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SPOUSES TEODORO v.

SPOUSES NICOLAS
G.R. No. 157917; August 29, 2012
BERSAMIN, J.:
FACTS: Spouses Teodoro and Nanette Peres (Peres) were engaged in the business
of transporting students from their respective residences in Paraque City to Don
Bosco in Pasong Tamo, Makati City, and back. They employed Clemente Alfaro
(Alfaro) as driver of the van. Spouses Nicolas and Teresita Zarate (Zarates)
contracted the Peres to transport their son Aaron to and from Don Bosco.
Considering that the students were due at Don Bosco by 7:15 a.m., and that they
were already running late because of the heavy vehicular traffic on the South
Superhighway, Alfaro took the van to an alternate route at about 6:45 a.m. by
traversing the narrow path underneath the Magallanes Interchange. The railroad
crossing in the narrow path had no railroad warning signs, or watchmen, or other
responsible persons manning the crossing. In fact, the bamboo barandilla was up,
leaving the railroad crossing open to traversing motorists.
At about the time the van was to traverse the railroad crossing, PNR Commuter No.
302 (train), was in the vicinity of the Magallanes Interchange travelling northbound. As
the train neared the railroad crossing, Alfaro drove the van eastward across the
railroad tracks, closely tailing a large passenger bus. His view of the oncoming train
was blocked because he overtook the passenger bus on its left side. The train blew
its horn to warn motorists of its approach. The passenger bus successfully crossed
the railroad tracks, but the van driven by Alfaro did not. The impact threw nine of the
12 students in the rear, including Aaron, out of the van. Aaron landed in the path of
the train, which dragged his body and severed his head, instantaneously killing him.
Thus, the Zarates sued the Peres for breach of contract of carriage and the PNR for
quasi-delict. The RTC ruled in favor of the Zarates. On appeal, the CA affirmed the
findings of the RTC.

Peres as the operators of a school bus service were: (a) engaged in transporting
passengers generally as a business, not just as a casual occupation; (b) undertaking
to carry passengers over established roads by the method by which the business was
conducted; and (c) transporting students for a fee. Despite catering to a limited
clientele, the Peres operated as a common carrier because they held themselves out
as a ready transportation indiscriminately to the students of a particular school living
within or near where they operated the service and for a fee.
Article 1755 of the Civil Code specifies that the common carrier should "carry the
passengers safely as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with a due regard for all the circumstances." To
successfully fend off liability in an action upon the death or injury to a passenger, the
common carrier must prove his or its observance of that extraordinary diligence;
otherwise, the legal presumption that he or it was at fault or acted negligently would
stand.
According to Article 1759 of the Civil Code, their liability as a common carrier did not
cease upon proof that they exercised all the diligence of a good father of a family in
the selection and supervision of their employee. The Peres were liable for the death
of Aaron despite the fact that their driver might have acted beyond the scope of his
authority or even in violation of the orders of the common carrier.
DENIED.
***
FACTS: In June 1996, Nicolas and Teresita Zarate contracted Teodoro and Nanette
Perea to transport their (Zarates) son, Aaron Zarate, to and from school. The
Pereas were owners of a van being used for private school transport.
At about 6:45am of August 22, 1996, the driver of the said private van, Clemente
Alfaro, while the children were on board including Aaron, decided to take a short cut
in order to avoid traffic. The usual short cut was a railroad crossing of the Philippine
National Railway (PNR).

ISSUE: Whether or not the Peres are liable for breach of contract of carriage?
HELD: The petition has no merit.
CIVIL LAW: common carrier; extraordinary diligence
A common carrier is a 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, offering such services to the public. Contracts of common
carriage are governed by the provisions on common carriers of the Civil Code, the
Public Service Act, and other special laws relating to transportation. A common carrier
is required to observe extraordinary diligence, and is presumed to be at fault or to
have acted negligently in case of the loss of the effects of passengers, or the death or
injuries to passengers. The true test for a common carrier is not the quantity or extent
of the business actually transacted, or the number and character of the conveyances
used in the activity, but whether the undertaking is a part of the activity engaged in by
the carrier that he has held out to the general public as his business or occupation.
Applying these considerations to the case before us, there is no question that the

Alfaro saw that the barandilla (the pole used to block vehicles crossing the railway)
was up which means it was okay to cross. He then tried to overtake a bus. However,
there was in fact an oncoming train but Alfaro no longer saw the train as his view was
already blocked by the bus he was trying to overtake. The bus was able to cross
unscathed but the vans rear end was hit. During the collision, Aaron, was thrown off
the van. His body hit the railroad tracks and his head was severed. He was only 15
years old. It turns out that Alfaro was not able to hear the train honking from 50
meters away before the collision because the vans stereo was playing loudly.
The Zarates sued PNR and the Pereas (Alfaro became at-large). Their cause of
action against PNR was based on quasi-delict. Their cause of action against the
Pereas was based on breach of contract of common carriage.
In their defense, the Pereas invoked that as private carriers they were not negligent
in selecting Alfaro as their driver as they made sure that he had a drivers license and
that he was not involved in any accident prior to his being hired. In short, they
observed the diligence of a good father in selecting their employee.

