COMMON CARRIERS

DE GUZMAN vs. CA L-47822

FACTS:
Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles
and scrap metal in Pangasinan. Upon gathering sufficient quantities of such scrap material,
respondent would bring such material to Manila for resale. He utilized two (2) six-wheeler trucks
which he owned for hauling the material to Manila. On the return trip to Pangasinan, respondent
would load his vehicles with cargo which various merchants wanted delivered to differing
establishments in Pangasinan. For that service, respondent charged freight rates which were
commonly lower than regular commercial rates.
Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes
never reached petitioner, since the truck which carried these boxes was hijacked somewhere
along the MacArthur Highway in Paniqui, Tarlac, by armed men who took with them the truck, its
driver, his helper and the cargo.
ISSUE:

WON

respondent

is

common

carrier

and

if

he's

liable

RULING: Yes - common carrier. The Civil Code defines "common carriers" in accordance with
Art. 1732. The article makes no distinction between one whose principal business activity is the
carrying of persons or goods or both, and one who does such carrying only as
an ancillary activity (in local Idiom as "a sideline").
Article 1732 also carefully avoids making any distinction between a person or enterprise offering
transportation service on a regular or scheduled basis and one offering such service on
an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a
carrier offering its services to the "general public," i.e., the general community or population, and
one who offers services or solicits business only from a narrow segment of the general
population.
The Public Service Act (Sec. 13, par. B) also supplements the law on common carriers which
defines public service that includes that of common carriers:
... every person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited clientele, whether
permanent, occasional or accidental, and done for general business purposes, any
common carrier, xxx
Moreover, a certificate of public convenience is not a requisite for the incurring of
liability under the Civil Code provisions governing common carriers...else, it would be offensive
to sound public policy. The law imposes duties and liabilities upon common carriers for the
safety and protection of those who utilize their services and the law cannot allow a common
carrier to render such duties and liabilities merely facultative by simply failing to obtain the
necessary permits and authorizations.

COMMON CARRIERS
1ST Philippine Industrial Corp vs. CA
FACTS:
Petitioner is a grantee of a pipeline concession under Republic Act No. 387, as
amended, to contract, install and operate oil pipelines. The original pipeline concession was
granted in 1967] and renewed by the Energy Regulatory Board in 1992
ISSUE: WON Petitioner should be granted tax exemption (tax on gross receipts) under Section
133 of the Local Government Code of 1991 since it argues it is a common carrier
RULING:
Yes - common carrier. A "common carrier" may be defined, broadly, as one who holds himself
out to the public as engaged in the business of transporting persons or property from
place to place, for compensation, offering his services to the public generally. Article 1732
of the Civil Code defines a "common carrier".
The test for determining whether a party is a common carrier of goods is:
1.
He must be engaged in the business of carrying goods for others as
a public employment, and must hold himself out as ready to engage in the
transportation of goods for person generally as a business and not as a
casual occupation;
2.
He must undertake to carry goods of the kind to which his business
is confined;
3.
He must undertake to carry by the method by which his business is
conducted and over his established roads; and
4.

The transportation must be for hire.

It is engaged in the business of transporting or carrying goods, i.e. petroleum products, for
hire as a public employment. It undertakes to carry for all persons indifferently, that is, to all
persons who choose to employ its services, and transports the goods by land and for
compensation.
So understood, the concept of 'common carrier' under Article 1732 may be seen to
coincide neatly with the notion of 'public service,' under the Public Service Act (Commonwealth
Act No. 1416, as amended) which at least partially supplements the law on common carriers set

forth in the Civil Code. Under Section 13, paragraph (b) of the Public Service Act, 'public
service' includes1
The definition of "common carriers" in the Civil Code makes no distinction as to the
means of transporting, as long as it is by land, water or air. It does not provide that the
transportation of the passengers or goods should be by motor vehicle.
Under the Petroleum Act of the Philippines (Republic Act 387), petitioner is considered a
"common carrier." Thus, Article 86 thereof provides that:
"Art. 86. Pipe line concessionaire as a common carrier. - A pipe line shall have the
preferential right to utilize installations for the transportation of petroleum owned by him, but is
obligated to utilize the remaining transportation capacity pro rata for the transportation of such
other petroleum as may be offered by others for transport, and to charge without discrimination
such rates as may have been approved by the Secretary of Agriculture and Natural Resources."

