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Page 93-94
4. On April 4, 1989, BM shipped on board the vessel ​Nen Jiang​, owned and operated by CO.
Shipping Co. Represented by its agent WALLEM. 3,500 boxes of watermelon valued at US
$5,950.00 covered by Bill of Lading No. HKG 99012 and exported through Letter of Credit No.
HK 1031/30 issued by National Bank of Pakistan and 1,611 boxes of fresh mangoes with a value
of US$14,273.46 covered by Bill of Lading No. HKG 99013 and exported through the Letter of
Credit No. HK 1032/30 also issued by PAKISTAN BANK. The Bills of Lading contained the
following pertinent provision: “One of the Bills of Lading must be surrendered duly endorsed in
exchange for the goods or delivery order. The shipment was bound for Hongkong with
PAKISTAN BANK as consignee and Great Prospect Company of Kowloon, Hong Kong
(hereinafter GPC) as notify party.” The goods were delivered to GPC without the bills of lading.

a) Can carrier validly deliver the goods to GPC?

b) Did the common carrier validly deliver the goods without the bill of lading or bank guarantee?

A: ​a) Yes, the goods can be validly delivered to GPC. The extraordinary responsibility of the
common carriers lasts until actual or constructive delivery of the cargoes to the consignee ​or to
the person who has a right to receive them​. PAKISTAN BANK was indicated in the bills of
lading as consignee whereas GPC was the notify party. However, in the export invoices GPC
was clearly named as buyer/importer. Petitioner also referred to GPC as such in his demand letter
to respondent WALLEM and in his complaint before the trial court. This premise draws us to
conclude that the delivery of the cargoes to GPC as buyer/importer which, conformably with
Article 1736 had, other than the consignee, the right to receive them was proper.

b) Yes. The carrier submitted in evidence a telex dated April 5, 1989 as basis for delivering the
cargoes to GPC without the bills of lading and bank guarantee. The telex instructed the delivery
of various shipments to the respective consignees without need of presenting the bill of lading
and bank guarantee per the respective shipper’s request since “for prepaid ​shipt ofrt ​charges
already fully paid.” Petitioner was named therein as shipper and GPC as consignee with respect
to Bill of Lading Nos. HKG 99012 and HKG 99013. To implement the said telex instruction, the
delivery of the shipment must be to GPC, the notify party or real importer/buyer of the goods and
not the Pakistani Bank since the latter can very well present the original Bills of Lading in its
possession. Likewise, if it were the Pakistani Bank to whom the cargoes were to be strictly
delivered, it will no longer be proper to require a bank guarantee as a substitute for the Bill of
Lading. To construe otherwise will render meaningless the telex instruction. After all, the
cargoes consist of perishable fresh fruits and immediate delivery thereof to the buyer/importer is
essentially a factor to reckon with. Besides, GPC is listed as one among the several consignees in
the telex (Exhibit 5-B) and the instruction in the telex was to arrange delivery of A/M shipment
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(not any party) to respective consignees without presentation of OB/L and bank guarantee.
(​Benito Macam v. Court of Appeals, et al,. G.R. No. 125524, August 25,1999)​

Page 140
1. ​Marino was a passenger on a train. Another passenger, Juancho, had taken a gallon of gasoline
placed in a plastic bag into the same coach where Marino was riding. The gasoline ignited and
exploded causing injury to Marino who filed a civil suit for damages against the railway
company claiming that Juancho should have been subjected to inspection by its conductor. The
railway company disclaimed liability resulting from the explosion contending that it was
unaware of the contents of the plastic bag and invoke the right of Juancho to privacy. a) Should
the railway company be held liable for damages? b) If it were an airline company involved,
would your answer be the same? Explain your answer briefly.

Answer:
a) No. The railway company is not liable for damages. This is subject to the qualification that the
company should prove that it, through the exercise of ordinary diligence, cannot detect the
presence of gasoline. It should be noted that in overland transportation, the common carrier is not
bound nor empowered to make an examination on the contents of packages or bags, particularly
those handcarried by passengers.

b. No, my answer would not be the same. If an airline company was involved, it is duty bound to
inspect each and every cargo that is brought into the aircraft. (RA 6235, ​infra)​ . Exercise of
extraordinary diligence would therefore result in the discovery of the gasoline. (1992)

2​. A, as a paying passenger, boarded a plane of X & Co., a duly authorized air carrier bound
from Manila to Cebu. On the way, the plane exploded in mid-air, and crashed, causing the death
of all persons on board. It was determined that the mid-air explosion was due to the explosive
device contained in the suitcase by another passenger in the ill-fated aircraft. If you are the judge,
how will you rule?