PNR also disclaimed liability as they insist that the railroad crossing they placed there
was not meant for railroad crossing (really, thats their defense!).
The RTC ruled in favor of the Zarates. The Court of Appeals affirmed the RTC. In the
decision of the RTC and the CA, they awarded damages in favor of the Zarates for
the loss of earning capacity of their dead son.
The Pereas appealed. They argued that the award was improper as Aaron
was merely a high school student; hence, the award of such damages was merely
speculative. They cited the case of People vs Teehankee where the Supreme Court
did not award damages for the loss of earning capacity despite the fact that the victim
there was enrolled in a pilot school.
ISSUES: (1) Whether or not the defense of due diligence of a good father by the
Pereas is untenable. (2) Whether or not the award of damages for loss of income is
proper.
HELD: Yes, in both issues.
The Defense of Due Diligence of a Good Father of a Family is not tenable in this
case. The Pereas are common carriers. They are not merely private carriers. (Prior
to this case, the status of private transport for school services or school buses is not
well settled as to whether or not they are private or common carriers but they were
generally regarded as private carriers). Private transports for schools are common
carriers. The Pereas, as the operators of a school bus service were: (a) engaged in
transporting passengers generally as a business, not just as a casual occupation; (b)
undertaking to carry passengers over established roads by the method by which the
business was conducted; and (c) transporting students for a fee. Despite catering to a
limited clientele, the Pereas operated as a common carrier because they held
themselves out as a ready transportation indiscriminately to the students of a
particular school living within or near where they operated the service and for a fee.
Being a common carrier, what is required of the Pereas is not mere diligence of a
good father. What is specifically required from them by law is extraordinary diligence
a fact which they failed to prove in court. Verily, their obligation as common carriers
did not cease upon their exercise of diligently choosing Alfaro as their employee.
On the Award of Damages for Aarons loss of earning capacity despite him being a
high school student at the time of his death, the award is proper. Aaron was enrolled
in a reputable school (Don Bosco). He was of normal health and was an able-bodied
person. Further, the basis of the computation of his earning capacity was not on what
he would have become. It was based on the current minimum wage. The minimum
wage was validly used because with his circumstances at the time of his death, it is
most certain that had he lived, he would at least be a minimum wage earner by the
time he starts working. This is not being speculative at all.
The Teehankee case was different because in that case, the reason why no damages
were awarded for loss of earning capacity was that the defendants there were
already assuming that the victim would indeed become a pilot hence, that made the
assumption speculative. But in the case of Aaron, there was no speculation as to
what he might be but whatever hell become, it is certain that he will at the least be
earning minimum wage.

De Guzman v. CA
G.R. No. L-47822; December 22, 1988
Feliciano, J.
Facts:
Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings
those that he gathered to Manila for resale using 2 six-wheeler trucks. On the return
trip to Pangasinan, respondent would load his vehicle with cargo which various
merchants wanted delivered, charging fee lower than the commercial rates.
Sometime in November 1970, petitioner Pedro de Guzman contracted with
respondent for the delivery of 750 cartons of Liberty Milk. On December 1, 1970,
respondent loaded the cargo. Only 150 boxes were delivered to petitioner because
the truck carrying the boxes was hijacked along the way. Petitioner commenced an
action claiming the value of the lost merchandise. Petitioner argues that respondent,
being a common carrier, is bound to exercise extraordinary diligence, which it failed to
do. Private respondent denied that he was a common carrier, and so he could not be
held liable for force majeure. The trial court ruled against the respondent, but such
was reversed by the Court of Appeals.
Issues:
(1) Whether or not private respondent is a common carrier
(2) Whether private respondent is liable for the loss of the goods
Held:
(1) Article 1732 makes no distinction between one whose principal business activity is
the carrying of persons or goods or both, and one who does such carrying only as an
ancillary activity. 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. It
appears to the Court that private respondent is properly characterized as a common
carrier even though he merely "back-hauled" goods for other merchants from Manila
to Pangasinan, although such backhauling was done on a periodic or occasional
rather than regular or scheduled manner, and even though private respondent's
principal occupation was not the carriage of goods for others. There is no dispute that
private respondent charged his customers a fee for hauling their goods; that fee
frequently fell below commercial freight rates is not relevant here. A certificate of
public convenience is not a requisite for the incurring of liability under the Civil Code
provisions governing common carriers.
(2) Article 1734 establishes the general rule that common carriers are responsible for
the loss, destruction or deterioration of the goods which they carry, "unless the same
is due to any of the following causes only:
a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;
b. Act of the public enemy in war, whether international or civil;
c. Act or omission of the shipper or owner of the goods;
d. The character of the goods or defects in the packing or in the containers; and
e. Order or act of competent public authority."

