Private Carrier Liability

1. MALAYAN INSURANCE CO., INC., Petitioner, AUTHOR: K.
Guevarra
vs. NOTES:
PHILIPPINES FIRST INSURANCE CO., INC. and REPUTABLE I did not include the issues and facts regarding insurance in this case.
FORWARDER SERVICES, INC., Respondents. Art. 1745 (6) - Any of the following or similar stipulations shall be
G.R. No. 184300 | 11 July 2012 considered unreasonable, unjust and contrary to public policy: … That
TOPIC: Common Carriers the common carrier’s liability for acts committed by thieves, or of
PONENTE: Reyes, J. robbers who do not act with grave or irresistible threat, violence or
force is dispensed with or diminished.
CASE LAW/ DOCTRINE:

 Under Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or associations engaged in the business of carrying
or transporting passenger or goods, or both by land, water or air for compensation, offering their services to the public.
 A private carrier is one wherein the carriage is generally undertaken by special agreement and it does not hold itself out to carry goods for
the general public.
 A common carrier becomes a private carrier when it undertakes to carry a special cargo or chartered to a special person only.
Emergency Recit: Wyeth and Reputable execute annually a contract of carriage for the former’s products to be transported by the latter. However,
their contract for 1993 was not signed by Wyeth’s representatives. Nevertheless, the contract was signed and executed by Reputable. A shipment
of Promil was hijacked in transit while in the custody of Reputable. Wyeth filed a claim with PhilFirst and was able to collect. PhilFirst then
proceeded against Reputable, consequentially involving Malayan. The RTC ruled that Reputable was liable for the loss and was affirmed by the CA
noting that Reputable was a private carrier. The Supreme Court affirmed the RTC and the CA when it found that Reputable was a private carrier
given the fact that it rendered its services to carry a special cargo to and for a special person only.
FACTS:
1. Since 1989, Wyeth Phils. (Wyeth) and respondent Reputable Forwarders Services, Inc. (Reputable) had been annually executing a contract of
carriage, whereby the latter undertook to transport and deliver the former’s products to its customers, dealers, or salesmen.
2. On 18 November 1993, Wyeth procured a Marine policy from respondent Philippines First Insurance Co. (PhilFirst) to secure its interest over
its own products. PhilFirst, insured Wyeth’s products while the same were a being transported or shipped in the Philippines. The policy covers
all risks of direct physical loss or doamage from any external cause, if by land, and provides a limit of Php6M per any one land vehicle.
3. On 1 December 1993, Wyeth and Reputable executed its annual contract of carriage. However, said contract was not signed by Wyeth’s
representative. Nevertheless, it was signed by Reputable’s representatives, the terms thereof faithfully observed by the parties since it was
the same annual contract executed by the parties since 1989. At the same time, contract required Reputable to secure an insurance policy
on Wyeth’s products. Thus, on 11 February 1994, they secured a Special Risk Insurance Policy with Malayan
4. Under the contract, Reputable undertook to answer for "all risks with respect to the goods and shall be liable to the COMPANY (Wyeth), for
the loss, destruction, or damage of the goods/products due to any and all causes whatsoever, including theft, robbery, flood, storm,
earthquakes, lightning, and other force majeure while the goods/products are in transit and until actual delivery to the customers, salesmen,
and dealers of the COMPANY"
5. On October 6, 1994, during the effectivity of the Marine Policy and SR Policy, Reputable received from Wyeth 1,000 boxes of Promil infant
formula worth P2,357,582.70 to be delivered by Reputable to Mercury Drug Corporation in Libis, Quezon City. Unfortunately, on the same
date, the truck carrying Wyeth’s products was hijacked by about 10 armed men. They threatened to kill the truck driver and two of his helpers
should they refuse to turn over the truck and its contents to the said highway robbers. The hijacked truck was recovered two weeks later
without its cargo.
6. PhilFirst, after due investigation and adjustment, paid Wyeth P2,133,257.00 as indemnity. They then demanded reimbursement from
Reputable. Reputable, however, ignored the demand.
7. PhilFirst filed an action against Reputable, citing that Reputable is a “private corporation engaged in the business of a common carrier.”
8. Reputable claimed that it s a private carrier. They also claimed that that they cannot be made liable under the contract of carriage with Wyeth
since it was not signed by Wyeth’s representative and that the cause of the loss was force majeure. Subsequently, they impleaded Malayan
as third-party defendant in an effort to collect the amount covered in the SR Policy.
9. RTC: found Reputable liable to PhilFirst while Malayan was liable to Reputable.
10. CA: sustained the RTC ruling.
11. Malayan contends that the CA erred when it held that Reputable is a private carrier and should be bound by the contractual stipulations in
the contract of carriage. This argument is based on its assertion that PhilFirst judicially admitted in its complaint that Reputable is a common
carrier and a such, Reputable should not be held liable pursuant to Article 1745(6) of the Civil Code. Necessarily, if Reputable is not liable for
the loss, then there is no reason to hold Malayan liable to Reputable.
12. Reputable contends that it is exempt from liability for acts committed by thieves/robbers who act with grave or irresistible threat whether
it’s a common carrier or a private/special carrier.
13. PhilFirst contends that the factual finding that Reputable is a private carrier should be accorded the highest degree of respect and must be
considered conclusive between the parties.
ISSUE(S): Whether Reputable is a private carrier.
HELD:
1. Yes, Reputable is a private carrier. Well-entrenched in jurisprudence is the rules that factual findings of the trial court, especially when
affirmed by the appellate court, are accorded the highest degree of respect and considered conclusive between the parties, save for the
certain exceptional and meritorious circumstances, none of which are present in this case.
Commercial Law Review – G04 | Atty. Sergio M. Ceniza 1

Transportation Law: Case Digests
RATIO:
1. Reputable is a common carrier. Consequently, pursuant to Article 1745 (6) of the Civil Code, the liability of Reputable for the loss of
Wyeth’s goods should be dispensed with, or at least diminished.
2. It is true that judicial admissions, such as matters alleged in the pleadings do not require proof and need not be offered to be considered
by the court. "The court, for the proper decision of the case, may and should consider, without the introduction of evidence, the facts
admitted by the parties." The rule on judicial admission, however, also states that such allegation, statement, or admission is conclusive
as against the pleader, and that the facts alleged in the complaint are deemed admissions of the plaintiff and binding upon him. In this
case, the pleader or the plaintiff who alleged that Reputable is a common carrier was Philippines First. It cannot, by any stretch of
imagination, be made conclusive as against Reputable whose nature of business is in question.
3. More importantly, the finding of the RTC and CA that Reputable is a special or private carrier is warranted by the evidence on record,
primarily, the unrebutted testimony of Reputable’s Vice President and General Manager, Mr. William Ang Lian Suan, who expressly
stated in open court that Reputable serves only one customer, Wyeth.27
4. Under Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or associations engaged in the business of
carrying or transporting passenger or goods, or both by land, water or air for compensation, offering their services to the public. On the
other hand, a private carrier is one wherein the carriage is generally undertaken by special agreement and it does not hold itself out to
carry goods for the general public. A common carrier becomes a private carrier when it undertakes to carry a special cargo or chartered
to a special person only. For all intents and purposes, therefore, Reputable operated as a private/special carrier with regard to its
contract of carriage with Wyeth
WHEREFORE, premises considered, the petition is DENIED. The Decision dated February 29, 2008 and Resolution dated August 28, 2008 of the
Court of Appeals in CA-G.R. CV No. 71204 are hereby AFFIRMED.
2) National Steel Corporation vs. CA and Vlasons Shipping Inc AUTHOR: HERNANDEZ
[G.R. No. 112287; Dec. 12, 1997] NOTES: NSC – National Steel Corp; VSI – Vlasons Shipping Inc
TOPIC: A. Common Carrier B/L – Bill of lading
PONENTE: Panganiban
CASE LAW/ DOCTRINE: 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. Unlike in a contract involving a common
carrier, private carriage does not involve the general public. Hence, the stringent provisions of the Civil Code on common carriers protecting the
general public cannot justifiably be applied to a ship transporting commercial goods as a private carrier.
Emergency Recit: There was a charter party agreement between VSI (shipowner) and NSC (charterer) whereby the latter is liable for loading and
unloading and the former is not liable for damages unless negligence is proven. SC held that VSI is a private carrier because it did not offer its
services to the general public. It carried passengers and goods only for those it chose under a charter party. As such, its duties and obligations are
not governed by the Civil Code but by their stipulations and the Code of Commerce. No presumption of negligence. NSC has the burden of proving
negligence on the part of VSI and it failed to do so.
FACTS:
 The parties entered into a Contract of Voyage Charter Hire with NSC as Charterer and VSI as owner of MV Vlasons I to transport steel
products from Iligan to North Harbor, Manila. 75k charter hire (or 30/metric ton). 8k per day for demurrage.
 Payment is on Freight In and Out including Stevedoring and Trading (FIOST) basis which means that the handling, loading and
unloading of cargoes are the responsibility of the Charterer. It is a standard provision in the shipping business under the NANYOZAI
Charter Party which likewise states that Charterers load, stow and discharge the cargo free of risk and expenses to owners.
 Charterer must insure the cargoes. Shipowners not responsible for losses/damages except on proven willful negligence of the
officers of the vessel.
 All terms of the NONYAZAI Charter Party Agreement shall form part of the contract. (such as shipowner not liable for loss due to
unseaworthiness unless caused by its lack of due diligence; shipowner not responsible for split, chafing or any damage unless caused
by negligence of master or crew)
 4 day laytime as WWDSHINC or weather working days Sundays and holidays included.
 NSC’s shipment of 1.6k skids of tinplates and 92 packages of hot rolled sheets were placed in 3 hatches of the ship. Chief Mate Sabando,
acting as the vessel’s agent, acknowledged receipt of the cargo and signed the corresponding B/L.
 The vessel arrived at North Harbor a few days later. The hatches were opened the following day. Cargo was found wet and rusty.
Discharge and unloading was commenced by the stevedores hired by the Charterer. Unloading was competed only after 11 days due to
heavy rain and a typhoon.
 Manila Adjusters and Surveyors Company conducted lab tests and an ocular inspection on the cargo both while it was still on board the
vessel and while it was stored at the warehouse. It found that the rusting was caused by contact with sea water sustained while still on
board the vessel due to heavy weather encountered while en route to Manila. The tarpaulin hatch covers were torn at various extents.
 NSC demanded payment for damages amounting to 941k with VSI. VSI refused to pay. NSC filed a complaint before the CFI.
 VSI arguments:
a. Not a common carrier under the charter party;
b. Adverse weather conditions;
c. Under their contract, it can’t be held liable for damages except on proven willful negligence of the officers of the vessels. Officers
exercised due diligence.
d. Loading and discharging was on FIOST terms;
e. Damage was due to inherent defects of cargo or insufficient packing by NSC.
f. Cargo was exposed to rain and seawater while on the pier or in transit to the warehouse.
g. NSC refused to pay the agreed charter hire although it complied with its obligations under the contract.
h. NSC liable to pay 88k because the vessel was on demurrage for 11 days waiting for the complete discharge of cargo.
 CFI ruled in favor of VSI.
 The vessel is engaged in tramping service and available for hire only under special contracts of charter party. No presumption of
negligence because the Civil Code provisions on common carriers N/A. VSI’s alleged violation of the contract is not supported by
evidence.
 It was covered by the required seaworthiness certificates, underwent drydocking and was thoroughly inspected by the Phil Coast Guard
prior to the voyage. It was also the first voyage after drydocking.
 Hatch covers were water tight. Hatch openings were covered by (steel beam) hatchboards which were in turn covered by double
tarpaulins. Tinplates were wrapped in kraft paper lining and corrugated cardboards. They could not be affected by water. A witness
even testified that tinplates sweat by themselves when packed even w/o water contact.
 Vessel encountered rough seas causing sea water to splash on the deck as stated in the Marine Protest.
 NSC violated the contract. It failed to insure the cargo as prescribed by their contract. NSC also loaded not only steel products but also
tinplates and hot rolled sheets which are high grade cargo commanding higher freight.
 CA affirmed but reduced the award for demurrage.
ISSUE(S): Is VSI a common carrier or private carrier?
HELD: VSI is a private carrier.

RATIO:
VSI is a private carrier.
 Civil Code Art 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 true test of a common carrier is the carriage of passengers or goods, provided it has space, for all who opt to avail themselves of its
transportation service for a fee.
 Private carrier: By special agreement and does not hold himself out to carry goods for the general public. Most common form is a charter
party- a maritime contract by which the charterer, a party other than the shipowner, obtains the use and service of all or some part of a
ship for a period of time or a voyage or voyages.
 VSI did not offer its services to the general public. It carried passengers and goods only for those it chose under a charter party.
 Civil Code provisions on common carriers n/a to private carriers while Code of Commerce is applicable. Parties may also freely stipulate
their duties and obligations.
Negligence of VSI not proven
 It is clear from their contract and the NANYOZAI Charter Party that VSI is not liable for losses unless it was caused by lack of due diligence
to make it seaworthy or willful negligence of the officers of the vessel.
 Code of commerce provides that cargo is transported at the risk of the shipper unless otherwise stipulated.
 Burden of proof is still on NSC to prove VSI was negligent or unseaworthy although the carrier may have burden of coming forward with
evidence as it is in a better position to know the cause of loss and that it was not involved.
 Records reveal that VSI exercised due diligence in making the ship seaworthy and fit for carriage as shown by certificates, drydocking and
inspection by the coast guard.
 The marine protest discloses that the old (torn) tarpaulins mentioned in the surveyor report were used only in addition to the new one
primarily used to make the hatches watertight.
 The stevedores hired by NSC were negligent. They used only a tent-like material to cover the hatches although there was a typhoon. A VSI
officer testified that water soaked into the canvass. He first called the attention of the stevedores and later NSC. The stevedoring company,
not VSI, should be held liable.
Effect of failure to insure cargo: None. The obligation of NSC to insure the cargo stipulated in the Contract of Voyage Charter Hire is totally separate
and distinct from the contractual or statutory responsibility that may be incurred by VSI for damage to the cargo caused by the willful negligence
of the vessel officers.
Seaworthiness: Several certificates of seaworthiness are actually inadmissible because they were not properly offered as evidence. They were
either issued by private parties but not proven by one who saw its execution or mere photocopies. The certificate by the Phil Coast Guard is
admissible as an entry in official records made in the performance of a duty specifically enjoined by law. At any rate, NSC still has the burden of
proof that the vessel was not seaworthy.
Demurrage:
1. Demurrage is compensation provided for in the contract of affreightment for the detention of the vessel beyond the laytime or that period
of time agreed on for loading and unloading of cargo.
2. Under the contract, the running of laytime was thus made subject to the weather and would cease to run in the event unfavorable weather
interfered with the unloading of cargo. Consequently, NSC may not be held liable for demurrage as the four-day laytime allowed it did not
lapse, having been tolled by unfavorable weather condition in view of the WWDSHINC qualification agreed upon by the parties.
Attys Fees: Deleted. No sufficient showing of bad faith on the part of NSC.
03 SPS. PEREÑA vs. SPS. ZARATE, PHILIPPINE NATIONAL RAILWAYS (PNR), and CA Magsanay
G.R. No. 157917 | August 29, 2012 | J. Bersamin Discusses the definition and distinction of private
TOPIC: Common Carrier carriers and common carriers
DOCTRINE:

 A carrier is a person or corporation who undertakes to transport or convey goods or persons from one place to another, gratuitously or for
hire. The carrier is classified either as a private/special carrier or as a common/public carrier.
 A PRIVATE CARRIER is one who, without making the activity a vocation, or without holding himself or itself out to the public as ready to act
for all who may desire his or its services, undertakes, by special agreement in a particular instance only, to transport goods or persons from
one place to another either gratuitously or for hire. The provisions on ordinary contracts of the Civil Code govern the contract of carriage.
The diligence required of a private carrier is only ordinary, that is, the diligence of a good father of the family.
 In contrast, a COMMON CARRIER is a person, corporation, firm or association engaged in the business of carrying or transporting passengers
or goods or both, by land, water, or air, for compensation, offering such services to the public. Contracts of common carriage are governed
by the provisions on common carriers of the Civil Code, the Public Service Act, and other special laws relating to transportation. A common
carrier is required to observe extraordinary diligence, and is presumed to be at fault or to have acted negligently in case of the loss of the
effects of passengers, or the death or injuries to passengers.
 The TRUE TEST for a COMMON CARRIER is not the quantity or extent of the business actually transacted, or the number and character of
the conveyances used in the activity, but whether the undertaking is a part of the activity engaged in by the carrier that he has held out to
the general public as his business or occupation. If the undertaking is a single transaction, not a part of the general business or occupation
engaged in, as advertised and held out to the general public, the individual or the entity rendering such service is a private carrier. The
question must be determined by the character of the business actually carried on by the carrier, not by any secret intention or mental
reservation it may entertain or assert when charged with the duties and obligations that the law imposes.
FACTS:
a) The Sps. Pereñas were engaged in the business of transporting students from their residences in Parañaque City to Don Bosco, Pasong Tamo,
Makati City, and back. In their business, the Sps. Pereñas used a KIA Ceres Van (van) which had the capacity to transport 14 students at a
time. Clemente Alfaro (Alfaro) was the employed driver of the van.
b) Sps. Zarates contracted the Sps. Pereñas to transport their son, Aaron, to and from Don Bosco.
c) On August 22, 1996, the van picked up Aaron around 6:00am from their house. Aaron sat on the left side of the van near the rear door. Inside
the van, the stereo was playing loudly. Considering that they were running late for the 7:15am expected time of arrival of the students due
to the heavy traffic on the South Superhighway, Alfaro took an alternate route at about 6:45am by traversing the narrow path underneath
the Magallanes Interchange that was then commonly used by Makati-bound vehicles as a short cut into Makati.
d) At the time, the railroad crossing in the narrow path had no railroad signs, or watchmen, or other responsible persons manning the crossing.
In fact, the bamboo barandilla was up, leaving the railroad crossing open to traversing motorists.
e) When the van was about to cross railroad crossing, PNR Commuter No. 302 (train), operated by Jhonny Alano (Alano), was in the vicinity of
the Magallanes Interchange travelling northbound. As the train neared the railroad crossing, Alfaro drove the van eastward (pa-north si train,
pa-east si van – so tumawid siya) across the railroad tracks, closely tailing a large passenger bus. His view of the oncoming train was blocked
because he overtook the passenger bus on its left side. (Picture: nag-overtake siya sa bus na tumatawid din, so nasa right side ni van yung
bus, then nasa right side din ni bus yung train).
f) When the train was about 50 meters away from the bus and the van, Alano (train driver) applied the ordinary brakes. He applied the
emergency brakes only when he saw that a collision was imminent. The bus successfully crossed the railroad tracks, but the VAN was HIT at
the rear end. The impact threw 9 out of the 12 students in the rear, including Aaron, out of the van. Aaron landed in the path of the train,
which dragged his body and severed his head, instantaneously killing him. Alano (train driver) fled.
g) Sps. Zarates (parents of Aaron), filed an action for damages against Alfaro, Sps. Pereñas, PNR and Alano.
- Against Sps. Pereñas: breach of the contract of carriage
- Against PNR: quasi-delict under Art. 2176 of the Civil Code
 Sps. Pereñas defense:
o They exercised the diligence of a good father of the family in the selection and supervision of Alfaro, by making sure that he
has a driver’s license and had not been involved in any vehicular accident prior to the collision
o That their own son had taken the van daily
o That Teodora Pereña (owner/husband) had sometimes accompanied Alfaro in the van’s trips transporting students to school
o During the time of the collision, there were no appropriate and safety warning signs and railings at the site commonly used
for railroad crossing.
o Countless number of Makati bound public utility and private vehicles used, on a daily basis, the alternate route as a short-cut
to Makati.
 PNR defense:
o The alternate route used by motorists was not in fact intended by the railroad operator for railroad crossing
o The proximate cause of the collision had been the reckless crossing of the van and the driver did not first “stop, look and listen”
 RTC: Sps. Zarates won. The cooperative gross negligence of both the Sps. Pereñas and PNR caused the collision and Aaron’s death.
 CA: affirmed RTC decision. It upheld the damages award for the loss of Aaron’s earning capacity.
ISSUES:
1. WON the van used as a school service is a common carrier? – YES!
2. WON Sps. Pereñas and PNR are negligent and liable? – YES!
HELD: Petition denied. CA decision affirmed. Sps. Pereñas and PNR jointly and severally liable.
RATIO:
The van of the Sps. Pereñas is a COMMON CARRIER
1. Although in this jurisdiction the operator of a school bus service has been usually regarded as a private carrier, primarily because he
only caters to some specific or privileged individuals, and his operation is neither open to the indefinite public nor for public use, the

exact nature of the operation of a school bus service has not been finally settled. However, the definitions of carriers are clearly stated.
[Read DOCTRINE part here]
2. In relation to common carriers, the Court defined public use in the following terms:
“Public use” is the same as “use by the public.” The essential feature of the public use is not confined to privileged individuals, but is
open to the indefinite public. It is this indefinite or unrestricted quality that gives it its public character. In determining whether a use is
public, we must look not only to the character of the business to be done, but also to the proposed mode of doing it. If the use is merely
optional with the owners, or the public benefit is merely incidental, it is not a public use, authorizing the exercise of the jurisdiction of
the public utility commission. There must be, in general, a right which the law compels the owner to give to the general public. It is not
enough that the general prosperity of the public is promoted. Public use is not synonymous with public interest. The true criterion by
which to judge the character of the use is whether the public may enjoy it by right or only by permission.
- Article 1732 avoided any distinction between a person or an enterprise offering transportation on a regular or an isolated basis; and has
not distinguished a carrier offering his services to the general public, that is, the general community or population, from one offering
his services only to a narrow segment of the general population. Nonetheless, the concept coincides neatly with the notion of public
service under the Public Service Act, which supplements the law on common carriers. Section 13, par. (d) of Public Service Act states
defines a public service as:
“x x x for hire or compensation, with general or limited clientele, whether permanent or occasional, and done for the general business
purposes, any common carrier, railroad, street railway x x x.”
- Therefore, applying these considerations, the Sps. Pereñas were:
 Engaged in transporting passengers as a business, not just as a casual occupation;
 Undertaking to carry passengers over established roads by the method by which the business was conducted; and
 Transporting students for a fee.
- Despite catering to a limited clientele, the Sps. Pereñas operated a common carrier because they held themselves out as a ready
transportation indiscriminately to the students of a particular school living within or near where they operated the service and for a fee.
Standard of care: Extraordinary diligence

- The defense of the owners of the van is inappropriate in an action for breach of contract of carriage. They operated as a common carrier,
and that their standard of care was extraordinary diligence. This is defined by law, and based on the nature of the business and for
reasons of public policy. Article 1755 specifies that the common carrier should “carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.” The common
carrier must prove his or its observance of that extraordinary diligence; otherwise, the legal presumption that he or it was at fault or
acted negligently would stand.
- The presumption of negligence, being a presumption of law, laid the burden of evidence on their shoulders (Sps. Pereñas and PNR). Sps.
Pereñas did not overturn the presumption of their negligence by credible evidence. Their defense of observing the “diligence of a good
father of a family” in the selection and supervision of their driver was not legally sufficient. They were liable despite the fact that their
driver Alfaro acted beyond the scope of his authority or even in violation of the orders of the common carrier. The driver was negligent
when he crossed the train tracks and disregarded the risks in taking the alternate route/shortcut. His lack of care was also apparent
when he played loud music while the aircon was turned on (meaning closed yung van kasi lalabas yung lamig so hindi niya marinig yung
horn ng train) AND he overtook the bus in the train tracks.
- PNR did not ensure the safety of others by placing crossbars, signal lights, warning signs, and other permanent safety barriers to prevent
vehicles or pedestrians from crossing, although they were already aware of the risks to control the vehicular and other traffic there.
Notes:
Article 1732, Civil Code
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.
Article 1732, Civil Code

In case of death of or injuries to passengers, common carriers are presumed to have been at faults or to have acted negligently, unless they prove
that they observed extraordinary diligence as prescribed in articles 1733 and 1755.
04 SCHMITZ TRANSPORT & BROKERAGE CORPORATION, petitioner, AUTHOR: Mendoza, J.D.

vs. TRANSPORT VENTURE, INC. (TVI), INDUSTRIAL INSURANCE NOTES:
COMPANY, LTD., and BLACK SEA SHIPPING AND DODWELL now
INCHCAPE SHIPPING SERVICES, respondents.
[G.R. No. 150255. April 22, 2005.]
TOPIC: Common Carrier
PONENTE: Carpio-Morales
CASE LAW/ DOCTRINE: "as long as a person or corporation holds [itself] to the public for the purpose of transporting goods as [a] business, [it] is
already considered a common carrier regardless if [it] owns the vehicle to be used or has to hire one”
Emergency Recit: 545 hot rolled steel sheets in coil were shipped on board a vessel owned by Black Sea Shipping from Russia to Manila. Upon
arrival to Manila, Petitioner was responsible for the delivery of the goods to the consignee’s warehouse. 37 of the 545 coils were unloaded from
the vessel unto a barge owned by TVI, which services was engaged by Petitioner. No tugboat pulled the barge back to the pier. Due to strong
waves, the crew of the barge abandoned it and the barge eventually capsized washing the 37 coils to the sea. The lost cargoes were not recovered.

