Sealoader Shipping Corporation vs Grand Cement Manufacturing

Corp.

G.R. No. 167363

December 15, 2010

SEALOADER SHIPPING CORPORATION, Petitioner, vs. GRAND

CEMENT MANUFACTURING CORPORATION, JOYCE LAUNCH & TUG CO.,
INC., ROMULO DIANTAN & JOHNNY PONCE, Respondents.
G.R. No. 177466

TAIHEIYO CEMENT PHILIPPINES, INC. (Formerly Grand Cement

Manufacturing Corporation), Petitioner, vs. SEALOADER SHIPPING
CORPORATION, JOYCE LAUNCH & TUG CO., INC., ROMULO DIANTAN &
JOHNNY PONCE, Respondents.

FACTS:
Carrier - Sealoader Shipping Corporation
Shipper - Grand Cement Manufacturing Corp.
Sealoader executed a Time Charter Party Aggrement with Joyce Launch
for the chartering of MT Viper in order to tow its unpropelled barges for
a minimum of 15 days. Sealoder entered into a contract with Grand
Cement for the loading of cement clinkers and the delivery thereof to
Manila. On March 31, 1994, Sealoders barge arrived at the wharf of
Grand Cement tugged by MT Viper. It was not immediately loaded as
the employees of Grand Cement were loaded another vessel. On April
4, typhoon Bising struck Cebu area. The barge was still docked at the
wharf of Grand Cement. As it became stronger, MT Viper tried to tow
the barge away but it was unsuccessful because the towing line
connecting the vessels snapped since the mooring lines was not cast
off, which is the ultimate cause. Hence, the barge rammed the wharf
causing significant damage. Grand Cement filed a complaint for
damages (P2.4M) since Sealoader ignored its demands. They allege
that Sealoader was negligent when it ignored its employees advice to
move the vessels after it had received weather updates. Sealoader
filed a motion to dismiss on the ground that Joyce Launch is the one
liable since it was the owner of MT Viper, whos employees were

manning the vessel. Sealoader filed a cross-claim against Joyce

Launch. Joyce maintains that the damages were due to force majeure
and faulted Grand Cements employees for abandoning the wharf
leaving them helpless and for not warning them early on.
Sealoader contends that Grand Cement had the last clear chance to
prevent the damage to the latters wharf. Had Grand Cement cast off
the mooring lines attached to the D/B Toploader early on, the barge
could have been towed away from the wharf and the damage thereto
could have been avoided.
RTC in favor of Grand Cement holding the two companies liable since
there was complete disregard of the storm signal, the captain of the
vessel was not present and the vessel was not equipped with a radio or
any navigational facility, which is mandatory. Joyce launch did not
appeal.
CA - affirmed the decision but on MR, it partly reversed its decision
finding Grand Cement to be guilty of contributory negligence since it
was found that it was still loading the other vessel at the last minute
just before the storm hit, hence Sealodersvessel did not move.
Damages were reduced to 50%. Hence, petition for review to SC.

ISSUE
W/N Sealoader should be held liable for
Grand Cement.

the damages incurred by

HELD;
YES. The doctrine of last clear chance states that where both parties
are negligent but the negligent act of one is appreciably later than that of
the other, or where it is impossible to determine whose fault or negligence
caused the loss, the one who had the last clear opportunity to avoid the loss
but failed to do so, is chargeable with the loss. Stated differently, the
antecedent negligence of plaintiff does not preclude him from recovering
damages caused by the supervening negligence of defendant, who had the
last fair chance to prevent the impending harm by the exercise of due
diligence.
Negligence on the part of Sealoader PROVEN. After a thorough review
of the records of this case, the Court finds that Sealoader was indeed guilty
of negligence in the conduct of its affairs during the incident in question on
the following grounds:

Lack of a radio or any navigational communication facility aboard the

D/B Toploader.

manifest laxity of the crew of the D/B Toploader in monitoring the

weather. Despite the apparent difficulty in receiving weather bulletins
from the head office of Sealoader, the evidence on record suggests
that the crew of the D/B Toploader failed to keep a watchful eye on the
prevailing weather conditions.

