on March 7. When the cargo was delivered to consignee San Miguel Brewery Inc. 1968 HOME INSURANCE COMPANY.71 — the insurance value of the loss. J. vs.71 with legal interest. Luzon Stevedoring Corporation alleged that it delivered with due diligence the goods in the same quantity and quality that it had received the same from the carrier. William H. covered by clean bills of lading Numbers 1 and 2. L-25599 April 4. J. Because the others denied liability. defendants. now San Miguel Corporation.870. Home Insurance Company. Salcedo and Associates for defendant-appellant. Quasha and Associates for plaintiff-appellee. plaintiff-appellee. BENGZON.P. In answer. the charterer. American Steamship Agencies denied liability by alleging that under the provisions of the Charter party referred to in the bills of lading. it claimed to have exercised due diligence in . not the shipowner. The cargo. Home Insurance Company and the American Steamship Agencies. Peru.870.033. both dated January 17. 1964 before the Court of First Instance of Manila a complaint for recovery of P14. Ross. SO ORDERED. Inc. was responsible for any loss or damage of the cargo. Home Insurance Company paid the consignee P14. Costs against petitioner. Furthermore.505..740 jute bags of Peruvian fish meal through SS Crowborough. 21.: "Consorcio Pesquero del Peru of South America" shipped freight pre-paid at Chimbate. G. It also claimed that plaintiff's claim had prescribed under Article 366 of the Code of Commerce stating that the claim must be made within 24 hours from receipt of the cargo. 1963 and was discharged into the lighters of Luzon Stevedoring Company. and insured by Home Insurance Company for $202. causing the latter to lay claims against Luzon Stevedoring Corporation. Selph.
" A perusal of the charter party3 referred to shows that while the possession and control of the ship were not entirely transferred to the charterer. having found the latter to have merely delivered what it received from the carrier in the same condition and quality. absolved Luzon Stevedoring Corporation. and (d) When goods are delivered to the carrier in good order and the same are in bad order at the place of destination.1 covering the shipment of Peruvian fish meal provide at the back thereof that the bills of lading shall be governed by and subject to the terms and conditions of the charter party. Disagreeing with such judgment. (b) The stipulation in the charter party contract exempting the owner from liability is against public policy under Article 1744 of the Civil Code. and they cannot by contract exempt themselves from liability resulting from their negligence or that of their servants. American Steamship Agencies appealed directly to Us. even from the neglect or fault of the captain or crew or some other person employed by .4 the vessel was chartered to its full and complete capacity (Exh.870. if any. 3). 1965. the liability of the shipowner for acts or negligence of its captain and crew. after trial. Subject to all terms.000 attorney's fees. stowing and discharging at its risk and expense. Said court cited the following grounds: (a) The non-liability claim of American Steamship Agencies under the charter party contract is not tenable because Article 587 of the Code of Commerce makes the ship agent also civilly liable for damages in favor of third persons due to the conduct of the captain of the carrier.6 Accordingly. the. charter had the option to go north or south or vice-versa. As such. exempts the owner of the vessel from any loss or damage or delay arising from any other source.71 with legal interest plus P1. Dec. it was not responsible for losses or damages to the cargo. 13. the carrier is prima facie liable. conditions and exceptions of charter party dated London. the Court of First Instance. and ordered American Steamship Agencies to pay plaintiff P14. (c) In case of loss.2 On the of the bills are stamped "Freight prepaid as per charter party. Said paragraph. however. otherwise. paragraph 2 of the charter party. the bills of lading prevail over all the agreements.5 loading.stowing the goods and that as a mere forwarding agent. provides that the owner is liable for loss or damage to the goods caused by personal want of due diligence on its part or its manager to make the vessel in all respects seaworthy and to secure that she be properly manned. common carriers are presumed at fault or negligent under Article 1735 of the Civil Code unless they prove extraordinary diligence. Furthermore. 1962. the charter party contract is one of affreightment over the whole vessel rather than a demise. Section 2. equipped and supplied or by the personal act or default of the owner or its manager. On November 17. destruction or deterioration of goods. would remain in the absence of stipulation. The appeal brings forth for determination this legal issue: Is the stipulation in the charter party of the owner's non-liability valid so as to absolve the American Steamship Agencies from liability for loss? The bills of lading.
9 and is deemed valid. for the contract is the charter party. is in fact and legal contemplation merely a receipt and a document of title not a contract. petitioner.R. 1997 . recovery cannot be had thereunder. G. COURT OF APPEALS AND VLASONS SHIPPING. respondents. And furthermore. as shipper. becomes a private carrier.8 As a private carrier. No costs.. Regarding the stipulation. In this case. No. the bill of lading issued by the master to the charterer. the consignees under the bills of lading must likewise abide by the terms of the charter party. as in the case of a ship totally chartered for the use of a single party. as distinguished from its other agents or employees. vs. a common carrier undertaking to carry a special cargo or chartered to a special person only. The release from liability in this case was held unreasonable and contrary to the public policy on common carriers. Such doctrine We find reasonable. Accordingly. in a charter of the entire vessel. unless the same is due to personal acts or negligence of said owner or its manager. 112350 December 12. the judgment appealed from is hereby reversed and appellant is absolved from liability to plaintiff. no such personal act or negligence has been proved. And as stated. Such policy has no force where the public at large is not involved. the Court of First Instance declared the contract as contrary to Article 587 of the Code of Commerce making the ship agent civilly liable for indemnities suffered by third persons arising from acts or omissions of the captain in the care of the goods and Article 1744 of the Civil Code under which a stipulation between the common carrier and the shipper or owner limiting the liability of the former for loss or destruction of the goods to a degree less than extraordinary diligence is valid provided it be reasonable. 112287 December 12. G.7 Under American jurisprudence. WHEREFORE. 1997 NATIONAL STEEL CORPORATION.R. The Civil Code provisions on common carriers should not be applied where the carrier is not acting as such but as a private carrier. INC.the owner on board. The provisions of our Civil Code on common carriers were taken from Anglo-American law. The stipulation in the charter party absolving the owner from liability for loss due to the negligence of its agent would be void only if the strict public policy governing common carriers is applied. No. for loss or damage to the cargo. a stipulation exempting the owner from liability for the negligence of its agent is not against public policy. against the shipowners.. for whose acts the owner would ordinarily be liable except for said paragraph. So ordered. just and not contrary to public policy.10 The consignee may not claim ignorance of said charter party because the bills of lading expressly referred to the same.
(VSI). both of which assail the August 12. its owner's responsibility for damage to the cargo and its liability for demurrage and attorney's fees. as such. petitioner. Except as thus modified. vs. SO ORDERED.000. when affirmed by the Court of Appeals.000. 1993 Decision of the Court of Appeals. premises considered.VLASONS SHIPPING. COURT OF APPEALS AND NATIONAL STEEL CORPORATION.00 as unpaid freight and P88. are binding on this Court. The Case Before us are two separate petitions for review filed by National Steel Corporation (NSC) and Vlasons Shipping.00 and deleting the award for attorney's fees and expenses of litigation.. Attorney's fees and expenses of litigation in the sum of P100. the decision appealed from is modified by reducing the award for demurrage to P44. 3 The Facts The MV Vlasons I is a vessel which renders tramping service and. Inc. Branch 163 in Civil Case No. Costs of suit. does not transport cargo or shipment for the general public.000. the Court of Appeals ruled: WHEREFORE. judgment is hereby rendered in favor of defendant and against the plaintiff dismissing the complaint with cost against plaintiff. J. 2 On the other hand. SO ORDERED. 1 The Court of Appeals modified the decision of the Regional Trial Court of Pasig. The RTC disposed as follows: WHEREFORE. It is undisputed that the ship is a . 23317.00 as demurrage with interest at the legal rate on both amounts from April 7. 1976 until the same shall have been fully paid. There is no pronouncement as to costs. and 3. PANGANIBAN. the decision is AFFIRMED. The sum of P75. respondents.00. and ordering plaintiff to pay the defendant on the counterclaim as follows: 1. INC.000. Metro Manila. The Court also reiterates the well-known rule that findings of facts of trial courts. 2. Its services are available only to specific persons who enter into a special contract of charter party with its owner.: The Court finds occasion to apply the rules on the seaworthiness of private carrier.
.000. Other terms: (a) All terms/conditions of NONYAZAI C/P [sic] or other internationally recognized Charter Party Agreement shall form part of this Contract. Cargo: Full cargo of steel products of not less than 2. 3. Manila. .private carrier. (Weather Working Day of 24 consecutive hours. exercise due diligence to make the vessel seaworthy and properly manned. . The facts as found by Respondent Court of Appeals are as follows: (1) On July 17. Shipowners not responsible for losses/damages except on proven willful negligence of the officers of the vessel. . 4. . Laydays/Cancelling: July 26. 10% more or less at Master's option." which is used in the shipping business is a standard provision in the NANYOZAI Charter Party which stands for "Freight In and Out including Stevedoring and Trading". 2.I. 10. plaintiff National Steel Corporation (NSC) as Charterer and defendant Vlasons Shipping. Cargo Insurance: Charterer's and/or Shipper's must insure the cargoes. the MV "VLASONS I" to make one (1) voyage to load steel products at Iligan City and discharge them at North Harbor.000. . Sundays and Holidays Included).O. . 5. . 8. Freight/Payment: P30. stow and discharge the cargo free of risk and expenses to owners. Payment upon presentation of Bill of Lading within fifteen (15) days. viz: 1. it states. Under paragraph 10 thereof. . Loading/Discharging Rate: 750 tons per WWDSHINC. Vlasons Shipping.500 MT. . And it is in the capacity that its owner. (Emphasis supplied). (VSI) as Owner. also Exhibit "1") whereby NSC hired VSI's vessel.T. entered into a Contract of Voyage Charter Hire (Exhibit "B". 1974. 1974/Aug. xxx xxx xxx The terms "F.S. before and at the beginning of the voyage. FIOST basis. . Inc. equipped and supplied and to make the holds and all other parts of . 9. loading and unloading of the cargoes are the responsibility of the Charterer. 5.00/P4. 1974. Inc. Under Paragraph 5 of the NANYOZAI Charter Party. it is provided that "(o)wners shall.00 per day.. under the following terms and conditions. entered into a contract of affreightment or contract of voyage charter hire with National Steel Corporation. . 7. which means that the handling. Demurrage/Dispatch: P8.00/metric ton. 6. "Charterers to load.
769 packages with a total weight of about 2. . . (Exhibit "E") (4) To determine the nature and extent of the wetting and rusting." (2) On August 6. MASCO made a report of its ocular inspection conducted on the cargo. states. both while it was still on board the vessel and later at the NDC warehouse in Pureza St. Manila.I. the NSC's shipment of 1. fit and safe for its reception. It was also reported that MASCO's surveyors drew at random samples of bad order packing materials of the tinplates and delivered the same to the M. Mesa.P.19 metric tons for carriage to Manila.L. 1975 (Exhibit "G"). chafing and/or any damage unless caused by the negligence or default of the master and crew. 1974. 1974. Chief Mate Gonzalo Sabando. MASCO ventured the opinion that "rusting of the tinplates was caused by contact with SEA WATER sustained while still on board the vessel as a consequence of the heavy weather and rough seas encountered while en route to destination (Exhibit "F"). latent defects not discoverable by due diligence. wastage in bulk or weight or any other loss or damage arising from inherent defect. . . The cargo was discharged and unloaded by stevedores hired by the Charterer. .] acknowledged receipt of the cargo on board and signed the corresponding bill of lading.the vessel in which cargo is carried. . and to secure that the vessel is properly manned. . .481. acting as agent of the vessel[. . 1770 (Exhibit "I") which in part. 7 and 8. No. quality or vice of the cargo. 1974.T. August 13. B. nearly all the skids of tinplates and hot rolled sheets were allegedly found to be wet and rusty. shows that wetting was caused by contact with SEA WATER". The following day. . MASCO reported that it found wetting and rusting of the packages of hot rolled sheets and metal covers of the tinplates. in accordance with the Contract of Voyage Charter Hire. The shipment was placed in the three (3) hatches of the ship. that container/metal casings of the skids were rusting all over. . Unloading was completed only on August 24. 1974 after incurring a delay of eleven (11) days due to the heavy rain which interrupted the unloading operations. fit and safe for its reception. In a letter to the NSC dated March 17. 0233 (Exhibit "D") on August 8.. Testing Laboratories for analysis. that tarpaulin hatch covers were noted torn at various extents. (3) The vessel arrived with the cargo at Pier 12. carriage and preservation. Testing Laboratories issued Report No.T. perils. On August 31. North Harbor. "The analysis of bad order samples of packing materials .P. . dangers and accidents of the sea or other navigable waters. the M. any other cause arising without the actual fault or privity of Owners or without the fault of the agents or servants of owners. . 1974.677 skids of tinplates and 92 packages of hot rolled sheets or a total of 1. NSC called for a survey of the shipment by the Manila Adjusters and Surveyors Company (MASCO). 1974. insufficiency of packing." Paragraph 12 of said NANYOZAI Charter Party also provides that "(o)wners shall not be responsible for split. Owners shall not be liable for loss of or damage of the cargo arising or resulting from: unseaworthiness unless caused by want of due diligence on the part of the owners to make the vessel seaworthy. . the MV "VLASONS I" loaded at plaintiffs pier at Iligan City. Manila where the cargo was taken and stored. when the vessel's three (3) hatches containing the shipment were opened by plaintiff's agents. carriage and preservation. equipped and supplied and to make the holds and all other parts of the vessel in which cargo is carried.I. on August 12. . Sta.
