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TRANSPORTATION LAW CASE DIGESTS

I. CONTRACT OF TRANSPORTATION part of the carrier in order to hold it responsible to pay


A. CONCEPT, PARTIES AND the damages sought by the passenger. By contract of
PERFECTION carriage, the carrier assumes the express obligation to
transport the passenger to his destination safely and
DANGWA TRANSPORTATION vs. COURT OF observe extraordinary diligence with a due regard for
APPEALS all the circumstances, and any injury that might be
suffered by the passenger is right away attributable to
FACTS: the fault or negligence of the carrier. This is an
exception to the general rule that negligence must be
Private respondents filed a complaint for damages proved, and it is therefore incumbent upon the carrier
against petitioners for the death of Pedrito Cudiamat as to prove that it has exercised extraordinary diligence
a result of a vehicular accident which occurred on as prescribed in Articles 1733 and 1755 of the Civil
March 25, 1985 at Marivic, Sapid, Mankayan, Benguet. Code.
Petitioner Theodore M. Lardizabal was driving a
passenger bus belonging to petitioner corporation in a
reckless and imprudent manner and without due KOREAN AIRLINES CO. v. CA
regard to traffic rules and regulations and safety to
persons and property, it ran over its passenger, Pedrito
Cudiamat. Petitioners alleged that they had observed LIGHT RAIL TRANSIT AUTHORITY & RODOLFO
and continued to observe the extraordinary diligence ROMAN, versus
and that it was the victim's own carelessness and MARJORIE NAVIDAD, Heirs of the Late NICANOR
negligence which gave rise to the subject incident. NAVIDAD & PRUDENT SECURITY AGENCY

RTC pronounced that Pedrito Cudiamat was negligent, FACTS:


which negligence was the proximate cause of his
death. However, Court of Appeals set aside the Nicanor Navidad, then drunk, entered the EDSA LRT
decision of the lower court, and ordered petitioners to station after purchasing a "token" (representing
pay private respondents damages due to negligence. payment of the fare). While Navidad was standing on
the platform near the LRT tracks, Junelito Escartin, the
ISSUE: security guard assigned to the area approached him. A
misunderstanding or an altercation between the two
WON the CA erred in reversing the decision of the trial apparently ensued that led to a fist fight. No evidence,
court and in finding petitioners negligent and liable for however, was adduced to indicate how the fight started
the damages claimed. or who, between the two, delivered the first blow or
how Navidad later fell on the LRT tracks. At the exact
HELD: CA Decision AFFIRMED moment that Navidad fell, an LRT train, operated by
petitioner Rodolfo Roman, was coming in. Navidad was
The testimonies of the witnesses show that that the struck by the moving train, and he was killed
bus was at full stop when the victim boarded the same. instantaneously. The widow of Nicanor, Marjorie
They further confirm the conclusion that the victim fell Navidad, along with her children, filed a complaint for
from the platform of the bus when it suddenly damages against Junelito Escartin, Rodolfo Roman, the
accelerated forward and was run over by the rear right LRTA, the Metro Transit Organization, Inc. (Metro
tires of the vehicle. Under such circumstances, it Transit), and Prudent for the death of her husband.
cannot be said that the deceased was guilty of Trial court ruled in favor Navidad’s wife and against the
negligence. defendants Prudent Security and Junelito Escartin .
LRTA and Rodolfo Roman were dismissed for lack of
It is not negligence per se, or as a matter of law, for merit. CA held LRTA and Roman liable, hence the
one attempt to board a train or streetcar which is petition.
moving slowly. An ordinarily prudent person would
have made the attempt board the moving conveyance ISSUE:
under the same or similar circumstances. The fact that
passengers board and alight from slowly moving Whether or not there was a perfected contract of
vehicle is a matter of common experience both the carriage between Navidad and LRTA
driver and conductor in this case could not have been
unaware of such an ordinary practice. HELD:

Common carriers, from the nature of their business and AFFIRMED with MODIFICATION but only in that (a) the
reasons of public policy, are bound to observe award of nominal damages is DELETED and (b)
extraordinary diligence for the safety of the passengers petitioner Rodolfo Roman is absolved from liability
transported by the according to all the circumstances
of each case. A common carrier is bound to carry the Contract of carriage was deemed created from the
passengers safely as far as human care and foresight moment Navidad paid the fare at the LRT station and
can provide, using the utmost diligence very cautious entered the premises of the latter, entitling Navidad to
persons, with a due regard for all the circumstances. all the rights and protection under a contractual
relation. The appellate court had correctly held LRTA
It has also been repeatedly held that in an action and Roman liable for the death of Navidad in failing to
based on a contract of carriage, the court need not exercise extraordinary diligence imposed upon a
make an express finding of fault or negligence on the common carrier. While the deceased might not have

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then as yet boarded the train, a contract of carriage denied that he was a common carrier and argued that
theretofore had already existed when the victim he could not be held responsible for the value of the
entered the place where passengers were supposed to lost goods, such loss having been due to force
be after paying the fare and getting the corresponding majeure.
token therefor.
ISSUE:
The law requires common carriers to carry passengers
safely using the utmost diligence of very cautious Whether or not Ernesto Cendana may, under the facts
persons with due regard for all circumstances. Such earlier set forth, be properly characterized as a
duty of a common carrier to provide safety to its common carrier?
passengers so obligates it not only during the course of
the trip but for so long as the passengers are within its Whether or not high jacking with robbery can be
premises and where they ought to be in pursuance to properly regarded as a fortuitous event that can
the contract of carriage. The statutory provisions exempt the carrier?
render a common carrier liable for death of or injury to
passengers (a) through the negligence or willful acts of HELD:
its employees or b) on account of willful acts or
negligence of other passengers or of strangers if the The trial court rendered a Decision finding private
common carrier’s employees through the exercise of respondent to be a common carrier and holding him
due diligence could have prevented or stopped the act liable for the value of the undelivered goods as
or omission. damages and as attorney's fees. The Court of Appeals
reversed the judgment of the trial court and held that
In case of such death or injury, a carrier is presumed to respondent had been engaged in transporting return
have been at fault or been negligent, and by simple loads of freight "as a casual occupation — a sideline to
proof of injury, the passenger is relieved of the duty to his scrap iron business" and not as a common carrier.
still establish the fault or negligence of the carrier or of
its employees and the burden shifts upon the carrier to Liability arises the moment a person or firm acts as a
prove that the injury is due to an unforeseen event or common carrier, without regard to whether or not such
to force majeure. The liability of the common carrier carrier has also complied with the requirements of the
and that of the independent contractor is solidary. applicable regulatory statute and implementing
regulations and has been granted a certificate of public
convenience or other franchise. To exempt private
B. COMMON CARRIERS (Arts. 1731 to respondent from the liabilities of a common carrier
1766 NCC) because he has not secured the necessary certificate
1. Definitions of “domestic of public convenience, would be offensive to sound
shipping” under R.A. No. 9295 public policy; that would be to reward private
and of “public service” under respondent precisely for failing to comply with
Commonwealth Act No. 146 applicable statutory requirements.
2. Common Carriage
Common carriers, "by the nature of their business and
PEDRO DE GUZMAN vs.COURT OF APPEALS and for reasons of public policy" 2 are held to a very high
ERNESTO CENDANA degree of care and diligence ("extraordinary
diligence") in the carriage of goods as well as of
FACTS: passengers. Article 1734 establishes the general rule
that common carriers are responsible for the loss,
Ernesto Cendana, a junk dealer, was engaged in buying destruction or deterioration of the goods which they
up used bottles and scrap metal in Pangasinan, and carry, "unless the same is due to any of the following
bring such material to Manila for resale. He utilized two causes only:
(2) six-wheeler trucks which he owned for hauling the (1) Flood, storm, earthquake, lightning or other natural
material to Manila. He charged freight rates which disaster or calamity;
were commonly lower than regular commercial rates (2) Act of the public enemy in war, whether
for the cargo loaded in his vehicle. international or civil;
(3) Act or omission of the shipper or owner of the
Pedro de Guzman a merchant and authorized dealer of goods;
General Milk Company contracted with Cendana for the (4) The character-of the goods or defects in the
hauling of 750 cartons of Liberty filled milk from a packing or-in the containers; and
warehouse of General Milk in Makati, Rizal. 150 (5) Order or act of competent public authority.
cartons were loaded on a truck driven by Cendana
himself, while 600 cartons were placed on board the The above list of causes of loss, destruction or
other truck which was driven by Manuel Estrada, deterioration which exempt the common carrier for
Cendana’s driver and employee. The other 600 boxes responsibility therefor, is a closed list. Causes falling
never reached de Guzman, since the truck which outside the foregoing list, even if they appear to
carried these boxes was hijacked somewhere along the constitute a species of force majeure fall within the
MacArthur Highway in Paniqui, Tarlac, by armed men scope of Article 1735, which provides as follows:
who took with them the truck, its driver, his helper and In all cases other than those mentioned in numbers 1,
the cargo. Having failed to exercise the extraordinary 2, 3, 4 and 5 of the preceding article, if the goods are
diligence required of him by the law, he is held liable lost, destroyed or deteriorated, common carriers are
for the value of the undelivered goods. Cendana presumed to have been at fault or to have acted

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negligently, unless they prove that they observed the berth, using metal scoops attached to the ship,
extraordinary diligence as required in Article 1733. pursuant to the terms and conditions of the charter-
(Emphasis supplied) partly (which provided for an F.I.O.S. clause). However,
the hatches remained open throughout the duration of
The limits of the duty of extraordinary diligence in the the discharge. Each time a dump truck was filled up, its
vigilance over the goods carried are reached where the load of Urea was covered with tarpaulin. The port area
goods are lost as a result of a robbery which is was windy, certain portions of the route to the
attended by "grave or irresistible threat, violence or warehouse were sandy and the weather was variable,
force." In the instant case, armed men held up the raining occasionally while the discharge was in
second truck owned by private respondent which progress.
carried petitioner's cargo.
It took eleven (11) days for PPI to unload the cargo. A
The occurrence of the loss must reasonably be private marine and cargo surveyor, Cargo
regarded as quite beyond the control of the common Superintendents Company Inc. (CSCI), was hired by PPI
carrier and properly regarded as a fortuitous event. It to determine the "outturn" of the cargo shipped, by
is necessary to recall that even common carriers are taking draft readings of the vessel prior to and after
not made absolute insurers against all risks of travel discharge. The survey report submitted by CSCI to the
and of transport of goods, and are not held liable for consignee (PPI) revealed a shortage in the cargo of
acts or events which cannot be foreseen or are 106.726 M/T and that a portion of the Urea fertilizer
inevitable, provided that they shall have complied with approximating 18 M/T was contaminated with dirt,
the rigorous standard of extraordinary diligence. sand and rust and rendered unfit for commerce.

Cendana is not liable for the value of the undelivered Consequently, PPI sent a claim letter to Soriamont
merchandise which was lost because of an event Steamship Agencies (SSA), the resident agent of the
entirely beyond private respondent's control. Petition carrier, KKKK, representing the cost of the alleged
for Review on certiorari is hereby DENIED and the shortage in the goods shipped and the diminution in
Decision of the Court of Appeals dated 3 August 1977 value of that portion said to have been contaminated
is AFFIRMED. No pronouncement as to costs. with dirt. Respondent SSA was not able to respond to
this consignee’s claim for payment because according
to them, they only received a request for shortlanded
PLANTERS PRODUCTS, INC. VS. COURT OF certificate and not a formal claim.
APPEALS,
SORIAMONT STEAMSHIP AGENCIES AND KYOSEI Hence, PPI filed an action for damages with the Court
KISEN KABUSHIKI KAISHA of First Instance of Manila. The defendant carrier
G.R. No. 101503 September 15, 1993 argued that the strict public policy governing common
carriers does not apply to them because they have
FACTS: become private carriers by reason of the provisions of
the charter-party. The court a quo however sustained
Planters Products, Inc. (PPI), purchased from Mitsubishi the claim of the plaintiff against the defendant carrier
International Corporation (MITSUBISHI) of New York, for the value of the goods lost or damaged.
U.S.A., 9,329.7069 metric tons (M/T) of Urea 46%
fertilizer which the latter shipped in bulk on 16 June On appeal, respondent Court of Appeals reversed the
1974 aboard the cargo vessel M/V "Sun Plum" owned lower court and absolved the carrier from liability for
by private respondent Kyosei Kisen Kabushiki Kaisha the value of the cargo that was lost or
(KKKK) from Kenai, Alaska, U.S.A., to Poro Point, San damaged. Relying on the 1968 case of Home Insurance
Fernando, La Union, Philippines, as evidenced by Bill of Co.v. American Steamship Agencies, Inc., the appellate
Lading No. KP-1 signed by the master of the vessel and court ruled that the cargo vessel M/V "Sun Plum"
issued on the date of departure. owned by private respondent KKKK was a private
carrier and not a common carrier by reason of the time
Prior to its voyage, a time charter-party on the vessel charterer-party. Accordingly, the Civil Code provisions
M/V "Sun Plum" pursuant to the Uniform General on common carriers which set forth a presumption of
Charter was entered into between Mitsubishi as negligence do not find application in the case at bar.
shipper/charterer and KKKK as shipowner, in Tokyo,
Japan. ISSUE: Whether a common carrier becomes a private
carrier by reason of a charter-party.
Before loading the fertilizer aboard the vessel, four (4)
of her holds were all presumably inspected by the HELD: The assailed decision of the Court of Appeals,
charterer's representative and found fit to take a load which reversed the trial court, is affirmed.
of urea in bulk pursuant to par. 16 of the charter-
party . After the Urea fertilizer was loaded in bulk by A "charter-party" is defined as a contract by which an
stevedores hired by and under the supervision of the entire ship, or some principal part thereof, is let by the
shipper, the steel hatches were closed with heavy iron owner to another person for a specified time or use; a
lids, covered with three (3) layers of tarpaulin, then contract of affreightment by which the owner of a ship
tied with steel bonds. The hatches remained closed or other vessel lets the whole or a part of her to a
and tightly sealed throughout the entire voyage. merchant or other person for the conveyance of goods,
on a particular voyage, in consideration of the payment
Petitioner unloaded the cargo from the holds into its of freight; Charter parties are of two types: (a) contract
steelbodied dump trucks which were parked alongside

