Transportation Law Reviewer

Transportation Law Transportation Law
Commercial Law Review Series Commercial Law Review Series

Fiscal Rocille Aquino-Tambasacan Fiscal Rocille Aquino-Tambasacan
justice and only justice you shall pursue justice and only justice you shall pursue
-Deuteronomy 16:20 -Deuteronomy 16:20
A. Definition of Transportation; When is transportation commercial

Held: Based on the definition of common carrier, petitioner is a common carrier. It is engaged in
B. Classes of Transportation the business of transporting or carrying goods (i.e. petroleum products), for hire as a public
employment. It undertakes to carry for all persons indifferently. The fact that it has limited clientele
C. Common Carrier (Art. 1732); Definition; Elements does not exclude it from the definition of a common industrial. Further, under Petroleum Act, pipe
Article 1732. Common carriers are persons, corporations, firms or associations engaged in the line concessionaires are considered as common carrier.
business of carrying or transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public. 2. Schmitz Transport & Brokerage Corporation v. Transport Venture Inc., 456 SCRA 557
D. Private vs. common Under a given set of facts, a customs broker may be regarded as common carrier, as
1. First Philippine Industrial v. CA, 300 SCRA 661 defined under Art. 1732. Common carrier are persons , corporations or firms engaged in
transporting passengers or goods or both, by land, air or water, for compensation offering
A common carrier is one who holds himself out to the public as engaged in the business their services to the public.
of transporting persons or property from place to place, for compensation, offering his
services generally to the public Parties to a contract of carriage may agree upon a definition of delivery that extends the
services rendered by a carrier.
The test for determining whether a party is a common carrier of goods is;
a) He must be engaged in the business of carrying goods for others as a public The principle embodied in the acts of god doctrine strictly requires that the act must be
employment and must hold himself out as ready to engage in the transportation occasioned solely by the violence of nature human interaction is to be excluded from
of goods for persons generally as a business and not as a casual occupation. creating or entering into the cause of mischief. When the effect is found to be result from
b) He must undertake to carry goods of the kind to which his business is confined. human interaction, whether due to his act or omission, the whole occurrence is removed
c) He must undertake to carry by the method by which his business is conducted and from rules applicable to acts of god. In order to be considered as fortuitous event, the
over his established roads. following requisites must concur;
d) The transportation must be for hire. a) The failure of the debtor to comply with his obligation must be independent of
human will.
The fact that petitioner has a limited clientele does not exclude it from definition of a b) It must be impossible to foreseen or can be foreseen but impossible to avoid.
common carrier. c) The occurrence of such renders the fulfillment of the obligation impossible to any
manner.
The definition of common carrier under the Civil Code makes no distinction as to the d) The debtor must be free from any participation in the aggravation of the injury of
means of transportation, as long as it is made by land, air or water. It does not provide the creditor.
that transportation of passenger or goods must be made by motor vehicle.
While a private carrier is under no duty to observe extra-ordinary diligence, it was still
Facts: First Philippine Industrial Corporation (petitioner) is a grantee if a pipeline concession under required to observe ordinary diligence.
Act. 387, to contract, install and operate pipelines. The petitioner applied for mayors permit but
before the same could be released, the petitioner were required by the City Treasurer to pay a local Facts: Cargoes, which contains 545 hot rolled steel sheets, from the port of Russia were shipped on
tax based on its gross receipt. In order not to hamper the operation, it paid under protest. Later, the board M/V Alexander (russian vessel owned by Black Sea Shipping) in the port of Manila in favor
petitioner filed a letter protest asserting that it is a pipeline operator and engaged in the business of of Little Giant Steel Pipe Corporation and were insured by Industrial Insurance Corp. The PPA
transporting petroleum products via pipe line, as such, exempted in paying tax on gross receipts assigned it a dock outside of breakwater in the port. Schmitz Transport was engaged by Little Giant
pursuant to Sec. 133 of Local Government Code. The City Treasurer denied the letter-protest and to receive the cargoes from the shipside and the deliver the same to Little Giants warehouse in
contends that the petitioner cannot be considered to engage in the transportation business. Cainta, Rizal. Schmitz Transport, in turn, engaged the services of Transport Ventures Inc. (TVI) to
Aggrieved, the petitioner filed a complaint for tax refund before the RTC. The petitioner claims that send a barge and tugboat at the ship side. The tugboat then positioned the barge alongside the vessel
it is a common carrier but the respondent City Treasurer contends that common carrier pertains to which contains the 545 hot rolled steel sheets. The arrastre operator commence to unload the steel
the mode or manner by which a product is delivered to its destination. The RTC dismissed the sheets from the vessel to the barge. The unloading of 37 of the 545 sheets were completed and was
complaint and ruled that petitioner is not a common carrier but a special carrier extending only initially suspended due to increment in weather. The barge however was not pulled back by the tug
specific services to a single specific customer under a special contract. On appeal, the CA affirmed boat to the pier. Due to the storm, the barged pitched and capsized, washing 37 steel sheets into the
the dismissal of the complaint by the RTC. sea. Little Giant filed a formal claim of insurance against Industrial Insurance which it paid and the
Page 1 of 41 Page 2 of 41
latter issue subrogation receipt in favor of Industrial Insurance. The insurance company then filed a Held: The contention has no merit. Respondent is not an entity engaged in the business of
complaint against Schmitz, TVI and Black Sea before the RTC of Manila for the recovery of the transporting either the passenger, goods or both. It did not undertake to transport petitioner from one
amount paid to Little Giant. It faulted the three corporation for unloading the cargoes despite place to another since its covenant was to make travel arrangements in their behalf. The object of
weather increments. The RTC found all the defendants solidarily liable for unloading the cargoes. petitioners contractual relation with respondent is the service of arranging and facilitating
All the defendants appealed before the CA. The appellate court affirmed the ruling of the trial court petitioners booking, ticketing and accommodation in the package tour. In contrast, the object of
and held that all the defendants were common carrier. Schmitz brought the matter before the Court contract of carriage is the transportation of passenger, goods or both. It is in this sense that the
and posit, among others that, in obtaining the services of TVI for the tugboat and the barge, the contract was for services and not of carriage.
transportation contract was by and between Little Giant and TVI. Schmitz insist that it is not a
common carrier but a customs broker. 4. De Guzman v. CA, 168 SCRA 612
Held: It is settled that a customs broker may be regarded as common carrier. It suffices that petitioner Art. 1732 makes no distinction between one whose principal business activity is the
is undertakes to deliver the goods from the port to the warehouse for a fee. The argument it does not carrying of goods, persons or both and one who does such only as an ancillary activity.
own the vehicle is immaterial, as long as a persons or corporation holds himself out to the public for Neither does the article distinguished between a carrier who offers services or solicits
the purpose of transporting goods as a business, it is already considered as common carrier. The business only from the narrow segment of the general population.
transportation of goods is an integral part of a customs broker, the customs broker is also a common
carrier. A Certificate of Public Convenience is not a requisite for the incurring liability under the
Civil Code provisions governing common carriers. That liability arises from the moment
3. Crisostomo v. CA, August 25, 2003 the firm acts as a common carrier without regard to whether or not such firm has complied
with the statutory requirements for the issuance of the certificate. Otherwise, to exempt a
By definition, a contract of carriage or transportation is one whereby a certain person or firm from liability will be to reward the firm precisely for failing to comply with the
association of persons obligate themselves to transport persons, things or news from one statutory requirements.
place to another for a fixed price. Such person or association is regarded as carrier and
may be classified as (1) private or special carrier or, (2) common or public carrier. Common carriers, by virtue of the nature of their business is required to observe extra-
Common carrier is defined under Art. 1732 of the Civil Code. ordinary diligence. The specific import of extraordinary diligence is further import by Art.
1734, 1735 and 1745 number 5, 6 and 7. Art. 1734 establishes the general rule that
For reasons of public policy, a common carrier in a contract of carriage is bound by law common carriers are responsible for the loss, destruction and deterioration of the goods
to carry passengers as far as human care and foresight can provide using the utmost they carry unless the same is due to any of the following causes;
diligence of very cautious persons and with due regard for all circumstances. a) Natural disaster or calamity
b) Acts of public enemy, whether international or civil
Facts: Estela Crisostomo contracted the services of Caravan Travel and Tours International to c) Act or omission of the shipper or owner of the goods
arrange and facilitate her booking, ticketing and accommodation tour dubbed Jewels of Europe at d) Character of goods or defects in the packing or in the containers
a total cost of P74,322.70. Pursuant to the said contract, Meriam Menor her niece and Caravans e) Order or act of competent public authority
ticket manager, deliver the petitioner travel documents and plane tickets. Menor told her to be at
NAIA on Saturday, two hours before her flight on board of British Airways. Without checking her The list of causes of destruction, deterioration or loss which exempt the carrier from the
travel documents she went to NAIA on Saturday and was informed that the plane had already responsibility is a closed list. Anything that do not fall within the ambit of Art. 1734 even
departed the previous day. Petitioner then called Menor to complain. Subsequently, Menor prevailed if they constitute a specie of force majeure, falls within the scope of Art. 1735, that is the
upon the petitioner and took up another tour dubbed as British Pageant for P20,881. She then common carrier is presumed negligent. This presumption maybe overthrown by proof of
commenced the trip. Upon her return from Europe, she demanded the reimbursement of the extraordinary diligence
difference of the amount she paid for Jewels of Europe and that of British Pageant, which was .
unheeded. She filed a complaint before the RTC and claimed negligence on the part of the Caravan The duty of extraordinary diligence under Art. 1733 is given by additional specification by
Travel. On its answer, Caravan Travel denied any responsibility and faulted petitioner for not Art. 1734, 1735 and 1745. The specification is an indicia that behind the diligence imposed
checking her travel documents despite receiving it on advance. The RTC rendered decision in favor by law as a common carrier, the latter is not made an absolute insurer against all risk of
of Crisostomo. On appeal before the CA, the appellate court found both parties at fault and reversed travel and transport of goods and are not held liable for acts or events which cannot be
the decision of the RTC. Before the Court, petitioner contends that Caravan Travel, being a common foreseen or inevitable provided that they shall have complied with the rigorous standard
carrier, has failed to exercise the diligence required by law. of extraordinary diligence.
Facts: Ernesto Cendena is a junk dealer and engaged in selling scrap metal and used bottles from In determining whether the use is public, the character and the mode of doing business
Pangasinan to Manila. As a sideline, he would load cargo of various merchant to and from Manila must be taken into consideration. If the use is merely optional with the owner, or the public
for a fee which is lower than commercial rates. Pedro De Guzman, merchant and authorized dealer benefit is only incidental, it is not a public use. The character is whether the public may
of General Milk Company, contracted Cendena to deliver 750 cartons of Liberty Milk from a enjoy it by right or only by permission.
warehouse in Makati to his establishment in Pangasinan. After Cendena loaded the cartoons to the
two trucks and on the way to Pangasinan, the other truck was hi-jacked and the milk including the The true test of a common carrier is whether the undertaking is a part of the activity
driver were taken away by the brigands. As a result of the hi-jacking, only 150 boxes were delivered engaged in by the carrier that he has held out to the public as his business or occupation.
to De Guzman. A complaint for recovery of the value loss was filed by De Guzman before the RTC. If the undertaking is a single transaction, not part of the general business or occupation
It argued that petitioner is a common carrier and has failed to exercise extraordinary diligence engaged in, as advertised and held out to the general public, the individual rendering such
required by law. In its answer, Cendena claimed that he was not a common carrier, the delivery of service is a private, not a common carrier.
goods being ancillary in nature and he could not be held liable for the loss is a fortuitous event. The
trial court declared Cendena a common carrier and liable to the goods lost. On appeal before the Given the nature of the business and for reasons of public policy, the common carrier
CA, the appellate court reverse the decision of the RTC and held that Cendena is not a common should carry the passengers safely as far as human care and foresight can provide, using
carrier, as he is not habitually engaged in trucking services to the public and has no certificate of utmost diligence of a very cautious persons with a due regard to all circumstances. To
public convenience. successfully fend off liability, the common carrier must prove that he exercised and
observed extraordinary diligence as required by law. No device, whether by stipulation,
Held: Cendena is a common carrier. There is no dispute that Cendena charged his customer a fee posting of notices, statements on tickets, or otherwise, may dispense with or lessen the
for hauling their goods. Whether or not the firm or entity engaged in transporting is a principal responsibility of the common carrier.
business or mere sideline, is immaterial. A certificate of public convenience is not requisites to be
considered as common carrier and its liability. Under Art. 1745 par. 6, the responsibility of the Facts: Spouses Perena were engaged in transporting students from their respective residence in
common carrier for acts of thieves or robbers ceases when such thieves or robbers acted with grave Paranaque City to Don Bosco in Pasong Tamo, Makati City using their van and their driver
or irresistible threat. In this case, an information for robbery was filed before the trial court of Tarlac Clemente Alfaro. The Sps. Zarates contracted the Perenas to transport Aaron, their son. The van
and finds that the brigands not only took the milk but also kidnapped and detain the driver and his took a shortcut because of the heavy vehicular traffic and had a mishap with the PNR train which
helper for several days. The truck was subsequently found in Quezon City. Such was the case, the resulted in to the death of Aaron. A complaint for damages was filed by Sps. Zarate before the RTC.
lost is beyond the control of common carrier and properly regarded as fortuitous event. In their answer, the Sps. Perena claimed that they are not common carrier as alleged by the Zarates
and that they exercised due diligence required by law. The RTC rendered judgment in favor of the
5. Perena v. Zarate, August 29, 2012 complainant. On appeal, the CA affirmed the judgment of the RTC with modifications.
A carrier is a person or corporation who undertakes to transport or convey goods or Held: Sps. Perena are common carriers. There is no question that (a) they are engaged in transporting
persons from one place to another, gratuitously or for hire. The carrier is classified either the passengers generally as a business not just as casual occupation; (b) undertaking to carry
as private/special carrier or as a common/public carrier passengers over established roads by the method which the business was conducted; and (c)
transporting the students for a fee. Despite catering to limited clientele, the Perenas operated as a
A private carrier is one who, without making the activity a vocation or without holding common carrier because they themselves out as a ready transportation to a students of a particular
himself out to the public as ready to act for all who desires his services, undertakes, by school living within or near where they operated the service and for a fee. As such, the law requires
special agreement in a particular instance only, to transport goods or persons from one extraordinary diligence. The records show that there is negligence on the part of the driver employed
place to another gratuitously or for hire. The provisions on ordinary contracts governs the by the Perenas. The driver traversed a rail road tracks and while traversing overtake a passenger bus
contract of private carriage and the diligence required is that of ordinary. which caused him to miscalculate the distance between the passing train and the van he is driving,
in addition to the loudness of the music which reduced his ability to hear the warning horn of the
A common carrier is a person, corporation, firm or association engaged in the business of train.
carrying or transporting passengers, goods or both, by land, water, or air, for
compensation, offering such services to the public. Contracts of common carrier are 6. Cruz v. Sun Holidays Inc., June 29, 2010
governed by the Civil Code provisions on common carrier, Public Service Act and other
special laws relating to transportation. The diligence required is that of extraordinary and Art. 1732 defining the common carriers has deliberately refrained from making
is presumed to be at fault, or to have acted negligently in case of loss, injury or death to distinctions on whether the carrying of persons or goods is the carriers principal business,
passengers. whether it is offered on a regular basis, or whether it is offered to the public. The intent is
not to consider distinctions. Otherwise, there is no telling how many distinctions will be offering tour packages is to factor the transportation in the tour package price. As to its liability,
concocted by unscrupulous businessman to escape liability. evidence shows that PAGASA has issued weather forecast and tropical cyclone warnings over the
area and that gust of wind are to be expected. A very cautious person exercising utmost diligence
From the nature of the business and for reasons of public policy, common carriers are would thus not brave such stormy weather and put other peoples lives at risk. The incidence, in
bound to observe extraordinary diligence for the safety of the passengers transported by itself is not free of human intervention.
them, according to all circumstances.