plaintiff failed and refused to pay the agreed charter hire of P75.145. that said vessel was not a "common carrier" inasmuch as she was under voyage charter contract with the plaintiff as charterer under the charter party. that the officers of said MV "VLASONS I" exercised due diligence and proper seamanship and were not willfully negligent. that under the Contract of Voyage Charter Hire. defendant is not liable. CFI. 23317. neglect and default of the master and crew in the management of the vessel as well as the want of due diligence on the part of the defendant to make the vessel seaworthy and to make the holds and all other parts of the vessel in which the cargo was carried. defendant shall not be responsible for losses/damages except on proven willful negligence of the officers of the vessel.(5) On September 6. that furthermore the Voyage Charter Party provides that loading and discharging of the cargo was on FIOST terms which means that the vessel was free of risk and expense in connection with the loading and discharging of the cargo. that in the course of the voyage from Iligan City to Manila.18. consequently. (7) In its answer. fit and safe for its reception.145. and that plaintiff's claim was highly speculative and grossly exaggerated and that the small stain marks or sweat marks on the edges of the tinplates were magnified and considered total loss of the cargo. carriage and preservation — all in violation of defendant's undertaking under their Contract of Voyage Charter Hire. quality or vice of the cargo or to the insufficient packing thereof or to latent defect of the cargo not discoverable by due diligence or to any other cause arising without the actual fault or privity of defendant and without the fault of the agents or servants of defendant. 1974. that the damage. defendant denied liability for the alleged damage claiming that the MV "VLASONS I" was seaworthy in all respects for the carriage of plaintiff's cargo. plaintiff filed with the defendant its claim for damages suffered due to the downgrading of the damaged tinplates in the amount of P941.00 despite demands made by defendant. Then on October 3. Finally. land that the cargo was exposed to rain and seawater spray while on the pier or in transit from the pier to plaintiff's warehouse after discharge from the vessel. the MV "VLASONS I" encountered very rough seas.000. was due to the inherent defect. plaintiff claimed that it sustained losses in the aforesaid amount of P941. (6) In its complaint. 1974. plaintiff had agreed to pay defendant the sum of P8. causing strong winds and big waves to continuously pound against the vessel and seawater to overflow on its deck and hatch covers. In turn. (b) That under their Voyage Charter Hire Contract. that the stevedores of plaintiff who discharged the cargo in Manila were negligent and did not exercise due care in the discharge of the cargo. it alleged the following counterclaim: (a) That despite the full and proper performance by defendant of its obligations under the Voyage Charter Hire Contract. Plaintiff filed its complaint against defendant on April 21. Rizal. 1770. 1976 which was docketed as Civil Case No. The vessel was on demurrage for eleven (11) days in Manila waiting for plaintiff to .000.18 as a result of the act. on the basis of the aforesaid Report No. if any. strong winds and adverse weather condition.00 per day for demurrage. defendant claimed that it had complied with all its duties and obligations under the Voyage Charter Hire Contract and had no responsibility whatsoever to plaintiff. plaintiff formally demanded payment of said claim but defendant VSI refused and failed to pay.
"6"). "8"). (b) That for purposes of the voyage covered by the Contract of Voyage Charter Hire (Exh. International Loadline Certificate from the Philippine Coast Guard (Exh. Furthermore. The hatch openings were covered by hatchboards which were in turn covered by two or double tarpaulins. Coastwise License from the Board of Transportation (Exh. plaintiff should be ordered to pay defendant attorney's fees and all expenses of litigation in the amount of not less than P100. "9"). "4"). In fact. Ship Radio Station License (Exh. As to the damage to the tinplates which was allegedly due to the wetting and rusting thereof. The hatch covers were water tight. Thus. The evidence shows that the MV "VLASONS I" was seaworthy and properly manned. That being a vessel engaged in both overseas and coastwise trade. the trial court came out with the following findings which were set forth in its decision: (a) The MV "VLASONS I" is a vessel of Philippine registry engaged in the tramping service and is available for hire only under special contracts of charter party as in this particular case.000. "1"). Cargo Ship Safety Equipment Certificate also from the Philippine Coast Guard (Exh. the MV "VLASONS I" has a higher degree of seaworthiness and safety. (8) From the evidence presented by both parties.00. and Certificate of Approval for Conversion issued by the Bureau of Customs (Exh.000. Certificate of Inspection by the Philippine Coast Guard (Exh. under the hatchboards were steel beams to give support.discharge its cargo from the vessel. (c) Before it proceeded to Iligan City to perform the voyage called for by the Contract of Voyage Charter Hire. the MV VLASONS I" was covered by the required seaworthiness certificates including the Certification of Classification issued by an international classification society. It has all the required certificates of seaworthiness. "5"). plaintiff was liable to pay defendant demurrage in the total amount of P88. (d) The cargo/shipment was securely stowed in three (3) hatches of the ship. (c) For filing a clearly unfounded civil action against defendant. "12"). (e) The claim of the plaintiff that defendant violated the contract of carriage is not supported by evidence. there is unrebutted testimony of witness Vicente Angliongto that tinplates "sweat" by themselves when packed even without being in contract (sic) with water from outside especially when the . subject voyage was the vessel's first voyage after the drydocking.00. equipped and supplied when it undertook the voyage. The provisions of the Civil Code on common carriers pursuant to which there exists a presumption of negligence in case of loss or damage to the cargo are not applicable. "7"). the MV "VLASONS I" underwent drydocking in Cebu and was thoroughly inspected by the Philippine Coast Guard. the NIPPON KAIJI KYOKAI (Exh.
.weather is bad or raining. The delay amounted to eleven (11) days thereby making .00 despite demands. It was shown as claimed by plaintiff that the tinplates themselves were wrapped in kraft paper lining and corrugated cardboards could not be affected by water from outside. .000. It was proven that the stevedores merely set up temporary tents to cover the hatch openings in case of rain so that it would be easy for them to resume work when the rains stopped by just removing the tent or canvas. which can be invoked by defendant as a force majeure that would exempt the defendant from liability. (g) It was also established that the vessel encountered rough seas and bad weather while en route from Iligan City to Manila causing sea water to splash on the ship's deck on account of which the master of the vessel (Mr.769 skids of the tinplates could not have been damaged by water as claimed by plaintiff." All the 1. (h) Plaintiff did not comply with the requirement prescribed in paragraph 9 of the Voyage Charter Hire contract that it was to insure the cargo because it did not. the contract of voyage charter hire under Paragraph 4 thereof.000. (f) The stevedores hired by the plaintiff to discharge the cargo of tinplates were negligent in not closing the hatch openings of the MV "VLASONS I" when rains occurred during the discharging of the cargo thus allowing rainwater to enter the hatches. The trust caused by sweat or moisture on the tinplates may be considered as a loss or damage but then. stowing and discharging of the cargo is the sole responsibility of the plaintiff charterer and defendant carrier has no liability for whatever damage may occur or maybe [sic] caused to the cargo in the process. steel bars. 1974 (Exh. defendant cannot be held liable for it pursuant to Article 1734 of the Civil Case which exempts the carrier from responsibility for loss or damage arising from the "character of the goods . Thus plaintiff was able to ship grade cargo at a lower freight rate. Plaintiff also violated the charter party contract when it loaded not only "steel products". Had plaintiff complied with the requirement. the loading. then it could have recovered its loss or damage from the insurer. angular bars and the like but also tinplates and hot rolled sheets which are high grade cargo commanding a higher freight. rainwater drifted into the cargo through the hatch openings.00 per metric ton payable to defendant carrier upon presentation of the bill of lading within fifteen (15) days. "15"). Dumlao) filed a "Marine Protest" on August 13. Antonio C.e. Pursuant to paragraph 5 of the NANYOSAI [sic] Charter Party which was expressly made part of the Contract of Voyage Charter Hire.00 per day of delay in the unloading of the cargoes. Because of this improper covering of the hatches by the stevedores during the discharging and unloading operations which were interrupted by rains. i. The evidence also showed that the plaintiff was required and bound under paragraph 7 of the same Voyage Charter Hire contract to pay demurrage of P8. fixed the freight at P30. (i) As regards defendant's counterclaim. Plaintiff has not paid the total freight due of P75.
6 The Issues In its petition 7 and memorandum. II The trial court erred in finding that the rusting of NSC's tinplates was due to the inherent nature or character of the goods and not due to contact with seawater. On motion of VSI. equipped and supplied.00. demurrage and attorney's fees. properly manned. 8 NSC raises the following questions of law and fact: Questions of Law 1.000.000. 1993. In a Resolution 5 dated October 20. VI The trial court erred in ordering NSC to pay freight. V The trial court erred in finding that NSC violated the contract of voyage charter hire. NSC and VSI filed their respective petitions for review before this Court. IV The trial court erred in exempting VSI from liability on the ground of force majeure. III The trial court erred in finding that the stevedores hired by NSC were negligent in the unloading of NSC's shipment. 1994 the consolidation of these petitions. NSC alleged six errors: I The trial court erred in finding that the MV "VLASONS I" was seaworthy.00 and deleting the award of attorneys fees and expenses of litigation. Whether or not a charterer of a vessel is liable for demurrage due to cargo unloading delays caused by weather interruption.plaintiff liable to pay defendant for demurrage in the amount of P88.00 to P44. . Appealing the RTC decision to the Court of Appeals. the appellate court denied both motions. the Court ordered on February 14. the Court of Appeals modified the decision of the trial court by reducing the demurrage from P88.000. Undaunted. and that there is no proof of willful negligence of the vessel's officers. NSC and VSI filed separate motions for reconsideration. 4 As earlier stated. to VSI.