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of affreightment which involves the use of shipping stipulation in the charter-party exempting the
space on vessels leased by the owner in part or as a shipowners from liability for loss due to the negligence
whole, to carry goods for others; and, (b) charter by of its agent, and not the effects of a special charter on
demise or bareboat charter, by the terms of which the common carriers. At any rate, the rule in the United
whole vessel is let to the charterer with a transfer to States that a ship chartered by a single shipper to
him of its entire command and possession and carry special cargo is not a common carrier, does not
consequent control over its navigation, including the find application in our jurisdiction, for we have
master and the crew, who are his servants. Contract of observed that the growing concern for safety in the
affreightment may either be time charter, wherein the transportation of passengers and /or carriage of goods
vessel is leased to the charterer for a fixed period of by sea requires a more exacting interpretation of
time, or voyage charter, wherein the ship is leased for admiralty laws, more particularly, the rules governing
a single voyage. In both cases, the charter-party common carriers.
provides for the hire of vessel only, either for a
determinate period of time or for a single or In an action for recovery of damages against a
consecutive voyage, the shipowner to supply the ship's common carrier on the goods shipped, the shipper or
stores, pay for the wages of the master and the crew, consignee should first prove the fact of shipment and
and defray the expenses for the maintenance of the its consequent loss or damage while the same was in
ship. the possession, actual or constructive, of the carrier.
Upon the other hand, the term "common or public Thereafter, the burden of proof shifts to respondent to
carrier" is defined in Art. 1732 of the Civil Code. The prove that he has exercised extraordinary diligence
definition extends to carriers either by land, air or required by law or that the loss, damage or
water which hold themselves out as ready to engage in deterioration of the cargo was due to fortuitous event,
carrying goods or transporting passengers or both for or some other circumstances inconsistent with its
compensation as a public employment and not as a liability. To our mind, respondent carrier has
casual occupation. The distinction between a "common sufficiently overcome, by clear and convincing proof,
or public carrier" and a "private or special carrier" lies the prima facie presumption of negligence. Verily, the
in the character of the business, such that if the presumption of negligence on the part of the
undertaking is a single transaction, not a part of the respondent carrier has been efficaciously overcome by
general business or occupation, although involving the the showing of extraordinary zeal and assiduity
carriage of goods for a fee, the person or corporation exercised by the carrier in the care of the cargo. The
offering such service is a private carrier. period during which private respondent was to observe
the degree of diligence required of it as a public carrier
It is not disputed that respondent carrier, in the began from the time the cargo was unconditionally
ordinary course of business, operates as a common placed in its charge after the vessel's holds were duly
carrier, transporting goods indiscriminately for all inspected and passed scrutiny by the shipper, up to
persons. When petitioner chartered the vessel M/V and until the vessel reached its destination and its hull
"Sun Plum", the ship captain, its officers and was reexamined by the consignee, but prior to
compliment were under the employ of the shipowner unloading.
and therefore continued to be under its direct
supervision and control. Hardly then can we charge the Article 1734 of the New Civil Code provides that
charterer, a stranger to the crew and to the ship, with common carriers are not responsible for the loss,
the duty of caring for his cargo when the charterer did destruction or deterioration of the goods if caused by
not have any control of the means in doing so. This is the charterer of the goods or defects in the packaging
evident in the present case considering that the or in the containers. The Code of Commerce also
steering of the ship, the manning of the decks, the provides that all losses and deterioration which the
determination of the course of the voyage and other goods may suffer during the transportation by reason
technical incidents of maritime navigation were all of fortuitous event, force majeure, or the inherent
consigned to the officers and crew who were screened, defect of the goods, shall be for the account and risk of
chosen and hired by the shipowner. the shipper, and that proof of these accidents is
incumbent upon the carrier. The carrier, nonetheless,
It is therefore imperative that a public carrier shall shall be liable for the loss and damage resulting from
remain as such, notwithstanding the charter of the the preceding causes if it is proved, as against him,
whole or portion of a vessel by one or more persons, that they arose through his negligence or by reason of
provided the charter is limited to the ship only, as in his having failed to take the precautions which usage
the case of a time-charter or voyage-charter. It is only has established among careful persons.
when the charter includes both the vessel and its crew,
as in a bareboat or demise that a common carrier Thus, the petition is dismissed.
becomes private, at least insofar as the particular
voyage covering the charter-party is concerned. ESTRELLITA M. BASCOS vs. COURT OF
Indubitably, a shipowner in a time or voyage charter APPEALS and RODOLFO A. CIPRIANO G.R.
retains possession and control of the ship, although her No. 101089. April 7, 1993.
holds may, for the moment, be the property of the
charterer. FACTS:

Respondent carrier's heavy reliance on the case Rodolfo A. Cipriano representing Cipriano Trading
of Home Insurance Co. v. American Steamship Enterprise (CIPTRADE) entered into a hauling contract
Agencies, supra, is misplaced for the reason that the with Jibfair Shipping Agency Corp. whereby the former
meat of the controversy therein was the validity of a

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bound itself to haul the latter’s 2,000 m/tons of soya principal business activity is the carrying of persons or
bean meal from Magallanes Drive, Del Pan, Manila to goods or both, and one who does such carrying only as
the warehouse of Purefoods Corporation in Calamba, an ancillary activity (in local idiom, as a “sideline”).
Laguna. To carry out its obligation, CIPTRADE, through Article 1732 also carefully avoids making any
Rodolfo Cipriano, subcontracted with Estrellita Bascos distinction between a person or enterprise offering
to transport and to deliver 400 sacks of soya bean transportation service on a regular or scheduled basis
meal from the Manila Port Area to Calamba, Laguna at and one offering such service on an occasional,
the rate. But, Bascos failed to deliver the said cargo. As episodic or unscheduled basis. Neither does Article
a consequence, Cipriano paid Jibfair Shipping Agency 1732 distinguish between a carrier offering its services
the amount of the lost goods in accordance with the to the “general public,” i.e., the general community or
contract. Cipriano demanded reimbursement from population, and one who offers services or solicits
Bascos but the latter refused to pay. business only from a narrow segment of the general
population.
Eventually, Cipriano filed a complaint for a sum of
money and damages with writ of preliminary Common carriers are obliged to observe extraordinary
attachment for breach of a contract of carriage. The diligence in the vigilance over the goods transported
trial court granted the writ of preliminary attachment by them. Accordingly, they are presumed to have been
and rendered a decision, ordering Bascos to pay for at fault or to have acted negligently if the goods are
actual damages with legal interest, attorney’s fees and lost, destroyed or deteriorated. There are very few
the costs of the suit. The court further denied the instances when the presumption of negligence does
“Urgent Motion To Dissolve/Lift preliminary not attach and these instances are enumerated in
Attachment” filed by Bascos for being moot and Article 1734. In those cases where the presumption is
academic. applied, the common carrier must prove that it
exercised extraordinary diligence in order to overcome
Bascos appealed to the CA but the appellate court the presumption.
affirmed the trial court’s judgment. Hence, the petition
for review on certiorari. Petitioner, Bascos interposed As to the second issue, the Court held that hijacking,
the following defenses: that there was no contract of not being included in the provisions of Article 1734,
carriage since CIPTRADE leased her cargo truck to load must be dealt with under the provisions of Article 1735
the cargo from Manila Port Area to Laguna; that and thus, the common carrier is presumed to have
CIPTRADE was liable to petitioner for loading the cargo; been at fault or negligent. UArticle 1745 of the Civil
that the truck carrying the cargo was hijacked along Code provides that a common carrier is held
Paco, Manila; that the hijacking was immediately responsible; and will not be allowed to divest or to
reported to CIPTRADE and that petitioner and the diminish such responsibility even for acts of strangers
police exerted all efforts to locate the hijacked like thieves or robbers except where such thieves or
properties; and that hijacking, being a force majeure, robbers in fact acted with grave or irresistible threat,
exculpated petitioner from any liability to CIPTRADE violence or force. Affidavits were not enough to
overcome the presumption. (1) Bascos’s affidavit about
ISSUE: the hijacking was based on what had been told her by
WON petitioner was a common carrier. Juanito Morden. It was not a first-hand account. While it
WON the hijacking referred to a force majeure. had been admitted in court for lack of objection on the
part of Cipriano, the lower court had discretion in
assigning weight to such evidence. (2) The affidavit of
HELD:
Jesus Bascos did not dwell on how the hijacking took
place. (3) While the affidavit of Juanito Morden, the
The Supreme Court dismissed the petition and affirmed truck helper in the hijacked truck, was presented as
the decision of the Court of Appeals. evidence in court, he himself was a witness as could be
gleaned from the contents of the petition.
Petitioner is a common carrier. Article 1732 of the Civil
Code defines a common carrier as "(a) person,
corporation or firm, or association engaged in the Mr. & Mrs. Engracio Fabre, Jr. vs. CA, et al.
business of carrying or transporting passengers or 259 SCRA 426
goods or both, by land, water or air, for compensation,
offering their services to the public." The test to Facts:
determine a common carrier is "whether the given
undertaking is a part of the business engaged in by the Petitioners Fabre and his wife were owners of a
carrier which he has held out to the general public as minibus which they used principally in connection with
his occupation rather than the quantity or extent of the a bus service for school children which they operated.
business transacted." In this case, petitioner herself The couple had a driver, Porfirio Cabil, whom they
has made the admission that she was in the trucking hired after trying him out for two weeks. His job was to
business, offering her trucks to those with cargo to take school children to and from the St. Scholastica’s
move. Judicial admissions are conclusive and no College.
evidence is required to prove the same.
On November 2, 1984, private respondent Word for the
Moreover, in referring to Article 1732 of the Civil Code, World Christian Fellowship Inc. arranged with
it held in De Guzman vs. Court of Appeals that “The petitioners for the transportation of 33 members from
above article makes no distinction between one whose

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Manila to La Union and back in consideration of which have driven his vehicle at a moderate speed. There
they paid P3,000 to petitioners. is testimony that the vehicles passing on that
portion of the road should only be running 20
The group left at 8:00 in the evening, petitioner Cabil kilometers per hour, so that at 50 kilometers per
drove the minibus. The usual route to Caba, La Union hour, Cabil was running at a very high speed. Cabil
was through Carmen, Pangasinan. However, the was grossly negligent and should be held liable for
bridge at Carmen was under repair, so that petitioner the injuries suffered by private respondent Amyline
Cabil, who was unfamiliar with the area (it being his Antonio.
first trip to La Union), was forced to take a detour
through the town of Ba-ay in Lingayen, Pangasinan. At Pursuant to Arts. 2176 and 2180 of the Civil Code
11:30 that night, petitioner Cabil came upon a sharp his negligence gave rise to the presumption that
curve on the highway, running on a south to east his employers, the Fabres, were themselves
direction. The road was slippery because it was raining, negligent in the selection and supervision of their
causing the bus, which was running at the speed of 50 employee. Due diligence in selection of employees
kilometers per hour, to skid to the left road is not satisfied by finding that the applicant
shoulder. The bus hit the left traffic steel brace and possessed a professional driver’s license. The
sign along the road and rammed the fence of one Jesus employer should also examine the applicant for his
Escano, then turned over and landed on its left side, qualifications, experience and record of service. In
coming to a full stop only after a series of impacts. The the case at bar, the Fabres, in allowing Cabil to
bus came to rest off the road. A coconut tree which it drive the bus to La Union, apparently did not
had hit fell on it and smashed its front portion. consider the fact that Cabil had been driving for
school children only, from their homes to the St.
Several passengers were injured. Private respondent Scholastica’s College in Metro Manila. They had
Amyline Antonio was thrown on the floor of the bus and hired him only after a two-week apprenticeship.
pinned down by a wooden seat which came off after
being unscrewed. It took three persons to safely 2. This case involves a contract of carriage.
remove her from this position. She was in great pain Petitioners, the Fabres, did not have to be engaged
and could not move. in the business of public transportation for the
provisions of the Civil Code on common carriers to
A case was filed by the respondents against Fabre and apply to them.
Cabil. Amyline Antonio was found to be suffering from Art. 1732. Common carriers are persons,
paraplegia and is permanently paralyzed from the corporations, firms or associations engaged in the
waist down. The RTC ruled in favor of respondents. Mr. business of carrying or transporting passengers or
& Mrs. Fabre and Cabil were ordered to pay jointly and goods or both, by land, water, or air for
severally actual, moral and exemplary damages, and compensation, offering their services to the public.
as well as amount of loss of earning capacity of
Antonio and attorney’s fees. The Court of Appeals The above article makes no distinction between
affirmed the decision of the trial court with one whose principal business activity is the
modification on the award of damages. carrying of persons or goods or both, and one who
does such carrying only as an ancillary activity.
Issues: Neither does Article 1732 distinguish between a
1. Whether or not petitioners were carrier offering its services to the “general public,”
negligent. i.e., the general community or population, and one
2. Whether or not petitioners were liable who offers services or solicits business only from a
for the injuries suffered by private narrow segment of the general population.
respondents.
3. Whether or not damages can be As common carriers, the Fabres were bound to
awarded and in the positive, up to what extent. exercise “extraordinary diligence” for the safe
transportation of the passengers to their
Held: destination. This duty of care is not excused by
SC affirmed the decision of the CA but reverted proof that they exercised the diligence of a good
the amount of the award of damages to that ordered father of the family in the selection and supervision
by the RTC. of their employee.
As Art. 1759 of the Code provides:
1. The finding that Cabil drove his bus Common carriers are liable for the death of or
negligently, while his employer, the Fabres, who injuries to passengers through the negligence or
owned the bus, failed to exercise the diligence of a wilful acts of the former’s employees, although
good father of the family in the selection and such employees may have acted beyond the scope
supervision of their employee is fully supported by of their authority or in violation of the orders of the
the evidence on record. Indeed, it was admitted by common carriers.
Cabil that on the night in question, it was raining,
and, as a consequence, the road was slippery, and
it was dark. However, it is undisputed that Cabil First Philippine Industrial Corporation vs. Court
drove his bus at the speed of 50 kilometers per of Appeals
hour and only slowed down when he noticed the G.R. No. 125948 December 29, 1998
curve some 15 to 30 meters ahead. Given the
conditions of the road and considering that the trip Facts:
was Cabil’s first one outside of Manila, Cabil should