The consignee of the goods filed a formal claim against its insurer and the latter filed a complaint against petitioner, and respondents. Petitioner
and TVI were held solidarily liable as the loss was not due to acts of God but was because of the negligence of both parties.
FACTS:
 SYTCO Pte Ltd. Singapore shipped from the port of Ilyichevsk, Russia on board M/V "Alexander Saveliev" (a vessel of Russian registry and
owned by Black Sea) 545 hot rolled steel sheets in coil weighing 6,992,450 metric tons. The cargoes, which were to be discharged at the port
of Manila in favor of the consignee, Little Giant Steel Pipe Corporation were insured against all risks with Industrial Insurance Company Ltd.
(Industrial Insurance).
 The vessel arrived at the port of Manila and the Philippine Ports Authority (PPA) assigned it a place of berth at the outside breakwater at the
Manila South Harbor. Schmitz Transport, whose services the consignee engaged to secure the requisite clearances, to receive the cargoes
from the shipside, and to deliver them to (the consignee's) warehouse at Cainta, Rizal, in turn engaged the services of TVI to send a barge
and tugboat. TVI's tugboat "Lailani" towed the barge "Erika V" to shipside.
 The tugboat, after positioning the barge alongside the vessel, left and returned to the port terminal. The arrastre operator Ocean Terminal
Services Inc. commenced to unload 37 of the 545 coils from the vessel unto the barge.
 The weather condition had become inclement due to an approaching storm, the unloading unto the barge of the 37 coils was accomplished.
No tugboat pulled the barge back to the pier.
 Due to strong waves, the crew of the barge abandoned it and transferred to the vessel. The barge pitched and rolled with the waves and
eventually capsized, washing the 37 coils into the sea. A tugboat finally arrived to pull the already empty and damaged barge back to the
pier.
 Earnest efforts on the part of both the consignee Little Giant and Industrial Insurance to recover the lost cargoes proved futile.
 Little Giant thus filed a formal claim against Industrial Insurance which paid it the amount of P5,246,113.11. Little Giant thereupon executed
a subrogation receipt in favor of Industrial Insurance.
 Industrial Insurance later filed a complaint against Schmitz Transport, TVI, and Black Sea through its representative Inchcape (the defendants)
before the RTC of Manila, for the recovery of the amount it paid to Little Giant plus adjustment fees, attorney's fees, and litigation expenses.
Industrial Insurance faulted the defendants for undertaking the unloading of the cargoes while typhoon signal No. 1 was raised in Metro
Manila.
 RTC held all the defendants negligent for unloading the cargoes outside of the breakwater notwithstanding the storm signal.
 CA: Affirmed. The defendants were common carriers — Black Sea and TVI for engaging in the transport of goods and cargoes over the seas
as a regular business and not as an isolated transaction, and Schmitz Transport for entering into a contract with Little Giant to transport the
cargoes from ship to port for a fee.
ISSUE(S):
(1) Whether the loss of the cargoes was due to a fortuitous event, independent of any act of negligence on the part of petitioner Black Sea and
TVI. NO.
(2) If there was negligence, whether liability for the loss may attach to Black Sea, petitioner and TVI. Only to Petitioner and TVI.
HELD: WHEREFORE, judgment is hereby rendered ordering petitioner Schmitz Transport & Brokerage Corporation, and Transport Venture
Incorporation jointly and severally liable for the amount of P5,246,113.11 with the MODIFICATION that interest at SIX PERCENT per annum of the
amount due should be computed from the promulgation on November 24, 1997 of the decision of the trial court.
RATIO:
1. In order, to be considered a fortuitous event, however, (1) the cause of the unforeseen and unexpected occurrence, or the failure of the debtor
to comply with his obligation, must be independent of human will; (2) it must be impossible to foresee the event which constitute the caso fortuito,
or if it can be foreseen it must be impossible to avoid; (3) the occurrence must be such as to render it impossible for the debtor to fulfill his
obligation in any manner; and (4) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor.
There is no indication that there was greater risk in loading the cargoes outside the breakwater. As the defendants proffered, the weather
remained normal with moderate sea condition such that port operations continued and proceeded normally. The weather data report, furnished
and verified by the Chief of the Climate Data Section of PAG-ASA and marked as a common exhibit of the parties, states that while typhoon signal
No. 1 was hoisted over Metro Manila on October 23-31, 1991, the sea condition at the port of Manila was moderate. It cannot, therefore, be said
that the defendants were negligent in not unloading the cargoes upon the barge on October 26, 1991 inside the breakwater.
That no tugboat towed back the barge to the pier after the cargoes were completely loaded in the morning is, however, a material fact which the
appellate court failed to properly consider and appreciate 40 — the proximate cause of the loss of the cargoes. Had the barge been towed back
promptly to the pier, the deteriorating sea conditions notwithstanding, the loss could have been avoided. But the barge was left floating in open
sea until big waves set in at 5:30 a.m., causing it to sink along with the cargoes. The loss thus falls outside the "act of God doctrine."
2. This Court, as did the appellate court, finds that petitioner is a common carrier. For it undertook to transport the cargoes from the shipside of
"M/V Alexander Saveliev" to the consignee's warehouse at Cainta, Rizal. As the appellate court put it, "as long as a person or corporation holds
[itself] to the public for the purpose of transporting goods as [a] business, [it] is already considered a common carrier regardless if [it] owns the
vehicle to be used or has to hire one." That petitioner is a common carrier, the testimony of its own Vice-President and General Manager Noel
Aro that part of the services it offers to its clients as a brokerage firm includes the transportation of cargoes reflects so.
True, petitioner was the broker-agent of Little Giant in securing the release of the cargoes. In effecting the transportation of the cargoes from the
shipside and into Little Giant's warehouse, however, petitioner was discharging its own personal obligation under a contact of carriage. Petitioner,
which did not have any barge or tugboat, engaged the services of TVI as handler to provide the barge and the tugboat. In their Service Contract,
while Little Giant was named as the consignee, petitioner did not disclose that it was acting on commission and was chartering the vessel for Little
Giant. Little Giant did not thus automatically become a party to the Service Contract and was not, therefore, bound by the terms and conditions
therein. Not being a party to the service contract, Little Giant cannot directly sue TVI based thereon but it can maintain a cause of action for
negligence
In the case of TVI, while it acted as a private carrier for which it was under no duty to observe extraordinary diligence, it was still required to
observe ordinary diligence to ensure the proper and careful handling, care and discharge of the carried goods. TVI's failure to promptly provide a
tugboat did not only increase the risk that might have been reasonably anticipated during the shipside operation, but was the proximate cause of
the loss. A man of ordinary prudence would not leave a heavily loaded barge floating for a considerable number of hours, at such a precarious
time, and in the open sea, knowing that the barge does not have any power of its own and is totally defenseless from the ravages of the sea. That
it was nighttime and, therefore, the members of the crew of a tugboat would be charging overtime pay did not excuse TVI from calling for one
such tugboat.
In the case at bar, Bill of Lading No. 2 covering the shipment provides that delivery be made "to the port of discharge or so near thereto as she
may safely get, always afloat." 59 The delivery of the goods to the consignee was not from "pier to pier" but from the shipside of "M/V Alexander
Saveliev" and into barges, for which reason the consignee contracted the services of petitioner. Since Black Sea had constructively delivered the
cargoes to Little Giant, through petitioner, it had discharged its duty.
5 ASIA LIGHTERAGE AND SHIPPING, INC. vs. COURT OF APPEALS and PRUDENTIAL GUARANTEE AND ASSURANCE, INC. AUTHOR: MONJE
G.R. No. 147246 | August 19, 2003 NOTES:
TOPIC: COMMON CARRIER
PONENTE:| J. Puno
CASE LAW/ DOCTRINE: The test to determine a common carrier is whether the given undertaking is a part of the business engaged in by the carrier
which he has held out to the general public as his occupation rather than the quantity or extent of the business transacted.
FACTS:
 Asia Lighterage and Shipping was contracted by the consignee, General Milling Corporation, as carrier to deliver the 3,150 metric tons of Better
Western White Wheat in bulk to consignee's warehouse at Bo. Ugong, Pasig City. The shipment was insured by Prudential Guarantee and
Assurance, Inc. against loss or damage for P14,621,771.75.
 However, the transport of the said cargo did not reach its destination due to a warning of an incoming 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 filed a Marine Protest on August 28, 1990. It likewise secured the services of Gaspar Salvaging Corporation which refloated the
barge. 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.
 Days later, a bidding was conducted to dispose of the damaged wheat retrieved and loaded on the three other barges.
 The total proceeds from the sale of the salvaged cargo was P201,379.75.
 The consignee sent a letter to the petitioner and the insurer for the recovery of the lost cargo. The insurer paid the consignee. Thereafter, as
subrogee, it sought recovery of said amount from the petitioner, but to no avail.
 RTC – ruled in favor of the insurer and ordered Asia Lighterage to pay
 CA – affirmed RTC ruling
ISSUE(S): Whether or not Asia Lighterage is a common carrier
HELD: YES, ASIA LIGHTERAGE IS A COMMON CARRIER

RATIO: YES
 Article 1732 of the Civil Code defines common carriers as 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.
o Petitioner contends that it is not a common carrier but a private carrier. Allegedly, it has no fixed and publicly known route,
maintains no terminals, and issues no tickets. It points out that it is not obliged to carry indiscriminately for any person. It is not
bound to carry goods unless it consents. In short, it does not hold out its services to the general public.
 However, 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.
 In the case at bar, the principal business of the petitioner is that of lighterage and drayage and it offers its barges to the public for carrying
or transporting goods by water for compensation.
 The 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.
 The test to determine a common carrier is whether the given undertaking is a part of the business engaged in by the carrier which he has
held out to the general public as his occupation rather than the quantity or extent of the business transacted.

6 TORRES-MADRID BROKERAGE, INC v. FEB MITSUI MARINE INSURANCE CO., INC. AND BENJAMIN P. MANALASTAS, AUTHOR:
DOING BUSINESS UNDER THE NAME OF BMT TRUCKING SERVICES MONZON
G.R. No. 194121, July 11, 2016 NOTES:
TOPIC: COMMON CARRIER
PONENTE: BRION, J.
CASE LAW/ DOCTRINE: A brokerage may be considered a common carrier if it also undertakes to deliver the goods for its customers
Emergency Recit: TMBI and Sony entered into an agreement wherein TMBI will deliver the goods of Sony to its warehouse in Binan. TMBI
subcontracted BMT to have the goods delivered. One of the trucks was abandoned and all of the goods were missing. FEB Mitsui, Sony’s insurer,
filed a complaint to recover the amount it paid to Sony. RTC held that TMBI and BMT should be liable because they are common carriers and failed
to exercise extraordinary diligence.
FACTS:
 Sony engaged the services of TMBI to facilitate, process, and deliver the shipment of electronic goods from the Port of Manila to its warehouse
in Biñan, Laguna. TMBI subcontracted Benjamin Manalastas’ company and BMT Trucking Services to transport the shipment since TMBI did
not own any delivery trucks. Sony was notified of this arrangement.
 Four BMT trucks picked up the shipment. However, BMT could not immediately undertake the delivery because of the truck ban and because
the following day was a Sunday. On the rescheduled day of delivery, the four trucks left BMT’s garage for Laguna but only three trucks arrived
at Sony’s Biñan warehouse.
 The missing truck was found abandoned along the Diversion Road in Filinvest, Alabang, Muntinlupa City. Both the driver and the shipment
were missing. TMBI notified Sony of the loss through a letter. It also sent BMT a letter demanding payment for the lost shipment. BMT refused
to pay, insisting that the goods were "hijacked."
 Sony filed an insurance claim with the Mitsui, the insurer of the goods. Mitsui paid Sony the amount of the value of the lost goods.
 After being subrogated to Sony’s rights, Mitsui sent TMBI a demand letter dated August 30, 2001 for payment of the lost goods. TMBI refused
to pay Mitsui’s claim. As a result, Mitsui filed a complaint against TMBI.
 TMBI, impleaded Benjamin Manalastas, the proprietor of BMT, as a third-party defendant. TMBI alleged that BMT’s driver, Lapesura, was
responsible for the theft/hijacking of the lost cargo and claimed BMT’s negligence as the proximate cause of the loss. TMBI prayed that in
the event it is held liable to Mitsui for the loss, it should be reimbursed by BMT.
RTC: TMBI and Benjamin are solidarily liable. They were common carriers and had acted negligently.
CA affirmed RTC decision.
(1) that "hijacking" is not necessarily a fortuitous event
(2) that TMBI is a common carrier engaged in the business of transporting goods for the general public for a fee;
(3) even if the "hijacking" were a fortuitous event, TMBI’s failure to observe extraordinary diligence in overseeing the cargo and adopting
security measures rendered it liable for the loss;
4) even if TMBI had not been negligent in the handling, transport and the delivery of the shipment, TMBI still breached its contractual
obligation to Sony when it failed to deliver the shipment.
The Arguments
TMBI’s Petition
- hijacking of the truck was a fortuitous event
- denies being a common carrier because it does not own a single truck to transport its shipment and it does not offer transport services to
the public for compensation.
- insists that the service it offered was limited to the processing of paperwork attendant to the entry of Sony’s goods
- TMBI solely blames BMT as it had full control and custody of the cargo when it was lost. BMT, as a common carrier, is presumed negligent
and should be responsible for the loss.
BMT’s Comment
 BMT insists that it observed the required standard of care
 hijacking was a fortuitous event – a force majeure – that exonerates it from liability
Mitsui’s Comment
 adopts the CA’s reasons to conclude that TMBI is a common carrier. It also points out Victor Torres’ admission during the trial that
TMBI’s brokerage service includes the eventual delivery of the cargo to the consignee.
ISSUE(S): W/N TMBI is a common carrier – YES. The Court hereby ORDERS petitioner Torres Madrid Brokerage, Inc. to pay the respondent FEB
Mitsui Marine Insurance Co" but TMBI is entitled to reimbursement from BMT.
RATIO:
1. A brokerage may be considered a common carrier if it also undertakes to deliver the goods for its customers
Common carriers are persons, corporations, firms or associations engaged in the business of transporting passengers or goods or both, by land,
water, or air, for compensation, offering their services to the public. By the nature of their business and for reasons of public policy, they are
bound to observe extraordinary diligence in the vigilance over the goods and in the safety of their passengers.
The Court held that a customs broker – whose principal business is the preparation of the correct customs declaration and the proper shipping
documents – is still considered a common carrier if it also undertakes to deliver the goods for its customers. The law does not distinguish
between one whose principal business activity is the carrying of goods and one who undertakes this task only as an ancillary activity.

Despite TMBI’s present denials, we find that the delivery of the goods is an integral, albeit ancillary, part of its brokerage services. TMBI admitted
that it was contracted to facilitate, process, and clear the shipments from the customs authorities, withdraw them from the pier, then transport
and deliver them to Sony’s warehouse in Laguna.
That TMBI does not own trucks and has to subcontract the delivery of its clients’ goods, is immaterial. As long as an entity holds itself to the
public for the transport of goods as a business, it is considered a common carrier regardless of whether it owns the vehicle used or has to
actually hire one.
Lastly, TMBI’s customs brokerage services – including the transport/delivery of the cargo – are available to anyone willing to pay its fees. Given
these circumstances, we find it undeniable that TMBI is a common carrier.
2. Consequently, TMBI should be held responsible for the loss, destruction, or deterioration of the goods it transports. The theft or the robbery of
the goods is not considered a fortuitous event or a force majeure. Nevertheless, a common carrier may absolve itself of liability for a resulting
loss: (1) if it proves that it exercised extraordinary diligence in transporting and safekeeping the goods; or (2) if it stipulated with the shipper/owner
of the goods to limit its liability for the loss, destruction, or deterioration of the goods to a degree less than extraordinary diligence.
However, a stipulation diminishing or dispensing with the common carrier’s liability for acts committed by thieves or robbers who do not act with
grave or irresistible threat, violence, or force is void under Article 1745 of the Civil Code for being contrary to public policy. Jurisprudence, too,
has expanded Article 1734’s five exemptions. SC interpreted Article 1745 to mean that a robbery attended by "grave or irresistible threat, violence
or force" is a fortuitous event that absolves the common carrier from liability.
In the present case, the shipper, Sony, engaged the services of TMBI, a common carrier, to facilitate the release of its shipment and deliver the
goods to its warehouse. In turn, TMBI subcontracted a portion of its obligation – the delivery of the cargo – to another common carrier, BMT.
Despite the subcontract, TMBI remained responsible for the cargo. Under Article 1736, a common carrier’s extraordinary responsibility over the
shipper’s goods lasts from the time these goods are unconditionally placed in the possession of, and received by, the carrier for transportation,
until they are delivered, actually or constructively, by the carrier to the consignee. That the cargo disappeared during transit while under the
custody of BMT – TMBI’s subcontractor – did not diminish nor terminate TMBI’s responsibility over the cargo.
Instead of showing that it had acted with extraordinary diligence, TMBI simply argued that it was not a common carrier bound to observe
extraordinary diligence. Its failure to successfully establish this premise carries with it the presumption of fault or negligence, thus rendering it
liable to Sony/Mitsui for breach of contract. Specifically, TMBI’s current theory – that the hijacking was attended by force or intimidation – is
untenable.
First, TMBI alleged in its Third Party Complaint against BMT that Lapesura was responsible for hijacking the shipment. Further, Victor Torres filed
a criminal complaint against Lapesura with the NBI. These actions constitute direct and binding admissions that Lapesura stole the cargo. Justice
and fair play dictate that TMBI should not be allowed to change its legal theory on appeal.
Second, neither TMBI nor BMT succeeded in substantiating this theory through evidence. Thus, the theory remained an unsupported allegation
no better than speculations and conjectures. The CA therefore correctly disregarded the defense of force majeure.
3. TMBI and BMT are not solidarily liable to Mitsui
Art. 2194 provides that the responsibility of two or more persons who are liable for quasi-delict is solidary. Notably, TMBI’s liability to Mitsui does
not stem from a quasi-delict but from its breach of contract . The tie that binds TMBI with Mitsui is contractual, albeit one that passed on to Mitsui
as a result of TMBI’s contract of carriage with Sony to which Mitsui had been subrogated as an insurer who had paid Sony’s insurance claim. The
legal reality that results from this contractual tie precludes the application of quasi-delict based Article 2194.
4. A third party may recover from a common carrier for quasi-delict but must prove actual negligence
While it is undisputed that the cargo was lost under the actual custody of BMT, no direct contractual relationship existed between Sony/Mitsui
and BMT. If at all, Sony/Mitsui’s cause of action against BMT could only arise from quasi-delict, as a third party suffering damage from the action
of another due to the latter’s fault or negligence. In the present case, Mitsui’s action is solely premised on TMBI’s breach of contract. Mitsui did
not even sue BMT, much less prove any negligence on its part. If BMT has entered the picture at all, it is because TMBI sued it for reimbursement
for the liability that TMBI might incur from its contract of carriage with Sony/Mitsui. Accordingly, there is no basis to directly hold BMT liable to
Mitsui for quasi-delict.
5. BMT is liable to TMBI for breach of their contract of carriage
We do not hereby say that TMBI must absorb the loss. By subcontracting the cargo delivery to BMT, TMBI entered into its own contract of carriage
with a fellow common carrier. The cargo was lost after its transfer to BMT' s custody based on its contract of carriage with TMBI. Following Article
1735, BMT is presumed to be at fault. Since BMT failed to prove that it observed extraordinary diligence in the performance of its obligation to
TMBI, it is liable to TMBI for breach of their contract of carriage. Hence, TMBI is liable to Sony (subrogated by Mitsui) for breaching the contract
of carriage. In sum, TMBI is entitled to reimbursement from BMT due to the latter's own breach of its contract of carriage with TMBI.
7 Sps. Dante and Leonora Cruz vs. Sun Holidays, Inc. AUTHOR: Ong
G.R. No. 186312 ; June 29, 2010 NOTES:
PONENTE: Carpio Morales
CASE LAW/ DOCTRINE:
 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 (in local idiom, as "a sideline"). 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 1733 deliberately refrained from making such distinctions.
 When a passenger dies or is injured in the discharge of a contract of carriage, it is presumed that the common carrier is at fault or negligent.
In fact, there is even no need for the court to make an express finding of fault or negligence on the part of the common carrier. This statutory
presumption may only be overcome by evidence that the carrier exercised extraordinary diligence.
Emergency Recit: Ruelito and his wife availed the services of Sun Holidays for transportation to and from the Resort. The couple was scheduled
to leave the Resort on Sept 11, 2000. Despite the strong winds and rain, the boat set sail. However, the boat got hit by waves and it capsized.
Ruelito and his wife died during the incident. The parents of Ruelito, Sps. Cruz, filed a complaint for damages against Sun Holidays. The RTC and
CA dismissed the complaint and ruled that Sun Holidays is a private carrier and is required to only exercise ordinary diligence. Issue: Whether or
not Sun Holidays is a common carrier. The Supreme Court ruled that Sun Holidays is a common carrier. When a passenger dies or is injured in the
discharge of a contract of carriage, it is presumed that the common carrier is at fault or negligent. In fact, there is even no need for the court to
make an express finding of fault or negligence on the part of the common carrier. This statutory presumption may only be overcome by evidence
that the carrier exercised extraordinary diligence.
FACTS:
1. Ruelito and his wife stayed at the Resort from September 9 to 11, 2000 by virtue of a tour package-contract with respondent Sun
Holidays, Inc. that included transportation to and from the Resort and the point of departure in Batangas.
2. Miguel C. Matute (Matute), a scuba diving instructor and one of the survivors, gave his account of the incident that led to the filing of
the complaint as follows:
a. Matute stayed at the Resort from September 8 to 11, 2000. He was originally scheduled to leave the Resort in the afternoon
of September 10, 2000, but was advised to stay for another night because of strong winds and heavy rains.
b. On September 11, 2000, Matute and 25 other Resort guests including petitioners' son, Ruelito 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 to Batangas.
c. Shortly after the boat sailed, it started to rain. As it moved farther away from Puerto Galera and into the open seas, the rain
and wind got stronger, causing the boat to tilt from side to side and the captain to step forward to the front, leaving the wheel
to one of the crew members.
d. After getting hit by two big waves which came one after the other, M/B Coco Beach III capsized putting all passengers
underwater.
e. The passengers, who had put on their life jackets, struggled to get out of the boat. Upon seeing the captain, Matute and the
other passengers who reached the surface asked him 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).
f. Help came after about 45 minutes when two boats owned by Asia Divers in Sabang, Puerto Galera passed by the capsized M/B
Coco Beach III. Boarded on those two boats were 22 persons, consisting of 18 passengers and four crew members, who were
brought to Pisa Island. Eight passengers, including petitioners' son, Ruelito and his wife, died during the incident.
3. At the time of Ruelito's 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 salary of $900
4. Petitioners (the parents of Ruelito) demanded indemnification from respondent Sun Holidays for the death of their son in the amount
of at least P4,000,000.
5. Sun Holidays denied any responsibility for the incident which it considered to be a fortuitous event. It nevertheless offered, as an act of
commiseration, the amount of P10,000 to petitioners upon their signing of a waiver.
6. Spouses Dante and Leonora Cruz (petitioners) lodged a Complaint against Sun Holidays, Inc. (respondent) with the Regional Trial Court
(RTC) of Pasig City for damages arising from the death of their son Ruelito C. Cruz (Ruelito) who perished with his wife on September 11,
2000 on board the boat M/B Coco Beach III that 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.
 RTC: dismissed the complaint of the petitioners
 CA: dismissed the appeal of the petitioners; affirmed the RTC ruling that Sun Holidays is only a private carrier and is required to exercise
ordinary diligence.
1. Petitioners maintain the position they took before the trial court, adding that respondent is a common carrier since by its tour
package, the transporting of its guests is an integral part of its resort business.
2. Respondent contends that petitioners failed to present evidence to prove that it is a common carrier; that the Resort's ferry services
for guests cannot be considered as ancillary to its business as no income is derived therefrom; that it exercised extraordinary

diligence as shown by the conditions it had imposed before allowing M/B Coco Beach III to sail; that the incident was caused by a
fortuitous event without any contributory negligence on its part
ISSUE(S): Whether or not respondent Sun Holidays is a common carrier.
HELD: Yes. Respondent Sun Holidays is a common carrier.

