Beruflich Dokumente
Kultur Dokumente
On 14 November 1985 and 18 November 1985, respectively, Fortune Insurance and Aggrieved, the Spouses appealed to respondent Court of Appeals.
Baliwag each filed Motions to Dismiss on the ground that George, in consideration of the
sum of P8,020.50 had executed a "Release of Claims" dated 16 May 1985. These Motions On 22 October 1987, the Appellate Court rendered a Decision 2 setting aside the appealed
were denied by the Trial Court in an Order dated 13 January 1986 as they were filed Order and holding that the "Release of Claims" cannot operate as a valid ground for the
beyond the time for pleading and after the Answer were already filed. dismissal of the case because it does not have the conformity of all the parties, particularly
George's parents, who have a substantial interest in the case as they stand to be
On 5 February 1986 Baliwag filed a Motion to Admit Amended Answer, which was granted prejudiced by the judgment because they spent a sizeable amount for the medical bills of
by the Trial Court. The Amended Answer incorporated the affirmative defense in the their son; that the Release of Claims was secured by Fortune Insurance for the
Motion to Dismiss to the effect that on 16 May 1985, George bad been paid all his claims consideration of P8,020.50 as the full and final settlement of its liability under the insurance
There is no question regarding the genuineness and due execution of the Release of REGALADO, J.:
Claims. It is a duly notarized public document. It clearly stipulates that the consideration of On May 13, 1985, private respondents filed a complaint 1 for damages against
P8,020.50 received by George was "to release and forever discharge Fortune Insurance petitioners for the death of Pedrito Cudiamat as a result of a vehicular accident which
and/or Baliwag from any and all liabilities now accrued or to accrue on account of any and occurred on March 25, 1985 at Marivic, Sapid, Mankayan, Benguet. Among others, it was
On July 29, 1988, the trial court rendered a decision, effectively in favor of petitioners, with
This Court is satisfied that Pedrito Cudiamat was negligent in trying to board a
this decretal portion:
moving vehicle, especially with one of his hands holding an umbrella. And,
without having given the driver or the conductor any indication that he wishes to
IN VIEW OF ALL THE FOREGOING, judgment is hereby pronounced that board the bus. But defendants can also be found wanting of the necessary
Pedrito Cudiamat was negligent, which negligence was the proximate cause of diligence. In this connection, it is safe to assume that when the deceased
his death. Nonetheless, defendants in equity, are hereby ordered to pay the heirs Cudiamat attempted to board defendants' bus, the vehicle's door was open
of Pedrito Cudiamat the sum of P10,000.00 which approximates the amount instead of being closed. This should be so, for it is hard to believe that one would
defendants initially offered said heirs for the amicable settlement of the case. No even attempt to board a vehicle (i)n motion if the door of said vehicle is closed.
costs. Here lies the defendant's lack of diligence. Under such circumstances, equity
demands that there must be something given to the heirs of the victim to
SO ORDERED. 2 assuage their feelings. This, also considering that initially, defendant common
carrier had made overtures to amicably settle the case. It did offer a certain
Not satisfied therewith, private respondents appealed to the Court of Appeals which, in a monetary consideration to the victim's heirs. 7
decision 3 in CA-G.R. CV No. 19504 promulgated on August 14, 1990, set aside the
decision of the lower court, and ordered petitioners to pay private respondents: However, respondent court, in arriving at a different opinion, declares that:
1. The sum of Thirty Thousand (P30,000.00) Pesos by way of indemnity for From the testimony of appellees'own witness in the person of Vitaliano Safarita, it
death of the victim Pedrito Cudiamat; is evident that the subject bus was at full stop when the victim Pedrito Cudiamat
boarded the same as it was precisely on this instance where a certain Miss
2. The sum of Twenty Thousand (P20,000.00) by way of moral damages; Abenoja alighted from the bus. Moreover, contrary to the assertion of the
appellees, the victim did indicate his intention to board the bus as can be seen
from the testimony of the said witness when he declared that Pedrito Cudiamat
3. The sum of Two Hundred Eighty Eight Thousand (P288,000.00) Pesos as
was no longer walking and made a sign to board the bus when the latter was still
actual and compensatory damages;
at a distance from him. It was at the instance when Pedrito Cudiamat was closing
his umbrella at the platform of the bus when the latter made a sudden jerk
4. The costs of this suit. 4 movement (as) the driver commenced to accelerate the bus.
Petitioners' motion for reconsideration was denied by the Court of Appeals in its resolution Evidently, the incident took place due to the gross negligence of the appellee-
dated October 4, 1990, 5 hence this petition with the central issue herein being whether driver in prematurely stepping on the accelerator and in not waiting for the
BENTOR| S.Y.2017-2018 Transportation Law: Atty. Ventura| 3
passenger to first secure his seat especially so when we take into account that when it suddenly accelerated forward and was run over by the rear right tires of the
the platform of the bus was at the time slippery and wet because of a drizzle. The vehicle, as shown by the physical evidence on where he was thereafter found in relation to
defendants-appellees utterly failed to observe their duty and obligation as the bus when it stopped. Under such circumstances, it cannot be said that the deceased
common carrier to the end that they should observe extra-ordinary diligence in was guilty of negligence.
the vigilance over the goods and for the safety of the passengers transported by
them according to the circumstances of each case (Article 1733, New Civil The contention of petitioners that the driver and the conductor had no knowledge that the
Code). 8 victim would ride on the bus, since the latter had supposedly not manifested his intention
to board the same, does not merit consideration. When the bus is not in motion there is no
After a careful review of the evidence on record, we find no reason to disturb the above necessity for a person who wants to ride the same to signal his intention to board. A public
holding of the Court of Appeals. Its aforesaid findings are supported by the testimony of utility bus, once it stops, is in effect making a continuous offer to bus riders. Hence, it
petitioners' own witnesses. One of them, Virginia Abalos, testified on cross-examination as becomes the duty of the driver and the conductor, every time the bus stops, to do no act
follows: that would have the effect of increasing the peril to a passenger while he was attempting to
Q It is not a fact Madam witness, that at bunkhouse 54, that is before the place of board the same. The premature acceleration of the bus in this case was a breach of such
the incident, there is a crossing? duty.
A The way going to the mines but it is not being pass(ed) by the bus.
Q And the incident happened before bunkhouse 56, is that not correct? It is the duty of common carriers of passengers, including common carriers by railroad
A It happened between 54 and 53 bunkhouses. train, streetcar, or motorbus, to stop their conveyances a reasonable length of time in order
to afford passengers an opportunity to board and enter, and they are liable for injuries
The bus conductor, Martin Anglog, also declared: suffered by boarding passengers resulting from the sudden starting up or jerking of their
conveyances while they are doing so.
Q When you arrived at Lepanto on March 25, 1985, will you please inform this
Honorable Court if there was anv unusual incident that occurred? Further, even assuming that the bus was moving, the act of the victim in boarding the
same cannot be considered negligent under the circumstances. As clearly explained in the
A When we delivered a baggage at Marivic because a person alighted there testimony of the aforestated witness for petitioners, Virginia Abalos, th bus had "just
between Bunkhouse 53 and 54. started" and "was still in slow motion" at the point where the victim had boarded and was
on its platform. 13
Q What happened when you delivered this passenger at this particular place in
Lepanto? It is not negligence per se, or as a matter of law, for one attempt to board a train or
streetcar which is moving slowly. An ordinarily prudent person would have made the
attempt board the moving conveyance under the same or similar circumstances. The fact
A When we reached the place, a passenger alighted and I signalled my driver.
that passengers board and alight from slowly moving vehicle is a matter of common
When we stopped we went out because I saw an umbrella about a split second
experience both the driver and conductor in this case could not have been unaware of
and I signalled again the driver, so the driver stopped and we went down and we
such an ordinary practice.
saw Pedrito Cudiamat asking for help because he was lying down.
The victim herein, by stepping and standing on the platform of the bus, is already
Q How far away was this certain person, Pedrito Cudiamat, when you saw him
considered a passenger and is entitled all the rights and protection pertaining to such a
lying down from the bus how far was he?
contractual relation. Hence, it has been held that the duty which the carrier passengers
A It is about two to three meters.
owes to its patrons extends to persons boarding cars as well as to those alighting
Q On what direction of the bus was he found about three meters from the bus,
therefrom.
was it at the front or at the back?
A At the back, sir. 10 (Emphasis supplied.)
Common carriers, from the nature of their business and reasons of public policy, are
bound to observe extraordina diligence for the safety of the passengers transported by the
The foregoing testimonies show that the place of the accident and the place where one of
according to all the circumstances of each case. A common carrier is bound to carry the
the passengers alighted were both between Bunkhouses 53 and 54, hence the finding of
passengers safely as far as human care and foresight can provide, using the utmost
the Court of Appeals that the bus was at full stop when the victim boarded the same is
diligence very cautious persons, with a due regard for all the circumstances. 17
orrect. They further confirm the conclusion that the victim fell from the platform of the bus
BENTOR| S.Y.2017-2018 Transportation Law: Atty. Ventura| 4
It has also been repeatedly held that in an action based on a contract of carriage, the court With respect to the award of damages, an oversight was, however, committed by
need not make an express finding of fault or negligence on the part of the carrier in order respondent Court of Appeals in computing the actual damages based on the gross income
to hold it responsible to pay the damages sought by the passenger. By contract of of the victim. The rule is that the amount recoverable by the heirs of a victim of a tort is not
carriage, the carrier assumes the express obligation to transport the passenger to his the loss of the entire earnings, but rather the loss of that portion of the earnings which the
destination safely and observe extraordinary diligence with a due regard for all the beneficiary would have received. In other words, only net earnings, not gross earnings, are
circumstances, and any injury that might be suffered by the passenger is right away to be considered, that is, the total of the earnings less expenses necessary in the creation
attributable to the fault or negligence of the carrier. This is an exception to the general rule of such earnings or income and minus living and other incidental expenses. 22
that negligence must be proved, and it is therefore incumbent upon the carrier to prove
that it has exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the We are of the opinion that the deductible living and other expense of the deceased may
Civil Code. fairly and reasonably be fixed at P500.00 a month or P6,000.00 a year. In adjudicating the
actual or compensatory damages, respondent court found that the deceased was 48 years
Moreover, the circumstances under which the driver and the conductor failed to bring the old, in good health with a remaining productive life expectancy of 12 years, and then
gravely injured victim immediately to the hospital for medical treatment is a patent and earning P24,000.00 a year. Using the gross annual income as the basis, and multiplying
incontrovertible proof of their negligence. It defies understanding and can even be the same by 12 years, it accordingly awarded P288,000. Applying the aforestated rule on
stigmatized as callous indifference. The evidence shows that after the accident the bus computation based on the net earnings, said award must be, as it hereby is, rectified and
could have forthwith turned at Bunk 56 and thence to the hospital, but its driver instead reduced to P216,000.00. However, in accordance with prevailing jurisprudence, the death
opted to first proceed to Bunk 70 to allow a passenger to alight and to deliver a indemnity is hereby increased to P50,000.00.
refrigerator, despite the serious condition of the victim. The vacuous reason given by
petitioners that it was the wife of the deceased who caused the delay was tersely and WHEREFORE, subject to the above modifications, the challenged judgment and resolution
correctly confuted by respondent court: of respondent Court of Appeals are hereby AFFIRMED in all other respects.
... The pretension of the appellees that the delay was due to the fact that they SO ORDERED.
had to wait for about twenty minutes for Inocencia Cudiamat to get dressed
deserves scant consideration. It is rather scandalous and deplorable for a wife
whose husband is at the verge of dying to have the luxury of dressing herself up
Republic of the Philippines
for about twenty minutes before attending to help her distressed and helpless
SUPREME COURT
husband. 19
Manila
THIRD DIVISION
Further, it cannot be said that the main intention of petitioner Lardizabal in going to Bunk G.R. No. L-47822 December 22, 1988
70 was to inform the victim's family of the mishap, since it was not said bus driver nor the PEDRO DE GUZMAN, petitioner,
conductor but the companion of the victim who informed his family thereof. 20 In fact, it vs.
was only after the refrigerator was unloaded that one of the passengers thought of sending COURT OF APPEALS and ERNESTO CENDANA, respondents.
somebody to the house of the victim, as shown by the testimony of Virginia Abalos again, Vicente D. Millora for petitioner.
to wit: Jacinto Callanta for private respondent.
Q Why, what happened to your refrigerator at that particular time? FELICIANO, J.:
A I asked them to bring it down because that is the nearest place to our house
and when I went down and asked somebody to bring down the refrigerator, I also Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and
asked somebody to call the family of Mr. Cudiamat. scrap metal in Pangasinan. Upon gathering sufficient quantities of such scrap material,
COURT: respondent would bring such material to Manila for resale. He utilized two (2) six-wheeler
Q Why did you ask somebody to call the family of Mr. Cudiamat? trucks which he owned for hauling the material to Manila. On the return trip to Pangasinan,
A Because Mr. Cudiamat met an accident, so I ask somebody to call for the respondent would load his vehicles with cargo which various merchants wanted delivered
family of Mr. Cudiamat. to differing establishments in Pangasinan. For that service, respondent charged freight
Q But nobody ask(ed) you to call for the family of Mr. Cudiamat? rates which were commonly lower than regular commercial rates.
A No sir.
Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes
The above article makes no distinction between one whose principal business activity is
never reached petitioner, since the truck which carried these boxes was hijacked
the carrying of persons or goods or both, and one who does such carrying only as
somewhere along the MacArthur Highway in Paniqui, Tarlac, by armed men who took with
an ancillary activity (in local Idiom as "a sideline"). Article 1732 also carefully avoids
them the truck, its driver, his helper and the cargo.
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
On 6 January 1971, petitioner commenced action against private respondent in the Court unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its
of First Instance of Pangasinan, demanding payment of P 22,150.00, the claimed value of services to the "general public," i.e., the general community or population, and one who
the lost merchandise, plus damages and attorney's fees. Petitioner argued that private offers services or solicits business only from a narrow segment of the general population.
respondent, being a common carrier, and having failed to exercise the extraordinary We think that Article 1733 deliberaom making such distinctions.
diligence required of him by the law, should be held liable for the value of the undelivered
goods.