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Petitioner, First Phil. Industrial Corporation (FirstPhil for 3. He must undertake to carry by the method by which
brevity) is a grantee of a pipeline concession under his business is conducted and over his established
Republic Act No. 387, as amended, to contract, install roads; and
and operate oil pipelines. FirstPhil applied for a mayor's 4. The transportation must be for hire.
permit, but before the mayor's permit could be issued,
the respondent City Treasurer required petitioner to Based on the above definitions and requirements,
pay a local tax pursuant to the Local Government there is no doubt that petitioner is a common carrier. It
Code. Petitioner filed a letter-protest addressed to the is engaged in the business of transporting or carrying
respondent City Treasurer, but the latter denied the goods, i.e. petroleum products, for hire as a public
same contending that petitioner cannot be considered employment. It undertakes to carry for all persons
engaged in transportation business, thus it cannot indifferently, that is, to all persons who choose to
claim exemption under Section 133 (j) of the Local employ its services, and transports the goods by land
Government Code. and for compensation. The fact that petitioner has a
limited clientele does not exclude it from the definition
FirstPhil filed with the RTC Batangas a complaint for of a common carrier.
tax refund with prayer for writ of preliminary injunction
against respondents, contending that the imposition of The definition of "common carriers" in the Civil Code
tax upon them violates Sec 133 of the Local makes no distinction as to the means of transporting,
Government Code. On the other hand, respondents as long as it is by land, water or air. It does not provide
assert that pipelines are not included in the term that the transportation of the passengers or goods
"common carrier" which refers solely to ordinary should be by motor vehicle. In fact, in the United
carriers such as trucks, trains, ships and the like. States, oil pipe line operators are considered common
Respondents further posit that the term "common carriers.
carrier" under the said code pertains to the mode or
manner by which a product is delivered to its Under the Petroleum Act of the Philippines (Republic
destination. Act 387), petitioner is considered a "common carrier.",
RTC dismissed the complaint, ruling that exemption and at the same time, said act also regards petroleum
granted under Sec. 133 (j) encompasses only "common operation as a public utility. BIR likewise considers the
carriers" so as not to overburden the riding public or petitioner a "common carrier." In so ruling, it held that,
commuters with taxes. And that petitioner is not a since petitioner is a pipeline concessionaire that is
common carrier, but a special carrier extending its engaged only in transporting petroleum products, it is
services and facilities to a single specific or "special considered a common carrier under Republic Act No.
customer" under a "special contract." 387. Such being the case, it is not subject to
withholding tax prescribed by Revenue Regulations No.
The case was elevated by the petitioner to the CA, but 13-78, as amended.
CA affirmed the decision of the RTC. Hence this
petition. Section 133 (j), of the Local Government Code,
provides:
Issue: Sec. 133. Common Limitations on the Taxing Powers of
Local Government Units. — Unless otherwise provided
WON the petitioner is a "common carrier" and, herein, the exercise of the taxing powers of provinces,
therefore, exempt from the business taxc cities, municipalities, and barangays shall not extend
to the levy of the following:
Held: Petition was granted. CA decision was (j) Taxes on the gross receipts of transportation
REVERSED and SET ASIDE. contractors and persons engaged in the transportation
of passengers or freight by hire and common carriers
SC ruled in this case that petitioner is a common by air, land or water, except as provided in this Code.
carrier and thus, exempt from business tax.
SC held that the legislative intent in excluding from the
A "common carrier" may be defined, broadly, as one taxing power of the local government unit the
who holds himself out to the public as engaged in the imposition of business tax against common carriers is
business of transporting persons or property from to prevent a duplication of the so-called "common
place to place, for compensation, offering his services carrier's tax."
to the public generally. Art. 1732 of the Civil Code
defines a "common carrier" as "any person,
corporation, firm or association engaged in the
business of carrying or transporting passengers or
goods or both, by land, water, or air, for compensation, LOADSTAR SHIPPING CO., INC., vs.
offering their services to the public." The test for COURT OF APPEALS
determining whether a party is a common carrier of
goods is: Facts:
1. He must be engaged in the business of carrying
goods for others as a public employment, and must On 19 November 1984, LOADSTAR received on board
hold himself out as ready to engage in the a) 705 bales of lawanit hardwood; b) 27 boxes and
transportation of goods for person generally as a crates of tilewood assemblies and the others ;and c) 49
business and not as a casual occupation; bundles of mouldings R & W (3) Apitong Bolidenized.
2. He must undertake to carry goods of the kind to On its way to Manila from the port of Nasipit, Agusan
which his business is confined; del Norte, the vessel, along with its cargo, sank off

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Limasawa Island. As a result of the total loss of its unloaded from the vessel, Calvo withdrew the cargo
shipment, the consignee made a claim with LOADSTAR from the arrastre operator and delivered the same to
which, however, ignored the same. MIC filed a SMC’s warehouse. When it was inspected, it was found
complaint against LOADSTAR and PGAI, alleging that out that some of the goods were torn. UCPB, being the
the sinking of the vessel was due to the fault and insurer, paid for the amount of the damages and as
negligence of LOADSTAR and its employees. subrogee thereafter, filed a suit against Calvo.
LOADSTAR denied any liability for the loss of the Petitioner, on the other hand, contends that it is a
shipper's goods and claimed that sinking of its vessel private carrier not required to observe such
was due to force majeure. LOADSTAR submits that the extraordinary diligence in the vigilance over the goods.
vessel was a private carrier because it was not issued As customs broker, she does not indiscriminately hold
certificate of public convenience, it did not have a her services out to the public but only to selected
regular trip or schedule nor a fixed route, and there parties.
was only "one shipper, one consignee for a special
cargo. Issue:

Issues: Whether or not Calvo is a common carrier liable for the


damages for failure to observe extraordinary diligence
(1) Is the M/V "Cherokee" a private or a common in the vigilance over the goods.
carrier?
(2) Did LOADSTAR observe due and/or ordinary Held:
diligence in these premises.
The contention has no merit. In De Guzman v. Court of
Held: Petition is dismissed: Appeals, the Court dismissed a similar contention and
held the party to be a common carrier, thus -
SC hold that LOADSTAR is a common carrier. It is not The Civil Code defines "common carriers" in the
necessary that the carrier be issued a certificate of following terms:
public convenience, and this public character is not "Article 1732. Common carriers are persons,
altered by the fact that the carriage of the goods in corporations, firms or associations engaged in the
question was periodic, occasional, episodic or business of carrying or transporting passengers or
unscheduled. The bills of lading failed to show any goods or both, by land, water, or air for compensation,
special arrangement, but only a general provision to offering their services to the public."
the effect that the M/V"Cherokee" was a "general
cargo carrier." 14 Further, the bare fact that the vessel The law makes no distinction between a carrier offering
was carrying a particular type of cargo for one shipper, its services to the general community or solicits
which appears to be purely coincidental, is not reason business only from a narrow segment of the general
enough to convert the vessel from a common to a population. Note that the transportation of goods holds
private carrier, especially where, as in this case, it was an integral part of Calvo’s business, it cannot indeed
shown that the vessel was also carrying passengers. be doubted that it is a common carrier.
Under Article 1732 of the Civil Code the Civil Code
defines "common carriers" in the following terms:
Art. 1732. Common carriers are persons, Asia Lighterage and Shipping Inc. v. CA
corporations, firms or associations engaged in the Gr, No. 147246, August 19, 2003
business of carrying or transporting passengers or
goods or both, by land, water, or air for compensation, FACTS:
offering their services to the public.
Petitioner was contracted as carrier by a corporation
On to the second assigned error, we find that the M/V from Portland, Oregon to deliver a cargo to the
"Cherokee" was not seaworthy when it embarked on its consignee's warehouse at Pasig City. The cargo,
voyage on 19 November 1984. The vessel was not however, never reached the consignee as the barge
even sufficiently manned at the time. "For a vessel to that carried the cargo sank completely, resulting in
be seaworthy, it must be adequately equipped for the damage to the cargo. Private respondent, as insurer,
voyage and manned with a sufficient number of indemnified the consignee for the lost cargo and thus,
competent officers and crew. The failure of a common as subrogee, sought recovery from petitioner. Both the
carrier to maintain in seaworthy condition its vessel trial court and the appellate court ruled in favor of
involved in a contract of carriage is a clear breach of its private respondent.
duty. The Court ruled in favor of private respondent.
Whether or not petitioner is a common carrier, the
CALVO VS. UCPB GENERAL INSURANCE TERMINAL Court ruled in the affirmative. The principal business of
SERVICE, INC. petitioner is that of lighterage and drayage, offering its
barges to the public, although for limited clientele, for
Facts: carrying or transporting goods by water for
compensation. Whether or not petitioner failed to
A contract was entered into between Calvo and San exercise extraordinary diligence in its care and custody
Miguel Corporation (SMC) for the transfer of certain of the consignee's goods, the Court also ruled in the
cargoes from the port area in Manila to the warehouse affirmative. The barge completely sank after its towing
of SMC. The cargo was insured by UCPB General bits broke, resulting in the loss of the cargo. Petitioner
Insurance Co., Inc. When the shipment arrived and failed to prove that the typhoon was the proximate and

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TRANSPORTATION LAW CASE DIGESTS
only cause of the loss and that it has exercised due earthquake, lightning, or other natural disaster or
diligence before, during and after the occurrence. calamity; (2) Act of the public enemy in war, whether
HCISED international or civil; (3) Act or omission of the shipper
or owner of the goods; (4) The character of the goods
ISSUE: or defects in the packing or in the containers; (5) Order
or act of competent public authority.
Whether or Not the petitioner is a common carrier.
In the case at bar, the barge completely sank after its
RULING: YES. towing bits broke, resulting in the total loss of its
cargo. Petitioner claims that this was caused by a
Petitioner is a common carrier whether its carrying of typhoon, hence, it should not be held liable for the loss
goods is done on an irregular rather than scheduled of the cargo. However, petitioner failed to prove that
manner, and with an only limited clientele. A common the typhoon is the proximate and only cause of the loss
carrier need not have fixed and publicly known routes. of the goods, and that it has exercised due diligence
Neither does it have to maintain terminals or issue before, during and after the occurrence of the typhoon
tickets. To be sure, petitioner fits the test of a common to prevent or minimize the loss. The evidence show
carrier as laid down in Bascos vs. Court of Appeals. The that, even before the towing bits of the barge broke, it
test to determine a common carrier is "whether the had already previously sustained damage when it hit a
given undertaking is a part of the business engaged in sunken object while docked at the Engineering Island.
by the carrier which he has held out to the general It even suffered a hole. Clearly, this could not be solely
public as his occupation rather than the quantity or attributed to the typhoon. The partly-submerged vessel
extent of the business transacted." In the case at bar, was refloated but its hole was patched with only clay
the petitioner admitted that it is engaged in the and cement. The patch work was merely a provisional
business of shipping and lighterage, offering its barges remedy, not enough for the barge to sail safely. Thus,
to the public, despite its limited clientele for carrying or when petitioner persisted to proceed with the voyage,
transporting goods by water for compensation. it recklessly exposed the cargo to further damage.