The hijacking of the carrier's truck - does not fall within any of the five (5) categories
of exempting causes listed in Article 1734. Private respondent as common carrier is
presumed to have been at fault or to have acted negligently. This presumption,
however, may be overthrown by proof of extraordinary diligence on the part of private
respondent. We believe and so hold that the limits of the duty of extraordinary
diligence in the vigilance over the goods carried are reached where the goods are lost
as a result of a robbery which is attended by "grave or irresistible threat, violence or
force." we hold that the occurrence of the loss must reasonably be regarded as quite
beyond the control of the common carrier and properly regarded as a fortuitous event.
It is necessary to recall that even common carriers are not made absolute insurers
against all risks of travel and of transport of goods, and are not held liable for acts or
events which cannot be foreseen or are inevitable, provided that they shall have
complied with the rigorous standard of extraordinary diligence.
***
FACTS:
Ernesto Cendana 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 (2) two six-wheeler trucks
which he owned for the purpose. Upon returning to Pangasinan, he would load his
vehicle with cargo belonging to different merchants to different establishments in
Pangasisnan which respondents charged a freight fee for. Sometime in November
1970, herein petitioner Pedro de Guzman, a merchant and dealer of General Milk
Company Inc. in Pangasinan contracted with respondent for hauling 750 cartons of
milk. Unfortunately, only 150 cartons made it, as the other 600 cartons were
intercepted by hijackers along Marcos Highway. Hence, petitioners commenced an
action against private respondent. In his defense, respondent argued that he cannot
be held liable due to force majuere, and that he is not a common carrier and hence is
not required to exercise extraordinary diligence. On appeal before the Court of
Appeals, Cendana urged that the trial court had erred in considering him a common
carrier; in finding that he had habitually offered trucking services to the public; in not
exempting him from liability on the ground of force majeure; and in ordering him to
pay damages and attorneys fees. The Court of Appeals reversed the judgment of the
trial court and held that Cendana had been engaged in transporting return loads of
freight as a casual occupation a sideline to his scrap iron business and not as a
common carrier. De Guzman came to the Supreme Court by way of a Petition for
Review.
ISSUES:
1. Is respondent a common carrier?
2. Is the respondent liable for the loss of the cartons of milk due to force majeure?
ARGUMENTS:
1. Herein respondent is considered as a common carrier.
Article 1732 of the New Civil Code avoids any 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. It also avoids a distinction between a
person or enterprise offering transportation services on a regular or scheduled basis
and one offering such services on an occasional, episodic, and unscheduled basis.

2. Respondent is not liable for the value of the undelivered merchandise .


Article 1734 of the Civil Code- The general rule is established by the article that
common carriers are responsible for the loss, destruction or deterioration of the goods
which they carry, unless the same is due to any of the following causes only:
a. Flood, storm, earthquake, lightning or other natural disasters;
b. Act of the public enemy, whether international or civil;
c. Act or omission of the shipper or owner of the goods;
d. Character of the goods or defects in the packing;
e. Order or act of competent public authority.
Applying the above article, we note firstly that the specific cause alleged in the instant
case the hijacking of the carrier's truck does not fall within any of the five (5)
categories of exempting causes listed in Article 1734. It would follow; therefore, that
the hijacking of the carrier's vehicle must be dealt with under the provisions of Article
1735, in other words, the private respondent as common carrier is presumed to have
been at fault or to have acted negligently. This presumption, however, may be
overthrown by proof of extraordinary diligence on the part of private respondent.
Article 1745: Any of the following or similar stipulations shall be considered
unreasonable, unjust and contrary to public policy:
xxx xxx xxx
(5) that the common carrier shall not be responsible for the acts or omissions
of his or its employees;
(6) that the common carrier's liability for acts committed by thieves, or of
robbers who do not act with grave or irresistible threat, violence or force, is
dispensed with or diminished; and
(7) that the common carrier shall not responsible for the loss, destruction or
deterioration of goods on account of the defective condition of the car
vehicle, ship, airplane or other equipment used in the contract of carriage.
(Emphasis supplied)
Under Article 1745 (6) above, a common carrier is held responsible and will not be
allowed to divest or to diminish such responsibility even for acts of strangers like
thieves or robbers, except where such thieves or robbers in fact acted "with grave or
irresistible threat, violence or force." We believe and so hold that the limits of the duty
of extraordinary diligence in the vigilance over the goods carried are reached where
the goods are lost as a result of a robbery which is attended by "grave or irresistible
threat, violence or force."
The decision of the trial court shows that the armed men who held up the second
truck owned by private respondent acted with grave, if not irresistible, threat, violence
or force, which is an exception of the general rule of Article 1745 (6).