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
In his Answer, private respondent denied that he was a common carrier and argued that (Commonwealth Act No. 1416, as amended) which at least partially supplements the law
he could not be held responsible for the value of the lost goods, such loss having been due on common carriers set forth in the Civil Code. Under Section 13, paragraph (b) of the
to force majeure. Public Service Act, "public service" includes:
On 10 December 1975, the trial court rendered a Decision 1 finding private respondent to ... every person that now or hereafter may own, operate, manage, or control in
be a common carrier and holding him liable for the value of the undelivered goods (P the Philippines, for hire or compensation, with general or limited clientele,
22,150.00) as well as for P 4,000.00 as damages and P 2,000.00 as attorney's fees. whether permanent, occasional or accidental, and done for general business
purposes, any common carrier, railroad, street railway, traction railway, subway
On appeal before the Court of Appeals, respondent urged that the trial court had erred in motor vehicle, either for freight or passenger, or both, with or without fixed route
considering him a common carrier; in finding that he had habitually offered trucking and whatever may be its classification, freight or carrier service of any class,
services to the public; in not exempting him from liability on the ground of force express service, steamboat, or steamship line, pontines, ferries and water craft,
majeure; and in ordering him to pay damages and attorney's fees. engaged in the transportation of passengers or freight or both, shipyard, marine
repair shop, wharf or dock, ice plant,
The Court of Appeals reversed the judgment of the trial court and held that respondent had ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power,
been engaged in transporting return loads of freight "as a casual water supply and power petroleum, sewerage system, wire or wireless
occupation a sideline to his scrap iron business" and not as a common carrier. communications systems, wire or wireless broadcasting stations and other
Petitioner came to this Court by way of a Petition for Review assigning as errors the similar public services. ... (Emphasis supplied)
following conclusions of the Court of Appeals:
It appears to the Court that private respondent is properly characterized as a common
1. that private respondent was not a common carrier; carrier even though he merely "back-hauled" goods for other merchants from Manila to
2. that the hijacking of respondent's truck was force majeure; and Pangasinan, although such back-hauling was done on a periodic or occasional rather than
3. that respondent was not liable for the value of the undelivered cargo. (Rollo, p. regular or scheduled manner, and even though private respondent's principal occupation
111) was not the carriage of goods for others. There is no dispute that private respondent
We turn then to the liability of private respondent as a common carrier. The precise issue that we address here relates to the specific requirements of the duty of
extraordinary diligence in the vigilance over the goods carried in the specific context of
Common carriers, "by the nature of their business and for reasons of public policy" 2 are hijacking or armed robbery.
held to a very high degree of care and diligence ("extraordinary diligence") in the carriage
of goods as well as of passengers. The specific import of extraordinary diligence in the As noted earlier, the duty of extraordinary diligence in the vigilance over goods is, under
care of goods transported by a common carrier is, according to Article 1733, "further Article 1733, given additional specification not only by Articles 1734 and 1735 but also by
expressed in Articles 1734,1735 and 1745, numbers 5, 6 and 7" of the Civil Code. Article 1745, numbers 4, 5 and 6, Article 1745 provides in relevant part:
Article 1734 establishes the general rule that common carriers are responsible for the loss, Any of the following or similar stipulations shall be considered unreasonable,
destruction or deterioration of the goods which they carry, "unless the same is due to any unjust and contrary to public policy:
of the following causes only:
xxx xxx xxx
(1) Flood, storm, earthquake, lightning or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(5) that the common carrier shall not be responsible for the acts or
(3) Act or omission of the shipper or owner of the goods;
omissions of his or its employees;
(4) The character-of the goods or defects in the packing or-in the containers; and
(5) Order or act of competent public authority.
(6) that the common carrier's liability for acts committed by thieves, or
of robbers who donot act with grave or irresistible threat, violence or
It is important to point out that the above list of causes of loss, destruction or deterioration
force, is dispensed with or diminished; and
which exempt the common carrier for responsibility therefor, is a closed list. Causes falling
outside the foregoing list, even if they appear to constitute a species of force majeure fall
within the scope of Article 1735, which provides as follows: (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
In all cases other than those mentioned in numbers 1, 2, 3, 4 and 5 of the
the contract of carriage. (Emphasis supplied)
preceding article, if the goods are lost, destroyed or deteriorated, common
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Under Article 1745 (6) above, a common carrier is held responsible and will not be ADORACION C. ARELLANO, in her official capacity as City Treasurer of
allowed to divest or to diminish such responsibility even for acts of strangers like thieves Batangas, respondents.
or robbers, except where such thieves or robbers in fact acted "with grave or irresistible DECISION
threat, violence or force." We believe and so hold that the limits of the duty of extraordinary MARTINEZ, J.:
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." This petition for review on certiorari assails the Decision of the Court of Appeals
dated November 29, 1995, in CA-G.R. SP No. 36801, affirming the decision of the
Regional Trial Court of Batangas City, Branch 84, in Civil Case No. 4293, which dismissed
In the instant case, armed men held up the second truck owned by private respondent
petitioners' complaint for a business tax refund imposed by the City of Batangas.
which carried petitioner's cargo. The record shows that an information for robbery in band
was filed in the Court of First Instance of Tarlac, Branch 2, in Criminal Case No. 198 Petitioner is a grantee of a pipeline concession under Republic Act No. 387, as
entitled "People of the Philippines v. Felipe Boncorno, Napoleon Presno, Armando Mesina, amended, to contract, install and operate oil pipelines. The original pipeline concession
Oscar Oria and one John Doe." There, the accused were charged with willfully and was granted in 1967[1] and renewed by the Energy Regulatory Board in 1992. [2]
unlawfully taking and carrying away with them the second truck, driven by Manuel Estrada
and loaded with the 600 cartons of Liberty filled milk destined for delivery at petitioner's Sometime in January 1995, petitioner applied for a mayor's permit with the Office of
store in Urdaneta, Pangasinan. The decision of the trial court shows that the accused the Mayor of Batangas City. However, before the mayor's permit could be issued, the
acted with grave, if not irresistible, threat, violence or force. 3 Three (3) of the five (5) hold- respondent City Treasurer required petitioner to pay a local tax based on its gross receipts
uppers were armed with firearms. The robbers not only took away the truck and its cargo for the fiscal year 1993 pursuant to the Local Government Code.[3] The respondent City
but also kidnapped the driver and his helper, detaining them for several days and later Treasurer assessed a business tax on the petitioner amounting to P956,076.04 payable in
releasing them in another province (in Zambales). The hijacked truck was subsequently four installments based on the gross receipts for products pumped at GPS-1 for the fiscal
found by the police in Quezon City. The Court of First Instance convicted all the accused of year 1993 which amounted to P181,681,151.00. In order not to hamper its operations,
robbery, though not of robbery in band. 4 petitioner paid the tax under protest in the amount of P239,019.01 for the first quarter of
1993.
In these circumstances, we hold that the occurrence of the loss must reasonably be On January 20, 1994, petitioner filed a letter-protest addressed to the respondent
regarded as quite beyond the control of the common carrier and properly regarded as a City Treasurer, the pertinent portion of which reads:
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 "Please note that our Company (FPIC) is a pipeline operator with a government
or events which cannot be foreseen or are inevitable, provided that they shall have concession granted under the Petroleum Act. It is engaged in the business of transporting
complied with the rigorous standard of extraordinary diligence. petroleum products from the Batangas refineries, via pipeline, to Sucat and JTF Pandacan
Terminals. As such, our Company is exempt from paying tax on gross receipts under
We, therefore, agree with the result reached by the Court of Appeals that private Section 133 of the Local Government Code of 1991 x x x x
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. "Moreover, Transportation contractors are not included in the enumeration of contractors
under Section 131, Paragraph (h) of the Local Government Code. Therefore, the authority
ACCORDINGLY, the Petition for Review on certiorari is hereby DENIED and the Decision to impose tax 'on contractors and other independent contractors' under Section 143,
of the Court of Appeals dated 3 August 1977 is AFFIRMED. No pronouncement as to Paragraph (e) of the Local Government Code does not include the power to levy on
costs. transportation contractors.
SO ORDERED. "The imposition and assessment cannot be categorized as a mere fee authorized under
Section 147 of the Local Government Code. The said section limits the imposition of fees
and charges on business to such amounts as may be commensurate to the cost of
regulation, inspection, and licensing. Hence, assuming arguendo that FPIC is liable for the
license fee, the imposition thereof based on gross receipts is violative of the aforecited
SECOND DIVISION
provision. The amount of P956,076.04 (P239,019.01 per quarter) is not commensurate to
[G.R. No. 125948. December 29, 1998]
the cost of regulation, inspection and licensing. The fee is already a revenue raising
FIRST PHILIPPINE INDUSTRIAL CORPORATION, petitioner, vs. COURT OF
measure, and not a mere regulatory imposition."[4]
APPEALS, HONORABLE PATERNO V. TAC-AN, BATANGAS CITY and
BENTOR| S.Y.2017-2018 Transportation Law: Atty. Ventura| 8
On March 8, 1994, the respondent City Treasurer denied the protest contending that taxes. Plaintiff is not a common carrier, but a special carrier
petitioner cannot be considered engaged in transportation business, thus it cannot claim extending its services and facilities to a single specific or "special
exemption under Section 133 (j) of the Local Government Code. [5] customer" under a "special contract."
On June 15, 1994, petitioner filed with the Regional Trial Court of Batangas City a
2. The Local Tax Code of 1992 was basically enacted to give more and effective
complaint[6] for tax refund with prayer for a writ of preliminary injunction against
local autonomy to local governments than the previous enactments,
respondents City of Batangas and Adoracion Arellano in her capacity as City Treasurer. In
to make them economically and financially viable to serve the people
its complaint, petitioner alleged, inter alia, that: (1) the imposition and collection of the
and discharge their functions with a concomitant obligation to accept
business tax on its gross receipts violates Section 133 of the Local Government Code; (2)
certain devolution of powers, x x x So, consistent with this policy
the authority of cities to impose and collect a tax on the gross receipts of "contractors and
even franchise grantees are taxed (Sec. 137) and contractors are
independent contractors" under Sec. 141 (e) and 151 does not include the authority to
also taxed under Sec. 143 (e) and 151 of the Code."[9]
collect such taxes on transportation contractors for, as defined under Sec. 131 (h), the
term "contractors" excludes transportation contractors; and, (3) the City Treasurer illegally
and erroneously imposed and collected the said tax, thus meriting the immediate refund of Petitioner assailed the aforesaid decision before this Court via a petition for
the tax paid.[7] review. On February 27, 1995, we referred the case to the respondent Court of Appeals for
consideration and adjudication.[10]On November 29, 1995, the respondent court rendered a
Traversing the complaint, the respondents argued that petitioner cannot be exempt decision[11] affirming the trial court's dismissal of petitioner's complaint. Petitioner's motion
from taxes under Section 133 (j) of the Local Government Code as said exemption applies for reconsideration was denied on July 18, 1996. [12]
only to "transportation contractors and persons engaged in the transportation by hire and
common carriers by air, land and water." Respondents assert that pipelines are not Hence, this petition. At first, the petition was denied due course in a Resolution dated
included in the term "common carrier" which refers solely to ordinary carriers such as November 11, 1996.[13] Petitioner moved for a reconsideration which was granted by this
trucks, trains, ships and the like. Respondents further posit that the term "common carrier" Court in a Resolution[14]of January 20, 1997. Thus, the petition was reinstated.
under the said code pertains to the mode or manner by which a product is delivered to its
Petitioner claims that the respondent Court of Appeals erred in holding that (1) the
destination.[8]
petitioner is not a common carrier or a transportation contractor, and (2) the exemption
On October 3, 1994, the trial court rendered a decision dismissing the complaint, sought for by petitioner is not clear under the law.
ruling in this wise:
There is merit in the petition.
"xxx Plaintiff is either a contractor or other independent contractor. A "common carrier" may be defined, broadly, as one who holds himself out to the
public as engaged in the business of transporting persons or property from place to place,
xxx the exemption to tax claimed by the plaintiff has become unclear. It is a rule that tax for compensation, offering his services to the public generally.
exemptions are to be strictly construed against the taxpayer, taxes being the lifeblood of Article 1732 of the Civil Code defines a "common carrier" as "any person,
the government. Exemption may therefore be granted only by clear and unequivocal corporation, firm or association engaged in the business of carrying or transporting
provisions of law. passengers or goods or both, by land, water, or air, for compensation, offering their
services to the public."
"Plaintiff claims that it is a grantee of a pipeline concession under Republic Act 387,
(Exhibit A) whose concession was lately renewed by the Energy Regulatory Board (Exhibit The test for determining whether a party is a common carrier of goods is:
B). Yet neither said law nor the deed of concession grant any tax exemption upon the
plaintiff. 1. He must be engaged in the business of carrying goods for others as a public
employment, and must hold himself out as ready to engage in the
"Even the Local Government Code imposes a tax on franchise holders under Sec. 137 of transportation of goods for person generally as a business and not as a
the Local Tax Code. Such being the situation obtained in this case (exemption being casual occupation;
unclear and equivocal) resort to distinctions or other considerations may be of help:
2. He must undertake to carry goods of the kind to which his business is
1. That the exemption granted under Sec. 133 (j) encompasses only common confined;
carriers so as not to overburden the riding public or commuters with
So understood, the concept of 'common carrier' under Article 1732 may be seen to The Bureau of Internal Revenue likewise considers the petitioner a "common
coincide neatly with the notion of 'public service,' under the Public Service Act carrier." In BIR Ruling No. 069-83, it declared:
(Commonwealth Act No. 1416, as amended) which at least partially supplements the law
on common carriers set forth in the Civil Code. Under Section 13, paragraph (b) of the "x x x since [petitioner] is a pipeline concessionaire that is engaged only in transporting
Public Service Act, 'public service' includes: petroleum products, it is considered a common carrier under Republic Act No. 387 x x
x. Such being the case, it is not subject to withholding tax prescribed by Revenue
'every person that now or hereafter may own, operate, manage, or control in the Regulations No. 13-78, as amended."