Article 1732 of the Civil Code defines common carriers


as persons, corporations, firms or associations engaged AF Sanchez Brokerage vs CA
in the business of carrying or transporting passengers (Dec 21, 2004)
or goods or both, by land, water, or air, for
compensation..offering their services to the public. Facts:
Petitioner contends that it is not a common carrier but
a private carrier. Allegedly, it has no fixed and publicly AF Sanchez is engaged in a broker business wherein its
known route, maintains no terminals, and issues no main job is to calculate customs duty, fees and charges
tickets. It points out that it is not obliged to carry as well as storage fees for the cargoes. Part also of the
indiscriminately for any person. It is not bound to carry services being given by AF Sanchez is the delivery of
goods unless it consents. In short, it does not hold out the shipment to the consignee upon the instruction of
its services to the general public. In De Guzman vs. the shipper.
Court of Appeals, we held that the definition of
common carriers in Article 1732 of the Civil Code Wyett engaged the services of AF Sanchez where the
makes no distinction between one whose principal latter delivered the shipment to Hizon Laboratories
business activity is the carrying of persons or goods or upon instruction of Wyett. Upon inspection, it was
both, and one who does such carrying only as an found out that at least 44 cartons containing
ancillary activity. We also did not distinguish between a contraceptives were in bad condition. Wyett claimed
person or enterprise offering transportation service on insurance from FGU. FGU exercising its right of
a regular or scheduled basis and one offering such subrogation claims damages against AF Sanchez who
service on an occasional, episodic or unscheduled delivered the damaged goods. AF Sanchez contended
basis. Further, we ruled that Article 1732 does not that it is not a common carrier but a brokerage firm.
distinguish between a carrier offering its services to
the general public, and one who offers services or Issue: Is AF Sanchez a common carrier?
solicits business only from a narrow segment of the Held:
general population.
Common carriers are bound to observe extraordinary
SC held that Art 1732 of the Civil Code in defining
diligence in the vigilance over the goods transported
common carrier does not distinguish whether the
by them. They are presumed to have been at fault or to
activity is undertaken as a principal activity or merely
have acted negligently if the goods are lost, destroyed
as an ancillary activity. In this case, while it is true that
or deteriorated. To overcome the presumption of
AF Sanchez is principally engaged as a broker, it
negligence in the case of loss, destruction or
cannot be denied from the evidence presented that
deterioration of the goods, deterioration of the goods,
part of the services it offers to its customers is the
the common carrier must prove that it exercised
delivery of the goods to their respective consignees.
extraordinary diligence. There are, however,
exceptions to this rule. Article 1734 of the Civil Code
Note:
enumerates the instances when the presumption of
AF Sanchez claimed that the proximate cause of the
negligence does not attach: Art. 1734. Common
damage is improper packing. Under the CC, improper
carriers are responsible for the loss, destruction, or
packing of the goods is an exonerating circumstance.
deterioration of the goods, unless the same is due to
But in this case, the SC held that though the goods
any of the following causes only: (1) Flood, storm,

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TRANSPORTATION LAW CASE DIGESTS
were improperly packed, since AF Sanchez knew of the Issue:
condition and yet it accepted the shipment without
protest or reservation, the defense is deemed waived. Whether or not Black Sea and TVI are common carriers

Held :
Schmitz Transport and Brokerage Corp v
Transort Venture Inc., GR 150255 April 22,2005 Contrary to petitioner’s insistence, this Court, as did
the appellate court, finds that petitioner is a common
Facts: carrier. For it undertook to transport the cargoes from
the shipside of “M/V Alexander Saveliev” to the
On September 25, 1991, SYTCO Pte Ltd. Singapore consignee’s warehouse at Cainta, Rizal. As the
shipped from the port of Ilyichevsk, Russia on board appellate court put it, “as long as a person or
M/V “Alexander Saveliev” 545 hot rolled steel sheets in corporation holds [itself] to the public for the
coil weighing 6,992,450 metric tons. The cargoes, purpose of transporting goods as [a] business,
which were to be discharged at the port of Manila in [it] is already considered a common carrier
favor of the consignee, Little Giant Steel Pipe regardless if [it] owns the vehicle to be used or
Corporation (Little Giant), were insured against all risks has to hire one.” That petitioner is a common carrier,
with Industrial Insurance Company Ltd. (Industrial the testimony of its own Vice-President and General
Insurance) under Marine Policy No. M-91-3747-TIS. Manager Noel Aro that part of the services it offers to
The vessel arrived at the port of Manila and the its clients as a brokerage firm includes the
Philippine Ports Authority (PPA) assigned it a place of transportation of cargoes reflects so.
berth at the outside breakwater at the Manila South
Harbor. It is settled that under a given set of facts, a customs
broker may be regarded as a common carrier. Thus,
Schmitz Transport, whose services the consignee this Court, in A.F. Sanchez Brokerage, Inc. v. The
engaged to secure the requisite clearances, to receive Honorable Court of Appeals,[44] held:
the cargoes from the shipside, and to deliver them to The appellate court did not err in finding
its (the consignee’s) warehouse at Cainta, Rizal, in turn petitioner, a customs broker, to be also a
engaged the services of TVI to send a barge and common carrier, as defined under Article 1732
tugboat at shipside. TVI’s tugboat “Lailani” towed the of the Civil Code, to wit,
barge “Erika V” to shipside. The tugboat, after Art. 1732. Common carriers are persons,
positioning the barge alongside the vessel, left and corporations, firms or associations
returned to the port terminal. Arrastre operator Ocean engaged in the business of carrying or
Terminal Services Inc. commenced to unload 37 of the transporting passengers or goods or
545 coils from the vessel unto the barge. By 12:30 both, by land, water, or air, for
a.m. of October 27, 1991 during which the weather compensation, offering their services to
condition had become inclement due to an the public.
approaching storm, the unloading unto the barge of xxx
the 37 coils was accomplished. No tugboat pulled the Article 1732 does not distinguish between one whose
barge back to the pier, however. At around 5:30 a.m. principal business activity is the carrying of goods and
of October 27, 1991, due to strong waves, the crew of one who does such carrying only as an ancillary
the barge abandoned it and transferred to the vessel. activity. The contention, therefore, of petitioner that it
The barge pitched and rolled with the waves and is not a common carrier but a customs broker whose
eventually capsized, washing the 37 coils into the sea. principal function is to prepare the correct customs
declaration and proper shipping documents as required
Little Giant thus filed a formal claim against Industrial by law is bereft of merit. It suffices that petitioner
Insurance which paid it the amount of P5,246,113.11. undertakes to deliver the goods for pecuniary
Little Giant thereupon executed a subrogation receipt consideration.
in favor of Industrial Insurance. Industrial Insurance
later filed a complaint against Schmitz And in Calvo v. UCPB General Insurance Co. Inc.,[46]
Transport, TVI, and Black Sea through its this Court held that as the transportation of goods
representative Inchcape (the defendants) before is an integral part of a customs broker, the
the RTC of Manila, they faulted the defendants customs broker is also a common carrier. For to
for undertaking the unloading of the cargoes declare otherwise “would be to deprive those with
while typhoon signal No. 1 was raised. The RTC whom [it] contracts the protection which the law
held all the defendants negligent. Defendants affords them notwithstanding the fact that the
Schmitz Transport and TVI filed a joint motion obligation to carry goods for [its] customers, is part
for reconsideration assailing the finding that and parcel of petitioner’s business.”
they are common carriers. RTC denied the
motion for reconsideration. CA affirmed the RTC
decision in toto, finding that all the defendants were PHIL CHARTER vs. M/V "NATIONAL HONOR,"
common carriers — Black Sea and TVI for engaging in [G.R. No. 161833. July 8, 2005.]
the transport of goods and cargoes over the seas as a
regular business and not as an isolated transaction, FACTS:
and Schmitz Transport for entering into a contract with
Little Giant to transport the cargoes from ship to port On November 5, 1995, J. Trading Co. Ltd. of Seoul,
for a fee. Korea, loaded a shipment of four units of parts and
accessories on board the vessel M/V "National Honor,"

EH 405 Page 10
TRANSPORTATION LAW CASE DIGESTS
represented in the Philippines by its agent, National We agree with the contention of the petitioner that
Shipping Corporation of the Philippines (NSCP). The common carriers, from the nature of their business and
shipment was contained in two wooden crates, namely, for reasons of public policy, are mandated to observe
Crate No. 1 and Crate No. 2, complete and in good extraordinary diligence in the vigilance over the goods
order condition. Crate No. 1 contained the following according to all the circumstances of each case. The
articles: one (1) unit Lathe Machine complete with extraordinary diligence in the vigilance over the
parts and accessories; one (1) unit Surface Grinder goods requires common carriers to render service with
complete with parts and accessories; and one (1) unit the greatest skill and foresight and "to use all
Milling Machine complete with parts and accessories. reasonable means to ascertain the nature and
On the flooring of the wooden crates were three characteristic of goods tendered for shipment, and to
wooden battens placed side by side to support the exercise due care in the handling and stowage,
weight of the cargo. It was insured for P2,547,270.00 including such methods as their nature requires."
with the Philippine Charter Insurance Corporation When the goods shipped are either lost or arrive in
(PCIC). damaged condition, a presumption arises against the
carrier of its failure to observe that diligence, and there
The M/V "National Honor" arrived at the Manila need not be an express finding of negligence to hold it
International Container Terminal (MICT). The liable. However, under Article 1734 of the New
International Container Terminal Services, Incorporated Civil Code, the presumption of negligence does not
(ICTSI) was the exclusive arrastre operator of MICT and apply to any of the following causes:
was charged with discharging the cargoes from the 1. Flood, storm, earthquake, lightning or
vessel. Claudio Cansino, the stevedore of the ICTSI, other natural disaster or calamity;
placed two sling cables on each end of Crate No. 1. No 2. Act of the public enemy in war, whether
sling cable was fastened on the mid-portion of the international or civil;
crate. As the crate was being hoisted from the vessel's 3. Act or omission of the shipper or owner of
hatch, the mid-portion of the wooden flooring suddenly the goods;
snapped in the air, about five feet high from the 4. The character of the goods or defects in
vessel's twin deck, sending all its contents crashing the packing or in the containers;
down hard, resulting in extensive damage to the 5. Order or act of competent public
shipment. authority.

Blue Mono International Company, Incorporated It bears stressing that the enumeration in Article 1734
(BMICI) subsequently filed separate claims against the of the New Civil Code which exempts the common
NSCP, the ICTSI, and its insurer, the PCIC, for carrier for the loss or damage to the cargo is a closed
US$61,500.00. When the other companies denied list. Crate No. 1 was provided by the shipper of the
liability, PCIC paid the claim and was issued a machineries in Seoul, Korea. There is nothing in the
Subrogation Receipt for P1,740,634.50. On March 22, record which would indicate that defendant ICTSI had
1995, PCIC, as subrogee, filed with the RTC of Manila a any role in the choice of the materials used in
Complaint for Damages against the "Unknown owner of fabricating this crate. Said defendant, therefore,
the vessel M/V National Honor," NSCP and ICTSI, as cannot be held as blame worthy for the loss of the
defendants. ICTSI, for its part, filed its Answer with machineries contained in Crate No. 1.
Counterclaim and Cross-claim against its co-defendant The CA affirmed the ruling of the RTC, thus:
NSCP, claiming that the loss/damage of the shipment “The case at bar falls under one of the exceptions
was caused exclusively by the defective material of the mentioned in Article 1734 of the Civil Code, particularly
wooden battens of the shipment, insufficient packing number (4) thereof, i.e., the character of the goods or
or acts of the shipper. defects in the packing or in the containers. The trial
court found that the breakage of the crate was not due
The trial court rendered judgment for PCIC and ordered to the fault or negligence of ICTSI, but to the inherent
the complaint dismissed. According to the trial court, defect and weakness of the materials used in the
the loss of the shipment contained in Crate No. 1 was fabrication of the said crate.”
due to the internal defect and weakness of the
materials used in the fabrication of the crates. The CA Upon examination of the records, We find no
affirmed in TOTO the decision of the RTC. compelling reason to depart from the factual findings
of the trial court. It appears that the wooden batten
ISSUE: used as support for the flooring was not made of good
materials, which caused the middle portion thereof to
WHETHER OR NOT THE COMMON CARRIER IS LIABLE give way when it was lifted. The shipper also failed to
FOR THE DAMAGE SUSTAINED BY THE SHIPMENT IN indicate signs to notify the stevedores that extra care
THE HANDS OF THE ARRASTRE OPERATOR. should be employed in handling the shipment.
Appellant's allegation that since the cargo arrived
HELD: THE RULING OF THE RTC AND CA WAS safely from the port of [P]usan, Korea without defect,
UPHELD. the fault should be attributed to the arrastre operator
who mishandled the cargo; is without merit. The cargo
The petitioner posits that the loss/damage was caused fell while it was being carried only at about five (5) feet
by the mishandling of the shipment by therein high above the ground. It would not have so easily
respondent ICTSI, the arrastre operator, and not by its collapsed had the cargo been properly packed. The
negligence. The petition has no merit. shipper should have used materials of stronger quality
to support the heavy machines. Not only did the
shipper fail to properly pack the cargo, it also failed to