RATIO:
 The Civil Code defines "common carriers" in the following terms:
o 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 (in local idiom, as "a sideline"). 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 1733 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. Under Section 13, paragraph (b) of the Public Service Act, "public service" includes:
o . . . every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation,
with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any
common carrier, railroad, street railway, traction railway, subway motor vehicle, either for freight or passenger, or both, with
or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steamboat,
or steamship line, pontines, ferries and water craft, engaged in the transportation of passengers or freight or both, shipyard,
marine repair shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power,
water supply and power petroleum, sewerage system, wire or wireless communications systems, wire or wireless broadcasting
stations and other similar public services . . . (emphasis and underscoring supplied.)
 Indeed, respondent is a common carrier. Its ferry services are so intertwined with its main business as to be properly considered
ancillary thereto. The constancy of respondent's ferry services in its resort operations is underscored by its having its own Coco Beach
boats. And the tour packages it offers, which include the ferry services, may be availed of by anyone who can afford to pay the same.
These services are thus available to the public.
 That respondent does not charge a separate fee or fare for its ferry services is of no moment. It would be imprudent to suppose that
it provides said services at a loss. The Court is aware of the practice of beach resort operators offering tour packages to factor the
transportation fee in arriving at the tour package price. That guests who opt not to avail of respondent's ferry services pay the same
amount is likewise inconsequential. These guests may only be deemed to have overpaid.
 Under the Civil Code, common carriers, from the nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence for the safety of the passengers transported by them, according to all the circumstances of each case. They
are bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious
persons, with due regard for all the circumstances.
 When a passenger dies or is injured in the discharge of a contract of carriage, it is presumed that the common carrier is at fault or
negligent. In fact, there is even no need for the court to make an express finding of fault or negligence on the part of the common
carrier. This statutory presumption may only be overcome by evidence that the carrier exercised extraordinary diligence.
 Respondent nevertheless harps on its strict compliance with the earlier mentioned conditions of voyage before it allowed M/B Coco
Beach III to sail on September 11, 2000. Respondent's position does not impress.
 The evidence shows that PAGASA issued 24-hour public weather forecasts and tropical cyclone warnings for shipping on September 10
and 11, 2000 advising of tropical depressions in Northern Luzon which would also affect the province of Mindoro. By the testimony of
Dr. Frisco Nilo, supervising weather specialist of PAGASA, squalls are to be expected under such weather condition.
 A very cautious person exercising the utmost diligence would thus not brave such stormy weather and put other people's 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.
WHEREFORE, the Court of Appeals Decision of August 19, 2008 is REVERSED and SET ASIDE. Judgment is rendered in favor of petitioners ordering
respondent to pay petitioners the following: (1) P50,000 as indemnity for the death of Ruelito Cruz; (2) P8,316,000 as indemnity for Ruelito's loss
of earning capacity; (3) P100,000 as moral damages; (4) P100,000 as exemplary damages; (5) 10% of the total amount adjudged against respondent
as attorneys fees; and (6) the costs of suit.
The total amount adjudged against respondent shall earn interest at the rate of 12% per annum computed from the finality of this decision until
full payment.
SO ORDERED.
8. First Phil. Industrial Corp. v. CA AUTHOR: JC

G.R. No. 125948 December 29, 1998 Notes: Pipelines are common carriers.
PONENTE: Martinez, J.
CASE LAW/ DOCTRINE:
 Common Carrier, defined. One who holds himself out to the public as engaged in the business of transporting persons or property
from place to place, for compensation, offering his services to the public.
 Art. 1732: any person, corporation, firm or association 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.
 Test:
o 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 transportation of goods for person generally as a business and not as a casual occupation;
o He must undertake to carry goods of the kind to which his business is concerned;
o He must undertake to carry by the method by which his business is conducted and over his established roads; and
o The transportation must be for hire.
 As correctly pointed out by First Phil. Industrial Corp, the Civil Code makes no distinction as to the means of transporting, as long as it is
by land, water, or air. It does not provide that the transportation of the passengers or goods should be by motor vehicle. In fact, in the
US, oil pipe line operators are considered common carriers.
 Under Sec. 86 of the Petroleum Act (RA 387), First Phil. Industrial Crop is a common carrier.
Emergency Recit: FPIC filed for tax exception in the City of Batangas but City Treasurer argues they are not exempted under the LGC because they
are not common carriers. SC ruled they are common carriers. Thus, they are tax exempted.
FACTS:
 FPIC is a grantee of pipeline concession under RA 387, as amended, contract, install and operate oil pipelines.
 Jan 1995: FPIC applied for mayor’s permit in Batangas. FPIC was required to pay local tax based on gross receipts for 1993 pursuant to the
Local Gov’t Code (LGC) amounting to Php 181, 681,151.00.
 FPIC protested the assessment but was denied by the City Treasurer arguing that FPIC cannot be considered as engaging in transportation
business, thus it cannot claim exemption under the Sec. 133 of the LGC. City Treasurer asserts that the pipelines are not included in the term
“common carrier”
 RTC Batangas dismisses petition of First Phil. Industrial Corp (FPIC) for tax refund imposed by the City of Batangas.
 CA affirms RTC’s decision. Hence this petition
ISSUE(S):
 Is FPIC considered a common carrier? YES
 Is FPIC tax excepted under the LGC? YES
RATIO:
 <SEE DOCTRINE ABOVE>
 Based on the above definitions and requirements, there is no doubt that petitioner is a common carrier. It is engaged in the business of
transporting or carrying goods, i.e. petroleum products, for hire as a public employment. It undertakes to carry for all persons indifferently,
that is, to all persons who choose to employ its services, and transports the goods by land and for compensation. The fact that petitioner has
a limited clientele does not exclude it from the definition of a common carrier
 Also, respondent's argument that the term "common carrier" as used in Section 133 (j) of the LGC refers only to common carriers transporting
goods and passengers through moving vehicles or vessels either by land, sea or water, is erroneous.
 As correctly pointed out by petitioner, the definition of "common carriers" in the Civil Code makes no distinction as to the means of
transporting, as long as it is by land, water or air. It does not provide that the transportation of the passengers or goods should be by motor
vehicle. In fact, in the United States, oil pipe line operators are considered common carriers. Under the Petroleum Act of the Philippines (RA
387), petitioner is considered a "common carrier." Thus, Art. 86 thereof provides that: "Art. 86. Pipe line concessionaire as common carrier.
— A pipe line shall have the preferential right to utilize installations for the transportation of petroleum owned by him, but is obliged to
utilize the remaining transportation capacity pro rata for the transportation of such other petroleum as may be offered by others for
transport, and to change without discrimination such rates as may have been approved by the Secretary of Agriculture and Natural
Resources." RA 387 also regards petroleum operation as a public utility. Pertinent portion of Art. 7 thereof provides: "that everything relating
to the exploration for and exploitation of petroleum . . . and everything relating to the manufacture, refining, storage, or transportation by
special methods of petroleum, is hereby declared to be a public utility." (Emphasis Supplied)
 The BIR likewise considers the petitioner a "common carrier." In BIR Ruling No. 069-83, it declared: ". . . since (petitioner) is a pipeline
concessionaire that is engaged only in transporting petroleum products, it is considered a common carrier under RA No. 387 . . . Such being
the case, it is not subject to withholding tax prescribed by Revenue Regulations No. 13-78, as amended.

10 G.V. FLORIDA TRANSPORT, INC., Petitioner, v. HEIRS OF Panganiban
ROMEO L. BATTUNG, JR., REPRESENTED BY ROMEO
BATTUNG, SR., Respondents
GR 208802, Oct 14, 2015
Perlas Bernabe
Doctrine: Article 1756 of the Civil Code provides that "[i]n case of death of or injuries to passengers, common carriers are presumed to have been
at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755." This
disputable presumption may also be overcome by a showing that the accident was caused by a fortuitous event
 where the injury sustained by the passenger was in no way due (1) to any defect in the means of transport or in the method of transporting,
or (2) to the negligent or willful acts of the common carrier's employees with respect to the foregoing - such as when the injury arises wholly
from causes created by strangers which the carrier had no control of or prior knowledge to prevent — there would be no issue regarding the
common carrier's negligence in its duty to provide safe and suitable care, as well as competent employees in relation to its transport business;
as such, the presumption of fault/negligence foisted under Article 1756 of the Civil Code should not apply
Emergency Recit: Battung boarded GV Florida Transport bound for Manila, but was shot dead inside the bus. His heirs filed for damages on the
basis of breach of contract of carriage saying that GV Florida failed to exercise extraordinary diligence and that in case of death of passenger,
common carrier is liable. The Court held that the injury was sustained not by fault of the common carrier, the latter had no control to prevent the
incident. Thus, the presumption of negligence shall not apply.
FACTS
 Romeo L. Battung, Jr. (Battung) boarded GV Florida Transport's bus in Isabela bound for Manila
 Battung was seated at the first row behind the driver and slept during the ride.
 When the bus reached Muñoz, Nueva Ecija, the bus driver, Duplio, stopped the bus and alighted to check the tires
 a man who was seated at the fourth row of the bus stood up, shot Battung at his head, and then left with a companion.
 The bus conductor, Daraoay, notified Duplio of the incident and thereafter, brought Romeo to the hospital, but the latter was pronounced
dead on arrival.
 Heirs of Battung filed a complaint for damages amounting to 1.8M based on breach of contract of carriage against petitioner, Duplio, and
Baraoay (petitioner, et al.)
 Heirs of Battung argued: as a common carrier, petitioner and its employees are bound to observe extraordinary diligence in ensuring the
safety of passengers; and in case of injuries and/or death on the part of a passenger, they are presumed to be at fault and, thus, responsible
therefor.
 GV Florida argued: they had exercised the extraordinary diligence required by law from common carriers. In this relation, they claimed that
a common carrier is not an absolute insurer of its passengers and that Battung's death should be properly deemed a fortuitous event.
 RTC: in favor of Heirs of Battung ordered the GV Florida to pay compensatory, actual and moral damages for having failed to rebut the
presumed liability of common carriers in case of injuries/death to its passengers due to their failure to show that they implemented the
proper security measures to prevent passengers from carrying deadly weapons inside the bus
 CA: affirmed
ISSUE: WON GV Florida as common carrier is liable for death of Battung?
HELD: No, presumption of negligence will not apply.

RATIO:
 The law exacts from common carriers (i.e., those 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 highest degree
of diligence (i.e., extraordinary diligence) in ensuring the safety of its passengers.
 Article 1756 of the Civil Code provides that "[i]n case of death of or injuries to passengers, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755." This
disputable presumption may also be overcome by a showing that the accident was caused by a fortuitous event
 the law does not make the common carrier an insurer of the absolute safety of its passengers.
o it is imperative for a party claiming against a common carrier under the above-said provisions to show that the injury or death
to the passenger/s arose from the negligence of the common carrier and/or its employees in providing safe transport to its
passengers.
 Pilapil v. CA: the Court clarified that where the injury sustained by the passenger was in no way due (1) to any defect in the means of transport
or in the method of transporting, or (2) to the negligent or willful acts of the common carrier's employees with respect to the foregoing - such
as when the injury arises wholly from causes created by strangers which the carrier had no control of or prior knowledge to prevent — there
would be no issue regarding the common carrier's negligence in its duty to provide safe and suitable care, as well as competent employees
in relation to its transport business; as such, the presumption of fault/negligence foisted under Article 1756 of the Civil Code should not apply
 In this case, Battung's death was neither caused by any defect in the means of transport or in the method of transporting, or to the
negligent or willful acts of petitioner's employees, namely, that of Duplio and Daraoay, in their capacities as driver and conductor,
respectively. Instead, the case involves the death of Battung wholly caused by the surreptitious act of a co-passenger who, after
consummating such crime, hurriedly alighted from the vehicle.
 On the other hand, since Battung's death was caused by a co-passenger, the applicable provision is Article 1763 of the Civil Code, which
states that "a common carrier is responsible for injuries suffered by a passenger on account of the willful acts or negligence of other
passengers or of strangers, if the common carrier's employees through the exercise of the diligence of a good father of a familycould have
prevented or stopped the act or omission."
o Case law states that the concept of diligence of a good father of a family "connotes reasonable care consistent with that which
an ordinarily prudent person would have observed when confronted with a similar situation.
o In contrast, no similar danger was shown to exist in this case so as to impel petitioner or its employees to implement
heightened security measures to ensure the safety of its passengers. There was also no showing that during the course of the
trip, Battung's killer made suspicious actions which would have forewarned petitioner's employees of the need to conduct
thorough checks on him or any of the passengers.
 During the foregoing, both Duplio and Daraoay observed nothing which would rouse their suspicion that the men were armed or were to
carry out an unlawful activity. With no such indication, there was no need for them to conduct a more stringent search (i.e., bodily search)
on the aforesaid men. By all accounts, therefore, it cannot be concluded that petitioner or any of its employees failed to employ the
diligence of a good father of a family in relation to its responsibility under Article 1763 of the Civil Code. As such, petitioner cannot
altogether be held civilly liable.
11 DANGWA TRANS, CO., INC., THEODORE LARDIZABAL y MALECDAN v. CA, INOCENCIA CUDIAMAT, EMILIA AUTHOR: Ramos
CUDIAMAT BANDOY, FERNANDO CUDLAMAT, MARRIETA CUDIAMAT, NORMA CUDIAMAT, DANTE NOTES:
CUDIAMAT, SAMUEL CUDIAMAT and LIGAYA CUDIAMAT, all Heirs of the late Pedrito Cudiamat represented
by Inocencia Cudiamat [G.R. 95582; October 7, 1991]
TOPIC: When contract of carriage begins PONENTE: Regalado, J.
DOCTRINE: The victim, by stepping and standing on the platform of the bus, is already considered a passenger and is entitled all the rights and
protection pertaining to such a contractual relation. The duty which the carrier passengers owes to its patrons extends to persons boarding cars
as well as to those alighting therefrom
ER: Here, the petitioner bus company and driver claim that it was the victim Pedrito’s negligence which led to his death. They alleged that he did
not give a signal that he wanted to board the bus, which was supposedly running very fast. SC ruled against this assertion. Testimonies presented
countered this assertion, as the victim was actually boarding on a platform while the bus was slowing down to let another passenger alight. The
bus suddenly accelerated, leading to the victim slipping and being run over by the bus’ rear wheels. Further, the bus driver did not immediately
deliver the victim to a nearby hospital, opting instead to continue with their journey to drop off another passenger. The Court ruled that the
requisite extraordinary diligence already attached even if the victim was unable to successfully board the bus. The common carrier has the duty
to ensure that those boarding the vehicle be given ample time to safely board.
FACTS:
 May 13, 1985: respondents filed a complaint for damages against petitioners for the death of Pedrito Cudiamat as a result of a vehicular
accident on March 25, 1985 at Marivic, Sapid, Mankayan, Benguet.
o while Lardizabal was driving a passenger bus belonging to Dangwa in a reckless and imprudent manner, it ran over its passenger,
Pedrito Cudiamat.
o Instead of bringing Pedrito immediately to the nearest hospital, Lardizabal first brought his other passengers and cargo to their
destinations before bringing the victim to the Lepanto Hospital where he died
 Petitioners: they observed the extraordinary diligence required in the operation of the transportation company and the supervision of the
employees. They are not absolute insurers of the safety of the public at large.
o it was the victim's own carelessness and negligence which gave rise to the incident (sought counterclaim)
 Trial court: ruled in favor of petitioners
o Pedrito Cudiamat’s negligence was the proximate cause of his death. He tried to board a moving vehicle while one of his hands was
holding an umbrella. He did not show the driver or conductor any indication that he wished to board the bus.
o Petitioners also negligent for leaving the bus door open, which allowed Pedrito’s attempt at boarding.
o Petitioners to pay the heirs of Pedrito P10K – the amount they initially offered for amicable settlement
 CA: reversed the trial court. Petitioners to pay P30K (indemnity for death), P20K (moral), P288K (actual damages)
o Witness attested to the fact that the bus was at a full stop when Pedrito tried to board, as someone else alighted therefrom. Pedrito
actually signaled the bus that he was going to board. It was only when he closed his umbrella and tried to board that the bus driver
suddenly accelerated.
o Bus driver was negligent in prematurely stepping on the accelerator and not waiting for Pedrito to sit.
ISSUE(S): WON petitioners were guilty of negligence.
HELD: YES, they were. CA decision AFFIRMED with MODIFICATIONS as to the amount of damages: P216K actual damages, P50K death indemnity.
 Common carriers are bound to observe extraordinary diligence for the safety of the passengers transported by the according to all the
circumstances of each case
 Pedrito was not negligent
o Petitioners’ conductor himself attested that he saw the deceased’s umbrella and signaled the driver. Thereafter, he saw Pedrito
lying on his back asking for help 3 meters behind the bus.
o This confirms the conclusion that the victim fell from the platform of the bus when it suddenly accelerated forward and was run
over by the rear right tires of the vehicle
o 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 attempted to board under the same or similar circumstances. That passengers board and alight from
slowly moving vehicle is a matter of common experience
 When the bus is NOT in motion there is NO necessity for a person who wants to ride the same to signal his intention to board. A public utility
bus, once it stops, is in effect making a continuous offer to bus riders

o duty of common carriers to stop their conveyances a reasonable length of time in order to afford passengers an opportunity to
board and enter
o it is the duty of the driver and the conductor, every time the bus stops, to do no act that would have the effect of increasing the
peril to a passenger while he was attempting to board
o the premature acceleration of the bus was a breach of such duty
 TOPIC: The victim, by stepping and standing on the platform of the bus, is already considered a passenger and is entitled all the rights and
protection pertaining to such a contractual relation. The duty which the carrier passengers owes to its patrons extends to persons boarding
cars as well as to those alighting therefrom
 Petitioners were negligent. Their failure to immediately bring Pedrito to the hospital is a patent proof of this.
 On damages (modification to the CA’s decision)
o CA erred in computing damages based on the victim’s gross income.
o the amount recoverable by the heirs of a victim of a tort is not the loss of the entire earnings, but rather the loss of that portion of
the earnings which the beneficiary would have received (net, not gross earnings)
ABOITIZ SHIPPING CORPORATION 012 REYES

vs. HON. COURT OF APPEALS, ELEVENTH DIVISION, LUCILA C. VIANA,
SPS. ANTONIO VIANA and GORGONIA VIANA, and PIONEER
STEVEDORING CORPORATION
G.R. No. 84458. November 6, 1989

Transportation Law: When Does Contract of Carriage End?
Regalado, J.
CASE LAW/ DOCTRINE: The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of
destination and has left the vessel owner's dock or premises. Once created, the relationship will not ordinarily terminate until the passenger has,
after reaching his destination, safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. What
is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances.
Emergency Recit: Anacleto Viana disembarked from Aboitiz’ (Petitioner) M/V Antonia ship in Manila. The ship was then turned over to Pioneer
Stevedoring Corp. While a crane was unloading cargo, Anacleto returned to the ship 1 hour after the passengers had disembarked to get his cargo
that he had forgotten. He was hit by the crane and thus killed from his injuries so his parents (Respondents) sued Petitioner. The SC ruled that
Petitioner was liable for his death since their carrier-passenger relationship had not yet been terminated. Reasonable time had not yet passed as
it was only possible for Anacleto to get his cargo 1 hour after disembarkment.
FACTS:
1. Anacelto Viana boarded the M/V Antonia ship owned by Aboitiz Shipping Corp. (Petitioner) at the port of San Jose, Occidental Mindoro bound
for Manila.
2. He arrived at Pier 4, North Harbor, Manila wherein a gangplank connected to the pier was provided for disembarking passengers. However,
he didn’t use it and disembarked on the 3rd deck which was on the level with the pier. After the vessel landed, Pioneer Stevedoring Corp.
took over exclusive control of the cargoes loaded on it.
3. Pioneer’s crane operated by Alejo Figueroa was placed alongside the vessel and 1 hour after the passengers had disembarked, the crane
started unloading the cargoes. While this was done, Anacleto who had already disembarked went back to the ship because he forgot his
cargo. While he was pointing to the crew where his cargo as loaded, the crane hit him pinning him to the side of the ship and the crane. He
died from his injuries 3 days later.
4. Anacleto’s parents (Respondents) filed against Petitioner for damages. Petitioner retorted that it wasn’t liable since the ship was under the
exclusive control of Pioneer.
5. RTC: Ruled in Respondents’ favor.
6. CA: Affirmed RTC decision.
ISSUE(S): Whether Petitioner remains liable for Anacleto’s death.
HELD: Yes. Petitioner is liable because its carrier-passenger relationship with Anacleto had not yet been terminated.
RATIO:
 By the very nature of petitioner's business as a shipper, the passengers of vessels are allotted a longer period of time to disembark from the
ship than other common carriers such as a passenger bus. 1 hour prior to the incident, the victim had not disembarked from the vessel. At
the time the victim was taking his cargoes, the vessel had already docked an hour earlier. In consonance with common shipping procedure
as to the minimum time of 1 hour allowed for the passengers to disembark, it may be presumed that the victim had just gotten off the vessel
when he went to retrieve his baggage. Even if he had already disembarked an hour earlier, his presence in petitioner's premises was not
without cause. The victim had to claim his baggage which was possible only 1 hour after the vessel arrived since it was admittedly standard
procedure in the case of petitioner's vessels that the unloading operations shall start only after that time. Consequently, under the foregoing
circumstances, the victim Anacleto is still deemed a passenger of said carrier at the time of his death.
 The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left
the vessel owner's dock or premises. Once created, the relationship will not ordinarily terminate until the passenger has, after reaching
his destination, safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. All persons
who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers, and what is a reasonable time
or a reasonable delay within this rule is to be determined from all the circumstances, and includes a reasonable time to see after his baggage
and prepare for his departure. The carrier-passenger relationship is not terminated merely by the fact that the person transported has
been carried to his destination if, for example, such person remains in the carrier's premises to claim his baggage.
13. La Mallorca vs. Court of Appeals, 17 SCRA 793 AUTHOR: REYES

TOPIC: When Contract of Carriage ends Notes:
PONENTE: J. Barrera
CASE LAW/ DOCTRINE: It has been recognized as a rule that the relation of carrier and passenger does not cease at the moment the passenger
alights from the carrier's vehicle at a place selected by the carrier at the point of destination, but continues until the passenger has had a
reasonable time or a reasonable opportunity to leave the carrier's premises. And, what is a reasonable time or a reasonable delay within this rule
is to be determined from all the circumstances.
Emergency Recit: Plaintiffs were passengers on board a La Mallorca bus and when the bus had reached their destination. One of the passenger-
plaintiffs forgot some of his personal belongings on the bus and went back to retrieve them, while gathering them the bus had started to move
prompting the passenger-plaintiff to disembark quickly, immediately after they saw that the bus had accidentally crushed passenger-plaintiff’s
daughter, SC held that CONTRACT OF CARRIAGE ENDS when the passenger has had a reasonable time or reasonable opportunity to leave the
carrier’s premises.
FACTS:
o Plaintiffs, husband and wife, together with their three minor daughters (Milagros, 13 years old, Raquel, about 4 years old and Fe, 2 years old)
boarded the Pambusco at San Fernando Pampanga, bound for Anao, Mexico, Pampanga.
o Such bus is owned and operated by the defendant La Mallorca.
o They were carrying with them four pieces of baggage containing their personal belonging. The conductor of the bus issued three tickets
covering the full fares of the plaintiff and their eldest child Milagros.
o After about an hour’s trip, the bus reached Anao where it stopped to allow the passengers bound therefore, among whom were the plaintiffs
and their children to get off. Mariano Beltran, carrying some of their baggage was the first to get down the bus, followed by his wife and
children.
o Mariano led his companion to a shaded spot on the left pedestrian side of the road about four or five meters away from the vehicle.
Afterwards, he returned to the bus in controversy to get his payong, which he had left behind, but in so doing, his daughter followed him
unnoticed by his father. While said Mariano Beltran was on the running board of the bus waiting for the conductor to hand him his payong
which he left under one its seats near the door, the bus, whose motor was not shut off while unloading suddenly started moving forward,
notwithstanding the fact that the conductor was still attending to the baggage left behind by Mariano Beltran.
o Incidentally, when the bus was again placed in a complete stop, it had traveled about 10 meters from point where plaintiffs had gotten off.
o Sensing the bus was again in motion; Mariano immediately jumped form the running board without getting his bayong from conductor. He
landed on the side of the road almost board in front of the shaded place where he left his wife and his children. At that time, he saw people
beginning to gather around the body of a child lying prostrate on the ground, her skull crushed, and without life. The child was none other
than his daughter Raquel, who was run over by the bus in which she rode earlier together her parent.
o For the death of the said child, plaintiffs commenced the suit against the defendant to recover from the latter damages. Trial court ruled in
favor of plaintiff and found defendant La Mallorca liable for breach of contract pf carriage.
o On appeal to the Court of Appeals, La Mallorca claimed that there could not be a breach of contract in the case, for the reason that when the
child met her death, she was no longer a passenger of the bus involved in the incident and, therefore, the contract of carriage had already
terminated.
o CA held La Malorca liable and even increased the amount of damages they had to pay for.
ISSUES:
(1)Whether or not CA erred in holding it liable for quasi-delict, considering that respondents complaint was one for breach of contract, and
(2) whether or not CA erred in raising the award of damages from P3,000.00 to P6,000.00 although respondents did not appeal from the decision
of the lower court
RATIO: NO, CA JUDGEMENT affirmed. But the damages were lowered.
 Although it is true that respondent Mariano Beltran, his wife, and their children (including the deceased child) had alighted from the bus at
a place designated for disembarking or unloading of passengers, it was also established that the father had to return to the vehicle (which
was still at a stop) to get one of his bags or bayong that was left under one of the seats of the bus.
 There can be no controversy that as far as the father is concerned, when he returned to the bus for his bayong which was not unloaded, the
relation of passenger and carrier between him and the petitioner remained subsisting. For, the relation of carrier and passenger does not
necessarily cease where the latter, after alighting from the car, aids the carrier's servant or employee in removing his baggage from the car.
 The issue to be determined here is whether as to the child, who was already led by the father to a place about 5 meters away from the bus,
the liability of the carrier for her safety under the contract of carriage also persisted.
 It has been recognized as a rule that the relation of carrier and passenger does not cease at the moment the passenger alights from the
carrier's vehicle at a place selected by the carrier at the point of destination, but continues until the passenger has had a reasonable time or
a reasonable opportunity to leave the carrier's premises. And, what is a reasonable time or a reasonable delay within this rule is to be
determined from all the circumstances.
 Thus, a person who, after alighting from a train, walks along the station platform is considered still a passenger. So also, where a passenger
has alighted at his destination and is proceeding by the usual way to leave the company's premises, but before actually doing so is halted by
the report that his brother, a fellow passenger, has been shot, and he in good faith and without intent of engaging in the difficulty, returns to
relieve his brother, he is deemed reasonably and necessarily delayed and thus continues to be a passenger entitled as such to the protection
of the railroad and company and its agents.
 In the present case, the father returned to the bus to get one of his baggages which was not unloaded when they alighted from the bus.
 Raquel, the child that she was, must have followed the father. However, although the father was still on the running board of the bus awaiting
for the conductor to hand him the bag or bayong, the bus started to run, so that even he (the father) had to jump down from the moving
vehicle.
 It was at this instance that the child, who must be near the bus, was run over and killed.
 In the circumstances, it cannot be claimed that the carrier's agent had exercised the "utmost diligence" of a "very cautions person" required
by Article 1755 of the Civil Code to be observed by a common carrier in the discharge of its obligation to transport safely its passengers.
 In the first place, the driver, although stopping the bus, nevertheless did not put off the engine. Secondly, he started to run the bus even
before the bus conductor gave him the signal to go and while the latter was still unloading part of the baggages of the passengers Mariano
Beltran and family.
 The presence of said passengers near the bus was not unreasonable and they are, therefore, to be considered still as passengers of the
carrier, entitled to the protection under their contract of carriage.
 But even assuming arguendo that the contract of carriage has already terminated, herein petitioner can be held liable for the negligence of
its driver, as ruled by the Court of Appeals, pursuant to Article 2180 of the Civil Code.
 The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was predicated when it was alleged in the complaint that
"the death of Raquel Beltran, plaintiffs' daughter, was caused by the negligence and want of exercise of the utmost diligence of a very cautious
person on the part of the defendants and their agent."
 This allegation was also proved when it was established during the trial that the driver, even before receiving the proper signal from the
conductor, and while there were still persons on the running board of the bus and near it, started to run off the vehicle. The presentation of
proof of the negligence of its employee gave rise to the presumption that the defendant employer did not exercise the diligence of a good
father of the family in the selection and supervision of its employees. And this presumption, as the Court of Appeals found, petitioner had
failed to overcome. Consequently, petitioner must be adjudged peculiarily liable for the death of the child Raquel Beltran.
 The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of Appeals, however, cannot be sustained. Generally, the
appellate court can only pass upon and consider questions or issues raised and argued in appellant's brief. Plaintiffs did not appeal from that
portion of the judgment of the trial court awarding them on P3,000.00 damages for the death of their daughter. Neither does it appear that,
as appellees in the Court of Appeals, plaintiffs have pointed out in their brief the inadequacy of the award, or that the inclusion of the figure
P3,000.00 was merely a clerical error, in order that the matter may be treated as an exception to the general rule.
14 GREENSTAR EXPRESS, INC. AND FRUTO L. SAYSON, JR., v. AUTHOR: ROJAS