00. "7". Whether or not the provisions of the Civil Code of the Philippines on common carriers pursuant to which there exist[s] a presumption of negligence against the common carrier in case of loss or damage to the cargo are applicable to a private carrier. II. hence. including the Nanyozai Charter. Whether or not a charterer's failure to insure its cargo exempts the shipowner from liability for cargo damage. 2. are valid and binding on both contracting parties. Whether or not NSC's stevedores were negligent and caused the wetting[/]rusting of NSC's tinplates. Questions of Fact 1. The respondent Court of Appeals committed an error of law in deleting the award of P100. B. and 3.000. "5". In its separate petition. Admissibility of Certificates Proving Seaworthiness 4. Whether or not vessel's officers and crew were negligent in handling and caring for NSC's cargo.2. and 4. "6". The respondent Court of Appeals committed an error of law in reducing the award of demurrage from P88. Whether or not the vessel was seaworthy and cargo-worthy. Whether or not the alleged "seaworthiness certificates" (Exhibits "3". "4".00 to P44. "9". 3. Effect of NSC's Failure to Insure the Cargo 3. Demurrage and Attorney's Fees.000. The Court's Ruling . Whether or not NSC's cargo of tinplates did sweat during the voyage and. VSI raises the following issues in its memorandum: 10 I. Amplifying the foregoing. "11" and "12") were admissible in evidence and constituted evidence of the vessel's seaworthiness at the beginning of the voyages. Questions of Fact 2. The foregoing issues raised by the parties will be discussed under the following headings: 1. Whether or not the terms and conditions of the Contract of Voyage Charter Hire.000 for attorney's fees and expenses of litigation. rusted on their own. 9 VSI submits for the consideration of this Court the following alleged errors of the CA: A. "8".
the MV Vlasons I "was not a common but a private carrier. 11 A carrier which does not qualify under the above test is deemed a private carrier. which was incorporated in the parties' contract of transportation further provided that the shipowner shall not be liable for loss of or a damage to the cargo arising or resulting from unseaworthiness." 14 Consequently. it is undisputed that VSI did not offer its services to the general public. . that VSI "shall not be responsible for losses except on proven willful negligence of the officers of the vessel. firms or associations engaged in the business of carrying or transporting passengers or goods or both. . by land. dated July 17. Preliminary Matter: Common Carrier or Private Carrier? At the outset. although not the only form of private carriage. As found by the Regional Trial Court. a maritime contract by which the charterer. 17 Extent of VSI's Responsibility and Liability Over NSC's Cargo It is clear from the parties' Contract of Voyage Charter Hire. The resolution of this preliminary question determines the law. The most typical." 18 The NANYOZAI Charter Party also provided that "[o]wners shall not be responsible for split. in Valenzuela Hardwood and Industrial Supply. for compensation. 1974. offering their services to the public. in a contract of private carriage." 13 As correctly concluded by the Court of Appeals. unless the same was caused by its lack of due diligence to make the vessel seaworthy or to ensure that the same was "properly manned. Article 1732 of the Civil Code defines a common carrier as "persons. it carried passengers or goods only for those it chose under a "special contract of charter party. 16 the Court ruled: .The Court affirms the assailed Decision of the Court of Appeals. the rights and obligations of VSI and NSC. obtains the use and service of all or some part of a ship for a period of time or a voyage or voyages. chafing and/or any damage unless caused by the negligence or default of the master or crew. corporations. the stringent provisions of the Civil Code on common carriers protecting the general public cannot justifiably be applied to a ship transporting commercial goods as a private carrier." The NANYOZAI Charter Party. are determined primarily by stipulations in their contract of private carriage or charter party." and to "make the holds and all other parts of the vessel in which cargo [was] carried. is the charter party. provided it has space. "Generally. 15Recently. vs. private carriage is undertaken by special agreement and the carrier does not hold himself out to carry goods for the general public. private carriage does not involve the general public. water." 19 . Hence. a party other than the shipowner. for all who opt to avail themselves of its transportation service for a fee. fit and safe for its reception." 12 In the instant case. or air. standard of diligence and burden of proof applicable to the present case. the parties may freely stipulate their duties and obligations which perforce would be binding on them. it is essential to establish whether VSI contracted with NSC as a common carrier or as a private carrier. the public policy embodied therein is not contravened by stipulations in a charter party that lessen or remove the protection given by law in contracts involving common carriers. Court of Appeals and Seven Brothers Shipping Corporation.. Consequently. equipped and supplied. carriage and preservation." It has been held that the true test of a common carrier is the carriage of passengers or goods. except in respect of the demurrage. including their respective liability for damage to the cargo. Unlike in a contract involving a common carrier. Inc.
Ineluctably. the shipowner's obligations are governed by the foregoing provisions of the Code of Commerce and not by the Civil Code which. This view finds further support in the Code of Commerce which pertinently provides: Art. Since . plaintiff is entitled to the benefit of the presumptions and inferences by which the law aids the bailor in an action against a bailee. in discharging the burden of proof. Merchandise shall be transported at the risk and venture of the shipper.Burden of Proof In view of the aforementioned contractual stipulations. and since the carrier is in a better position to know the cause of the loss and that it was not one involving its liability. the damage and impairment suffered by the goods during the transportation. where the carrier comes forward with evidence explaining the loss or damage. The burden of proof of these accidents is on the carrier. such inferences and presumptions. making him to believe that the goods were of a class or quality different from what they really were. and the fact that the goods were lost or damaged while in the carrier's custody does not put the burden of proof on the carrier. due to fortuitous event. however. However. cargo while in the carrier's possession does not cast on it the burden of proving proper care and diligence on its part or that the loss occurred from an excepted cause in the contract or bill of lading. as a general rule. NSC must prove that the damage to its shipment was caused by VSI's willful negligence or failure to exercise due diligence in making MV Vlasons I seaworthy and fit for holding. carrying and safekeeping the cargo. the law requires that it come forward with the information available to it. force majeure. . the burden of going forward with the evidence is again on plaintiff. and its failure to do so warrants an inference or presumption of its liability. the burden of proving negligence or a breach of that duty rests on plaintiff and proof of loss of. or damage to. Art. . unless the shipper committed fraud in the bill of lading. or the nature and inherent defect of the things. places the prima faciepresumption of negligence on a common carrier. 361. . Therefore. the burden of proof was placed on NSC by the parties' agreement. The carrier. do not alter the burden of proof which remains on plaintiff. a private carrier is not an insurer but undertakes only to exercise due care in the protection of the goods committed to its care. 362. or injury to. shall be liable for damages arising from the cause mentioned in the preceding article if proofs against him show that they occurred on account of his negligence or his omission to take the precautions usually adopted by careful persons. while they may affect the burden of coming forward with evidence. cargo. if the contrary has not been expressly stipulated. and. However. the burden is on the plaintiff to prove that the carrier was negligent or unseaworthy. shall be for the account and risk of the shipper. Because the MV Vlasons I was a private carrier. It is a hornbook doctrine that: In an action against a private carrier for loss of.
The Philippine Coast Guard Station in Cebu cleared it as seaworthy. . the carrier has the preliminary burden of proving the exercise of due diligence to make the vessel seaworthy. This is shown by the fact that it was drylocked and inspected by the Philippine Coast Guard before it proceeded to Iligan City for its voyage to Manila under the contract of voyage charter hire. Thus. We find no reason to modify or reverse this finding of both the trial and the appellate courts. as indeed NSC has not successfully proven the application of any of the aforecited exceptions. (2) whether the damage to the cargo should be attributed to the willful negligence of the officers and crew of the vessel or of the stevedores hired by NSC. Where the factual findings of both the trial court and the Court of Appeals coincide. the records reveal that VSI exercised due diligence to make the ship seaworthy and fit for the carriage of NSC's cargo of steel and tinplates. and proof that the goods were lost or damaged while in the carrier's possession does not cast on it the burden of proving seaworthiness. 22 We stress that. Where the contract of carriage exempts the carrier from liability for unseaworthiness not discoverable by due diligence. which had the firsthand opportunity to hear the parties' conflicting claims and to carefully weigh their respective evidence. in its brief (pp. subject to some exceptional instances. and (3) whether the rusting of the tinplates was caused by its own "sweat" or by contact with seawater. After a thorough review of the case at bar. . the burden of proving a breach thereof and that such breach was the proximate cause of the damage rests on plaintiff. the determination of the following factual questions is manifestly relevant: (1) whether VSI exercised due diligence in making MV Vlasons I seaworthy for the intended purpose under the charter party. Who Were Negligent: Seamen or Stevedores? . 25 The Court of Appeals itself sustained the conclusion of the trial court that MV Vlasons Iwas seaworthy. it argues that 'a careful examination of the evidence will show that VSI miserably failed to comply with any of these obligation's as if defendant-appellee [VSI] had the burden of proof. 10-11).Where the action is based on the shipowner's warranty of seaworthiness. . after citing Clause 10 and Clause 12 of the NANYOZAI Charter Party (incidentally plaintiffappellant's [NSC's] interpretation of Clause 12 is not even correct). it met all requirements for trading as cargo vessel. we find no reason to disturb the lower court's factual findings. The findings of the trial court were subsequently affirmed by the Court of Appeals. 24 The vessel's voyage from Iligan to Manila was the vessel's first voyage after drydocking. 23 only questions of law — not questions of fact — may be raised before this Court in a petition for review under Rule 45 of the Rules of Court. Was MV Vlasons I Seaworthy? In any event. the Court of Appeals correctly found the NSC "has not taken the correct position in relation to the question of who has the burden of proof. 20 In the instant case." 21 First Issue: Questions of Fact Based on the foregoing. fitted and equipped. These questions of fact were threshed out and decided by the trial court. the same are binding on this Court.
we encountered again rough seas. Before us. that in the afternoon of August 10. It faults the Court of Appeals for failing to consider such claim as an "uncontroverted fact" 26 and denies that MV Vlasons I "was equipped with new canvas covers in tandem with the old ones as indicated in the Marine Protest . loaded with approximately 2. . that on or about August 9. only in addition to the new one used primarily to make the ship's hatches watertight. strong winds and big waves which caused the same canvass to give way and leaving the new canvass holding on. 1974. The records sufficiently support VSI's contention that the ship used the old tarpaulin. that in the morning of August 10. the NSC had the burden of proving that the damage to the cargo was caused by the negligence of the officers and the crew of MV Vlasons I in making their vessel seaworthy and fit for the carriage of tinplates. 1974. with a little canvas flowing over the sides and we place[d] a flat bar over the canvas on the side of . The salient portions of said marine protest read: . NSC failed to discharge this burden. we encountered very rough seas and strong winds and Manila office was advised by telegram of the adverse weather conditions encountered. . fully equipped and cleared by the authorities. . Dumlao. . while in the vicinity of the western part of Negros and Panay. the weather condition changed to worse and strong winds and big waves continued pounding the vessel at her port side causing sea water to overflow on deck andhatch (sic) covers and which caused the first layer of the canvass covering to give way while the new canvass covering still holding on. while entering Maricaban Passage. 1974. and the deposition of the ship's boatswain.9 tons of steel plates and tin plates consigned to National Steel Corporation. the vessel was rigged. That the M/V "VLASONS I" departed Iligan City or about 0730 hours of August 8. that while approaching Fortune Island. The foregoing are clear from the marine protest of the master of the MV Vlasons I. xxx xxx xxx 28 And the relevant portions of Jose Pascua's deposition are as follows: q What is the purpose of the canvas cover? a So that the cargo would not be soaked with water. that before departure.487. 1974." 27 We disagree. q And will you describe how the canvas cover was secured on the hatch opening? WITNESS a It was placed flat on top of the hatch cover. Antonio C. NSC relies heavily on its claim that MV Vlasons I had used an old and torn tarpaulin or canvas to cover the hatches through which the cargo was loaded into the cargo hold of the ship. we were again exposed to moderate seas and heavy rains. That the weather condition improved when we reached Dumali Point protected by Mindoro. that we re-secured the canvass covering back to position. Jose Pascua.As noted earlier.
q Is the beam that was placed in the hatch opening covering the whole hatch opening? a No. with a handle.the hatches and then we place[d] a stopper so that the canvas could not be removed. q How many hatch beams were there placed across the opening? a There are five beams in one hatch opening. a Forty-five feet by thirty-five feet. sir. sir. ATTY DEL ROSARIO q What is the hatch board made of? a It is made of wood. sir. xxx xxx xxx q How was the canvas supported in the middle of the hatch opening? a There is a hatch board. q And aside from the hatch board. is there any other material there to cover the hatch? a There is a beam supporting the hatch board. q What is this beam made of? a It is made of steel. because there are several pieces on top of the hatch beam. sir. ATTY DEL ROSARIO q And will you tell us the size of the hatch opening? The length and the width of the hatch opening. How many pieces of wood are put on top? a Plenty. ATTY DEL ROSARIO q And on top of the beams you said there is a hatch board. q And is there a space between the hatch boards? .