A: ​I will make the carrier liable. The carrier is bound to exercise extraordinary diligence in
carrying its passengers. It is presumed to be negligent when its passengers died when the aircraft
exploded. Moreover, the negligence of the carrier is apparent because an explosive device was
brought into the carrier without being detected by the employees. Under R.A. 6235, the carrier is
bound to inspect and investigate suspicious packages that are being brought into the aircraft. This
duty was not complied with because the explosive device was not detected by the carrier’s
personnel.

Page 155-157
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CASES:

1. ​On the night of October 5,1963, plaintiffs-appellees attended a birthday party inside the
United Housing Subdivision in Paranaque, Rizal. After the party which broke up at about 11
o’clock that evening, the plaintiffs-appellees proceeded home in their Vauxhall car with
Victorino Cusi at the wheel. Upon reaching the railroad tracks, finding that the level crossing bar
was raised and seeing that there was no flashing red light, and hearing no whistle from any
coming train, Cusi merely slackened his speed and proceeded to cross the tracks. At the same
time, a train bound for Lucena traversed the crossing, resulting in a collision between the two.
The impact threw plaintiffs-appellees out of their car which was smashed. One Benjamin Franco,
who came from the same party and was driving a vehicle right behind them, rushed to their aid
and brought them to San Juan de Dios Hospital for emergency treatment. Later, the
plaintiffs-appellees were transferred to the Philippine General Hospital. A week later, Mrs. Cusi
transferred to the Manila Doctors Hospital where Dr. Manuel Rivera, head of the Orthopedic and
Fracture Service of the Philippine General Hospital performed on her a second operation and
continued to treat her until her discharge from the hospital on November 2, 1963. Thereafter, Dr.
Rivera treated her as an out-patient until the end of February, 1964, although by that time the
fractured bones had not yet healed. Mrs. Cusi was also operated on by Dr. Francisco Aguilar,
Director of the National Orthopedic Hospital, in May, 1964 and in August, 1965, after another
operation in her upper body from the chest to her abdomen, she was placed in cast for some three
months and her right arm immobilized. Is the railway company liable?

A: ​The railway company is liable because the circumstances attendant to the collision shows
negligence on its part. “Undisputably, the warning devices installed at the railroad crossing were
manually operated; there were only two shifts of guards provided for the operation thereof—one,
the 7:00 A.M. to 3:00 P.M. shift, and the other, the 3:00 P.M. to 11:00 P.M. shift. On the night of
the accident, the train for Lucena was on an unscheduled trip after 11:00 P.M. During that
precise hour, the warning devices were not operating for no one attended to them. Also, as
observed by the lower court, the locomotive driver did not blow his whistle, thus: ”…he simply
sped on without taking an extra precaution of blowing his whistle from a distance of 10 to 50
meters from the crossing. That the train was running at full speed is attested to by the fact that
notwithstanding the application of the emergency brakes, the train did not stop until it reached a
distance of around 100 meters.”

These facts assessed together show the inadequacy, nay, the absence, of precautions taken by the
defendant-appellant to warn the traveling public of the impending danger. It is clear to Us that as
the signal devices were wholly manually-operated, there was an urgent need for a flagman or
guard to man the crossing at all times. As it was, the crossing was left unattended to after eleven
o’clock every night and on the night of the accident. We cannot in all reason justify or condone
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the act of the defendant-appellant allowing the subject locomotive to travel through the
unattended crossing with inoperative signal devices, but without sending any of its employees to
operate said signal devices, so as to warn oncoming motorists of the approach of one of its
locomotives. It is not surprising therefore that the inoperation of the warning devices created a
situation which was misunderstood by the riding public to mean safe passage. Jurisprudence
recognizes that if the warning devices are installed in railroad crossings, the travelling public has
the right to rely on such warning devices to put them on their guard and take the necessary
precautions before crossing the tracks. A need, therefore, exists for the railroad company to use
reasonable care to keep such devices in good condition and in working order, or to give notice
that they are not operating, since if such a signal is misunderstood, it is a menace. Thus it has
been held that if a railroad company maintains a signalling device at a crossing to give warning
of the approach of a train, the failure of the device to operate is generally held to be evidence of
negligence, which maybe considered with all the circumstances of the case in determining
whether the railroad company was negligent as a matter of fact. (​Cusi v. Philippine National
Railways, G.R. No. L-29889, May 31, 1979)

