Asia Lighterage and Shipping Inc. v. Court of Appeals the towing bits of the barge broke.
e barge broke. It sank completely, resulting in
GR No. 147246
August 19, 2003
Facts: 3,150 metric tons of Better Western White Wheat in bulk,
valued at US$423,192,35 was shipped by Marubeni American
Corporation of Portland, Oregon on board the vessel M/V NEO
CYMBIDIUM V-26 for delivery to the consignee, General Milling
Corporation in Manila. The shipment was insured by the private
respondent Prudential Guarantee and Assurance, Inc. against
loss or damage for P14,621,771.75. the carrying vessel arrived in
Manila and the cargo was transferred to the custody of the
petitioner Asia Lighterage and Shipping, Inc. The petitioner was
contracted by the consignee as carrier to deliver the cargo to
consignee’s warehouse at Bo. Ugong, Pasig City. 900 metric tons
of the shipment was loaded on barge PSTSI III however the cargo
did not reach its destination. It appears that on two days after
loading the shipment, the transport of said cargo was suspended
due to a warning of an incoming typhoon. Thereafter, the
petitioner proceeded to pull the barge to Engineering Island off
Baseco to seek shelter from the approaching typhoon. PSTSI III
was tied down to other barges which arrived ahead of it while
weathering out the storm that night. A few days after, the barge
developed a list because of a hole it sustained after hitting an
unseen protuberance underneath the water. The petitioner
secured the services of Gaspar Salvaging Corporation which
refloated the barge. The hole was then patched with clay and
cement. The barge was then towed to ISLOFF terminal before it
finally headed towards the consignee’s wharf. Upon reaching the
Sta. Mesa spillways, the barge again ran aground due to strong
current. To avoid the complete sinking of the barge, a portion of
the goods was transferred to three other barges. The next day,
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the total loss of the remaining cargo.
Issues: (1) Whether the petitioner is a common carrier; and,
(2) Assuming the petitioner is a common carrier, whether it
exercised extraordinary diligence in its care and custody of the
consignee’s cargo.
Ruling: (1)Yes. The definition of common carriers in Article 1732
of the Civil Code makes no distinction between one whose
principal business activity is the carrying of persons or goods or
both, and one who does such carrying only as an ancillary activity.
We also did not distinguish between a person or enterprise
offering transportation service on a regular or scheduled basis
and one offering such service on an occasional, episodic or
unscheduled basis. Further, we ruled that Article 1732 does not
distinguish between a carrier offering its services to the general
public, and one who offers services or solicits business only from
a narrow segment of the general population. petitioner is a
common carrier whether its carrying of goods is done on an
irregular rather than scheduled manner, and with an only limited
clientele. A common carrier need not have fixed and publicly
known routes. Neither does it have to maintain terminals or issue
tickets. In the case at bar, the petitioner admitted that it is
engaged in the business of shipping and lighterage, offering its
barges to the public, despite its limited clientele for carrying or
transporting goods by water for compensation.
(2) No. Petitioner failed to exercise extraordinary diligence in its
care and custody of the consignee’s goods. Common carriers are
bound to observe extraordinary diligence in the vigilance over the
goods transported by them. They are presumed to have been at
fault or to have acted negligently if the goods are lost, destroyed
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or deteriorated. To overcome the presumption of negligence in the
case of loss, destruction or deterioration of the goods, the
common carrier must prove that it exercised extraordinary
diligence. petitioner failed to prove that the typhoon is the
proximate and only cause of the loss of the goods, and that it has
exercised due diligence before, during and after the occurrence of
the typhoon to prevent or minimize the loss. The evidence show
that, even before the towing bits of the barge broke, it had already
previously sustained damage when it hit a sunken object while
docked at the Engineering Island. It even suffered a hole. Clearly,
this could not be solely attributed to the typhoon. The partly-
submerged vessel was refloated but its hole was patched with
only clay and cement. The patch work was merely a provisional
remedy, not enough for the barge to sail safely. Thus, when
petitioner persisted to proceed with the voyage, it recklessly
exposed the cargo to further damage.
Accordingly, the petitioner cannot invoke the occurrence of the
typhoon as force majeure to escape liability for the loss sustained
by the private respondent. Surely, meeting a typhoon head-on
falls short of due diligence required from a common carrier. More
importantly, the officers/employees themselves of petitioner
admitted that when the towing bits of the vessel broke that caused
its sinking and the total loss of the cargo upon reaching the Pasig
River, it was no longer affected by the typhoon. The typhoon then
is not the proximate cause of the loss of the cargo; a human
factor, i.e., negligence had intervened.

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Calvo v. UCPB General Insurance Co.