Port Area. where is the place. During the course of the investigation. . 1974 carrying on board thereof plaintiff-appellant's shipment of 1. we find no reason not to sustain the conclusion of the lower court based on overwhelming evidence. . you stated on August 14 you went on board the vessel upon notice from the National Steel Corporation in order to conduct the inspection of the cargo.a There is none. On the contrary. How many canvas covers? a Two. Vicente Angliongto. is the canvass cover. Q In connection with these cargoes which were unloaded. The stevedores employed only a tent-like material to cover the hatches when strong rains occasioned by a passing typhoon disrupted the unloading of the cargo. NSC failed to discharge its burden to show negligence on the part of the officers and the crew of MV Vlasons I. however. As aptly stated by the Court of Appeals. did you chance to see the discharging operation? WITNESS: A Yes. ". sir. . on August 12.677 skids of tinplates and 92 packages of hot rolled sheets or a total of 1. an officer of VSI. q Now. Manila. q How tight? a Very tight.769 packages from NSC's pier in Iligan City arriving safely at North Harbor. was clearly inadequate for keeping rain and seawater away from the hatches of the ship. sir. 29 That due diligence was exercised by the officers and the crew of the MV Vlasons I was further demonstrated by the fact that. sir. all the hatches were opened. 30 Indeed. sir. . the records reveal that it was the stevedores of NSC who were negligent in unloading the cargo from the ship. during your testimony on November 5. that the MV 'VLASONS I' was seaworthy when it undertook the voyage on August 8. testified thus: ATTY ZAMORA: Q Now. according to you. q They are tight together? a Yes. sir. on top of the hatch boards. the new tarpaulin did not give way and the ship's hatches and cargo holds remained waterproof. 1974. despite encountering rough weather twice. I saw some of the tinplates already discharged on the pier but majority of the tinplates were inside the hall. upon my arrival at the vessel. . 1979. This tent-like covering. .
the second time I went there. ATTY ZAMORA: Precisely. will you describe [to] the Court the tents constructed. and tents were built at the opening of the hatches. did you see in fact the water enter and soak into the canvass and tinplates. your Honor. is this procedure adopted by the stevedores of covering tents proper? A No. Mr. . at the time they were discharging the cargo. I saw it.A At the Pier. sir. ATTY LOPEZ: Q What was used in order to protect the cargo from the weather? A A base of canvas was used as cover on top of the tin plates. Anglingto [sic]. the size of the hatch and it is soaks [sic] at the middle because of those weather and this can be used only to temporarily protect the cargo from getting wet by rains. Q In the course of your inspection. your Honor. . Q What was used to protect the same from weather? ATTY LOPEZ: We object. Now. A Yes. the transcript of stenographic notes shows the same was covered in the direct examination. Q Now. there was a typhoon passing by and the hatch tent was not good enough to hold all of it to prevent the water soaking through the canvass and enter the cargo. this question was already asked. sir. witness may answer. This particular matter . COURT: All right. we would like to go on detail. Q You also stated that the hatches were already opened and that there were tents constructed at the opening of the hatches to protect the cargo from the rain. . this is the serious part of the testimony. A The tents are just a base of canvas which look like a tent of an Indian camp raise[d] high at the middle with the whole side separated down to the hatch.
subject to the laws on prescription. not closing the hatch of MV 'VLASONS I' when rains occurred during the discharging of the cargo thus allowing rain water and seawater spray to enter the hatches and to drift to and fall on the cargo. . 32 The Court is not persuaded. . or loss of. 31 NSC attempts to discredit the testimony of Angliongto by questioning his failure to complain immediately about the stevedores' negligence on the first day of unloading. 1974. because he was not responsible for the stevedores or the unloading operations. just the same. Such negligence according to the trial court is evident in the stevedores hired by [NSC]. Do Tinplates "Sweat"? . about the negligent and defective procedure adopted in unloading the cargo. then the NSC's representative. I called the attention of the stevedores but the stevedores did not mind at all. . . In fact. I did the first time I saw it. or damage to. called the attention of the representative of the National Steel but nothing was done. the cargo caused by the negligence of the stevedores . sir. VSI President Vicente Angliongto wrote [NSC] calling attention to the manner the stevedores hired by [NSC] were discharging the cargo on rainy days and the improper closing of the hatches which allowed continuous heavy rain water to leak through and drip to the tinplates' covers and [Vicente Angliongto] also suggesting that due to four (4) days continuos rains with strong winds that the hatches be totally closed down and covered with canvas and the hatch tents lowered. This series of actions constitutes a reasonable response in accord with common sense and ordinary human experience. has the duty to load the cargo . . Finally. [NSC] claims that the trial court erred in finding that the stevedores hired by NSC were negligent in the unloading of NSC's shipment. in a prudent manner. . I wrote a letter to them. 33 The fact that NSC actually accepted and proceeded to remove the cargo from the ship during unfavorable weather will not make VSI liable for any damage caused thereby. (Exh. and it is liable for injury to. . In passing. We do not think so. This letter was received by [NSC] on 22 August 1974 while discharging operations were still going on (Exhibit "13-A"). cargo caused by its negligence . Vicente Angliongto could not be blamed for calling the stevedores' attention first and then the NSC's representative on location before formally informing NSC of the negligence he had observed. so. "13"). it may be noted that the NSC may seek indemnification. We see no reason to reverse the trial and the appellate courts' findings and conclusions on this point. . from the stevedoring company at fault in the discharge operations. and where the officers and members and crew of the vessel do nothing and have no responsibility in the discharge of cargo by stevedores . It has also been shown that on August 20. Angliongto's candid answer in his aforequoted testimony satisfactorily explained the delay." 34 as in the instant case. . he was merely expressing concern for NSC which was ultimately responsible for the stevedores it had hired and the performance of their task to unload the cargo. . did you not advise the National Steel Corporation [of] the procedure adopted by its stevedores in discharging the cargo particularly in this tent covering of the hatches? A Yes. Seven days lapsed because he first called the attention of the stevedores. viz: In the THIRD assigned error. "A stevedore company engaged in discharging cargo . It was proven that the stevedores merely set up temporary tents or canvas to cover the hatch openings when it rained during the unloading operations so that it would be easier for them to resume work after the rains stopped by just removing said tents or canvass.Q As owner of the vessel. the vessel is not liable for loss of. pointing out that he wrote his letter to petitioner only seven days later.
as owner and real party in interest. . It points out that Exhibits 3. International Load Line Certificate from the Philippine Coast Guard 4. Certificate of Approval for Conversion issued by the Bureau of Customs 36 NSC argues that the certificates are hearsay for not having been presented in accordance with the Rules of Court. 7. As previously discussed. of the Rules of Court. 9 and 12 are inadmissible. but they have not been proven by one who saw the writing executed. NSC's failure to insure the cargo will not affect its right. while Exhibits 5. . 37 After a careful examination of these exhibits. . 4. therefore. the damage to the tinplates was occasioned not by airborne moisture but by contact with rain and seawater which the stevedores negligently allowed to seep in during the unloading. to file an action against VSI for damages caused by the latter's willful negligence. 4 and 11 allegedly are "not written records or acts of public officers". The said certificates include the following: 1. or by evidence of the genuineness of the handwriting of the maker. 11 and 12 are not "evidenced by official publications or certified true copies" as required by Sections 25 and 26. A discussion of this issue appears inconsequential and unnecessary. Rule 132. 5. 7.The trial court relied on the testimony of Vicente Angliongto in finding that ". Certificate of Inspection from the Philippine Coast Guard 3. . 9. the Court rules that Exhibits 3. tinplates 'sweat' by themselves when packed even without being in contact with water from outside especially when the weather is bad or raining . 8. Coastwise License from the Board of Transportation 5. for they have not been properly offered as evidence. Certificate of Inspection of the Philippines Coast Guard at Cebu 2." 35 The Court of Appeals affirmed the trial court's finding. Third Issue: Admissibility of Certificates Proving Seaworthiness NSC's contention that MV Vlasons I was not seaworthy is anchored on the alleged inadmissibility of the certificates of seaworthiness offered in evidence by VSI. 6. Second Issue: Effect of NSC's Failure to Insure the Cargo The obligation of NSC to insure the cargo stipulated in the Contract of Voyage Charter Hire is totally separate and distinct from the contractual or statutory responsibility that may be incurred by VSI for damage to the cargo caused by the willful negligence of the officers and the crew of MV Vlasons I. We do not find anything in the charter party that would make the liability of VSI for damage to the cargo contingent on or affected in any manner by NSC's obtaining an insurance over the cargo. 6. or by a . Clearly. Exhibits 3 and 4 are certificates issued by private parties. 8.
it should be stressed that NSC has the burden of proving that MV Vlasons I was not seaworthy. . the vessel was a private carrier and. 6. that Exhibit 11 is admissible under a well-settled exception to the hearsay rule per Section 44 of Rule 130 of the Rules of Court. 5." 38 Exhibit 11 is an original certificate of the Philippine Coast Guard in Cebu issued by Lieutenant Junior Grade Noli C. it did not have the obligation of a common carrier to show that it was seaworthy. . NSC glaringly failed to discharge its duty of proving the willful negligence of VSI in making the ship seaworthy resulting in damage to its cargo." (sic) NSC's claim. 42 The running of laytime was thus made subject to the weather. 8. A qualification of "weather permitting" excepts only those days when bad weather reasonably prevents the work contemplated. We find. the following is well-settled: Laytime runs according to the particular clause of the charter party. meets all requirements. Indeed. If laytime is expressed in "running days. a cargo vessel. and would cease to run in the event . and 12 are photocopies.500 MT. Demurrage/Dispatch: P8. and holidays are not excepted.000. fitted and equipped for trading as a cargo vessel was cleared by the Philippine Coast Guard and sailed for Cebu Port on July 10. 1974. and PCG Inspectors were sent on board for inspection . 39 The Court defined demurrage in its strict sense as the compensation provided for in the contract of affreightment for the detention of the vessel beyond the laytime or that period of time agreed on for loading and unloading of cargo. 7. Flores to the effect that "the vessel 'VLASONS I' was drydocked .000. 10% more or less at Master's option. 7. . Loading/Discharging Rate: 750 tons per WWDSHINC. as such. 41 In this case. xxx xxx xxx 6. 9.00 per day.subscribing witness. therefore. is in seaworthy condition." this means days when the ship would be run continuously. however. Fourth Issue: Demurrage and Attorney's Fees The contract of voyage charter hire provides inter alia: xxx xxx xxx 2. but their admission under the best evidence rule have not been demonstrated. On the other hand. which provides that "(e)ntries in official records made in the performance of a duty by a public officer of the Philippines.00/P4. 40 It is given to compensate the shipowner for the nonuse of the vessel. Exhibits. . is obviously misleading and erroneous. After completion of drydocking and duly inspected by PCG Inspectors. . . . At any rate. or by a person in the performance of a duty specially enjoined by law. areprima facie evidence of the facts therein stated. Cargo: Full cargo of steel products of not less than 2. Assailing the genuineness of the certificate of seaworthiness is not sufficient proof that the vessel was not seaworthy. it also qualified laytime as WWDSHINC or weather working days Sundays and holidays included. As observed earlier. the vessel 'VLASONS I'. the contract of voyage charter hire provided for a four-day laytime.
