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AF Sanchez Brokerage vs CA and FGU Insurance

(Dec 21, 2004)

AF Sanchez is engaged in a broker business wherein its main job is to
calculate customs duty, fees and charges as well as storage fees for the
cargoes. Part also of the services being given by AF Sanchez is the delivery
of the shipment to the consignee upon the instruction of the shipper.

Wyett engaged the services of AF Sanchez where the latter delivered the
shipment to Hizon Laboratories upon instruction of Wyett. Upon inspection, it
was found out that at least 44 cartons containing contraceptives were in bad
condition. Wyett claimed insurance from FGU. FGU exercising its right of
subrogation claims damages against AF Sanchez who delivered the damaged
goods. AF Sanchez contended that it is not a common carrier but a
brokerage firm.

Is AF Sanchez a common carrier?

SC held that Art 1732 of the Civil Code in defining common carrier does not
distinguish whether the activity is undertaken as a principal activity or
merely as an ancillary activity. In this case, while it is true that AF Sanchez
is principally engaged as a broker, it cannot be denied from the evidence
presented that part of the services it offers to its customers is the delivery of
the goods to their respective consignees.

AF Sanchez claimed that the proximate cause of the damage is improper
packing. Under the CC, improper packing of the goods is an exonerating
circumstance. But in this case, the SC held that though the goods were
improperly packed, since AF Sanchez knew of the condition and yet it
accepted the shipment without protest or reservation, the defense is deemed
Foul Bill of Lading – reservation or protest on a shipment or goods
improperly packed.

National Trucking and Forwarding Corp vs Lorenzo Shipping Corp

(GR No 153563, Feb 7, 2005)

Art 353 of the Code of Commerce provides “after the contract has been
complied, the bill of lading which the carrier has issued shall be returned to
him and by virtue of the exchange of this title with the thing transported the
respective obligations and actions shall be deemed canceled”.

What if the original copy of the bill of lading could not be returned?

The SC held that in case the consignee upon receiving the goods cannot
return the bill of lading because it has been lost, he must give the carrier a
receipt for the goods delivered, this receipt producing the same effects as
return of the bill of lading.

William Tiu vs Arriesgado

(GR No 138060, Sept 1, 2004, Callejo)

Spouses Arriesgado were passengers of a bus owned by the petitioner. The

respondents sustained injures when the bus collided with a cargo truck. In
its defense, petitioner invoked the defense of last clear chance.

The SC held that Doctrine of last clear chance applies to a suit involving the
owners of the two colliding vehicle. It does not apply to a suit involving
breach for a contract of carriage.

Philippine Rabbit Bus Lines vs Macalinao

(GR No 141856, Feb 11, 2005, Sandoval-Gutierrez)
Doctrine of last clear chance was applied in this case because it involves a
suit between two colliding vehicles.

Nostradamus Villanueva vs Priscilla and Leandro Domingo

(GR No 144274, Sept 20, 2006, Corona)

Application of the Registered Owner Rule

The registered owner of a vehicle is directly and principally responsible for

any accident, injury or death caused by the operation of the vehicle in the
streets and highways.

The purpose is to protect the public in general and for easy identification of
the persons who could be held responsible for the injury sustained.

Extraordinary diligence is required to common carriers in transporting goods
and passengers
1. nature of the business
2. public policy

Registered owner primarily and solidarily liable with driver under the KABIT
SYSTEM. Kabit system is contrary to public policy; therefore, void and

Spouses Hernandez vs Spouses Dolor

(GR No 160286, Jul 30, 2004, Santiago)

A vehicle owned by the petitioners figured in an accident as a result of which

the petitioners were sued for damages. Petitioners main defense at the time
the incident happened is that the vehicle is being leased to the driver. The
latter paying the rental by way of boundary at P150 per day. Since they are
merely lessors, they should not be held liable for the injury sustained by the

The SC held that for the purpose of imputing liability, employer-employee

relationship exist between the owner and the driver although the latter may
pay rental by way of boundary. (Boundary System).

To sustain the petitioners’ contention that they should be excused from

liability because they are merely lessors will be a flagrant disregard of our
public service law which imputes liability upon registered owner of the
subject vehicle. To sustain the contention of the petitioner will put the public
at the mercy of irresponsible and reckless drivers.

Japan Air Lines vs Michael Asuncion et al

(GR No 161730, Jan 28, 2005, Santiago)

The case involves the application of extra-ordinary diligence in the discharge

of carrier’s duty.

The respondent left Manila on board an aircraft being operated by the

petitioner. Part of the itinerary of the respondent is a stop-over in Narita
where they will have an overnight stay in Narita Hotel. However, the laws of
Japan require them to apply for a shore pass wherein they have to be
interviewed by immigration officials of Japan. During the interview, the
immigration officials denied their application for shore pass because there
appears to be errors in the travel documents. His height recorded in the
documents appears to be taller than his actual height. Therefore, the
petitioners were not allowed to stay in Narita Hotel but rather spent their
nights uncomfortably at the airport.

As a result, petitioners sued the airlines claiming that they did not exercise
extra-ordinary diligence required in the contract of carriage. They contend
that JAL should have appraised them of the requirement needed to obtain a
shore pass. Is JAL liable?
SC held that JAL is not liable and did not breach its contract of carriage with
the petitioners. While it may be true that JAL are required to appraise their
clients with all the necessary travel documents to obtain a shore pass, this
duty does not extend to verification as to whether or not the
information/entries in these travel documents are correct.

Posted by Lawstude at 10:00 AM 0 commented

Labels: Kabatas Komersyal