GR No. 148496
March 19, 2002
Facts: Petitioner Virgines Calvo is the owner of Transorient
Container Terminal Services, Inc. (TCTSI), a sole proprietorship
customs broker. At the time material to this case, petitioner
entered into a contract with San Miguel Corporation (SMC) for the
transfer of 114 reels of semi-chemical fluting paper and 124 reels
of kraft liner board from the Port Area in Manila to SMCÊs
warehouse at the Tabacalera Compound, Romualdez St., Ermita,
Manila. The cargo was insured by respondent UCPB General
Insurance Co., Inc. the shipment in question, contained in 30
metal vans, arrived in Manila on board M/V Hayakawa Maru and,
after 24 hours, were unloaded from the vessel to the custody of
the arrastre operator, Manila Port Services, Inc. Pursuant to her
contract with SMC, withdrew the cargo from the arrastre operator
and delivered it to SMC’s warehouse in Ermita, Manila. The goods
were inspected by Marine Cargo Surveyors, who found that 15
reels of the semi-chemical fluting paper were wet/stained/torn and
3 reels of kraft liner board were likewise torn. The damage was
placed at P93,112.00.
SMC collected payment from respondent UCPB under its
insurance contract for the aforementioned amount. In turn,
respondent, as subrogee of SMC, brought suit against petitioner
in the Regional Trial Court.
Issue: Whether or not petitioner is a common carrier, hence liable
for failure to exercise extraordinary diligence
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Ruling: Yes. She is a common carrier. In De Guzman v. Court
of Appeals, the Court dismissed a similar contention and held the
party to be a common carrier, thus· The Civil Code defines
common carriers in the following terms: Article 1732. Common
carriers are persons, corporations, firms or associations engaged
in the business of carrying or transporting passengers or goods or
both, by land, water, or air for compensation, offering their
services to the public. The above article makes no distinction
between one whose principal business activity is the carrying of
persons or goods or both, and one who does such carrying only
as an ancillary activity . . . Article 1732 also carefully avoids
making any distinction between a person or enterprise offering
transportation service on a regular or scheduled basis and one
offering such service on an occasional, episodic or unscheduled
basis. Neither does Article 1732 distinguish between a carrier
offering its services to the general public, i.e., the general
community or population, and one who offers services or solicits
business only from a narrow segment of the general population.
We think that Article 1732 deliberately refrained from making such
distinctions. 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 (Commonwealth Act
No. 1416, as amended) which at least partially supplements the
law on common carriers set forth in the Civil Code.
Hence, for failure of petitioner to prove that she exercised
extraordinary diligence in the carriage of goods in this case or that
she is exempt from liability, the presumption of negligence as
provided under Art. 1735 holds.
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Phil. American Genreal Insurance Company, et al. v. PKS
Shipping Company
GR No. 149038
April 9, 2003
Facts: Davao Union Marketing Corporation (DUMC) contracted
the services of respondent PKS Shipping Company (PKS
Shipping) for the shipment to Tacloban City of seventy-five
thousand (75,000) bags of cement worth Three Million Three
Hundred Seventy-Five Thousand Pesos (P3,375,000.00). DUMC
insured the goods for its full value with petitioner Philippine
American General Insurance Company (Philamgen). The goods
were loaded aboard the dumb barge Limar I belonging to PKS
Shipping. On the evening of 22 December 1993, about nine
o’clock, while Limar I was being towed by respondent’s tugboat,
MT Iron Eagle, the barge sank a couple of miles off the coast of
Dumagasa Point, in Zamboanga del Sur, bringing down with it the
entire cargo of 75,000 bags of cement.
DUMC filed a formal claim with Philamgen for the full amount of
the insurance. Philamgen promptly made payment; it then sought
reimbursement from PKS Shipping of the sum paid to DUMC but
the shipping company refused to pay, prompting Philamgen to file
suit.
Issue: Whether or not PKS is a common carrier
Ruling: Yes. PKS is a common carrier. Much of the distinction
between a common or public carrier and a private or special
carrier lies in the character of the business, such that if the
undertaking is an isolated transaction, not a part of the business
or occupation, and the carrier does not hold itself out to carry the
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goods for the general public or to a limited clientele, although
involving the carriage of goods for a fee, the person or corporation
providing such service could very 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 use and service of all or some part of a ship
for a period of time or a voyage or voyages and gets the control of
the vessel and its crew. Contrary to the conclusion 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, undertaking to carry such goods
for a fee. The regularity of its activities in this area indicates more
than just a casual activity on its part. Neither can the concept of a
common carrier change merely because individual contracts are
executed or entered into with patrons of the carrier. Such
restrictive interpretation would make it easy for a common carrier
to escape liability by the simple expedient of entering into those
distinct agreements with clients.
However, PKS is absolved from liability as the appellate court
ruled, gathered from the testimonies and sworn marine protests of
the respective vessel masters of Limar I and MT Iron Eagle, that
there was no way by which the barge’s or the tugboat’s crew
could have prevented the sinking of Limar I.
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