7. Loadstar Shipping v. Pioneer Asia Insurance, January 24, 2006
When a passenger dies or is injured in a contract of carriage, it is presumed that the
common carrier is negligent. In fact, there is no need for the court to make an express It is imperative that a public carrier shall remain as such, notwithstanding the charter of
finding of fault or negligence on the part of the common carrier. The statutory presumption the whole or portion of a vessel, provided that the charter is limited to the ship only, as it
may only be overcome by evidence of extraordinary diligence. is in time-charter or voyage charter. It is only when the charter includes the vessel and its
crew, as in a demise or bareboat that a common carrier becomes private in so far as the
The elements of fortuitous events are; voyage covering the charter party is concerned. Hence, a voyage-charter agreement
a) The failure to comply by the debtor is independent of human will. cannot, in any way, change the nature of a carrier from common to private.
b) The event must have been impossible to foresee or can be foreseen but inevitable.
c) The occurrence must have been such to render the compliance impossible to fulfill As a common carrier, it is required that extraordinary diligence is observed. When the
the obligation in a normal manner. goods are lost or destroyed, the common carrier is presumed negligent unless it proved it
d) The debtor must have been free from any participation in the aggravation of the exercised the diligence required by law.
resulting injury to the creditor.
Facts: Loadstar Shipping, owner and operator of M/V Weasel, entered into a chartered agreement
To fully free a common carrier from any liability, the fortuitous event must have been the with Iligan Cement Corporation which the latter will ship 65,000 bags of cement from Iligan to
proximate and only cause of the loss. Manila. The 65,000 bags were covered by marine insurance issued by Pioneer Asia Marine
Insurance. M/V Weasel left Iligan City in a good weather in June 24. However, in the wee hours of
Art. 1764 in relation to Art. 2206 holds that common carrier in breach of its contract of June 25, the Captain of M/V Weasel ordered the vessel to be forced aground. Consequently, the
carriage that results in the death of a passenger is liable to pay (a) indemnity for death, cement was expose to sea water and is as good as gone. Iligan Cement Corporation demanded
(b) indemnity for loss of earning capacity and (3) moral damages payment from Loadstar but the latter refused. Nonetheless, Iligan Cement Corporation obtained the
insurance proceeds from Pioneer Asia and the former issued a subrogation receipt in favor of the
Facts: Newly-wed Ruelito Cruz and his wife stayed at a resort in Batangas by virtue of a tour latter. Pioneer Asia then commence an action before the RTC against Loadstar. In its answer, it
package-contract from Holiday Inc. Miguel Matute, scuba diver instructor, together with the 25 alleged that it has no fault over the subject cargo, invoking force majeure. RTC ruled in favor of
other guest including Ruelito and his wife trekked to the other side of the Coco Beach that was Pioneer Asia. On appeal, the CA affirmed the judgement of the RTC with modification. Petitioner
sheltered from the wind where they boarded M/B Coco Beach III, which was to ferry them to Loadstar allege that as per voyage-charter agreement with Iligan, the latter agree to hold Loadstar
Batangas. Shortly after the boat sail, the rain and wind got stronger and the ship capsized which free from any liability and that since the trip is under voyage-charter agreement, the presumption of
resulted to the death of 8 persons including Ruelito Cruz and his wife. Spouses Danter Cruz, parents extraordinary diligence that is required to common carriers do not apply in this case.
of Ruelito, demanded indemnity from Holiday Inc. but the latter refused alleging that the accident Held: The voyage charter entered into between Loadstar and Iligan Cement does not alter the fact
was due to fortuitous event and it cannot be faulted from the incident. As such, a complaint was that petitioner is a common carrier since the charter is limited only to the ship and does not involve
filed by Sps. Cruz before the RTC alleging that Holiday Inc. was a common carrier and guilty of both the vessel and the crew. As a common carrier, petitioner then is required to exercise
negligence. In their answer, Holiday Inc. denied being a common carrier, the transportation being extraordinary diligence. Records show that the weather conditions in the vicinity are calm and that
an integral package of the tour, and alleged that its boats are not available to the general public as instead of taking the usual route, petitioner took a shortcut which exposed the voyage to unexpected
they only ferry Resort guest and crew members and claimed that it exercised due diligence. The hazard.
RTC and the CA dismissed the complaint filed by Sps. Cruz for lack of merit.
8. A.F. Sanchez Brokerage v. CA, December 21, 2004
Held: The petition is impressed with merit and Holiday Inc. is a common carrier. Its ferry services
are intertwined with its main business as to be considered ancillary thereto. The dependability of its Common carriers are persons, corporations, firms or associations engaged in the business
ferry services in its own resort operation is underscored by having its own Coco Beach boats. The of carrying or transporting passengers or goods, or both, by land, water, or air, for
tour package it offers, which includes ferry services, may be availed of by anyone who can afford compensation, offering their services to the public. It suffices that it undertakes to deliver
to pay the same. These services are thus available to the public. The fact that respondent do not the goods for pecuniary consideration.
charge separate fee of fare for its ferry services is immaterial. The practice of beach resort operators
undertaking is a part of the business engaged in by the carrier which he has held out to the
While Art. 1734 par. 4 exempts a common carrier from liability if the loss or damage is public as his occupation
due to the character of the goods or defects in the packing or in the containers, the rule is .
that if the improper packing is known to the carrier or his employees or is apparent upon Common carriers are presumed to have been at fault or have acted negligently if the goods
ordinary observation, but the common carrier nevertheless accepts the same without are lost destroyed or deteriorated. To overcome this presumption of negligence, the
protest or exception notwithstanding such condition, he is not relieved from liability common carrier must prove that it exercise extraordinary diligence. However, Art. 1734
therefrom. provides instances when the presumption do not attached.
Facts: Wyeth-Pharma GMBH shipped 124 cartons of Femental tablets, 20 cartons of Nordiol tablets Facts: Marubeni American Corporation shipped 3,150 metric tons of Better Western White Wheat
and 30 cartoons of Trinordial tablets from Germany to Manila, in favor of Wyeth-Suaco to General Milling Corporation. The shipment was insured by Prudential Guarantee and Assurance,
Laboratories. Wyeth-Suaco insured the shipment with FGU Insurance. Upon arrival at NAIA, it was Inc. against loss or damage. The carrying vessel arrived in Manila and the cargo was transferred to
discharged and delivered to the warehouse of Philippine Skylanders, Inc. (PSI) for safekeeping. In the custody of Asia Lighterage and Shipping, Inc. for delivery to the warehouse of General Milling.
order for the shipment to be release, Wyeth-Suaco engaged the service of Sanchez Brokerage. The 900 metric tons of cargo was loaded to PSTSI III. Due to the warning of incoming storm, the
Sanchez Brokerage received the shipment from PSI and issued an acknowledgement receipt that the PSTSI III was tied to other barges while weathering the storm, unfortunately, the PSTSI III sustained
shipments were in good condition. Upon instruction of Wyeth-Suaco, the cargoes were delivered to a hole after hitting an unknown object in to the water. PSTSI III was partially submerged when
Hizon Laboratories, Inc. Upon inspection of the shipments, a representative of Wyeth-Suaco provisional repairs in the hole was made for the same to float. PSTSI III was then towed towards
discovered that 44 cartoons of the shipments were received in bad condition. Wyeth-Suaco the consignees wharf. To avoid the complete sinking of the PSTSI III, some of the goods were
demanded payment of the value of the 44 cartoons to Sanchez Brokerage but the latter refused which transferred to other barges. Subsequently, the towing bits of the barge broke and it completely sank.
prompted Wyeth-Suaco to file a claim of insurance to FGU Insurance. After payment by FGU The cargo never reached its destination. General Milling filed an insurance claim. Prudential
insurance, a subrogation receipt was issued. FGU Insurance then demanded payment to Sanchez Guarantee paid General Milling and a subrogation receipt was issued therefrom. Due to failure to
Brokerage but the latter refused prompting FGU Insurance to file a complaint before the trial court. pay of Asia Lighterage despite of repeated demands, complaint for damages was filed by Prudential
The trial court dismissed the complaint. On appeal, the CA reverse the findings of the trial court and Guarantee. The trial court ruled in favor of Prudential Guarantee and was sustained by the CA.
ruled that Sanchez Brokerage is also engaged in the transportation and delivery of goods of its client, before the Court, petitioner contends that it is a private carrier. Allegedly, it has no fixed routes,
hence, a common carrier. It held that Sanchez Brokerage is presumed negligent. The matter was maintains no terminal and issues no tickets. It is not bound to carry goods unless it consents. In
brought before the Court imputing grave abuse on the part of the CA. short, it does not hold out its services to the general public.
Held: The appellate court did not err in finding that the petitioner is a common carrier. As claimed Held: The petition is bereft of merit. The principal business of the petitioner is that of lighterage and
by the manager of Sanchez Brokerage, the services the firm offers includes delivery of goods to the drayage and it offers its barges to the public. Thus, petitioner is a common carrier. A common carrier
consignee or their warehouse. Art. 1732 does not distinguished between one whose principal need not to have a public known routes, terminals or to issue tickets. The petitioner engaged in the
business is the carrying of goods and one who does such carrying only as an ancillary activity. It business of shipping and lighterage, offering its barges, despite its limited clientele for carrying or
suffices that petitioner deliver goods with pecuniary consideration. In this light, common carrier are transporting of goods. As to its liability, the petitioner failed to exercise the diligence required by
mandated by the law to exercise extraordinary diligence. In the even that goods are lost, destroyed law to common carriers. The petitioner claimed that it should not be faulted since the loss is a result
or deteriorated, it is presumed to have been act negligently, unless it proved that it exercised of storm, a force majeure. As can be seen, the barge was hit by an unknown object which resulted
extraordinary diligence. It is established that Sanchez Brokerage received the goods from PSI and in it having a hole and a provisional repair was made and was allowed to transport the goods of
delivered the same to Hizon Laboratories and were found to be in bad order. Petitioner posits that it General Milling despite warning of storm. The cause then of the loss was not absolutely due to
cannot be faulted since they were damaged due to the fault or negligence of the shipper for failing typhoon. When petitioner proceed with the voyage, it recklessly put the cargo at risk and to further
to properly pack them and to the inherent characteristic of the goods. The claim is bereft of merit. damage.
If the claim were true, the petitioner should have received it under protest or with reservations duly
noted to PSI, but it made no reservation or protest. The petitioner did not present iota of evidence to 10. Ramos v. China Southern Airlines Co. Ltd., September 21, 2016
prove that it exercised extraordinary diligence when it received the goods from PSI and delivered
the same to Wyeth-Sauco. A contract of carriage, in this case, air transport, is intended to serve the traveling public
9. Asia Lighterage and Shipping v. CA, August 19, 2003 and thus, imbued with public interest. The law governing common carriers consequently
imposes an exacting standard of conduct.
Art. 1732 does not make any distinction of whether the carrying was done for principal
business or for ancillary activity, for regular or for sporadic basis, or for general public When an airline issues a ticket to a passenger confirmed on a particular flight, on a certain
or a narrow segment of the general population. The test then is whether the given date, a contract of carriage arises, and the passenger has every right to expect that he
would fly on that flight and on that date. If that does not happen, then the carrier opens
itself to a suit for breach of contract of carriage. In an action based on a breach of contract 11. Manay Jr., v. Cebu Air, Inc., April 4, 2016
of carriage, the aggrieved party does not have to prove that the common carrier was at
fault or was negligent. All he has to prove is the existence of the contract and the fact of its Air Passenger Bill of Rights mandates that the airline must inform the passenger in writing
non-performance by the carrier, through the latter's failure to carry the passenger to its of all the conditions and restrictions in the contract of carriage. Purchase of the contract
destination. of carriage binds the passenger and imposes reciprocal obligations on both the airline and
the passenger. The airline must exercise extraordinary diligence in the fulfillment of the
Facts: Petitioners purchased five China Southern Airlines roundtrip plane tickets from Active Travel terms and conditions of the contract of carriage. The passenger, however, has the
Agency for $985.00. It is provided in their itineraries that petitioners will be leaving Manila on 8 correlative obligation to exercise ordinary diligence in the conduct of his or her affairs.