Unmistakably, the crew of the D/B Toploader and the M/T Viper were caught
unawares and unprepared when Typhoon Bising struck their vicinity.
Sealoader cannot pass to Grand Cement the responsibility of casting off the
mooring lines connecting the D/B Toploader to the wharf. The people at the
wharf could not just cast off the mooring lines without any instructions from
the crew of the D/B Toploader and the M/T Viper. As the D/B Toploader was
without an engine, casting off the mooring lines prematurely might send the
barge adrift or even run the risk of the barge hitting the wharf sure enough.
Thus, Sealoader should have taken the initiative to cast off the mooring lines
early on or, at the very least, requested the crew at the wharf to undertake
the same. In failing to do so, Sealoader was manifestly negligent.
Article 2179 of the Civil Code defines the concept of contributory
negligence as follows:
Art. 2179. When the plaintiffs own negligence was the
immediate and proximate cause of his injury, he cannot recover
damages. But if his negligence was only contributory, the immediate
and proximate cause of the injury being the defendants lack of due
care, the plaintiff may recover damages, but the courts shall mitigate
the damages to be awarded.
Contributory negligence is conduct on the part of the injured party,
contributing as a legal cause to the harm he has suffered, which falls below
the standard to which he is required to conform for his own protection. 76
Negligence on the part of Grand Cement NOT PROVEN. Grand
Cement was not guilty of negligent acts, which contributed to the damage
that was incurred on its wharf. The Court holds that Sealoader had the
responsibility to inform itself of the prevailing weather conditions in the areas
where its vessel was set to sail. Sealoader cannot merely rely on other
vessels for weather updates and warnings on approaching storms, as what
apparently happened in this case. Common sense and reason dictates this.
To do so would be to gamble with the safety of its own vessel, putting the
lives of its crew under the mercy of the sea, as well as running the risk of
causing damage to the property of third parties for which it would
necessarily be liable.Be that as it may, the records of the instant case reveal

that Grand Cement timely informed the D/B Toploader of the impending
typhoon.
Therefore the doctrine of Last Clear Chance clearly does not apply in
the instant case and it is but right and proper to hold sealoader liable for the
damages incurred by Grand Cement.

[G.R. No. 161833. July 8, 2005]

PHILIPPINE CHARTER INSURANCE CORPORATION, petitioner, vs

UNKNOWN OWNER OF THE VESSEL M/V NATIONAL HONOR,
NATIONAL SHIPPING CORPORATION OF THE PHILIPPINES and
INTERNATIONAL CONTAINER SERVICES, INC., respondents.

FACTS:

Carrier - National Shipping Corporation of the Philippines (NSCP)

Consignee - Blue Mono International Company, Incorporated (BMICI)

Insurer - Philippine Charter Insurance Corporation (PCIC)

Arrastre Operator Incorporated (ICTSI)

On November 5, 1995, J. Trading Co. Ltd. of Seoul, Korea, loaded a

shipment of four units of parts and accessories in the port of Pusan,
Korea, on board the vessel M/V National Honor, represented in the
Philippines by its agent, National Shipping Corporation of the
Philippines (NSCP). The goods were to be delivered to the ultimate
consignee Blue Mono International Company, Incorporated
(BMICI). The shipment was contained in two wooden crates, namely,

International

Container

Terminal

Services,

Crate No. 1 and Crate No. 2, complete and in good order condition.
There were no markings on the outer portion of the crates except the
name of the consignee.[7]
Crate No. 1 measured 24 cubic meters and weighed 3,620 kgs.
On the flooring of the wooden crates were three wooden battens
placed side by side to support the weight of the cargo.
Crate No. 2, on the other hand, measured 10 cubic meters and
weighed 2,060 kgs.