Philippines, for hire or compensation, with general or limited clientele, whether permanent,
occasional or accidental, and done for general business purposes, any common carrier, From the foregoing disquisition, there is no doubt that petitioner is a "common
railroad, street railway, traction railway, subway motor vehicle, either for freight or carrier" and, therefore, exempt from the business tax as provided for in Section 133 (j), of
passenger, or both, with or without fixed route and whatever may be its classification, the Local Government Code, to wit:
freight or carrier service of any class, express service, steamboat, or steamship line,
pontines, ferries and water craft, engaged in the transportation of passengers or freight "Section 133. Common Limitations on the Taxing Powers of Local Government Units. -
or both, shipyard, marine repair shop, wharf or dock, ice plant, ice-refrigeration plant, Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities,
canal, irrigation system gas, electric light heat and power, water supply and power municipalities, and barangays shall not extend to the levy of the following :
petroleum, sewerage system, wire or wireless communications systems, wire or wireless
broadcasting stations and other similar public services.' "(Underscoring Supplied) xxxxxxxxx
Also, respondent's argument that the term "common carrier" as used in Section 133
(j) Taxes on the gross receipts of transportation contractors and persons
(j) of the Local Government Code refers only to common carriers transporting goods and engaged in the transportation of passengers or freight by hire and
passengers through moving vehicles or vessels either by land, sea or water, is erroneous.
common carriers by air, land or water, except as provided in this Code."
BENTOR| S.Y.2017-2018 Transportation Law: Atty. Ventura| 10
The deliberations conducted in the House of Representatives on the Local WHEREFORE, the petition is hereby GRANTED. The decision of the respondent
Government Code of 1991 are illuminating: Court of Appeals dated November 29, 1995 in CA-G.R. SP No. 36801 is REVERSED and
SET ASIDE.
"MR. AQUINO (A). Thank you, Mr. Speaker.
SO ORDERED.
Mr. Speaker, we would like to proceed to page 95, line 1. It states : "SEC.121 [now Sec. Bellosillo, (Chairman), Puno, and Mendoza, JJ., concur.
131]. Common Limitations on the Taxing Powers of Local Government Units." x x x
It is clear that the legislative intent in excluding from the taxing power of the local On 17 May 1974, or prior to its voyage, a time charter-party on the vessel M/V "Sun Plum"
government unit the imposition of business tax against common carriers is to prevent a pursuant to the Uniform General Charter 2 was entered into between Mitsubishi as
duplication of the so-called "common carrier's tax." shipper/charterer and KKKK as shipowner, in Tokyo, Japan. 3 Riders to the aforesaid
charter-party starting from par. 16 to 40 were attached to the pre-printed agreement.
Petitioner is already paying three (3%) percent common carrier's tax on its gross Addenda Nos. 1, 2, 3 and 4 to the charter-party were also subsequently entered into on
sales/earnings under the National Internal Revenue Code. [19] To tax petitioner again on its the 18th, 20th, 21st and 27th of May 1974, respectively.
gross receipts in its transportation of petroleum business would defeat the purpose of the
Local Government Code.
Before loading the fertilizer aboard the vessel, four (4) of her holds 4 were all presumably
inspected by the charterer's representative and found fit to take a load of urea in bulk
pursuant to par. 16 of the charter-party which reads:
As earlier stated, the primordial issue here is whether a common carrier becomes a private It is not disputed that respondent carrier, in the ordinary course of business, operates as a
carrier by reason of a charter-party; in the negative, whether the shipowner in the instant common carrier, transporting goods indiscriminately for all persons. When petitioner
case was able to prove that he had exercised that degree of diligence required of him chartered the vessel M/V "Sun Plum", the ship captain, its officers and compliment were
under the law. under the employ of the shipowner and therefore continued to be under its direct
supervision and control. Hardly then can we charge the charterer, a stranger to the crew
It is said that etymology is the basis of reliable judicial decisions in commercial cases. This and to the ship, with the duty of caring for his cargo when the charterer did not have any
being so, we find it fitting to first define important terms which are relevant to our control of the means in doing so. This is evident in the present case considering that the
discussion. steering of the ship, the manning of the decks, the determination of the course of the
voyage and other technical incidents of maritime navigation were all consigned to the
officers and crew who were screened, chosen and hired by the shipowner. 27
A "charter-party" is defined as a contract by which an entire ship, or some principal part
thereof, is let by the owner to another person for a specified time or use; 20 a contract of
affreightment by which the owner of a ship or other vessel lets the whole or a part of her to It is therefore imperative that a public carrier shall remain as such, notwithstanding the
a merchant or other person for the conveyance of goods, on a particular voyage, in charter of the whole or portion of a vessel by one or more persons, provided the charter is
consideration of the payment of freight; 21 Charter parties are of two types: (a) contract of limited to the ship only, as in the case of a time-charter or voyage-charter. It is only when
affreightment which involves the use of shipping space on vessels leased by the owner in the charter includes both the vessel and its crew, as in a bareboat or demise that a
part or as a whole, to carry goods for others; and, (b) charter by demise or bareboat common carrier becomes private, at least insofar as the particular voyage covering the
charter, by the terms of which the whole vessel is let to the charterer with a transfer to him charter-party is concerned. Indubitably, a shipowner in a time or voyage charter retains
of its entire command and possession and consequent control over its navigation, possession and control of the ship, although her holds may, for the moment, be the
including the master and the crew, who are his servants. Contract of affreightment may property of the charterer. 28
either be time charter, wherein the vessel is leased to the charterer for a fixed period of
time, or voyage charter, wherein the ship is leased for a single voyage. 22 In both cases, Respondent carrier's heavy reliance on the case of Home Insurance Co. v. American
the charter-party provides for the hire of vessel only, either for a determinate period of time Steamship Agencies, supra, is misplaced for the reason that the meat of the controversy
or for a single or consecutive voyage, the shipowner to supply the ship's stores, pay for the therein was the validity of a stipulation in the charter-party exempting the shipowners from
wages of the master and the crew, and defray the expenses for the maintenance of the liability for loss due to the negligence of its agent, and not the effects of a special charter
ship. on common carriers. At any rate, the rule in the United States that a ship chartered by a
single shipper to carry special cargo is not a common carrier, 29 does not find application in
We quote with approval the observations of Raoul Colinvaux, the learned barrister-at- . . . Be that as it may, contrary to the trial court's finding, the record of the instant
law 30 case discloses ample evidence showing that defendant carrier was not negligent
in performing its obligations. Particularly, the following testimonies of plaintiff-
As a matter of principle, it is difficult to find a valid distinction between cases in appellee's own witnesses clearly show absence of negligence by the defendant
which a ship is used to convey the goods of one and of several persons. Where carrier; that the hull of the vessel at the time of the discharge of the cargo was
the ship herself is let to a charterer, so that he takes over the charge and control sealed and nobody could open the same except in the presence of the owner of
of her, the case is different; the shipowner is not then a carrier. But where her the cargo and the representatives of the vessel (TSN, 20 July 1977, p. 14); that
services only are let, the same grounds for imposing a strict responsibility exist, the cover of the hatches was made of steel and it was overlaid with tarpaulins,
whether he is employed by one or many. The master and the crew are in each three layers of tarpaulins and therefore their contents were protected from the
case his servants, the freighter in each case is usually without any representative weather (TSN, 5 April 1978, p. 24); and, that to open these hatches, the seals
on board the ship; the same opportunities for fraud or collusion occur; and the would have to be broken, all the seals were found to be intact (TSN, 20 July
same difficulty in discovering the truth as to what has taken place arises . . . 1977, pp. 15-16) (emphasis supplied).
In an action for recovery of damages against a common carrier on the goods shipped, the The period during which private respondent was to observe the degree of diligence
shipper or consignee should first prove the fact of shipment and its consequent loss or required of it as a public carrier began from the time the cargo was unconditionally placed
damage while the same was in the possession, actual or constructive, of the carrier. in its charge after the vessel's holds were duly inspected and passed scrutiny by the
Thereafter, the burden of proof shifts to respondent to prove that he has exercised shipper, up to and until the vessel reached its destination and its hull was reexamined by
extraordinary diligence required by law or that the loss, damage or deterioration of the the consignee, but prior to unloading. This is clear from the limitation clause agreed upon
cargo was due to fortuitous event, or some other circumstances inconsistent with its by the parties in the Addendum to the standard "GENCON" time charter-party which
liability. 31 provided for an F.I.O.S., meaning, that the loading, stowing, trimming and discharge of the
cargo was to be done by the charterer, free from all risk and expense to the
carrier. 35 Moreover, a shipowner is liable for damage to the cargo resulting from improper
To our mind, respondent carrier has sufficiently overcome, by clear and convincing proof,
stowage only when the stowing is done by stevedores employed by him, and therefore
the prima faciepresumption of negligence.
under his control and supervision, not when the same is done by the consignee or
stevedores under the employ of the latter. 36
The master of the carrying vessel, Captain Lee Tae Bo, in his deposition taken on 19 April
1977 before the Philippine Consul and Legal Attache in the Philippine Embassy in Tokyo,
Article 1734 of the New Civil Code provides that common carriers are not responsible for
Japan, testified that before the fertilizer was loaded, the four (4) hatches of the vessel were
the loss, destruction or deterioration of the goods if caused by the charterer of the goods or
cleaned, dried and fumigated. After completing the loading of the cargo in bulk in the ship's
defects in the packaging or in the containers. The Code of Commerce also provides that all
holds, the steel pontoon hatches were closed and sealed with iron lids, then covered with
losses and deterioration which the goods may suffer during the transportation by reason of
three (3) layers of serviceable tarpaulins which were tied with steel bonds. The hatches
fortuitous event, force majeure, or the inherent defect of the goods, shall be for the account
remained close and tightly sealed while the ship was in transit as the weight of the steel
and risk of the shipper, and that proof of these accidents is incumbent upon the
covers made it impossible for a person to open without the use of the ship's boom. 32
carrier. 37 The carrier, nonetheless, shall be liable for the loss and damage resulting from
the preceding causes if it is proved, as against him, that they arose through his negligence
It was also shown during the trial that the hull of the vessel was in good condition, or by reason of his having failed to take the precautions which usage has established
foreclosing the possibility of spillage of the cargo into the sea or seepage of water inside among careful persons. 38
the hull of the vessel. 33 When M/V "Sun Plum" docked at its berthing place,
representatives of the consignee boarded, and in the presence of a representative of the
Respondent carrier presented a witness who testified on the characteristics of the fertilizer
shipowner, the foreman, the stevedores, and a cargo surveyor representing CSCI, opened
shipped and the expected risks of bulk shipping. Mr. Estanislao Chupungco, a chemical
the hatches and inspected the condition of the hull of the vessel. The stevedores unloaded
engineer working with Atlas Fertilizer, described Urea as a chemical compound consisting
the cargo under the watchful eyes of the shipmates who were overseeing the whole
mostly of ammonia and carbon monoxide compounds which are used as fertilizer. Urea
operation on rotation basis. 34
The probability of the cargo being damaged or getting mixed or contaminated with foreign SECOND DIVISION
particles was made greater by the fact that the fertilizer was transported in "bulk," thereby [G.R. No. 111127. July 26, 1996]
exposing it to the inimical effects of the elements and the grimy condition of the various MR. & MRS. ENGRACIO FABRE, JR.* and PORFIRIO CABIL, petitioners, vs. COURT
pieces of equipment used in transporting and hauling it. OF APPEALS, THE WORD FOR THE WORLD CHRISTIAN FELLOWSHIP,
INC., AMYLINE ANTONIO, JOHN RICHARDS, GONZALO GONZALES,
VICENTE V. QUE, JR., ICLI CORDOVA, ARLENE GOJOCCO, ALBERTO
The evidence of respondent carrier also showed that it was highly improbable for sea
ROXAS CORDERO, RICHARD BAUTISTA, JOCELYN GARCIA, YOLANDA
water to seep into the vessel's holds during the voyage since the hull of the vessel was in
CORDOVA, NOEL ROQUE, EDWARD TAN, ERNESTO NARCISO,
good condition and her hatches were tightly closed and firmly sealed, making the M/V "Sun
ENRIQUETA LOCSIN, FRANCIS NORMAN O. LOPEZ, JULIUS CAESAR
Plum" in all respects seaworthy to carry the cargo she was chartered for. If there was loss
GARCIA, ROSARIO MA. V. ORTIZ, MARIETTA C. CLAVO, ELVIE SENIEL,
or contamination of the cargo, it was more likely to have occurred while the same was
ROSARIO MARA-MARA, TERESITA REGALA, MELINDA TORRES,
being transported from the ship to the dump trucks and finally to the consignee's
MARELLA MIJARES, JOSEFA CABATINGAN, MARA NADOC, DIANE MAYO,
warehouse. This may be gleaned from the testimony of the marine and cargo surveyor of
TESS PLATA, MAYETTE JOCSON, ARLENE Y. MORTIZ, LIZA MAYO,
CSCI who supervised the unloading. He explained that the 18 M/T of alleged "bar order
CARLOS RANARIO, ROSAMARIA T. RADOC and BERNADETTE
cargo" as contained in their report to PPI was just an approximation or estimate made by
FERRER, respondents.
them after the fertilizer was discharged from the vessel and segregated from the rest of the
DECISION
cargo.
MENDOZA, J.:
The Court notes that it was in the month of July when the vessel arrived port and unloaded
her cargo. It rained from time to time at the harbor area while the cargo was being This is a petition for review on certiorari of the decision of the Court of Appeals [1] in
discharged according to the supply officer of PPI, who also testified that it was windy at the CA-GR No. 28245, dated September 30, 1992, which affirmed with modification the
waterfront and along the shoreline where the dump trucks passed enroute to the decision of the Regional Trial Court of Makati, Branch 58, ordering petitioners jointly and
consignee's warehouse. severally to pay damages to private respondent Amyline Antonio, and its resolution which
denied petitioners motion for reconsideration for lack of merit.