August 2003 at 0900H and will be leaving Xiamen on 12 August 2003 at 1920H. On their way back
to the Manila, however, petitioners were prevented from taking their designated flight despite the Common carriers are required to exercise extraordinary diligence in the performance of
fact that earlier that day an agent from Active Tours informed them that their bookings for China its obligations under the contract of carriage. This extraordinary diligence must be
Southern Airlines 1920H flight are confirmed. The refusal came after petitioners already checked observed not only in the transportation of goods and services but also in the issuance of
in all their baggages and were given the corresponding claim stubs and after they had paid the the contract of carriage, including its ticketing operations.
terminal fees. According to the airlines' agent with whom they spoke at the airport, petitioners were
merely chance passengers but they may be allowed to join the flight if they are willing to pay an When a common carrier, through its ticketing agent, has not yet issued a ticket to the
additional 500 Renminbi (RMB) per person. When petitioners refused to defray the additional cost, prospective passenger, the transaction between them is still that of a seller and a buyer.
their baggages were offloaded from the plane and China Southern Airlines 1920H flight then left The obligation of the airline to exercise extraordinary diligence commences upon the
Xiamen International Airport without them. Because they have business commitments waiting for issuance of the contract of carriage. Ticketing, as the act of issuing the contract of
them in Manila, petitioners were constrained to rent a car that took them to Chuan Chio Station carriage, is necessarily included in the exercise of extraordinary diligence.
where they boarded the train to Hong Kong. Upon reaching Hong Kong, petitioners purchased new
plane tickets from Philippine Airlines (PAL) that flew them back to Manila. Upon arrival in Manila, When an airline issues a ticket to a passenger confirmed on a particular flight, on a certain
petitioners went to Active Travel to inform them of their unfortunate fate with China Southern date, a contract of carriage arises, and the passenger has every right to expect that he
Airlines. In their effort to avoid lawsuit, Active Travel offered to refund the price of the plane tickets would fly on that flight and on that date. If he does not, then the carrier opens itself to a
but petitioners refused to accept the offer. Petitioners then went to China Southern Airlines to suit for breach of contract of carriage. Once a plane ticket is issued, the common carrier
demand for the reimbursement of their airfare and travel expenses in the amount of P87,375.00. binds itself to deliver the passenger safely on the date and time stated in the ticket. The
When the airline refused to accede to their demand, petitioners initiated an action for damages before contractual obligation of the common carrier to the passenger is governed principally by
the RTC of Manila against China Southern Airlines and Active Travel. In their Complaint, what is written on the contract of carriage. Once the ticket is paid for and printed, the
petitioners sought for the payment of the amount of P87,375.00 as actual damages, P500,000.00 as purchaser is presumed to have agreed to all its terms and conditions.
moral damages, P500,000.00 as exemplary damages and cost of the suit. In their Answer, China
Southern Airlines denied liability by alleging that petitioners were not confirmed passengers of the The Air Passenger Bill of Rights recognizes that a contract of carriage is a contract of
airlines but were merely chance passengers. The RTC found for the complainant. On appeal, the CA adhesion, and thus, all conditions and restrictions must be fully explained to the passenger
affirmed the judgment of the RTC with modifications. before the purchase of the ticket: WHEREAS, such a contract of carriage creates an
asymmetrical relationship between an air carrier and a passenger, considering that, while
Held: Petitioners had an existing contract of air carriage with China Southern Airlines as evidenced a passenger has the option to buy or not to buy the service, the decision of the passenger
by the airline tickets issued by Active Travel. When they showed up at the airport and after they to buy the ticket binds such passenger, by adhesion, to all the conditions and/or restrictions
went through the routine security check including the checking in of their luggage and the payment attached to the air carrier ticket on an all-or-nothing basis, without any say, whatsoever,
of the corresponding terminal fees, petitioners were not allowed by China Southern Airlines to board with regard to the reasonableness of the individual conditions and restrictions attached to
on the plane. The airlines' claim that petitioners do not have confirmed reservations cannot be given the air carrier ticket.
credence by the Court. The petitioners were issued two-way tickets with itineraries indicating the
date and time of their return flight to Manila. These are binding contracts of carriage. China Southern The duty of an airline to disclose all the necessary information in the contract of carriage
Airlines allowed petitioners to check in their luggage and issued the necessary claim stubs showing does not remove the correlative obligation of the passenger to exercise ordinary diligence
that they were part of the flight. It was only after petitioners went through all the required check-in in the conduct of his or her affairs.
procedures that they were informed by the airlines that they were merely chance passengers. Airlines
companies do not, as a practice, accept pieces of luggage from passengers without confirmed Facts: Carlos S. Jose (Jose) purchased 20 Cebu Pacific round-trip tickets from Manila to Palawan
reservations. for himself and on behalf of his relatives and friends. Jose alleged that he specified to "Alou," the
Cebu Pacific ticketing agent, that his preferred date and time of departure from Manila to Palawan purchase since the tickets clearly indicated in the "Comments" section: "FULL RECAP GVN TO
should be on July 20, 2008 at 0820 and that his preferred date and time for their flight back to Manila CARLOS JOSE."
should be on July 22, 2008 at 1615. After paying for the tickets, Alou printed the tickets, which
consisted of three (3) pages, and recapped only the first page to him. Since the first page contained Held: Respondent, as one of the four domestic airlines in the country, is a common carrier required
the details he specified to Alou, he no longer read the other pages of the flight information. On the by law to exercise extraordinary diligence. Extraordinary diligence requires that the common carrier
afternoon of July 22, 2008, the group proceeded to the airport for their flight back to Manila. During must transport goods and passengers safely as far as human care and foresight can provide, and it
the processing of their boarding passes, they were informed by Cebu Pacific personnel that nine (9) must exercise the utmost diligence of very cautious persons with due regard for all the
of them could not be admitted because their tickets were for the 1005 (or 10:05 a.m.) flight earlier circumstances. Based on the information stated on the contract of carriage, all three (3) pages were
that day. Jose informed the ground personnel that he personally purchased the tickets and recapped to petitioner Jose. The only evidence petitioners have in order to prove their true intent of
specifically instructed the ticketing agent that all 20 of them should be on the 4:15 p.m. flight to having the entire group on the 4:15 p.m. flight is petitioner Jose's self-serving testimony that the
Manila. Upon checking the tickets, they learned that only the first two (2) pages had the schedule airline failed to recap the last page of the tickets to him. They have neither shown nor introduced
Jose specified. They were left with no other option but to rebook their tickets and learned that their any other evidence. Even assuming that the ticketing agent encoded the incorrect flight information,
return tickets had been purchased as part of the promo sales of the airline, and the cost to rebook the it is incumbent upon the purchaser of the tickets to at least check if all the information is correct
flight would be more expensive than the promo tickets. They offered to pay the amount by credit before making the purchase. Once the ticket is paid for and printed, the purchaser is presumed to
card but were informed by the ground personnel that they only accepted cash and offered to pay in have agreed to all its terms and conditions. Had petitioner exercised due diligence in the conduct of
dollars, but the airline personnel still refused. Eventually, they pooled enough cash to be able to buy her affairs, there would have been no reason for her to miss the flight. Needless to say, after the
tickets for five (5) of their companions. Upon his arrival in Manila, Jose immediately purchased travel papers were delivered to petitioner, it became incumbent upon her to take ordinary care of her
four (4) tickets for the companions they left behind. Jose went to Cebu Pacific's ticketing office in concerns. This undoubtedly would require that she at least read the documents in order to assure
to complain about the allegedly erroneous booking and the rude treatment that his group encountered herself of the important details regarding the trip.
Jose and his companions were frustrated and annoyed by Cebu Pacific's handling of the incident so
they sent the airline demand asking for a reimbursement. They also filed a complaint before the 12. Torres-Madrid Brokerage, Inc. v. FEB Mitsui Marine Insurance Co. Inc., July 11, 2016
Department of Trade and Industry. Cebu Pacific, through its Guest Services Department, sent
petitioners' counsel an email explaining that "ticketing agents, like Alou, recap flight details to the Common carriers are persons, corporations, firms or associations engaged in the business
purchaser to avoid erroneous booking." The recap is given one other time by the cashier. Jose and of transporting passengers or goods or both, by land, water, or air, for compensation,
his companions were unsatisfied with Cebu Pacific's response so they filed a Complaint for offering their services to the public. By the nature of their business and for reasons of
Damages against Cebu Pacific before Branch 59 of the Metropolitan Trial Court of Mandaluyong. public policy, they are bound to observe extraordinary diligence in the vigilance over the
In its Answer, Cebu Pacific essentially denied all the allegations in the Complaint and insisted that goods and in the safety of their passengers.
Jose was given a full recap of the tickets. It also argued that Jose had possession of the tickets 37
days before the scheduled flight; hence, he had sufficient time and opportunity to check the flight As long as an entity holds itself to the public for the transport of goods as a business, it is
information and itinerary. Metropolitan Trial Court rendered its Decision ordering Cebu Pacific to considered a common carrier regardless of whether it owns the vehicle used or has to
pay Jose and his companions. The Metropolitan Trial Court found that as a common carrier, Cebu actually hire one.
Pacific should have exercised extraordinary diligence in performing its contractual obligations.
Cebu Pacific's ticketing agent "should have placed markings or underlined the time of the departure A common carriers extraordinary responsibility over the shippers goods lasts from the
of the nine passengers". Cebu Pacific appealed to the Regional Trial Court, reiterating that its time these goods are unconditionally placed in the possession of, and received by, the
ticketing agent gave Jose a full recap of the tickets he purchased. The Regional Trial Court of carrier for transportation, until they are delivered, actually or constructively, by the
Mandaluyong rendered the Decision dismissing the appeal but deleted the award of attorney's fees. carrier to the consignee.
Cebu Pacific appealed to the Court of Appeals, arguing that it was not at fault for the damages
caused to the passengers. Court of Appeals rendered the Decision granting the appeal and reversing In culpa contractual, the plaintiff only needs to establish the existence of the contract and
the Decisions of the Metropolitan Trial Court and the Regional Trial Court. According to the Court the obligors failure to perform his obligation. It is not necessary for the plaintiff to prove
of Appeals, the extraordinary diligence expected of common carriers only applies to the carriage of or even allege that the obligors noncompliance was due to fault or negligence because
passengers and not to the act of encoding the requested flight schedule. It was incumbent upon the Article 1735 already presumes that the common carrier is negligent. The common carrier
passenger to exercise ordinary care in reviewing flight details and checking schedules. Aggrieved, can only free itself from liability by proving that it observed extraordinary diligence. It
Jose, et al. filed before this Court a Petition for Review on Certiorari. Jose, et al. argue that Cebu cannot discharge this liability by shifting the blame on its agents or servants.
Pacific is a common carrier obligated to exercise extraordinary diligence. Cebu Pacific, on the other
hand, argues that the damage in this case was caused by Jose, et al.'s "gross and inexplicable The plaintiff in culpa aquiliana must clearly establish the defendants fault or negligence
negligence." It argues further that its ticketing agent did not neglect giving Jose a full recap of his because this is the very basis of the action. Moreover, if the injury to the plaintiff resulted
from the act or omission of the defendants employee or servant, the defendant may absolve observe extraordinary diligence. Its failure to successfully establish this premise carries with it the
himself by proving that he observed the diligence of a good father of a family to prevent presumption of fault or negligence, thus rendering it liable to Sony/Mitsui for breach of contract.
the damage. BMT is directly liable to Sony/Mitsui for the loss of the cargo. While it is undisputed that the cargo
was lost under the actual custody of BMT (whose employee is the primary suspect in the hijacking
Facts: Shipment of various electronic goods from Thailand and Malaysia arrived at the Port of or robbery of the shipment), no direct contractual relationship existed between Sony/Mitsui and
Manila for Sony Philippines, Inc. (Sony). Sony had engaged the services of TMBI to facilitate, BMT. If at all, Sony/Mitsui's cause of action against BMT could only arise from quasi-delict, as a
process, withdraw, and deliver the shipment from the port to its warehouse. TMBI - who did not third party suffering damage from the action of another due to the latter's fault or negligence. Mitsui's
own any delivery trucks - subcontracted the services of BMT Trucking Services (BMT), to transport action is solely premised on TMBI's breach of contract. Mitsui did not even sue BMT, much less
the shipment from the port to warehouse. Incidentally, TMBI notified Sony who had no objections prove any negligence on its part. If BMT has entered the picture at all, it is because TMBI sued it
to the arrangement. BMT trucks picked up the shipment. However, BMT could not immediately for reimbursement for the liability that TMBI might incur from its contract of carriage with
undertake the delivery because of the truck ban and because the following day was a Sunday. Thus, Sony/Mitsui. We do not hereby say that TMBI must absorb the loss. By subcontracting the cargo
BMT scheduled the delivery on October 9. In the early morning of October 9 four trucks left BMT's delivery to BMT, TMBI entered into its own contract of carriage with a fellow common carrier. The
garage for Laguna, only three trucks arrived at Sony's Binan warehouse. The truck driven by Rufo cargo was lost after its transfer to BMT's custody based on its contract of carriage with TMBI. Since
Reynaldo Lapesura (NSF-391) was found abandoned along the Diversion Road in Filinvest, BMT failed to prove that it observed extraordinary diligence in the performance of its obligation to
Alabang. Both the driver and the shipment were missing. BMT's Operations Manager informed TMBI, it is liable to TMBI for breach of their contract of carriage.
TMBI's General Manager, of the development. A complaint with the National Bureau of
Investigation (NBI) against Lapesura for "hijacking." The complaint resulted in a recommendation E. Fortuitous Event (Art. 1734, 1735, 1739)
by the NBI to the Manila City Prosecutor's Office to prosecute Lapesura for qualified theft. TMBI Article 1734. Common carriers are responsible for the loss, destruction, or deterioration of
notified Sony of the loss through a letter and it also sent BMT a letter demanding payment for the the goods, unless the same is due to any of the following causes only:
lost shipment. BMT refused to pay, insisting that the goods were "hijacked." Sony filed an insurance 1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
claim with the Mitsui, the insurer of the goods. After evaluating the merits of the claim, Mitsui paid 2) Act of the public enemy in war, whether international or civil;
Sony. After being subrogated to Sony's rights, Mitsui sent TMBI a demand letter. TMBI refused to 3) Act or omission of the shipper or owner of the goods;
pay Mitsui's claim. As a result, Mitsui filed a complaint against TMBI. TMBI, in turn, impleaded 4) The character of the goods or defects in the packing or in the containers;
Benjamin Manalastas, the proprietor of BMT, as a third-party defendant. TMBI prayed that in the 5) Order or act of competent public authority.
event it is held liable to Mitsui for the loss, it should be reimbursed by BMT. The RTC found TMBI
and Benjamin Manalastas jointly and solidarity liable to pay Mitsui. The RTC held that TMBI and Article 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding
Manalastas were common carriers and had acted negligently. Both TMBI and BMT appealed the article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have
RTC's verdict. TMBI denied that it was a common carrier required to exercise extraordinary been at fault or to have acted negligently, unless they prove that they observed extraordinary
diligence. It maintains that it exercised the diligence of a good father of a family. BMT claimed that diligence as required in article 1733.
it had exercised extraordinary diligence over the lost shipment, and argued as well that the loss
resulted from a fortuitous event. The CA affirmed the RTC's decision but reduced the award of Article 1739. In order that the common carrier may be exempted from responsibility, the
attorney's fees. TMBI disagreed with the CA's ruling. natural disaster must have been the proximate and only cause of the loss. However, the
common carrier must exercise due diligence to prevent or minimize loss before, during and
Held: The delivery of the goods is an integral, albeit ancillary, part of its brokerage services. TMBI after the occurrence of flood, storm or other natural disaster in order that the common carrier
admitted that it was contracted to facilitate, process, and clear the shipments from the customs may be exempted from liability for the loss, destruction, or deterioration of the goods. The
authorities, withdraw them from the pier, then transport and deliver them to Sony's warehouse in same duty is incumbent upon the common carrier in case of an act of the public enemy
Laguna. That TMBI does not own trucks and has to subcontract the delivery of its clients' goods, is referred to in article 1734, No. 2.
immaterial. TMBI's customs brokerage services - including the transport/delivery of the cargo - are
available to anyone willing to pay its fees. Given these circumstances, we find it undeniable that 1. De Guzman v. CA, 168 SCRA 612
TMBI is a common carrier. The shipper, Sony, engaged the services of TMBI, a common carrier,
to facilitate the release of its shipment and deliver the goods to its warehouse. In turn, TMBI Art. 1732 makes no distinction between one whose principal business activity is the
subcontracted a portion of its obligation - the delivery of the cargo - to another common carrier, carrying of goods, persons or both and one who does such only as an ancillary activity.