EH 405 Page 11
TRANSPORTATION LAW CASE DIGESTS
indicate an arrow in the middle portion of the cargo the vessel with his own people and becomes, in effect,
where additional slings should be attached. the owner pro hac vice, subject to liability to others for
damages caused by negligence. To create a demise,
While it is true that the crate contained machineries the owner of a vessel must completely and exclusively
and spare parts, it cannot thereby be concluded that relinquish possession, command and navigation
the respondents knew or should have known that the thereof to the charterer; anything short of such a
middle wooden batten had a hole, or that it was not complete transfer is a contract of affreightment (time
strong enough to bear the weight of the shipment. The or voyage charter party) or not a charter party at all."
statement in the Bill of Lading, that the shipment was
in apparent good condition, is sufficient to sustain a The distinction is significant, because a demise or
finding of absence of defects in the merchandise. Case bareboat charter indicates a business undertaking that
law has it that such statement will create a prima facie is private in character. Consequently, the rights and
presumption only as to the external condition and not obligations of the parties to a contract of private
to that not open to inspection. carriage are governed principally by their stipulations,
not by the law on common carriers. The Contract in the
present case was one of affreightment, as shown by
LEA MER INDUSTRIES INC VS MALAYAN the fact that it was petitioner's crew that manned the
INSURANCE CO, INC. tugboat M/V Ayalit and controlled the barge Judy VII.
GR No. 161745, SEPTEMBER 30, 2005
Common carriers are bound to observe extraordinary
FACTS: diligence in their vigilance over the goods and the
safety of the passengers they transport, as required by
Ilian Silica Mining entered into a contract of carriage the nature of their business and for reasons of public
with the petitioner, Lea Mer Industries Inc. for the policy. Extraordinary diligence requires rendering
shipment of 900 metric tons of silica sand worth service with the greatest skill and foresight to avoid
P565,000. The cargo was consigned to Vulcan damage and destruction to the goods entrusted for
Industrial and Mining Corporation and was to be carriage and delivery.
shipped from Palawan to Manila. The silica sand was
boarded to Judy VII, the vessel leased by Lea Mer. Common carriers are presumed to have been at fault
However, during the course of its voyage, the vessel or to have acted negligently for loss or damage to the
sank which led to the loss of the cargo. goods that they have transported. This presumption
can be rebutted only by proof that they observed
Consequently, the respondent, as the insurer, paid extraordinary diligence, or that the loss or damage was
Vulcan the value of the lost cargo. Malayan Insurance occasioned by any of the following causes:
Co., Inc. then collected from the petitioner the amount "(1) Flood, storm, earthquake, lightning, or other
it paid to Vulcan as reimbursement and as its exercise natural disaster or calamity;
on the right of subrogation. Lea Mer refused to pay "(2) Act of the public enemy in war, whether
which led Malayan to institute a complaint with the international or civil;
RTC. The RTC dismissed the complaint stating that the "(3) Act or omission of the shipper or owner of the
loss was due to a fortuitous event, Typhoon Trining. goods;
Petitioner did not know that a typhoon was coming and "(4) The character of the goods or defects in the
that it has been cleared by the Philippine Coast Guard packing or in the containers;
to travel from Palawan to Manila. The CA reversed the "(5) Order or act of competent public authority."
ruling of the trial court for the reason that said vessel
was not seaworthy when it sailed to Manila. Jurisprudence defines the elements of a "fortuitous
event" as follows: (a) the cause of the unforeseen and
ISSUE: unexpected occurrence, or the failure of the debtors to
Whether or not the petitioner is liable for the loss of the comply with their obligations, must have been
cargo. independent of human will; (b) the event that
constituted the caso fortuito must have been
HELD: impossible to foresee or, if foreseeable, impossible to
avoid; (c) the occurrence must have been such as to
CA reversed. Common carriers are persons, render it impossible for the debtors to fulfill their
corporations, firms or associations engaged in the obligation in a normal manner; and (d) the obligor must
business of carrying or transporting passengers or have been free from any participation in the
goods, or both — by land, water, or air — when this aggravation of the resulting injury to the creditor. To
service is offered to the public for compensation. excuse the common carrier fully of any liability, the
Petitioner is clearly a common carrier, because it offers fortuitous event must have been the proximate and
to the public its business of transporting goods through only cause of the loss. Moreover, it should have
its vessels. Thus, the Court corrects the trial court's exercised due diligence to prevent or minimize the loss
finding that petitioner became a private carrier when before, during and after the occurrence of the
Vulcan chartered it. Charter parties are classified as fortuitous event. As required by the pertinent law, it
contracts of demise (or bareboat) and affreightment, was not enough for the common carrier to show that
which are distinguished as follows: there was an unforeseen or unexpected occurrence. It
had to show that it was free from any fault — a fact it
"Under the demise or bareboat charter of the vessel, miserably failed to prove.
the charterer will generally be considered as owner for
the voyage or service stipulated. The charterer mans

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TRANSPORTATION LAW CASE DIGESTS
LOADSTAR SHIPPING CO., INC., v. CA CEBU SALVAGE CORP. v. PHIL HOME ASSURANCE

Facts: 3. Private Carriage

On 19 November 1984, LOADSTAR received on board Home Insurance Co. v. American Steamship
a) 705 bales of lawanit hardwood; b) 27 boxes and Agencies
crates of tilewood assemblies and the others ;and c) 49 23 SCRA 24
bundles of mouldings R & W (3) Apitong Bolidenized.
On its way to Manila from the port of Nasipit, Agusan FACTS:
del Norte, the vessel, along with its cargo, sank off
Limasawa Island. As a result of the total loss of its "Consorcio Pesquero del Peru of South America"
shipment, the consignee made a claim with LOADSTAR shipped freight pre-paid at Chimbate, Peru, 21,740 jute
which, however, ignored the same. MIC filed a bags of Peruvian fish meal through SS Crowborough.
complaint against LOADSTAR and PGAI, alleging that The cargo, consigned to San Miguel Brewery, Inc., now
the sinking of the vessel was due to the fault and San Miguel Corporation, and insured by Home
negligence of LOADSTAR and its employees. Insurance Company for $202,505, arrived in Manila and
LOADSTAR denied any liability for the loss of the was discharged into the lighters of Luzon Stevedoring
shipper's goods and claimed that sinking of its vessel Company. When the cargo was delivered to consignee
was due to force majeure. LOADSTAR submits that the San Miguel Brewery Inc., there were shortages
vessel was a private carrier because it was not issued amounting to P12,033.85, causing the latter to lay
certificate of public convenience, it did not have a claims against Luzon Stevedoring Corporation, Home
regular trip or schedule nor a fixed route, and there Insurance Company and the American Steamship
was only "one shipper, one consignee for a special Agencies, owner and operator of SS Crowborough.
cargo.
Because the others denied liability, Home Insurance
Issues: Company paid the consignee P14,870.71. Having been
refused reimbursement by both the Luzon Stevedoring
(1) Is the M/V "Cherokee" a private or a common Corporation and American Steamship Agencies, Home
carrier? Insurance Company, as subrogee to the consignee,
(2) Did LOADSTAR observe due and/or ordinary filed against them before the Court of First Instance a
diligence in these premises. complaint for recovery of P14,870.71 with legal
interest, plus attorney's fees.
Held: Petition is dismissed:
In answer, Luzon Stevedoring Corporation alleged that
SC hold that LOADSTAR is a common carrier. It is not it delivered with due diligence the goods in the same
necessary that the carrier be issued a certificate of quantity and quality that it had received the same from
public convenience, and this public character is not the carrier. It also claimed that plaintiff's claim had
altered by the fact that the carriage of the goods in prescribed under Article 366 of the Code of Commerce
question was periodic, occasional, episodic or stating that the claim must be made within 24 hours
unscheduled. The bills of lading failed to show any from receipt of the cargo.
special arrangement, but only a general provision to American Steamship Agencies denied liability by
the effect that the M/V"Cherokee" was a "general alleging that under the provisions of the Charter party
cargo carrier." 14 Further, the bare fact that the vessel referred to in the bills of lading, the charterer, not the
was carrying a particular type of cargo for one shipper, shipowner, was responsible for any loss or damage of
which appears to be purely coincidental, is not reason the cargo. Furthermore, it claimed to have exercised
enough to convert the vessel from a common to a due diligence in stowing the goods and that as a mere
private carrier, especially where, as in this case, it was forwarding agent, it was not responsible for losses or
shown that the vessel was also carrying passengers. damages to the cargo.
Under Article 1732 of the Civil Code the Civil Code
defines "common carriers" in the following terms: The Court of First Instance absolved the Luzon
Art. 1732. Common carriers are persons, Stevedoring Corporation from any liability and ordered
corporations, firms or associations engaged in the the American Steamship Agencies to pay the sum.
business of carrying or transporting passengers or Hence, this petition.
goods or both, by land, water, or air for compensation,
offering their services to the public. ISSUE:

On to the second assigned error, we find that the M/V Is the stipulation in the charter party of the owner's
"Cherokee" was not seaworthy when it embarked on its non-liability valid so as to absolve the American
voyage on 19 November 1984. The vessel was not Steamship Agencies from liability for loss?
even sufficiently manned at the time. "For a vessel to
be seaworthy, it must be adequately equipped for the RULING:
voyage and manned with a sufficient number of
competent officers and crew. The failure of a common Judgment was reversed and American Steamship
carrier to maintain in seaworthy condition its vessel Agencies was absolved liability.
involved in a contract of carriage is a clear breach of its • The bills of lading provided at the back thereof that
duty. the bills of lading shall be governed by and subject
to the terms and conditions of the charter party, if

EH 405 Page 13
TRANSPORTATION LAW CASE DIGESTS
any, otherwise, the bills of lading prevail over all distinguished from its other agents or employees.
the agreements. In this case, no such personal act or negligence has
been proved.
o Section 2, paragraph 2 of the charter party,
provides that the owner is liable for loss or
damage to the goods caused by personal want NATIONAL STEEL CORPORATION vs. COURT OF
of due diligence on its part or its manager to APPEALS (1997)
make the vessel in all respects seaworthy and
to secure that she be properly manned, Facts:
equipped and supplied or by the personal act
or default of the owner or its manager. Said NSC hired MV Vlasons I, a private vessel owned by VSI.
paragraph, however, exempts the owner of the They entered into a contract of voyage charter hire
vessel from any loss or damage or delay wherein the contract states that NSC hired VSI's vessel
arising from any other source, even from the to make one voyage to load steel products at Iligan
neglect or fault of the captain or crew or some City and discharge them at North Harbor, Manila. On
other person employed by the owner on board, arrival and upon opening the three hatches containing
for whose acts the owner would ordinarily be the shipment, nearly all the skids of tinplates and hot
liable except for said paragraph.. rolled sheets were allegedly found to be wet and rusty.
NSC filed a complaint for damages but RTC dismissed
• The Court of First Instance declared the contract as the complaint
contrary to Article 587 of the Code of Commerce
making the ship agent civilly liable for indemnities Issues:
suffered by third persons arising from acts or 1. whether VSI contracted with NSC as a common
omissions of the captain in the care of the goods carrier or as a private carrier
and Article 1744 of the Civil Code under which a 2. Whether or not the provisions of the Civil Code
stipulation between the common carrier and the of the Philippines on common carriers pursuant
shipper or owner limiting the liability of the former to which there exist[s] a presumption of
for loss or destruction of the goods to a degree less negligence against the common carrier in case
than extraordinary diligence is valid provided it be of loss or damage to the cargo are applicable
reasonable, just and not contrary to public policy. to a private carrier.
The release from liability in this case was held
unreasonable and contrary to the public policy on Held:
common carriers.
1. VSI was not a common carrier but a private
o Under American jurisprudence, a common carrier. It is undisputed that VSI did not offer its
carrier undertaking to carry a special cargo or services to the general public. The extent of
chartered to a special person only, becomes a VSI's responsibility and liability over NSC's
private carrier.8 As a private carrier, a cargo are determined primarily by the
stipulation exempting the owner from liability stipulations in the contract of carriage or
for the negligence of its agent is not against charter party and the Code of Commerce. The
public policy, and is deemed valid burden of proof lies on the part of NSC and not
o he Civil Code provisions on common carriers the VSI.
should not be applied where the carrier is not
acting as such but as a private carrier. The Article 1732 of the Civil Code defines a
stipulation in the charter party absolving the common carrier as "persons, corporations,
owner from liability for loss due to the firms or associations engaged in the business
negligence of its agent would be void only if of carrying or transporting passengers or goods
the strict public policy governing common or both, by land, water or air, for
carriers is applied. Such policy has no force compensation, offering their services to the
where the public at large is not involved, as in public." It has been held that the true test of a
the case of a ship totally chartered for the use common carrier is the carriage of passengers
of a single party. or goods, provided it has space, for all who opt
to avail themselves of its transportation service
• And furthermore, in a charter of the entire vessel, for a fee. A carrier which does not qualify under
the bill of lading issued by the master to the the above test is deemed a private carrier.
charterer, as shipper, is in fact and legal "Generally, private carriage is undertaken by
contemplation merely a receipt and a document of special agreement and the carrier does not
title not a contract, for the contract is the charter hold himself out to carry goods for the general
party. The consignee may not claim ignorance of public. . . ."
said charter party because the bills of lading
expressly referred to the same. Accordingly, the 2. Because the MV Vlason I was a private carrier,
consignees under the bills of lading must likewise the shipowner's obligations are governed by
abide by the terms of the charter party. And as the provisions of the Code of Commerce and
stated, recovery cannot be had thereunder, for loss not by the Civil Code which, as a general rule
or damage to the cargo, against the shipowners, places the prima facie presumption of
unless the same is due to personal acts or negligence on a common carrier.
negligence of said owner or its manager, as

EH 405 Page 14
TRANSPORTATION LAW CASE DIGESTS
IN A CONTRACT OF PRIVATE CARRIAGE, THE and other Civil Code provisions on common carriers
BURDEN OF PROOF IN CASE OF ACCIDENT IS which were cited by petitioner may not be applied
ON THE CARRIER but the court exempts VSI unless expressly stipulated by the parties in their
due to force majeure. charter party.