It was insured for P2,547,270.00 with the Philippine Charter

Insurance Corporation (PCIC). Upon arrival, the International
Container Terminal Services, Incorporated (ICTSI) was furnished
with a copy of the crate cargo list and bill of lading, and it knew the
contents of the crate.[11] The following day, the vessel started
discharging its cargoes using its winch crane. Claudio Cansino, the
stevedore of the ICTSI, placed two sling cables on each end of Crate
No. 1.[15] No sling cable was fastened on the mid-portion of the crate.
In Dauzs experience, this was a normal procedure. [16] As the crate
was being hoisted from the vessels hatch, the mid-portion of the
wooden flooring suddenly snapped in the air, about five feet high from
the vessels twin deck, sending all its contents crashing down hard,
[17]
resulting in extensive damage to the shipment. BMICIs customs
broker, JRM Incorporated, took delivery of the cargo in such damaged
condition.[18] Upon receipt of the damaged shipment, BMICI found that
the same could no longer be used for the intended purpose. ]BMICI
subsequently filed separate claims against the NSCP, [20] the ICTSI,
[21]
and its insurer, the PCIC,[22] for US$61,500.00. When the other
companies denied liability, PCIC paid the claim and was issued a
Subrogation Receipt[23] for P1,740,634.50. On March 22, 1995, PCIC, as
subrogee, filed with the RTC of Manila, Branch 35, a Complaint for
Damages[24] against the Unknown owner of the vessel M/V National
Honor, NSCP and ICTSI, as defendants. PCIC alleged that the loss was
due to the fault and negligence of the defendants.

RTC - rendered judgment for PCIC and ordered the complaint

dismissed.
The loss was due to the internal defect and weakness of the
materials used in the fabrication of the crates. The middle
wooden batten had a hole (bukong-bukong).

CA affirmed in toto the RTCs decision

The loss of the shipment was due to an excepted cause
[t]he character of the goods or defects in the packing or in
the containers and the failure of the shipper to indicate signs
to notify the stevedores that extra care should be employed in
handling the shipment.

ISSUE:
W/N respondents should be held liable for the damage of the goods.

HELD:
NO. Common carriers, from the nature of their business and for reasons
of public policy, are mandated 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 extraordinary
diligence in the vigilance over the goods tendered for shipment requires the
common carrier to know and to follow the required precaution for avoiding
damage to, or destruction of the goods entrusted to it for sale, carriage and
delivery. It requires common carriers to render service with the greatest skill
and foresight and to use all reasonable means to ascertain the nature and
characteristic of goods tendered for shipment, and to exercise due care in
the handling and stowage, including such methods as their nature
requires.[42]
The common carriers duty to observe the requisite diligence in the
shipment of goods lasts from the time the articles are surrendered to or
unconditionally placed in the possession of, and received by, the carrier for
transportation until delivered to, or until the lapse of a reasonable time for
their acceptance, by the person entitled to receive them. [43] When the goods
shipped are either lost or arrive in damaged condition, a presumption arises
against the carrier of its failure to observe that diligence, and there need not
be an express finding of negligence to hold it liable. [44] To overcome the
presumption of negligence in the case of loss, destruction or deterioration of
the goods, the common carrier must prove that it exercised extraordinary
diligence.[45]

However, under Article 1734 of the New Civil Code, the presumption of
negligence does not apply to any of the following causes:
1. Flood, storm, earthquake, lightning or other natural disaster or
calamity;
2. Act of the public enemy in war, whether international or civil;
3. Act or omission of the shipper or owner of the goods;
4.