RULING:
The Petition for Review on certiorari is hereby DENIED and the Decision of the Court
of Appeals dated 3 August 1977 is AFFIRMED.
The occurrence of the loss must reasonably be regarded as quite beyond the control
of the common carrier and properly regarded as a fortuitous event. It is necessary to
recall that even common carriers are not made absolute insurers against all risks of
travel and of transport of goods, and are not held liable for acts or events which
cannot be foreseen or are inevitable, provided that they shall have complied with the
rigorous standard of extraordinary diligence.
We, therefore, agree with the result reached by the Court of Appeals that private
respondent Cendana is not liable for the value of the undelivered merchandise which
was lost because of an event entirely beyond private respondent's control.
FABRE, JR. vs. COURT OF APPEALS
G.R. no. 111127, July 26, 1996
Mendoza, J.
FACTS: Petitioner Fabre and his wife were the owners of 1982 model Mazda
minibus. They were using the said vehicle as a school bus service for children in
Manila. They hired Cabil as their driver. On November 2, 1982, private respondent
Word for the World Christian Fellowship (WWCF) arranged with petitioners for the
transportation of members of young adult ministry from Manila to La Union and back.
While travelling, they met an accident. The bus hit a fence and a coconut tree that
caused passengers to be injured including respondent Antonio.
The WWCF and Antonio then filed a criminal complaint against the driver, the trial
court decided in favor of respondents. All evidence presented showed the negligence
of the defendants ultimately resulted to the accident. The Court of Appeals affirmed
the decision of the Trial Court. Hence this petition.
ISSUE: Whether or not the petitioners are liable for the injuries suffered by the
respondents based on culpa contractual and/or culpa aquiliana.
RULING: The Court ruled that damages should be awarded based on the theory that
petitioners are liable for breach of contract of carriage or culpa contractual or on the
theory of quasi delict or culpa aquiliana holding that the relation of passenger and
carrier is contractual both in origin and nature, nevertheless the act that breaks the
contract may be also a tort. In both sources of obligation, the existence of negligence
of petitioners must be determined. In this case, Cabil drove his bus negligently, while
his employer, the Fabres, who owned the bus, failed to exercise the diligence of a
good father of the family in the selection and supervision of their employee is fully
supported by the evidence on record. Pursuant to Arts. 2176 and 2180 of the Civil
Code his negligence gave rise to the presumption that his employers, the Fabres,
were themselves negligent in the selection and supervision of their employee. Thus,
the finding of the Court that petitioners are liable under Arts. 2176 and 2180 for quasi
delict fully justify that they are guilty of breach of contract of carriage under Arts. 1733,
1755 and 1759 of the Civil Code.
***

Facts: Petitioners Engracio Fabre, Jr. and his wife were owners of a Mazda minibus.
They used the bus principally in connection with a bus service for school children
which they operated in Manila. It was driven by Porfirio Cabil.
On November 2, 1984 private respondent Word for the World Christian Fellowship
Inc. (WWCF) arranged with the petitioners for the transportation of 33 members of its
Young Adults Ministry from Manila to La Union and back in consideration of which
private respondent paid petitioners the amount of P3,000.00.
The usual route to Caba, La Union was through Carmen, Pangasinan. However, the
bridge at Carmen was under repair, so that petitioner Cabil, who was unfamiliar with
the area (it being his first trip to La Union), was forced to take a detour through the
town of Ba-ay in Lingayen, Pangasinan. At 11:30 that night, petitioner Cabil came
upon a sharp curve on the highway. The road was slippery because it was raining,
causing the bus, which was running at the speed of 50 kilometers per hour, to skid to
the left road shoulder. The bus hit the left traffic steel brace and sign along the road
and rammed the fence of one Jesus Escano, then turned over and landed on its left
side, coming to a full stop only after a series of impacts. The bus came to rest off the
road. A coconut tree which it had hit fell on it and smashed its front portion. Because
of the mishap, several passengers were injured particularly Amyline Antonio.
Criminal complaint was filed against the driver and the spouses were also made
jointly liable. Spouses Fabre on the other hand contended that they are not liable
since they are not a common carrier. The RTC of Makati ruled in favor of the plaintiff
and the defendants were ordered to pay jointly and severally to the plaintiffs. The
Court of Appeals affirmed the decision of the trial court.
Issue: Whether the spouses Fabre are common carriers?
Held: Petition was denied. Spouses Fabre are common carriers.
The Supreme Court held that this case actually involves a contract of carriage.
Petitioners, the Fabres, did not have to be engaged in the business of public
transportation for the provisions of the Civil Code on common carriers to apply to
them. As this Court has held: 10 Art. 1732, Common carriers are persons,
corporations, firms or associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air for compensation, offering their
services to the public.
The above article makes no distinction between one whose principal business activity
is the carrying of persons or goods or both, and one who does such carrying only as
an ancillary activity (in local idiom, as "a sideline"). Article 1732 also carefully avoids
making any distinction between a person or enterprise offering transportation service
on a regular or scheduled basis and one offering such service on an occasional,
episodic or unscheduled basis. Neither does Article 1732 distinguish between a
carrier offering its services to the "general public," i.e., the general community or
population, and one who offers services or solicits business only from a narrow
segment of the general population. We think that Article 1732 deliberately refrained
from making such distinctions.