SO ORDERED. No pronouncement as to costs. The trial court arrived at this erroneous finding by subtracting from the twelve days. Basic too is the doctrine that courts cannot relieve a parry from the effects of a private contract freely entered into. 43 Consequently. That NSC failed or neglected to protect itself with such insurance should not adversely affect VSI. attorney's fees may not be awarded to a party for the reason alone that the judgment rendered was favorable to the latter. both lower courts found that such damage was brought about during the unloading process when rain and seawater seeped through the cargo due to the fault or negligence of the stevedores employed by it. the agreement between the parties — the Contract of Voyage Charter Hire — placed the burden of proof for such loss or damage upon the shipper. this appeal really hinges on a factual issue: when. not the least of which is the transport price which is determined not only by the actual costs but also by the risks and burdens assumed by the shipper in regard to possible loss or damage to the cargo. Clearly. As mentioned. . ." 44 Moreover. In recognition of such factors. such fact by itself will not justify an award of attorney's fees under Article 2208 of the Civil Code when ". 1974 to August 24. . as this is tantamount to imposing a premium on one's right to litigate or seek judicial redress of legitimate grievances. it was error for the trial court and the Court of Appeals to have found and affirmed respectively that NSC incurred eleven days of delay in unloading the cargo. on the ground that it is allegedly one-sided or unfair to the plaintiff. not one of common carriage. NSC has not satisfactorily shown that this case is one of them. We disagree. the instant consolidated petitions are hereby DENIED.unfavorable weather interfered with the unloading of cargo. . . the parties even stipulated that the shipper should insure the cargo to protect itself from the risks it undertook under the charter party. NSC may not be held liable for demurrage as the four-day laytime allowed it did not lapse. not upon the shipowner. Based on our previous discussion. Second. Attorney's Fees VSI assigns as error of law the Court of Appeals' deletion of the award of attorney's fees. First. WHEREFORE. 45 Epilogue At bottom. when affirmed by the Court of Appeals. 1974. The charter party is a normal commercial contract and its stipulations are agreed upon in consideration of many factors. The questioned Decision of the Court of Appeals is AFFIRMED with the MODIFICATION that the demurrage awarded to VSI is deleted. even if it reduced the amount by half. the only day of unloading unhampered by unfavorable weather or rain. how and who caused the damage to the cargo? Ranged against NSC are two formidable truths. the respondent appellate court also erred in ruling that NSC was liable to VSI for demurrage. Although there are settled exceptions. such finding is a reversible error. specifically August 13. having been tolled by unfavorable weather condition in view of the WWDSHINC qualification agreed upon by the parties. While VSI was compelled to litigate to protect its rights. is valid because the parties entered into a contract of private charter. while disadvantageous to NSC. Basic is the rule that factual findings of the trial court. which was August 22. no sufficient showing of bad faith would be reflected in a party's persistence in a case other than an erroneous conviction of the righteousness of his cause . premises considered. 1974. are binding on the Supreme Court. Such stipulation. which had nothing to do with such failure or neglect.
to pay plaintiff the sum of TWO MILLION PESOS (P2. No.G. Defendant South Sea Surety and Insurance Company's counterclaim is hereby dismissed.00) representing the balance of the stipulated freight charges. 102316 June 30. split. Branch 171. Metro Manila. J. The Court of Appeals modified the judgment of the Regional Trial Court of Valenzuela.000. 3 The Facts The factual antecedents of this case as narrated in the Court of Appeals Decision are as follows: . Plaintiff is hereby ordered to pay defendant Seven Brothers Shipping Corporation the sum of TWO HUNDRED THIRTY THOUSAND PESOS (P230. 1997 VALENZUELA HARDWOOD AND INDUSTRIAL SUPPLY INC. breakages and any kind of damages to the cargo" 1 valid? This is the main question raised in this petition for review assailing the Decision of Respondent Court of Appeals 2 in CAG. Inc.: Is a stipulation in a charter party that the "(o)wners shall not be responsible for loss. 1984 until the amount is fully paid or in the alternative. CV-20156 promulgated on October 15. Respondent Court of Appeals held: WHEREFORE.000.000. shortlanding.R. COURT OF APPEALS AND SEVEN BROTHERS SHIPPING CORPORATION. respondents. defendant Seven Brothers Shipping Corporation to pay plaintiff the amount of TWO MILLION PESOS (2. No.R. the reasonable attorney's fees in the amount equivalent to five (5) percent of the amount of the claim and the costs of the suit.000. petitioner.00) representing the value of the policy of the lost logs with legal interest thereon from the date of demand on February 2. the appealed judgment is hereby AFFIRMED except in so far (sic) as the liability of the Seven Brothers Shipping Corporation to the plaintiff is concerned which is hereby REVERSED and SET ASIDE.000.00) representing the value of lost logs plus legal interest from the date of demand on April 24.. Judgment is hereby rendered ordering South Sea Surety and Insurance Co. the dispositive portion of which reads: WHEREFORE. vs. In its assailed Decision. 1984 until full payment thereof.. PANGANIBAN. 1991.
plaintiff (Valenzuela Hardwood and Industrial Supply. After due hearing and trial. On 30 January 1984.000. Inc. causing the iron chains to snap and the logs to roll to the portside. Inc.00 (Exh. plaintiff insured the logs against loss and/or damage with defendant South Sea Surety and Insurance Co..000. Plaintiff likewise filed a formal claim with defendant Seven Brothers Shipping Corporation for the value of the lost logs but the latter denied the claim. "E") to cover payment of the premium and documentary stamps due on the policy was tendered due to the insurer but was not accepted. On 24 January 1984. Inc. Defendant-appellant Seven Brothers Shipping Corporation impute (sic) to the court a quo the following assignment of errors. On 20 January 1984.. In the meantime. the South Sea Surety and Insurance Co.000. was not due to fortuitous event but to the negligence of the captain in stowing and securing the logs on board.000. Both defendants shipping corporation and the surety company appealed. plaintiff demanded from defendant South Sea Surety and Insurance Co. The lower court erred in holding defendant-appellant Seven Brothers Shipping Corporation liable in the alternative and ordering/directing it to pay plaintiff- .It appears that on 16 January 1984. 84/24229 for P2. Victorio Chua. a check for P5. cancelled the insurance policy it issued as of the date of the inception for non-payment of the premium due in accordance with Section 77 of the Insurance Code. On 2 February 1984. Inc.00 and the latter issued its Marine Cargo Insurance Policy No. the payment of the proceeds of the policy but the latter denied liability under the policy. the said vessel M/V Seven Ambassador sank on 25 January 1984 resulting in the loss of the plaintiff's insured logs. Instead.. the plaintiff gave the check in payment of the premium on the insurance policy to Mr.) entered into an agreement with the defendant Seven Brothers (Shipping Corporation) whereby the latter undertook to load on board its vessel M/V Seven Ambassador the former's lauan round logs numbering 940 at the port of Maconacon. Isabela for shipment to Manila.00 on said date. The lower court erred in declaring that the non-liability clause of the Seven Brothers Shipping Corporation from logs (sic) of the cargo stipulated in the charter party is void for being contrary to public policy invoking article 1745 of the New Civil Code. for P2. the court a quo rendered judgment in favor of plaintiff and against defendants. C. to wit: A.625. The lower court erred in holding that the proximate cause of the sinking of the vessel Seven Ambassadors. B.
84/24229. E. to pay plaintiff-appellee P2. F. H. The lower court erred in not awarding defendant-appellant Seven Brothers Corporation its counter-claim for attorney's fees. Inc.00) pesos representing the value of the logs plus legal interest from date of demand until fully paid.00 representing value of the policy with legal interest from 2 February 1984 until the amount is fully paid. but modified it by holding that Seven Brothers . D. The trial court erred in disregarding the "receipt of payment clause" attached to and forming part of the Marine Cargo Insurance Policy No.000. The primary issue to be resolved before us is whether defendants shipping corporation and the surety company are liable to the plaintiff for the latter's lost logs. The trial court erred in holding that Victorio Chua was an agent of defendantappellant South Sea Surety and Insurance Company. The trial court in disregarding the statement of account or bill stating the amount of premium and documentary stamps to be paid on the policy by the plaintiff-appellee. The trial court erred in not applying Section 77 of the Insurance Code.000. assigns the following errors: A. 4 The Court of Appeals affirmed in part the RTC judgment by sustaining the liability of South Sea Surety and Insurance Company ("South Sea").. and likewise erred in not holding that he was the representative of the insurance broker Columbia Insurance Brokers.appellee the amount of two million (2. Inc. Defendant-appellant South Sea Surety and Insurance Co. The lower court erred in ordering defendant-appellant Seven Brothers Shipping Corporation to pay appellee reasonable attorney's fees in the amount equivalent to 5% of the amount of the claim and the costs of the suit. D. F. The trial court erred in not awarding to the defendant-appellant the attorney's fees alleged and proven in its counterclaim.000. The trial court erred in ordering defendant-appellant South Sea Surety and Insurance Company. Inc. B. The trial court erred in disregarding the endorsement of cancellation of the policy due to non-payment of premium and documentary stamps. Inc. E. The lower court erred in not dismissing the complaint against Seven Brothers Shipping Corporation.000. Ltd. G. C. The trial court erred in holding that Victorio Chua received compensation/commission on the premiums paid on the policies issued by the defendant-appellant South Sea Surety and Insurance Company.
American Steamship Agencies. 1995. 23 SCRA 24). The court a quo erred in applying the provisions of the Civil Code on common carriers to establish the liability of the shipping corporation. ("Valenzuela") filed separate petitions for review before this Court.. Inc. short-landing. Validity of Stipulation is Lis Mota The charter party between the petitioner and private respondent stipulated that the "(o)wners shall not be responsible for loss. The shipping corporation should not therefore be held liable for the loss of the logs. Under American jurisprudence." 9 The Court's Ruling The petition is not meritorious. the respondent appellate court ratiocinated thus: It appears that there is a stipulation in the charter party that the ship owner would be exempted from liability in case of loss. 8 The Court is now called upon to resolve the petition for review filed by Valenzuela assailing the CA Decision which exempted Seven Brothers from any liability for the lost cargo. this Court denied the petition of South Sea. As a private carrier. 7 There the Court found no reason to reverse the factual findings of the trial court and the Court of Appeals that Chua was indeed an authorized agent of South Sea when he received Valenzuela's premium payment for the marine cargo insurance policy which was thus binding on the insurer. split. The Issue Petitioner Valenzuela's arguments resolve around a single issue: "whether or not respondent Court (of Appeals) committed a reversible error in upholding the validity of the stipulation in the charter party executed between the petitioner and the private respondent exempting the latter from liability for the loss of petitioner's logs arising from the negligence of its (Seven Brothers') captain. vs. a common carrier undertaking to carry a special cargo or chartered to a special person only." 10 The validity of this stipulation is the lis mota of this case. The provisions on common carriers should not be applied where the carrier is not acting as such but as a private carrier. breakages and any kind of damages to the cargo. a stipulation exempting the owner from liability even for the negligence of its agent is valid (Home Insurance Company. . In a Resolution dated June 2. Inc. 5 In modifying the RTC judgment. becomes a private carrier.Shipping Corporation ("Seven Brothers") was not liable for the lost cargo. Inc. 6 South Sea and herein Petitioner Valenzuela Hardwood and Industrial Supply.
it is undisputed that private respondent had acted as a private carrier in transporting petitioner's lauan logs." The Court is not persuaded. Even the latter admits this in its petition. (3) That the common carrier need not observe any diligence in the custody of the goods. Thus. unjust and contrary to public policy: (1) That the goods are transported at the risk of the owner or shipper. vehicle. or deterioration of goods on account of the defective condition of the car. violence or force. 12 The trial court deemed the charter party stipulation void for being contrary to public policy. (7) That the common carrier is not responsible for the loss. (5) That the common carrier shall not be responsible for the acts or omissions of his or its employees. Article 1409 of the Civil Code." 11 Likewise undisputed is the status of Private Respondent Seven Brothers as a private carrier when it contracted to transport the cargo of Petitioner Valenzuela. ship. or deterioration of the goods. (6) That the common carrier's liability for acts committed by thieves. 16 . Any of the following or similar stipulations shall be considered unreasonable. As adverted to earlier. 1745. or of a man of ordinary prudence in the vigilance over the movables transported.It should be noted at the outset that there is no dispute between the parties that the proximate cause of the sinking of M/V Seven Ambassadors resulting in the loss of its cargo was the "snapping of the iron chains and the subsequent rolling of the logs to the portside due to the negligence of the captain in stowing and securing the logs on board the vessel and not due to fortuitous event. airplane or other equipment used in the contract of carriage. 13 citing Article 1745 of the Civil Code which provides: Art. destruction. Petitioner Valenzuela adds that the stipulation is void for being contrary to Articles 586 and 587 of the Code of Commerce 14 and Articles 1170 and 1173 of the Civil Code. Citing Article 1306 and paragraph 1. destruction. or of robbers who do not act with grave or irresistible threat. (2) That the common carrier will not be liable for any loss. 15 petitioner further contends that said stipulation "gives no duty or obligation to the private respondent to observe the diligence of a good father of a family in the custody and transportation of the cargo. is dispensed with or diminished. Article 1745 and other Civil Code provisions on common carriers which were cited by petitioner may not be applied unless expressly stipulated by the parties in their charter party. (4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family.