Page 157-158

2. The incident involved transpired on May 10, 1931. At about 7’o clock in the morning of the
same day, the plaintiff Aleko, his wife Sonja Maria Lilius, and his 4-year old daughter Brita
Marianne Lilius, left Manila in their ​Studebaker ​car driven by said plaintiff Aleko E. Lilius - for
the municipality of Pagsanjan, the Province of Laguna, on a sight-seeing trip. It was the first time
that he made said trip although he has already been to many places, driving his own car, in and
outside the Philippines. Prior thereto, he had made the trip as far as Calauan, but never from
Calauan to Pagsanjan via Dayap. He was entirely unacquainted with the conditions of the road at
said points and had no knowledge of the existence of a railroad crossing at Dayap. Before
reaching the crossing in question, there was nothing to indicate its existence inasmuch as there
were many houses, shrubs, and trees along the road, it was impossible to see an approaching
train. At about seven or eight meters from the crossing, coming from Calauan, the plaintiff saw
an autotruck parked on the left side of the road. Several people, who seemed to have alighted
from the truck, were walking on the opposite side. He slowed down to about 12 miles an hour
and sounded his horn for the people to get out of the way. With his attention thus occupied, he
did not see the crossing but he heard two short whistles. Immediately afterwards, he saw a huge
black mass fling itself upon him, which turned out to be locomotive No. 713 of the defendant
company’s train coming eastward from Bay to Dayap station. The locomotive truck struck the
plaintiff’s car right in the center. After dragging the car a distance of about ten meters, the
locomotive threw it upon siding. The force of the impact was so great that the plaintiff’s wife and
daughter were thrown from the car and were picked up from the ground unconscious and
seriously hurt. In spite of the efforts of engineer Andres Basilio, he was unable to stop the
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locomotive until after it had gone about 70 meters from the crossing. Aleko, Sonja and Brita
Marianne suffered extensive injuries as a consequence of the incident. Is the train operator
liable?

A: Yes. The Court concluded that the railway company was negligent explaining that “prior to
the accident, there had been no notice nor sign of the existence of the crossing, nor was there
anybody to warn the public of approaching trains. The flagman or switchman arrived after the
collision, coming from the station with a red flag in one hand and a green one in the other, both
of which were wound on their respective sticks. The said flagman and switchman had many
times absented himself from his post at the crossing upon arrival of a train. The train left Bay
station a little late and therefore travelled at a great speed.

Upon examination of the oral as well as of the documentary evidence which the parties presented
at the trial in support of their respective contentions, and after taking into consideration all the
circumstances of the case, this court is of the opinion that the accident was due to negligence on
the part of the defendant-appellant company, for not having had on that occasion any semaphore
at the crossing at Dayap, to serve as a warning to passers-by of its existence in order that they
might take the necessary precautions before crossing the railroad; and on the part of its
employees – the flagman and the switchman, for not having remained at his post at the crossing
in question to warn passersby of the approaching train; the stationmaster, for failure to send the
said flagman and switchman to his post on time; and the engineer, for not having taken the
necessary precautions to avoid an accident, in view of the absence of said flagman and
switchman, by slackening his speed and continuously ringing the bell and blowing the whistle
before arriving at the crossing. Although it is probable that the defendant-appellant entity
employed the diligence of a good father of a family in selecting its aforesaid employees, however
it did not employ such diligence in supervising their work and the discharge of their duties
because, otherwise, it would have had a semaphore or sign at the crossing and, on previous
occasions as well as on the night in question, the flagman and switchman would have always
been at his post at the crossing upon the arrival of a train. The diligence of a good father of a
family, which the law requires in order to avoid damage, is not confined to the careful and
prudent selection of subordinates or employees but includes inspection of their work and
supervision of the discharge of their duties.” (​Lilius v. The Manila Railroad Company, GR No.
L-39587, March 24, 1934​)

Page 158-159

3. Rhonda Brunty, daughter of respondent Ethel Brunty and an American citizen, came to the
Philippines for a visit sometime in January 1980. Prior to her departure, she, together with her
Filipino host Juan Manuel M. Garcia, travelled to Baguio City on board a Mercedes Benz sedan
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with plate number FU 799, driven by Rodolfo L. Mercelita. It was about 12:00 midnight, January
25, 1980. By then, PNR Train No. T-71, driven by Alfonso Reyes, was on its way to Tutuban,
Metro Manila, as it had left the La Union station at 11:00 p.m., January 24, 1980. By 2:00 a.m.,
Rhonda Brunty, Garcia and Mercelita were already approaching the railroad crossing at
Barangay Rizal, Moncada, Tarlac. Mercelita, driving at approximately 70 km/hr., drove past a
vehicle, unaware of the railroad track up ahead and that they were about to collide with PNR
Train No. T-71. Mercelita was instantly killed when the Mercedes Benz smashed into the train;
the two other passengers suffered serious physical injuries. A certain James Harrow brought
Rhonda Brunty to the Central Luzon Doctor’s Hospital in Tarlac, where she was pronounced
dead after ten minutes from arrival. Garcia, who had suffered severe head injuries, was brought
via ambulance to the same hospital. He was transferred to the Manila Doctor’s Hospital, and
later to the Makati Medical Center for further treatment. Is PNR liable?