The character of the goods or defects in the packing or in

the containers;

5. Order or act of competent public authority.

Defect is the want or absence of something necessary for
completeness or perfection; a lack or absence of something essential to
completeness; a deficiency in something essential to the proper use for the
purpose for which a thing is to be used.[48] On the other hand, inferior means
of poor quality, mediocre, or second rate. [49] A thing may be of inferior quality
but not necessarily defective. In other words, defectiveness is not
synonymous with inferiority.
In the present case, the trial court declared that based on the record, the
loss of the shipment was caused by the negligence of the petitioner as the
shipper:
The case at bar falls under one of the exceptions mentioned in Article 1734
of the Civil Code, particularly number (4) thereof, i.e., the character of the
goods or defects in the packing or in the containers. The trial court found
that the breakage of the crate was not due to the fault or negligence of
ICTSI, but to the inherent defect and weakness of the materials used in the
fabrication of the said crate.
It appears that the wooden batten used as support for the flooring was not
made of good materials, which caused the middle portion thereof to give way
when it was lifted. The shipper also failed to indicate signs to notify the
stevedores that extra care should be employed in handling the shipment.
The petitioner failed to rebut the evidence of respondent, that the crates
were sealed and that the contents thereof could not be seen from the
outside.[52] While it is true that the crate contained machineries and spare
parts, it cannot thereby be concluded that the respondents knew or should

have known that the middle wooden batten had a hole, or that it was not
strong enough to bear the weight of the shipment.

PHILIPPINE CHARTER INSURANCE CORPORATION vs. UNKNOWN

OWNER OF THE VESSEL M/V NATIONAL HONOR, NATIONAL
SHIPPING CORPORATION OF THE PHILIPPINES and INTERNATIONAL
CONTAINER SERVICES, INC.
[G.R. No. 161833. July 8, 2005]
FACTS:
Petitioner Philippine Charter Insurance Corporation (PCIC) is the insurer of a
shipment on board the vessel M/V National Honor, represented in the
Philippines by its agent, National Shipping Corporation of the Philippines
(NSCP).
The M/V National Honor arrived at the Manila International Container
Terminal (MICT). The International Container Terminal Services, Incorporated
(ICTSI) was furnished with a copy of the crate cargo list and bill of lading, and
it knew the contents of the crate. The following day, the vessel started
discharging its cargoes using its winch crane. The crane was operated by
Olegario Balsa, a winchman from the ICTSI, exclusive arrastre operator of
MICT.
Denasto Dauz, Jr., the checker-inspector of the NSCP, along with the crew and
the surveyor of the ICTSI, conducted an inspection of the cargo. They
inspected the hatches, checked the cargo and found it in apparent good
condition. Claudio Cansino, the stevedore of the ICTSI, placed two sling
cables on each end of Crate No. 1. No sling cable was fastened on the midportion of the crate. In Dauzs experience, this was a normal procedure. As
the crate was being hoisted from the vessels hatch, the mid-portion of the
wooden flooring suddenly snapped in the air, about five feet high from the
vessels twin deck, sending all its contents crashing down hard, resulting in
extensive damage to the shipment.
PCIC paid the damage, and as subrogee, filed a case against M/V National
Honor, NSCP and ICTSI. Both RTC and CA dismissed the complaint.
ISSUE:
Whether or not the presumption of negligence is applicable in the instant
case.

HELD:
No.
We agree with the contention of the petitioner that common carriers, from
the nature of their business and for reasons of public policy, are mandated 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. he Court has defined extraordinary diligence in
the vigilance over the goods as follows:
The extraordinary diligence in the vigilance over the goods tendered for
shipment requires the common carrier to know and to follow the required
precaution for avoiding damage to, or destruction of the goods entrusted to
it for sale, carriage and delivery. It requires common carriers to render
service with the greatest skill and foresight and to use all reasonable means
to ascertain the nature and characteristic of goods tendered for shipment,
and to exercise due care in the handling and stowage, including such
methods as their nature requires.
The common carriers duty to observe the requisite diligence in the shipment
of goods lasts from the time the articles are surrendered to or
unconditionally placed in the possession of, and received by, the carrier for
transportation until delivered to, or until the lapse of a reasonable time for
their acceptance, by the person entitled to receive them.] >When the goods
shipped are either lost or arrive in damaged condition, a presumption arises
against the carrier of its failure to observe that diligence, and there need not
be an express finding of negligence to hold it liable. To overcome the
presumption of negligence in the case of loss, destruction or deterioration of
the goods, the common carrier must prove that it exercised extraordinary
diligence.
However, under Article 1734 of the New Civil Code, the presumption of
negligence does not apply to any of the following causes:
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 or 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.