FGU Insurance Corporation vs. G.P. Sarmiento Trucking Corporation Posted


G.R. No. 141910; August 6, 2002
Vitug, J.
FACTS: G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on June 18,
1994, 30 units of Condura S.D. white refrigerators aboard its Isuzu truck driven by
Lambert Eroles, to the Central Luzon Appliances in Dagupan City. While traversing
the North Diversion Road along McArthur highway in Barangay Anupol, Bamban,
Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal,
resulting in damage to the cargoes.
FGU, an insurer of the shipment, paid the value of the covered cargoes
(P204,450.00) to Concepcion Industries, Inc.,. Being subrogee of CIIs rights &
interests, FGU, in turn, sought reimbursement from GPS. Since GPS failed to heed
the claim, FGU filed a complaint for damages & breach of contract of carriage against
GPS and Eroles with the RTC. In its answer, respondents asserted that GPS was
only the exclusive hauler of CII since 1988, and it was not so engaged in business as
a common carrier. Respondents further claimed that the cause of damage was purely
accidental.
GPS filed a motion to dismiss the complaint by way of demurrer to evidence on the
ground that petitioner had failed to prove that it was a common carrier.
The RTC granted the motion to dismiss on April 30, 1996. It subsequently dismissed
the complaint holding that GPS was not a common carrier defined under the law &
existing jurisprudence. The subsequent motion for reconsideration having been
denied, FGU interposed an appeal to the CA. The CA rejected the FGUs appeal &
ruled in favor of GPS. It also denied petitioners motion for reconsideration.
ISSUES:
1. WON GPS may be considered a common carrier as defined under the law &
existing jurisprudence.
2. WON GPS, either as a common carrier or a private carrier, may be presumed to
have been negligent when the goods it undertook to transport safely were
subsequently damaged while in its protective custody & possession.
3. Whether the doctrine of Res ipsa loquitur is applicable in the instant case.
HELD:
1. The SC finds the conclusion of the RTC and the CA to be amply justified. GPS,
being an exclusive contractor & hauler of Concepcion Industries, Inc.,
rendering/offering its services to no other individual or entity, cannot be considered a
common carrier. Common carriers are persons, corporations, firms or associations
engaged in the business of carrying or transporting passengers or goods or both, by
land, water, or air, for hire or compensation, offering their services to the public,
whether to the public in general or to a limited clientele in particular, but never on an
exclusive basis. The true test of a common carrier is the carriage of
passengers/goods, providing space for those who opt to avail themselves of its
transportation service for a fee. Given accepted standards, GPS scarcely falls within
the term common carrier.
2. GPS cannot escape from liability. In culpa contractual, the mere proof of the
existence of the contract & the failure of its compliance justify, prima facie, a

corresponding right of relief. The law will not permit a party to be set free from liability
for any kind of misperformance of the contractual undertaking or a contravention of
the tenor thereof. A breach upon the contract confers upon the injured party a valid
cause for recovering that which may have been lost/suffered. The remedy serves to
preserve the interests of the promisee that may include his:
1. Expectation interest interest in having the benefit of his bargain by being put in as
good a position as he would have been in had the contract been performed;
2. Reliance interest interest in being reimbursed for loss caused by reliance on the
contract by being put in as good a position as he would have been in had the contract
not been made;
3. Restitution interest interest in having restored to him any benefit that he has
conferred on the other party.
Agreements can accomplish little unless they are made the basis for action. The
effect of every infraction is to create a new duty, or to make recompense to the one
who has been injured by the failure of another to observe his contractual obligation
unless he can show extenuating circumstances, like proof of his exercise of due
diligence (normally that of the diligence of a good father of a family or, exceptionally
by stipulation or by law such as in the case of common carriers, that of extraordinary
diligence) or of the attendance of fortuitous event, to excuse him from his ensuing
liability.
A default on, or failure of compliance with, the obligation gives rise to a presumption
of lack of care & corresponding liability on the part of the contractual obligor the
burden being on him to establish otherwise. GPS has failed to do so.
Eroles, on the other hand, may not be ordered to pay petitioner without concrete proof
of his negligence/fault. The driver, not being a party to the contract of carriage
between petitioners principal and defendant, may not be held liable under the
agreement. A contract can only bind the parties who have entered into it or their
successors who have assumed their personality/juridical position. Consonantly with
the axiom res inter alios acta aliis neque nocet prodest, such contract can neither
favor nor prejudice a third person. Petitioners civil action against the driver can only
be based on culpa aquiliana, which would require the claimant for damages to prove
the defendants negligence/fault.
3. Res ipsa loquitur holds a defendant liable where the thing which caused the injury
complained of is shown to be under the latters management and the accident is such
that, in the ordinary course of things, cannot be expected to happen if those who have
its management/control use proper care. In the absence of the defendants
explanation, it affords reasonable evidence that the accident arose from want of care.
It is not a rule of substantive law and does not create an independent ground of
liability. Instead, it is regarded as a mode of proof, or a mere procedural convenience
since it furnishes a substitute for, and relieves the plaintiff of, the burden of producing
specific proof of negligence. The maxim simply places the burden of going forward
with the proof on the defendant.
However, resort to the doctrine may only be allowed when:
(a) the event is of a kind which does not ordinarily occur in the absence of negligence;
(b) other responsible causes are sufficiently eliminated by the evidence (includes the
conduct of the plaintiff and third persons); and
(c) the indicated negligence is within the scope of the defendants duty to the plaintiff.

Thus, it is not applicable when an unexplained accident may be attributable to one of


several causes, for some of which the defendant could not be responsible.

ofP1,036,497.00 under the terms of the Marine Open Policy. Temic then executed a
loss and subrogation receipt in favor of Netherlands Insurance.

Res ipsa loquitur generally finds relevance whether or not a contractual relationship
exists between the plaintiff and the defendant, for the inference of negligence arises
from the circumstances and nature of the occurrence and not from the nature of the
relation of the parties. Nevertheless,for the doctrine to apply, the requirement that
responsible causes (other than those due to defendants conduct) must first be
eliminated should be understood as being confined only to cases of pure (noncontractual) tort since obviously the presumption of negligence in culpa contractual
immediately attaches by a failure of the covenant or its tenor.