A: ​Yes, PNR is liable. “It was clearly established that plaintiffs-appellees (respondents herein)
sustained damage or injury as a result of the collision. That there was negligence on the part of
PNR is, likewise, beyond cavil. Considering the circumstances prevailing at the time of the fatal
accident, the alleged safety measure installed by the PNR at the railroad crossing is not only
inadequate but does not satisfy the well-settled safety standards in transportation.” An
examination of the photographs of the railroad crossing at Moncada, Tarlac presented as
evidence by PNR itself would yield the following: (1) absence of flag bars or safety railroad
bars; (2) inadequacy of the installed warning signals; and (3) lack of proper lighting within the
area. Thus, even if there was a flagman stationed at the site as claimed by PNR (petitioner), it
would still be impossible to know or see that there is a railroad crossing/tracks ahead, or that
there is an approaching train from the Moncada side of the road since one’s view would be
blocked by a cockpit arena.

A vehicle coming from the Moncada side would have difficulty in knowing that there is
an approaching train because of the slight curve, more so, at an unholy hour as 2:00 a.m. Thus, it
is imperative on the part of the PNR to provide adequate safety equipment in the area.

This Court has previously determined the liability of the PNR for damages for its failure
to put a cross bar, or signal light, flagman or switchman, or semaphores. Such failure is evidence
of negligence and disregard of the safety of public, even if there is no law or ordinance requiring
it because public safety demands that said device or equipment be installed. ​(Philippine National
Railways v. Brunty, G.R. No. 169891, November 2, 2006; Note that the Supreme Court ruled that
the liability of PNR should be mitigated because there was contributory negligence.)

PAGE: 170
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1. ​X boarded an airconditioned Pantranco Bus bound for Baguio. X was given notice that the
carrier is not liable for baggage brought in by passengers. X kept in his custody his attach​é case
containing $10,000.00. In Tarlac, all passengers, including X, were told to get off and take their
lunch, he discovered that his attach​é case was missing. A vendor said that a man picked the lock
of the door, entered the bus and ran away with the attache case. What, if any, is the liability of
the carrier?

A: ​The carrier may be held liable. Hand-carried luggage of passengers are governed by the rules
on necessary deposits. Under Article 2000 of the Civil Code, the responsibility of the depositary
shall among other cases, include the loss of property of the guest cause(d) by strangers but not
that which may proceed from ​force majeure.​ Article 2001 of the same Code considers an act of a
thief as not one of ​force majeure unless done with the use of arms or through an irresistible
force. (1989)

2. X took the Benguet Bus from Baguio going to Manila. He deposited his ​maleta i​ n the baggage
compartment of the bus common to all passengers. He did not declare his baggage nor pay its
charges contrary to the regulations of the bus company. When X got off, he could not find his
baggage, which obviously was taken by another passenger. Determine the liability of the bus
company.

A: The bus company is liable for the loss of the ​maleta.​ The carrier had the duty to exercise
extraordinary diligence over the baggage that was turned over to the carrier or placed in the
baggage compartment of the bus. The fact that the ​maleta ​was not declared nor the charges paid
thereon would not be material so long as it was received by the carrier for transportation (Article
1754, Civil Code). (1989)

Page 171

3. Antonio, a paying passenger, boarded a bus bound for Batangas City. He chose to sit at the
front row near the bus driver and told the bus driver that he had valuable items in his hand
carried bag which he then placed beside the driver’s seat. Not having slept for 24 hours, he
requested the driver to keep an eye on the bag should he doze off during the trip. While Antonio
was asleep, another passenger took the bag away and alighted at Calamba, Laguna. Could the
common carrier be held liable by Antonio for the loss?

A: Yes, the common carrier is liable to Antonio for the loss of his bag. Hand-carried luggages of
passengers are governed by the rules on necessary deposits. Under Article 2000 of the Civil
Code, the responsibility of a depositary shall, among other cases, include the loss of property of
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the guest caused by strangers but not that which may proceed from ​force majeure.​ Article 2001
of the same Code considers an act of a thief as not one of ​force majeure​, unless done with the use
of arms or through irresistible force. (1986)

[An alternative answer has been suggested that the carrier is not liable because the bag of
Antonio was never turned over by him to the common carrier under a bill of lading or similar
arrangement and Antonio’s mere request to the bus driver to keep an eye on the bag while
Antonio dozed off (without even the driver acceding to the request) could not possibly make the
common carrier liable for the loss.]