It bears stressing that the enumeration in Article 1734 of the New Civil Code
which exempts the common carrier for the loss or damage to the cargo is a

closed list. 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
aforecited causes 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
carrier is negligent.
Defect is the want or absence of something necessary for completeness or
perfection; a lack or absence of something essential to completeness; a
deficiency in something essential to the proper use for the purpose for which
a thing is to be used. On the other hand, inferior means of poor quality,
mediocre, or second rate. A thing may be of inferior quality but not
necessarily defective. In other words, defectiveness is not synonymous
with inferiority.
xxx
In the present case, the trial court declared that based on the record, the
loss of the shipment was caused by the negligence of the petitioner as the
shipper:
The same may be said with respect to defendant ICTSI. The breakage and
collapse of Crate No. 1 and the total destruction of its contents were not
imputable to any fault or negligence on the part of said defendant in
handling the unloading of the cargoes from the carrying vessel, but was due
solely to the inherent defect and weakness of the materials used in the
fabrication of said crate.
The crate should have three solid and strong wooden batten placed side by
side underneath or on the flooring of the crate to support the weight of its
contents. x x x

BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V. and JARDINE

DAVIES TRANSPORT SERVICES, INC., petitioners, vs. PHILIPPINE FIRST
INSURANCE CO., INC., respondents.
PANGANIBAN, J.:
DOCTRINE: Proof of the delivery of goods in good order to a common carrier
and of their arrival in bad order at their destination constitutes prima facie
fault or negligence on the part of the carrier. If no adequate explanation is
given as to how the loss, the destruction or the deterioration of the goods
happened, the carrier shall be held liable therefor.

FACTS:
Shipper: CMC Trading A.G.
Carrier: BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V.
Subject: coils of various Prime Cold Rolled Steel sheets
Consignee: Philippine Steel Trading Corporation
Insurer: PHILIPPINE FIRST INSURANCE CO., INC.
Goods found to be in bad order. Belgian refused to pay. Thus, Phil First did.
Impugning the propriety of the suit against them, defendants-appellees
imputed that the damage and/or loss was due to pre-shipment damage, to
the inherent nature, vice or defect of the goods, or to perils, danger and
accidents of the sea, or to insufficiency of packing thereof, or to the act or
omission of the shipper of the goods or their representatives.
RTC dismissed. CA ruled that Belgian liable. Failed to overcome presumption
of negligence. Belgian inadequately proven petitioners' claim that the loss or
the deterioration of the goods was due to pre-shipment damage.
ISSUES: Whether petitioners have overcome the presumption of negligence
of a common carrier
RULING:
No. A review of the records and more so by the evidence shows
First, as stated in the Bill of Lading, petitioners received the subject shipment
in good order and condition in Hamburg, Germany.
Second, prior to the unloading of the cargo, an Inspection Report prepared
and signed by representatives of both parties showed the steel bands
broken, the metal envelopes rust-stained and heavily buckled, and the
contents thereof exposed and rusty.
Third, Bad Order Tally Sheet No. 154979 issued by Jardine Davies Transport
Services, Inc., stated that the four coils were in bad order and condition.
Normally, a request for a bad order survey is made in case there is an
apparent or a presumed loss or damage.
Fourth, the Certificate of Analysis stated that, based on the sample
submitted and tested, the steel sheets found in bad order were wet with
fresh water.
Fifth, petitioners -- in a letter addressed to the Philippine Steel Coating
Corporation and dated October 12, 1990 -- admitted that they were aware of
the condition of the four coils found in bad order and condition.