PUBLIC SERVICE ACT: 'every person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental,
and done for general business purposes, any common carrier, railroad, street railway, traction railway, subway motor
vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its classification,
freight or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries and water
craft, engaged in the transportation of passengers or freight or both, shipyard, marine repair shop, wharf or dock,
ice plant, ice-refrigeration plant, canal, irrigation system gas, electric light heat and power, water supply and power
petroleum, sewerage system, wire or wireless communications systems, wire or wireless broadcasting stations and
other similar public services.'

COMMON CARRIERS
SPOUSES DANTE CRUZ and LEONORA CRUZ vs. SUN HOLIDAYS, INC.

FACTS:
Spouses Dante and Leonora Cruz (petitioners) lodged a Complaint against Sun
Holidays, Inc. (respondent) for damages arising from the death of their son Ruelito C. Cruz
(Ruelito) who perished with his wife on board the boat M/B Coco Beach III that capsized en
route to Batangas from Puerto Galera, Oriental Mindoro where the couple had stayed at Coco
Beach Island Resort (Resort) owned and operated by respondent.
The stay of the newlywed Ruelito and his wife at the Resort was by virtue of a tour
package-contract with respondent that included transportation to and from the Resort and the
point of departure in Batangas.
ISSUE: WON Sun Holidays is considered a common carrier and therefore, liable

RULING: Yes - a common carrier (cites De Guzman vs. CA for defn). Its ferry services are so
intertwined with its main business as to be properly considered ancillary thereto. The
constancy of respondents ferry services in its resort operations is underscored by its having its
own Coco Beach boats. And the tour packages it offers, which include the ferry services, may
be availed of by anyone who can afford to pay the same. These services are thus
available to the public.
That respondent does not charge a separate fee or fare for its ferry services is of no
moment. It would be imprudent to suppose that it provides said services at a loss. The Court is
aware of the practice of beach resort operators offering tour packages to factor the
transportation fee in arriving at the tour package price. That guests who opt not to avail of
respondents ferry services pay the same amount is likewise inconsequential. These guests may
only be deemed to have overpaid.

CHARTER PARTIES
PLANTERS PRODUCERS v. CA (1993)
FACTS:
Planters Products, Inc. (PPI), purchased from Mitsubishi metric tons (M/T) of Urea
fertilizer which the latter shipped in bulk aboard the cargo vessel M/V "Sun Plum" owned by
private respondent Kyosei Kisen Kabushiki Kaisha (KKKK) from Kenai, Alaska, U.S.A., to Poro
Point, San Fernando, La Union, Philippines. Prior to its voyage, a time charter-party on the
vessel M/V "Sun Plum" pursuant to the Uniform General Charter was entered into between
Mitsubishi as shipper/charterer and KKKK as shipowner. Before loading the fertilizer aboard the
vessel, four (4) of her holds were all presumably inspected by the charterer's representative and
found fit to take a load of urea in bulk.
The survey report submitted by to the consignee (PPI) revealed a shortage in the cargo
and that a portion of the Urea fertilizer was rendered unfit for commerce, having been polluted
with sand, rust and dirt.
ISSUE: WON whether a common carrier becomes a private carrier by reason of a charter-party
RULING: It depends. A "charter-party" is defined as a contract by which an entire ship, or
some principal part thereof, is let by the owner to another person for a specified time or use.
Charter parties are of two types: (a) contract of affreightment (Public Carrier) which involves
the use of shipping space on vessels leased by the owner in part or as a whole, to carry goods
for others; and,
(b) charter by demise or bareboat charter (Private Carrier), by the terms of which the whole
vessel is let to the charterer with a transfer to him of its entire command and possession and
consequent control over its navigation, including the master and the crew, who are his servants.
Contract of affreightment may either be time charter, wherein the vessel is leased to the
charterer for a fixed period of time, or voyage charter, wherein the ship is leased for a single
voyage. In both cases, the charter-party provides for the hire of vessel only, either for a
determinate period of time or for a single or consecutive voyage, the shipowner to supply the
ship's stores, pay for the wages of the master and the crew, and defray the expenses for the
maintenance of the ship.
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Upon the other hand, the term "common or public carrier" is defined in Art. 1732 of the
Civil Code.
It is not disputed that respondent carrier, in the ordinary course of business, operates as
a common carrier, transporting goods indiscriminately for all persons. When petitioner chartered
the vessel M/V "Sun Plum", the ship captain, its officers and compliment were under the employ
of the shipowner and therefore continued to be under its direct supervision and control. Hardly
then can we charge the charterer, a stranger to the crew and to the ship, with the duty of caring
for his cargo when the charterer did not have any control of the means in doing so. This is
evident in the present case considering that the steering of the ship, the manning of the decks,
the determination of the course of the voyage and other technical incidents of maritime
navigation were all consigned to the officers and crew who were screened, chosen and hired by
the shipowner.
It is therefore imperative that a public carrier shall remain as such, notwithstanding
the charter of the whole or portion of a vessel by one or more persons, provided the
charter is limited to the ship only, as in the case of a time-charter or voyage-charter. It is
only when the charter includes both the vessel and its crew, as in a bareboat or demise that a
common carrier becomes private, at least insofar as the particular voyage covering the charterparty is concerned. Indubitably, a shipowner in a time or voyage charter retains possession
and control of the ship, although her holds may, for the moment, be the property of the
charterer.