BMT. Despite the subcontract, TMBI remained responsible for the cargo. That the cargo Neither does the article distinguished between a carrier who offers services or solicits
disappeared during transit while under the custody of BMT - TMBI's subcontractor - did not business only from the narrow segment of the general population.
diminish nor terminate TMBFs responsibility over the cargo. Instead of showing that it had acted
with extraordinary diligence, TMBI simply argued that it was not a common carrier bound to
A Certificate of Public Convenience is not a requisite for the incurring liability under the
Civil Code provisions governing common carriers. That liability arises from the moment Held: Cendena is a common carrier. There is no dispute that Cendena charged his customer a fee
the firm acts as a common carrier without regard to whether or not such firm has complied for hauling their goods. Whether or not the firm or entity engaged in transporting is a principal
with the statutory requirements for the issuance of the certificate. Otherwise, to exempt a business or mere sideline, is immaterial. A certificate of public convenience is not requisites to be
firm from liability will be to reward the firm precisely for failing to comply with the considered as common carrier and its liability. Under Art. 1745 par. 6, the responsibility of the
statutory requirements. common carrier for acts of thieves or robbers ceases when such thieves or robbers acted with grave
or irresistible threat. In this case, an information for robbery was filed before the trial court of Tarlac
Common carriers, by virtue of the nature of their business is required to observe extra- and finds that the brigands not only took the milk but also kidnapped and detain the driver and his
ordinary diligence. The specific import of extraordinary diligence is further import by Art. helper for several days. The truck was subsequently found in Quezon City. Such was the case, the
1734, 1735 and 1745 number 5, 6 and 7. Art. 1734 establishes the general rule that lost is beyond the control of common carrier and properly regarded as fortuitous event.
common carriers are responsible for the loss, destruction and deterioration of the goods
they carry unless the same is due to any of the following causes; 2. Loadstar Shipping v. Pioneer Asia Insurance, January 24, 2006
a) Natural disaster or calamity
b) Acts of public enemy, whether international or civil It is imperative that a public carrier shall remain as such, notwithstanding the charter of
c) Act or omission of the shipper or owner of the goods the whole or portion of a vessel, provided that the charter is limited to the ship only, as it
d) Character of goods or defects in the packing or in the containers is in time-charter or voyage charter. It is only when the charter includes the vessel and its
e) Order or act of competent public authority crew, as in a demise or bareboat that a common carrier becomes private in so far as the
voyage covering the charter party is concerned. Hence, a voyage-charter agreement
The list of causes of destruction, deterioration or loss which exempt the carrier from the cannot, in any way, change the nature of a carrier from common to private.
responsibility is a closed list. Anything that do not fall within the ambit of Art. 1734 even
if they constitute a specie of force majeure, falls within the scope of Art. 1735, that is the As a common carrier, it is required that extraordinary diligence is observed. When the
common carrier is presumed negligent. This presumption maybe overthrown by proof of goods are lost or destroyed, the common carrier is presumed negligent unless it proved it
extraordinary diligence exercised the diligence required by law.
.
The duty of extraordinary diligence under Art. 1733 is given by additional specification by Facts: Loadstar Shipping, owner and operator of M/V Weasel, entered into a chartered agreement
Art. 1734, 1735 and 1745. The specification is an indicia that behind the diligence imposed with Iligan Cement Corporation which the latter will ship 65,000 bags of cement from Iligan to
by law as a common carrier, the latter is not made an absolute insurer against all risk of Manila. The 65,000 bags were covered by marine insurance issued by Pioneer Asia Marine
travel and transport of goods and are not held liable for acts or events which cannot be Insurance. M/V Weasel left Iligan City in a good weather in June 24. However, in the wee hours of
foreseen or inevitable provided that they shall have complied with the rigorous standard June 25, the Captain of M/V Weasel ordered the vessel to be forced aground. Consequently, the
of extraordinary diligence. cement was expose to sea water and is as good as gone. Iligan Cement Corporation demanded
payment from Loadstar but the latter refused. Nonetheless, Iligan Cement Corporation obtained the
Facts: Ernesto Cendena is a junk dealer and engaged in selling scrap metal and used bottles from insurance proceeds from Pioneer Asia and the former issued a subrogation receipt in favor of the
Pangasinan to Manila. As a sideline, he would load cargo of various merchant to and from Manila latter. Pioneer Asia then commence an action before the RTC against Loadstar. In its answer, it
for a fee which is lower than commercial rates. Pedro De Guzman, merchant and authorized dealer alleged that it has no fault over the subject cargo, invoking force majeure. RTC ruled in favor of
of General Milk Company, contracted Cendena to deliver 750 cartons of Liberty Milk from a Pioneer Asia. On appeal, the CA affirmed the judgement of the RTC with modification. Petitioner
warehouse in Makati to his establishment in Pangasinan. After Cendena loaded the cartoons to the Loadstar allege that as per voyage-charter agreement with Iligan, the latter agree to hold Loadstar
two trucks and on the way to Pangasinan, the other truck was hi-jacked and the milk including the free from any liability and that since the trip is under voyage-charter agreement, the presumption of
driver were taken away by the brigands. As a result of the hi-jacking, only 150 boxes were delivered extraordinary diligence that is required to common carriers do not apply in this case.
to De Guzman. A complaint for recovery of the value loss was filed by De Guzman before the RTC.
It argued that petitioner is a common carrier and has failed to exercise extraordinary diligence Held: The voyage charter entered into between Loadstar and Iligan Cement does not alter the fact
required by law. In its answer, Cendena claimed that he was not a common carrier, the delivery of that petitioner is a common carrier since the charter is limited only to the ship and does not involve
goods being ancillary in nature and he could not be held liable for the loss is a fortuitous event. The both the vessel and the crew. As a common carrier, petitioner then is required to exercise
trial court declared Cendena a common carrier and liable to the goods lost. On appeal before the extraordinary diligence. Records show that the weather conditions in the vicinity are calm and that
CA, the appellate court reverse the decision of the RTC and held that Cendena is not a common instead of taking the usual route, petitioner took a shortcut which exposed the voyage to unexpected
carrier, as he is not habitually engaged in trucking services to the public and has no certificate of hazard.
public convenience.
3. Phil. Charter Insurance Corp. v. Unknown Owner of the Vessel M/V National Honor, National apparent good condition. The stevedore of the ICTSI, placed two sling cables on each end of Crate
Shipping Corp. and International Container Services Inc., July 8, 2005 No. 1. No sling cable was fastened on the mid-portion of the crate. In Dauz's experience, this was
a normal procedure. As the crate was being hoisted from the vessel's hatch, the mid-portion of the
The extraordinary diligence in the vigilance over the goods tendered for shipment requires wooden flooring suddenly snapped in the air, about five feet high from the vessel's twin deck,
the common carrier to know and to follow the required precaution for avoiding damage sending all its contents crashing down hard, resulting in extensive damage. Upon receipt of the
to, or destruction of the goods entrusted to it for sale, carriage and deliveryit requires damaged shipment, BMICI found that the same could no longer be used for the intended purpose.
common carriers to render service with the greatest skill and foresight and to use all The Mariners' Adjustment Corporation hired by PCIC conducted a survey and declared that three to
reasonable means to ascertain the nature and characteristics of goods tendered for four pieces of cable or wire rope slings, held in all equal setting, never by-passing the center of the
shipment, and to exercise due care in the handling and stowage, including such methods crate, should have been used, considering that the crate contained heavy machinery. BMICI
as their nature requires. subsequently filed separate claims against the NSCP, the ICTSI, and its insurer, the PCIC. When
the other companies denied liability, PCIC paid the claim and was issued a Subrogation Receipt.
The common carriers duty to observe the requisite diligence in the shipment of goods lasts PCIC, as subrogee, filed with the RTC of Manila Complaint for Damages against the "Unknown
from the time the articles are surrendered to or unconditionally placed in the possession owner of the vessel M/V National Honor," NSCP and ICTSI, as defendants. PCIC alleged that the
of, and received by, the carrier for transportation until delivered to, or until the lapse of a loss was due to the fault and negligence of the defendants. ICTSI, for its part, filed its Answer with
reasonable time for their acceptance, by the person entitled to receive them. When the Counterclaim and Cross-claim against its co-defendant NSCP, claiming that the loss/damage of the
goods shipped are either lost or arrive in damaged condition, a presumption arises against shipment was caused exclusively by the defective material of the wooden battens of the shipment,
the carrier of its failure to observe that diligence, and there need not be an express finding insufficient packing or acts of the shipper. At the trial, the safety inspector of ICTSI, testified that
of negligence to hold it liable. 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 the machines. He averred that most stevedores did not know
It bears stressing that the enumeration in Article 1734 of the New Civil Code which exempts how to read and write; hence, he placed the sling cables only on those portions of the crate where
the common carrier for the loss or damage to the cargo is a closed list. To exculpate itself the arrow signs were placed. Unless otherwise indicated by arrow signs, the ICTSI used only two
from liability for the loss/damage to the cargo under any of the causes, the common carrier cable slings on each side of the crate and would not place a sling cable in the mid-section. He
is burdened to prove any of the aforecited causes claimed by it by a preponderance of concluded that the loss/damage was caused by the failure of the shipper or its packer to place wooden
evidence. If the carrier succeeds, the burden of evidence is shifted to the shipper to prove battens of strong materials under the flooring of the crate, and to place a sign in its mid-term section
that the carrier is negligent. The ICTSI adduced in evidence that the damage to the cargo could be attributed to insufficient
packing and unbalanced weight distribution of the cargo inside the crate. The trial court rendered
Defect is the want or absence of something necessary for completeness or perfection, a judgment for PCIC and ordered the complaint dismissed. According to the trial court, the loss of the
lack or absence of something essential to completeness, a deficiency in something essential shipment contained in Crate No. 1 was due to the internal defect and weakness of the materials used
to the proper use for the purpose for which a thing is to be used; Inferior means of poor in the fabrication of the crates. PCIC appealed to the CA which rendered affirming in toto the
quality, mediocre, or second rate. A thing may be of inferior quality but not necessarily appealed decision. Hence, this petition by the PCIC. The petitioner avers that the shipment was
defective. sufficiently packed in wooden boxes, as shown by the fact that it was accepted on board the vessel
and arrived in Manila safely. It emphasizes that the respondents did not contest the contents of the
Facts: J. Trading Co. Ltd. of Seoul, Korea, loaded a shipment of four units of parts and accessories bill of lading, and that the respondents knew that the manner and condition of the packing of the
on board the vessel M/V "National Honor," represented in the Philippines by its agent, National cargo was normal and barren of defects. Petitioner insists that the respondents did not observe
Shipping Corporation of the Philippines (NSCP). The shipment was for delivery to Manila, Freight extraordinary diligence in the care of the goods. It argues that in the performance of its obligations,
forwarder issued Bill of Lading No. SH9410306 in the name of the shipper consigned to the order the respondent ICTSI should observe the same degree of diligence as that required of a common
of Metropolitan Bank and Trust Company with arrival notice in Manila to ultimate consignee Blue carrier. Respondent NSCP counters that carrier cannot discharge directly to the consignee because
Mono International Company, Incorporated (BMICI). The shipment was contained in two wooden cargo discharging is the monopoly of the arrastre. Liability, therefore, falls solely upon the shoulder
crates, namely, Crate No. 1 and Crate No. 2, complete and in good order condition, covered by of respondent ICTSI, inasmuch as the discharging of cargoes from the vessel. Respondent ICTSI
Commercial Invoice No. YJ-73564 DTD and a Packing List. There were no markings on the outer avers that it is merely a depository and not a common carrier; hence, it is not obliged to exercise
portion of the crates except the name of the consignee. The M/V "National Honor" arrived at the extraordinary diligence. It reiterates that the loss/damage was caused by the failure of the shipper
Manila International Container Terminal (MICT). The International Container Terminal Services, or his packer to place a sign on the sides and middle portion of the crate.
Incorporated (ICTSI) was furnished with a copy of the crate cargo list and bill of lading, and it knew
the contents of the crate. The following day, the vessel started discharging its cargoes using its winch Held: Negligence is on the part of the shipper of the goods. The breakage and collapse of Crate No.
crane. The checker-inspector of the NSCP, along with the crew and the surveyor of the ICTSI, 1 and the total destruction of its contents were not imputable to any fault or negligence on the part
conducted an inspection of the cargo. They inspected the hatches, checked the cargo and found it in of said respondent-defendant in handling the unloading of the cargoes from the carrying vessel, but
was due solely to the inherent defect and weakness of the materials used in the fabrication of said the amount of insurance. In turn Berde Plants executed in its favor a Subrogation Receipt. Federal
crate. The cargo fell while it was being carried only at about five (5) feet high above the ground. It Phoenix Assurance sent a letter to C.F. Sharp demanding payment. C.F. Sharp denied any liability
would not have so easily collapsed had the cargo been properly packed. The shipper should have on the ground that such liability was extinguished when the vessel carrying the cargo was gutted by
used materials of stronger quality to support the heavy machines. Not only did the shipper fail to fire. Thus Federal Phoenix Assurance filed with the RTC, Branch 16, Manila a complaint for
properly pack the cargo, it also failed to indicate an arrow in the middle portion of the cargo where damages against DSR-Senator Lines and C.F. Sharp. The RTC rendered a Decision in favor of
additional slings should be attached. Petitioner failed to adduce any evidence to counter that of Federal Phoenix Assurance. On appeal, the Court of Appeals affirmed the decision of the RTC.
respondent ICTSI. The petitioner failed to rebut the testimony of Dauz, that the crates were sealed
and that the contents thereof could not be seen from the outside. While it is true that the crate Held: Fire is not one of those enumerated under the above provision which exempts a carrier from
contained machineries and spare parts, it cannot thereby be concluded that the respondents knew or liability for loss or destruction of the cargo. Since the peril of fire is not comprehended within the
should have known that the middle wooden batten had a hole, or that it was not strong enough to exceptions in Article 1734, then the common carrier shall be presumed to have been at fault or to
bear the weight of the shipment. have acted negligently, unless it proves that it has observed the extraordinary diligence required by
law. Federal Phoenix Assurance raised the presumption of negligence against petitioners. However,
4. DSR-Senator Lines vs. Federal Phoenix Assurance, October 7, 2003 they failed to overcome it by sufficient proof of extraordinary diligence.