Indeed, we agree with respondent carrier that bulk shipment of highly soluble goods like
Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model Mazda
fertilizer carries with it the risk of loss or damage. More so, with a variable weather
minibus. They used the bus principally in connection with a bus service for school children
condition prevalent during its unloading, as was the case at bar. This is a risk the shipper
which they operated in Manila. The couple had a driver, Porfirio J. Cabil, whom they hired
or the owner of the goods has to face. Clearly, respondent carrier has sufficiently proved
in 1981, after trying him out for two weeks. His job was to take school children to and from
the inherent character of the goods which makes it highly vulnerable to deterioration; as
the St. Scholasticas College in Malate, Manila.
well as the inadequacy of its packaging which further contributed to the loss. On the other
The group was scheduled to leave on November 2, 1984, at 5:00 oclock in the No convincing evidence was shown that the minibus was properly checked for travel to a
afternoon. However, as several members of the party were late, the bus did not leave the long distance trip and that the driver was properly screened and tested before being
Tropical Hut at the corner of Ortigas Avenue and EDSA until 8:00 oclock in the admitted for employment. Indeed, all the evidence presented have shown the negligent act
evening. Petitioner Porfirio Cabil drove the minibus. of the defendants which ultimately resulted to the accident subject of this case.
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 Accordingly, it gave judgment for private respondents holding:
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 Considering that plaintiffs Word for the World Christian Fellowship, Inc. and Ms. Amyline
on the highway, running on a south to east direction, which he described as siete. The Antonio were the only ones who adduced evidence in support of their claim for damages,
road was slippery because it was raining, causing the bus, which was running at the speed the Court is therefore not in a position to award damages to the other plaintiffs.
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 WHEREFORE, premises considered, the Court hereby renders judgment against
over and landed on its left side, coming to a full stop only after a series of impacts. The bus defendants Mr. & Mrs. Engracio Fabre, Jr. and Porfirio Cabil y Jamil pursuant to articles
came to rest off the road. A coconut tree which it had hit fell on it and smashed its front 2176 and 2180 of the Civil Code of the Philippines and said defendants are ordered to pay
portion. jointly and severally to the plaintiffs the following amount:
Several passengers were injured. Private respondent Amyline Antonio was thrown
on the floor of the bus and pinned down by a wooden seat which came off after being 1) P93,657.11 as compensatory and actual damages;
unscrewed. It took three persons to safely remove her from this position. She was in great
2) P500,000.00 as the reasonable amount of loss of earning capacity of plaintiff
pain and could not move.
Amyline Antonio;
The driver, petitioner Cabil, claimed he did not see the curve until it was too late. He
3) P20,000.00 as moral damages;
said he was not familiar with the area and he could not have seen the curve despite the
care he took in driving the bus, because it was dark and there was no sign on the road. He 4) P20,000.00 as exemplary damages; and
said that he saw the curve when he was already within 15 to 30 meters of it. He allegedly
slowed down to 30 kilometers per hour, but it was too late. 5) 25% of the recoverable amount as attorneys fees;
The Lingayen police investigated the incident the next day, November 3, 1984. On 6) Costs of suit.
the basis of their finding they filed a criminal complaint against the driver, Porfirio
Cabil. The case was later filed with the Lingayen Regional Trial Court. Petitioners Fabre SO ORDERED.
paid Jesus Escano P1,500.00 for the damage to the latters fence. On the basis of Escanos
affidavit of desistance the case against petitioners Fabre was dismissed. The Court of Appeals affirmed the decision of the trial court with respect to Amyline
Amyline Antonio, who was seriously injured, brought this case in the RTC of Makati, Antonio but dismissed it with respect to the other plaintiffs on the ground that they failed to
Metro Manila. As a result of the accident, she is now suffering from paraplegia and is prove their respective claims. The Court of Appeals modified the award of damages as
permanently paralyzed from the waist down. During the trial she described the operations follows:
she underwent and adduced evidence regarding the cost of her treatment and 1) P93,657.11 as actual damages;
therapy. Immediately after the accident, she was taken to the Nazareth Hospital in Ba-ay,
Lingayen. As this hospital was not adequately equipped, she was transferred to the Sto. 2) P600,000.00 as compensatory damages;
Nio Hospital, also in the town of Ba-ay, where she was given sedatives. An x-ray was
taken and the damage to her spine was determined to be too severe to be treated 3) P50,000.00 as moral damages;
there. She was therefore brought to Manila, first to the Philippine General Hospital and 4) P20,000.00 as exemplary damages;
II. WHETHER OR NOT PETITIONERS WERE LIABLE FOR THE INJURIES Due diligence in selection of employees is not satisfied by finding that the applicant
SUFFERED BY PRIVATE RESPONDENTS. possessed a professional drivers license. The employer should also examine the applicant
for his qualifications, experience and record of service. [5] Due diligence in supervision, on
III. WHETHER OR NOT DAMAGES CAN BE AWARDED AND IN THE the other hand, requires the formulation of rules and regulations for the guidance of
POSITIVE, UP TO WHAT EXTENT. employees and the issuance of proper instructions as well as actual implementation and
monitoring of consistent compliance with the rules. [6]
Petitioners challenge the propriety of the award of compensatory damages in the
amount of P600,000.00. It is insisted that, on the assumption that petitioners are liable, an In the case at bar, the Fabres, in allowing Cabil to drive the bus to La Union,
award of P600,000.00 is unconscionable and highly speculative. Amyline Antonio testified apparently did not consider the fact that Cabil had been driving for school children only,
that she was a casual employee of a company called Suaco, earning P1,650.00 a month, from their homes to the St. Scholasticas College in Metro Manila. [7] They had hired him
and a dealer of Avon products, earning an average of P1,000.00 monthly. Petitioners only after a two-week apprenticeship. They had tested him for certain matters, such as
contend that as casual employees do not have security of tenure, the award of whether he could remember the names of the children he would be taking to school, which
P600,000.00, considering Amyline Antonios earnings, is without factual basis as there is were irrelevant to his qualification to drive on a long distance travel, especially considering
no assurance that she would be regularly earning these amounts. that the trip to La Union was his first.The existence of hiring procedures and supervisory
policies cannot be casually invoked to overturn the presumption of negligence on the part
With the exception of the award of damages, the petition is devoid of merit.
of an employer.[8]
First, it is unnecessary for our purpose to determine whether to decide this case on
Petitioners argue that they are not liable because (1) an earlier departure (made
the theory that petitioners are liable for breach of contract of carriage or culpa
impossible by the congregations delayed meeting) could have averted the mishap and (2)
contractual or on the theory of quasi delict or culpa aquiliana as both the Regional Trial
under the contract, the WWCF was directly responsible for the conduct of the trip. Neither
Court and the Court of Appeals held, for although the relation of passenger and carrier is
of these contentions hold water. The hour of departure had not been fixed. Even if it had
contractual both in origin and nature, nevertheless the act that breaks the contract may be
been, the delay did not bear directly on the cause of the accident. With respect to the
also a tort.[2] In either case, the question is whether the bus driver, petitioner Porfirio Cabil,
second contention, it was held in an early case that:
was negligent.
The finding that Cabil drove his bus negligently, while his employer, the Fabres, who [A] person who hires a public automobile and gives the driver directions as to the place to
owned the bus, failed to exercise the diligence of a good father of the family in the which he wishes to be conveyed, but exercises no other control over the conduct of the
selection and supervision of their employee is fully supported by the evidence on driver, is not responsible for acts of negligence of the latter or prevented from recovering
record. These factual findings of the two courts we regard as final and conclusive, for injuries suffered from a collision between the automobile and a train, caused by the
supported as they are by the evidence. Indeed, it was admitted by Cabil that on the night in negligence either of the locomotive engineer or the automobile driver. [9]
question, it was raining, and, as a consequence, the road was slippery, and it was dark. He
averred these facts to justify his failure to see that there lay a sharp curve As already stated, this case actually involves a contract of carriage. Petitioners, the
ahead. However, it is undisputed that Cabil drove his bus at the speed of 50 kilometers per Fabres, did not have to be engaged in the business of public transportation for the
hour and only slowed down when he noticed the curve some 15 to 30 meters ahead. [3] By provisions of the Civil Code on common carriers to apply to them. As this Court has
then it was too late for him to avoid falling off the road. Given the conditions of the road held:[10]
and considering that the trip was Cabils first one outside of Manila, Cabil should have
driven his vehicle at a moderate speed. There is testimony[4] that the vehicles passing on
that portion of the road should only be running 20 kilometers per hour, so that at 50
kilometers per hour, Cabil was running at a very high speed.
BENTOR| S.Y.2017-2018 Transportation Law: Atty. Ventura| 17
Art. 1732. Common carriers are persons, corporations, firms or associations engaged in 1764, in relation to Art. 2220, since Cabils gross negligence amounted to bad
the business of carrying or transporting passengers or goods or both, by land, water, or air faith.[12] Amyline Antonios testimony, as well as the testimonies of her father and co-
for compensation, offering their services to the public. passengers, fully establish the physical suffering and mental anguish she endured as a
result of the injuries caused by petitioners negligence.
The above article makes no distinction between one whose principal business
The award of exemplary damages and attorneys fees was also properly
activity is the carrying of persons or goods or both, and one who does such carrying only
made. However, for the same reason that it was error for the appellate court to increase
as an ancillary activity (in local idiom, as a sideline). Article 1732 also carefully avoids
the award of compensatory damages, we hold that it was also error for it to increase the
making any distinction between a person or enterprise offering transportation service on a
award of moral damages and reduce the award of attorneys fees, inasmuch as private
regular or scheduled basis and one offering such service on an occasional, episodic or
respondents, in whose favor the awards were made, have not appealed. [13]
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 As above stated, the decision of the Court of Appeals can be sustained either on the
offers services or solicits business only from a narrow segment of the general theory of quasi delict or on that of breach of contract. The question is whether, as the two
population. We think that Article 1732 deliberately refrained from making such distinctions. courts below held, petitioners, who are the owners and driver of the bus, may be made to
respond jointly and severally to private respondent. We hold that they may be. In Dangwa
As common carriers, the Fabres were bound to exercise extraordinary diligence for the
Trans. Co. Inc. v. Court of Appeals,[14] on facts similar to those in this case, this Court held
safe transportation of the passengers to their destination. This duty of care is not excused
the bus company and the driver jointly and severally liable for damages for injuries
by proof that they exercised the diligence of a good father of the family in the selection and
suffered by a passenger.Again, in Bachelor Express, Inc. v. Court of Appeals [15] a driver
supervision of their employee. As Art. 1759 of the Code provides:
found negligent in failing to stop the bus in order to let off passengers when a fellow
Common carriers are liable for the death of or injuries to passengers through the passenger ran amuck, as a result of which the passengers jumped out of the speeding bus
negligence or wilful acts of the formers employees, although such employees may have and suffered injuries, was held also jointly and severally liable with the bus company to the
acted beyond the scope of their authority or in violation of the orders of the common injured passengers.
carriers.
The same rule of liability was applied in situations where the negligence of the driver
This liability of the common carriers does not cease upon proof that they exercised of the bus on which plaintiff was riding concurred with the negligence of a third party who
all the diligence of a good father of a family in the selection and supervision of their was the driver of another vehicle, thus causing an accident. In Anuran v. Buo,[16] Batangas
employees. Laguna Tayabas Bus Co. v. Intermediate Appellate Court,[17] and Metro Manila Transit
Corporation v. Court of Appeals,[18] the bus company, its driver, the operator of the other
The same circumstances detailed above, supporting the finding of the trial court and vehicle and the driver of the vehicle were jointly and severally held liable to the injured
of the appellate court that petitioners are liable under Arts. 2176 and 2180 for quasi delict, passenger or the latters heirs. The basis of this allocation of liability was explained
fully justify finding them guilty of breach of contract of carriage under Arts. 1733, 1755 and in Viluan v. Court of Appeals,[19] thus:
1759 of the Civil Code.
Secondly, we sustain the award of damages in favor of Amyline Antonio. However, Nor should it make any difference that the liability of petitioner [bus owner] springs from
we think the Court of Appeals erred in increasing the amount of compensatory damages contract while that of respondents [owner and driver of other vehicle] arises from quasi-
because private respondents did not question this award as inadequate. [11] To the contrary, delict. As early as 1913, we already ruled in Gutierrez vs. Gutierrez, 56 Phil. 177, that in
the award of P500,000.00 for compensatory damages which the Regional Trial Court case of injury to a passenger due to the negligence of the driver of the bus on which he
made is reasonable considering the contingent nature of her income as a casual employee was riding and of the driver of another vehicle, the drivers as well as the owners of the two
of a company and as distributor of beauty products and the fact that the possibility that she vehicles are jointly and severally liable for damages. Some members of the Court, though,
might be able to work again has not been foreclosed. In fact she testified that one of her are of the view that under the circumstances they are liable on quasi-delict.[20]
previous employers had expressed willingness to employ her again.
It is true that in Philippine Rabbit Bus Lines, Inc. v. Court of Appeals [21] this Court
With respect to the other awards, while the decisions of the trial court and the Court exonerated the jeepney driver from liability to the injured passengers and their families
of Appeals do not sufficiently indicate the factual and legal basis for them, we find that they while holding the owners of the jeepney jointly and severally liable, but that is because that
are nevertheless supported by evidence in the records of this case. Viewed as an action case was expressly tried and decided exclusively on the theory of culpa contractual. As
for quasi delict, this case falls squarely within the purview of Art. 2219(2) providing for the this Court there explained:
payment of moral damages in cases of quasi delict. On the theory that petitioners are
liable for breach of contract of carriage, the award of moral damages is authorized by Art.