Seven months from delivery of the cargo, Netherlands Insurance filed a complaint for
subrogation of insurance settlement with the Regional Trial Court, against the
unknown owner of M/V Piya Bhum and TMS Ship Agencies (TMS), the latter thought
to be the local agent of M/V Piya Bhums unknown owner

On the other hand, while the truck driver, whose civil liability is predicated on culpa
acquiliana, can be said to have been in control & management of the vehicle, it is not
equally shown that the accident has been exclusively due to his negligence. If it were
so, the negligence could allow res ipsa loquitur to properly work against him.
However, clearly this is not the case.
REGIONAL CONTAINER LINES (RCL) OF SINGAPORE vs. THE NETHERLANDS
INSURANCE CO. (PHILIPPINES), INC.
G.R. No. 168151; September 4, 2009
BRION, J.:
Facts of the case: On October 20, 1995, 405 cartons of Epoxy Molding Compound
were consigned to be shipped from Singapore to Manila for Temic Telefunken
[3]
Microelectronics Philippines (Temic). U-Freight Singapore PTE Ltd. (U-Freight
Singapore), a forwarding agent based in Singapore, contracted the services of Pacific
Eagle Lines PTE. Ltd. (Pacific Eagle) to transport the subject cargo. The cargo was
packed, stored, and sealed by Pacific Eagle in its Refrigerated Container. As the
cargo was highly perishable, the inside of the container had to be kept at a
temperature of 0 Celsius. Pacific Eagle then loaded the refrigerated container on
board the M/V Piya Bhum, a vessel owned by RCL, with which Pacific Eagle had a
slot charter agreement. RCL duly issued its own Bill of Lading in favor of Pacific
Eagle.
To insure the cargo against loss and damage, Netherlands Insurance issued a Marine
Open Policy in favor of Temic, to cover all losses/damages to the shipment.
On October 25, 1995, the M/V Piya Bhum docked in Manila. After unloading the
refrigerated container, it was plugged to the power terminal of the pier to keep its
temperature constant. Fidel Rocha (Rocha), Vice-President for Operations of
Marines Adjustment Corporation, accompanied by two surveyors, conducted a
protective survey of the cargo. They found that based on the temperature chart, the
temperature reading was constant from October 18, 1995 to October 25, 1995 at 0
Celsius. However, at midnight of October 25, 1995 when the cargo had already
been unloaded from the ship the temperature fluctuated with a reading of 33
Celsius. Rocha believed the fluctuation was caused by the burnt condenser fan motor
of the refrigerated container.
On November 9, 1995, Temic received the shipment. It found the cargo completely
damaged. Temic filed a claim for cargo loss against Netherlands Insurance, with
supporting claims documents. The Netherlands Insurance paid Temic the sum

Netherlands Insurance amended the complaint on January 17, 1997 to implead EDSA
Shipping, RCL, Eagle Liner Shipping Agencies, U-Freight Singapore, and U-Ocean
(Phils.), Inc. (U-Ocean), as additional defendants. A third amended complaint was
later made, impleading Pacific Eagle in substitution of Eagle Liner Shipping Agencies.
TMS filed its answer to the original complaint. RCL and EDSA Shipping filed their
answers with cross-claim and compulsory counterclaim to the second amended
complaint. U-Ocean likewise filed an answer with compulsory counterclaim and crossclaim. During the pendency of the case, U-Ocean, jointly with U-Freight Singapore,
filed another answer with compulsory counterclaim. Only Pacific Eagle and TMS filed
their answers to the third amended complaint.
The defendants all disclaimed liability for the damage caused to the cargo, citing
several reasons why Netherland Insurances claims must be rejected. Specifically,
RCL and EDSA Shipping denied negligence in the transport of the cargo; they
attributed any negligence that may have caused the loss of the shipment to their codefendants. They likewise asserted that no valid subrogation exists, as the payment
made by Netherlands Insurance to the consignee was invalid. By way of affirmative
defenses, RCL and EDSA Shipping averred that the Netherlands Insurance has no
cause of action, and is not the real party-in-interest, and that the claim is barred by
laches/prescription.
After Netherlands Insurance had made its formal offer of evidence, the defendants
including RCL and EDSA Shipping sought leave of court to file their respective
motions to dismiss based on demurrer to evidence.
RCL and EDSA Shipping, in their motion, insisted that Netherlands Insurance had (1)
failed to prove any valid subrogation, and (2) failed to establish that any negligence
on their part or that the loss was sustained while the cargo was in their custody.
On May 22, 2002, the trial court handed down an Order dismissing Civil Case No. 9678612 on demurrer to evidence. The trial court ruled that while there was valid
subrogation, the defendants could not be held liable for the loss or damage, as their
respective liabilities ended at the time of the discharge of the cargo from the ship at
the Port of Manila.
Netherlands Insurance seasonably appealed the order of dismissal to the CA.
On May 26, 2004, the CA disposed of the appeal as follows:
WHEREFORE, in view of the foregoing, the dismissal of the complaint against
defendants Regional Container Lines and Its local agent, EDSA
Shipping Agency, is REVERSED and SET ASIDE. The dismissal of the complaint
against the other defendants is AFFIRMED. Pursuant to Section 1, Rule 33 of the