Further, petitioners failed to prove that they observed the extraordinary

diligence and precaution which the law requires a common carrier to know
and to follow to avoid damage to or destruction of the goods entrusted to it
for safe carriage and delivery.
True, the words "metal envelopes rust stained and slightly dented" were
noted on the Bill of Lading; however, there is no showing that petitioners
exercised due diligence to forestall or lessen the loss. The master of the
vessel should have known at the outset that metal envelopes in the said
state would eventually deteriorate when not properly stored while in
transit.The master of the vessel and his crew should have undertaken
precautionary measures to avoid possible deterioration of the cargo. But
none of these measures was taken.
In their attempt to escape liability, petitioners further contend that they are
exempted from liability under Article 1734(4) of the Civil Code. They cite the
notation "metal envelopes rust stained and slightly dented" printed on the
Bill of Lading as evidence that the character of the goods or defect in the
packing or the containers was the proximate cause of the damage
From the evidence on record, it cannot be reasonably concluded that the
damage to the four coils was due to the condition noted on the Bill of
Lading.Theaforecitedexception refers to cases when goods are lost or
damaged while in transit as a result of the natural decay of perishable goods
or the fermentation or evaporation of substances liable therefor, the
necessary and natural wear of goods in transport, defects in packages in
which they are shipped, or the natural propensities of animals. None of these
is present in the instant case.
Further, even if the fact of improper packing was known to the carrier or its
crew or was apparent upon ordinary observation, it is not relieved of liability
for loss or injury resulting therefrom, once it accepts the goods
notwithstanding such condition.
May 2nd at 3rd issue pa pero di konasinama. Notice of loss. Dapat within 3
days dawsiyanagfile, 1 yr prescription if there was an inspection. Limited
liability. No stipulation in the bill of lading, Letter of credit attached to the bill
of lading does not count.

Delsan Transport Lines v. CA

G.R. No. 127897

November 15, 2001

DELSAN TRANSPORT LINES, INC., petitioner, vs. THE HON. COURT OF

APPEALS and AMERICAN HOME ASSURANCE
CORPORATION, respondents.

FACTS;

Carrier Delsan Transport Lines Inc.

Shipper Caltex Philippines

Insurer American Home Assurance Corporation

Caltex entered into a contract with Delsan Transport Lines to transport

ots petroleum goods from its Batangas Bataan Refinery to
Zamboanga City. The shipment was insured by private respondent
American Home Assurance Corp. MT Maysum set sail from Batangas
for Zamboanga City. Unfortunately, the vessel sank in the early
morning of August 16, 1986 near Panay Gulf in the Visayas taking with
it the entire cargo of fuel oil. Subsequently, private respondent paid
Caltex the sum of (P5,096,635.67) representing the insured value of
the lost cargo. Exercising its right of subrogation, the private
respondent demanded of the petitioner the same amount it paid to
Caltex. Delsan failed to pay its obligation the American Home
Assurance Corp. Hence, the latter institutes an action to recover the
amount paid.

RTC - ruled in favor of petitioner with the following reasons:

MT Maysum, was seaworthy as certified by Philippine Coastguard
the incident was caused by unexpected inclement weather
condition or force majeure.

CS reversed trial courts decision on the following reasons:

gave credence to the weather report issued by the PAG-ASA that
the sea was calm during the voyage

ISSUE:
W/N petitioner should be held liable for damages.

HELD;
YES. From the nature of their business and for reasons of public policy,
common carriers are bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of passengers transported by
them, according to all the circumstance of each case. 11 In the event of loss,
destruction or deterioration of the insured goods, common carriers shall be
responsible unless the same is brought about, among others, by flood, storm,
earthquake, lightning or other natural disaster or calamity. 12 In all other
cases, 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.
The tale of strong winds and big waves by the said officers of the
petitioner however, was effectively rebutted and belied by the weather
report15 from the PAGASA, showing that from 2:00 oclock to 8:00 oclock in
the morning on August 16, 1986, the wind speed remained at ten (10) to
twenty (20) knots per hour while the height of the waves ranged from .7 to
two (2) meters in the vicinity of Cuyo East Pass and Panay Gulf where the
subject vessel sank. Thus, as the appellate court correctly ruled, petitioners
vessel, MT Maysun, sank with its entire cargo for the reason that it was not
seaworthy. There was no squall or bad weather or extremely poor sea
condition in the vicinity when the said vessel sank.
Thus not having overturned the evidence presented, (that it observed
extraordinary diligence) the presumption of negligence stands, and therefore
it is but right and proper to rule that petitioner should be held liable for
damages.