As in the case of BLTB, private respondents in this case and her co-plaintiffs did not PIONEER ASIA INSURANCE CORP., Promulgated:
stake out their claim against the carrier and the driver exclusively on one theory, much less Respondent.
on that of breach of contract alone. After all, it was permitted for them to allege alternative January 24, 2006
causes of action and join as many parties as may be liable on such causes of action [23] so x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
long as private respondent and her co-plaintiffs do not recover twice for the same DECISION
injury. What is clear from the cases is the intent of the plaintiff there to recover from both QUISUMBING, J.:
the carrier and the driver, thus justifying the holding that the carrier and the driver were For review on certiorari are (1) the Decision[1] dated October 15, 2002 and (2)
jointly and severally liable because their separate and distinct acts concurred to produce the Resolution[2] dated February 27, 2003, of the Court of Appeals in CA-G.R. CV No.
the same injury. 40999, which affirmed with modification the Decision [3] dated February 15, 1993 of the
Regional Trial Court of Manila, Branch 8 in Civil Case No. 86-37957.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED with
MODIFICATION as to the award of damages. Petitioners are ORDERED to PAY jointly The pertinent facts are as follows:
and severally the private respondent Amyline Antonio the following amounts:
Petitioner Loadstar Shipping Co., Inc. (Loadstar for brevity) is the registered
1) P93,657.11 as actual damages;
owner and operator of the vessel M/V Weasel. It holds office at 1294 Romualdez St.,
2) P500,000.00 as the reasonable amount of loss of earning capacity of plaintiff Paco, Manila.
Amyline Antonio;
On June 6, 1984, Loadstar entered into a voyage-charter with Northern
3) P20,000.00 as moral damages;
Mindanao Transport Company, Inc. for the carriage of 65,000 bags of cement
4) P20,000.00 as exemplary damages; from Iligan City to Manila. The shipper was Iligan Cement Corporation, while the consignee
in Manila was Market Developers, Inc.
5) 25% of the recoverable amount as attorneys fees; and
On June 24, 1984, 67,500 bags of cement were loaded on board M/V
6) costs of suit.
Weasel and stowed in the cargo holds for delivery to the consignee. The shipment was
SO ORDERED. covered by petitioners Bill of Lading[4] dated June 23, 1984.
Prior to the voyage, the consignee insured the shipment of cement with
respondent Pioneer Asia Insurance Corporation for P1,400,000, for which respondent
issued Marine Open Policy No. MOP-006 dated September 17, 1980, covering all
shipments made on or after September 30, 1980.[5]
THIRD DIVISION
At 12:50 in the afternoon of June 24, 1984, M/V
Weasel left Iligan City for Manila in good weather. However, at 4:31 in the morning of June
25, 1984, Captain Vicente C. Montera, master of M/V Weasel, ordered the vessel to be
forced aground. Consequently, the entire shipment of cement was good as gone due to
The consignee demanded from petitioner full reimbursement of the cost of the Petitioners defense of force majeure was found bereft of factual basis. The RTC
lost shipment. Petitioner, however, refused to reimburse the consignee despite repeated called attention to the PAG-ASA report that at the time of the incident, tropical
demands. storm Asiang had moved away from the Philippines. Further, records showed that the sea
and weather conditions in the area of Hinubaan, Negros Occidental from 8:00 p.m. of June
Nonetheless, on March 11, 1985, respondent insurance company paid the 24, 1984 to 8:00 a.m. the next day were slight and smooth. Thus, the trial court concluded
consignee P1,400,000 plus an additional amount of P500,000, the value of the lost that the cause of the loss was not tropical storm Asiang or any other force majeure, but
shipment of cement. In return, the consignee executed a Loss and Subrogation Receipt in gross negligence of petitioner.
favor of respondent concerning the latters subrogation rights against petitioner.
Petitioner appealed to the Court of Appeals.
Hence, on October 15, 1986, respondent filed a complaint docketed as Civil
Case No. 86-37957, against petitioner with the Regional Trial Court of Manila, Branch 8. It In its Decision dated October 15, 2002, the Court of Appeals affirmed the RTC
alleged that: (1) the M/V Weasel was not seaworthy at the commencement of the voyage; Decision with modification that Loadstar shall only pay the sum of 10% of the total claim for
(2) the weather and sea conditions then prevailing were usual and expected for that time of attorneys fees and litigation expenses. It ruled,
the year and as such, was an ordinary peril of the voyage for which the M/V Weasel should WHEREFORE, premises considered, the Decision dated
have been normally able to cope with; and (3) petitioner was negligent in the selection and February 15, 1993, of the Regional Trial Court of Manila, National
supervision of its agents and employees then manning the M/V Weasel. Capital Judicial Region, Branch 8, in Civil Case No. 86-37957 is hereby
AFFIRMED with the MODIFICATION that the appellant shall only pay
In its Answer, petitioner alleged that no fault nor negligence could be attributed to the sum of 10% of the total claim as and for attorneys fees and litigation
it because it exercised due diligence to make the ship seaworthy, as well as properly expenses. Costs against the appellant.
manned and equipped. Petitioner insisted that the failure to deliver the subject cargo to the
SO ORDERED.[7]
consignee was due to force majeure. Petitioner claimed it could not be held liable for an
act or omission not directly attributable to it. Petitioners Motion for Reconsideration was denied. [8]
IT IS SO ORDERED.[6]
III
The RTC reasoned that petitioner, as a common carrier, bears the burden of
THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING
proving that it exercised extraordinary diligence in its vigilance over the goods it
THE AWARD BY THE TRIAL COURT OF ATTORNEYS FEES AND
transported. The trial court explained that in case of loss or destruction of the goods, a
LITIGATION EXPENSES IN FAVOR OF HEREIN RESPONDENT.[9]
Prefatorily, we stress that the finding of fact by the trial court, when affirmed by As a common carrier, petitioner is required to observe extraordinary diligence in
the Court of Appeals, is not reviewable by this Court in a petition for review on certiorari. the vigilance over the goods it transports. [13] When the goods placed in its care are lost,
However, the conclusions derived from such factual finding are not necessarily pure issues petitioner is presumed to have been at fault or to have acted negligently. Petitioner
of fact when they are inextricably intertwined with the determination of a legal issue. In therefore has the burden of proving that it observed extraordinary diligence in order to
such instances, the conclusions made may be raised in a petition for review before this avoid responsibility for the lost cargo.[14]
Court.[10]
In Compania Maritima v. Court of Appeals,[15] we said:
The threshold issues in this case are: (1) Given the circumstances of this case, is it is incumbent upon the common carrier to prove that the
petitioner a common or a private carrier? and (2) In either case, did petitioner exercise the loss, deterioration or destruction was due to accident or some other
required diligence i.e., the extraordinary diligence of a common carrier or the ordinary circumstances inconsistent with its liability.
diligence of a private carrier? ...
The extraordinary diligence in the vigilance over the goods
Article 1732 of the Civil Code defines a common carrier as follows: tendered for shipment requires the common carrier to know and to
follow the required precaution for avoiding damage to, or destruction of
Article 1732. Common carriers are persons, corporations, firms or the goods entrusted to it for safe carriage and delivery. It requires
associations engaged in the business of carrying or transporting common carriers to render service with the greatest skill and foresight
passengers or goods or both, by land, water, or air, for compensation, and to use all reasonable means to ascertain the nature and
offering their services to the public. characteristics of goods tendered for shipment, and to exercise due
care in the handling and stowage, including such methods as their
Petitioner is a corporation engaged in the business of transporting cargo by water and for nature requires.[16]
compensation, offering its services indiscriminately to the public. Thus, without doubt, it is
a common carrier. However, petitioner entered into a voyage-charter with the Northern Article 1734 enumerates the instances when a carrier might be exempt from
Mindanao Transport Company, Inc. Now, had the voyage-charter converted petitioner into liability for the loss of the goods. These are:
a private carrier? (1) Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
PKS Shipping, in its comment, urges that the petition should be denied because what The above article makes no distinction between one whose principal business activity is
Philamgen seeks is not a review on points or errors of law but a review of the undisputed the carrying of persons or goods or both, and one who does such carrying only as
factual findings of the RTC and the appellate court. In any event, PKS Shipping points out, an ancillary activity (in local idiom, as `a sideline). Article 1732 also carefully avoids making
the findings and conclusions of both courts find support from the evidence and applicable any distinction between a person or enterprise offering transportation service on a regular
jurisprudence. 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
The determination of possible liability on the part of PKS Shipping boils down to the services to the `general public, i.e., the general community or population, and one who
question of whether it is a private carrier or a common carrier and, in either case, to the offers services or solicits business only from a narrow segment of the general
other question of whether or not it has observed the proper diligence (ordinary, if a private population. We think that Article 1732 deliberately refrained from making such distinctions.
carrier, or extraordinary, if a common carrier) required of it given the circumstances.
The findings of fact made by the Court of Appeals, particularly when such findings So understood, the concept of `common carrier under Article 1732 may be seen to
are consistent with those of the trial court, may not at liberty be reviewed by this Court in a coincide neatly with the notion of `public service, under the Public Service Act
petition for review under Rule 45 of the Rules of Court. [1] The conclusions derived from (Commonwealth Act No. 1416, as amended) which at least partially supplements the law
those factual findings, however, are not necessarily just matters of fact as when they are on common carriers set forth in the Civil Code.
so linked to, or inextricably intertwined with, a requisite appreciation of the applicable
law. In such instances, the conclusions made could well be raised as being appropriate Much of the distinction between a common or public carrier and a private or special
issues in a petition for review before this Court. Thus, an issue whether a carrier is private carrier lies in the character of the business, such that if the undertaking is an isolated
or common on the basis of the facts found by a trial court or the appellate court can be a transaction, not a part of the business or occupation, and the carrier does not hold itself
valid and reviewable question of law. out to carry the goods for the general public or to a limited clientele, although involving the
carriage of goods for a fee,[3] the person or corporation providing such service could very
The Civil Code defines common carriers in the following terms:
well be just a private carrier. A typical case is that of a charter party which includes both
the vessel and its crew, such as in a bareboat or demise, where the charterer obtains the
Article 1732. Common carriers are persons, corporations, firms or associations engaged in use and service of all or some part of a ship for a period of time or a voyage or
the business of carrying or transporting passengers or goods or both, by land, water, or air voyages[4] and gets the control of the vessel and its crew. [5] Contrary to the conclusion
for compensation, offering their services to the public. made by the appellate court, its factual findings indicate that PKS Shipping has engaged
itself in the business of carrying goods for others, although for a limited clientele,
Complementary to the codal definition is Section 13, paragraph (b), of the Public Service undertaking to carry such goods for a fee. The regularity of its activities in this area
Act; it defines public service to be indicates more than just a casual activity on its part. [6] Neither can the concept of a
common carrier change merely because individual contracts are executed or entered into
x x x every person that now or hereafter may own, operate, manage, or control in the with patrons of the carrier. Such restrictive interpretation would make it easy for a common
Philippines, for hire or compensation, with general or limited clientele, whether permanent, carrier to escape liability by the simple expedient of entering into those distinct agreements
occasional or accidental, and done for general business purposes, any common carrier, with clients.
railroad, street railway, subway motor vehicle, either for freight or passenger, or both, with Addressing now the issue of whether or not PKS Shipping has exercised the proper
or without fixed route and whatever may be its classification, freight or carrier service of diligence demanded of common carriers, Article 1733 of the Civil Code requires common
any class, express service, steamboat, or steamship, or steamship line, pontines, ferries carriers to observe extraordinary diligence in the vigilance over the goods they carry. In
and water craft, engaged in the transportation of passengers or freight or both, shipyard, case of loss, destruction or deterioration of goods, common carriers are presumed to have
BENTOR| S.Y.2017-2018 Transportation Law: Atty. Ventura| 23
been at fault or to have acted negligently, and the burden of proving otherwise rests on FIRST DIVISION
them.[7] The provisions of Article 1733, notwithstanding, common carriers are exempt from [G.R. No. 131621. September 28, 1999]
liability for loss, destruction, or deterioration of the goods due to any of the following LOADSTAR SHIPPING CO., INC., petitioner, vs. COURT OF APPEALS and THE
causes: MANILA INSURANCE CO., INC., respondents.
DECISION
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil; DAVIDE, JR., C.J.:
(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; Petitioner Loadstar Shipping Co., Inc. (hereafter LOADSTAR), in this petition for
and review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, seeks to reverse
(5) Order or act of competent public authority. [8] and set aside the following:(a) the 30 January 1997 decision [1] of the Court of Appeals in
The appellate court ruled, gathered from the testimonies and sworn marine protests CA-G.R. CV No. 36401, which affirmed the decision of 4 October 1991 [2] of the Regional
of the respective vessel masters of Limar I and MT Iron Eagle, that there was no way by Trial Court of Manila, Branch 16, in Civil Case No. 85-29110, ordering LOADSTAR to pay
which the barges or the tugboats crew could have prevented the sinking of Limar I. The private respondent Manila Insurance Co. (hereafter MIC) the amount of P6,067,178, with
vessel was suddenly tossed by waves of extraordinary height of six (6) to eight (8) feet and legal interest from the filing of the complaint until fully paid, P8,000 as attorneys fees, and
buffeted by strong winds of 1.5 knots resulting in the entry of water into the barges the costs of the suit; and (b) its resolution of 19 November 1997, [3] denying LOADSTARs
hatches. The official Certificate of Inspection of the barge issued by the Philippine motion for reconsideration of said decision.
Coastguard and the Coastwise Load Line Certificate would attest to the seaworthiness The facts are undisputed.
of Limar I and should strengthen the factual findings of the appellate court.
On 19 November 1984, LOADSTAR received on board its M/V Cherokee (hereafter,
Findings of fact of the Court of Appeals generally conclude this Court; none of the the vessel) the following goods for shipment:
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 a) 705 bales of lawanit hardwood;
on speculation, surmises, or conjectures; (3) when the inference made by the Court of
b) 27 boxes and crates of tilewood assemblies and others; and
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 c) 49 bundles of mouldings R & W (3) Apitong Bolidenized.