NSC must prove that the damage to its In a contract of private carriage, the parties may
shipment was caused by VSI's willful validly stipulate that responsibility for the cargo rests
negligence or failure to exercise due diligence solely on the charterer, exempting the shipowner from
in making MV Vlason I seaworthy and fit for liability for loss of or damage to the cargo caused even
holding, carrying and safekeeping the cargo. by the negligence of the ship captain. Pursuant to
The burden of proof was placed on NSC by the Article 1306 of the Civil Code, such stipulation is valid
parties' agreement. because it is freely entered into by the parties and the
same is not contrary to law, morals, good customs,
public order, or public policy. Indeed, their contract of
VALENZUELA HARDWOOD AND INDUSTRIAL private carriage is not even a contract of adhesion. We
SUPPLY v. CA stress that in a contract of private carriage, the parties
may freely stipulate their duties and obligations which
FACTS: perforce would be binding on them. Unlike in contract
involving a common carrier, private carriage does not
Plaintiff shipped at Maconcon Port, Isabela 940 round involve the general public. Hence, the stringent
logs on board M/V Seven Ambassador, a vessel owned provisions of the Civil Code on common carriers
by defendant Seven Brothers Shipping Corporation. protecting the general public cannot justifiably be
Plaintiff insured the logs against loss and/or damage applied to a ship transporting commercial goods as a
with defendant South Sea Surety and Insurance Co., private carrier. Consequently, the public policy
Inc. for P2M and the latter issued its Marine Cargo embodied therein is not contravened by stipulations in
Insurance Policy on said date. In the meantime, the a charter party that lessen or remove the protection
M/V Seven Ambassador sank resulting in the loss of the given by law in contracts involving common carriers.
plaintiff’s insured logs.
The provisions of our Civil Code on common carriers
Plaintiff demanded from defendant South Sea Surety were taken from Anglo-American law. Under American
and Insurance Co., Inc. the payment of the proceeds of jurisprudence, a common carrier undertaking to carry a
the policy but the latter denied liability under the special cargo or chartered to a special person only,
policy. Plaintiff likewise filed a formal claim with becomes a private carrier. As a private carrier a
defendant Seven Brothers Shipping Corporation for the stipulation exempting the owner from liability for the
value of the lost logs but the latter denied the claim. negligence of its agent is not against public policy and
is deemed valid. Such doctrine We find reasonable. The
Court of Appeals affirmed in part the RTC judgment by Civil Code provisions on common carriers should not be
sustaining the liability of South Sea Surety and applied where the carrier is not acting as such but as a
Insurance Company ("South Sea"), but modified it by private carrier. The stipulation in the charter party
holding that Seven Brothers Shipping Corporation absolving the owner from liability for loss due to the
("Seven Brothers") was not liable for the lost cargo. negligence of its agent would be void only if the strict
public policy governing common carriers is applied.
ISSUE: Such policy has no force where the public at large is
not involved as in this case of a ship totally chartered
Whether defendants shipping corporation and the for the use of a single party. (Home Insurance Co. vs.
surety company are liable to the plaintiff for the latter's American Steamship Agencies Inc., 23 SCRA 24, April
lost logs. 4, 1968)
HELD:

The charter party between the petitioner and private FGU INSURANCE v. G.P. SARMIENTO
respondent stipulated that the "(o)wners shall not be
responsible for loss, split, short-landing, breakages and
any kind of damages to the cargo" –VALID Crisostomo vs. CA
G.R. No. 138334 August 25, 2003
There is no dispute between the parties that the
proximate cause of the sinking of M/V Seven FACTS:
Ambassadors resulting in the loss of its cargo was the
"snapping of the iron chains and the subsequent rolling In May 1991, petitioner Estela L. Crisostomo contracted
of the logs to the portside due to the negligence of the the services of respondent Caravan Travel and Tours
captain in stowing and securing the logs on board the International, Inc. to arrange and facilitate her booking,
vessel and not due to fortuitous event." Likewise ticketing and accommodation in a tour dubbed “Jewels
undisputed is the status of Private Respondent Seven of Europe”. The package tour included the countries of
Brothers as a private carrier when it contracted to England, Holland, Germany, Austria, Liechstenstein,
transport the cargo of Petitioner Valenzuela. Even the Switzerland and France at a total cost of
latter admits this in its petition. P74,322.70.Petitioner was given a 5% discount on the
amount, which included airfare, and the booking fee
Private respondent had acted as a private carrier in was also waived because petitioner’s niece, Meriam
transporting petitioner's lauan logs. Thus, Article 1745 Menor, was respondent company’s ticketing manager.

EH 405 Page 15
TRANSPORTATION LAW CASE DIGESTS
either passengers or goods and is therefore, neither a
Pursuant to said contract, Menor went to her aunt’s private nor a common carrier. Respondent did not
residence on June 12, 1991 – a Wednesday – to deliver undertake to transport petitioner from one place to
petitioner’s travel documents and plane another since its covenant with its customers is simply
tickets.Petitioner, in turn, gave Menor the full payment to make travel arrangements in their behalf.
for the package tour.Menor then told her to be at the Respondent’s services as a travel agency include
Ninoy Aquino International Airport (NAIA) on procuring tickets and facilitating travel permits or visas
Saturday,two hours before her flight on board British as well as booking customers for tours.
Airways.
While petitioner concededly bought her plane ticket
Without checking her travel documents, petitioner through the efforts of respondent company, this does
went to NAIA on Saturday, June 15, 1991, to take the not mean that the latter ipso facto is a common carrier.
flight for the first leg of her journey from Manila to At most, respondent acted merely as an agent of the
Hongkong. To petitioner’s dismay, she discovered that airline, with whom petitioner ultimately contracted for
the flight she was supposed to take had already her carriage to Europe. Respondent’s obligation to
departed the previous day.She learned that her plane petitioner in this regard was simply to see to it that
ticket was for the flight scheduled on June 14, 1991. petitioner was properly booked with the airline for the
She thus called up Menor to complain. appointed date and time. Her transport to the place of
destination, meanwhile, pertained directly to the
Subsequently, Menor prevailed upon petitioner to take airline.
another tour – the “British Pageant” – which included
England, Scotland and Wales in its itinerary. For this The object of petitioner’s contractual relation with
tour package, petitioner was asked anew to pay respondent is the latter’s service of arranging and
US$785.00 or P20,881.00 (at the then prevailing facilitating petitioner’s booking, ticketing and
exchange rate of P26.60). She gave respondent accommodation in the package tour. In contrast, the
US$300 or P7,980.00 as partial payment and object of a contract of carriage is
commenced the trip in July 1991. the transportation of passengers or goods. It is in this
sense that the contract between the parties in this
Upon petitioner’s return from Europe, she demanded case was an ordinary one for services and not one of
from respondent the reimbursement of P61,421.70, carriage. Petitioner’s submission is premised on a
representing the difference between the sum she paid wrong assumption.It is thus not bound under the law to
for “Jewels of Europe” and the amount she owed observe extraordinary diligence in the performance of
respondent for the “British Pageant” tour. Despite its obligation, as petitioner claims.
several demands, respondent company refused to
reimburse the amount, contending that the same was Since the contract between the parties is an ordinary
non-refundable.Petitioner was thus constrained to file a one for services, the standard of care required of
complaint against respondent for breach of contract of respondent is that of a good father of a family under
carriage and damages, which was docketed as Civil Article 1173 of the Civil Code.This connotes reasonable
Case No. 92-133 and raffled to Branch 59 of the care consistent with that which an ordinarily prudent
Regional Trial Court of Makati City. person would have observed when confronted with a
similar situation. The test to determine whether
After due proceedings, the trial court rendered a negligence attended the performance of an obligation
decision in favor of Estela Crisostomo. is: did the defendant in doing the alleged negligent act
But it was reversed by the Court of Appeals. Hence, use that reasonable care and caution which an
this petition. ordinarily prudent person would have used in the same
situation?If not, then he is guilty of negligence.
ISSUE:
we do not agree with the finding of the lower court
Is the Caravan Travel and Tours liable for that Menor’s negligence concurred with the negligence
reimbursement and damages? of petitioner and resultantly caused damage to the
latter. Contrary to petitioner’s claim, the evidence on
HELD: Petition DENIED. record shows that respondent exercised due diligence
in performing its obligations under the contract and
By definition, a contract of carriage or transportation is followed standard procedure in rendering its services to
one whereby a certain person or association of persons petitioner. As correctly observed by the lower court, the
obligate themselves to transport persons, things, or plane ticket. issued to petitioner clearly reflected the
news from one place to another for a fixed price.Such departure date and time, contrary to petitioner’s
person or association of persons are regarded as contention. The travel documents, consisting of the
carriers and are classified as private or special carriers tour itinerary, vouchers and instructions, were likewise
and common or public carriers.A common carrier is delivered to petitioner two days prior to the trip.
defined under Article 1732 of the Civil Code as persons, Respondent also properly booked petitioner for the
corporations, firms or associations engaged in the tour, prepared the necessary documents and procured
business of carrying or transporting passengers or the plane tickets. It arranged petitioner’s hotel
goods or both, by land, water or air, for compensation, accommodation as well as food, land transfers and
offering their services to the public. sightseeing excursions, in accordance with its avowed
undertaking. Therefore, it is clear that respondent
It is obvious from the above definition that respondent performed its prestation under the contract as well as
is not an entity engaged in the business of transporting

EH 405 Page 16
TRANSPORTATION LAW CASE DIGESTS
everything else that was essential to book petitioner
for the tour. 1. This issue should be answered in the affirmative.
The oral contract was later confirmed by a formal and
Hence, petitioner cannot recover and must bear her written booking issued by the shipper's branch office,
own damage. Davao City, in virtue of which the carrier sent two of its
lighters to undertake the service. It also appears that
the patrons of said lighters were employees of the
carrier with due authority to undertake the
4. Distinction from towage,
transportation and to sign the documents that may be
arrester and stevedoring
necessary therefor.
5. Governing Laws
The fact that the carrier sent its lighters free of charge
6. Registered Owner Rule and
to take the hemp from Macleod's wharf at Sasa
Kabit System
preparatory to its loading onto the ship Bowline Knot
does not in any way impair the contract of carriage
C. OBLIGATIONS OF PARTIES AND
already entered into between the carrier and the
DEFENSES
shipper, for that preparatory step is but part and parcel
1. Duties of Common Carrier
of said contract of carriage. In other words, here we
have a complete contract of carriage the
COMPAÑIA MARITIMA v. INSURANCE COMPANY
consummation of which has already begun: the shipper
OF NORTH AMERICA
delivering the cargo to the carrier, and the latter taking
G.R. No. L-18965 October 30, 1964
possession thereof by placing it on a lighter manned by
its authorized employees, under which Macleod
FACTS:
became entitled to the privilege secured to him by law
for its safe transportation and delivery, and the carrier
Macleod and Company of the Philippines contracted
to the full payment of its freight upon completion of the
the services of the Compañia Maritima, a shipping
voyage.
corporation, for the shipment of 2,645 bales of hemp
from the former's Sasa private pier at Davao City to
The receipt of goods by the carrier has been said to lie
Manila and for their subsequent transhipment to
at the foundation of the contract to carry and deliver,
Boston, Massachusetts, U.S.A. on board the S.S. Steel
and if actually no goods are received there can be no
Navigator. This oral contract was later on confirmed by
such contract. The liability and responsibility of the
a formal and written booking issued by Macleod's
carrier under a contract for the carriage of goods
branch office in Sasa and handcarried to Compañia
commence on their actual delivery to, or receipt by,
Maritima's branch office in Davao in compliance with
the carrier or an authorized agent. ... and delivery to a
which the latter sent to Macleod's private wharf on
lighter in charge of a vessel for shipment on the vessel,
which the loading of the hemp was completed on
where it is the custom to deliver in that way, is a good
October 29, 1952. These two lighters were manned
delivery and binds the vessel receiving the freight, the
each by a patron and an assistant patron. The patrons
liability commencing at the time of delivery to the
of both barges issued the corresponding carrier's
lighter. ... and, similarly, where there is a contract to
receipts.
carry goods from one port to another, and they cannot
be loaded directly on the vessel and lighters are sent
During the night of October 29, 1952, or at the early
by the vessel to bring the goods to it, the lighters are
hours of October 30, LCT No. 1025 sank, resulting in
for the time its substitutes, so that the bill of landing is
the damage or loss of 1,162 bales of hemp loaded
applicable to the goods as soon as they are placed on
therein. The total damages totaled to P60,421.02.
the lighters. (80 C.J.S., p. 901, emphasis supplied)
Since Macleod’s products were insured by Insurance
Company of North America, it executed a subrogation
The liability of the carrier as common carrier begins
contract where Macleod assigned all rights to the
with the actual delivery of the goods for transportation,
Insurance Company of North America to the damaged
and not merely with the formal execution of a receipt
and insured cargo. Unable to collect from Compania
or bill of lading; the issuance of a bill of lading is not
Maritima, Company of North America filed this case in
necessary to complete delivery and acceptance. Even
court. The trial court ordered Compania Maritima to
where it is provided by statute that liability commences
pay Macleod the damages it incurred due to its sinking.
with the issuance of the bill of lading, actual delivery
The CA affirmed the decision of the lower court
and acceptance are sufficient to bind the carrier.
prompting the petitioner to elevate the case to the
Supreme Court.
SERVANDO vs. PHILIPPINE STEAM NAVIGATION
ISSUE:
CO.
(1) Was there a contract of carriage between the
FACTS:
carrier and the shipper even if the loss occurred when
the hemp was loaded on a barge owned by the carrier
On November 6, 1963, appellees Clara Uy Bico and
which was loaded free of charge and was not actually
Amparo Servando loaded on board the appellant's
loaded on the S.S. Bowline Knot which would carry the
vessel, FS-176, for carriage from Manila to Pulupandan,
hemp to Manila and no bill of lading was issued
Negros Occidental. In the bills of lading issued for the
therefore?
cargoes in question, the parties agreed to limit the
responsibility of the carrier for the loss or damage that
HELD:

EH 405 Page 17
TRANSPORTATION LAW CASE DIGESTS
may be caused to the shipment by inserting therein had demanded that the same be withdrawn. In fact,
the following stipulation: pursuant to such demand, appellee Uy Bico had taken
Clause 14. Carrier shall not be responsible for loss or delivery of 907 cavans of rice before the burning of the
damage to shipments billed 'owner's risk' unless such warehouse.
loss or damage is due to negligence of carrier. Nor
shall carrier be responsible for loss or damage caused Nor can the appellant or its employees be charged with
by force majeure, dangers or accidents of the sea or negligence. The storage of the goods in the Customs
other waters; war; public enemies; . . . fire . ... warehouse pending withdrawal thereof by the
appellees was undoubtedly made with their knowledge
Upon arrival of the vessel at Pulupandan, in the and consent. Since the warehouse belonged to and
morning of November 18, 1963, the cargoes were was maintained by the government, it would be unfair
discharged, complete and in good order, unto the to impute negligence to the appellant, the latter having
warehouse of the Bureau of Customs. At about 2:00 in no control whatsoever over the same.
the afternoon of the same day, said warehouse was
razed by a fire of unknown origin, destroying appellees' The lower court in its decision relied on the ruling laid
cargoes. Before the fire, however, appellee Uy Bico down in Yu Biao Sontua vs. Ossorio 6, where this Court
was able to take delivery of 907 cavans of rice 2 held the defendant liable for damages arising from a
Appellees' claims for the value of said goods were fire caused by the negligence of the defendant's
rejected by the appellant employees while loading cases of gasoline and
petroleon products. But unlike in the said case, there is
SC RULING not a shred of proof in the present case that the cause
of the fire that broke out in the Custom's warehouse
We sustain the validity of the above stipulation; there was in any way attributable to the negligence of the
is nothing therein that is contrary to law, morals or appellant or its employees. Under the circumstances,
public policy. the appellant is plainly not responsible

Besides, the agreement contained in the above quoted


Clause 14 is a mere iteration of the basic principle of MAERSK LINE vs. CA
law written in Article 1 1 7 4 of the Civil Code:
Article 1174. Except in cases expressly specified by the FACTS:
law, or when it is otherwise declared by stipulation, or
when the nature of the obligation requires the Petitioner Maersk Line is engaged in the transportation
assumption of risk, no person shall be responsible for of goods by sea, doing business in the Philippines
those events which could not be foreseen, or which, through its general agent Compania General de
though foreseen, were inevitable. Tabacos de Filipinas while private respondent Efren
Castillo, on the other hand, is the proprietor of Ethegal
Thus, where fortuitous event or force majeure is the Laboratories, a firm engaged in the manutacture of
immediate and proximate cause of the loss, the obligor pharmaceutical products.
is exempt from liability for non-performance. The
Partidas, 4 the antecedent of Article 1174 of the Civil Private respondent ordered from Eli Lilly. Inc. (ELI) of
Code, defines 'caso fortuito' as 'an event that takes Puerto Rico through its agent in the Philippines, Elanco
place by accident and could not have been foreseen. Products, 600,000 empty gelatin capsules for the
Examples of this are destruction of houses, unexpected manufacture of his pharmaceutical products. The
fire, shipwreck, violence of robbers.' shipper ELI advised Castillo as consignee that the
gelatin capsules contained in 6 drums were already
In its dissertation of the phrase 'caso fortuito' the shipped on board MV "Anders Maerskline for shipment
Enciclopedia Juridicada Espanola 5 says: "In a legal to the Philippines via Oakland, California, which
sense and, consequently, also in relation to contracts, according to the memo sent, was to arrive on April 3,
a 'caso fortuito' presents the following essential 1977.
characteristics: (1) the cause of the unforeseen and
unexpected occurrence, or of the failure of the debtor For reasons unknown, the cargo of capsules were
to comply with his obligation, must be independent of mishipped and diverted to Richmond, Virginia, USA and
the human will; (2) it must be impossible to foresee the then transported back Oakland, Califorilia causing it to
event which constitutes the 'caso fortuito', or if it can arrive 2 months after it was specified in the memo.
be foreseen, it must be impossible to avoid; (3) the Castillo refused to receive the delivery of the goods
occurrence must be such as to render it impossible for due to the delay. Castillo filed before the rescission of
the debtor to fulfill his obligation in a normal manner; the contract and damages against ELI.
and (4) the obligor must be free from any participation
in the aggravation of the injury resulting to the ELI’s argument was that it the subject shipment was
creditor." In the case at bar, the burning of the transported in accordance with the provisions of the
customs warehouse was an extraordinary event which covering bill of lading and that its liability under the
happened independently of the will of the appellant. law on transportation of good attaches only in case of
The latter could not have foreseen the event. loss, destruction or deterioration of the goods as
provided for in Article 1734 of Civil Code and ELI filed a
There is nothing in the record to show that appellant croos-claim against Maerskline. issues having been
carrier ,incurred in delay in the performance of its joined, private respondent moved for the dismissal of
obligation. It appears that appellant had not only the complaint against Eli Lilly, Inc.on the ground that
notified appellees of the arrival of their shipment, but the evidence on record shows that the delay in the

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delivery of the shipment was attributable solely to requirement, copies of the bills of lading and
petitioner. commercial invoices were submitted to petitioner's
depository bank, Consolidated Banking Corporation
RTC: ruled in favor of Castillo on the ground that (SOLIDBANK), which paid petitioner in advance the
breach in the performance of their obligation consisting total value of the shipment of US$20,223.46.
of their negligence to deliver the goods on time.
CA: Affirmed the Decision of the RTC. Upon arrival in Hongkong, the shipment was (1)
delivered by respondent WALLEM directly to GPC (the
ISSUE: buyer-importer), not to PAKISTAN BANK, (2) and
without the required bill of lading having been
W/N maerskline may be held liable for the delay surrendered. Subsequently, GPC failed to pay
PAKISTAN BANK such that the latter, still in possession
Ruling: of the original bills of lading, refused to pay petitioner
through SOLIDBANK. Since SOLIDBANK already pre-
The SC, in their ruling made reference to the paid petitioner the value of the shipment, it demanded
stipulations in the bill of lading. A provision in said bill payment from respondent WALLEM through five (5)
of lading states that “The Carrier does not undertake letters but was refused. Petitioner was thus allegedly
that the goods shall arive at the port of discharge or constrained to return the amount involved to
the place of delivery at any particular time or to meet SOLIDBANK; petitioner then demanded payment from
any particular market or use and save as is provided in respondent WALLEM in writing but to no avail.
clause 4 the Carrier shall in no circumstances be liable
for any direct, indirect or consequential loss or damage On 25 September 1991 petitioner sought collection of
caused by delay”. According to the SC, the aforequoted the value of the shipment of US$20,223.46 or its
provision at the back of the bill of lading, in fine print, equivalent of P546,033.42 from respondents before the
is a contract of adhesion. Generally, contracts of Regional Trial Court of Manila, based on delivery of the
adhesion are considered void since almost all the shipment to GPC without presentation of the bills of
provisions of these types of contracts are prepared and lading and bank guarantee.
drafted only by one party, usually the carrier.
Nonetheless, settled is the rule that bills of lading are On 14 May 1993, the trial court favored Pet, ordering
contracts not entirely prohibited. The questioned China Ocean Shipping and Wallem to pay, jointly and
provision in the subject bill of lading has the effect of severally. The Court of Appeals appreciated the
practically leaving the date of arrival of the subject evidence in a different manner; it set aside the
shipment on the sole determination and will of the decision of the trial court and dismissed the complaint
carrier. together with the counterclaims. Hence, the petition
for review.
While it is true that common carriers are not obligated
by law to carry and to deliver merchandise, and ISSUES:
persons are not vested with the right to prompt
delivery, unless such common carriers previously (1) Duration and extent of a common carrier’s
assume the obligation to deliver at a given date or time extraordinary responsibility. WON delivery to
(Mendoza v. Philippine Air Lines, Inc., 90 Phil. 836 GPC was proper.
[1952]), delivery of shipment or cargo should at least (2) WON respondents are liable to petitioner for
be made within a reasonable time. releasing the goods to GPC without the bills of
In the case before us, we find that a delay in the lading or bank guarantee.
delivery of the goods spanning a period of two (2)
months and seven (7) days falls was beyond the realm RULING:
of reasonableness. It was due to petitioner’s
negligence that the goods were mishipped to 1.) YES.
Richmond, Virginia. Art. 1736 of the NCC. The extraordinary
responsibility of the common carriers lasts from the
time the goods are unconditionally placed in the
MACAM vs. CA possession of, and received by the carrier for
[G.R. No. 125524. August 25, 1999] transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to
FACTS: the person who has a right to receive them, without
prejudice to the provisions of article 1738.
On 4 April 1989 petitioner Macam shipped on board the
vessel Nen Jiang, owned and operated by respondent We emphasize that the extraordinary responsibility of
China Ocean Shipping Co., through local agent the common carriers lasts until actual or constructive
respondent WALLEM, 3,500 boxes of watermelons and delivery of the cargoes to the consignee or to the
1,611 boxes of fresh mangoes; the two sets of fruits person who has a right to receive them. PAKISTAN
were covered by two bills of lading and were exported BANK was indicated in the bills of lading as consignee
through their respective Letters of Credit both issued whereas GPC was the notify party. However, in the
by Pakistan Bank. The shipment was bound for export invoices GPC was clearly named as
Hongkong with PAKISTAN BANK as consignee and buyer/importer. Petitioner also referred to GPC as such
Great Prospect Company of Kowloon, Hongkong (GPC) in his demand letter to respondent WALLEM and in his
as notify party. On 6 April 1989, per letter of credit complaint before the trial court.

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This premise draws us to conclude that the Unloading operations commenced, discharging of the
delivery of the cargoes to GPC as buyer/importer diesel oil. The discharging had to be stopped on
which, conformably with Art. 1736 had, other than the account of the discovery that the port bow mooring of
consignee, the right to receive them was proper. the vessel was intentionally cut or stolen by unknown
persons. Because there was nothing holding it, the
2.) NO. vessel drifted westward, ultimately caused the diesel
Contrary to petitioner’s claims, the Court oil to spill into the sea.
agrees with respondents that it was his (Macam’s)
practice to ask the shipping lines to immediately As a result of spillage and backflow of diesel oil, Caltex
release shipment of perishable goods through sought recovery of the loss from Delsan, but the latter
telephone calls by himself or his “people.” He no refused to pay. As insurer, AHAC paid Caltex. AHAC, as
longer required presentation of a bill of lading nor of a Caltex’s subrogee, instituted Civil Case against Delsan.
bank guarantee as a condition to releasing the goods caused by the spillage. It likewise prayed that it be
in case he was already fully paid. Thus, taking into indemnified for damages suffered
account that subject shipment consisted of perishable
goods and SOLIDBANK pre-paid the full amount of the Delsan insists that the rule on contributory negligence
value thereof, it is not hard to believe the claim of against Caltex, the shipper-owner of the cargo, and the
respondent WALLEM that petitioner indeed requested diesel oil was already completely delivered to Caltex.
the release of the goods to GPC without presentation of
the bills of lading and bank guarantee. ISSUE:

Respondents submitted in evidence a telex dated 5 W.O.N. Delsan is liable based on Article 1734 of the
April 1989 as basis for delivering the cargoes to GPC NCC and W.O.N. the rule on contributory negligence
without the bills of lading and bank guarantee. The should be applied against Caltex.
telex instructed delivery of various shipments to the
respective consignees without need of presenting the HELD:
bill of lading and bank guarantee per the respective
shipper’s request since “for prepaid shipt ofrt charges Petition is DENIED. CA is affirmed.
already fully paid” (sic).
Art. 1734. Common carriers are responsible for the
It has been the practice of petitioner to request the loss, destruction, or deterioration of the goods, unless
shipping lines to immediately release perishable the same is due to any of the following causes only:
cargoes such as watermelons and fresh mangoes
through telephone calls by himself or his “people.” In 1) Flood storm, earthquake, lightning, or other natural
transactions covered by a letter of credit, bank disaster or calamity;
guarantee is normally required by the shipping lines 2) Act of the public enemy in war, whether
prior to releasing the goods. But for buyers using international or civil;
telegraphic transfers, petitioner dispenses with the 3) Act or omission of the shipper or owner of the
bank guarantee because the goods are already fully goods;
paid. In his several years of business relationship with 4) The character of the goods or defects in the packing
GPC and respondents, there was not a single instance or in the containers;
when the bill of lading was first presented before the 5) Order or act of competent public authority.
release of the cargoes.
Delsan failed to prove its claim that there was a
In view of petitioner’s utter failure to establish the contributory negligence on the part of the owner of the
liability of respondents over the cargoes, no reversible goods – Caltex. Dlesan, as the owner of the vessel, was
error was committed by respondent court in ruling obliged to prove that the loss was caused by one of the
against him. excepted causes if it were to seek exemption from
responsibility. 7 Unfortunately, it miserably failed to
WHEREFORE, the petition is DENIED. discharge this burden by the required quantum of
proof.

DELSAN TRANSPORT LINES, INC vs. AMERICAN Delsan’s argument that it should not be held liable for
HOME ASSURANCE CORPORATION the loss of diesel oil due to backflow because the same
G.R. No. 149019, August 15, 2006 had already been actually and legally delivered to
Caltex at the time it entered the shore tank holds no
water. It had been settled that the subject cargo was
FACTS: still in the custody of Delsan because the discharging
thereof has not yet been finished.
Delsan is a domestic corporation which owns and
operates the vessel MT Larusan. On the other hand,
respondent American Home Assurance Corporation 2. Defenses of Common Carrier
(AHAC for brevity) is a foreign insurance company duly.  Fire as Cause
It is engaged, among others, in insuring cargoes for
transportation within the Philippines. DSR-SENATOR LINES AND C.F. SHARP AND
COMPANY, INC. vs. FEDERAL PHOENIX
ASSURANCE CO., INC.
G.R. No. 135377. October 7, 2003

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Common carriers are obliged to observe extraordinary
Facts: diligence in the vigilance over the goods transported
by them. Accordingly, they are presumed to have been
Berde Plants, Inc. (Berde Plants) delivered 632 units of at fault or to have acted negligently if the goods are
artificial trees to C.F. Sharp and Company, Inc. (C.F. lost, destroyed or deteriorated. There are very few
Sharp, for transportation and delivery to the instances when the presumption of negligence does
consignee. The cargo was loaded in M/S "Arabian not attach and these instances are enumerated in
Senator." Article 1739. In those cases where the presumption is
applied, the common carrier must prove that it
Federal Phoenix Assurance Company, Inc. (Federal exercised extraordinary diligence in order to overcome
Phoenix Assurance) insured the cargo against all risks the presumption.
in the amount of P941,429.61.
Respondent Federal Phoenix Assurance raised the
M/S "Arabian Senator" left the Manila South Harbor for presumption of negligence against petitioners.
Saudi Arabia with the cargo on board. When the vessel However, they failed to overcome it by sufficient proof
arrived in Khor Fakkan Port, the cargo was reloaded on of extraordinary diligence.
board DSR-Senator Lines' feeder vessel, bound for Port
Dammam, Saudi Arabia. However, while in transit, the Petition is DENIED
vessel and all its cargo caught fire.