If the peril of fire is not comprehended within the exceptions in Article 1734, the common 5. G.V. Florida Transport, Inc. v. Heirs of Battung, October 14, 2015
carrier shall be presumed to have been at fault or to have acted negligently unless it proves
that it has observed the extraordinary diligence required by law. If the peril of fire is not comprehended within the exceptions in Article 1734, the common
carrier shall be presumed to have been at fault or to have acted negligently unless it proves
Even if fire were to be considered a natural disaster within the purview of Article 1734, it that it has observed the extraordinary diligence required by law.
is required under Article 1739 of the same Code that the natural disaster must have been
the proximate and only cause of the loss, and that the carrier has exercised due diligence Article 1756 of the Civil Code provides that in case of death of or injuries to passengers,
to prevent or minimize the loss before, during or after the occurrence of the disaster. common carriers are presumed to have been at fault or to have acted negligently, unless
they prove that they observed extraordinary diligence as prescribed in Articles 1733 and
Common carriers duty to observe the requisite diligence in the shipment of goods lasts 1755. This disputable presumption may also be overcome by a showing that the accident
from the time the articles are surrendered to or unconditionally placed in the possession was caused by a fortuitous event.
of, and received by, the carrier for transportation until delivered to or until the lapse of a
reasonable time for their acceptance by the person entitled to receive them. When the goods It is imperative for a party claiming against a common carrier under the above said
shipped either are lost or arrive in damaged condition, a presumption arises against the provisions to show that the injury or death to the passenger/s arose from the negligence of
carrier of its failure to observe that diligence, and there need not be an express finding of the common carrier. In Pilapil v. CA, the Court clarified that where the injury sustained
negligence to hold it liable. by the passenger was in no way due (1) to any defect in the means of transport or in the
method of transporting, or (2) to the negligent or willful acts of the common carriers
There are very few instances when the presumption of negligence does not attach and these employees such as when the injury arises wholly from causes created by strangers which
instances are enumerated in Article 1734. In those cases where the presumption is applied, the carrier had no control of or prior knowledge to prevent, the presumption of
the common carrier must prove that it exercised extraordinary diligence in order to fault/negligence foisted under Article 1756 of the Civil Code should not apply.
overcome the presumption.
Article 1763 of the Civil Code, which states that a common carrier is responsible for
Facts: Berde Plants, Inc. (Berde Plants) delivered 632 units of artificial trees to C.F. Sharp and injuries suffered by a passenger on account of the willful acts or negligence of other
Company, Inc. (C.F. Sharp), the General Ship Agent of DSR-Senator Lines, a foreign shipping passengers or of strangers, if the common carriers employees through the exercise of the
corporation, for transportation and delivery to the consignee in Riyadh, Saudi Arabia. C.F. Sharp diligence of a good father of a family could have prevented or stopped the act or omission.
issued International Bill of Lading No. SENU MNL-26548[3] for the .The cargo was loaded in M/S Notably, for this obligation, the law provides a lesser degree of diligence, i.e., diligence of
"Arabian Senator." Federal Phoenix Assurance Company, Inc. (Federal Phoenix Assurance) insured a good father of a family, in assessing the existence of any culpability on the common
the cargo against all risks. M/S "Arabian Senator" left the Manila South Harbor for Saudi Arabia. carriers part.
When the vessel arrived in Khor Fakkan Port, the cargo was reloaded on board DSR-Senator Lines'
feeder vessel, M/V "Kapitan Sakharov," bound for Saudi Arabia. However, while in transit, the Facts: Respondents alleged that Romeo L. Battung, Jr. (Battung) boarded petitioner's bus in Delfin
vessel and all its cargo caught fire. DSR-Senator Lines informed Berde Plants that M/V "Kapitan Albano, Isabela, bound for Manila. Battung was seated at the first row behind the driver and slept
Sakharov" with its cargo was gutted by fire and sunk. Federal Phoenix Assurance paid Berde Plants during the ride. When the bus reached Muoz, Nueva Ecija, the bus driver stopped the bus and
alighted to check the tires. At this point, a man who was seated at the fourth row of the bus stood
up, shot Battung at his head, and then left with a companion. The bus conductor notified the bus Not all instances of bad weather may be categorized as "storms" or "perils of the sea"
driver of the incident and thereafter, brought Romeo to the hospital, but the latter was pronounced within the meaning of the provisions of the Civil Code and COGSA on common carriers.
dead. Hence, respondents filed a complaint based on a breach of contract of carriage against To be considered absolutory causes under either statute, bad weather conditions must
petitioner before the RTC and contended that as a common carrier, petitioner and its employees are reach a certain threshold of severity.
bound to observe extraordinary diligence in ensuring the safety of passengers; and in case of injuries
and/or death on the part of a passenger, they are presumed to be at fault. In their defense, petitioner, Accordingly, strong winds and waves are not automatically deemed perils of the sea, if
maintained that they had exercised the extraordinary diligence required by law from common these conditions are not unusual for that particular sea area at that specific time, or if they
carriers and claimed that a common carrier is not an absolute insurer of its passengers and that could have been reasonably anticipated or foreseen.
Battung's death should be properly deemed a fortuitous event. The RTC ruled in respondents' favor
and found that petitioner were unable to rebut the presumed liability of common carriers. Common carriers are automatically presumed to have been at fault or to have acted
Dissatisfied, petitioner appealed to the CA. The CA affirmed the ruling of the RTC in toto. It held negligently if the goods they were transporting were lost, destroyed or damaged while in
that the killing of Battung cannot be deemed as a fortuitous event, considering that such killing transit. 64 This presumption can only be rebutted by proof that the carrier exercised
happened right inside petitioner's bus and that it did not take any safety measures in ensuring that extraordinary diligence and caution to ensure the protection of the shipment in the event
no deadly weapon would be smuggled inside the bus. Hence, the instant petition. of foul weather.
Held: It should be pointed out that the law does not make the common carrier an insurer of the Facts: M/V Meryem Ana received a shipment consisting of 21,857 metric tons of Prilled Urea
absolute safety of its passengers. Battung's death was neither caused by any defect in the means of Fertilizer from Helm Duengemittel GMBH at Odessa, Ukraine consigned to Fertiphil for delivery
transport or in the method of transporting, or to the negligent or willful acts of petitioner's to two ports - one in Poro Point, San Fernando, La Union; and the other in Tabaco, Albay. Fertiphil
employees, namely, that of Duplio and Daraoay, in their capacities as driver and conductor, insured the cargo against all risks issued by respondent. M/V Meryem Ana arrived at Poro Point, La
respectively. Instead, the case involves the death of Battung wholly caused by the surreptitious act Union, and discharged 14,339.507 metric tons of fertilizer. The ship sailed on to Tabaco, Albay, to
of a co-passenger who, after consummating such crime, hurriedly alighted from the vehicle. Thus, unload the remainder of the cargo. The fertilizer unloaded at Albay appeared to have a gross weight
there is no proper issue on petitioner's duty to observe extraordinary diligence in ensuring the safety of 7,700 metric tons. As soon as the vessel docked at the Tabaco port, the fertilizer was bagged and
of the passengers transported by it, and the presumption of fault/negligence against petitioner under stored inside a warehouse by employees of the consignee. When the cargo was subsequently
Article 1756 in relation to Articles 1733 and 1755 of the Civil Code should not apply. Since weighed, it was discovered that only 7,350.35 metric tons of fertilizer had been delivered. Because
Battung's death was caused by a co-passenger, the applicable provision is Article 1763 of the Civil of the alleged shortage of 349.65 metric tons, Fertiphil filed a claim which was found compensable.
Code. No danger was shown to exist in this case so as to impel petitioner or its employees to Respondent demanded reimbursement from petitioner on the basis of the right of subrogation. The
implement heightened security measures to ensure the safety of its passengers. There was also no claim was denied, prompting respondent to file a Complaint with the RTC. Petitioner denied that
showing that during the course of the trip, Battung's killer made suspicious actions which would there was loss or damage to the cargo and that there was, in fact, an excess of 3.340 metric tons of
have forewarned petitioner's employees of the need to conduct thorough checks on him or any of fertilizer delivered. The RTC ruled in favor of respondent and ordered petitioner. The trial court
the passengers. Records reveal that when the bus stopped at San Jose City to let four (4) men ride found that there was indeed a shortage in the cargo delivered, for which the common carrier must
petitioner's bus (two 2 of which turned out to be Battung's murderers), the bus driver saw them get be held responsible under Article 1734 of the Civil Code. The trial court notes that what was loaded
on the bus and even took note of what they were wearing. Moreover, the bus driver made the bus in the vessel M/V Meryem Ana at Odessa, Ukraine was 21,857 metric. How the quantity loaded had
conductor approach these men and have them pay the corresponding fare, which it did. During the increased to 21,860.34 has not been explained by the defendants. As to the defense that defendants
foregoing, both driver and conductor observed nothing which would rouse their suspicion that the had supposedly exercised extraordinary care and diligence in the transport and handling of the cargo,
men were armed or were to carry out an unlawful activity. With no such indication, there was no the trial court finds that the evidence presented by the defendants is absolutely and completely bereft
need for them to conduct a more stringent search on the aforesaid men. By all accounts, therefore, of anything. The CA affirmed the ruling of the RTC and denied petitioner's appeal. Before the Court,
it cannot be concluded that petitioner or any of its employees failed to employ the diligence of a the petitioner argued that it cannot be held liable because the deterioration was caused by the storm
good father of a family in relation to its responsibility under Article 1763. in the sea, which under the Civil Code, renders the common carrier free from liability.
6. Transimex Co., v. Mafre Asian Insurance Corporation, G.R. No. 190271 Held: the documentary and testimonial evidence cited by petitioner indicate that MIV Meryem Ana
faced winds of only up to 40 knots while at sea. This wind force clearly fell short of the 48 to 55
The law of the country to which the goods are to be transported shall govern the liability knots required for "storms" under Article 1734 par. 1 of the Civil Code based on the threshold
of the common carrier for their loss, destruction or deterioration. The Code takes established by PAGASA. Petitioner also failed to prove that the inclement weather encountered by
precedence as the primary law over the rights and obligations of common carriers with the the vessel was unusual, unexpected, or catastrophic. In particular, the strong winds and waves, which
Code of Commerce and (Carriage of Goods by Sea Act) COGSA applying suppletory. allegedly assaulted the ship, were not shown to be worse than what should have been expected in
that particular location during that time of the year. Even assuming that the inclement weather
encountered by the vessel amounted to a "storm". There are two other reasons why this Court cannot
absolve petitioner from liability for loss or damage to the cargo under the Civil Code. First, there is undertake the delivery because of the truck ban and because the following day was a Sunday. Thus,
no proof that the bad weather encountered by MIV Meryem Ana was the proximate and only cause BMT scheduled the delivery on October 9. In the early morning of October 9 four trucks left BMT's
of damage to the shipment. Second, petitioner failed to establish that it had exercised the diligence garage for Laguna, only three trucks arrived at Sony's Binan warehouse. The truck driven by Rufo
required from common carriers to prevent loss or damage to the cargo. There is absolutely no Reynaldo Lapesura (NSF-391) was found abandoned along the Diversion Road in Filinvest,
evidence that petitioner satisfied the two requisites. Before the trial court, petitioner limited itself to Alabang. Both the driver and the shipment were missing. BMT's Operations Manager informed
the defense of denial. The latter refused to admit that the shipment sustained any loss or damage and TMBI's General Manager, of the development. A complaint with the National Bureau of
even alleged overage of the cargo delivered. As a result, the evidence it submitted was severely Investigation (NBI) against Lapesura for "hijacking." The complaint resulted in a recommendation
limited, i.e., the testimony of a witness that supposedly confirmed the alleged excess in the quantity by the NBI to the Manila City Prosecutor's Office to prosecute Lapesura for qualified theft. TMBI
of the fertilizer delivered to the consignee in Albay. No other evidence was presented to demonstrate notified Sony of the loss through a letter and it also sent BMT a letter demanding payment for the
either the proximate and exclusive cause of the loss or the extraordinary diligence of the carrier. lost shipment. BMT refused to pay, insisting that the goods were "hijacked." Sony filed an insurance
claim with the Mitsui, the insurer of the goods. After evaluating the merits of the claim, Mitsui paid
7. Torres-Madrid Brokerage Inc. v. FEB Mitsui Marine Insurance Co. Inc. Sony. After being subrogated to Sony's rights, Mitsui sent TMBI a demand letter. TMBI refused to
pay Mitsui's claim. As a result, Mitsui filed a complaint against TMBI. TMBI, in turn, impleaded
Common carriers are persons, corporations, firms or associations engaged in the business Benjamin Manalastas, the proprietor of BMT, as a third-party defendant. TMBI prayed that in the
of transporting passengers or goods or both, by land, water, or air, for compensation, event it is held liable to Mitsui for the loss, it should be reimbursed by BMT. The RTC found TMBI
offering their services to the public. By the nature of their business and for reasons of and Benjamin Manalastas jointly and solidarity liable to pay Mitsui. The RTC held that TMBI and
public policy, they are bound to observe extraordinary diligence in the vigilance over the Manalastas were common carriers and had acted negligently. Both TMBI and BMT appealed the
goods and in the safety of their passengers. RTC's verdict. TMBI denied that it was a common carrier required to exercise extraordinary
diligence. It maintains that it exercised the diligence of a good father of a family. BMT claimed that
As long as an entity holds itself to the public for the transport of goods as a business, it is it had exercised extraordinary diligence over the lost shipment, and argued as well that the loss
considered a common carrier regardless of whether it owns the vehicle used or has to resulted from a fortuitous event. The CA affirmed the RTC's decision but reduced the award of
actually hire one. attorney's fees. TMBI disagreed with the CA's ruling.