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 The goods, amounting to P6,067,178, were insured for the same amount with MIC against
Court of Appeals is premised on a misapprehension of facts; (7) when the Court of various risks including TOTAL LOSS BY TOTAL LOSS OF THE VESSEL. The vessel, in
Appeals failed to notice certain relevant facts which, if properly considered, would justify a turn, was insured by Prudential Guarantee & Assurance, Inc. (hereafter PGAI) for P4
different conclusion; (8) when the findings of fact are themselves conflicting; (9) when the million. On 20 November 1984, on its way to Manila from the port of Nasipit, Agusan del
findings of fact are conclusions without citation of the specific evidence on which they are Norte, the vessel, along with its cargo, sank off Limasawa Island. As a result of the total
based; and (10) when the findings of fact of the Court of Appeals are premised on the loss of its shipment, the consignee made a claim with LOADSTAR which, however,
absence of evidence but such findings are contradicted by the evidence on record would ignored the same. As the insurer, MIC paid P6,075,000 to the insured in full settlement of
appear to be clearly extant in this instance. its claim, and the latter executed a subrogation receipt therefor.
All given then, the appellate court did not err in its judgment absolving PKS Shipping On 4 February 1985, MIC filed a complaint against LOADSTAR and PGAI, alleging
from liability for the loss of the DUMC cargo. that the sinking of the vessel was due to the fault and negligence of LOADSTAR and its
employees. It also prayed that PGAI be ordered to pay the insurance proceeds from the
WHEREFORE, the petition is DENIED. No costs. loss of the vessel directly to MIC, said amount to be deducted from MICs claim from
LOADSTAR.
SO ORDERED.
In its answer, LOADSTAR denied any liability for the loss of the shippers goods and
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur
claimed that the sinking of its vessel was due to force majeure. PGAI, on the other hand,
averred that MIC had no cause of action against it, LOADSTAR being the party insured. In
any event, PGAI was later dropped as a party defendant after it paid the insurance
proceeds to LOADSTAR.
In dismissing LOADSTARs appeal, the appellate court made the following Regarding the first issue, LOADSTAR submits that the vessel was a private carrier
observations: because it was not issued a certificate of public convenience, it did not have a regular trip
or schedule nor a fixed route, and there was only one shipper, one consignee for a special
1) LOADSTAR cannot be considered a private carrier on the sole ground that cargo.
there was a single shipper on that fateful voyage. The court noted that the
charter of the vessel was limited to the ship, but LOADSTAR retained In refutation, MIC argues that the issue as to the classification of the M/V Cherokee
control over its crew.[4] was not timely raised below; hence, it is barred by estoppel. While it is true that the vessel
had on board only the cargo of wood products for delivery to one consignee, it was also
2) As a common carrier, it is the Code of Commerce, not the Civil Code, which carrying passengers as part of its regular business. Moreover, the bills of lading in this
should be applied in determining the rights and liabilities of the parties. case made no mention of any charter party but only a statement that the vessel was a
general cargo carrier. Neither was there any special arrangement between LOADSTAR
3) The vessel was not seaworthy because it was undermanned on the day of and the shipper regarding the shipment of the cargo. The singular fact that the vessel was
the voyage. If it had been seaworthy, it could have withstood the natural carrying a particular type of cargo for one shipper is not sufficient to convert the vessel into
and inevitable action of the sea on 20 November 1984, when the condition a private carrier.
of the sea was moderate. The vessel sank, not because of force majeure,
but because it was not seaworthy. LOADSTARS allegation that the sinking As regards the second error, LOADSTAR argues that as a private carrier, it cannot
was probably due to the convergence of the winds, as stated by a PAGASA be presumed to have been negligent, and the burden of proving otherwise devolved upon
expert, was not duly proven at the trial. The limited liability rule, therefore, is MIC.[8]
not applicable considering that, in this case, there was an actual finding of
negligence on the part of the carrier.[5] LOADSTAR also maintains that the vessel was seaworthy. Before the fateful voyage
on 19 November 1984, the vessel was allegedly dry docked at Keppel Philippines
4) Between MIC and LOADSTAR, the provisions of the Bill of Lading do not Shipyard and was duly inspected by the maritime safety engineers of the Philippine Coast
apply because said provisions bind only the shipper/consignee and the Guard, who certified that the ship was fit to undertake a voyage. Its crew at the time was
carrier. When MIC paid the shipper for the goods insured, it was experienced, licensed and unquestionably competent. With all these precautions, there
subrogated to the latters rights as against the carrier, LOADSTAR.[6] could be no other conclusion except that LOADSTAR exercised the diligence of a good
father of a family in ensuring the vessels seaworthiness.
5) There was a clear breach of the contract of carriage when the shippers
goods never reached their destination. LOADSTARs defense of diligence LOADSTAR further claims that it was not responsible for the loss of the cargo, such
of a good father of a family in the training and selection of its crew is loss being due to force majeure. It points out that when the vessel left Nasipit, Agusan del
unavailing because this is not a proper or complete defense in culpa Norte, on 19 November 1984, the weather was fine until the next day when the vessel
contractual. sank due to strong waves. MICs witness, Gracelia Tapel, fully established the existence of
two typhoons, WELFRING and YOLING, inside the Philippine area of responsibility. In fact,
6) Art. 361 (of the Code of Commerce) has been judicially construed to mean on 20 November 1984, signal no. 1 was declared over Eastern Visayas, which includes
that when goods are delivered on board a ship in good order and condition, Limasawa Island. Tapel also testified that the convergence of winds brought about by
and the shipowner delivers them to the shipper in bad order and condition, these two typhoons strengthened wind velocity in the area, naturally producing strong
it then devolves upon the shipowner to both allege and prove that the waves and winds, in turn, causing the vessel to list and eventually sink.
goods were damaged by reason of some fact which legally exempts him
from liability. Transportation of the merchandise at the risk and venture of LOADSTAR goes on to argue that, being a private carrier, any agreement limiting its
the shipper means that the latter bears the risk of loss or deterioration of liability, such as what transpired in this case, is valid. Since the cargo was being shipped at
his goods arising from fortuitous events, force majeure, or the inherent owners risk, LOADSTAR was not liable for any loss or damage to the same. Therefore, the
nature and defects of the goods, but not those caused by the presumed Court of Appeals erred in holding that the provisions of the bills of lading apply only to the
negligence or fault of the carrier, unless otherwise proved. [7] shipper and the carrier, and not to the insurer of the goods, which conclusion runs counter
to the Supreme Courts ruling in the case of St. Paul Fire & Marine Insurance Co. v.
The errors assigned by LOADSTAR boil down to a determination of the following Macondray & Co., Inc.,[9] and National Union Fire Insurance Company of Pittsburg v. Stolt-
issues: Nielsen Phils., Inc.[10]
MIC, on the other hand, claims that LOADSTAR was liable, notwithstanding that the Article 1732. Common carriers are persons, corporations, firms or associations engaged in
loss of the cargo was due to force majeure, because the same concurred with the business of carrying or transporting passengers or goods or both, by land, water, or air
LOADSTARs fault or negligence. for compensation, offering their services to the public.
Secondly, LOADSTAR did not raise the issue of prescription in the court below;
The above article makes no distinction between one whose principal business activity is
hence, the same must be deemed waived.
the carrying of persons or goods or both, and one who does such carrying only as
Thirdly, the limited liability theory is not applicable in the case at bar because an ancillary activity (in local idiom, as a sideline. Article 1732 also carefully avoids making
LOADSTAR was at fault or negligent, and because it failed to maintain a seaworthy any distinction between a person or enterprise offering transportation service on a regular
vessel. Authorizing the voyage notwithstanding its knowledge of a typhoon is tantamount or scheduled basis and one offering such service on an occasional, episodic or
to negligence. 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
We find no merit in this petition. offers services or solicits business only from a narrow segment of the general
population. We think that Article 1733 deliberately refrained from making such distinctions.
Anent the first assigned error, we hold that LOADSTAR is a common carrier. It is not
necessary that the carrier be issued a certificate of public convenience, and this public
character is not altered by the fact that the carriage of the goods in question was periodic, xxx
occasional, episodic or unscheduled.
It appears to the Court that private respondent is properly characterized as a common
In support of its position, LOADSTAR relied on the 1968 case of Home Insurance
carrier even though he merely back-hauled goods for other merchants from Manila to
Co. v. American Steamship Agencies, Inc.,[11] where this Court held that a common carrier
Pangasinan, although such backhauling was done on a periodic or occasional rather than
transporting special cargo or chartering the vessel to a special person becomes a private
regular or scheduled manner, and even though private respondents principal occupation
carrier that is not subject to the provisions of the Civil Code. Any stipulation in the charter
was not the carriage of goods for others. There is no dispute that private respondent
party absolving the owner from liability for loss due to the negligence of its agent is void
charged his customers a fee for hauling their goods; that that fee frequently fell below
only if the strict policy governing common carriers is upheld. Such policy has no force
commercial freight rates is not relevant here.
where the public at large is not involved, as in the case of a ship totally chartered for the
use of a single party. LOADSTAR also cited Valenzuela Hardwood and Industrial Supply,
Inc. v. Court of Appeals[12] and National Steel Corp. v. Court of Appeals, [13] both of which The Court of Appeals referred to the fact that private respondent held no certificate of
upheld the Home Insurance doctrine. public convenience, and concluded he was not a common carrier. This is palpable error. A
certificate of public convenience is not a requisite for the incurring of liability under the Civil
These cases invoked by LOADSTAR are not applicable in the case at bar for simple Code provisions governing common carriers. That liability arises the moment a person or
reason that the factual settings are different. The records do not disclose that the M/V firm acts as a common carrier, without regard to whether or not such carrier has also
Cherokee, on the date in question, undertook to carry a special cargo or was chartered to complied with the requirements of the applicable regulatory statute and implementing
a special person only. There was no charter party. The bills of lading failed to show any regulations and has been granted a certificate of public convenience or other franchise. To
special arrangement, but only a general provision to the effect that the M/V Cherokee was exempt private respondent from the liabilities of a common carrier because he has not
a general cargo carrier.[14] Further, the bare fact that the vessel was carrying a particular secured the necessary certificate of public convenience, would be offensive to sound
type of cargo for one shipper, which appears to be purely coincidental, is not reason public policy; that would be to reward private respondent precisely for failing to comply with
enough to convert the vessel from a common to a private carrier, especially where, as in applicable statutory requirements. The business of a common carrier impinges directly and
this case, it was shown that the vessel was also carrying passengers. intimately upon the safety and well being and property of those members of the general
community who happen to deal with such carrier. The law imposes duties and liabilities
Under the facts and circumstances obtaining in this case, LOADSTAR fits the upon common carriers for the safety and protection of those who utilize their services and
definition of a common carrier under Article 1732 of the Civil Code. In the case of De the law cannot allow a common carrier to render such duties and liabilities merely
facultative by simply failing to obtain the necessary permits and authorizations.
LOADSTAR also claims that the Court of Appeals erred in holding it liable for the loss
of the goods, in utter disregard of this Courts pronouncements in St. Paul Fire & Marine
Ins. Co. v. Macondray & Co., Inc.,[18] and National Union Fire Insurance v. Stolt-Nielsen THIRD DIVISION
Phils., Inc.[19] It was ruled in these two cases that after paying the claim of the insured for
damages under the insurance policy, the insurer is subrogated merely to the rights of the
assured, that is, it can recover only the amount that may, in turn, be recovered by the SPOUSES DANTE CRUZ and G.R. No. 186312
latter. Since the right of the assured in case of loss or damage to the goods is limited or LEONORA CRUZ,
restricted by the provisions in the bills of lading, a suit by the insurer as subrogee is Petitioners, Present:
necessarily subject to the same limitations and restrictions. We do not agree. In the first
place, the cases relied on by LOADSTAR involved a limitation on the carriers liability to an CARPIO MORALES, J.,
amount fixed in the bill of lading which the parties may enter into, provided that the same Chairperson,
was freely and fairly agreed upon (Articles 1749-1750). On the other hand, the stipulation BRION,
in the case at bar effectively reduces the common carriers liability for the loss or - versus - BERSAMIN,
destruction of the goods to a degree less than extraordinary (Articles 1744 and 1745), that ABAD,* and
is, the carrier is not liable for any loss or damage to shipments made at owners risk. Such SUN HOLIDAYS, INC., VILLARAMA, JR., JJ.
stipulation is obviously null and void for being contrary to public policy.[20] It has been said: Respondent.
Promulgated:
Three kinds of stipulations have often been made in a bill of lading. The first is one June 29, 2010
exempting the carrier from any and all liability for loss or damage occasioned by its own
negligence. The second is one providing for an unqualified limitation of such liability to an x-------------------------------------------------x
agreed valuation. And the third is one limiting the liability of the carrier to an agreed DECISION
valuation unless the shipper declares a higher value and pays a higher rate of
freight. According to an almost uniform weight of authority, the first and second kinds of CARPIO MORALES, J.:
stipulations are invalid as being contrary to public policy, but the third is valid and
enforceable.[21] Spouses Dante and Leonora Cruz (petitioners) lodged a Complaint on January 25,
2001[1] against Sun Holidays, Inc. (respondent) with the Regional Trial Court (RTC) of
Since the stipulation in question is null and void, it follows that when MIC paid the shipper, Pasig City for damages arising from the death of their son Ruelito C. Cruz (Ruelito) who
it was subrogated to all the rights which the latter has against the common carrier, perished with his wife on September 11, 2000 on board the boat M/B Coco Beach III that
LOADSTAR.