Consequently, Federal Phoenix Assurance paid Berde  Shore Pass Requirement


Plants P941,429.61 corresponding to the amount of
insurance for the cargo. In turn Berde Plants executed JAPAN AIRLINES vs. ASUNCION
in its favor a "Subrogation Receipt" Thus, Federal
Phoenix Assurance filed a complaint for damages FACTS:
against DSR-Senator Lines and C.F. Sharp
Respondents Michael and Jeanette Asuncion left Manila
RTC rendered a Decision in favor of Federal Phoenix on board Japan Airlines (JAL) bound for LA. Their
Assurance itinerary included a stop-over in Narita and an
overnight stay at Hotel Nikko Narita. Upon arrival at
On appeal, the Court of Appeals rendered a Decision Narita, JAL endorsed their applications for shore pass
affirming the RTC Decision and directed them to the Japanese immigration official.
A shore pass is required of a foreigner aboard a
Issue: vessel or aircraft who desires to stay in the
neighborhood of the port of call for not more than 72
WON the liability was extinguished when the vessel hours.
carrying the cargo was gutted by fire
During their interview, the Japanese immigration
Ruling: official noted that Michael appeared shorter than his
height as indicated in his passport. Because of this
Article 1734 of the Civil Code provides: inconsistency, respondents were denied shore pass
"Art. 1734. Common carriers are responsible for entries and were brought instead to the Narita Airport
the loss, destruction, or deterioration of the goods, Rest House where they were billeted overnight.
unless the same is due to any of the following causes
only: Respondents were charged US$400.00 each for their
(1) Flood, storm, earthquake, lightning, or other accommodation, security service and meals.
natural disaster or calamity;
(2) Act of the public enemy in war, whether Respondents filed a complaint for damages claiming
international or civil; that JAL did not fully apprise them of their travel
(3) Act or omission of the shipper or owner of the requirements and that they were rudely and forcibly
goods; detained at Narita Airport.
(4) The character of the goods or defects in the
packing or in the containers; JAL denied the allegations of respondents. It
(5) Order or act of competent public authority." maintained that the refusal of the Japanese
immigration authorities to issue shore passes to
Fire is not one of those enumerated under the above respondents is an act of state which JAL cannot
provision which exempts a carrier from liability for loss interfere with or prevail upon. Consequently, it cannot
or destruction of the cargo. impose upon the immigration authorities that
respondents be billeted at Hotel Nikko instead of the
Even if fire were to be considered a natural disaster airport resthouse.
within the purview of Article 1734, it is required under
Article 1739 of the same Code that the natural ISSUE:
disaster must have been the proximate and only cause
of the loss, and that the carrier has exercised due WON JAL is guilty of breach of contract.
diligence to prevent or minimize the loss before, during
or after the occurrence of the disaster. HELD:

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Under Article 1755 of the Civil Code, a common carrier tied with steel bonds. The hatches remained closed
such as JAL is bound to carry its passengers safely as and tightly sealed throughout the entire voyage.
far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with due Petitioner unloaded the cargo from the holds into its
regard for all the circumstances. When an airline steelbodied dump trucks which were parked alongside
issues a ticket to a passenger, confirmed for a the berth, using metal scoops attached to the ship,
particular flight on a certain date, a contract of pursuant to the terms and conditions of the charter-
carriage arises. The passenger has every right to partly (which provided for an F.I.O.S. clause). However,
expect that he be transported on that flight and on that the hatches remained open throughout the duration of
date and it becomes the carrier’s obligation to carry the discharge. Each time a dump truck was filled up, its
him and his luggage safely to the agreed destination. If load of Urea was covered with tarpaulin. The port area
the passenger is not so transported or if in the process was windy, certain portions of the route to the
of transporting he dies or is injured, the carrier may be warehouse were sandy and the weather was variable,
held liable for a breach of contract of carriage. raining occasionally while the discharge was in
progress.
We find that JAL did not breach its contract of carriage
with respondents. It may be true that JAL has the duty It took eleven (11) days for PPI to unload the cargo. A
to inspect whether its passengers have the necessary private marine and cargo surveyor, Cargo
travel documents, however, such duty does not extend Superintendents Company Inc. (CSCI), was hired by PPI
to checking the veracity of every entry in these to determine the "outturn" of the cargo shipped, by
documents. JAL could not vouch for the authenticity of taking draft readings of the vessel prior to and after
a passport and the correctness of the entries therein. discharge. The survey report submitted by CSCI to the
The power to admit or not an alien into the country is a consignee (PPI) revealed a shortage in the cargo of
sovereign act which cannot be interfered with even by 106.726 M/T and that a portion of the Urea fertilizer
JAL. This is not within the ambit of the contract of approximating 18 M/T was contaminated with dirt,
carriage entered into by JAL and herein respondents. sand and rust and rendered unfit for commerce.
As such, JAL should not be faulted for the denial of
respondents’ shore pass applications. Consequently, PPI sent a claim letter to Soriamont
Steamship Agencies (SSA), the resident agent of the
carrier, KKKK, representing the cost of the alleged
 Exercise of Extraordinary shortage in the goods shipped and the diminution in
Diligence, Inherent Character of Goods value of that portion said to have been contaminated
and Inadequacy of Packaging with dirt. Respondent SSA was not able to respond to
this consignee’s claim for payment because according
PLANTERS PRODUCTS, INC. VS. COURT OF to them, they only received a request for shortlanded
APPEALS, certificate and not a formal claim.
SORIAMONT STEAMSHIP AGENCIES AND KYOSEI
KISEN KABUSHIKI KAISHA Hence, PPI filed an action for damages with the Court
G.R. No. 101503 September 15, 1993 of First Instance of Manila. The defendant carrier
argued that the strict public policy governing common
FACTS: carriers does not apply to them because they have
become private carriers by reason of the provisions of
Planters Products, Inc. (PPI), purchased from Mitsubishi the charter-party. The court a quo however sustained
International Corporation (MITSUBISHI) of New York, the claim of the plaintiff against the defendant carrier
U.S.A., 9,329.7069 metric tons (M/T) of Urea 46% for the value of the goods lost or damaged.
fertilizer which the latter shipped in bulk on 16 June
1974 aboard the cargo vessel M/V "Sun Plum" owned On appeal, respondent Court of Appeals reversed the
by private respondent Kyosei Kisen Kabushiki Kaisha lower court and absolved the carrier from liability for
(KKKK) from Kenai, Alaska, U.S.A., to Poro Point, San the value of the cargo that was lost or
Fernando, La Union, Philippines, as evidenced by Bill of damaged. Relying on the 1968 case of Home Insurance
Lading No. KP-1 signed by the master of the vessel and Co.v. American Steamship Agencies, Inc., the appellate
issued on the date of departure. court ruled that the cargo vessel M/V "Sun Plum"
owned by private respondent KKKK was a private
Prior to its voyage, a time charter-party on the vessel carrier and not a common carrier by reason of the time
M/V "Sun Plum" pursuant to the Uniform General charterer-party. Accordingly, the Civil Code provisions
Charter was entered into between Mitsubishi as on common carriers which set forth a presumption of
shipper/charterer and KKKK as shipowner, in Tokyo, negligence do not find application in the case at bar.
Japan.
ISSUE: Whether a common carrier becomes a private
Before loading the fertilizer aboard the vessel, four (4) carrier by reason of a charter-party.
of her holds were all presumably inspected by the
charterer's representative and found fit to take a load HELD: The assailed decision of the Court of Appeals,
of urea in bulk pursuant to par. 16 of the charter- which reversed the trial court, is affirmed.
party . After the Urea fertilizer was loaded in bulk by
stevedores hired by and under the supervision of the A "charter-party" is defined as a contract by which an
shipper, the steel hatches were closed with heavy iron entire ship, or some principal part thereof, is let by the
lids, covered with three (3) layers of tarpaulin, then owner to another person for a specified time or use; a

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contract of affreightment by which the owner of a ship
or other vessel lets the whole or a part of her to a Respondent carrier's heavy reliance on the case
merchant or other person for the conveyance of goods, of Home Insurance Co. v. American Steamship
on a particular voyage, in consideration of the payment Agencies, supra, is misplaced for the reason that the
of freight; Charter parties are of two types: (a) contract meat of the controversy therein was the validity of a
of affreightment which involves the use of shipping stipulation in the charter-party exempting the
space on vessels leased by the owner in part or as a shipowners from liability for loss due to the negligence
whole, to carry goods for others; and, (b) charter by of its agent, and not the effects of a special charter on
demise or bareboat charter, by the terms of which the common carriers. At any rate, the rule in the United
whole vessel is let to the charterer with a transfer to States that a ship chartered by a single shipper to
him of its entire command and possession and carry special cargo is not a common carrier, does not
consequent control over its navigation, including the find application in our jurisdiction, for we have
master and the crew, who are his servants. Contract of observed that the growing concern for safety in the
affreightment may either be time charter, wherein the transportation of passengers and /or carriage of goods
vessel is leased to the charterer for a fixed period of by sea requires a more exacting interpretation of
time, or voyage charter, wherein the ship is leased for admiralty laws, more particularly, the rules governing
a single voyage. In both cases, the charter-party common carriers.
provides for the hire of vessel only, either for a
determinate period of time or for a single or In an action for recovery of damages against a
consecutive voyage, the shipowner to supply the ship's common carrier on the goods shipped, the shipper or
stores, pay for the wages of the master and the crew, consignee should first prove the fact of shipment and
and defray the expenses for the maintenance of the its consequent loss or damage while the same was in
ship. the possession, actual or constructive, of the carrier.
Upon the other hand, the term "common or public Thereafter, the burden of proof shifts to respondent to
carrier" is defined in Art. 1732 of the Civil Code. The prove that he has exercised extraordinary diligence
definition extends to carriers either by land, air or required by law or that the loss, damage or
water which hold themselves out as ready to engage in deterioration of the cargo was due to fortuitous event,
carrying goods or transporting passengers or both for or some other circumstances inconsistent with its
compensation as a public employment and not as a liability. To our mind, respondent carrier has
casual occupation. The distinction between a "common sufficiently overcome, by clear and convincing proof,
or public carrier" and a "private or special carrier" lies the prima facie presumption of negligence. Verily, the
in the character of the business, such that if the presumption of negligence on the part of the
undertaking is a single transaction, not a part of the respondent carrier has been efficaciously overcome by
general business or occupation, although involving the the showing of extraordinary zeal and assiduity
carriage of goods for a fee, the person or corporation exercised by the carrier in the care of the cargo. The
offering such service is a private carrier. period during which private respondent was to observe
the degree of diligence required of it as a public carrier
It is not disputed that respondent carrier, in the began from the time the cargo was unconditionally
ordinary course of business, operates as a common placed in its charge after the vessel's holds were duly
carrier, transporting goods indiscriminately for all inspected and passed scrutiny by the shipper, up to
persons. When petitioner chartered the vessel M/V and until the vessel reached its destination and its hull
"Sun Plum", the ship captain, its officers and was reexamined by the consignee, but prior to
compliment were under the employ of the shipowner unloading.
and therefore continued to be under its direct
supervision and control. Hardly then can we charge the Article 1734 of the New Civil Code provides that
charterer, a stranger to the crew and to the ship, with common carriers are not responsible for the loss,
the duty of caring for his cargo when the charterer did destruction or deterioration of the goods if caused by
not have any control of the means in doing so. This is the charterer of the goods or defects in the packaging
evident in the present case considering that the or in the containers. The Code of Commerce also
steering of the ship, the manning of the decks, the provides that all losses and deterioration which the
determination of the course of the voyage and other goods may suffer during the transportation by reason
technical incidents of maritime navigation were all of fortuitous event, force majeure, or the inherent
consigned to the officers and crew who were screened, defect of the goods, shall be for the account and risk of
chosen and hired by the shipowner. the shipper, and that proof of these accidents is
incumbent upon the carrier. The carrier, nonetheless,
It is therefore imperative that a public carrier shall shall be liable for the loss and damage resulting from
remain as such, notwithstanding the charter of the the preceding causes if it is proved, as against him,
whole or portion of a vessel by one or more persons, that they arose through his negligence or by reason of
provided the charter is limited to the ship only, as in his having failed to take the precautions which usage
the case of a time-charter or voyage-charter. It is only has established among careful persons.
when the charter includes both the vessel and its crew,
as in a bareboat or demise that a common carrier Thus, the petition is dismissed.
becomes private, at least insofar as the particular
voyage covering the charter-party is concerned.
Indubitably, a shipowner in a time or voyage charter  Exercise of Extraordinary Diligence
retains possession and control of the ship, although her and Doctrine of Last Clear Chance
holds may, for the moment, be the property of the  Fortuitous Event
charterer.

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