1997 Rules of Civil Procedure, defendants Regional Container Lines and EDSA
Shipping Agency are deemed to have waived the right to present evidence.
ISSUE: The sole issue for our resolution is whether the CA correctly held RCL and
EDSA Shipping liable as common carriers under the theory of presumption of
negligence.
RULING: The present case is governed by the following provisions of the Civil Code:
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.

the cargo was the fluctuation of the temperature in the reefer van, which fluctuation
occurred after the cargo had already been discharged from the vessel; no fluctuation,
they point out, arose when the cargo was still on board M/V Piya Bhum. As the cause
of the damage to the cargo occurred after the same was already discharged from the
vessel and was under the custody of the arrastre operator (International Container
Terminal Services, Inc. or ICTSI), RCL and EDSA Shipping posit that the presumption
of negligence provided in Article 1735 of the Civil Code should not apply. What
applies in this case is Article 1734, particularly paragraphs 3 and 4 thereof, which
exempts the carrier from liability for loss or damage to the cargo when it is caused
either by an act or omission of the shipper or by the character of the goods or defects
in the packing or in the containers. Thus, RCL and EDSA Shipping seek to lay the
blame at the feet of other parties.
We do not find the arguments of RCL and EDSA Shipping meritorious.

Such extraordinary diligence in the vigilance over the goods is further expressed in
articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for
the safety of the passengers is further set forth in articles1755 and 1756.
ART. 1734. Common carriers are responsible for the loss, destruction, or deterioration
of the goods, unless the same is due to any of the following causes only:
1)
2)
3)
4)
5)

Flood, storm, earthquake, lightning, or other natural disaster or calamity;


Act of the public enemy in war, whether international or civil;
Act of omission of the shipper or owner of the goods;
The character of the goods or defects in the packing or in the containers;
Order or act of competent public authority.

ART. 1735. In all cases other that those mentioned in Nos. 1, 2, 3, 4 and 5 of the
preceding article, if the goods are lost, destroyed, or deteriorated, common
carriers are presumed to have been at fault or to have acted negligently, unless
they prove that they observed extraordinary diligence as required by article
1733.
ART. 1736. The extraordinary responsibility of the common carrier lasts from
the time the goods are unconditionally placed in the possession of, and
received by the carrier for transportation until the sane are delivered, actually
or constructively, by the carrier to the consignee, or to the person who has a
right to receive them, without prejudice to the provisions of articles 1738.
ART. 1738. The extraordinary liability of the common carrier continues to be
operative even during the time the goods are stored in a warehouse of the carrier at
the place of destination, until the consignee has been advised of the arrival of the
goods and has had reasonable opportunity thereafter to remove them or otherwise
dispose of them.
ART. 1742. Even if the loss, destruction, or deterioration of the goods should be
caused by the character of the goods, or the faulty nature of the packing or of the
containers, the common carrier must exercise due diligence to forestall or
lessen the loss.
In the present case, RCL and EDSA Shipping disclaim any responsibility for the loss
or damage to the goods in question. They contend that the cause of the damage to

A common carrier is presumed to have been negligent if it fails to prove that it


[8]
exercised extraordinary vigilance over the goods it transported. When the goods
shipped are either lost or arrived in damaged condition, a presumption arises against
the carrier of its failure to observe that diligence, and there need not be an express
[9]
finding of negligence to hold it liable.
To overcome the presumption of negligence, the common carrier must
establish by adequate proof that it exercised extraordinary diligence over the
goods. It must do more than merely show that some other party could be
[10]
responsible for the damage.
In the present case, RCL and EDSA Shipping failed to prove that they did
exercise that degree of diligence required by law over the goods they
transported. Indeed, there is sufficient evidence showing that the fluctuation of the
temperature in the refrigerated container van, as recorded in the temperature chart,
occurred after the cargo had been discharged from the vessel and was already under
the custody of the arrastre operator, ICTSI. This evidence, however, does not
disprove that the condenser fan which caused the fluctuation of the temperature in
the refrigerated container was not damaged while the cargo was being unloaded
from the ship. It is settled in maritime law jurisprudence that cargoes while being
[11]
unloaded generally remain under the custody of the carrier; RCL and EDSA
Shipping failed to dispute this.
RCL and EDSA Shipping could have offered evidence before the trial court to
show that the damage to the condenser fan did not occur: (1) while the cargo was in
transit; (2) while they were in the act of discharging it from the vessel; or (3) while they
were delivering it actually or constructively to the consignee. They could have
presented proof to show that they exercised extraordinary care and diligence in the
handling of the goods, but they opted to file a demurrer to evidence. As the order
granting their demurrer was reversed on appeal, the CA correctly ruled that
[12]
they are deemed to have waived their right to present evidence, and the
presumption of negligence must stand.
It is for this reason as well that we find RCL and EDSA Shippings claim that the
loss or damage to the cargo was caused by a defect in the packing or in the
containers. To exculpate itself from liability for the loss/damage to the cargo under
any of the causes, the common carrier is burdened to prove any of the causes in