BENTOR| S.Y.2017-2018 Transportation Law: Atty. Ventura| 27
capsized en route to Batangas from Puerto Galera, Oriental Mindoro where the couple had
stayed at Coco Beach Island Resort (Resort) owned and operated by respondent. As petitioners declined respondents offer, they filed the Complaint, as earlier reflected,
alleging that respondent, as a common carrier, was guilty of negligence in allowing M/B
The stay of the newly wed Ruelito and his wife at the Resort from September 9 to 11, Coco Beach III to sail notwithstanding storm warning bulletins issued by the Philippine
2000 was by virtue of a tour package-contract with respondent that included transportation Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) as early
to and from the Resort and the point of departure in Batangas. as 5:00 a.m. of September 11, 2000.[6]
Miguel C. Matute (Matute),[2] a scuba diving instructor and one of the survivors, gave his In its Answer,[7] respondent denied being a common carrier, alleging that its boats are not
account of the incident that led to the filing of the complaint as follows: available to the general public as they only ferry Resort guests and crew
members.Nonetheless, it claimed that it exercised the utmost diligence in ensuring the
Matute stayed at the Resort from September 8 to 11, 2000. He was originally scheduled to safety of its passengers; contrary to petitioners allegation, there was no storm
leave the Resort in the afternoon of September 10, 2000, but was advised to stay for on September 11, 2000as the Coast Guard in fact cleared the voyage; and M/B Coco
another night because of strong winds and heavy rains. Beach III was not filled to capacity and had sufficient life jackets for its passengers. By way
of Counterclaim, respondent alleged that it is entitled to an award for attorneys fees and
On September 11, 2000, as it was still windy, Matute and 25 other Resort guests including litigation expenses amounting to not less than P300,000.
petitioners son and his wife trekked to the other side of the Coco Beach mountain that was
sheltered from the wind where they boarded M/B Coco Beach III, which was to ferry them Carlos Bonquin, captain of M/B Coco Beach III, averred that the Resort customarily
to Batangas. requires four conditions to be met before a boat is allowed to sail, to wit: (1) the sea is
calm, (2) there is clearance from the Coast Guard, (3) there is clearance from the captain
Shortly after the boat sailed, it started to rain. As it moved farther away from Puerto Galera and (4) there is clearance from the Resorts assistant manager. [8] He added that M/B Coco
and into the open seas, the rain and wind got stronger, causing the boat to tilt from side to Beach III met all four conditions on September 11, 2000, [9] but a subasco or squall,
side and the captain to step forward to the front, leaving the wheel to one of the crew characterized by strong winds and big waves, suddenly occurred, causing the boat to
members. capsize.[10]
By Decision of February 16, 2005,[11] Branch 267 of the Pasig RTC dismissed petitioners
The waves got more unwieldy. After getting hit by two big waves which came one Complaint and respondents Counterclaim.
after the other, M/B Coco Beach III capsized putting all passengers underwater.
The passengers, who had put on their life jackets, struggled to get out of the boat. Upon Petitioners Motion for Reconsideration having been denied by Order dated September 2,
seeing the captain, Matute and the other passengers who reached the surface asked him 2005,[12] they appealed to the Court of Appeals.
what they could do to save the people who were still trapped under the boat. The captain
replied Iligtas niyo na lang ang sarili niyo (Just save yourselves). By Decision of August 19, 2008,[13] the appellate court denied petitioners appeal,
holding, among other things, that the trial court correctly ruled that respondent is a private
Help came after about 45 minutes when two boats owned by Asia Divers in Sabang, carrier which is only required to observe ordinary diligence; that respondent in fact
Puerto Galera passed by the capsized M/B Coco Beach III. Boarded on those two boats observed extraordinary diligence in transporting its guests on board M/B Coco Beach III;
were 22 persons, consisting of 18 passengers and four crew members, who were brought and that the proximate cause of the incident was a squall, a fortuitous event.
to Pisa Island. Eight passengers, including petitioners son and his wife, died during the
incident. Petitioners Motion for Reconsideration having been denied by Resolution dated January
16, 2009,[14] they filed the present Petition for Review. [15]
At the time of Ruelitos death, he was 28 years old and employed as a contractual worker
for Mitsui Engineering & Shipbuilding Arabia, Ltd. in Saudi Arabia, with a basic monthly Petitioners maintain the position they took before the trial court, adding that
salary of $900.[3] respondent is a common carrier since by its tour package, the transporting of its guests is
Petitioners, by letter of October 26, 2000,[4] demanded indemnification from respondent for an integral part of its resort business. They inform that another division of the appellate
the death of their son in the amount of at least P4,000,000. court in fact held respondent liable for damages to the other survivors of the incident.
Replying, respondent, by letter dated November 7, 2000,[5] denied any responsibility for the Upon the other hand, respondent contends that petitioners failed to present evidence to
incident which it considered to be a fortuitous event. It nevertheless offered, as an act of prove that it is a common carrier; that the Resorts ferry services for guests cannot be
commiseration, the amount of P10,000 to petitioners upon their signing of a waiver. considered as ancillary to its business as no income is derived therefrom; that it exercised
Respondent nevertheless harps on its strict compliance with the earlier mentioned Petitioners are entitled to indemnity for the death of Ruelito which is fixed
conditions of voyage before it allowed M/B Coco Beach III to sail on September 11, at P50,000.[29]
2000.Respondents position does not impress.
As for damages representing unearned income, the formula for its computation
The evidence shows that PAGASA issued 24-hour public weather forecasts and tropical is:
cyclone warnings for shipping on September 10 and 11, 2000 advising of tropical Net Earning Capacity = life expectancy x (gross annual income - reasonable and
depressions in Northern Luzon which would also affect the province of Mindoro.[22] By the necessary living expenses).
testimony of Dr. Frisco Nilo, supervising weather specialist of PAGASA, squalls are to be
expected under such weather condition.[23] Life expectancy is determined in accordance with the formula:
A very cautious person exercising the utmost diligence would thus not brave such stormy 2 / 3 x [80 age of deceased at the time of death][30]
weather and put other peoples lives at risk. The extraordinary diligence required of
common carriers demands that they take care of the goods or lives entrusted to their
hands as if they were their own. This respondent failed to do. The first factor, i.e., life expectancy, is computed by applying the formula (2/3 x
[80 age at death]) adopted in the American Expectancy Table of Mortality or the Actuarial
Respondents insistence that the incident was caused by a fortuitous event does of Combined Experience Table of Mortality. [31]
not impress either. The second factor is computed by multiplying the life expectancy by the net
The elements of a "fortuitous event" are: (a) the cause of the unforeseen and unexpected earnings of the deceased, i.e., the total earnings less expenses necessary in the creation
occurrence, or the failure of the debtors to comply with their obligations, must have been of such earnings or income and less living and other incidental expenses. [32] The loss is not
independent of human will; (b) the event that constituted the caso fortuito must have been equivalent to the entire earnings of the deceased, but only such portion as he would have
impossible to foresee or, if foreseeable, impossible to avoid; (c) the occurrence must have used to support his dependents or heirs. Hence, to be deducted from his gross earnings
been such as to render it impossible for the debtors to fulfill their obligation in a normal are the necessary expenses supposed to be used by the deceased for his own needs.[33]
manner; and (d) the obligor must have been free from any participation in the aggravation
of the resulting injury to the creditor. [24] In computing the third factor necessary living expense, Smith Bell Dodwell
Shipping Agency Corp. v. Borja[34] teaches that when, as in this case, there is no showing
To fully free a common carrier from any liability, the fortuitous event must have been that the living expenses constituted the smaller percentage of the gross income, the living
the proximate and only cause of the loss. And it should have exercised due diligence to expenses are fixed at half of the gross income.
prevent or minimize the loss before, during and after the occurrence of the fortuitous
event.[25] Applying the above guidelines, the Court determines Ruelito's life expectancy as
follows:
Respondent cites the squall that occurred during the voyage as the fortuitous event that
overturned M/B Coco Beach III. As reflected above, however, the occurrence of squalls Life expectancy = 2/3 x [80 - age of deceased at the time of death]
was expected under the weather condition of September 11, 2000. Moreover, evidence 2/3 x [80 - 28]
shows that M/B Coco Beach III suffered engine trouble before it capsized and sank. [26]The 2/3 x [52]
incident was, therefore, not completely free from human intervention. Life expectancy = 35
The Court need not belabor how respondents evidence likewise fails to demonstrate that it Documentary evidence shows that Ruelito was earning a basic monthly salary of
exercised due diligence to prevent or minimize the loss before, during and after the $900[35] which, when converted to Philippine peso applying the annual average exchange
occurrence of the squall. rate of $1 = P44 in 2000,[36] amounts to P39,600. Ruelitos net earning capacity is thus
computed as follows:
Article 1764[27] vis--vis Article 2206[28] of the Civil Code holds the common carrier
in breach of its contract of carriage that results in the death of a passenger liable to pay the Net Earning Capacity = life expectancy x (gross annual income -
reasonable and necessary living expenses).
Net Earning Capacity = P8,316,000 3. When the judgment of the court awarding a sum of money
becomes final and executory, the rate of legal interest, whether the
Respecting the award of moral damages, since respondent common carriers case falls under paragraph 1 or paragraph 2, above, shall be 12% per
breach of contract of carriage resulted in the death of petitioners son, following Article annum from such finality until its satisfaction, this interim period being
1764 vis--vis Article 2206 of the Civil Code, petitioners are entitled to moral damages. deemed to be by then an equivalent to a forbearance of credit.
(emphasis supplied).
Since respondent failed to prove that it exercised the extraordinary diligence
required of common carriers, it is presumed to have acted recklessly, thus warranting the Since the amounts payable by respondent have been determined with certainty only in the
award too of exemplary damages, which are granted in contractual obligations if the present petition, the interest due shall be computed upon the finality of this decision at the
defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. [37] rate of 12% per annum until satisfaction, in accordance with paragraph number 3 of the
immediately cited guideline in Easter Shipping Lines, Inc.
Under the circumstances, it is reasonable to award petitioners the amount
of P100,000 as moral damages and P100,000 as exemplary damages.[38] WHEREFORE, the Court of Appeals Decision of August 19, 2008 is REVERSED and SET
Pursuant to Article 2208[39] of the Civil Code, attorney's fees may also be awarded where ASIDE. Judgment is rendered in favor of petitioners ordering respondent to pay petitioners
exemplary damages are awarded. The Court finds that 10% of the total amount adjudged the following: (1) P50,000 as indemnity for the death of Ruelito Cruz; (2) P8,316,000 as
against respondent is reasonable for the purpose. indemnity for Ruelitos loss of earning capacity; (3) P100,000 as moral
damages; (4) P100,000 as exemplary damages; (5) 10% of the total amount adjudged
Finally, Eastern Shipping Lines, Inc. v. Court of Appeals [40] teaches that when an against respondent as attorneys fees; and (6) the costs of suit.
obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-
delicts is breached, the contravenor can be held liable for payment of interest in the The total amount adjudged against respondent shall earn interest at the rate of 12% per
concept of actual and compensatory damages, subject to the following rules, to wit annum computed from the finality of this decision until full payment.
PERALTA, J.: After trial, the RTC dismissed UCPBs complaint and the counterclaims of Westwind, ATI,
and OFII. It ruled that the right, if any, against ATI already prescribed based on the
These two consolidated cases challenge, by way of petition for certiorari under Rule 45 of stipulation in the 16 Cargo Gate Passes issued, as well as the doctrine laid down in
the 1997 Rules of Civil Procedure, September 13, 2011 Decision 1 and January 19, 2012 International Container Terminal Services, Inc. v. Prudential Guarantee & Assurance Co.
Resolution2 of the Court of Appeals (CA) in CA-G.R. CV No. 86752, which reversed and Inc.7 that a claim for reimbursement for damaged goods must be filed within 15 days from
set aside the January 27, 2006 Decision3 of the Manila City Regional Trial Court Branch the date of consignees knowledge. With respect to Westwind, even if the action against it
(RTC) 30. The facts, as established by the records, are as follows: is not yet barred by prescription, conformably with Section 3 (6) of the Carriage of Goods
by Sea Act (COGSA) and Our rulings in E.E. Elser, Inc., et al. v. Court of Appeals, et
On August 23, 1993, Kinsho-Mataichi Corporation shipped from the port of Kobe, Japan, al.8 and Belgian Overseas Chartering and Shipping N.V. v. Phil. First Insurance Co.,
197 metal containers/skids of tin-free steel for delivery to the consignee, San Miguel Inc.,9 the court a quo still opined that Westwind is not liable, since the discharging of the
Corporation (SMC). The shipment, covered by Bill of Lading No. KBMA-1074,4 was loaded cargoes were done by ATI personnel using forklifts and that there was no allegation that it
and received clean on board M/V Golden Harvest Voyage No. 66, a vessel owned and (Westwind) had a hand in the conduct of the stevedoring operations. Finally, the trial court
operated by Westwind Shipping Corporation (Westwind). likewise absolved OFII from any liability, reasoning that it never undertook the operation of
the forklifts which caused the dents and punctures, and that it merely facilitated the release
and delivery of the shipment as the customs broker and representative of SMC.
SMC insured the cargoes against all risks with UCPB General Insurance Co., Inc. (UCPB)
for US Dollars: One Hundred Eighty-Four Thousand Seven Hundred Ninety-Eight and
Ninety-Seven Centavos (US$184,798.97), which, at the time, was equivalent to Philippine On appeal by UCPB, the CA reversed and set aside the trial court. The fallo of its
Pesos: Six Million Two Hundred Nine Thousand Two Hundred Forty-Five and Twenty- September 13, 2011 Decision directed:
Eight Centavos (6,209,245.28).