18 In that case. where the reason for the rule ceases.In a contract of private carriage. through Mr. Unlike in a contract involving a common carrier. This Court reversed the trial court and laid down. their contract of private carriage is not even a contract of adhesion. good customs. Inc. Consequently. Pursuant to Article 1306 17 of the Civil Code. worse. invoices or other documents over which the riding public has no understanding or. the stringent provisions of the Civil Code on common carriers protecting the general public cannot justifiably be applied to a ship transporting commercial goods as a private carrier. a stipulation exempting the owner from liability for the negligence of its agent is not against public policy. the law on common carriers extends its protective mantle against one-sided stipulations inserted in tickets. the parties in a contract of private carriage can stipulate the carrier's obligations and liabilities over the shipment which. the rule itself does not apply. as in this case of a ship totally chartered for the used of a single party. 19 (Emphasis supplied. in exchange for convenience and economy. Consequently. morals. private carriage does not involve the general public. a charterer in a contract of private carriage is not similarly situated. Bengzon. When the charterer decides to exercise this option. the trial court held the shipowner liable for damages resulting for the partial loss of the cargo. Under American jurisprudence. becomes a private carrier. may opt to set aside the protection of the law on common carriers. Thus. In practice. Hence. and is deemed valid. Such doctrine We find reasonable. the public policy embodied therein is not contravened by stipulations in a charter party that lessen or remove the protection given by law in contracts involving common carriers. As a private carrier. It can — and in fact it usually does — enter into a free and voluntary agreement. even if the public wants to. determine the price or consideration of the charter. public order. Thus. The issue posed in this case and the arguments raised by petitioner are not novel. a common carrier undertaking to carry a special cargo or chartered to a special person only. The stipulation in the charter party absolving the owner from liability for loss due to the negligence of its agent would be void if the strict public policy governing common carriers is applied. Petitioner contends that the rule in Home Insurance is not applicable to the present case because it "covers only a stipulation exempting a private carrier from liability for the negligence . or public policy. such stipulation is valid because it is freely entered into by the parties and the same is not contrary to law. The riding public merely adheres to the contract. Such policy has no force where the public at large is not involved. in turn. vs. no choice. the trial court similarly nullified a stipulation identical to that involved in the present case for being contrary to public policy based on Article 1744 of the Civil Code and Article 587 of the Code of Commerce. exempting the shipowner from liability for loss of or damage to the cargo caused even by the negligence of the ship captain. The Civil Code provisions on common carriers should not be applied where the carrier is not acting as such but as a private carrier. American Steamship Agencies. The general public enters into a contract of transportation with common carriers without a hand or a voice in the preparation thereof. Justice Jose P. he takes a normal business risk. the parties may freely stipulate their duties and obligations which perforce would be binding on them. the parties may validly stipulate that responsibility for the cargo rests solely on the charterer. a charterer. Compared to the general public. it cannot submit its own stipulations for the approval of the common carrier. We stress that in a contract of private carriage. Indeed. the following well-settled observation and doctrine: The provisions of our Civil Code on common carriers were taken from AngloAmerican law.) Indeed. they were resolved long ago by this Court in Home Insurance Co.
the petitioner did by acceding to the contractual stipulation that it is solely responsible or any damage to the cargo. the respondent appellate court aptly stated that "[in the case of] a private carrier. or prejudicial to a person with a right recognized by law. Furthermore. unless the waiver is contrary to law." 20 This contention of petitioner is bereft of merit. Civil Code . a stipulation exempting the owner from liability even for the negligence of its agents is valid. Code of Commerce Petitioner Valenzuela insists that the charter party stipulation is contrary to Articles 586 and 587 of the Code of Commerce which confer on petitioner the right to recover damages from the shipowner and ship agent for the acts or conduct of the captain." As a general rule. Home Insurance is applicable to the case at bar. Petitioner miserably failed to show such circumstances or arguments which would necessitate a departure from a well-settled rule. Article 6 of the Civil Code provides that "(r)ights may be waived." 22 Undoubtedly. it is not imbued with public policy considerations for the general public or third persons are not affected thereby.of his agent. 26 Being patently and undoubtedly patrimonial. public order. The Court there categorically held that said rule was "reasonable" and proceeded to apply it in the resolution of that case. our ruling in said case remains a binding judicial precedent based on the doctrine of stare decisis and Article 8 of the Civil Code which provides that "(j)udicial decisions applying or interpreting the laws or the Constitution shall form part of the legal system of the Philippines. Consequently. Articles 1170 and 1173. morals. the present petition may already be denied. This." 24 Other Arguments On the basis of the foregoing alone. for whose acts the owner would ordinarily be liable except for said paragraph. patrimonial rights may be waived as opposed to rights to personality and family rights which may not be made the subject of waiver. public policy. as discussed above. however. the contract of private carriage binds petitioner and private respondent alone. will discuss the other arguments of petitioner for the benefit and satisfaction of all concerned. The naked assertion of petitioner that the American rule enunciated in Home Insurance is not the rule in the Philippines 23 deserves scant consideration. even from the neglect or fault of the captain or crew or some other person employed by the owner on board." In fine. but it does not apply to a stipulation exempting a private carrier like private respondent from the negligence of his employee or servant which is the situation in this case. the Court. Whatever rights petitioner may have under the aforementioned statutory provisions were waived when it entered into the charter party. Articles 586 and 587. The case Home Insurance specifically dealt with "the liability of the shipowner for acts or negligence of its captain and crew" 21 and a charter party stipulation which "exempts the owner of the vessel from any loss or damage or delay arising from any other source. petitioner's right conferred under said articles may be waived. 25 We are not persuaded. or good customs. thereby exempting the private carrier from any responsibility for loss or damage thereto. for it raises a distinction without any substantive difference.
Private Respondent Seven Brothers is not an obligor in respect of the cargo. besides. 1170. vs. or delay. negligence. of the time and of the place. for this obligation to bear the loss was shifted to petitioner by virtue of the charter party. it was "bound by its undertaking"'. the stringent laws applicable to common carriers are not applied to private carries. is not void. the public policy considerations behind the rigorous treatment of common carriers are absent in the case of private carriers. Inc. inapplicable to the present case. When negligence shows bad faith. are liable for damages Art. The cases of Shewaram and Ysmael both involve a common carrier. therefore. quoted Juan Ysmael & Co." This promise was thus constructed to make sense together with the stipulation against liability for damages. In the instant case. Moreover. 34 In the present case. consequently. be modified in a contract of private carriage as the petitioner and private respondent had done in their charter party. and those who in any manner contravene the tenor thereof. Philippine Airlines. they necessarily justify the application of such policy considerations and concomitantly stricter rules. the defendant therein made a "promise to use due care in the lifting operations" and. 1173. we . vs. Cases Cited by Petitioner Inapplicable Petitioner cites Shewaram vs. This shifting of responsibility. 31 It also cites Manila Railroad Co. thus. Article 362 of the Code of Commerce 28 provides the standard of ordinary diligence for the carriage of goods by a carrier. Those who in the performance of their obligations are guilty of fraud. Gabino Barreto & Co. The Court notes that the foregoing articles are applicable only to the obligor or the one with an obligation to perform. The standard of diligence under this statutory provision may. Hence.Petitioner likewise argues that the stipulation subject of this controversy is void for being contrary to Articles 1170 and 1173 of the Civil Code 27 which read: Art. Furthermore. In the instant case. that which is expected of a good father of a family shall be required. If the law does not state the diligence which is to be observed in the performance. the provisions of articles 1171 and 2201. 29 which. the exemption was intended to cover accidents due to hidden defects in the apparatus or other unforseeable occurrences" not caused by its "personal negligence. the factual milieu of this case does not justify the application of the second paragraph of Article 1173 of the Civil Code which prescribes the standard of diligence to be observed in the event the law or the contract is silent. 30 and argues that the public policy considerations stated there vis-a-vis contractual stipulations limiting the carrier's liability be applied "with equal force" to this case. shall apply. in turn. as earlier observed. The case of Manila Railroad is also inapplicable because the action for damages there does not involve a contract for transportation.Compañia Transatlantica 32 and contends that stipulations exempting a party from liability for damages due to negligence "should not be countenanced" and should be "strictly construed" against the party claiming its benefit. The provisions cited by petitioner are. however.33 We disagree. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons. As already discussed above.
Lopez Costelo. 35 Walter A. the petition is hereby DENIED for its utter failure to show any reversible error on the part of Respondent Court. 2207. 39 in support of its contention that the shipowner be held liable for damages. vs. the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who has violated the contract. Smith & Co. vs. 2002 FGU INSURANCE CORPORATION. and he has received indemnity for the insurance company for the injury or loss arising out of the wrong or breach of contract complained of. The assailed Decision is AFFIRMED. J. SO ORDERED. Finally. Private respondent submits that petitioner is not legally entitled to collect twice for a single loss. 36 N.: . 141910 August 6. VITUG.. by itself. 40 These however are not on all fours with the present case because they do not involve a similar factual milieu or an identical stipulation in the charter party expressly exempting the shipowner form responsibility for any damage to the cargo. petitioner points to Standard Oil Co. vs. 1995 42 affirming the liability of South Sea does not. premises considered. G. It suffices to state that the Resolution of this Court dated June 2. WHEREFORE. EROLES.. SARMIENTO TRUCKING CORPORATION and LAMBERT M. the present issue is moot and academic. No. If the plaintiff's property has been insured. 37 Ohta Development Co. 41 In view of the above disquisition upholding the validity of the questioned charter party stipulation and holding that petitioner may not recover from private respondent. vs. The agreement of the parties to exempt the shipowner from responsibility for any damage to the cargo and place responsibility over the same to petitioner is the lone stipulation considered now by this Court. the aggrieved party shall be entitled to recover the deficiency form the person causing the loss or injury. of New York vs. Effect of the South Sea Resolution In its memorandum. Article 2207 of the Civil Code provides: Art. An aggrieved party may still recover the deficiency for the person causing the loss in the event the amount paid by the insurance company does not fully cover the loss. Rocha and Co. G.P. Yangco Steamship Co. respondents. If the amount paid by the insurance company does not fully cover the injury or loss. T . Hashim and Co.Cadwallader Gibson Lumber Co. petitioner. necessarily preclude the petitioner from proceeding against private respondent.Steamship "Pompey" 38 and Limpangco Sons vs. Seven Brothers argues that petitioner has no cause of action against it because this Court has earlier affirmed the liability of South Sea for the loss suffered by petitioner.stress that the private respondent made no such promise.R.
Inc. along South Superhighway in Alabang. from the plant site of Concepcion Industries. 2185. Article 2185 provides: ‘Art. "Thus. Inc. In its answer.1 granted the motion to dismiss. driven by Lambert Eroles. it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap. Thus.nêt The issues having thus been joined.450. plaintiff did not present any single evidence that would prove that defendant is a common carrier. Metro Manila. negligence or fault is not presumed..D.. establishing the extent of damage to the cargoes and the amount it had paid to the assured. xxx. it is provided that ‘Each party must prove his own affirmative allegation. in its order of 30 April 1996.’ "In the instant case. Inc. causing it to fall into a deep canal. FGU Insurance Corporation (FGU). the value of the covered cargoes in the sum of P204. The law on quasi delict provides for some presumption of negligence but only upon the attendance of some circumstances. explaining thusly: "Under Section 1 of Rule 131 of the Rules of Court. respondents asserted that GPS was the exclusive hauler only of Concepcion Industries. the laws governing the contract between the owner of the cargo to whom the plaintiff was subrogated and the owner of the vehicle which transports the cargo are the laws on obligation and contract of the Civil Code as well as the law on quasi delicts. since 1988. white refrigerators aboard one of its Isuzu truck. GPS.’ . instead of submitting its evidence. being the subrogee of the rights and interests of Concepcion Industries. Tarlac. sought reimbursement of the amount it had paid to the latter from GPS. to the Central Luzon Appliances in Dagupan City.G. Respondents further claimed that the cause of damage was purely accidental. Inc. FGU presented its evidence. The trial court. it collided with an unidentified truck. 1âwphi1. an insurer of the shipment.. Since the trucking company failed to heed the claim. FGU filed a complaint for damages and breach of contract of carriage against GPS and its driver Lambert Eroles with the Regional Trial Court. "x x x xxx xxx "Accordingly. paid to Concepcion Industries. damage or deterioration of goods during transport under 1735 of the Civil Code is not availing.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994 thirty (30) units of Condura S. in turn. FGU.00. "Under the law on obligation and contract.. Branch 66. Bamban. and it was not so engaged in business as a common carrier. filed with leave of court a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it was a common carrier. While the truck was traversing the north diversion road along McArthur highway in Barangay Anupol. the application of the law on common carriers is not warranted and the presumption of fault or negligence on the part of a common carrier in case of loss. he was violating any traffic regulation. Unless there is proof to the contrary. resulting in damage to the cargoes. of Makati City.