A common carriers extraordinary responsibility over the shippers goods lasts from the Held: The delivery of the goods is an integral, albeit ancillary, part of its brokerage services. TMBI
time these goods are unconditionally placed in the possession of, and received by, the admitted that it was contracted to facilitate, process, and clear the shipments from the customs
carrier for transportation, until they are delivered, actually or constructively, by the authorities, withdraw them from the pier, then transport and deliver them to Sony's warehouse in
carrier to the consignee. Laguna. That TMBI does not own trucks and has to subcontract the delivery of its clients' goods, is
immaterial. TMBI's customs brokerage services - including the transport/delivery of the cargo - are
In culpa contractual, the plaintiff only needs to establish the existence of the contract and available to anyone willing to pay its fees. Given these circumstances, we find it undeniable that
the obligors failure to perform his obligation. It is not necessary for the plaintiff to prove TMBI is a common carrier. The shipper, Sony, engaged the services of TMBI, a common carrier,
or even allege that the obligors noncompliance was due to fault or negligence because to facilitate the release of its shipment and deliver the goods to its warehouse. In turn, TMBI
Article 1735 already presumes that the common carrier is negligent. The common carrier subcontracted a portion of its obligation - the delivery of the cargo - to another common carrier,
can only free itself from liability by proving that it observed extraordinary diligence. It BMT. Despite the subcontract, TMBI remained responsible for the cargo. That the cargo
cannot discharge this liability by shifting the blame on its agents or servants. disappeared during transit while under the custody of BMT - TMBI's subcontractor - did not
diminish nor terminate TMBFs responsibility over the cargo. Instead of showing that it had acted
The plaintiff in culpa aquiliana must clearly establish the defendants fault or negligence with extraordinary diligence, TMBI simply argued that it was not a common carrier bound to
because this is the very basis of the action. Moreover, if the injury to the plaintiff resulted observe extraordinary diligence. Its failure to successfully establish this premise carries with it the
from the act or omission of the defendants employee or servant, the defendant may absolve presumption of fault or negligence, thus rendering it liable to Sony/Mitsui for breach of contract.
himself by proving that he observed the diligence of a good father of a family to prevent BMT is directly liable to Sony/Mitsui for the loss of the cargo. While it is undisputed that the cargo
the damage. was lost under the actual custody of BMT (whose employee is the primary suspect in the hijacking
or robbery of the shipment), no direct contractual relationship existed between Sony/Mitsui and
Facts: Shipment of various electronic goods from Thailand and Malaysia arrived at the Port of BMT. If at all, Sony/Mitsui's cause of action against BMT could only arise from quasi-delict, as a
Manila for Sony Philippines, Inc. (Sony). Sony had engaged the services of TMBI to facilitate, third party suffering damage from the action of another due to the latter's fault or negligence. Mitsui's
process, withdraw, and deliver the shipment from the port to its warehouse. TMBI - who did not action is solely premised on TMBI's breach of contract. Mitsui did not even sue BMT, much less
own any delivery trucks - subcontracted the services of BMT Trucking Services (BMT), to transport prove any negligence on its part. If BMT has entered the picture at all, it is because TMBI sued it
the shipment from the port to warehouse. Incidentally, TMBI notified Sony who had no objections for reimbursement for the liability that TMBI might incur from its contract of carriage with
to the arrangement. BMT trucks picked up the shipment. However, BMT could not immediately
Sony/Mitsui. We do not hereby say that TMBI must absorb the loss. By subcontracting the cargo injury. However, when a passengers is injured or dies while travelling, the law presumes
delivery to BMT, TMBI entered into its own contract of carriage with a fellow common carrier. The that the common carrier is negligent.
cargo was lost after its transfer to BMT's custody based on its contract of carriage with TMBI. Since
BMT failed to prove that it observed extraordinary diligence in the performance of its obligation to A fortuitous event is possessed of the following characteristics: (a) the cause of the
TMBI, it is liable to TMBI for breach of their contract of carriage. unforeseen and unexpected occurrence, or the failure of the debtor to comply with his
obligations, must be independent of human will; (b) it must be impossible to foresee the
F. Quantum of Diligence; presumption of negligence; duration of diligence (Art. 1733, 1734, 1735, 1748, 1755, event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to
1756) avoid; (c) the occurrence must be such as to render it impossible for the debtor to fulfill
Article 1733. Common carriers, from the nature of their business and for reasons of public his obligation in a normal manner; and (d) the obligor must be free from any participation
policy, are bound to observe extraordinary diligence in the vigilance over the goods and for in the aggravation of the injury resulting to the creditor. As Article 1174 provides, no
the safety of the passengers transported by them, according to all the circumstances of each person shall be responsible for a fortuitous event which could not be foreseen, or which,
case. though foreseen, was inevitable. In other words, there must be an entire exclusion of human
agency from the cause of injury or loss.
Such extraordinary diligence in the vigilance over the goods is further expressed in articles
1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the It is settled that an accident caused either by defects in the automobile or through the
passengers is further set forth in articles 1755 and 1756. negligence of its driver is not a caso fortuito that would exempt the carrier from liability
for damages. Moreover, a common carrier may not be absolved from liability in case of
Article 1734. Common carriers are responsible for the loss, destruction, or deterioration of force majeure or fortuitous event alone. The common carrier must still prove that it was
the goods, unless the same is due to any of the following causes only: not negligent in causing the death or injury resulting from an accident.
1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
2) Act of the public enemy in war, whether international or civil; Where a common carrier failed to exercise the extraordinary diligence required of it, which
3) Act or omission of the shipper or owner of the goods; resulted in the death of a passenger, it is deemed to have acted recklessly, and the heirs of
4) The character of the goods or defects in the packing or in the containers; the passenger shall be entitled to exemplary damages.
5) Order or act of competent public authority.
Facts: Spouses Tito and Leny Tumboy and their minor children named Ardee and Jasmin, boarded
Article 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding at Mangagoy, Surigao del Sur, a Yobido Liner bus bound for Davao City. Along Picop Road in Km.
article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have 17, Sta. Maria, Agusan del Sur, the left front tire of the bus exploded. The bus fell into a ravine
been at fault or to have acted negligently, unless they prove that they observed extraordinary around three (3) feet from the road and struck a tree. The incident resulted in the death of 28-year-
diligence as required in article 1733. old Tito Tumboy. A complaint for breach of contract of carriage, damages and attorney's fees was
filed by Leny and her children against Alberta Yobido, the owner of the bus, and Cresencio Yobido,
Article 1748. An agreement limiting the common carriers liability for delay on account of its driver, before the Regional Trial Court. In their answer to the complaint, they raised the
strikes or riots is valid. affirmative defense of caso fortuito. The plaintiffs asserted that violation of the contract of carriage
between them and the defendants was brought about by the driver's failure to exercise the diligence
Article 1755. A common carrier is bound to carry the passengers safely as far as human care required. For their part, the defendants tried to establish that the accident was due to a fortuitous
and foresight can provide, using the utmost diligence of very cautious persons, with a due event and claimed that the left front tire that exploded was a "brand new tire" that he mounted on
regard for all the circumstances. the bus. The lower court rendered a decision dismissing the action for lack of merit and found that
the falling of the bus to the cliff was a result of no other outside factor than the tire blow-out which
Article 1756. In case of death of or injuries to passengers, common carriers are presumed to was caused by the fact that the inner tube of the left front tire was pressed between the inner circle
have been at fault or to have acted negligently, unless they prove that they observed of the left wheel and the rim which had slipped out of the wheel and the cause of the explosion
extraordinary diligence as prescribed in articles 1733 and 1755. remains a mystery until at present. Plaintiffs appealed to the Court of Appeals. Court of Appeals
rendered the Decision reversing that of the lower court. It held that the fact that the cause of the
1. Yobido v. CA, 281 SCRA 1 blow-out was not known does not relieve the carrier of liability. It is the burden of the defendants
to prove that the cause of the blow-out was a fortuitous event. Proving that the tire that exploded is
As a rule, when a passenger boards a common carrier, he takes the risks incidental to the a new Goodyear tire is not sufficient. Furthermore, the driver could have explained the cause of the
mode of travel he has taken. After all, a carrier is not an insurer of the safety of its blow-out but he was not presented as witness. Hence, the instant petition asserting the position that
passengers and is not bound absolutely and at all events to carry them safely and without
the tire blowout that caused the death of Tito Tumboy was a caso fortuito and pray that this Court of the vessel M/V Philippine Princess, owned and operated by petitioner Sulpicio Lines, Inc.
review the facts of the case. (carrier). During the unloading of the shipment, one crate containing forty-two (42) cartons dropped
from the cargo hatch to the pier apron. The owner of the goods examined the dropped cargo, and
Held: Petitioners' contention that they should be exempt from liability because the tire blowout was upon an alleged finding that the contents of the crate were no longer usable, they were rejected as a
no more than a fortuitous event that could not have been foreseen, must fail. The explosion of the total loss and returned to Cebu City. The owner of the goods filed a claim with herein petitioner-
new tire may not be considered a fortuitous event. There are human factors involved in the situation. carrier for the recovery of the value of the rejected cargo which was refused. Thereafter, the owner
The fact that the tire was new did not imply that it was entirely free from manufacturing defects or of the goods sought payment from respondent First Lepanto-Taisho Insurance Corporation (insurer)
that it was properly mounted on the vehicle. Neither may the fact that the tire bought and used in under a marine insurance policy. Respondent-insurer paid the claim. Respondent-insurer then filed
the vehicle is of a brand name noted for quality, resulting in the conclusion that it could not explode claims for reimbursement from Delbros, Inc. and petitioner-carrier Sulpicio Lines, Inc. which were
within five days' use. Proof that the tire was new and of good quality is not sufficient proof that it subsequently denied. Respondent-insurer filed a suit for damages with the trial court against
was not negligent. Petitioners proved through the bus conductor, Salce, that the bus was running at Delbros, Inc. and herein petitioner-carrier. Petitioner-carrier filed its Answer with Counterclaim.
"60-50" kilometers per hour only or within the prescribed lawful speed limit. However, they failed Delbros, Inc. filed its Answer with Counterclaim and Cross-claim, alleging that assuming the
to rebut the testimony of Leny Tumboy that the bus was running so fast that she cautioned the driver contents of the crate in question were truly in bad order, fault is with herein petitioner-carrier which
to slow down. These contradictory facts must, therefore, be resolved in favor of liability in view of was responsible for the unloading of the crates. Petitioner-carrier filed its Answer to Delbros, Inc.'s
the presumption of negligence. Having failed to discharge its duty to overthrow the presumption of cross-claim asserting that it observed extraordinary diligence in the handling, storage and general
negligence with clear and convincing evidence, petitioners are hereby held liable for damages. care of the shipment and that subsequent inspection showed that the contents of the third crate that
had fallen were found to be in apparent sound condition, except that "2 cello bags each of 50 pieces
2. Sulpicio Lines v. First Lepanto-Taisho Insurance Corporation, June 29, 2005 ferri inductors. The trial court dismissed the complaint for damages as well as the counterclaim filed
by Sulpicio Lines, Inc. and the cross-claim filed by Delbros, Inc. According to the RTC, the plaintiff
A common carrier is bound to transport its cargo and its passengers safely as far as human has failed to prove its case. The first witness for the plaintiff merely testified about the payment of
care and foresight can provide using the utmost diligence of a very cautious person with the claim based on the documents. The second witness for the plaintiff, testified, among others, that
due regard to all circumstances. he, together with a co-surveyor and a representative of Sulpicio Lines had conducted a survey of the
shipment. It is apparent, according to the trial court that the plaintiff had failed to prove its case with
Under Articles 1735 and 1752 of the Civil Code, common carriers are presumed to have a preponderance of evidence. The Motion for Reconsideration was then filed by herein respondent-
been at fault or to have acted negligently in case the goods transported by them are lost, insurer and subsequently denied by the trial court Thus, respondent-insurer instituted an appeal with
destroyed or had deteriorated. To overcome the presumption of liability for loss, the Court of Appeals, which reversed the dismissal of the trial court. The appellate court disposed
destruction or deterioration of goods under Article 1735, the common carrier must prove ruled that the evidence shows that one of the three crates fell during the unloading at the pier in
that they observed extraordinary diligence as required in Article 1733 of the Civil Code. Manila. The wooden crate which fell was damaged such that this particular crate was not anymore
sent to Singapore and was instead shipped back to Cebu from Manila. These facts were admitted
Upon insurers payment of the alleged amount of loss suffered by the, the insurer is entitled by all the parties. Defendant-appellees, however, insist that it was only the external packaging that
to be subrogated pro tanto to any right of action which the insured may have against the was damaged, and that there was no actual damage to the goods. This theory is erroneous. They
common carrier whose negligence or wrongful act caused the loss. Subrogation is the were no longer fit to be sent to Singapore. Petitioner-carrier filed its Motion for Reconsideration
substitution of one person in the place of another with reference to a lawful claim or right, which was subsequently denied. Hence, the instant petition. During the pendency of the appeal
so that he who is substituted succeeds to the rights of the other in relation to a debt or before this Court, Delbros, Inc. filed a manifestation stating that its appeal filed before this Court
claim, including its remedies or securities. The rights to which the subrogee succeeds are had been dismissed for being filed out of time and as a consequence, it paid in full the amount of
the same as, but not greater than, those of the person for whom he is substituted, that is, the damages awarded by the appellate court to the respondent-insurer. Before this Court, Delbros,
he cannot acquire any claim, security or remedy the subrogor did not have. In other words, Inc. prays for reimbursement, contribution, or indemnity from its co-defendant, herein petitioner-
a subrogee cannot succeed to a right not possessed by the subrogor. A subrogee in effect carrier Sulpicio Lines, Inc. for whatever it had paid to respondent-insurer.
steps into the shoes of the insured and can recover only if the insured likewise could have
recovered. Held: It cannot be denied that the shipment sustained damage while in the custody of petitioner-
carrier. It is not disputed that one of the three (3) crates did fall from the cargo hatch to the pier
Facts: Taiyo Yuden Philippines, Inc. (owner of the goods) and Delbros, Inc. (shipper) entered into apron while petitioner-carrier was unloading the cargo from its vessel. Petitioner-carrier contends
a contract for Delbros, Inc. to transport a shipment of goods consisting of three (3) wooden crates that its liability, if any, is only to the extent of the cargo damage or loss and should not include the
containing one hundred thirty-six (136) cartons of inductors and LC compound on board the M/V lack of fitness of the shipment for transport to Singapore due to the damaged packing. This is
Singapore V20 from Cebu City to Singapore in favor of the consignee, Taiyo Yuden Singapore Pte, erroneous. Petitioner-carrier seems to belabor under the misapprehension that a distinction must be
Ltd. For the carriage of said shipment from Cebu City to Manila, Delbros, Inc. engaged the services made between the cargo packaging and the contents of the cargo. According to it, damage to the
packaging is not tantamount to damage to the cargo. It must be stressed that in the case at bar, the declares a greater value. In addition, a contract fixing the sum that may be recovered by
damage sustained by the packaging of the cargo while in petitioner-carrier's custody resulted in its the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it is
unfitness to be transported to its consignee in Singapore. Such failure to ship the cargo to its final reasonable and just under the circumstances, and has been fairly and freely agreed upon.