Article 1734 of the Civil Code claimed by it by a preponderance of evidence. If the


carrier succeeds, the burden of evidence is shifted to the shipper to prove that the
[13]
carrier is negligent.
RCL and EDSA Shipping, however, failed to satisfy this
standard of evidence and in fact offered no evidence at all on this point; a reversal of
a dismissal based on a demurrer to evidence bars the defendant from presenting
evidence supporting its allegations.
Heirs of Jose Marcial K. Ochoa vs. G & S Transport Corporation
G.R. No. 170071, March 9, 2011
Del Castillo, J.
FACTS: On the night of March 10, 1995, Jose Marcial K. Ochoa died while on board
an Avis taxicab owned and operated by G & S Transport Corporation, a common
carrier. The death certificate issued by the Office of the Civil Registrar of Quezon City
cited the cause of his death as vehicular accident it was found that the death of Jose
Marcial Ochoa was caused by negligence on the part of the taxicab driver employed
by G & S Transport Corporation, Bibiano Padilla. However, the taxicab driver, Bibiano
Padilla, was acquitted of the crime of reckless imprudence resulting in homicide.
Regardless, the petitioners alleged that respondent, as a common carrier, was under
legal obligation to observe and exercise extraordinary diligence in transporting its
passengers to their destination safely and securely. The contract was entered the
moment Ochoa entered the vehicle owned by the respondent. The failure of the
respondent, as evidenced by the death of Ochoa, led the petitioners to aver that they,
the respondents, are liable for having breached the contract of common carriage. The
heirs thus prayed for G & S to pay them actual damages, moral damages, exemplary
damages, and attorneys fees and expenses of litigation.
ISSUE: Whether or not the petitioner may proceed with the civil action given that
there was already an acquittal in the related criminal case.
HELD: The Supreme Court declared the ruling of Cancio, Jr., v. Isip, which stated that
in the instant case, it must be stressed that the action filed by petitioner is an
independent civil action, which remains separate and distinct from any criminal
prosecution based on the same act. Not being deemed instituted in the criminal action
based on culpa criminal, a ruling on the culpability of the offender will have no bearing
on said independent civil action based on an entirely different cause of action, i.e.,
culpa contractual. Considering Article 31 of the Civil Code, the petitioners claim for
damages is valid considering that the civil action, being based on an obligation,
proceeded independently of the criminal proceedings and regardless of the result of
the latter. Thus, the respondent is liable to pay the petitioners for damages because
by not transporting Jose Marcial Ochoa safely to his destination the former breached
its contract with the passenger.
***
Facts: Jose died while on board an Avis taxicab owned and operated by G&S, which
was cruising at high speed when it tried to overtake another vehicle, a ten-wheeler
truck, which it failed to do and instead rammed the railing throwing itself off the flyover.
Joses wife and minor children demanded indemnity in the total amount of
P15,000,000. Unheeded, Ruby filed a complaint for damages. G&S answered that the
cab was bumped by an on-rushing van causing the taxicab to ram the railings and fall

over. They posited that it was a fortuitous event and/or the fault or negligence of the
driver of the van that hit the cab. It likewise claimed that it exercised the diligence
required of a good father of a family in the selection and supervision of its employees
The RTC found the driver of G&S to be negligent and the latter did not prove exercise
of diligence of a good father of a family in the selection and supervision of its
employees as insufficient. The heirs filed a motion for partial reconsideration asking
for moral damages while G&S filed an appeal. The trial court declared them entitled
to moral and exemplary damages. Because of this, G & S filed another Notice of
Appeal. The CA ruled in favor of the heirs.
With respect to the award of P6,537,244.96 for Joses loss of earning capacity, the
CA declared the same unwarranted. It found the Certification issued by Joses
employer, the USAID, as self-serving, unreliable, and biased. While said certification
states that Jose Marcial was earning an annual salary of P450,844.49 at the time of
his untimely demise, the CA noted that same is unsupported by competent evidence
such as income tax returns or receipts. The CA found the award of P300,000
excessive and thus reduced the same to P200,000 as to make it proportionate to the
award of exemplary damages which is P50,000. Hence, the present petition filed by
both G&S and the heirs.
Issue: Whether G&S is liable for damages
Ruling: Both the trial court and the CA found that the accident which led to Jose
Marcials death was due to the reckless driving and gross negligence of G & S driver,
Padilla, thereby holding G & S liable to the heirs of Jose Marcial for breach of contract
of carriage.
The action filed by the heirs is primarily for the recovery of damages arising from
breach of contract of carriage allegedly committed by G & S. Clearly, it is an
independent civil action arising from contract which is separate and distinct from the
criminal action for reckless imprudence resulting in homicide filed by the heirs against
Padilla by reason of the same incident. Hence, regardless of Padillas acquittal or
conviction in said criminal case, same has no bearing in the resolution of the present
case.
The testimony of Joses wife that he was earning around P450,000 a year was
corroborated by a Certification issued by the USAID. It is highly improbable that such
an agency will issue a certification containing unreliable information regarding an
employees income. Besides, there exists a presumption that official duty has been
regularly performed.
We thus find as sufficient and "somehow proportional to and in approximation of the
suffering inflicted" an award of moral damages in an amount similar to that awarded in
Victory which is P100,000.