"x x x xxx xxx "Because it is the appellant who insists that the appellees can still be considered as a common carrier. damage or deterioration of good[s] during transport under [article] 1735 of the Civil Code is not availing. "x x x xxx xxx "x x x the lower court correctly ruled that 'the application of the law on common carriers is not warranted and the presumption of fault or negligence on the part of a common carrier in case of loss. the presumption would not arise. the presumption of negligence is not obtaining. This.hence. the dismissal of the plaintiff’s complaint by the trial court is justified. contending that the trial court had erred (a) in holding that the appellee corporation was not a common carrier defined under the law and existing jurisprudence. defendant cannot be made liable for the damages of the subject cargoes. it follows that it (appellant) has the burden of proving the same. The Court of Appeals rejected the appeal of petitioner and ruled in favor of GPS. despite its `limited clientele."Evidence for the plaintiff shows no proof that defendant was violating any traffic regulation.’ (Summa Insurance Corporation vs. the appellant failed to do -. hauler since 1970."5 . We advert to the long established rule that conclusions and findings of fact of a trial court are entitled to great weight on appeal and should not be disturbed unless for strong and valid reasons. the appellant must first prove that the appellee is a common carrier. "Finally. It (plaintiff-appellant) `must establish his case by a preponderance of evidence. Civil Code) to arise.' x x x. and (b) in dismissing the complaint on a demurrer to evidence.’ (assuming it was really a common carrier).4 discoursed. consequently. defendant has no choice but to comply with the directive of its principal. in its decision of 10 June 1999. Should the appellant fail to prove that the appellee is a common carrier. Court of Appeals. "Considering that plaintiff failed to adduce evidence that defendant is a common carrier and defendant’s driver was the one negligent. "x x x xxx xxx "Based on the foregoing disquisitions and considering the circumstances that the appellee trucking corporation has been `its exclusive contractor. among other things."2 The subsequent motion for reconsideration having been denied. 243 SCRA 175). that "x x x in order for the presumption of negligence provided for under the law governing common carrier (Article 1735. which means that the evidence as a whole adduced by one side is superior to that of the other. The appellate court.3 plaintiff interposed an appeal to the Court of Appeals.’ the inevitable conclusion is that the appellee is a private carrier. unfortunately. Hence. the appellant would have to prove that the carrier was negligent.
Inc. EITHER AS A COMMON CARRIER OR A PRIVATE CARRIER. Inc." which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made. corporations. the instant petition.11 The law.6 hence. or air. or his "restitution interest.14 Indeed. unless they are made the basis for action. to make recompense to the one who has been injured by the failure of another to observe his contractual obligation16 unless he can show extenuating circumstances." which is his interest in having restored to him any benefit that he has conferred on the other party. II WHETHER RESPONDENT GPS. being an exclusive contractor and hauler of Concepcion Industries.Petitioner's motion for reconsideration was likewise denied." The above conclusion nothwithstanding. GPS cannot escape from liability.10 Given accepted standards.12 will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. but never on an exclusive basis." which is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed. that is. the mere proof of the existence of the contract and the failure of its compliance justify. Common carriers are persons. The remedy serves to preserve the interests of the promisee that may include his "expectation interest. the Court finds the conclusion of the trial court and the Court of Appeals to be amply justified. either for their makers or for society. GPS. like proof of his exercise of due diligence (normally that of the .7 raising the following issues: I WHETHER RESPONDENT GPS MAY BE CONSIDERED AS A COMMON CARRIER AS DEFINED UNDER THE LAW AND EXISTING JURISPRUDENCE. In culpa contractual. rendering or offering its services to no other individual or entity. by land.13 A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered.8 whether to the public in general or to a limited clientele in particular.. providing space for those who opt to avail themselves of its transportation service for a fee. water.15 The effect of every infraction is to create a new duty. prima facie.9 The true test of a common carrier is the carriage of passengers or goods. recognizing the obligatory force of contracts. a corresponding right of relief. offering their services to the public. cannot be considered a common carrier. On the first issue. III WHETHER THE DOCTRINE OF RES IPSA LOQUITUR IS APPLICABLE IN THE INSTANT CASE. agreements can accomplish little. MAY BE PRESUMED TO HAVE BEEN NEGLIGENT WHEN THE GOODS IT UNDERTOOK TO TRANSPORT SAFELY WERE SUBSEQUENTLY DAMAGED WHILE IN ITS PROTECTIVE CUSTODY AND POSSESSION.. firms or associations engaged in the business of carrying or transporting passengers or goods or both. for hire or compensation. upon which the action of petitioner rests as being the subrogee of Concepcion Industries. GPS scarcely falls within the term "common carrier. or his "reliance interest.
that the accident could have been exclusively due to his negligence.23 Nevertheless.17 Consonantly with the axiom res inter alios acta aliis neque nocet prodest. to excuse him from his ensuing liability. and (c) the indicated negligence is within the scope of the defendant's duty to the plaintiff. in the ordinary course of things. exceptionally by stipulation or by law such as in the case of common carriers. in the absence of explanation by the defendant. for the doctrine to apply. Res ipsa loquitur. or a mere procedural convenience since it furnishes a substitute for. without concrete proof of his negligence or fault. may not be held liable under the agreement. it does not create an independent ground of liability. not being a party to the contract of carriage between petitioner’s principal and defendant. res ipsa loquitur to work against him. it is regarded as a mode of proof. the burden of producing specific proof of negligence. It affords reasonable evidence.20 Resort to the doctrine. should be understood as being confined only to cases of pure (non-contractual) tort since obviously the presumption of negligence in culpa contractual.18 A word in passing. whose liability in a civil action is predicated on culpa acquiliana. Respondent driver.21 Thus. it is not applicable when an unexplained accident may be attributable to one of several causes. on the other hand. the requirement that responsible causes other than those due to defendant’s conduct must first be eliminated. Petitioner’s civil action against the driver can only be based on culpa aquiliana. as such. may not himself be ordered to pay petitioner. such contract can neither favor nor prejudice a third person. GPS has failed to do so. unlikeculpa contractual. that of extraordinary diligence) or of the attendance of fortuitous event. including the conduct of the plaintiff and third persons. it is not equally shown. Respondent trucking corporation recognizes the existence of a contract of carriage between it and petitioner’s assured. are sufficiently eliminated by the evidence. while he admittedly can be said to have been in control and management of the vehicle which figured in the accident. Instead. for the inference of negligence arises from the circumstances and nature of the occurrence and not from the nature of the relation of the parties. and relieves the plaintiff of. a doctrine being invoked by petitioner. holds a defendant liable where the thing which caused the injury complained of is shown to be under the latter’s management and the accident is such that. which. . would require the claimant for damages to prove negligence or fault on the part of the defendant.22 Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists between the plaintiff and the defendant. The driver. may be allowed only when (a) the event is of a kind which does not ordinarily occur in the absence of negligence. a matter that can allow. or failure of compliance with. a default on. In the case of the truck driver. the delivery of the goods in its custody to the place of destination gives rise to a presumption of lack of care and corresponding liability on the part of the contractual obligor the burden being on him to establish otherwise. (b) other responsible causes. as previously so pointed out. The maxim simply places on the defendant the burden of going forward with the proof. A contract can only bind the parties who have entered into it or their successors who have assumed their personality or their juridical position. In such a situation. immediately attaches by a failure of the covenant or its tenor. the obligation – in this case. for some of which the defendant could not be responsible. forthwith. and admits that the cargoes it has assumed to deliver have been lost or damaged while in its custody. however. however. that the accident arose from want of care.diligence of a good father of a family or.19 It is not a rule of substantive law and. cannot be expected to happen if those who have its management or control use proper care.
Holland. She thus called up Menor to complain. Jr. Petitioner.chanroblesvirtuallawlibrary Subsequently. Eroles is concerned. The package tour included the countries of England.881. No costs. are AFFIRMED only insofar as respondent Lambert M. THE COURT OF APPEALS and CARAVAN TRAVEL & TOURS INTERNATIONAL. Crisostomo contracted the services of respondent Caravan Travel and Tours International. Menor then told her to be at the Ninoy Aquino International Airport (NAIA) on Saturday. vs.J.. to take the flight for the first leg of her journey from Manila to Hongkong. petitioner was asked anew to pay US$785. Austria.00 (at the then prevailing exchange rate of P26. Petitioner was given a 5% discount on the amount. Ynares-Santiago. INC.If a demurrer to evidence is granted but on appeal the order of dismissal is reversed. Germany.70. Davide. petitioner went to NAIA on Saturday. [G.00 or P20. For this tour package. and the decision. Kapunan.:chanroblesvirtuallawlibrary In May 1991..24Thus. of the Court of Appeals. respondents. which included airfare. is hereby ordered to pay FGU Insurance Corporation the value of the damaged and lost cargoes in the amount of P204. the order. two hours before her flight on board British Airways. of the Regional Trial Court.R. and Austria-Martinez. 138334. 2003] ESTELA L. C. concur.450. CRISOSTOMO. petitioner Estela L. but said assailed order of the trial court and decision of the appellate court are REVERSEDas regards G. Menor prevailed upon petitioner to take another tour the British Pageant which included England.60). Branch 66. Sarmiento Trucking Corporation which.chanroblesvirtuallawlibrary Without checking her travel documents. She learned that her plane ticket was for the flight scheduled on June 14. June 15. Meriam Menor.. SO ORDERED. gave Menor the full payment for the package tour. was respondent companys ticketing manager.. To petitioners dismay.322.chanroblesvirtuallawlibrary Pursuant to said contract. J.00. August 25. she discovered that the flight she was supposed to take had already departed the previous day. dated 30 April 1996. respondent corporation may no longer offer proof to establish that it has exercised due care in transporting the cargoes of the assured so as to still warrant a remand of the case to the trial court.nêt WHEREFORE. Inc. of Makati City. 1991 a Wednesday to deliver petitioners travel documents and plane tickets. petitioner. 1991. Menor went to her aunts residence on June 12. the movant shall be deemed to have waived the right to present evidence. dated 10 June 1999.P. DECISION YNARES-SANTIAGO. to arrange and facilitate her booking. Scotland and Wales in its itinerary. She gave . 1âwphi1. in turn. Liechstenstein. No. and the booking fee was also waived because petitioners niece. Switzerland and France at a total cost of P74. ticketing and accommodation in a tour dubbed Jewels of Europe. instead. 1991. JJ.
denied responsibility for petitioners failure to join the first tour.000. representing the difference between the sum she paid for Jewels of Europe and the amount she owed respondent for the British Pageant tour. Insight International Tours Ltd.43) with legal interest thereon at the rate of twelve percent (12%) per annum starting January 16. Petitioner was allowed to make a partial payment of only US$300.  Petitioner was thus constrained to file a complaint against respondent for breach of contract of carriage and damages. it is accepted industry practice to disallow refund for individuals who failed to take a booked tour. the date when the complaint was filed. petitioner alleged that her failure to join Jewels of Europe was due to respondents fault since it did not clearly indicate the departure date on the plane ticket..980.chanroblesvirtuallawlibrary 2.901. respondent company.chanroblesvirtuallawlibrary After due proceedings.chanroblesvirtuallawlibrary Respondent explained that it can no longer reimburse the amount paid for Jewels of Europe. Respondent was also negligent in informing her of the wrong flight schedule through its employee Menor. respondent company refused to reimburse the amount.00 for the second tour because her niece was then an employee of the travel agency. This tour was independently procured by petitioner after realizing that she made a mistake in missing her flight for Jewels of Europe. she demanded from respondent the reimbursement of P61. premises considered. the trial court rendered a decision. Lotus European tour organizer. Despite several demands.chanroblesvirtuallawlibrary Upon petitioners return from Europe. Consequently.989. the dispositive part of which reads:chanroblesvirtuallawlibrary WHEREFORE.70. which was clearly and legibly printed on the plane ticket. Chipeco insisted that petitioner was informed of the correct departure date. She insisted that the British Pageant was merely a substitute for the Jewels of Europe tour. respondent prayed that petitioner be ordered to pay the balance of P12. Concepcion Chipeco.chanroblesvirtuallawlibrary In her complaint.chanroblesvirtuallawlibrary Lastly. respondent maintained that the British Pageant was not a substitute for the package tour that petitioner missed. as she did not bother to read or confirm her flight schedule as printed on the ticket.00) Pesos as and for reasonable attorneys fees.00 as partial payment and commenced the trip in July 1991. determines the cost of a package tour based on a minimum number of projected participants. Ordering the defendant to pay the plaintiff the amount of Five Thousand (P5.00 for the British Pageant package tour. considering that the same had already been remitted to its principal in Singapore. contending that the same was non-refundable. Lotus Travel Ltd.. which had already billed the same even if petitioner did not join the tour. Petitioner had only herself to blame for missing the flight. Ordering the defendant to return and/or refund to the plaintiff the amount of Fifty Three Thousand Nine Hundred Eighty Nine Pesos and Forty Three Centavos (P53. which was docketed as Civil Case No. such that the cost of the former should be properly set-off against the sum paid for the latter.chanroblesvirtuallawlibrary . The travel documents were given to petitioner two days ahead of the scheduled trip.421. 1992. 92-133 and raffled to Branch 59 of the Regional Trial Court of Makati City. through its Operations Manager.chanroblesvirtuallawlibrary For its part.respondent US$300 or P7. For this reason. judgment is hereby rendered as follows:chanroblesvirtuallawlibrary 1.