UNIVERSAL ROBINA CORPORATION AND NISSIN UNIVERSAL ROBINA NOTES:
CORPORATION
[G.R. No. 205090, October 17, 2016]
TOPIC: Last Clear Chance
PONENTE: DEL CASTILLO, J.
CASE LAW/ DOCTRINE: The doctrine of last clear chance provides that where both parties are negligent but the negligent act of one is appreciably
later in point of time than that of the other, or where it is impossible to determine whose fault or negligence brought about the occurrence of the
incident, the one who had the last clear opportunity to avoid the impending harm but failed to do so, is chargeable with the consequences arising
therefrom. Stated differently, the rule is that the antecedent negligence of a person does not preclude recovery of damages caused by the
supervening negligence of the latter, who had the last fair chance to prevent the impending harm by the exercise of due diligence
Emergency Recit: Greenstar Express, Inc. (Grepistar) is in the business of public transportation, while Sayson is one of its bus drivers. Universal
Robina Corporation (URC) is the registered owner of a Mitsubishi L-300 van (URC van). Grepistar's bus, which was then being driven toward the
direction of Manila by Sayson, collided head-on with the URC van, which was then being driven Quezon province-bound by Renante Bicomong.
Bicomong died on the spot, while the colliding vehicles sustained considerable damage. Grepistar filed a Complaint to recover damages, premised
on negligence. Respondents countered that Sayson had the last clear chance to avert collision but he failed to take the necessary precaution under
the circumstances, by reducing his speed and applying the brakes on time to avoid collision. Issue: whether Saysyon had the last clear chance. SC:
the collision could have been avoided if Sayson exercised care and prudence, given the circumstances and information that he had immediately
prior to the accident. Sayson took no defensive maneuver whatsoever in spite of the fact that he saw Bicomong drive his van in a precarious
manner, as far as 250 meters away - or at a point in time and space where Sayson had all the opportunity to prepare and avert a possible collision.
The collision was certainly foreseen and avoidable but Sayson took no measures to avoid it. The doctrine of last clear chance applies.
FACTS:
 Petitioner Greenstar Express, Inc. (Grepistar) is a domestic corporation engaged in the business of public transportation, while petitioner
Fruto L. Sayson, Jr. (Sayson) is one of its bus drivers
 Respondents Universal Robina Corporation (URC) and Nissin Universal Robina Corporation (NURC) are domestic corporations engaged in the
food business. NURC is a subsidiary of URC
 URC is the registered owner of a Mitsubishi L-300 van (URC van)
 At about 6:50 a.m. on Feb 25, 2003, which was then a declared national holiday, Grepistar's bus, which was then being driven toward the
direction of Manila by Sayson, collided head-on with the URC van, which was then being driven Quezon province-bound by NURC's Operations
Manager, Renante Bicomong (Bicomong). The incident occurred along Km. 76, Maharlika Highway, Brgy. San Agustin, Alaminos, Laguna.
Bicomong died on the spot, while the colliding vehicles sustained considerable damage.
 Grepistar filed a Complaint against NURC to recover damages sustained during the collision, premised on negligence. An Amended Complaint
was later filed, wherein URC was impleaded as additional defendant.
 URC and NURC filed their respective Answers, where they particularly alleged and claimed lack of negligence on their part and on the part of
Bicomong
 During trial, only Sayson was presented by petitioners as eyewitness to the collision
 Sayson testified that on that day, he was driving the plaintiff passenger bus from Lucena City going to Manila at a speed of more or less 60
kms/hr when he met a vehicular accident in Laguna. He saw from afar an L-300 UV coming from the shoulder going on the opposite direction
to Lucena City. Said vehicle was already near his bus when it (UV) managed to return to its proper lane, then hit and swerved his vehicle.-
"He tried to prevent the collision by swerving to the right but it was too late.
 Respondents countered that the bus driven by Sayson was running at high speed when the collision occurred, thus indicating that Sayson
was in violation of traffic rules; and that Sayson had the last clear chance to avert collision but he failed to take the necessary precaution
under the circumstances, by reducing his speed and applying the brakes on time to avoid collision
 RTC dismissed the complaint as well as the counterclaim. CA affirmed
ISSUE(S): whether Sayson had the last clear chance to avert collision
HELD: yes
RATIO:
 the collision could have been avoided if Sayson exercised care and prudence, given the circumstances and information that he had
immediately prior to the accident. From the trial court's findings and evidence on record, it would appear that immediately prior to the
collision, which took place very early in the morning - or at around 6:50 a.m., Sayson saw that the URC van was traveling fast Quezon-bound
on the shoulder of the opposite lane about 250M away from him; that at this point, Sayson was driving the Greenstar bus Manila-bound at
60 kms/hr; that Sayson knew that the URC van was traveling fast as it was creating dust clouds from traversing the shoulder of the opposite
lane; that Sayson saw the URC van get back into its proper lane but directly toward him; that despite being apprised of the foregoing
information, Sayson, instead of slowing down, maintained his speed and tried to swerve the Greenstar bus, but found it difficult to do so at
his speed; that the collision or point of impact occurred right in the middle of the road; and that Sayson absconded from the scene
immediately after the collision.
 From the foregoing facts, from the way he was driving immediately before the collision took place, Bicomong could have fallen asleep or ill
at the wheel, which led him to gradually steer the URC van toward the shoulder of the highway; and to get back to the road after realizing
his mistake, Bicomong must have overreacted, thus overcompensating or oversteering to the left, or toward the opposite lane and right into
Sayson's bus. Given the premise of dozing off or falling ill, this explanation is not far-fetched. The collision occurred very early in the morning
in Alaminos, Laguna. Sayson himself testified that he found Bicomong driving on the service road or shoulder of the highway 250 meters
away, which must have been unpaved, as it caused dust clouds to rise on the heels of the URC van. And these dust clouds stole Sayson's
attention, leading him to conclude that the van was running at high speed. At any rate, the evidence places the point of impact very near the
middle of the road or just within Sayson's lane. In other words, the collision took place with Bicomong barely encroaching on Sayson's lane.
 Prior to and at the time of collision, Sayson did not take any defensive maneuver to prevent the accident and minimize the impending damage
to life and property, which resulted in the collision in the middle of the highway, where a vehicle would normally be traversing. If Sayson
took defensive measures, the point of impact should have occurred further inside his lane or not at the front of the bus - but at its side, which
should have shown that Sayson either slowed down or swerved to the right to avoid a collision.
 Despite having seen Bicomong drive the URC van in a precarious manner while the same was still a good 250m away from his bus, Sayson
did not take the necessary precautions, as by reducing speed and adopting a defensive stance to avert any untoward incident that may occur
from Bicomong's manner of driving. When the van began to swerve toward his bus, he did not reduce speed nor swerve his bus to avoid
collision. Instead, he maintained his current speed and course, and for this reason, the inevitable took place: An experienced driver who is.
presented with the same facts would have adopted an attitude consistent with a desire to preserve life and property; for common carriers,
the diligence demanded is of the highest degree.
 Sayson took no defensive maneuver whatsoever in spite of the fact that he saw Bicomong drive his van in a precarious manner, as far as 250
meters away - or at a point in time and space where Sayson had all the opportunity to prepare and avert a possible collision. The collision
was certainly foreseen and avoidable but Sayson took no measures to avoid it. Rather than exhibit concern for the welfare of his passengers
and the driver of the oncoming vehicle, who might have fallen asleep or suddenly fallen ill at the wheel, Sayson coldly and uncaringly stood
his ground^ closed his eyes, and left everything to fate, without due regard for the consequences. Such a suicidal mindset cannot be tolerated,
for the grave danger it poses to the public and passengers availing of petitioners' services. To add insult to injury, Sayson hastily fled the
scene of the collision instead of rendering assistance to the victims - thus exhibiting a selfish, cold-blooded attitude and utter lack of concern
motivated by the self-centered desire to escape liability, inconvenience, and possible detention by the authorities, rather than secure the
well-being of the victims of his own negligent act.
 The doctrine of last clear chance provides that where both parties are negligent but the negligent act of one is appreciably later in point of
time than that of the other, or where it is impossible to determine whose fault or negligence brought about the occurrence of the incident,
the one who had the last clear opportunity to avoid the impending harm but failed to do so, is chargeable with the consequences arising
therefrom. Stated differently, the rule is that the antecedent negligence of a person does not preclude recovery of damages caused by the
supervening negligence of the latter, who had the last fair chance to prevent the impending harm by the exercise of due diligence
15. Philippine National Railways vs Ethel Brunty and Juan Manuel M. AUTHOR: The Taliño
Garcia NOTES: Case has 3 issues. (Negligence; Contributory Negligence; and
[G.R. No. 169891; November 2, 2006] Doctrine of Last Clear Chance)
TOPIC: Doctrine of Last Clear Chance  Will include some discussions on the first 2 issues to understand
PONENTE: Callejo, Sr., J. why the doctrine of last clear chance does not apply in this case (SC
only provided 1 paragraph regarding the said doctrine in the ratio.)
CASE LAW/ DOCTRINE: The doctrine of last clear chance states that where both parties are negligent but the negligent act of one is appreciably
later than that of the other, or where it is impossible to determine whose fault or negligence caused the loss, the one who had the last clear
opportunity to avoid the loss but failed to do so, is chargeable with the loss.

Emergency Recit: Rhonda Brunty (daughter of respondent Brunty) was travelling with Mercelita and respondent Garcia to Baguio. Upon
approaching a railroad crossing at Moncada, Tarlac, they collided with a PNR Train. Rhonda and Mercelita both died, while Garcia suffered severe
head injuries. Respondents filed a case for damages against PNR. PNR contends that Mercelita had the last clear chance to avoid the accident.
RTC and CA ruled in favour of respondents. SC affirmed. (Refer above)
FACTS:
 Jan. 1980 - Rhonda Brunty, daughter of respondent Ethel Brunty came to the Philippines for a visit. Prior to her departure, she, together
with her host Juan Manuel M. Garcia, traveled to Baguio City on board a Mercedes Benz sedan driven by Rodolfo L. Mercelita.
 Jan. 25, 1980 –
o At about 12 am, PNR Train, driven by Alfonso Reyes, was on its way to Tutuban, Metro Manila as it had left the La Union station at
11 pm, Jan. 24, 1980.
o By 2 am, Rhonda, Garcia and Mercelita were already approaching the railroad crossing at Brgy. Rizal, Moncada, Tarlac. Mercelita,
driving at approximately 70 km/hr, drove past a vehicle, unaware of the railroad track up ahead and that they were about to collide
with PNR Train. Mercelita was instantly killed when the Mercedes Benz smashed into the train; the two other passengers suffered
serious physical injuries.
o James Harrow brought Rhonda to the Central Luzon Doctor’s Hospital in Tarlac, where she was pronounced dead after ten minutes
from arrival. Garcia suffered severe head injuries.
 July 28, 1981 - Ethel Brunty sent a demand letter to the PNR demanding payment of actual, compensatory, and moral damages, as a result
of her daughter’s death. When PNR did not respond, Ethel Brunty and Garcia, filed a complaint for damages before the RTC of Manila. They
alleged that:
o the death of Mercelita and Rhonda, as well as the physical injuries suffered by Garcia, were the direct and proximate result of the
gross and reckless negligence of PNR in not providing the necessary equipment at the railroad crossing;
o there was no flagbar or red light signal to warn motorists who were about to cross the railroad track, and that the flagman or
switchman was only equipped with a hand flashlight;
o PNR failed to supervise its employees in the performance of their respective tasks and duties, more particularly the pilot and
operator of the train.
 PNR claimed that:
o it exercised the diligence of a good father of a family not only in the selection but also in the supervision of its employees;
o it had the right of way on the railroad crossing in question, and that it has no legal duty to put up a bar or red light signal in any
such crossing;
o there were adequate, visible, and clear warning signs strategically posted on the sides of the road before the railroad crossing;
o the immediate and proximate cause of the accident was Mercelita’s negligence, and that he had the last clear chance to avoid the
accident;
o the driver disregarded the warning signs, the whistle blasts of the oncoming train and the flashlight signals to stop given by the
guard.
 RTC: Ruled in favour of respondents.
 CA: Affirmed the ruling of the RTC as to the negligence of the PNR. Considering the circumstances prevailing at the time of the fatal accident,
it ruled that the alleged safety measures installed by the PNR at the railroad crossing were not merely inadequate – they did not satisfy the
well-settled safety standards in transportation. However, it did not agree with the RTC’s findings on the contributory negligence of Mercelita,
the driver of the Mercedes Benz. It held that Mercelita could not have foreseen the harm that would befall him and the two other passengers
under the prevailing circumstances, thus, could not be considered guilty of contributory negligence.
 Hence, this case.
 Petitioner contends that:
- the proximate cause of the mishap was Mercelita’s disregard of traffic rules and regulations.
- had the court considered the fact that Mercelita had overtaken another vehicle a few yards before the railroad track, it would have
reached a different conclusion.
- since there is freedom of control and greater maneuverability on the part of motor vehicles, it is obvious that in railroad crossings, they
have the last clear chance to prevent or avoid an unwanted accident from taking place.
ISSUE(S): WON the doctrine of last clear chance applies in this case.
HELD: Nah.
RATIO:
NEGLIGENCE:
 It was clearly established that respondents sustained damage or injury as a result of the collision. That there was negligence on the part
of PNR is, likewise, beyond cavil. Considering the circumstances prevailing at the time of the fatal accident, the alleged safety measures
installed by the PNR at the railroad crossing is not only inadequate but does not satisfy well-settled safety standards in transportation.
 An examination of the photographs of the railroad crossing at Moncada, Tarlac presented as evidence by PNR itself would yield the
following:
o absence of flagbars or safety railroad bars;
o inadequacy of the installed warning signals; and
o lack of proper lighting within the area.

 Thus, even if there was a flagman stationed at the site as claimed by PNR, it would still be impossible to know or see that there is a
railroad crossing/tracks ahead, or that there is an approaching train from the Moncada side of the road since one’s view would be
blocked by a cockpit arena.
 Moreover, the CA held that a vehicle coming from the Moncada side would have difficulty in knowing that there is an approaching train
because of the slight curve, more so, at an unholy hour as 2 am. Thus, it is imperative on the part of the PNR to provide adequate safety
equipment in the area.
 It may broadly be stated that railroad companies owe to the public a duty of exercising a reasonable degree of care to avoid injury to
persons and property at railroad crossings, which duties pertain both in the operation of trains and in the maintenance of the
crossings. Moreover, every corporation constructing or operating a railway shall make and construct at all points where such railway
crosses any public road, good, sufficient, and safe crossings and erect at such points, at a sufficient elevation from such road as to admit
a free passage of vehicles of every kind, a sign with large and distinct letters placed thereon, to give notice of the proximity of the
railway, and warn persons of the necessity of looking out for trains.
CONTRIBUTORY NEGLIGENCE:
1. As to whether or not Mercelita was guilty of contributory negligence, we agree with PNR. Contributory negligence is conduct on the
part of the injured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is required
to conform for his own protection. To hold a person as having contributed to his injuries, it must be shown that he performed an act
that brought about his injuries in disregard of warning or signs of an impending danger to health and body. To prove contributory
negligence, it is still necessary to establish a causal link, although not proximate, between the negligence of the party and the succeeding
injury. In a legal sense, negligence is contributory only when it contributes proximately to the injury, and not simply a condition for its
occurrence.
2. The court below found that there was a slight curve before approaching the tracks; the place was not properly illuminated; one’s view
was blocked by a cockpit arena; and Mercelita was not familiar with the road. Yet, it was also established that Mercelita was then driving
the Mercedes Benz at a speed of 70 km/hr and, in fact, had overtaken a vehicle a few yards before reaching the railroad track. Mercelita
should not have driven the car the way he did. However, while his acts contributed to the collision, they nevertheless do not negate
PNR’s liability. Pursuant to Art. 2179 of the New Civil Code, the only effect such contributory negligence could have is to mitigate
liability, which, however, is not applicable in this case, as will be discussed later.
DOCTRINE OF LAST CLEAR CHANCE:

 As to whether or not the doctrine of last clear chance is applicable, we rule in the negative. The doctrine of last clear chance states that
where both parties are negligent but the negligent act of one is appreciably later than that of the other, or where it is impossible to determine
whose fault or negligence caused the loss, the one who had the last clear opportunity to avoid the loss but failed to do so, is chargeable with
the loss. Stated differently, the antecedent negligence of plaintiff does not preclude him from recovering damages caused by the supervening
negligence of defendant, who had the last fair chance to prevent the impending harm by the exercise of due diligence.
 The proximate cause of the injury having been established to be the negligence of PNR, we hold that the above doctrine finds no application
in the instant case.
16 Sealoader Shipping Corp. vs. Grand Cement Mfg. Corp., et. al. AUTHOR: Arthur Archie Tiu
G.R. No. 167363 Dec. 15, 2010 NOTES:
TOPIC: Transportation Law; contributory negligence
PONENTE: Corona, J.
CASE LAW/ DOCTRINE: Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has
suffered, which falls below the standard to which he is required to conform for his own protection.
Emergency Recit: Sealoader was hired by Grand Cement to make certain deliveries to manila. Sealoader hired a tugboat for it’s ship because of
sealaoder’s unpropelled barges. Upon arrival at the wharf, Grand Cement was still loading another ship until the typhoon struck the area. The
following day, the employees of grandcement found the ship of Sealoader on top of the wharf causing significant damage. Sealoader claims that
Grand Cement is guilty of contributory negligence because it was still loading another ship when the typhoon struck. SC held that Sea Loader is
solely responsible since it was ill equipped and that the Grand Cement had warned Sea Loader of the impending typhoon
FACTS:
 Sealoader is a domestic corporation engaged in the business of shipping and hauling cargo using sea-going inter-island barges.
 Grand Cement (now Taiheiyo Cement) is a domestic corp engaged in the manufacturing and selling cement, it maintains its own private wharf
in Cebu
 March 24, 1993, Sealoader executed a Time Charter Party Agreement with Joyce Launch (a domestic corp which operated a tugboat M/T
Viper). It chartered M/T viper to tow its unpropelled barges for a min of 15 days, and renewable pon a 15-day bases upon mutual agreement
of the parties.
 Sealoader entered into a contract with Grand Cament for loading of cement clinkers and its delivery to Manila
 March 31, 1994, Sealoader’s barge, D/B Toploader, arrived at the wharf of Grand Cement tugged by M/T viper. It was not loaded immediately
since Grand Cement was still loadin another vessel.
 April 4, 1994, Typhoon Bising struck the area (120kph winds, Signal 3) D/B Toploader was still docked at the Wharf. M/T Viper tried to tow
D/B Toploader away from the Wharf. The towing line snapped.
 The next morning, the employees of Grand Cement discovered that D/B Toploader was on top of the Wharf, ramming the wharf and causing
significant damage.

 Oct. 3, 1994, Grand Cement filed a complaint for damages against Sealoader, Romilo Diantan as Captain of M/T Viper, and Johnny Ponce the
Barge Patron of D/B Toploader.
 Grand Cement claimed that when D/B toploader arrived, the same was not properly secured and there were storm warning published in
print media and the radio. That it immediately advised Diantan and Ponce to move the vessels away from the wharf but both refused to do
so.
 Sealoader filed an MTD insiting that Joyce Launch should have been sued in its stead, as the latter was the owner and operator of the M/T
Viper. Having complete physical control of the M/T Viper, as well as the towing, docking, mooring and berthing of the D/B Toploader,
Sealoader maintained that Joyce Launch should be held liable for the negligent acts of the latters employees who were manning the M/T
Viper.
 Grand Cement amended the complaint to include Joyce Launch as defendant.
 Sealoder instituted a Cross-claim against Launch and Diantan. Sealoader pointed out that Grand Cement did not initiate the loading of the
D/B Toploader notwithstanding the fact that the said barge had been docked at the latters wharf long before Typhoon Bising came on April
4, 1994. And that since the typhoon was force majeure, it is beyond the control of sealoader
 Launch claims that the damage was not due to the negligence of its crew but to a force majeure
 On several testimonies, RTC rendered judgement in favor of Grand Cement holding the 2 companies liable since there was complete disregard
of the storm signal and that the captain was not present and the vessel was not properly equipped with a radio or navigational facilities which
are mandatory
 CA partly affirmed holding Grand Cement guilty of contributory negligence since it was still loading another vessel at the last minute just
before the storm. Damages reduced to 50%
ISSUE(S):
 Whether or not Sea Loader is liable for the damage? yes
 Whether Grand Cement was guilty of contributory negligence? no
HELD: In light of the foregoing, the Court finds that the evidence proffered by Sealoader to prove the negligence of Grand Cement was marred by
contradictions and are, thus, weak at best. We therefore conclude that the contributory negligence of Grand Cement was not established in this
case. Thus, the ruling of the Court of Appeals in the Amended Decision, which reduced the actual damages to be recovered by Grand Cement, is
hereby revoked. Accordingly, the doctrine of last clear chance does not apply to the instant case.
RATIO:
o After a thorough review of the records of this case, the Court finds that Sealoader was indeed guilty of negligence in the conduct of its affairs
during the incident in question.
o One of the bases cited by the RTC for its finding that Sealoader was negligent was the lack of a radio or any navigational communication
facility aboard the D/B Toploader. To recall, Emar Acosta stated in his deposition dated July 9, 1998 that Sealoader was equipped with a
handheld radio while the M/T Viper had on board an SSB radio. Marita Santos, on the other hand, explained that Sealoader communicated
and transmitted weather forecasts to the M/T Viper through the latters SSB radio. Before Typhoon Bising hit the province of Cebu on April
4, 1994, Santos stated that Sealoader tried to relay the weather bulletins pertaining to the storm directly with the M/T Viper but the radio
signal was always poor. The foregoing statements were put to doubt, however, when Sealoaders own witness, Renee Cayang, stated on
cross-examination that there was no radio on board the D/B Toploader. The Court, therefore, agrees with the conclusion of Grand Cement
that there was either no radio on board the D/B Toploader, the radio was not fully functional, or the head office of Sealoader was negligent
in failing to attempt to contact the D/B Toploader through radio. Either way, this negligence cannot be ascribed to anyone else but
Sealoader.
o Unmistakably, the crew of the D/B Toploader and the M/T Viper were caught unawares and unprepared when Typhoon Bising struck their
vicinity. According to the Sworn Statement of Acosta, which was taken barely three months after the typhoon, he was already informed of
the approaching typhoon. Regrettably, Acosta merely relied on the assurances of the M/T Beejay crew and the opinion of Romulo Diantan
that the typhoon was nowhere near their area. As it turned out, such reliance was utterly misplaced. Within a few hours, the weather quickly
deteriorated as huge winds and strong waves began to batter the vessels. At the height of the typhoon, the M/T Viper tried in vain to tow
the D/B Toploader away from the wharf. Since the barge was still moored to the wharf, the line connecting the same to the M/T Viper
snapped and the latter vessel drifted to the Bohol area. The violent waves then caused the D/B Toploader to ram against the wharf, thereby
causing damage thereto.
o Sealoader cannot pass to Grand Cement the responsibility of casting off the mooring lines connecting the D/B Toploader to the wharf. The
Court agrees with the ruling of the Court of Appeals in the Decision dated November 12, 2004 that the people at the wharf could not just
cast off the mooring lines without any instructions from the crew of the D/B Toploader and the M/T Viper. As the D/B Toploader was without
an engine, casting off the mooring lines prematurely might send the barge adrift or even run the risk of the barge hitting the wharf sure
enough. Thus, Sealoader should have taken the initiative to cast off the mooring lines early on or, at the very least, requested the crew at
the wharf to undertake the same. In failing to do so, Sealoader was manifestly negligent.
o Grand Cement timely informed the D/B Toploader of the impending typhoon. Jaime Nobleza testified that he warned Acosta of the typhoon
as early as April 3, 1994 and even advised the latter to move the D/B Toploader to a safer place. On April 4, 1994, Nobleza twice directed
Acosta to remove the barge away from the wharf. The first order was given at about 9:00 a.m., while the second was around 2:00 p.m.
17 Larry Estacion vs. Noe Bernardo thru and his guardian ad litem Arlie Bernardo, AUTHOR: Valcos
Cecilia Bandoquillo and Geminiano Quinquillera NOTES:
G.R. No. 144723 | February 27, 2006
TOPIC: Contributory Negligence