destination because of the ruined packaging, indeed, resulted in damages on the part of the owner
of the goods. Petitioner-carrier miserably failed to adduce any shred of evidence of the required The bills of lading represent the formal expression of the parties rights, duties and
extraordinary diligence to overcome the presumption that it was negligent in transporting the cargo. obligations. It is the best evidence of the intention of the parties which is to be deciphered
from the language used in the contract, not from the unilateral post facto assertions of one
3. Eastern Shipping Lines, Inc. v. BPI/MS Insurance Corp., January 12, 2015 of the parties, or of third parties who are strangers to the contract. Thus, when the terms
of an agreement have been reduced to writing, it is deemed to contain all the terms agreed
The extraordinary responsibility of the common carrier lasts from the time the goods are upon and there can be, between the parties and their successors-in-interest, no evidence of
unconditionally placed in the possession of, and received by the carrier for transportation such terms other than the contents of the written agreement.
until the same are delivered, actually or constructively, by the carrier to the consignee, or
to the person who has a right to receive them. Facts: BPI/MS Insurance Corporation (BPI/MS) and Mitsui Sumitomo Insurance Company Limited
(Mitsui) filed a Complaint before the RTC against ESLI and ATI. In their complaint, BPI/MS and
In maritime transportation, a bill of lading is issued by a common carrier as a contract, Mitsui alleged that at Yokohama, Japan, Sumitomo Corporation shipped on board ESLI's vessel
receipt and symbol of the goods covered by it. If it has no notation of any defect or damage M/V "Eastern Venus 22" 22 coils of various Steel Sheet weighing 159,534 kilograms in good order
in the goods, it is considered as a clean bill of lading. A clean bill of lading constitutes and condition for transportation to and delivery at the port of Manila in favor of consignee Calamba
prima facie evidence of the receipt by the carrier of the goods as therein described. Steel Center, Inc. (Calamba Steel) as evidenced by a Bill of Lading with Nos. ESLIYMA001. The
declared value of the shipment was US$83,857.59 as shown by an Invoice with Nos. KJGE-03-
Mere proof of delivery of the goods in good order to a common carrier and of their arrival 1228-NT/KE3 and the shipment was insured with the respondents BPI/MS and Mitsui against all
in bad order at their destination constitutes a prima facie case of fault or negligence risks under Marine Policy No. 103-GG03448834. The shipment arrived at the port of Manila in an
against the carrier. If no adequate explanation is given as to how the deterioration, loss, unknown condition and was turned over to ATI for safekeeping. Upon withdrawal of the shipment
or destruction of the goods happened, the transporter shall be held responsible. by the Calamba Steel's representative, it was found out that part of the shipment was damaged and
was in bad order condition. It was found out that the damage amounted to US$4,598.85 prompting
Carriage of Goods by Sea Act (COGSA) provides under Section 4, Subsection 5 that an Calamba Steel to reject the damaged shipment for being unfit.Sumitomo Corporation again shipped
amount recoverable in case of loss or damage shall not exceed US$500.00 per package or on board ESLI's vessel M/V "Eastern Venus 25" 50 coils in various Steel Sheet weighing 383,532
per customary freight unless the nature and value of such goods have been declared by the kilograms in good order and condition for transportation to and delivery at the port of Manila,
shipper before shipment and inserted in the bill of lading. Philippines in favor of the same consignee Calamba Steel as evidenced by a Bill of Lading with
Nos. ESLIKSMA002. The declared value of the shipment was US$221,455.58 as evidenced by
The requirement provided by COGSA regarding the declaration. The declaration Invoice Nos. KJGE-04-1327-NT/KE2 and the shipment was insured with the respondents BPI/MS
requirement does not require that all the details must be written down on the very bill of and Mitsui against all risks under Marine Policy No. 104-GG04457785. ESLI's vessel with the
lading itself. It must be emphasized that all the needed details are in the invoice, which second shipment arrived at the port of Manila partly damaged and in bad order. The coils sustained
contains the itemized list of goods shipped to a buyer, stating quantities, prices, shipping further damage during the discharge from vessel to shore until its turnover to ATI's custody for
charges, and other details which may contain numerous sheets. Compliance can be safekeeping. Upon withdrawal from ATI and delivery to Calamba Steel, it was found out that the
attained by incorporating the invoice, by way of reference, to the bill of lading provided damage amounted to US$12,961.63. As it did before, Calamba Steel rejected the damaged shipment
that the former containing the description of the nature, value and/or payment of freight for being unfit for the intended purpose. Calamba Steel attributed the damages on both shipments
charges is as in this case duly admitted as evidence. to ESLI as the carrier and ATI as the arrastre operator in charge of the handling and discharge of
the coils and filed a claim against them. When ESLI and ATI refused to pay, Calamba Steel filed an
According to the New Civil Code, the law of the country to which the goods are to be insurance claim for the total amount of the cargo against BPI/MS and Mitsui as cargo insurers. As
transported shall govern the liability of the common carrier for their loss, destruction or a result, BPI/MS and Mitsui became subrogated in place of and with all the rights and defenses
deterioration. The Code takes precedence as the primary law over the rights and accorded by law in favor of Calamba Steel. ATI, in its Answer, denied the allegations and insisted
obligations of common carriers with the Code of Commerce and COGSA applying that the coils in two shipments were already damaged upon receipt from ESLI's vessels. It likewise
suppletorily. insisted that it exercised due diligence in the handling of the shipments and invoked that in case of
adverse decision, its liability should not exceed P5,000.00 pursuant to the Contract for Cargo
The New Civil Code provides that a stipulation limiting a common carriers liability to the Handling Services between Philippine Ports Authority (PPA) and ATI. A cross-claim was also filed
value of the goods appearing in the bill of lading is binding, unless the shipper or owner against ESLI. On its part, ESLI denied the allegations of the complainants and averred that the
damage to both shipments was incurred while the same were in the possession and custody of ATI
and/or of the consignee or its representatives. It also filed a cross-claim against ATI. Due to the The reduction of fare does not justify any limitation of the common carriers liability.
limited factual matters of the case, the parties were required to present their evidence through
affidavits and documents. RTC Makati City rendered a decision finding both the ESLI and ATI H. Reduction of Liability (Art. 1744, 1745, 1749, 1750, 1758, 1759, 1760, 1762)
liable for the damages sustained by the two shipments. Aggrieved, ESLI and ATI filed their Article 1744. A stipulation between the common carrier and the shipper or owner limiting the
respective appeals before the Court of Appeals. Before the appellate court, ESLI questioned the liability of the former for the loss, destruction, or deterioration of the goods to a degree less
ruling on its liability since the Survey Reports indicated that the cause of loss and damage was due than extraordinary diligence shall be valid, provided it be:
to the "rough handling of ATI's stevedores and invoked the limitation of liability of US$500.00 per 1) In writing, signed by the shipper or owner;
package as provided in the COGSA. On the other hand, ATI imputed error on the part of the trial 2) Supported by a valuable consideration other than the service rendered by the common
court when it ruled that ATI's employees were negligent in the ruling of the shipments and insisted carrier; and
on the applicability of the provision of COGSA on limitation of liability. The Court of Appeals 3) Reasonable, just and not contrary to public policy.
absolved ATI from liability thereby modifying the decision of the trial court. Before this Court,
ESLI seeks the reversal of the ruling on its liability. Article 1745. Any of the following or similar stipulations shall be considered unreasonable,
unjust and contrary to public policy:
Held: The petition must fail. ESLI bases of its non-liability on the survey reports prepared by 1) That the goods are transported at the risk of the owner or shipper;
BPI/MS and Mitsui's witness Manuel which found that the cause of damage was the rough handling 2) That the common carrier will not be liable for any loss, destruction, or deterioration of
on the shipment by the stevedores of ATI during the discharging operations.[48] However, Manuel the goods;
does not absolve ESLI of liability. The witness in fact includes ESLI in the findings of negligence. 3) That the common carrier need not observe any diligence in the custody of the goods;
Easily seen, however, is the absence of a crucial point in determining liability of either or both ESLI 4) That the common carrier shall exercise a degree of diligence less than that of a good
and ATI lack of determination whether the cargo was in a good order condition as described in the father of a family, or of a man of ordinary prudence in the vigilance over the movables
bills of lading at the time of his boarding. ESLI cannot invoke its non-liability solely on the manner transported;
the cargo was discharged and unloaded. The actual condition of the cargoes upon arrival prior to 5) That the common carrier shall not be responsible for the acts or omission of his or its
discharge is equally important and cannot be disregarded. Proof is needed that the cargo arrived at employees;
the port of Manila in good order condition and remained as such prior to its handling by ATI. Based 6) That the common carriers liability for acts committed by thieves, or of robbers who do
on the bills of lading issued, it is undisputed that ESLI received the two shipments of coils from not act with grave or irresistible threat, violence or force, is dispensed with or
shipper Sumitomo Corporation in good condition at the ports of Yokohama and Kashima, Japan. diminished;
However, upon arrival at the port of Manila, some coils from the two shipments were partly dented 7) That the common carrier is not responsible for the loss, destruction, or deterioration of
and crumpled. Calamba Steel requested for a re-examination of the damages sustained by the two goods on account of the defective condition of the car, vehicle, ship, airplane or other
shipments and finds that the first shipment and the second shipment was damaged prior to turn over equipment used in the contract of carriage.
by ESLI to ATI. From the foregoing, the fault is attributable to ESLI. While no longer an issue, it
may be nonetheless state that ATI was correctly absolved of liability for the damage. Accordingly, Article 1749. A stipulation that the common carriers liability is limited to the value of the
the issue whether or not ESLI has limited liability as a carrier is determined by either absence or goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is
presence of proof that the nature and value of the goods have been declared by Sumitomo binding.
Corporation and inserted in the bills of lading. There is no question about the declaration of the
nature, weight and description of the goods on the first bill of lading. As to the non-declaration of Article 1750. A contract fixing the sum that may be recovered by the owner or shipper for the
the value of the goods on the second bill of lading, we see no error on the part of the appellate court loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the
when it ruled that there was a compliance of the requirement provided by COGSA. The declaration circumstances, and has been fairly and freely agreed upon.
requirement does not require that all the details must be written down. Compliance can be attained
by incorporating the invoice, by way of reference, to the bill of lading provided that the former Article 1758. When a passenger is carried gratuitously, a stipulation limiting the common
containing the description of the nature, value and/or payment of freight charges. Also, ESLI carriers liability for negligence is valid, but not for willful acts or gross negligence.
admitted the existence and due execution of the Bills of Lading and the Invoice containing the nature
and value of the goods. The reduction of fare does not justify any limitation of the common carriers liability.
G. Gratuitious carriage; stowaway (Art. 1758) Article 1759. Common carriers are liable for the death of or injuries to passengers through
Article 1758. When a passenger is carried gratuitously, a stipulation limiting the common the negligence or willful acts of the formers employees, although such employees may have
carriers liability for negligence is valid, but not for willful acts or gross negligence. acted beyond the scope of their authority or in violation of the orders of the common carriers.
negligent, as she was not a licensed driver. The police investigator, testified that the plaintiff's car
This liability of the common carriers does not cease upon proof that they exercised all the was "near the sidewalk"; witness did not remember whether the hazard lights of plaintiffs car were
diligence of a good father of a family in the selection and supervision of their employees. on, and did not notice if there was an early warning device; it was not mostly dark. Witness for the
plaintiff testified that after plaintiff alighted from her car and opened the trunk compartment,
Article 1760. The common carriers responsibility prescribed in the preceding article cannot defendant's car came approaching very fast ten meters from the scene; the car was "zigzagging." He
be eliminated or limited by stipulation, by the posting of notices, by statements on the tickets stated that defendant was under the influence of liquor as he could "smell it very well". The trial
or otherwise. court sustained the plaintiff's submissions and found defendant Richard Li guilty of gross negligence
and liable for damages. On appeal, the CA affirmed the decision of the trial court with respect to Li
Article 1762. The contributory negligence of the passenger does not bar recovery of damages but absolved Lis employer from any liability. Further, the appellate court reduces the damages
for his death or injuries, if the proximate cause thereof is the negligence of the common awarded by the trial court. Consequently, both parties assail the respondent court's decision by filing
carrier, but the amount of damages shall be equitably reduced. two separate petitions.
I. Principle of emergency rule

1. Valenzuela v. CA, 253 SCRA 303 Held: Li was grossly negligent in driving his vehicle and Valenzuela cannot be said to have been
contributory thereto. A woman driving a vehicle suddenly crippled by a flat tire on a rainy night will
An actor who is confronted with an emergency is not to be held up to the standard of not be faulted for stopping at a point which is both convenient for her to do so and which is not a
conduct normally applied to an individual who is in no such situation. The law takes stock hazard to other motorists. She is not expected to run the entire boulevard in search for a parking
of impulses of humanity when placed in threatening or dangerous situations and does not zone or turn on a dark street or alley where she would likely find no one to help her. It would be
require the same standard of thoughtful and reflective care from persons confronted by hazardous for her not to stop and assess the emergency (simply because the entire length of Aurora
unusual and oftentimes threatening conditions. Boulevard is a no-parking zone) because the hobbling vehicle would be both a threat to her safety
and to other motorists. Valenzuela, upon reaching that portion of Aurora Boulevard close to A. Lake
Under the emergency rule adopted by this Court in Gan vs. Court of Appeals, an St., noticed that she had a flat tire. To avoid putting herself and other motorists in danger, she did
individual who suddenly finds himself in a situation of danger and is required to act without what was best under the situation. In fact, the investigator on the scene of the accident confirmed
much time to consider the best means that may be adopted to avoid the impending danger, that Valenzuelas car was parked very close to the sidewalk. Under the circumstances described,
is not guilty of negligence if he fails to undertake what subsequently and upon reflection Valenzuela did exercise the standard reasonably dictated by the emergency and could not be
may appear to be a better solution, unless the emergency was brought by his own considered to have contributed to the unfortunate circumstances which eventually led to the
negligence. amputation of one of her lower extremities. The emergency which led her to park her car on a
sidewalk in Aurora Boulevard was not of her own making, and it was evident that she had taken all
Facts: 2:00 in the morning plaintiff Ma. Lourdes Valenzuela was driving a blue Mitsubishi lancer reasonable precautions. The circumstances established by the evidence adduced in the court below
from her restaurant at Marcos highway to her home. She was travelling along Aurora Blvd. with a plainly demonstrate that Li was grossly negligent in driving his Mitsubishi Lancer.