FACTS:
Davao Union Marketing Corporation (DUMC) contracted the services of PKS
Shipping Company (PKS Shipping) for the shipment to Tacloban City of
75,000 bags of cement worth P3,375,000.

DUMC insured the goods for its full value with Philippine American General
Insurance Company (Philamgen).
The goods were loaded aboard the dumb barge Limar I belonging to PKS
Shipping.
December 22, 1988 9 pm: While Limar I was being towed by PKS tugboat MT
Iron Eagle, the barge sank a couple of miles off the coast of Dumagasa Point,
in Zamboanga del Sur, bringing down with it the entire cargo of 75,000 bags
of cement.
DUMC filed a formal claim with Philamgen for the full amount of the
insurance. Philamgen promptly made payment; it then sought
reimbursement from PKS Shipping of the sum paid to DUMC but the shipping
company refused to pay so Philamgen to file suit against PKS Shipping
RTC: dismissed the complaint - fortuitous event
CA:Affirmed - not a common carrier but a casual occupation
ISSUE: W/N PKS Shipping is NOT liable since it was NOT a common carrier

HELD: NO. Petition is DENIED

Article 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
Complementary is Section 13, paragraph (b), of the Public Service Act public
service" to be
"x x x 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, 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, 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 communication systems, wire or wireless broadcasting stations and

other similar public services
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
distinction between:
common or public carrier
private or special carrier - character of the business, such that if the
undertaking is an isolated transaction , not a part of the business or
occupation, and the carrier does not hold itself out to carry the goods for the
general public or to a limited clientele, although involving the carriage of
goods for a fee
EX: charter party which includes both the vessel and its crew, such as in a
bareboat or demise, where the charterer obtains the use and service of all or
some part of a ship for a period of time or a voyage or voyages and gets the
control of the vessel and its crew.
The regularity of its activities in this area indicates more than just a casual
activity on its part
The appellate court ruled, gathered from the testimonies and sworn marine
protests of the respective vessel masters ofLimar I and MT Iron Eagle, that
there was no way by which the barges or the tugboats crew could have
prevented the sinking of Limar I. The vessel was suddenly tossed by waves
of extraordinary height of 6 to 8 feet and buffeted by strong winds of 1.5
knots resulting in the entry of water into the barges hatches. The official
Certificate of Inspection of the barge issued by the Philippine Coastguard and
the Coastwise Load Line Certificate would attest to the seaworthiness of
Limar I and should strengthen the factual findings of the appellate court.
Findings of fact of the Court of Appeals generally conclude this Court; none of
the recognized exceptions from the rule - (1) when the factual findings of the
Court of Appeals and the trial court are contradictory; (2) when the
conclusion is a finding grounded entirely on speculation, surmises, or
conjectures; (3) when the inference made by the Court of Appeals from its
findings of fact is manifestly mistaken, absurd, or impossible; (4) when there
is a grave abuse of discretion in the appreciation of facts; (5) when the
appellate court, in making its findings, went beyond the issues of the case
and such findings are contrary to the admissions of both appellant and
appellee; (6) when the judgment of the Court of Appeals is premised on a
misapprehension of facts; (7) when the Court of Appeals failed to notice

certain relevant facts which, if properly considered, would justify a different

conclusion; (8) when the findings of fact are themselves conflicting; (9) when
the findings of fact are conclusions without citation of the specific evidence
on which they are based; and (10) when the findings of fact of the Court of
Appeals are premised on the absence of evidence but such findings are
contradicted by the evidence on record would appear to be clearly extant
in this instance.