PONENTE: AUSTRIA-MARTINEZ, J.
CASE LAW/ DOCTRINE: Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to the harm he has
suffered, which falls below the standard to which he is required to conform for his own protection.
Emergency Recit: Respondent Noe rode a jeepney driven by respondent Quinguillera and owned by respondent Bandoquillo on his way home.
Along the way, an old woman wanted to ride so Noe offered his seat and he just stood on the left rear carrier of the vehicle. Again, the jeepney
stopped by the right shoulder to pick up passengers when suddenly, a truck driven by Gerosano and owned by petitioner hit the jeepney. Because
of this incident, Noe’s left leg was amputated. He now claims damages against petitioner. The Court ruled that the petitioner, the owner of the
jeepney and the driver of the jeepney are all liable for their negligence. The owner of the jeepney was negligent in the selection of her driver. The
driver of the jeepney was negligent for overloading.
FACTS:
 Respondent Noe was going home to Dumaguete from Cebu, via Bato and Tampi. At Tampi, he boarded a Ford Fiera passenger jeepney driven
by respondent Quinquillera, owned by respondent Bandoquillo, and was seated on the extension seat placed at the center of the Fiera.
 From San Jose, an old woman wanted to ride, so respondent Noe offered his seat. Since the Fiera was already full, respondent Noe hung or
stood on the left rear carrier of the vehicle.
 Along the way, the Fiera began stopped by the right shoulder of the road to pick up passengers. Suddenly, an Isuzu cargo truck, owned by
petitioner and driven by Gerosano, which was traveling in the same direction, hit the rear end portion of the Fiera where respondent Noe was
standing.
 Due to the tremendous force, the cargo truck smashed respondent Noe against the Fiera crushing his legs and feet which made him fall to the
ground. A passing vehicle brought him to the Silliman University Medical Center where his lower left leg was amputated.
 Police investigation reports showed that respondent Noe was one of the 11 passengers of the Fiera who suffered injuries; that when the Fiera
stopped to pick up a passenger, the cargo truck bumped the rear left portion of the Fiera; that only one tire mark from the front right wheel of
the cargo truck was seen on the road.
 Respondent Noe, through his guardian ad litem Arlie Bernardo, filed with the RTC of Dumaguete City a complaint for damages arising from
quasi delict against petitioner as the registered owner of the cargo truck and his driver Gerosano. He alleged that the proximate cause of his
injuries and suffering was the reckless imprudence of Gerosano and petitioner’s negligence in the selection of a reckless driver and for operating
a vehicle that was not roadworthy.
 Petitioner and his driver Gerosano filed their Answer alleging that it was the reckless imprudence of respondent driver Quinquillera and his
clear violation of the traffic rules and regulations which was the proximate cause of the accident and asked for indemnification for whatever
damages they would be sentenced to pay.
 RTC ruled that the negligence of Gerosano, petitioner’s driver, is the direct and proximate cause of the incident and of the injuries suffered by
respondent Noe
 CA affirmed RTC in toto
ISSUE(S): WON respondents are also negligent
HELD: YES, respondent Noe’s act of standing on the left rear carrier portion of the Fiera showed his lack of ordinary care and foresight that such
act could cause him harm or put his life in danger. Respondent Quinquillera, the driver, was negligent in allowing respondent Noe to stand on the
Fiera’s rear portion. Since respondent Quinquillera is negligent, there arises a presumption of negligence on the part of his employer, respondent
Bandoquillo, in supervising her employees properly.
RATIO:
Respondent Noe’s contributory negligence:
Respondent Noe’s act of standing on the left rear carrier portion of the Fiera showed his lack of ordinary care and foresight that such act could
cause him harm or put his life in danger. It has been held that "to hold a person as having contributed to his injuries, it must be shown that he
performed an act that brought about his injuries in disregard of warning or signs of an impending danger to health and body.24 Respondent Noe’s
act of hanging on the Fiera is definitely dangerous to his life and limb.
Respondent Quinguillera’s contributory negligence:

Respondent Quinquillera should not have taken more passengers than what the Fiera can accommodate. If the Fiera was not overloaded,
respondent Noe would not have been standing on the rear carrier and sustained such extent of injury. Section 32(c) of Article III of Republic Act
No. 4136, otherwise known as "The Land Transportation and Traffic Code" provides:
(c) Riding on running boards – No driver shall allow any person to ride on running board, step board or mudguard of his motor vehicle for any
purpose while the vehicle is in motion.
Respondent Quinquillera’s act of permitting respondent Noe to hang on the rear portion of the Fiera in such a dangerous position creates undue
risk of harm to respondent Noe. Quinquillera failed to observe that degree of care, precaution and vigilance that the circumstances justly demand.
Respondent Bandoquillo’s contributory negligence:

Since respondent Quinquillera is negligent, there arises a presumption of negligence on the part of his employer, respondent Bandoquillo, in
supervising her employees properly. Such presumption was not rebutted at all by Bandoquillo.
Petitioner’s negligence:
As the employer of Gerosano, petitioner is primarily and solidarily liable for the quasi-delict committed by the former. Petitioner is presumed to
be negligent in the selection and supervision of his employee by operation of law and may be relieved of responsibility for the negligent acts of
his driver, who at the time was acting within the scope of his assigned task, only if he can show that he observed all the diligence of a good father
of a family to prevent damage.
Petitioner failed to show that he examined driver Gerosano as to his qualifications, experience and service records. In fact, the testimony of driver
Gerosano in his cross-examination showed the non-observance of these requirements. There was also no proof that he exercised diligence in
maintaining his cargo truck roadworthy and in good operating condition.
Petition PARTIALLY GRANTED. Defendants Gerosano and Estacion, as well as third party defendants Bandoquillo and Quinquillera, to pay plaintiff,
jointly and solidarily.
18) Travel & Tours Advisers, Inc. V. Alberto Cruz, Sr., et. al., AUTHOR: APOSTOL
G.R. No. 199282 The fundamental doctrine applied in this case is found in another case,
March 14, 2016 lol. It wasn’t even discussed in the ratio by the Court so I had to cite the
TOPIC: CONTRIBUTORY NEGLIGENCE other case so you have a basis as to why it is 50%. I’ll put the doctrine in
PONENTE: PERALTA, J. the ratio and italicize it.
CASE LAW/ DOCTRINE:
 The petitioner and its driver, therefore, are not solely liable for the damages caused to the victims. The petitioner must thus be held liable
only for the damages actually caused by his negligence. It is, therefore, proper to mitigate the liability of the petitioner and its driver. The
determination of the mitigation of the defendant's liability varies depending on the circumstances of each case.
 In the present case, it has been established that the proximate cause of the death of Alberto Cruz, Jr. is the negligence of petitioner's bus
driver, with the contributory negligence of respondent Edgar Hernandez, the driver and owner of the jeepney, hence, the heirs of Alberto
Cruz, Jr. shall recover damages of only 50% of the award from petitioner and its driver. Necessarily, 50% shall be bourne by respondent Edgar
Hernandez. This is pursuant to Rakes v. AG & P and after considering the circumstances of this case.
FACTS:
 1998 JAN 09: Respondent Edgar Hernandez was driving an Isuzu passenger jeepney that he owns along Angeles-Magalang Road in
Pampanga at around 7:50pm. The passenger jeep was bumped from behind by a Daewoo passenger bus (driven by Edgar Calaycay &
owned by petitioner Travel and Tours Advisers, Inc.) causing the jeep to ram into an acacia tree which resulted in the death Alberto Cruz
Jr. and serious physical injuries of Virginia Munoz.
 Edgar Hernandez (jeepney driver), Virginia Munoz, and the father of Alberto Cruz Jr. filed a complaint for damages before the RTC claiming
that the collision was due to the reckless, negligent and imprudent manner by which Edgar Calaycay drove the bus in complete disregard to
traffic rules and regulations and on an unauthorized route (Calaycay argued he changed route because it was “to avoid traffic”).
 Petitioner (Travel & Tours Advisers, Inc.) raised the defense: that it exercised the diligence of a good father of a family in the selection and
supervision of its employee Edgar Calaycay and further argued that it was Edgar Hernandez who was driving his passenger jeepney in a
reckless and imprudent manner by suddenly entering the lane of the petitioner's bus without seeing to it that the road was clear for him to
enter said lane. It also alleged that Edgar Hernandez (jeepney driver) violated his franchise by travelling along an unauthorized route and by
overloading with passengers. Alberto Cruz Jr. (deceased) was only clinging at the back of the jeepney
 RTC: petitioners (Travel and Tours + Edgar Calaycay [bus driver]) jointly and solidarily liable for damages
 CA: partly granted; the amount of damages liable to petitioners was reduced
ISSUE(S):
 Whether the jeepney driver was contributorily negligent
 Whether the petitioners must be held solely liable for damages
HELD:
1. YES. Both vehicles were not in their authorized routes at the time of the incident.
2. NO. There exists contributory negligence that must reduce the amount Edgar Hernandez (jeepney driver) is entitled to. [50-50 liability in
accordance with Rakes v. AG & P doctrine]
RATIO:
 Be that as it may, this doesn't erase the fact that at the time of the vehicular accident, the jeepney was in violation of its allowed route as
found by the RTC and the CA, hence, the owner and driver of the jeepney likewise, are guilty of negligence as defined under Article 2179
of the Civil Code, which reads as follows:
a. When the plaintiff's negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if his negligence
was only contributory, the immediate and proximate cause of the injury being the defendant's lack of due care, the plaintiff may
recover damages, but the courts shall mitigate the damages to be awarded.
 The petitioner and its driver, therefore, are not solely liable for the damages caused to the victims. The petitioner must thus be held liable
only for the damages actually caused by his negligence. It is, therefore, proper to mitigate the liability of the petitioner and its driver. The
determination of the mitigation of the defendant's liability varies depending on the circumstances of each case. The Court had sustained a
mitigation of 50% in Rakes v. AG & P; 20% in Phoenix Construction, Inc. v. Intermediate Appellate Court and LBC Air Cargo, Inc. v. Court of
Appeals; and 40% in Bank of the Philippine Islands v. Court of Appeals and Philippine Bank of Commerce v. Court of Appeals.
 In the present case, it has been established that the proximate cause of the death of Alberto Cruz, Jr. is the negligence of petitioner's bus
driver, with the contributory negligence of respondent Edgar Hernandez, the driver and owner of the jeepney, hence, the heirs of Alberto
Cruz, Jr. shall recover damages of only 50% of the award from petitioner and its driver. Necessarily, 50% shall be bourne by respondent
Edgar Hernandez. This is pursuant to Rakes v. AG & P and after considering the circumstances of this case.

 In the same manner, petitioner is also partly responsible for the injuries sustained by respondent Virginia Muñoz hence, of the P16,744.00
actual damages and P30,000.00 moral damages awarded by the CA, petitioner is liable for half of those amounts. Anent respondent Edgar
Hernandez, due to his contributory negligence, he is only entitled to receive half the amount (P40,200.00) awarded by the CA as actual
damages which is P20,100.00.
[AUTHOR’S NOTE!!!]
NOT IN RATIO BUT I ADDED THIS FOR INFO, JUST IN CASE:
1. Rakes v. AG & P case:
a. “…Difficulty seems to be apprehended in deciding which acts of the injured party shall be considered immediate causes of the
accident. The test is simple. Distinction must be between the accident and the injury, between the event itself, without which
there could have been no accident, and those acts of the victim not entering into it, independent of it, but contributing under
review was the displacement of the crosspiece or the failure to replace it. this produced the event giving occasion for damages
— that is, the shinking of the track and the sliding of the iron rails. To this event, the act of the plaintiff in walking by the side
of the car did not contribute, although it was an element of the damage which came to himself. Had the crosspiece been out
of place wholly or partly thorough his act of omission of duty, the last would have been one of the determining causes of the
event or accident, for which he would have been responsible. Where he contributes to the principal occurrence, as one of its
determining factors, he can not recover. Where, in conjunction with the occurrence, he contributes only to his own injury, he
may recover the amount that the defendant responsible for the event should pay for such injury, less a sum deemed a suitable
equivalent for his own imprudence…”
b. “…Where he contributes to the principal occurrence, as one of its determining factors, he can not recover. Where, in
conjunction with the occurrence, he contributes only to his own injury, he may recover the amount that the defendant
responsible for the event should pay for such injury, less a sum deemed a suitable equivalent for his own imprudence…”
c. “…Accepting, though with some hesitation, the judgment of the trial court, fixing the damage incurred by the plaintiff at 5,000
pesos, the equivalent of 2,500 dollars, United States money, we deduct therefrom 2,500 pesos, the amount fairly attributable
to his negligence, and direct judgment to be entered in favor of the plaintiff for the resulting sum of 2,500 pesos, with cost of
both instances…” [AUTHOR’S NOTE: 50% reduction for contributory negligence]
19) Abelardo Lim And Esmadito Gunnaban vs. CA, et. al., G.R. No. AUTHOR: Balabat
125817, Jan. 16, 2002 NOTES:
TOPIC: Kabit System
PONENTE: Belosillo, J.
CASE LAW/ DOCTRINE:
 The kabit system is an arrangement whereby a person who has been granted a certificate of public convenience allows other persons who
own motor vehicles to operate them under his license, sometimes for a fee or percentage of the earnings. Although the parties to such an
agreement are not outrightly penalized by law, the kabit system is invariably recognized as being contrary to public policy and therefore void
and inexistent under Art. 1409 of the Civil Code.
 It would seem then that the thrust of the law in enjoining the kabit system is not so much as to penalize the parties but to identify the person
upon whom responsibility may be fixed in case of an accident with the end view of protecting the riding public. The policy therefore loses its
force if the public at large is not deceived, much less involved.
FACTS:
 Sometime in 1982 private respondent Donato Gonzales purchased an Isuzu passenger jeepney from Gomercino Vallarta, holder of a
certificate of public convenience for the operation of public utility vehicles plying the Monumento-Bulacan route. While private respondent
Gonzales continued offering the jeepney for public transport services he did not have the registration of the vehicle transferred in his name
nor did he secure for himself a certificate of public convenience for its operation. Thus Vallarta remained on record as its registered owner
and operator.
 On 22 July 1990, while the jeepney was running northbound along the North Diversion Road somewhere in Meycauayan, Bulacan, it collided
with a ten-wheeler-truck owned by petitioner Abelardo Lim and driven by his co-petitioner Esmadito Gunnaban. Gunnaban owned
responsibility for the accident, explaining that while he was traveling towards Manila the truck suddenly lost its brakes. To avoid colliding
with another vehicle, he swerved to the left until he reached the center island. However, as the center island eventually came to an end, he
veered farther to the left until he smashed into a Ferroza automobile, and later, into private respondent's passenger jeepney driven by one
Virgilio Gonzales. The impact caused severe damage to both the Ferroza and the passenger jeepney and left one (1) passenger dead and
many others wounded.
 In his answer Lim denied liability by contending that he exercised due diligence in the selection and supervision of his employees. He further
asserted that as the jeepney was registered in Vallartas name, it was Vallarta and not private respondent who was the real party in
interest.For his part, petitioner Gunnaban averred that the accident was a fortuitous event which was beyond his control.
 Meanwhile, the damaged passenger jeepney was left by the roadside to corrode and decay. Private respondent explained that although he
wanted to take his jeepney home he had no capability, financial or otherwise, to tow the damaged vehicle.
 The trial court upheld private respondent's claim and awarded him P236,000.00 with legal interest and attorney's fees. In support of its
decision, the trial court ratiocinated that as vendee and current owner of the passenger jeepney private respondent stood for all intents and
purposes as the real party in interest. Even Vallarta himself supported private respondent's assertion of interest over the jeepney for, when
he was called to testify, he dispossessed himself of any claim or pretension on the property. Gunnaban was found by the trial court to have
caused the accident since he panicked in the face of an emergency which was rather palpable from his act of directing his vehicle to a perilous

streak down the fast lane of the superhighway then across the island and ultimately to the opposite lane where it collided with the jeepney.
Upon appeal by the petitioners, the Court of Appeals affirmed the decision of the trial court.
ISSUE(S): WON Gonzales is the real party in interest. – Yes.
RATIO:
 Gonzales in the real party in interest. The kabit system is an arrangement whereby a person who has been granted a certificate of public
convenience allows other persons who own motor vehicles to operate them under his license, sometimes for a fee or percentage of the
earnings.9 Although the parties to such an agreement are not outrightly penalized by law, the kabit system is invariably recognized as being
contrary to public policy and therefore void and inexistent under Art. 1409 of the Civil Code.
 In the early case of Dizon v. Octavio10 the Court explained that one of the primary factors considered in the granting of a certificate of public
convenience for the business of public transportation is the financial capacity of the holder of the license, so that liabilities arising from
accidents may be duly compensated. The kabit system renders illusory such purpose and, worse, may still be availed of by the grantee to
escape civil liability caused by a negligent use of a vehicle owned by another and operated under his license. If a registered owner is allowed
to escape liability by proving who the supposed owner of the vehicle is, it would be easy for him to transfer the subject vehicle to another
who possesses no property with which to respond financially for the damage done. Thus, for the safety of passengers and the public who
may have been wronged and deceived through the baneful kabit system, the registered owner of the vehicle is not allowed to prove that
another person has become the owner so that he may be thereby relieved of responsibility. Subsequent cases affirm such basic doctrine.
 It would seem then that the thrust of the law in enjoining the kabit system is not so much as to penalize the parties but to identify the person
upon whom responsibility may be fixed in case of an accident with the end view of protecting the riding public. The policy therefore loses its
force if the public at large is not deceived, much less involved.
 In the present case it is at once apparent that the evil sought to be prevented in enjoining the kabit system does not exist. First, neither of
the parties to the pernicious kabit system is being held liable for damages. Second, the case arose from the negligence of another vehicle in
using the public road to whom no representation, or misrepresentation, as regards the ownership and operation of the passenger jeepney
was made and to whom no such representation, or misrepresentation, was necessary. Thus it cannot be said that private respondent
Gonzales and the registered owner of the jeepney were in estoppel for leading the public to believe that the jeepney belonged to the
registered owner. Third, the riding public was not bothered nor inconvenienced at the very least by the illegal arrangement. On the contrary,
it was private respondent himself who had been wronged and was seeking compensation for the damage done to him. Certainly, it would be
the height of inequity to deny him his right.
 In light of the foregoing, it is evident that private respondent has the right to proceed against petitioners for the damage caused on his
passenger jeepney as well as on his business. Any effort then to frustrate his claim of damages by the ingenuity with which petitioners framed
the issue should be discouraged, if not repelled.
 DISPOSITIVE PORTION: WHEREFORE, the questioned Decision awarding private respondent Donato Gonzales P236,000.00 with legal interest
from 22 July 1990 as compensatory damages and P30,000.00 as attorney's fees is MODIFIED. Interest at the rate of six percent (6%) per
annum shall be computed from the time the judgment of the lower court is made until the finality of this Decision. If the adjudged principal
and interest remain unpaid thereafter, the interest shall be twelve percent (12%) per annum computed from the time judgment becomes
final and executory until it is fully satisfied.
20. Baliwag Transit Inc. vs. Court of Appeals and Roman Author: Banico
Martinez
G.R. No. L-57493, 7 January 1987.
Topic: Kabit System
Paras
Doctrine: The Kabit System has been defined as an arrangement “whereby a person who has been granted a certificate of convenience allows
another person who owns motor vehicles to operate under such franchise for a fee”.
Emergency Recit: Baliwag Transit and Baliwag Transit Inc. (BTI and petitioner) operated under different grants of franchise but were issued only
1 SSS ID Number. Martinez claimed to be employees of both bus lines and filed a complaint before the SSC for BTI to remit his SSS premium
contributions. The SSC ruled that there is no employer-employee relationship with Martinez and BTI, thus it dismissed the complaint. The CA
however, reversed the decision and ruled that Tuazon operated his bus under the Kabit System. Thus, it ruled in favour of Martinez. The SC
reinstated the decision of the SSC. BTI and Baliwag Transit were granted different franchise. Therefore, the decision of the SSC was reinstated.
Facts:
1. Two passenger bus lines with similar buses and similar routes were being operated by 2 firm names, “Baliwag Transit” and “Baliwag Transit
Inc (BTI – herein petitioner). Baliwag Transit is owned by the late Tuazon until his death on Jan 26, 1972, while BTI is owned by BTI-petitioner.
2. Both bus lines operated under different grants of franchise by the Public Service Commission, but were issued only one ID Number (03-22151)
by the SSS.
3. Martinez (respondent) claimed to be an employee of both lines with one ID Number. It filed a petition with the Social Securities Commission
to compel BTI to remit his SSS premium contributions (years 1958 to march 1963 and 1967 to March 1971).
4. Martinez alleged that he was employed by BTI as a conductor and was later on promoted to an inspector with corresponding salary increase.
His premium contributions was only remitted to cover a period of June 1963 to 1966.
5. BTI denied having employed Martinez. They alleged that Martinez was employed by the Tuazon of Baliwag Transit, and that BTI is separate
and distinct from the former. BTI was owned by Mrs. Victoria Vda. De. Tengco (niece of Tuazon). Both bus lines have different offices,
maintenance and repair shops, garages, books of accounts and managers.
6. SSC: No employer-employee between BTI and Martinez. Complaint was dismissed.
7. CA: Reversed the decision of the SSC. It ruled that the late Tuazon operated his buses under the “Kabit” System. Thus, BTI is ordered to remit
Martine’s premium contributions.
Issues: Whether or not the issuance by the SSS of one ID Number to 2 bus lines necessarily indicated that one of them operates his buses under
the Kabit system.
Ruling: No, the Court ruled in the negative.