companion, Cecilia Ramon, heading towards the direction of Manila. She noticed something wrong J. Last clear chance doctrine
with her tires; she stopped at a lighted place where there were people, to verify whether she had a 1. William Tiu v. Virgilio Te Laspinas, September 1, 2004
flat tire and to solicit help. The people present that her rear right tire was flat and that she cannot
reach her home in that car's condition, she parked along the sidewalk, put on her emergency lights, A man must use common sense, and exercise due reflection in all his acts; it is his duty to
alighted from the car, and went to the rear to open the trunk. She was suddenly bumped by a 1987 be cautious, careful and prudent, if not from instinct, then through fear of recurring
Mitsubishi Lancer driven by defendant Richard Li and registered in the name of defendant punishment. He is responsible for such results as anyone might foresee and for acts which
Alexander Commercial, Inc. The plaintiff was thrown against the windshield of the car of the no one would have performed except through culpable abandon. Otherwise, his own
defendant, which was destroyed, and then fell to the ground. She was pulled out from under person, rights and property, and those of his fellow beings, would ever be exposed to all
defendant's car. Plaintiff's left leg was severed. She was confined in the hospital for twenty (20) manner of danger and injury.
days and was eventually fitted with an artificial leg. Defendant Richard Li denied that he was
negligent. He claimed that he was driving along the inner portion of the right lane of Aurora Blvd. Any injury suffered by the passengers in the course thereof is immediately attributable to
towards the direction of Araneta Avenue, when he was suddenly confronted with a car coming from the negligence of the carrier. Upon the happening of the accident, the presumption of
the opposite direction with "full bright lights." Temporarily blinded, he instinctively swerved to the negligence at once arises, and it becomes the duty of a common carrier to prove that he
right to avoid colliding with the oncoming vehicle, and bumped plaintiff's car, which he did not see observed extraordinary diligence in the care of his passengers. It must be stressed that in
because it was midnight blue in color, with no parking lights or early warning device, and the area requiring the highest possible degree of diligence from common carriers and in creating a
was poorly lighted. Defendants counterclaimed for damages, alleging that plaintiff was reckless or
presumption of negligence against them, the law compels them to curb the recklessness of stalled vehicle, and instructed the latter to place a spare tire six fathoms away. The truck's tail lights
their drivers. were also left on. D' Rough Riders passenger bus driven by Virgilio Te Laspias was cruising along
the national highway among its passengers were the Spouses Pedro A. Arriesgado and Felisa Pepito
While evidence may be submitted to overcome such presumption of negligence, it must be Arriesgado As the bus was approaching the bridge, Laspias saw the stalled truck, which was then
shown that the carrier observed the required extraordinary diligence, which means that about 25 meters away. He applied the breaks and tried to swerve to the left to avoid hitting the truck.
the carrier must show the utmost diligence of very cautious persons as far as human care But it was too late; the bus rammed into the truck's left rear. Pedro Arriesgado lost consciousness
and foresight can provide, or that the accident was caused by fortuitous event. and suffered a fracture in his right colles. His wife, Felisa, was brought to the Danao City Hospital
and was later transferred to the Southern Island Medical Center where she died shortly. Respondent
The principle of last clear chance only applies in a suit between the owners and drivers of Pedro A. Arriesgado then filed a complaint for breach of contract of carriage against the petitioners,
two colliding vehicles. It does not arise where a passenger demands responsibility from D' Rough Riders bus operator William Tiu and his driver, Virgilio Te Laspias. Petitioners, for their
the carrier to enforce its contractual obligations, for it would be inequitable to exempt the part, filed a Third-Party Complaint against the Philippine Phoenix Surety and Insurance, Inc.
negligent driver and its owner on the ground that the other driver was likewise guilty of (PPSII), petitioner Tiu's insurer, respondent Benjamin Condor, the registered owner of the cargo
negligence. The common law notion of last clear chance permitted courts to grant recovery truck; and respondent Sergio Pedrano, the driver of the truck. They alleged the truck was parked in
to a plaintiff who has also been negligent provided that the defendant had the last clear a slanted manner, its rear portion almost in the middle of the highway, and that no early warning
chance to avoid the casualty and failed to do so. Accordingly, it is difficult to see what role, device was displayed and that the bus is covered by a common carrier liability insurance with
if any, the common law of last clear chance doctrine has to play in a jurisdiction where the Certificate of Cover No. 054940 issued by Philippine Phoenix Surety and Insurance, Inc. and that
common law concept of contributory negligence as an absolute bar to recovery by the the third-party plaintiff notified third-party defendant Philippine Phoenix Surety and Insurance, Inc.,
plaintiff, has itself been rejected, as it has been in Article 2179 of the Civil Code. of the alleged incident hereto mentioned, but to no avail.The trial court ruled in favor of respondent
Arriesgado. According to the trial court, there was no dispute that petitioner William Tiu was
It is such a firmly established principle, as to have virtually formed part of the law itself, engaged in business as a common carrier, and that if petitioner Laspias had not been driving at a
that the negligence of the employee gives rise to the presumption of negligence on the part fast pace, he could have easily swerved to the left to avoid hitting the truck, thus, averting the
of the employer. This is the presumed negligence in the selection and supervision of unfortunate incident. Petitioners elevated the case to the Court of Appeals. The appellate court
employee. The theory of presumed negligence, in contrast with the American doctrine of rendered judgment affirming the trial court's decision with the modification that the awards for
respondeat superior, where the negligence of the employee is conclusively presumed to be moral and exemplary damages. According to the appellate court, the action of respondent
the negligence of the employer, is clearly deducible from the last paragraph of Article 2180 Arriesgado was based not on quasi-delict but on breach of contract of carriage. As a common carrier,
of the Civil Code which provides that the responsibility therein mentioned shall cease if it was incumbent upon petitioner Tiu to prove that extraordinary diligence was observed in ensuring
the employers prove that they observed all the diligence of a good father of a family to the safety of passengers during transportation. Since the latter failed to do so, he should be held
prevent damages. liable for respondent Arriesgado's claim. Petitioners now come to this Court. According to the
petitioners, the appellate court erred in failing to appreciate the absence of an early warning device
Although the victim may proceed directly against the insurer for indemnity, the third party and/or built-in reflectors at the front and back of the cargo truck. They aver that such violation is
liability is only up to the extent of the insurance policy and those required by law. While it only a proof of respondent Pedrano's negligence. They also question the appellate court's failure to
is true that where the insurance contract provides for indemnity against liability to third take into account that the truck was parked in an oblique manner, its rear portion almost at the center
persons, and such persons can directly sue the insurer, the direct liability of the insurer of the road. As such, the proximate cause of the incident was the gross recklessness and imprudence
under indemnity contracts against third party liability does not mean that the insurer can of respondent Pedrano, creating the presumption of negligence on the part of respondent Condor in
be held liable in solidum with the insured and/or the other parties found at fault. For the supervising his employees, which presumption was not rebutted. The petitioners then contend that
liability of the insurer is based on contract; that of the insured carrier or vehicle owner is respondents Condor and Pedrano should be held jointly and severally liable to respondent
based on tort. Arriesgado for the payment of the latter's claim.
In case of injury to a passenger due to the negligence of the driver of the bus on which he Held: Petitioner was negligent in driving the bus. Since he saw the stalled truck in oblique position
was riding and of the driver of another vehicle, the drivers as well as the owners of the two at a distance of 25 meters, petitioner Laspias had more than enough time to swerve to his left to
vehicles are jointly and severally liable for damages. avoid hitting it; that is, if the speed of the bus was only 40 to 50 kilometers per hour as he claimed.
By his own admission, he had just passed a bridge and was traversing the highway of Compostela,
Facts: The cargo truck marked "Condor Hollow Blocks and General Merchandise" was loaded with Cebu at a speed of 40 to 50 kilometers per hour before the collision occurred. The maximum speed
firewood in Bogo, Cebu.Just as the truck passed over a bridge, one of its rear tires exploded. The allowed by law on a bridge is only 30 kilometers per hour. Contrary to the petitioner's contention,
driver, Sergio Pedrano, parked along the right side of the national highway and removed the the principle of last clear chance is inapplicable in the instant case, as it only applies in a suit between
damaged tire to have it vulcanized. Pedrano left his helper, Jose Mitante, Jr. to keep watch over the the owners and drivers of two colliding vehicles. It does not arise where a passenger demands
responsibility from the carrier to enforce its contractual obligations, for it would be inequitable to
exempt the negligent driver and its owner on the ground that the other driver was likewise guilty of Escartin inflicted fist blows upon the victim and the evidence merely established the fact of death
negligence. However, the trial and the appellate courts failed to consider that respondent Pedrano of Navidad by reason of his having been hit by the train owned and managed by the LRTA and
was also negligent in leaving the truck parked askew without any warning lights or reflector devices operated at the time by Roman. The appellate court faulted petitioners for their failure to present
to alert oncoming vehicles, and that such failure created the presumption of negligence on the part expert evidence to establish the fact that the application of emergency brakes could not have stopped
of his employer, respondent Condor, in supervising his employees properly and adequately. the train.
K. Assaults of employees (Art. 1759) Held: The foundation of LRTA's liability is the contract of carriage and its obligation to indemnify
Article 1759. Common carriers are liable for the death of or injuries to passengers through the the victim arises from the breach of that contract by reason of its failure to exercise the high diligence
negligence or willful acts of the formers employees, although such employees may have acted required of the common carrier. In the discharge of its commitment to ensure the safety of
beyond the scope of their authority or in violation of the orders of the common carriers. 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
This liability of the common carriers does not cease upon proof that they exercised all the diligence relieved of its responsibilities under the contract of carriage. In case of Prudent, the employer's
of a good father of a family in the selection and supervision of their employees. 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
1. LRTA v. Natividad, February 6, 2003 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
The statutory provisions render a common carrier liable for death of or injury to supervision of the employee, a factual matter that has not been shown. Regrettably for LRT, as well
passengers (a) through the negligence or willful acts of its employees or b) on account of as perhaps the surviving spouse and heirs of the late Nicanor Navidad, this Court is concluded by
willful acts or negligence of other passengers or of strangers if the common carriers the factual finding of the Court of Appeals that "there is nothing to link (Prudent) to the death of
employees through the exercise of due diligence could have prevented or stopped the act Nicanor (Navidad), for the reason that the negligence of its employee, Escartin, has not been duly
or omission. proven. 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
In case of such death or injury, a carrier is presumed to have been at fault or been tie between the LRT and Navidad is not itself a juridical relation between the latter and Roman;
negligent, andby simple proof of injury, the passenger is relieved of the duty to still thus, Roman can be made liable only for his own fault or negligence.
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. L. Registered Owner Rule
1. Metro Manila Transit Corp. v. Cuevas, June 15, 2015
Nicanor Navidad, then drunk, entered the EDSA LRT station after purchasing a "token"
(representing payment of the fare). While Navidad was standing on the platform near the LRT The statutory provisions render a common carrier liable for death of or injury to
tracks, Junelito Escartin, the security guard assigned to the area approached and a misunderstanding passengers (a) through the negligence or willful acts of its employees or b) on account of
or an altercation between the two apparently ensued that led to a fist fight. At the exact moment that willful acts or negligence of other passengers or of strangers if the common carriers
Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was coming in. Navidad was employees through the exercise of due diligence could have prevented or stopped the act
struck by the moving train, and he was killed instantaneously. Widow of Nicanor, herein respondent or omission.
Marjorie Navidad, along with her children, filed a complaint for damages against Junelito Escartin,
Rodolfo Roman, the LRTA, the Metro Transit Organization, Inc. (Metro Transit), and Prudent for In case of such death or injury, a carrier is presumed to have been at fault or been
the death. LRTA and Roman filed a counterclaim against Navidad and a cross-claim against Escartin negligent, andby simple proof of injury, the passenger is relieved of the duty to still
and Prudent. The LRTA and Roman presented their evidence while Prudent and Escartin filed a establish the fault or negligence of the carrier or of its employees and the burden shifts
demurrer contending that Navidad had failed to prove that Escartin was negligent in his assigned upon the carrier to prove that the injury is due to an unforeseen event or to force majeure.
task. The trial court rendered its decision in favor of the plaintiffs and against the defendants Prudent
Security and Junelito Escartin. The compulsory counterclaim of LRTA and Roman are dismissed. Nicanor Navidad, then drunk, entered the EDSA LRT station after purchasing a "token"
Prudent appealed to the Court of Appeals. The appellate court promulgated its decision exonerating (representing payment of the fare). While Navidad was standing on the platform near the LRT
Prudent from any liability for the death of Nicanor Navidad and holding the LRTA and Roman tracks, Junelito Escartin, the security guard assigned to the area approached and a misunderstanding
jointly and severally liable. The appellate court ratiocinated that while the deceased might not have or an altercation between the two apparently ensued that led to a fist fight. At the exact moment that
then as yet boarded the train, a contract of carriage theretofore had already existed when the victim Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was coming in. Navidad was
entered the place where passengers were supposed to be after paying the fare and getting the struck by the moving train, and he was killed instantaneously. Widow of Nicanor, herein respondent
corresponding token therefor. In exempting Prudent from liability, the court stressed that there was Marjorie Navidad, along with her children, filed a complaint for damages against Junelito Escartin,
nothing to link the security agency to the death of Navidad. It said that Navidad failed to show that Rodolfo Roman, the LRTA, the Metro Transit Organization, Inc. (Metro Transit), and Prudent for
Transportation Law
Commercial Law Review Series
Fiscal Rocille Aquino-Tambasacan
justice and only justice you shall pursue

-Deuteronomy 16:20
the death. LRTA and Roman filed a counterclaim against Navidad and a cross-claim against Escartin
and Prudent. The LRTA and Roman presented their evidence while Prudent and Escartin filed a
demurrer contending that Navidad had failed to prove that Escartin was negligent in his assigned
task. The trial court rendered its decision in favor of the plaintiffs and against the defendants Prudent
Security and Junelito Escartin. The compulsory counterclaim of LRTA and Roman are dismissed.
Prudent appealed to the Court of Appeals. The appellate court promulgated its decision exonerating
Prudent from any liability for the death of Nicanor Navidad and holding the LRTA and Roman
jointly and severally liable. The appellate court ratiocinated that while the deceased might not have
then as yet boarded the train, 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. In exempting Prudent from liability, the court stressed that there was
nothing to link the security agency to the death of Navidad. 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 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.
Held: 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. In case of Prudent, 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. 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. 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.
M. Bill of Lading; three-fold character; delivery of goods; period for filing claim/actions
1. Designer Basket Inc. v. Air Sea Transport, Inc. March 9, 2016
2. Eastern Shipping Lines, Inc. v. BPI/MS Insurance Corp., January 12, 2015
N. Marine Commerce; charter party; limited liability; loans; collision; averages; COGSA
1. Philam Insurance v. Heung-A Shipping and Wallem Phil., July 23, 2014
2. Federal Phoenix Assurance Co. Ltd. V. Fortune Sea Carrier, Inc., November 23, 2015
O. Warsaw Convention applicability and limitations
Page 41 of 41

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