WHEREFORE, premises considered, the instant appeal is hereby GRANTED. The
The shipment arrived in Manila, Philippines on August 31, 1993 and was discharged in the Decision dated January 27, 2006 rendered by the court a quo is REVERSED AND SET
custody of the arrastre operator, Asian Terminals, Inc. (ATI), formerly Marina Port ASIDE. Appellee Westwind Shipping Corporation is hereby ordered to pay to the appellant
Services, Inc.5 During the unloading operation, however, six containers/skids worth UCPB General Insurance Co., Inc., the amount of One Hundred Seventeen Thousand and
Philippine Pesos: One Hundred Seventeen Thousand Ninety-Three and Twelve Centavos Ninety-Three Pesos and Twelve Centavos (Php117,093.12), while Orient Freight
(117,093.12) sustained dents and punctures from the forklift used by the stevedores of International, Inc. is hereby ordered to pay to UCPB the sum of One Hundred Seventy-
Ocean Terminal Services, Inc. (OTSI) in centering and shuttling the containers/skids. As a Five Thousand Six Hundred Thirty-Nine Pesos and Sixty-Eight Centavos (Php175,639.68).
consequence, the local ship agent of the vessel, Baliwag Shipping Agency, Inc., issued Both sums shall bear interest at the rate of six (6%) percent per annum, from the filing of
two Bad Order Cargo Receipt dated September 1, 1993. the complaint on August 30, 1994 until the judgment becomes final and executory.
Thereafter, an interest rate of twelve (12%) percent per annum shall be imposed from the
time this decision becomes final and executory until full payment of said amounts.
Delsans argument that it should not be held liable for the loss of diesel oil due to backflow
The liability of the arrastre operator was reiterated in Eastern Shipping Lines, Inc. v. Court
because the same had already been actually and legally delivered to Caltex at the time it
of Appeals with the clarification that the arrastre operator and the carrier are not always
entered the shore tank holds no water. It had been settled that the subject cargo was still
and necessarily solidarily liable as the facts of a case may vary the rule.
in the custody of Delsan because the discharging thereof has not yet been finished when
the backflow occurred. Since the discharging of the cargo into the depot has not yet been
Thus, in this case, the appellate court is correct insofar as it ruled that an arrastre operator completed at the time of the spillage when the backflow occurred, there is no reason to
and a carrier may not be held solidarily liable at all times. But the precise question is which imply that there was actual delivery of the cargo to the consignee. Delsan is straining the
entity had custody of the shipment during its unloading from the vessel? issue by insisting that when the diesel oil entered into the tank of Caltex on shore, there
was legally, at that moment, a complete delivery thereof to Caltex. To be sure, the
The aforementioned Section 3 (2) of the COGSA states that among the carriers extraordinary responsibility of common carrier lasts from the time the goods are
responsibilities are to properly and carefully load, care for and discharge the goods carried. unconditionally placed in the possession of, and received by, the carrier for transportation
The bill of lading covering the subject shipment likewise stipulates that the carriers liability until the same are delivered, actually or constructively, by the carrier to the consignee, or
for loss or damage to the goods ceases after its discharge from the vessel. Article 619 of to a person who has the right to receive them. The discharging of oil products to Caltex
the Code of Commerce holds a ship captain liable for the cargo from the time it is turned Bulk Depot has not yet been finished, Delsan still has the duty to guard and to preserve
over to him until its delivery at the port of unloading. the cargo. The carrier still has in it the responsibility to guard and preserve the goods, a
duty incident to its having the goods transported.
In a case decided by a U.S. Circuit Court, Nichimen Company v. M/V Farland, it was ruled
that like the duty of seaworthiness, the duty of care of the cargo is non-delegable, and the To recapitulate, common carriers, from the nature of their business and for reasons of
carrier is accordingly responsible for the acts of the master, the crew, the stevedore, and public policy, are bound to observe extraordinary diligence in vigilance over the goods and
his other agents. It has also been held that it is ordinarily the duty of the master of a vessel for the safety of the passengers transported by them, according to all the circumstances of
to unload the cargo and place it in readiness for delivery to the consignee, and there is an each case. The mere proof of delivery of goods in good order to the carrier, and their
implied obligation that this shall be accomplished with sound machinery, competent hands, arrival in the place of destination in bad order, make out a prima facie case against the
and in such manner that no unnecessary injury shall be done thereto. And the fact that a carrier, so that if no explanation is given as to how the injury occurred, the carrier must be
consignee is required to furnish persons to assist in unloading a shipment may not relieve held responsible. It is incumbent upon the carrier to prove that the loss was due to
the carrier of its duty as to such unloading. accident or some other circumstances inconsistent with its liability. 18
xxxx
BENTOR| S.Y.2017-2018 Transportation Law: Atty. Ventura| 34
The contention of OFII is likewise untenable. A customs broker has been regarded as a carriage thereof. It failed to do so. Hence its presumed negligence under Article 1735 of
common carrier because transportation of goods is an integral part of its business. 19 In the Civil Code remains unrebutted.
Schmitz Transport & Brokerage Corporation v. Transport Venture, Inc., 20 the Court already
reiterated: It is settled that under a given set of facts, a customs broker may be regarded WHEREFORE, premises considered the petitions of Westwind and OFII in G.R. Nos.
as a common carrier.1wphi1 Thus, this Court, in A.F. Sanchez Brokerage, Inc. v. The 200289 and 200314 respectively are DENIED. The September 13 2011 Decision and
Honorable Court of Appeals held: January 19 2012 Resolution of the Court of Appeals in CA-G.R. CV No. 86752 which
reversed and set aside the January 27 2006 Decision of the Manila City Regional Trial
The appellate court did not err in finding petitioner, a customs broker, to be also a common Court Branch 30 are AFFIRMED.
carrier, as defined under Article 1732 of the Civil Code, to wit, Art. 1732. Common carriers
are persons, corporations, firms or associations engaged in the business of carrying or SO ORDERED.
transporting passengers or goods or both, by land, water, or air, for compensation, offering
their services to the public.
SECOND DIVISION
xxxx
[G.R. No. 148496. March 19, 2002]
Article 1732 does not distinguish between one whose principal business activity is the
VIRGINES CALVO doing business under the name and style TRANSORIENT
carrying of goods and one who does such carrying only as an ancillary activity. The
CONTAINER TERMINAL SERVICES, INC., petitioner, vs. UCPB GENERAL
contention, therefore, of petitioner that it is not a common carrier but a customs broker
INSURANCE CO., INC. (formerly Allied Guarantee Ins. Co., Inc.) respondent.
whose principal function is to prepare the correct customs declaration and proper shipping
DECISION
documents as required by law is bereft of merit. It suffices that petitioner undertakes to
deliver the goods for pecuniary consideration. MENDOZA, J.:
And in Calvo v. UCPB General Insurance Co. Inc., this Court held that as the This is a petition for review of the decision,[1] dated May 31, 2001, of the Court of
transportation of goods is an integral part of a customs broker, the customs broker is also Appeals, affirming the decision[2] of the Regional Trial Court, Makati City, Branch 148,
a common carrier. For to declare otherwise "would be to deprive those with whom [it] which ordered petitioner to pay respondent, as subrogee, the amount of P93,112.00 with
contracts the protection which the law affords them notwithstanding the fact that the legal interest, representing the value of damaged cargo handled by petitioner, 25% thereof
obligation to carry goods for [its] customers, is part and parcel of petitioners business." 21 as attorneys fees, and the cost of the suit.
On July 14, 1990, the shipment in question, contained in 30 metal vans, arrived in
As a common carrier, OFII is mandated to observe, under Article 1733 of the Civil
Manila on board M/V Hayakawa Maru and, after 24 hours, were unloaded from the vessel
Code,23 extraordinary diligence in the vigilance over the goods 24 it transports according to
to the custody of the arrastre operator, Manila Port Services, Inc. From July 23 to July 25,
the peculiar circumstances of each case. In the event that the goods are lost, destroyed or
1990, petitioner, pursuant to her contract with SMC, withdrew the cargo from the arrastre
deteriorated, it is presumed to have been at fault or to have acted negligently unless it
operator and delivered it to SMCs warehouse in Ermita, Manila. On July 25, 1990, the
proves that it observed extraordinary diligence. 25 In the case at bar it was established that
goods were inspected by Marine Cargo Surveyors, who found that 15 reels of the semi-
except for the six containers/skids already damaged OFII received the cargoes from ATI in
chemical fluting paper were wet/stained/torn and 3 reels of kraft liner board were likewise
good order and condition; and that upon its delivery to SMC additional nine
torn. The damage was placed at P93,112.00.
containers/skids were found to be in bad order as noted in the Delivery Receipts issued by
OFII and as indicated in the Report of Cares Marine Cargo Surveyors. Instead of merely SMC collected payment from respondent UCPB under its insurance contract for the
excusing itself from liability by putting the blame to ATI and SMC it is incumbent upon OFII aforementioned amount. In turn, respondent, as subrogee of SMC, brought suit against
to prove that it actively took care of the goods by exercising extraordinary diligence in the petitioner in the Regional Trial Court, Branch 148, Makati City, which, on December 20,
It cannot be denied . . . that the subject cargoes sustained damage while in the custody of 1. The sum of P93,112.00 plus interest;
defendants. Evidence such as the Warehouse Entry Slip (Exh. E); the Damage Report 2. 25% thereof as lawyers fee;
(Exh. F) with entries appearing therein, classified as TED and TSN, which the claims 3. Costs of suit.[4]
processor, Ms. Agrifina De Luna, claimed to be tearrage at the end and tearrage at the
middle of the subject damaged cargoes respectively, coupled with the Marine Cargo The decision was affirmed by the Court of Appeals on appeal. Hence this petition for
Survey Report (Exh. H - H-4-A) confirms the fact of the damaged condition of the subject review on certiorari.
cargoes. The surveyor[s] report (Exh. H-4-A) in particular, which provides among others Petitioner contends that:
that:
I. THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE
. . . we opine that damages sustained by shipment is attributable to improper handling in ERROR [IN] DECIDING THE CASE NOT ON THE EVIDENCE
transit presumably whilst in the custody of the broker . . . . PRESENTED BUT ON PURE SURMISES, SPECULATIONS AND
MANIFESTLY MISTAKEN INFERENCE.
is a finding which cannot be traversed and overturned. II. THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE
ERROR IN CLASSIFYING THE PETITIONER AS A COMMON CARRIER
The evidence adduced by the defendants is not enough to sustain [her] defense that [she AND NOT AS PRIVATE OR SPECIAL CARRIER WHO DID NOT HOLD
is] are not liable. Defendant by reason of the nature of [her] business should have devised ITS SERVICES TO THE PUBLIC.[5]
ways and means in order to prevent the damage to the cargoes which it is under obligation
It will be convenient to deal with these contentions in the inverse order, for if
to take custody of and to forthwith deliver to the consignee. Defendant did not present any
petitioner is not a common carrier, although both the trial court and the Court of Appeals
evidence on what precaution [she] performed to prevent [the] said incident, hence the
held otherwise, then she is indeed not liable beyond what ordinary diligence in the
presumption is that the moment the defendant accepts the cargo [she] shall perform such
vigilance over the goods transported by her, would require. [6] Consequently, any damage
extraordinary diligence because of the nature of the cargo.
to the cargo she agrees to transport cannot be presumed to have been due to her fault or
negligence.
Generally speaking under Article 1735 of the Civil Code, if the goods are proved to have
been lost, destroyed or deteriorated, common carriers are presumed to have been at fault Petitioner contends that contrary to the findings of the trial court and the Court of
or to have acted negligently, unless they prove that they have observed the extraordinary Appeals, she is not a common carrier but a private carrier because, as a customs broker
diligence required by law. The burden of the plaintiff, therefore, is to prove merely that the and warehouseman, she does not indiscriminately hold her services out to the public but
goods he transported have been lost, destroyed or deteriorated. Thereafter, the burden is only offers the same to select parties with whom she may contract in the conduct of her
shifted to the carrier to prove that he has exercised the extraordinary diligence required by business.
law. Thus, it has been held that the mere proof of delivery of goods in good order to a
The contention has no merit. In De Guzman v. Court of Appeals,[7] the Court
carrier, and of their arrival at the place of destination in bad order, makes out a prima facie
dismissed a similar contention and held the party to be a common carrier, thus
case against the carrier, so that if no explanation is given as to how the injury occurred, the
carrier must be held responsible. It is incumbent upon the carrier to prove that the loss was
due to accident or some other circumstances inconsistent with its liability. (cited in The Civil Code defines common carriers in the following terms:
Commercial Laws of the Philippines by Agbayani, p. 31, Vol. IV, 1989 Ed.)
Article 1732. Common carriers are persons, corporations, firms or associations engaged in
Defendant, being a customs brother, warehouseman and at the same time a common the business of carrying or transporting passengers or goods or both, by land, water, or air
carrier is supposed [to] exercise [the] extraordinary diligence required by law, hence the for compensation, offering their services to the public.
extraordinary responsibility lasts from the time the goods are unconditionally placed in the
possession of and received by the carrier for transportation until the same are delivered 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
Common carriers, from the nature of their business and for reasons of public policy, are Details of Discharge:
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 Shipment, provided with our protective supervision was noted discharged ex vessel to
case. . . . dock of Pier #13 South Harbor, Manila on 14 July 1990, containerized onto 30 x 20 secure
metal vans, covered by clean EIRs. Except for slight dents and paint scratches on side and
In Compania Maritima v. Court of Appeals,[9] the meaning of extraordinary diligence roof panels, these containers were deemed to have [been] received in good condition.
in the vigilance over goods was explained thus:
Transfer/Delivery:
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, On July 23, 1990, shipment housed onto 30 x 20 cargo containers was [withdrawn] by
or destruction of the goods entrusted to it for sale, carriage and delivery. It requires Transorient Container Services, Inc. . . . without exception.
Anent petitioners insistence that the cargo could not have been damaged while in her
custody as she immediately delivered the containers to SMCs compound, suffice it to say
that to prove the exercise of extraordinary diligence, petitioner must do more than merely
show the possibility that some other party could be responsible for the damage. It must
prove that it used all reasonable means to ascertain the nature and characteristic of goods
tendered for [transport] and that [it] exercise[d] due care in the handling [thereof]. Petitioner
failed to do this.
Nor is there basis to exempt petitioner from liability under Art. 1734(4), which
provides
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:
....
(4) The character of the goods or defects in the packing or in the containers.
....
For this provision to apply, the rule is that if the improper packing or, in this case, the
defect/s in the container, is/are known to the carrier or his employees or apparent upon
BENTOR| S.Y.2017-2018 Transportation Law: Atty. Ventura| 38