Ratio:
 The Kabit System has been defined as an arrangement “whereby a person who has been granted a certificate of convenience allows another
person who owns motor vehicles to operate under such franchise for a fee”.
 The determining factor is the possession of a franchise to operate which negates the existence of the Kabit System and not the issuance of
one SSS ID Number for both bus lines.
 As testified by the witnesses presented by BTI and also the SSS witness who had access to the records, it is undisputed that Tuazon and
Tengco were granted separate franchise to ooperate public utility buses. However, the franchise of Tuazon were cancelled.
 It is thus evident that both bus lines operated under their own franchises but opted to retain the firm name “Baliwag Transit”. For the case
of BTI, it was to take advantage of the good will of such firm name. It is thus obvious that the ruling of the CA is not supported by the records.
 While it is admitted that petitioner was the one who remitted the SSS premiums of Martinez, it has also been established that such
arrangement was done purposely to accommodate the request of the late Tuazon, uncle of Tengco, and that the money came from the
former.
 WHEREFORE, the decision of the CA is REVERSED and SET ASIDE.
21 TEJA MARKETING AND/OR ANGEL JAUCIAN, petitioner, vs. AUTHOR: CASANO

HONORABLE INTERMEDIATE APPELLATE COURT** AND PEDRO N. NOTES:
NALE, respondents.
No. L-65510. March 9, 1987.*
TOPIC: Kabit system
PONENTE: Paras
CASE LAW/ DOCTRINE: kabit system is invariably recognized as being contrary to public policy, and thus the contract is void.
Emergency Recit: Nale purchased a motorvehicle for the operation as a trimobile under the franchise of Angel Jaucian which was later mortgaged
in Teja Marketing to be a security for the remaining balance of the purchase price. They agreed that Jaucian will register the motorvehicle in the
LTC annually. However, both failed in their abligations, for Nale to pay the remaining balance of the purchase price and for Jaucian to register.
FACTS:
1. On May 9, 1975, the Nale bought from Teja Marketing (Angel Jaucian) a motorcycle with complete accessories and a sidecar in the total
consideration of P8,000.00.
2. Nale paid P1,700 as downpayment, and promised to pay the balance within 60days. The motorcycle was entered in a chattel mortgage with
Teja Marketing(owned by Angel) as security for the balance.
3. However, it was extended to 1year upon his request after failing to pay within 60 days. He stopped paying in January 1976.
4. They also agreed that plaintiff will register the motorcycle yearly with the Land Transportation Commission (LTC). Nela gave payment for the
registration and mortgage fee of the motorcycle.
5. Teja/Jauricio (plaintiff) failed to register the motorcycle that year on the ground that Nela did not pay the insurance premiums and did not
bring the motorcycle to the LTC for stenciling. Jauricio states Nela is hiding the motorcycle to him.
6. Since the vehicle was not registered, it was impounded by the LTC.
7. Jaucian made demands for the payment of the balnce but was unheeded. He filed a suit for collection of sum of money.
8. The records of the LTC show that the motorcycle sold to the defendant was first mortgaged to the Teja Marketing by Angel Jaucian though
the Teja Marketing and Angel Jaucian are one and the same, because it was made to appear that way only as the defendant had no
franchise of his own and he attached the unit to the plaintiff's MCH Line.
9. ... it also appears and the Court so finds that defendant purchased the motorcycle in question, particularly for the purpose of engaging and
using the same in the transportation business and for this purpose said trimobile unit was attached to the plaintiffs transportation line who
had the franchise, so much so that in the registration certificate, the plaintiff appears to be the owner of the unit. Furthermore, it appears to
have been agreed, further between the plaintiff and the defendant, that plaintiff would undertake the yearly registration of the unit in
question with the LTC. Thus, for the registration of the unit for the year 1976, per agreement, the defendant gave to the plaintiff the amount
of P82.00 for its registration, as well as the insurance coverage of the unit.
10. City Court ruled in favor of Teja Marketing, and ordered defendant Pedro Nale to pay remaining balance in installment
11. On appeal, CFI affirmed.
12. Nale filed a peitition for review in the IAC and it ruled to dismiss the case for both are in pari delicto
13. Hence, petition for review.
ISSUE(S): whether or not the agreement/contract entered into is valid? No, it is void being under a “kabit system”
HELD: NO. WHEREFORE, the petition is hereby dismissed for lack of merit. Affirmed decision of IAC.
RATIO:
 "'Ex pacto illicito' non oritur actio" (No action arises out of illicit bargain) is the time-honored maxim that must be applied to the parties in
the case at bar. Having entered into an illegal contract, neither can seek relief from the courts, and each must bear the consequences of his
acts." (Lita Enterprises vs. IAC, 129 SCRA 81.)
 Unquestionably, the parties herein operated under an arrangement, commonly known as the "kabit system" whereby a person who has been
granted a certificate of public convenience allows another person who owns motor vehicles to operate under such franchise for a fee. A
certificate of public convenience is a special privilege conferred by the government. Abuse of this privilege by the grantees thereof cannot
be countenanced. The "kabit system" has been Identified as one of the root causes of the prevalence of graft and corruption in the
government transportation offices.
 Although not outrightly penalized as a criminal offense, the kabit system is invariably recognized as being contrary to public policy and,
therefore, void and in existent under Article 1409 of the Civil Code. It is a fundamental principle that the court will not aid either party to
enforce an illegal contract, but will leave both where it finds then. The defect of in existence of a contract is permanent and cannot be cured
by ratification or by prescription. The mere lapse of time cannot give efficacy to contracts that are null and void.
22. Lita Enterprises, Inc. v. Second Civil Cases Division IAC AUTHOR: Concepcion
[G.R. L- No. 64693; 27 April 1984] NOTES: In the drafting of the emergency recit, I abstracted out
TOPIC: Kabit System from the “FACTS” the following parts “The Accident and “The Suit
PONENTE: Escolin, J. from the Accident”. What pertinent to this case is: (1) how the
kabit system manifested in the case; and also (2) how the court
treats such arrangement.
CASE LAW/ DOCTRINE:

 Unquestionably, the parties herein operated under an arrangement, commonly known as the "kabit system", whereby a person who has
been granted a certificate of convenience allows another person who owns motors vehicles to operate under such franchise for a fee. A
certificate of public convenience is a special privilege conferred by the government . Abuse of this privilege by the grantees thereof cannot
be countenanced. The "kabit system" has been Identified as one of the root causes of the prevalence of graft and corruption in the
government transportation offices. In the words of Chief Justice Makalintal, "this is a pernicious system that cannot be too severely
condemned. It constitutes an imposition upon the goo faith of the government.
 Although not out rightly penalized as a criminal offense, the "kabit system" is invariably recognized as being contrary to public policy and,
therefore, void and inexistent under Article 1409 of the Civil Code, It is a fundamental principle that the court will not aid either party to
enforce an illegal contract, but will leave them both where it finds them.
Emergency Recit: This case involves parties that entered into an arrangement known as the “kabit system” wherein one of the parties that did
not hold a public certificate of convenience to operate taxicabs used the other party’s certificate of public convenience. Litigation ensued between
the parties. The lower courts afforded the parties relief in the course of litigation. However, The Supreme Court held that since the arrangement
was contrary to public policy, the courts must leave the parties where the courts found them, and thus none of the parties are entitled to
affirmative relief. “Ex pacto illicito non oritur actio” [No action arises out of an illicit bargain]
FACTS:
 The spouses Nicasio Ocampo and Francisca Garcia (“Sps. Ocampo”) owned five Toyota Corona Standard cars (‘the Toyota cars”) to be used
as taxicabs;
 Spouses Ocampo intended to have the cars used as taxicabs, but they did not hold any certificate of public convenience to operate taxicabs;
The Arrangement
 This prompted Spouses Ocampo to enter into an arrangement {“the Arrangement”} with Lita Enterprises, Inc. (“Lita”) a holder of a Certificate
of Public Convenience to operate taxicabs:
o Sps. Ocampo would use Lita’s Certificate of Public Convenience; in consideration
o Sps Ocampo would make an initial payment and make monthly rental payments to Lita;
o To implement this arrangement, the Toyota cars were registered under the name of Lita, while the Toyota cars were possessed by
Sps. Ocampo
The Accident
 One day, while one of the Toyota cars were in service, driven by one of the employees, said car collided with a motorcycle resulting in the
death of the motorcycle driver;
The Suit from the Accident

 The heirs of the dead motorcycle driver filed a civil suit against Lita. The trial court ruled against Lita and held it liable for damages;
 A writ of execution was issued, and pursuant thereto some of Sps. Ocampo’s Toyota cars were levied, (since they were registered under Lita’s
name)
The Fallout
 Sps. Ocampo decided to register the remaining Toyota cars in their name, and thus requested Lita to turn over the registration papers;
however
 Lita refused.
The Suit from the Fallout

 Sps. Ocampo filed a Complaint against Lita, and in the course of litigation the lower courts granted the parties affirmative relief.
ISSUE(S): Are the parties entitled to affirmative relief?
HELD: No. Since the parties entered into an arrangement that is against public policy, the parties are not entitled to any affirmative relief.
RATIO:

 The parties operated under an arrangement known as “the kabit system”, whereby a person who has been granted a certificate of public
convenience (Lita) allows another person (Sps. Ocampo) who owns a motor vehicle to operate under such franchise for a fee. A certificate of
public convenience is a special privilege conferred by the government. Abuse of this privilege will not be countenanced. Said system is against
public policy and thus void and inexistent.
 Where parties are in pare delicto, no affirmative relief will be given to one against the other.
23 Oscar Villamaria, Jr. vs. Court Of Appeals AUTHOR: Dadivas, Ma. Louise B.
G.R. No. 165881, April 19, 2006 NOTES: LONG CASE
TOPIC: Boundary Hulog I skipped the procedural issue of Rule 65 and Labor issues not related to
PONENTE: Panganiban, J. the topic hehe
CASE LAW/ DOCTRINE: Under the boundary-hulog scheme incorporated in the Kasunduan, a dual juridical relationship was created: employer-
employee and vendor-vendee. The Kasunduan did not extinguish the employer-employee relationship of the parties extant before the execution
of said deed.
Emergency Recit: Villamaria executed a Kasunduan ng Bilihan ng Sasakyan sa Pamamagitan ng Boundary-Hulog over the passenger jeepney in
favor of his driver Bustamante. Bustamante failed to pay the boundary-hulog. This prompted Villamaria to serve a Paalala to warn that
the Kasunduan would be strictly enforced and urged them to comply with their obligation to avoid litigation. Bustamante filed a Complaint for
Illegal Dismissal against Villamaria. The Court held that under the boundary-hulog scheme incorporated in the Kasunduan, a dual juridical
relationship was created between Villamaria and Bustamante: employer-employee and vendor-vendee. The Kasunduan did not extinguish the
employer-employee relationship of the parties extant before the execution of said deed. Villamaria failed to prove the just cause of Bustamante’s
dismissal. Hence, he is liable for his backwages.
FACTS:
1. Oscar Villamaria, Jr. was the owner of Villamaria Motors: (sole proprietorship)
 assembling passenger jeepneys with a public utility franchise to operate along the Baclaran-Sucat route.
 1995: Villamaria retained only 9 jeepneys (4 of which he operated by employing drivers on a boundary basis)
2. Bustamante (one of the drivers) drove the jeepney (Plate No. PVU-660). He remits P450.00 a day to Villamaria as boundary and kept the
residue of his daily earnings as compensation for driving the vehicle.
3. 08/1997: Villamaria verbally agreed to sell the jeepney to Bustamante under the boundary-hulog scheme
 He would remit to Villarama P550.00 a day for a period of four years
 He would then become the owner of the vehicle and continue to drive the same under Villamarias franchise.
 He would make a downpayment of P10,000.00
4. 08/07/1997: Villamaria executed a Kasunduan ng Bilihan ng Sasakyan sa Pamamagitan ng Boundary-Hulog over the passenger jeepney:
 Bustamante fails to pay the boundary-hulog for three days: Villamaria Motors would hold on to the vehicle until Bustamante paid
his arrears, including a penalty of P50.00 a day. If he fails to remit the daily boundary-hulog for a period of one week:
the Kasunduan would cease to have legal effect and Bustamante would have to return the vehicle to Villamaria Motors.
 He was prohibited from driving the vehicle without prior authority from Villamaria Motors and is required to display an
identification card in front of the windshield of the vehicle, in case of failure to do so, any fine that may be imposed by government
authorities would be charged against his account.
 He further obliged himself to pay for the cost of replacing any parts of the vehicle that would be lost or damaged due to his
negligence. In case the vehicle sustained serious damage, Bustamante was obliged to notify Villamaria Motors before commencing
repairs.
 He was not allowed to wear slippers, short pants or undershirts while driving. He was required to be polite and respectful towards
the passengers.
 He was also obliged to notify Villamaria Motors in case the vehicle was leased for two or more days and was required to attend any
meetings which may be called from time to time.
 He was also obliged to pay for the annual registration fees of the vehicle and the premium for the vehicles comprehensive
insurance. (BUSTAMANTE FAILED TO PAY BUT WAS STILL ALLOWED TO CONTINUE DRIVING THE JEEPNEY)
5. 1999: Bustamante failed to pay the boundary-hulog. This prompted Villamaria to serve a Paalala to warn that the Kasunduan would be strictly
enforced and urged them to comply with their obligation to avoid litigation.
6. 07/24/2000: Villamaria took back the jeepney driven by Bustamante and barred him from driving the vehicle.
7. 08/05/2000: Bustamante filed a Complaint for Illegal Dismissal against Villamaria.
 07/2000: He informed the Villamaria spouses that the surplus engine of the jeepney needed to be replaced and was assured that
it would be done. However, he was later arrested and his driver’s license was confiscated because the replacement engine that
was installed was taken from a stolen vehicle.
 Due to negotiations with the apprehending authorities, the jeepney was not impounded. The Villamaria spouses took the jeepney
from him was no longer allowed to drive the vehicle since then unless he paid them P70,000.00.
8. Villamaria’s defense:
 Bustamante failed to pay the P10,000.00 downpayment and the vehicles annual registration fees.
 Bustamante eventually failed to remit the requisite boundary-hulog of P550.00 a day, which prompted them to issue the Paalaala.
 Bustamante stopped making his remittances despite his daily trips and even brought the jeepney to the province without
permission.
 The jeepney figured in an accident and its license plate was confiscated and he Bustamante even abandoned the vehicle.
 When the vehicle was finally retrieved, the tires were worn, the alternator was gone, and the battery was no longer working.
 He was not illegally dismissed since the Kasunduan transformed the employer-employee relationship into that of vendor-vendee.
9. Labor Arbiter: In favor of Villamaria
10. NLRC: Appeal dismissed; juridical relationship between Bustamante and Villamaria was that of vendor and vendee, hence LA has no
jurisdiction.
11. CA: Reversed NLRC
 The relationship between him and Villamaria was dual: that of vendor-vendee and employer-employee. Villamarias exercise of
control over Bustamantes conduct in operating the jeepney is inconsistent with the formers claim that he was not engaged in the
transportation business.
 While the power to dismiss was not mentioned in the Kasunduan, it did not mean that Villamaria could not exercise it. The existence
of an employment relationship did not depend on how the worker was paid but on the presence or absence of control over the
means and method of the employees work.
 Assuming that Bustamante failed to make the required payments, Villamaria nevertheless failed to take steps to recover the unit
and waited for Bustamante to abandon it. He neither submitted any police report to support his claim that the vehicle figured in a
mishap nor presented the affidavit of the gas station guard to substantiate the claim that Bustamante abandoned the unit.
ISSUE(S): Whether the existence of a boundary-hulog agreement negates the employer-employee relationship between the vendor and vendee?
HELD: NO NO NO WAY!
RATIO:
 THE COURT EXAMINED THE WHOLE CONTRACT AND TOOK INTO CONSIDERATION THE INTENT OF THE PARTIES.
 What is a boundary system?
o a scheme by an owner/operator engaged in transporting passengers as a common carrier to primarily govern the compensation of
the driver (daily earnings are remitted to the owner/operator less the excess of the boundary which represents the drivers
compensation)
o The owner/operator exercises control and supervision over the driver. The management of the business is still in the hands of the
owner/operator, who, being the holder of the certificate of public convenience, must see to it that the driver follows the route
prescribed by the franchising and regulatory authority and the rules promulgated with regard to the business operations.
o The fact that the driver does not receive fixed wages but only the excess of the boundary given to the owner/operator is not
sufficient to change the relationship between them.
 Under the Kasunduan, Bustamante was required to remit P550.00 daily, an amount which represented the boundary as well as his partial
payment (hulog) of the purchase price of the jeepney. He was entitled to keep the excess of his daily earnings as his daily wage. Thus, the
daily remittances also had a dual purpose: that of Villamaria’s boundary and Bustamante’s partial payment (hulog) for the vehicle.
 Under the boundary-hulog scheme incorporated in the Kasunduan, a dual juridical relationship was created between Villamaria and
Bustamante: employer-employee and vendor-vendee. The Kasunduan did not extinguish the employer-employee relationship of the
parties extant before the execution of said deed. (NO NOVATION: two obligations of Bustamante to remit the boundary-hulog can stand
together)
 The existence of an employment relation is not dependent on how the worker is paid but on the presence or absence of control over the
means and method of the work. The amount earned in excess of the “boundary hulog” is equivalent to wages and the fact that the power of
dismissal was not mentioned in the Kasunduan did not mean that Villamaria never exercised such power, or could not exercise such power
 What is primordial is that Villamaria retained control over the conduct of the Bustamante as driver of the jeepney. Villamaria, as the owner
of the vehicle and the holder of the franchise, is entitled to exercise supervision and control over Bustamante, by seeing to it that the route
provided in his franchise, and the rules and regulations of the Land Transportation Regulatory Board are duly complied with. HENCE,
VILLAMARIA FAILED TO PROVE THAT BUSTAMANTE WAS DISMISSED FOR A LAWFUL/JUST CAUSE. Liable for backwages.
24. PAGUIO TRANSPORT CORPORATION v. NLRC and WILFREDO AUTHOR: Delgado

MELCHOR NOTES:
Aug. 28, 1998, 294 SCRA 657
TOPIC: Boundary Hulog
PONENTE: Panganiban, J.
CASE LAW/ DOCTRINE: The boundary system used in taxi and jeepney operations presupposes an employer-employee relation.
EMERGENCY RECITATION: Melchor a taxi driver hired by Paguio Transport, met a vehicular accident in Quirino Avenue. He was advised to stop
working by the latter, only to be informed he was not needed in the company anymore. Thus, he filed a complaint for illegal dismissal. This was
contested by Paguio Transport alleging that no employer-employee relationship exists as there was no element of payment of compensation.
What existed was merely payment of boundary. The Supreme Court held Melchor was illegally dismissed as he boundary system used in taxi (and
jeepney) operations presupposes an employer-employee relation.
FACTS:
 Wilfredo Melchor was hired by Paguio Transport as a taxi driver on 25 December 1992 under the boundary system.
 He was engaged to drive the taxi unit assigned to him on a 24-hour schedule per trip every two (2) days, for which he used to earn an average
income from P500 to P700 per trip, exclusive of the P650.00 boundary and other deductions imposed on him.
 On November 23, 1993, Melchor allegedly met a vehicular accident along Quirino Avenue near the PNR Station and Plaza Dilao when he
accidentally bumped a car which stopped at the intersection even when the traffic light was green and go.
 After he submitted the traffic accident report to the office of respondents, he was allegedly advised to stop working and have a rest. After
several days, he allegedly reported for work only to be told that his service was no longer needed. Hence, the complaint for illegal dismissal,
among others.

 Paguio Transport maintained that Melchor was not illegally dismissed, there being in the first place no employer-employee relationship
between them. They was argued that the element of control which was a paramount test to determine the existence of such a relationship
was lacking. in lieu of the element of payment of compensation, payment of boundary is instead made allegedly makes the relationship
between them of a wage-agreement.
 Labor Arbiter: Melchor was illegally dismissed for he was not afforded the twin requirements of due process.
 NLRC: Sustained Labor Arbiter’s ruling. There was no proof was presented to establish reckless driving on the part of Melchor in his previous
vehicular accidents. Melchor was illegally dismissed by Paguio Transport and upheld the existence of an employer-employee relationship. It
cited Doce v. WCC, in which the Supreme Court ruled that the relationship created between the parties operating under a boundary system
is one of an employer and employee, and not of a lessor and a lessee.
 Paguio Transport appealed the case before the Supreme Court.
ISSUE(S): Whether or not the boundary system establishes an employer-employee relationship in taxi services?
HELD: Yes. Petition is not meritorious. Dismissed for lack of merit.

RATIO:
 Under the boundary system, Melchor was engaged to drive Paguio Transport’s taxi unit on a 24-hour schedule every two days. On each such
trip, Melchor remitted to petitioner a boundary of P650. Whatever he earned in excess of that amount was considered his income.
 In Martinez v. National Labor Relations Commission, this Court already ruled that the relationship of taxi owners and taxi drivers is the same
as that between jeepney owners and jeepney drivers under the boundary system. In both cases, the employer-employee relationship was
deemed to exist.
 The relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of
employer-employee and not of lessor-lessee. In the lease of chattels the lessor loses complete control over the chattel leased. In the case of
jeepney owners/operators and jeepney drivers, the former exercise supervision and control over the latter.
 The fact that the drivers do not receive fixed wages but get only the excess of that so-called boundary they pay to the owner/operator is not
sufficient to withdraw the relationship between them from that of employer and employee. Hence, drivers are considered employees
because they had been engaged to perform activities which were usually necessary or desirable in the usual trade or business of the
employer.
25 SPOUSES FRANCISCO M. HERNANDEZ and ANICETA ABEL-HERNANDEZ AUTHOR: David

and JUAN GONZALES vs. SPOUSES LORENZO DOLOR and MARGARITA NOTES:
DOLOR, FRED PANOPIO, JOSEPH SANDOVAL, RENE CASTILLO, SPOUSES
FRANCISCO VALMOCINA and VIRGINIA VALMOCINA, SPOUSES VICTOR
PANOPIO and MARTINA PANOPIO, and HON. COURT OF APPEALS
[G.R. No. 160286. July 30, 2004]
TOPIC: BOUNDARY SYSTEM (JEEPNEYS)
PONENTE: YNARES-SANTIAGO
CASE LAW/ DOCTRINE: To exempt from liability the owner of a public vehicle who operates it under the boundary system on the ground that he
is a mere lessor would be not only to abet flagrant violations of the Public Service Law, but also to place the riding public at the mercy of reckless
and irresponsible drivers reckless because the measure of their earnings depends largely upon the number of trips they make and, hence, the
speed at which they drive; and irresponsible because most if not all of them are in no position to pay the damages they might cause.
FACTS:
- At about 3:00 p.m. of December 19, 1986, Lorenzo Menard Boyet Dolor, Jr. was driving an owner-type jeepney with plate no. DEB 804 owned
by her mother, Margarita, towards Anilao, Batangas. As he was traversing the road at Barangay Anilao East, Mabini, Batangas, his vehicle
collided with a passenger jeepney bearing plate no. DEG 648, driven by petitioner Juan Gonzales and owned by his co-petitioner Francisco
Hernandez, which was travelling towards Batangas City. Boyet Dolor and his passenger, Oscar Valmocina, died as a result of the collision.
- Consequently, respondents commenced an action for damages against petitioners before the RTC of Batangas City, alleging that driver Juan
Gonzales was guilty of negligence and lack of care and that the Hernandez spouses were guilty of negligence in the selection and supervision
of their employees.
- Petitioners countered that the proximate cause of the death and injuries sustained by the passengers of both vehicles was the recklessness of
Boyet Dolor, the driver of the owner-type jeepney, who was driving in a zigzagging manner under the influence of alcohol. Petitioners also
alleged that Gonzales was not the driver-employee of the Hernandez spouses as the former only leased the passenger jeepney on a daily
basis. The Hernandez spouses further claimed that even if an employer-employee relationship is found to exist between them, they cannot
be held liable because as employers they exercised due care in the selection and supervision of their employee.
- During the trial of the case, it was established that the drivers of the two vehicles were duly licensed to drive and that the road where the
collision occurred was asphalted and in fairly good condition. The owner-type jeep was travelling uphill while the passenger jeepney was going
downhill. It was further established that the owner-type jeep was moderately moving and had just passed a road bend when its passengers,
private respondents Joseph Sandoval and Rene Castillo, saw the passenger jeepney at a distance of three meters away. The passenger jeepney
was traveling fast when it bumped the owner type jeep. Moreover, the evidence presented by respondents before the trial court showed that
petitioner Juan Gonzales obtained his professional drivers license only on September 24, 1986, or three months before the accident. Prior to
this, he was holder of a student drivers permit issued on April 10, 1986.
- The RTC rendered a decision in favor of respondents, holding defendants-spouses Francisco Hernandez and Aniceta Abel Hernandez and Juan
Gonzales solidarily liable. The CA affirmed this decision.