 petitioner filed the instant petition under Rule 45 on the following grounds: Ichanroblesvirtuallawlibrary It is respectfully submitted that the Honorable Court of Appeals committed a reversible error in reversing and setting aside the decision of the trial court by ruling that the petitioner is not entitled to a refund of the cost of unavailed Jewels of Europe tour she being equally. andchanroblesvirtuallawlibrary 4. This being so. With costs against the defendant. 1995 is hereby REVERSED and SET ASIDE.chanroblesvirtuallawlibrary SO ORDERED.901. or worse. Thus.chanroblesvirtuallawlibrary Respondent appealed to the Court of Appeals. However. Menor. . for in the contract of carriage the common carrier is obliged to observe utmost care and extra-ordinary diligence which is higher in degree than the ordinary diligence required of the passenger. premises considered.3. who was not presented as witness to rebut petitioners testimony. petitioners negligence is only contributory while the private respondent [is guilty] of gross negligence making the principle of pari delicto inapplicable in the case. Costs against the plaintiffappellee. negligent than the private respondent.00. she is not entitled to any form of damages. A new judgment is hereby ENTERED requiring the plaintiffappellee to pay to the defendant-appellant the amount of P12. petitioner should have verified the exact date and time of departure by looking at her ticket and should have simply not relied on Menors verbal representation. for lack of merit. However. if not more. she should have known better than to simply rely on what was told to her. deducted 10% from the amount being claimed as refund. the decision of the Regional Trial Court dated October 26.chanroblesvirtuallawlibrary The trial court held that respondent was negligent in erroneously advising petitioner of her departure date through its employee. the petitioner cannot be considered to be equally. The award of attorneys fees is DELETED. even if the petitioner and private respondent were both negligent. to be computed from the time the counterclaim was filed until the finality of this decision. the same to earn legal interest at the rate of SIX PERCENT (6%) per annum. more guilty than the private respondent. representing the balance of the price of the British Pageant Package Tour. IIchanroblesvirtuallawlibrary The Honorable Court of Appeals also erred in not ruling that the Jewels of Europe tour was not indivisible and the amount paid therefor refundable. Dismissing the defendants counterclaim. the rate of TWELVE PERCENT (12%) interest per annum shall be additionally imposed on the total obligation until payment thereof is satisfied. the appellate court held that petitioner is more negligent than respondent because as a lawyer and well-traveled person. The trial court thus declared that petitioner was guilty of contributory negligence and accordingly. Petitioner also forfeited her right to the Jewels of Europe tour and must therefore pay respondent the balance of the price for the British Pageant tour. At best.chanroblesvirtuallawlibrary SO ORDERED.chanroblesvirtuallawlibrary Upon denial of her motion for reconsideration. After this decision becomes final and executory. which likewise found both parties to be at fault. The dispositive portion of the judgment appealed from reads as follows:chanroblesvirtuallawlibrary WHEREFORE.
ticketing and accommodation in the package tour. for compensation.chanroblesvirtuallawlibrary The nature of the contractual relation between petitioner and respondent is determinative of the degree of care required in the performance of the latters obligation under the contract. Her loss could only be attributed to respondent as it was the direct consequence of its employees gross negligence. It is in this sense that the contract between the parties in this case was an ordinary one for services and not one of carriage. a contract of carriage or transportation is one whereby a certain person or association of persons obligate themselves to transport persons. If she were negligent at all. the standard of care required of respondent is that of a good father of a family under Article 1173 of the Civil Code. things.chanroblesvirtuallawlibrary The object of petitioners contractual relation with respondent is the latters service of arranging and facilitatingpetitioners booking. Her transport to the place of destination.IIIchanroblesvirtuallawlibrary The Honorable Court erred in not granting to the petitioner the consequential damages due her as a result of breach of contract of carriage. It is thus not bound under the law to observe extraordinary diligence in the performance of its obligation. a common carrier in a contract of carriage is bound by law to carry passengers 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. respondent is not a common carrier but a travel agency. Respondent did not undertake to transport petitioner from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. however. She could not be deemed more negligent than respondent since the latter is required by law to exercise extraordinary diligence in the fulfillment of its obligation. the same is merely contributory and not the proximate cause of the damage she suffered. as petitioner claims. by land. with whom petitioner ultimately contracted for her carriage to Europe. Respondents services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours. Respondents obligation to petitioner in this regard was simply to see to it that petitioner was properly booked with the airline for the appointed date and time.chanroblesvirtuallawlibrary Petitioners contention has no merit. firms or associations engaged in the business of carrying or transporting passengers or goods or both. Such person or association of persons are regarded as carriers and are classified as private or special carriers and common or public carriers. neither a private nor a common carrier. At most. water or air.chanroblesvirtuallawlibrary While petitioner concededly bought her plane ticket through the efforts of respondent company. pertained directly to the airline. respondent acted merely as an agent of the airline. offering their services to the public.chanroblesvirtuallawlibrary Since the contract between the parties is an ordinary one for services. this does not mean that the latter ipso facto is a common carrier.chanroblesvirtuallawlibrary Petitioner contends that respondent did not observe the standard of care required of a common carrier when it informed her wrongly of the flight schedule.chanroblesvirtuallawlibrary It is obvious from the above definition that respondent is not an entity engaged in the business of transporting either passengers or goods and is therefore. meanwhile. For reasons of public policy.chanroblesvirtuallawlibrary By definition. A common carrier is defined under Article 1732 of the Civil Code as persons. corporations. . the object of a contract of carriage is the transportation of passengers or goods. Petitioners submission is premised on a wrong assumption. or news from one place to another for a fixed price. As earlier stated. In contrast.
It arranged petitioners hotel accommodation as well as food. prepared the necessary documents and procured the plane tickets. The opportunity and possibility for obtaining Menors testimony belonged to both parties. Respondent also properly booked petitioner for the tour.chanroblesvirtuallawlibrary In sum. chanroblesvirtuallawlibrary Therefore. Menors negligence was not sufficiently proved.chanroblesvirtuallawlibrary Contrary to petitioners claim. respondent has consistently denied that Menor was negligent and maintains that petitioners assertion is belied by the evidence on record. vouchers and instructions. The date and time of departure was legibly written on the plane ticket and the travel papers were delivered two days in advance precisely so that petitioner could prepare for the trip. This connotes reasonable care consistent with that which an ordinarily prudent person would have observed when confronted with a similar situation. The travel documents. or when the same could have been obtained by both parties. upon whom rests the burden of proving his cause of action. If the plaintiff. considering that the only evidence presented on this score was petitioners uncorroborated narration of the events. Menor was already working in France at the time of the filing of the complaint. considering that Menor was not just respondents employee. It was thus error for the lower court to invoke the presumption that respondent willfully suppressed evidence under Rule 131. the presumption under Rule 131. the plane ticket issued to petitioner clearly reflected the departure date and time.chanroblesvirtuallawlibrary In the case at bar. The test to determine whether negligence attended the performance of an obligation is: did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not. contrary to petitioners contention. the lower court found Menor negligent when she allegedly informed petitioner of the wrong day of departure. The lower court applied the presumption under Rule 131. Section 3(e) would still not apply. the evidence on record shows that respondent exercised due diligence in performing its obligations under the contract and followed standard procedure in rendering its services to petitioner. the defendant is under no obligation to prove his exception or defense. even if it were possible for respondent to secure Menors testimony. Had petitioner exercised due . It is well-settled that the party alleging a fact has the burden of proving it and a mere allegation cannot take the place of evidence.chanroblesvirtuallawlibrary On the other hand. consisting of the tour itinerary. Section 3(e). It performed all its obligations to enable petitioner to join the tour and exercised due diligence in its dealings with the latter. Petitioners testimony was accepted as indubitable evidence of Menors alleged negligent act since respondent did not call Menor to the witness stand to refute the allegation.chanroblesvirtuallawlibrary We agree with respondent.chanroblesvirtuallawlibrary Respondents failure to present Menor as witness to rebut petitioners testimony could not give rise to an inference unfavorable to the former. were likewise delivered to petitioner two days prior to the trip. Then too. land transfers and sightseeing excursions. Said presumption would logically be inoperative if the evidence is not intentionally omitted but is simply unavailable. we do not agree with the finding of the lower court that Menors negligence concurred with the negligence of petitioner and resultantly caused damage to the latter. then he is guilty of negligence. Section 3 (e) of the Rules of Court that evidence willfully suppressed would be adverse if produced and thus considered petitioners uncontradicted testimony to be sufficient proof of her claim. in accordance with its avowed undertaking. fails to show in a satisfactory manner facts upon which he bases his claim. As correctly observed by the lower court. it is clear that respondent performed its prestation under the contract as well as everything else that was essential to book petitioner for the tour. thereby making it physically impossible for respondent to present her as a witness. but also petitioners niece.
is not supported by the evidence on record. the instant petition is DENIED for lack of merit. to be computed from the time the counterclaim was filed until the finality of this Decision. there would have been no reason for her to miss the flight. the evidence on record shows that respondent company performed its duty diligently and did not commit any contractual breach. as when the trial court overlooked.diligence in the conduct of her affairs. it became incumbent upon her to take ordinary care of her concerns. C. and Azcuna. Hence. the rule is subject to certain exceptions. chanroblesvirtuallawlibrary In the case at bar.. with legal interest thereon at the rate of 6% per annum. (Chairman). Accordingly. concur.chanroblesvirtuallawlibrary The negligence of the obligor in the performance of the obligation renders him liable for damages for the resulting loss suffered by the obligee. CV No. chanroblesvirtuallawlibrary SO ORDERED. The degree of diligence required depends on the circumstances of the specific obligation and whether one has been negligent is a question of fact that is to be determined after taking into account the particulars of each case. Jr.R.chanroblesvirtuallawlibrary The lower court declared that respondents employee was negligent. the rate of 12% per annum shall be imposed until the obligation is fully settled. The decision of the Court of Appeals in CA-G. petitioner cannot recover and must bear her own damage. JJ.901. ..chanroblesvirtuallawlibrary WHEREFORE. misunderstood.00 representing the balance of the price of the British Pageant Package Tour. After this Decision becomes final and executory. This factual finding. Vitug. Needless to say. This undoubtedly would require that she at least read the documents in order to assure herself of the important details regarding the trip.J. however. petitioner is ordered to pay respondent the amount of P12.chanroblesvirtuallawlibrary Davide. this interim period being deemed to be by then an equivalent to a forbearance of credit. Carpio. There is no fixed standard of diligence applicable to each and every contractual obligation and each case must be determined upon its particular facts. While factual findings below are generally conclusive upon this court. or misapplied some facts or circumstances of weight and substance which will affect the result of the case. Fault or negligence of the obligor consists in his failure to exercise due care and prudence in the performance of the obligation as the nature of the obligation so demands. 51932 is AFFIRMED. after the travel papers were delivered to petitioner..
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