BREACH OF CONTRACT OF CARRIAGE SAFETY OF PASSENGERS

CALALAS V. CA
FACTS:
Private respondent Eliza Jujeurche G. Sunga, then a college freshman at the Siliman
University, took a passenger jeepney owned and operated by petitioner Vicente Calalas. As the
jeepney was filled to capacity of about 24 passengers, Sunga was given by the conductor an
"extension seat," a wooden stool at the back of the door at the rear end of the vehicle.
On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a
passenger off. As she was seated at the rear of the vehicle, Sunga gave way to the outgoing
passenger. Just as she was doing so, an Isuzu truck driven by Iglecerio Verena and owned by
Francisco Salva bumped the left rear portion of the jeepney. As a result, Sunga was injured. She
sustained a fracture of the "distal third of the left tibia-fibula with severe necrosis of the
underlying skin." Closed reduction of the fracture, long leg circular casting, and case wedging
were done under sedation. Her attending physician certified she would remain on a cast for a
period of three months and would have to ambulate in crutches during said period.
ISSUE: WON the negligence of Verena was the proximate cause of the accident that would
negate Calalas liability and that to rule otherwise would be to make the common carrier an
insurer of the safety of its passengers.
WON petitioner is liable on his contract of carriage
RULING: Calalas is liable. Breach of contract or culpa contractual, is premised upon the
negligence in the performance of a contractual obligation. In breach of contract, the action can
be prosecuted merely by proving the existence of the contract and the fact that the obligor, in
this case the common carrier, failed to transport his passenger safely to his destination. In case
of death or injuries to passengers, Art. 1756 of the Civil Code provides that common carriers
are presumed to have been at fault or to have acted negligently unless they prove that

they observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code. This
provision necessarily shifts to the common carrier the burden of proof.
It is immaterial that the proximate cause of the collision between the jeepney and
the truck was the negligence of the truck driver.
The doctrine of proximate cause is applicable only in actions for quasi-delict, not in
actions involving breach of contract. The doctrine is a device for imputing liability to a person
where there is no relation between him and another party. In such a case, the obligation is
created by law itself. But, where there is a pre-existing contractual relation between the parties,
it is the parties themselves who create the obligation, and the function of the law is merely to
regulate the relation thus created. Insofar as contracts of carriage are concerned, some aspects
regulated by the Civil Code are those respecting the diligence required of common carriers with
regard to the safety of passengers as well as the presumption of negligence in cases of death or
injury to passengers. It provides in Articles 1733, 1755, and 1756.2
In the case at bar, upon the happening of the accident, the presumption of negligence at once
arose, and it became the duty of petitioner to prove that he had to observe extraordinary
diligence in the care of his passengers.
It is also not a causo fortuito. A caso fortuito is an event which could not be foreseen, or which,
though foreseen, was inevitable. This requires that the following requirements be present: (a)
the cause of the breach is independent of the debtors will; (b) the event is unforeseeable or
unavoidable; (c) the event is such as to render it impossible for the debtor to fulfill his obligation
in a normal manner, and (d) the debtor did not take part in causing the injury to the creditor.
Petitioner should have foreseen the danger of parking his jeepney with its body protruding two
meters into the highway.

Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.Such extraordinary diligence in the vigilance over the goods is
further expressed in articles 1734, 1735, and 1746, Nos. 5,6, and 7, while the extraordinary diligence for the safety of
the passengers is further set forth in articles 1755 and 1756.
Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with due regard for all the circumstances.
Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as prescribed by articles 1733
and 1755.

NOTICE OF CLAIM
PHIL. CHARTER INSURANCE (PCIC) v. CHEMOIL
FACTS:
PCIC is a domestic corporation engaged in the business of non-life insurance.
Respondent Chemoil Lighterage Corporation is also a domestic corporation engaged in the
transport of goods.
On 24 January 1991, Samkyung Chemical Company, Ltd., shipped the liquid chemical
DIOCTYL PHTHALATE (DOP) on board MT TACHIBANA. The consignee was Plastic Group
Phils., Inc. in Manila. PGP insured the cargo with (PCIC) Philippine Charter Insurance
Corporation against all risks.
The ocean tanker MT TACHIBANA unloaded the cargo to the tanker barge of Chemoil,
which shall transport the same to Del Pan Bridge in Pasig River and haul it by land to PGPs
storage tanks in Calamba, Laguna.
Upon inspection by PGP, the samples taken from the shipment showed discoloration
demonstrating that it was damaged. PGP then sent a letter where it formally made an insurance
claim for the loss it sustained.
PCIC paid PGP the full and final payment for the loss and issued a Subrogation Receipt.
Meanwhile, PGP paid the respondent as full payment for the latters services.
An action for damages was instituted by the petitioner-insurer (PCIC) against
respondent-carrier (Chemoil). Respondent filed an answer which admitted that it undertook to
transport the shipment, but alleged that before the DOP was loaded into its barge, the
representative of PGP, Adjustment Standard Corporation, inspected it and found the same
clean, dry, and fit for loading, thus accepted the cargo without any protest or notice. As carrier,
no fault and negligence can be attributed against respondent as it exercised extraordinary
diligence in handling the cargo.

Issues: 1. Whether or not the Notice of Claim was filed within the required period.
Held: There is no evidence to confirm that the notice of claim was filed within the period
provided for under Art. 366 of the Code of Commerce3.
The object sought to be attained by the requirement of the submission of claims in
pursuance of this article is to compel the consignee of goods entrusted to a carrier to make
prompt demand for settlement of alleged damages suffered by the goods while in
transport, so that the carrier will be enabled to verify all such claims at the time of
delivery or within 24 hours thereafter, and if necessary fix responsibility and secure
evidence as to the nature and extent of the alleged damages to the goods while the matter is
still fresh in the minds of the parties.
More particularly, where the contract of shipment contains a reasonable requirement of
giving notice of loss of or injury to the goods, the giving of such notice is a condition
precedent to the action for loss or injury or the right to enforce the carriers liability. Such
requirement is not an empty formalism. The fundamental reason or purpose of such a
stipulation is not to relieve the carrier from just liability, but reasonably to inform it that the
shipment has been damaged and that it is charged with liability therefore, and to give it an
opportunity to examine the nature and extent of the injury. This protects the carrier by affording it
an opportunity to make an investigation of a claim while the matter is fresh and easily
investigated so as to safeguard itself from false and fraudulent claims.
The filing of a claim with the carrier within the time limitation therefore actually constitutes a
condition precedent to the accrual of a right of action against a carrier for loss of, or damage to,
the goods. The shipper or consignee must allege and prove the fulfillment of the condition. If it
fails to do so, no right of action against the carrier can accrue in favor of the former. The
aforementioned requirement is a reasonable condition precedent; it does not constitute a
limitation of action.

3 Art. 366, Code of Commerce: Within 24 hours following the receipt of the merchandise a claim may be
made against the carrier on account of damage or average found upon opening the packages, provided that the
indications of the damage or average giving rise to the claim cannot be ascertained from the exterior of said
packages, in which case said claim shall only be admitted at the time of the receipt of the packages.After the periods
mentioned have elapsed, or after the transportation charges have been paid, no claim whatsoever shall be admitted
against the carrier with regard to the condition in which the goods transported were delivered.

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