ISSUE(S): W/N defendant-spouses should be held solidarily liable with Juan Gonzales, even if the latter was only operating on a boundary-system.
HELD: YES.
RATIO:
- Petitioners contend that the absence of the Hernandez spouses inside the passenger jeepney at the time of the collision militates against
holding them solidarily liable with their co-petitioner, Juan Gonzales, invoking Article 2184 of the Civil Code, which provides:
ARTICLE 2184. In motor vehicle mishaps, the owner is solidarily liable with his driver, if the former, who was in the vehicle, could have, by the
use of the due diligence, prevented the misfortune. It is disputably presumed that a driver was negligent, if he had been found guilty of reckless
driving or violating traffic regulations at least twice within the next preceding two months.
- If the owner was not in the motor vehicle, the provisions of article 2180 are applicable.
- ARTICLE 2180. The obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but
also for those of persons for whom one is responsible. (paragraph 1 lang yung important)
- On the other hand, Article 2176 provides:
- ARTICLE 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-
delict and is governed by the provisions of this Chapter.
- While the above provisions of law do not expressly provide for solidary liability, the same can be inferred from the wordings of the first paragraph
of Article 2180 which states that the obligation imposed by article 2176 is demandable not only for one's own acts or omissions, but also for
those of persons for whom one is responsible.
- Moreover, Article 2180 should be read with Article 2194 of the same Code, which categorically states that the responsibility of two or
more persons who are liable for quasi-delict is solidary. In other words, the liability of joint tortfeasors is solidary. Verily, under Article
2180 of the Civil Code, an employer may be held solidarily liable for the negligent act of his employee.
- The solidary liability of employers with their employees for quasi-delicts having been established, the next question is whether Julian Gonzales
is an employee of the Hernandez spouses. An affirmative answer will put to rest any issue on the solidary liability of the Hernandez spouses
for the acts of Julian Gonzales. The Hernandez spouses maintained that Julian Gonzales is not their employee since their relationship relative
to the use of the jeepney is that of a lessor and a lessee. They argue that Julian Gonzales pays them a daily rental of P150.00 for the use of the
jeepney. In essence, petitioners are practicing the boundary system of jeepney operation albeit disguised as a lease agreement between them
for the use of the jeepney.
- We hold that an employer-employee relationship exists between the Hernandez spouses and Julian Gonzales. Indeed to exempt from liability
the owner of a public vehicle who operates it under the boundary system on the ground that he is a mere lessor would be not only to abet
flagrant violations of the Public Service Law, but also to place the riding public at the mercy of reckless and irresponsible drivers reckless
because the measure of their earnings depends largely upon the number of trips they make and, hence, the speed at which they drive; and
irresponsible because most if not all of them are in no position to pay the damages they might cause.
26. PRIMO E. CAONG, JR., ALEXANDER J. TRESQUIO, and LORIANO D. AUTHOR: K. Guevarra
DALUYON, Petitioners, NOTES:
vs. This is a labor case regarding the ‘dismissal’ of the petitioners by the
AVELINO REGUALOS, Respondent. respondent. This case only describes lightly what a ‘boundary scheme’
G.R. No. 179428 | 26 January 2011 is.
TOPIC: Boundary Hulog
PONENTE: Nachura, J.
CASE LAW/ DOCTRINE: Under a boundary scheme, the driver remits the "boundary," which is a fixed amount, to the owner/operator and gets to
earn the amount in excess thereof.
FACTS:
 Petitioners Caong, Tresquio and Daluyon were employed as jeepney drivers by Respondent Regualos under a boundary agreement. They
filed separate complaints for illegal dismissal against Regualos who barred them from driving the jeepneys due to deficiencies in their
boundary payments. However, Regualos told them that they could resume their use of the vehicles after they pay their arrears.
 Regualos alleged that the petitioners were lessees of his vehicles and not his employees. Thus, the Labor Arbiter had no jurisdiction. The
Labor Arbiter ruled that there was an employer-employee relationship between Regualos and the petitioners and that there was no dismissal
because they would be allowed to use the vehicles once they pay their arrears. A reasonable sanction was deemed to be an appropriate
penalty.
 Petitioners appealed the decision to the NLRC, which agreed with the Labor Arbiter. The CA also affirmed. It ruled that the employer-
employee relationship of the parties was not severed but merely suspended because Regualos refused to allow petitioners to drive the
jeepneys when they failed to pay their obligations.
ISSUE(S): Whether the boundary scheme is fair
HELD: Yes, it is fair given that the boundary scheme only provides that the driver give the owner/operator a fixed amount daily and the rest is
theirs to keep.
RATIO:
 Respondent’s policy of suspending drivers who fail to remit the full amount of the boundary was fair and reasonable under the circumstances.
Respondent explained that he noticed that his drivers were getting lax in remitting their boundary payments and, in fact, herein petitioners
had already incurred a considerable amount of arrears. He had to put a stop to it as he also relied on these boundary payments to raise the

full amount of his monthly amortizations on the jeepneys. Demonstrating their obstinacy, petitioners, on the days immediately following the
implementation of the policy, incurred deficiencies in their boundary remittances.
 It is acknowledged that an employer has free rein and enjoys a wide latitude of discretion to regulate all aspects of employment, including
the prerogative to instill discipline on his employees and to impose penalties, including dismissal, if warranted, upon erring employees. This
is a management prerogative. Indeed, the manner in which management conducts its own affairs to achieve its purpose is within the
management’s discretion. The only limitation on the exercise of management prerogative is that the policies, rules, and regulations on work-
related activities of the employees must always be fair and reasonable, and the corresponding penalties, when prescribed, commensurate
to the offense involved and to the degree of the infraction.
 In the present case, petitioners merely alleged that there were only few passengers during the dates in question. Such excuse is not
acceptable without any proof or, at least, an explanation as to why passengers were scarce at that time. It is simply a bare allegation, not
worthy of belief. We also find the excuse unbelievable considering that petitioners incurred the shortages on separate days, and it appears
that only petitioners failed to remit the full boundary payment on said dates.
 Under a boundary scheme, the driver remits the "boundary," which is a fixed amount, to the owner/operator and gets to earn the amount
in excess thereof. Thus, on a day when there are many passengers along the route, it is the driver who actually benefits from it. It would be
unfair then if, during the times when passengers are scarce, the owner/operator will be made to suffer by not getting the full amount of the
boundary. Unless clearly shown or explained by an event that irregularly and negatively affected the usual number of passengers within the
route, the scarcity of passengers should not excuse the driver from paying the full amount of the boundary.
WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals Decision dated December 14, 2006 and Resolution dated July 16,
2007 are AFFIRMED.
27) Herminio Mariano Jr. vs. Ildefonso C. Callejas and Edgar de Borja AUTHOR: HERNANDEZ
[G.R. No. 112287; Dec. 12, 1997] NOTES
TOPIC: I. Liability for the Death of the Passenger
PONENTE: Puno
CASE LAW/ DOCTRINE: The presumption of negligence does not make the carrier an insurer of the absolute safety of its passengers. Being a mere
presumption, however, the same is rebuttable by proof that the common carrier had exercised extraordinary diligence as required by law in the
performance of its contractual obligation, or that the injury suffered by the passenger was solely due to a fortuitous event.
Emergency Recit: Herminio’s wife was a passenger who died from a collision between a Celyrosa Express (common carrier) bus and a trailer truck.
Celyrosa, through its owner and the driver, was able to overcome the presumption of negligence. Evidence shows that death was caused by the
reckless negligence of the trailer truck driver which ran at full speed, lost its brakes, encroached the other lane and bumped the bus which was
then at a halt to unload passengers.
FACTS:
 A Celyrosa Express bus collided with an Isuzu truck with trailer along Aguinaldo Highway. The bus was bound for Tagaytay while the truck
was headed to Manila. The bus fell on its right side on the shoulder of the high way- causing the death of Dr. Frelinda Mariano and injuries
to other passengers.
 Three cases were filed concerning the collision:
 Herminio filed a complaint for breach of contract of carriage and damages against Calleja (registered owner of Celyrosa Express) and
Borja (driver) for their failure to transport his wife and mother of his three minor children safely to her destination. The latter argues
that the bus was at a halt when the incident occurred. So, Calleja filed a 3 rd party complaint against Liong Chio Chang, owner of the
trailer truck under the business of La Perla Sugar Supply.
 Callejas filed a complaint for damages against La Perla Sugar and Arcilla (truck driver). The complaint was dismissed against La Perla
for lack of evidence while Arcilla was found liable to pay for the cost of the bus repairs and lost earnings.
 A criminal case was filed against Arcilla for reckless imprudence resulting to homicide, multiple slight physical injuries and damage to
property. Convicted.
 Going back to Herminio’s complaint, Callejas, de Borja and Chang were found liable for civil indemnity, actual and compensatory damages,
foregone income, moral damages and exemplary damages.
 CA reversed. The presumption of negligence against the carrier is only a disputable presumption. The presumption was rebutted as the injury
was caused by strangers over which the carrier had no control, knowledge or means to prevent the same.
 Evidence: Police report and testimony
 Sketch by the investigating police officer (De Villa) shows the bus facing the direction of Tagaytay and lying on its right side on the
shoulder of the road, about 5m from point of impact. The trailer truck was on the opposite direction, 500m away from point of impact.
 De Villa interviewed de Borja who said that he was about to unload some passengers when the bus was bumped.
 The trailer truck had no brakes, as tested and inspected by De Villa.
ISSUE(S): Is the common carrier liable for the death of Dr. Frelinda?
HELD: No. It observed extraordinary diligence and could not have prevented the incident. Absolved from any liability for her death.
RATIO:
 A common carrier has the obligation of carrying passengers safely as far as human care and foresight can provide, using the utmost diligence
of very cautious persons, with a due regard for all the circumstances, and to observe extraordinary diligence in the discharge of its duty.
 The presumption of negligence does not make the carrier an insurer of the absolute safety of its passengers. It is rebuttable by proof that
the common carrier had exercised extraordinary diligence as required by law in the performance of its contractual obligation, or that the
injury suffered by the passenger was solely due to a fortuitous event.

 Dr. Frelinda’s death gave rise to the presumption of negligence of the carrier. To overcome the presumption, it must be shown that the
carrier observed extraordinary diligence in the discharge of their duty or that the accident was caused by fortuitous event.
 The totality of evidence shows that Dr. Frelinda’s death was caused by the reckless negligence of the trailer truck driver which ran at full
speed, lost its brakes, encroached the other lane and bumped the bus.
 De Borja had every right to expect the truck would stay on its proper lane. He was not expected to know that it had lost its brakes. The
swerving of the trailer truck was abrupt and it was running on a fast speed as it was found 500 meters away from the point of collision.
 Any doubt as to the trailer truck driver’s culpability should have vanished when he pleaded guilty and was even convicted in the criminal
case concerning the same incident.
28 EDDIE CORTEL and YELLOW BUS LINE, INC. v. GEPAYA-LIM AUTHOR: Magsanay
G.R. No. 218014 | December 07, 2016 | J. Carpio
Topic: Res Ipsa Loquitur
CASE LAW/ DOCTRINE: The Doctrine of res ipsa loquitur literally means “the thing, instrumentality or transaction speaks for itself”. The facts or
circumstances accompanying an injury may be such as to raise a presumption, or at least permit an inference of negligence on the part of the
defendant, or some other person who is charged with negligence.
FACTS:
 Cartel was driving a bus, operated by Yellow Bus Line, which was on its way from Marbel, Koronadal to Davao City. At around 9:45 in the
evening, as the bus was traversing Crossing Rubber in the Municipality of Tupi, South Cotabato, Cortel noticed two trucks with glaring
headlights coming from the opposite direction. Cortel stated that he was driving at a speed of 40 to 50 kilometers per hour. He claimed that
upon noticing the trucks, he reduced his speed to 20 kilometers per hour.
 However, the bus hit a black motorcycle which allegedly had no tail light reflectors. The impact dragged the motorcycle at a distance of three
meters before it came to a full stop. Lim, who was riding the motorcycle, was thrown upward and then slammed into the bus, hitting the
base of its right windshield wiper. The motorcycle got entangled with the broken bumper of the bus. According to Cortel, Lim was wearing a
black jacket and was riding without a helmet at the time of the accident.
 Cortel drove the bus away and went to a nearby bus station where he surrendered to authorities. Cortel claimed that he left the scene of the
incident because he feared for his life.
 Cecile Gepaya-Lim, Lim's widow, filed a complaint for damages against petitioners.
 During trial, the investigation results showed that the bus and the motorcycle were going in the same direction. The bus bumped the
motorcycle from behind. The motorcycle was severely damaged by the accident.
 During the preliminary conference, Yellow Bus Line also presented Cortel's certificates showing that he attended the following seminars:
o Basic Tire Care Seminar;
o Basic Tire Knowledge and Understanding Retreading; and
o Traffic Rules and Regulations, Defensive Driving and Road Courtesy Seminar.
 However, the certificates were not offered in evidence during trial.
 RTC: The bus was running fast. The accident is the proximate cause of Lim's death. Petitioners are jointly and severally liable.
 CA: Applied the doctrine of res ipsa loquitor. Affirmed RTC decision.
 Hence, this petition.
ISSUE: WON the Doctrine of Res Ipsa Loquitor should apply? - YES
HELD: Petition denied. Cortel and Yellow Bus Line are jointly and severally liable to pay award of loss of earning capacity, temperate and moral
damages, death indemnity, and attorney’s fees.
RATIO:
RES IPSA LOQUITOR: Negligence
Res Ipsa Loquitur applies in this case. While negligence is not ordinarily inferred or presumed, and while the mere happening of an accident or
injury will not generally give rise to an inference or presumption that it was due to negligence on defendant's part, under the doctrine of res ipsa
loquitur, which means, literally, the thing or transaction speaks for itself, or in one jurisdiction, that the thing or instrumentality speaks for itself,
the facts or circumstances accompanying an injury may be such as to raise a presumption, or at least permit an inference of negligence on the
part of the defendant, or some other person who is charged with negligence.
x x x [W]here it is shown that the thing or instrumentality which caused the injury complained of was under the control or management of the
defendant, and that the occurrence resulting in the injury was such as in the ordinary course of things would not happen if those who had its
control or management used proper care, there is sufficient evidence, or, as sometimes stated, reasonable evidence, in the absence of explanation
by the defendant, that the injury arose from or was caused by the defendant's want of care.
x x x The res ipsa loquitur doctrine is based in part upon the theory that the defendant in charge of the instrumentality which causes the injury
either knows the cause of the accident or has the best opportunity of ascertaining it and that the plaintiff has no such knowledge, and therefore
is compelled to allege negligence in general terms and to rely upon the proof of the happening of the accident in order to establish negligence.
The inference which the doctrine permits is grounded upon the fact that the chief evidence of the true cause, whether culpable or innocent, is
practically accessible to the defendant but inaccessible to the injured person.
ELEMENTS of RES IPSA LOQUITUR

(1) the accident is of such character as to warrant an inference that it would not have happened except for the defendant's negligence;

(2) the accident must have been caused by an agency or instrumentality within the exclusive management or control of the person charged with
the negligence complained of; and
(3) the accident must not have been due to any voluntary action or contribution on the part of the person injured.
The result of the collision speaks for itself.

 If the speed of the bus was only 20 kilometers per hour as Cortel claimed, it would not bump the motorcycle traveling in the same direction
with such impact that it threw its rider upward before hitting the base of its right windshield wiper.
 If Cortel was driving at 20 kilometers per hour, the bus would not drag the motorcycle for three meters after the impact.
 The damages sustained by both the motorcycle and the bus indicated that he was driving fast at the time of the accident.
 Petitioners’ allegations are self-serving because it failed to present evidence that Lim was equally negligent since he was not wearing a helmet
and the motorcycle had no tail lights. Hence, no contributory negligence on the part of Lim
 Cortel had the exclusive control of the bus, including its speed.
 The collision would not have happened without negligence of Cortel. It was established that the collision caused Lim's death.
VICARIOUS LIABILITY
The rule is when an employee causes damage due to his own negligence while performing his own duties, there arises a presumption that his
employer is negligent.13 This presumption can be rebutted only by proof of observance by the employer of the diligence of a good father of a
family in the selection and supervision of its employees. In this case, we agree with the trial court and the Court of Appeals that Yellow Bus Line
failed to prove that it exercised due diligence of a good father of a family in the selection and supervision of its employees. Cortel's certificates of
attendance to seminars, which Yellow Bus Line did not even present as evidence in the trial court, are not enough to prove otherwise.
29 CARAVAN TRAVEL AND TOURS INTERNATIONAL, INC., petitioner, AUTHOR: Mendoza, J.D.
vs. ERMILINDA R. ABEJAR, respondent. NOTES:
G.R. No. 170631, [February 10, 2016]) [G.R. No.; Date]
TOPIC: Registered Owner Rule
PONENTE: Leonen, J.
CASE LAW/ DOCTRINE:
 The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by
the vehicle on the public highways, responsibility therefor can be fixed on a definite individual, the registered owner.
 The liability imposed on the registered owner is direct and primary. It does not depend on the inclusion of the negligent driver in the action.
Emergency Recit: An 18 year old, Reyes, was walking along a street in Paranaque when a driver employed by petitioner hit said girl when he
swerved the Mitsubishi L300 he was driving. Petitioner paid for the hospital bills, however, Reyes still died 2 days after the incident. Respondent,
Aunt of Reyes, filed a case against Petitioner and Driver for quasi-delict and damages. Petitioner argued that respondent was not a real party in
interest and that it should not be held liable as an employer of the driver. The court ruled that respondent exercised substitute parental authority
over Reyes and that she was a real party in interest. Also, the court held Petitioner liable under the Registered Owner Rule. Being that summons
could not be served upon the person of the driver, and that Petitioner as the registered owner of the vehicle which hit Reyes, should be held liable
under article 2180 of the New Civil Code.
FACTS:
 Jesmariane R. Reyes was walking along the west-bound lane of Sampaguita Street, United Parañaque Subdivision IV, Parañaque. A Mitsubishi
L-300 van with plate number PKM 195 was travelling along the east-bound lane, opposite Reyes. To avoid an incoming vehicle, the van
swerved to its left and hit Reyes. Alex Espinosa, a witness to the accident, went to her aid and loaded her in the back of the van. Espinosa
told the driver of the van, Jimmy Bautista, to bring Reyes to the hospital. Instead of doing so, Bautista appeared to have left the van parked
inside a nearby subdivision with Reyes still in the van. Fortunately for Reyes, an unidentified civilian came to help and drove Reyes to the
hospital.
 Upon investigation, it was found that the registered owner of the van was Caravan. Caravan is a corporation engaged in the business of
organizing travels and tours. Bautista was Caravan's employee assigned to drive the van as its service driver. Caravan shouldered the
hospitalization expenses of Reyes. Despite medical attendance, Reyes died 2 days after the accident.
 Respondent Ermilinda R. Abejar, Reyes' paternal aunt and the person who raised her since she was nine (9) years old, filed before the RTC of
Parañaque a Complaint for damages against Bautista and Caravan. In her Complaint, Abejar alleged that Bautista was an employee of Caravan
and that Caravan is the registered owner of the van that hit Reyes.
 Summons could not be served on Bautista. Thus, Abejar moved to drop Bautista as a defendant. The RTC granted her Motion. After trial, the
RTC found that Bautista was grossly negligent in driving the vehicle. It awarded damages in favor of Abejar,
 Caravan's Motion for Reconsideration was denied, The Court of Appeals affirmed with modification.
ISSUE(S):
1. whether respondent Ermilinda R. Abejar is a real party in interest who may bring an action for damages against petitioner Caravan Travel and
Tours International, Inc. on account of Jesmariane R. Reyes' death; YES
2. whether petitioner should be held liable as an employer, pursuant to Article 2180 of the Civil Code YES
HELD: WHEREFORE, the Decision of the Court of Appeals dated October 3, 2005 is AFFIRMED with the following MODIFICATIONS: (a) actual
damages in the amount of P35,000.00 shall earn interest at the rate of 6% per annum from the time it was judicially or extrajudicially demanded
from petitioner Caravan Travel and Tours International, Inc. until full satisfaction; (b) moral damages, exemplary damages, and attorney's fees
shall earn interest at the rate of 6% per annum from the date of the Regional Trial Court Decision until full satisfaction; and (c) civil indemnity shall
earn interest at the rate of 6% per annum from the date of the Court of Appeals Decision until full satisfaction
RATIO:
1.Having exercised substitute parental authority, respondent suffered actual loss and is, thus, a real party in interest in this case. In her Complaint,
respondent made allegations that would sustain her action for damages: that she exercised substitute parental authority over Reyes; that Reyes'
death was caused by the negligence of petitioner and its driver; and that Reyes' death caused her damage. 54 Respondent properly filed an action
based on quasi-delict. She is a real party in interest.
Respondent's right to proceed against petitioner, therefore, is based on two grounds.

First, respondent suffered actual personal loss. With her affinity for Reyes, it stands to reason that when Reyes died, respondent suffered the
same anguish that a natural parent would have felt upon the loss of one's child. It is for this injury — as authentic and personal as that of a natural
parent — that respondent seeks to be indemnified.
Second, respondent is capacitated to do what Reyes' actual parents would have been capacitated to do.
We note that Reyes was already 18 years old when she died. Having reached the age of majority, she was already emancipated upon her death.
While parental authority is terminated upon emancipation, respondent continued to support and care for Reyes even after she turned 18. Except
for the legal technicality of Reyes' emancipation, her relationship with respondent remained the same. The anguish and damage caused to
respondent by Reyes' death was no different because of Reyes' emancipation. In any case, the termination of respondent's parental authority is
not an insurmountable legal bar that precludes the filing of her Complaint.
2. Respondent's Complaint is anchored on an employer's liability for quasi-delict provided in Article 2180, in relation to Article 2176 of the Civil
Code. It was not fatal to respondent's cause that she herself did not adduce proof that Bautista acted within the scope of his authority. It was
sufficient that Abejar proved that petitioner was the registered owner of the van that hit Reyes.
The resolution of this case must consider two (2) rules. First, Article 2180's specification that "[e]mployers shall be liable for the damages caused
by their employees . . . acting within the scope of their assigned tasks[.]" Second, the operation of the registered-owner rule that registered
owners are liable for death or injuries caused by the operation of their vehicles.
Article 2180 requires proof of two things: first, an employment relationship between the driver and the owner; and second, that the driver acted
within the scope of his or her assigned tasks. On the other hand, applying the registered-owner rule only requires the plaintiff to prove that the
defendant-employer is the registered owner of the vehicle. The registered-owner rule was articulated as early as 1957 in Erezo, et al. v. Jepte,
where this court explained that the registration of motor vehicles, as required by Section 5 (a) of Republic Act No. 4136, the Land Transportation
and Traffic Code, was necessary "not to make said registration the operative act by which ownership in vehicles is transferred, . . . but to permit
the use and operation of the vehicle upon any public highway[.]"
Therefore, the appropriate approach is that in cases where both the registered-owner rule and Article 2180 apply, the plaintiff must first establish
that the employer is the registered owner of the vehicle in question. Once the plaintiff successfully proves ownership, there arises a disputable
presumption that the requirements of Article 2180 have been proven. As a consequence, the burden of proof shifts to the defendant to show that
no liability under Article 2180 has arisen. This disputable presumption, insofar as the registered owner of the vehicle in relation to the actual driver
is concerned, recognizes that between the owner and the victim, it is the former that should carry the costs of moving forward with the evidence.
The victim is, in many cases, a hapless pedestrian or motorist with hardly any means to uncover the employment relationship of the owner and
the driver, or any act that the owner may have done in relation to that employment.
Here, respondent presented a copy of the Certificate of Registration of the van that hit Reyes. The Certificate attests to petitioner's ownership of
the van. Petitioner itself did not dispute its ownership of the van. On the first, petitioner admitted that Bautista was its employee at the time of
the accident. On the second, petitioner was unable to prove that Bautista was not acting within the scope of his assigned tasks at the time of the
accident. On the third, petitioner likewise failed to prove that it exercised the requisite diligence in the selection and supervision of Bautista.
Employing a person holding a non-professional driver's license to operate another's motor vehicle violates Section 24 of the Land Transportation
and Traffic Code. Evidently, petitioner did not only fail to exercise due diligence when it selected Bautista as service driver; it also committed an
actual violation of law. For failing to overturn the presumption that the requirements of Article 2180 have been satisfied, petitioner must be held
liable.
Petitioner's interest and liability is distinct from that of its driver. Regardless of petitioner's employer-employee relationship with Bautista, liability
attaches to petitioner on account of its being the registered owner of a vehicle that figures in a mishap. This alone suffices. A determination of its
liability as owner can proceed independently of a consideration of how Bautista conducted himself as a driver. While certainly it is desirable that
a determination of Bautista's liability be made alongside that of the owner of the van he was driving, his non-inclusion in these proceedings does
not absolutely hamper a judicious resolution of respondent's plea for relief.
30. Mariano C. Mendoza and Elvira Lim v. Spouses Leonora J. Gomez AUTHOR:
and Gabriel V. Gomez NOTES:
G.R. no. 160110 June 18, 2014
TOPIC: Vicarious liability
PONENTE: Perez, J
CASE LAW/ DOCTRINE: The obligation imposed by Article 2176 is demandable not only for one’s own acts or omissions, but also for those of
persons for whom one is responsible. Employers shall be liable for the damages caused by their employees and household helpers acting within
the scope of their assigned tasks, even though the former are not engaged in any business of industry.
Emergency Recit: Mayamy bus, registered in the name of Petitioner Lim and driven by herein Mendoza (employee) hit an Isuzu elf truck owned
by respondent Gomez and driven by Perez. Also, lat the time of the collision, the bus intruded on the lane intended for the Isuzu truck. Having
encroached on the opposite lane, Mendoza was clearly in violation of traffic laws. Who among the actual owner or the registered owner of the
bus may be held liable? The court held that it is Lim who is liable.
FACTS:
 On 7 March 1997, an Isuzu Elf truck (Isuzu truck) with plate number UAW 582, owned by respondent Leonora J. Gomez (Leonora) and driven
by Antenojenes Perez (Perez), was hit by a Mayamy Transportation bus (Mayamy bus) with temporary plate number 1376-1280, registered
under the name of petitioner Elvira Lim (Lim) and driven by petitioner Mariano C. Mendoza (Mendoza). However, the actual owner of the
bus was SPO1 Cirilo Enriquez (Enriquez), who had the bus attached with Mayamy Transportation Company (Mayamy Transport) under the
so-called "kabit system."
 Owing to the incident, an Information for reckless imprudence resulting in damage to property and multiple physical injuries was filed against
Mendoza. Mendoza, however, eluded arrest, thus, respondents filed a separate complaint for damages against Mendoza and Lim, seeking
actual damages, compensation for lost income, moral damages, exemplary damages, attorney’s fees and costs of the suit.
 As a result of the incident, Perez,as well as the helpers on board the Isuzu truck, namely Melchor V. Anla (Anla), Romeo J. Banca (Banca), and
Jimmy Repisada (Repisada), sustained injuries necessitating medical treatment amounting to P11,267.35,which amount was shouldered by
respondents. Moreover, the Isuzu truck sustained extensive damages on its cowl, chassis, lights and steering wheel, amounting
to P142,757.40.
 Additionally, respondents averred that the mishap deprived them of a daily income of P1,000.00. Engaged in the business of buying plastic
scraps and delivering them to recycling plants, respondents claimed that the Isuzu truck was vital in the furtherance of their business.
 For their part, petitioners capitalized on the issue of ownership of the bus in question. Respondents argued that although the registered
owner was Lim, the actual owner of the bus was SPO1 Cirilo Enriquez (Enriquez), who had the bus attached with Mayamy Transportation
Company (Mayamy Transport) under the so-called "kabit system." Respondents then impleaded both Lim and Enriquez.
 Thus, the RTC disposed of the case as follows - judgment is hereby rendered in favor of the [respondents] and against the [petitioners]:
Displeased, petitioners appealed to the CA. After evaluating the damages awarded by the RTC, such were affirmed by the CA with the
exception of the award of unrealized income which the CA ordered deleted. Unsatisfied with the CA ruling, petitioners filed an appeal by
certiorari before the Court.
ISSUE(S): Who is deemed as Mendoza’s employer? Is it Enriquez, the actual owner of the bus or Lim, the registered owner of the bus?
HELD: LIM, registered owner of the bus.

RATIO:
 In impleading Lim, on the other hand, respondents invoke the latter’s vicarious liability as espoused in Article 2180 of the same Code: The
obligation imposed by Article 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is
responsible. Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their
assigned tasks, even though the former are not engaged in any business of industry.
 Mendoza’s employer may also be held liable under the doctrine of vicarious liability or imputed negligence. Under such doctrine, a person
who has not committed the act or omission which caused damage or injury to another may nevertheless be held civilly liable to the latter
either directly or subsidiarily under certain circumstances. In our jurisdiction, vicarious liability or imputed negligence is embodied in Article
2180 of the Civil Code and the basis for damages in the action under said article is the direct and primary negligence of the employer in the
selection or supervision, or both, of his employee.
 Generally, when an injury is caused by the negligence of a servant or employee, there instantly arises a presumption of law that there was
negligence on the part of the master or employer either in the selection of the servant or employee (culpa in eligiendo) or in the supervision
over him after the selection (culpa vigilando), or both. The presumption is juris tantum and not juris et de jure; consequently, it may be
rebutted. Accordingly, the general rule is that if the employer shows to the satisfaction of the court that in the selection and supervision of
his employee he has exercised the care and diligence of a good father of a family, the presumption is overcome and he is relieved of liability.
However, with the enactment of the motor vehicle registration law, the defenses available under Article 2180 of the Civil Code - that the
employee acts beyond the scope of his assigned task or that it exercised the due diligence of a good father of a family to prevent damage –
are no longer available to the registered owner of the motor vehicle, because the motor vehicle registration law, to a certain extent, modified
Article 2180.
 As such, there can be no other conclusion but to hold Lim vicariously liable with Mendoza.
 Lim is left without any recourse against Enriquez and Mendoza. Under the civil law principle of unjust enrichment, the registered owner of
the motor vehicle has a right to be indemnified by the actual employer of the driver; and under Article 2181 of the Civil Code, whoever pays
for the damage caused by his dependents or employees may recover from the latter what he has paid or delivered in satisfaction of the claim.
31 ACE NAVIGATION CO., INC.,vs FGU INSURANCE CORPORATION and PIONEER INSURANCE AND SURETY CORPORATION AUTHOR:
G.R. No. 194121, July 11, 2016 MONZON
TOPIC: G.R. No. 171591, 25 June 2012 NOTES:
PONENTE: PERLAS-BERNABE, J.
CASE LAW/ DOCTRINE A bill of lading is defined as "an instrument in writing, signed by a carrier or his agent, describing the freight so as to identify
it, stating the name of the consignor, the terms of the contract for carriage, and agreeing or directing that the freight to be delivered to the order
or assigns of a specified person at a specified place." It operates both as a receipt and as a contract. As a receipt, it recites the date and place of
shipment, describes the goods as to quantity, weight, dimensions, identification marks and condition, quality, and value. As a contract, it names
the contracting parties, which include the consignee, fixes the route, destination, and freight rates or charges, and stipulates the rights and
obligations assumed by the parties. As such, it shall only be binding upon the parties who make them, their assigns and heirs.
FACTS:
1. Cardia Limited (CARDIA) shipped on board M/V Pakarti Tiga at Shanghai Port 165,200 bags of Portland Grey Cement to be discharged at the
Port of Manila and delivered to its consignee, Heindrich Trading Corp. (HEINDRICH). The shipment was insured with respondents FGU and Pioneer
under a Marine Open Policy for the amount of ~Php 18 million.
• The vessel is owned by PAKARTI, which chartered it to SHINWA. Representing itself as the vessel’s owner, SHINWA entered into a charter party
contract with SKY, an agent of KEE YEH. SKY further chartered it to REGENCY.
2. REGENCY was the one which dealt directly with consignee HEINDRICH, and issued Clean Bill of Lading No. SM-1.
3. The vessel arrived at the Port of Manila and the shipment was discharged. However, upon inspection of HEINDRICH and petitioner Ace
Navigation Co., Inc. (ACENAV), agent of CARDIA, it was found that out that 43,905 bags were in bad order and condition.
4. CARDIA, and the charterer, REGENCY, FGU and Pioneer, as co-insurers of the cargo, each paid the consignee, HEINDRICH, and consequently
became subrogated to all the rights and causes of action accruing to HEINDRICH.
5. FGU and Pioneer filed a complaint for damages against PAKARTI, SHINWA, SKY, REGENCY, and ACENAV.
6. RTC dismissed the complaint. CA found that the parties entered into a time charter party, not a demise or bareboat charter where the owner
completely and exclusively relinquishes possession, command and navigation to the charterer. It found the parties jointly and severally liable.
PAKARTI, SHINWA, KEE YEH, and SKY to shoulder 70% of the claim for failure to prove that they exercised extraordinary diligence in the vigilance
over the bags of cement entrusted to them for transport. CARDIA and ACENAV to shoulder 30% upon a finding that the damage was partly due to
the cargo's inferior packing.
7. ACENAV asserts that it cannot be held liable for the damages sought to be collected by the respondents saying that it was not a party to the bill
of lading,
ISSUE(S): Whether ACENAV may be held liable to FGU and Pioneer for 30% of their claim. - No. The complaint against Ace dismissed.
RATIO:
 A bill of lading is defined as "an instrument in writing, signed by a carrier or his agent, describing the freight so as to identify it, stating the
name of the consignor, the terms of the contract for carriage, and agreeing or directing that the freight to be delivered to the order or assigns
of a specified person at a specified place." It operates both as a receipt and as a contract. As a receipt, it recites the date and place of
shipment, describes the goods as to quantity, weight, dimensions, identification marks and condition, quality, and value. As a contract, it
names the contracting parties, which include the consignee, fixes the route, destination, and freight rates or charges, and stipulates the rights
and obligations assumed by the parties. As such, it shall only be binding upon the parties who make them, their assigns and heirs.
 In this case, the original parties to the bill of lading are: (a) the shipper CARDIA; (b) the carrier PAKARTI; and (c) the consignee HEINDRICH.
However, by virtue of their relationship with PAKARTI under separate charter arrangements, SHINWA, KEE YEH and its agent SKY likewise
became parties to the bill of lading. In the same vein, ACENAV, as admitted agent of CARDIA, also became a party to the said contract of
carriage.
 FGU and Pioneer maintain that ACENAV is a ship agent and not a mere agent of CARDIA, as found by both the CA and the RTC. The Court
disagrees. Article 586 of the Code of Commerce provides: The shipowner and the ship agent shall be civilly liable for the acts of the captain
and for the obligations contracted by the latter to repair, equip, and provision the vessel, provided the creditor proves that the amount claimed
was invested therein. Records show that the obligation of ACENAV was limited to informing the consignee HEINDRICH of the arrival of the
vessel in order for the latter to immediately take possession of the goods. No evidence was offered to establish that ACENAV had a hand in
the provisioning of the vessel or that it represented the carrier, its charterers, or the vessel at any time during the unloading of the goods.
Clearly, ACENAV's participation was simply to assume responsibility over the cargo when they were unloaded from the vessel. Hence, no
reversible error was committed by the courts a quo in holding that ACENAV was not a ship agent within the meaning and context of Article
586 of the Code of Commerce, but a mere agent of CARDIA, the shipper.
 Article 1897 of the Civil Code provides that an agent is not personally liable to the party with whom he contracts, unless he expressly binds
himself or exceeds the limits of his authority without giving such party sufficient notice of his powers. Both exceptions do not obtain in this
case. Records are bereft of any showing that ACENAV exceeded its authority in the discharge of its duties as a mere agent of CARDIA. Neither
was it alleged, much less proved, that ACENAV's limited obligation as agent of the shipper, CARDIA, was not known to HEINDRICH.
Furthermore, since CARDIA was not impleaded as a party in the instant suit, the liability attributed upon it by the CA on the basis of its finding
that the damage sustained by the cargo was due to improper packing cannot be borne by ACENAV. As mere agent, ACENAV cannot be made
responsible or held accountable for the damage supposedly caused by its principal.
32 MOF Company, Inc. vs. Shin Yang Brokerage Corp. AUTHOR: Ong
G.R. No. 172822; Dec. 18, 2009 NOTES:
TOPIC: Bill of Lading
PONENTE: Del Castillo
CASE LAW/ DOCTRINE: A consignee, although not a signatory to the contract of carriage between the shipper and the carrier, becomes a party to
the contract by reason of either a) the relationship of agency between the consignee and the shipper/ consignor; b) the unequivocal acceptance
of the bill of lading delivered to the consignee, with full knowledge of its contents or c) availment of the stipulation pour autrui, i.e., when the
consignee, a third person, demands before the carrier the fulfillment of the stipulation made by the consignor/shipper in the consignee's favor,
specifically the delivery of the goods/cargoes shipped.
Emergency Recit: Halla Trading shipped secondhand cars to Manila. Hanjin Shipping prepared the bill of lading and named Shin Yang as the
consignee and indicated that the payment was on a Freight Collect basis. MOF Company, Hanjin's exclusive general agent in the Philippines,
demanded the freight charges from Shin Yang but the latter refused. MOF filed a collection of sum of money before the MTC. The MTC ruled in
favor of MOF. The RTC affirmed. The CA reversed. Issue: Whether or not Shin Yang can be made liable to pay the freight charges as stipulated in
the bill of lading. The SC ruled that Shin Yang is not bound because it consistently denied in all of its pleadings that it authorized Halla Trading, Co.
to ship the goods on its behalf; or that it got hold of the bill of lading covering the shipment or that it demanded the release of the cargo

FACTS:
 Halla Trading Co., a company based in Korea, shipped to Manila secondhand cars and other articles on board the vessel Hanjin Busan 0238W.
o The bill of lading covering the shipment, which was prepared by the carrier Hanjin Shipping Co., Ltd. (Hanjin), named respondent
Shin Yang Brokerage Corp. (Shin Yang) as the consignee and indicated that payment was on a "Freight Collect" basis, i.e., that the
consignee/receiver of the goods would be the one to pay for the freight and other charges in the total amount of P57,646.00.
 The shipment arrived in Manila. Petitioner MOF Company, Inc. (MOF), Hanjin's exclusive general agent in the Philippines, repeatedly
demanded the payment of ocean freight, documentation fee and terminal handling charges from Shin Yang. The latter failed and refused to
pay contending that it did not cause the importation of the goods, that it is only the Consolidator of the said shipment, that the ultimate
consignee did not endorse in its favor the original bill of lading and that the bill of lading was prepared without its consent.
 MOF filed a case for sum of money before the MTC.
o MOF alleged that Shin Yang, a regular client, caused the importation and shipment of the goods and assured it that ocean freight
and other charges would be paid upon arrival of the goods in Manila. Yet, after Hanjin's compliance, Shin Yang unjustly breached
its obligation to pay. MOF argued that Shin Yang, as the named consignee in the bill of lading, entered itself as a party to the
contract and bound itself to the "Freight Collect" arrangement. MOF thus prayed for the payment of P57,646.00 representing
ocean freight, documentation fee and terminal handling charges as well as damages and attorney's fees.
 Claiming that it is merely a consolidator/forwarder and that Bill of Lading was not endorsed to it by the ultimate consignee, Shin Yang denied
any involvement in shipping the goods or in promising to shoulder the freightage. It asserted that it never authorized Halla Trading Co. to
ship the articles or to have its name included in the bill of lading. Shin Yang also alleged that MOF failed to present supporting documents
to prove that it was Shin Yang that caused the importation or the one that assured payment of the shipping charges upon arrival of the
goods in Manila.
 MTC Ruling: ruled in favor of MOF Company
 RTC Ruling: affirmed the MTC Ruling
 CA Ruling: reversed the lower court’s ruling
ISSUE(S): Whether respondent Shin Yang who was not an agent of the shipper and who did not make any demand for the fulfillment of the
stipulations of the bill of lading drawn in its favor is liable to pay the corresponding freight and handling charges.
(In short: Whether or not Shin Yang can be made liable to pay the freight charges as stipulated in the bill of lading)
HELD: No. Shin Yang is not liable.

RATIO:
 A consignee, although not a signatory to the contract of carriage between the shipper and the carrier, becomes a party to the contract by
reason of either a) the relationship of agency between the consignee and the shipper/ consignor; b) the unequivocal acceptance of the bill
of lading delivered to the consignee, with full knowledge of its contents or c) availment of the stipulation pour autrui, i.e., when the consignee,
a third person, demands before the carrier the fulfillment of the stipulation made by the consignor/shipper in the consignee's favor,
specifically the delivery of the goods/cargoes shipped.
 In the instant case, Shin Yang consistently denied in all of its pleadings that it authorized Halla Trading, Co. to ship the goods on its behalf;
or that it got hold of the bill of lading covering the shipment or that it demanded the release of the cargo. Basic is the rule in evidence that
the burden of proof lies upon him who asserts it, not upon him who denies, since, by the nature of things, he who denies a fact cannot
produce any proof of it.Thus, MOF has the burden to controvert all these denials, it being insistent that Shin Yang asserted itself as the
consignee and the one that caused the shipment of the goods to the Philippines.
 In civil cases, the party having the burden of proof must establish his case by preponderance of evidence, which means evidence which is of
greater weight, or more convincing than that which is offered in opposition to it. Here, MOF failed to meet the required quantum of proof.
Other than presenting the bill of lading, which, at most, proves that the carrier acknowledged receipt of the subject cargo from the shipper
and that the consignee named is to shoulder the freightage, MOF has not adduced any other credible evidence to strengthen its cause of
action. It did not even present any witness in support of its allegation that it was Shin Yang which furnished all the details indicated in the bill
of lading and that Shin Yang consented to shoulder the shipment costs. There is also nothing in the records which would indicate that Shin
Yang was an agent of Halla Trading Co. or that it exercised any act that would bind it as a named consignee. Thus, the CA correctly dismissed
the suit for failure of petitioner to establish its cause against respondent.
 WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals dated March 22, 2006 dismissing petitioner's complaint
and the Resolution dated May 25, 2006 denying the motion for reconsideration are AFFIRMED.
33. Designer Baskets Inc v. Air Sea Transport Inc. AUTHOR: JC

G.R. No. 184513 Mar 9, 2016
TOPIC: Bill of Lading
PONENTE: Jardeleza, J.
CASE LAW/ DOCTRINE:
 Bill of lading, defined:
o written acknowledgment of the receipt of goods and an agreement to transport and to deliver them at a specified place to a person
named or on his order.
o "an instrument in writing, signed by a carrier or his agent, describing the freight so as to identify it, stating the name of the
consignor, the terms of the contract of carriage, and agreeing or directing that the freight be delivered to bearer, to order or to a
specified person at a specified place

o A legal evidence of the contract of carriage between the former and the latter. It defines the rights and liabilities of the parties
about the contract of carriage. The stipulations in the bill of lading are valid and binding unless they are contrary to law, morals,
customs, public order or public policy
 law and jurisprudence is settled that the surrender of the original bill of lading is not absolute; that in case of loss or any other cause, a
common carrier may release the goods to the consignee even without it
Emergency Recit: Ambiente ordered from DBI assorted items. DBI delivered the shipment to ACCLI in w/c the latter issued triplicate copies of the
bill of lading to DBI. Meanwhile, Ambiente and ASTI agreed to deliver the shipment w/o the surrender of the relevant bills due to the non arrival
or loss thereof. ASTI released the shipment to Ambiente w/o the consent of DBI w/o it receving the payment of the total cost of the shipment.
DBI claims for payment but was denied. RTC held Ambiente ACCLI and ASTI liable. CA held only Ambiente liable. SC ruled that ASTI and ACCLI is
not solidarily liable.
FACTS:
 Designer Baskets Inc (DBI) is a domestic corp. engaged in the production of housewares and handicraft items for export. Asia Cargo Container
Lines (ACCLI) is a domestic corp. acting as agent of Asia Sea Transport Inc. (ASTI), a used based corp. engaged in a carrier transport business
in the PH.
 Oct 1995: Ambiente, a foreign-based corp. ordered from DBI 223 cartons of assorted items worth $12,590.87.
 Ambiente designated ACCLI as the forwarding agent that will ship out its order from the Phil. To the US.
 Jan 7, 1996: DBI delivered the shipment to ACCLI from Manila and delivery to Ambiente in California. ACCLI issued to DBI TRIPLICATE copies
of ASTI Bill of Landing. DBI retained the originals pending the payment of the goods by Ambiente.
 Jan 23, 1996: Ambiente and ASTI agreed that ASTI will deliver the shipment to it or to its order of Ambiente w/o the surrender of the
relevant bills of landing due to the non-arrival or loss thereof. Ambiente undertook to indemnify and hold ASTI and its agent free from any
liability as a result of the shipment. Thereafter, ASTI release the shipment to Ambiente w/o the knowledge of DBI and w/o it receving the
payment for the total cost of the shipment.
 DBI made demands to Ambiente for the payment of the shipment but no avail. Thus, DBI filed compliant against ASTI, ACCLI and ACCLI’s
stockholders for the payment of the value of the shipment arguing that under the Bill of Lading, ASTI and ACCLI is to release and deliver the
shipment to the consignee only after the original copy of the Bill of Lading is surrendered to them; otherwise they become liable to the
shipper for the value of the shipment. Amendments were filed subsequently adding the stockholders and the agents of ACCLI solidarily liable
to the issue at hand.
 RTC: ASTI ACCLI and Ambiente were held solidarily liable to DBI for the value of the shipment.
o TC further declared that Ambiente is clearly liable. As the buyer, it has an obligation to pay the value of the shipment. TC noted
that the transaction is a simple sale transaction w/c had been perfected especially since delivery had already been affected and w/
only the payment for the shipment remaining left to be done.
o ASTI was held as a common carrier bound to observe extraordinary diligence in the vigilance over the goods and was liable due to
the non-presentation of the bill of landing. That ASTI entered into an agreement with Ambiente to release the shipment w/o the
surrender of the bill of landing.
o TC added tha the Ambiente and ASTI agreement does not include DBI because DBI has no privity to the agreement, not bound by
its terms.
o ACCLI should have prevented Ambiente and ASTI to enter such agreement disregarding the rights of DBI under the civil and
commercial laws.
 CA: Ambiente is liable but ASTI and ACCLI is absolved from any liability from DBI arguing that the law does not require that the bill of lading
be surrendered by the buyer/consignee before the carrier can release the goods to the former as suggested in Art. 353 of the Code of
Commerce. Furthermore, DBI failed to present evidence to privity its assertion that the surrender of the bill of lading upon delivery of the
goods is a common mercantile practice. As to ASTI, it explained that its only obligation as a common carrier was to deliver the shipment in
good condition.
ISSUE(S): Whether ASTI and ACCLI may be held solidarily liable to DBI? NO
RATIO:
 Here ACCLI, as agent of ASTI, issued the Bill of Lading to BDI. This bill of lading governs the rights, obligations, and liabilities of DBI and ASTI.
DBI failed to prove that bill of lading shows requirement to release and deliver the shipment to the consignee only after the original copy
of the said bill is surrender to them. There is no obligation on the part of ASTI and ACCLI to release goods only upon the surrender of the
original bill of lading.
 Furthermore, a carrier is allowed by law to release the goods to the consignee even w/o the latter’s surrender of the bill of lading as
provided in Art 353 of the Code of Commerce, to wit: … In case the consignee, upon receiving the goods, cannot return the bill of lading
subscribed by the carrier, because of its loss or any other cause, he must give the latter a receipt for the goods delivered, this receipt
producing the same effects as the return of the bill of lading.
 We already ruled in Republic v. Lorenzo Shipping Corp. that non-surrender of the original bill of lading does not violate the carrier’s duty
of extra ordinary diligence over the goods. Law and jurisprudence is settled that the surrender of the original bill of lading is not absolute;
that in case of loss or any other cause, a common carrier may release the goods to the consignee even without it.
 Here, Ambiente could not produce the bill of lading covering the shipment not because it was lost, but for another cause: the bill of lading
was retained by DBI pending Ambiente's full payment of the shipment. Ambiente and ASTI then entered into Agreement, wherein the former
asked the latter to release the shipment even without the surrender of the bill of lading. The execution of this Agreement, and the undisputed
fact that the shipment was released to Ambiente pursuant to it, to our mind, operates as a receipt in substantial compliance with the last
paragraph of Art 353 of the Code of Commerce.
 As to DBI argument that ASTI and ACCLI is liable for damages because they failed to exercise extraordinary diligence over the goods pursuant
to Art. 1733, 1734 and 1735 of the Civil Code, DBI is wrong. Art.1733, 1734, and 1735 speak of the common carrier's responsibility over the
goods. They refer to the general liability of common carriers in case of loss, destruction or deterioration of goods and the presumption of
negligence against them. This responsibility or duty of the common carrier 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, or constructively, by the carrier to the consignee,
or to the person who has a right to receive them.
34) Phil-Nippon Kyoei, Corp. vs. Rosalia T. Gudelosao, et. al., G.R. No. AUTHOR: Jeck
181375, July 13, 2016
Topic: Doctrine of limited liability of trade owners
Ponente: Jardeleza, J.
CASE LAW/ DOCTRINE:
 Articles 587 and 590 of the Code of Commerce embody the universal principle of limited liability in all cases wherein the ship owner or
agent may be properly held liable for the negligent or illicit acts of the captain. These articles precisely intend to limit the liability of the
shipowner or agent to the value of the vessel, its appurtenances and freightage earned in the voyage, provided that the owner or agent
abandons the vessel.
 When the vessel is totally lost, in which case abandonment is not required because there in no vessel to abandon, the liability of the ship
owner or agent for damages is extinguished.
 Nonetheless, it is not absolute and is without exception 1. Where the injury or death to a passenger is due either to the fault of the
shipowner, or to the concurring negligence of the shipowner and the captain; 2. Where the vessel is insured; and 3. In workmen’s
compensation claims.
Emergency Recit: Philippine Nippon purchased a RORO MV Mahlia in Japan. Hired the eight ( 8) crew members. Secured a Marine insurance
policy to answer for the damage, loss and 3rd party liability arising from the occurrence of the perils of the sea. However, the vessel sank while
the vessel is still within Japanese waters resulting to the death of 7 crew members. Hence the claim from the Respondents. NLRC absolved
Philippine Nippon from its liability, which granted by CA. Thus this petition.
FACTS:
 Petitioner, Nippon a domestic shipping corporation, purchased a RORO passenger/cargo “MV Mahlia” in Japan in February 2003. For the
vessel’s one month conduction voyage from Japan to the Philippines, hired Edwin Gudelosao, Virgilio Tancontian and six other crew
members.
 Petitioner Nippon secured a Marine Insurance Policy from SSSICI over the vessel for P10.8M against loss, damage and third party liability
or expense arising from the occurrence of the perils of the sea for the voyage from Japan to Batangas. While still within Japanese waters,
the vessel sank due to extreme bad weather condition. Only the chief engineer survived.
 Respondents, as heirs and beneficiaries filed separate complaints for death benefits and other damages against petitioner Nippon.
 Labor Arbiter, Magat rendered a decision finding solidary liability among Petitioner, TEMMPC, TMCL, and Capt. Orbeta. LA also found SSSICI
liable to the respondents for the proceeds of the Personal Accident Policies. LA however, ruled that the liability of the Petitioner Nippon
shall be deemed extinguished only upon SSSICI’s payment of the insurance proceeds.
 NLRC absolved petitioner Nippon, TEMMPC and TMCL and Capt. Orbeta from any liability rule. It however, affirmed SSSICI’s liability after
finding that the Personal Accident Policies answer for the death benefit claims under th POEA-Standard Employment Contract.
 Respondents filed petition for certiorari with CA and also argued that the NLRC gravely abused its discretion in ruling that the obligation to
pay the surviving heirs rests solely on SSSICI, which CA granted the petition. Hence, this petition.
ISSUE(S): Whether or not Phil-Nippon can invoke the Doctrine of Limited Liability of a Trade Owner Rule?
RATIO: No.
 The limited liability rule is not absolute and is without exceptions. It does not apply in cases:
1. Where the injury or death to a passenger is due either to the fault of the shipowner, or to the concurring negligence of he shipowner
and the captain
2. Where the vessel is insured
3. In workmen’s compensation claims
 The real and hypothecary nature of the liability of the shipowner or agent embodied in the provisions of the Maritime Law under the Code
of Commerce. To offset against these adverse conditions and to encourage shipbuilding and maritime commerce, it was deemed necessary
to confine the liability of the owner or agent in arising from the operation of a ship to the vessel, equipment, and freight or insurance, if
any, so that if the shipowner or agent abandoned the ship, equipment and freight, his liability was extinguished.
 But the provisions of the Code of Commerce invoked by appellant have no room in the application of the Workmen’s Compensation Act
which seeks to improve and aims at the amelioration of the condition of laborers and employee. It is not the liability for the damage or loss
of the cargo or injury to, or death of a passenger by or through the misconduct of the captain or master of the ship nor the liability for the
loss of the ship as a result of collision nor the responsibility for wages of the crew but a liability created by a statue to compensate employees
and laborers in cases of injury received by or inflicted upon them while engaged in the performance of their work or employment or the
heirs and dependents of such laborers and employees in the event of death caused by their employment.
35. PHILAM INSURANCE v. HEUNG-A SHIPPING and WALLEM Panganiban

PHILIPPINES SHIPPING See issue no2 for COGSA
G.R. No. 187701 | July 23, 2014 | REYES, J.
TOPIC: COGSA
DOCTRINE: The law of the country to which the goods are to be transported shall govern the liability of the common carrier; In all matters not
regulated by Civil Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws, such as
the COGSA; Code of Commerce provides that the value of the goods which the carrier must pay in cases if loss or misplacement shall be determined
in accordance with that declared in the bill of lading; In case, however, of the shipper’s failure to declare the value of the goods in the bill of lading,
COGSA provides: Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the
transportation of goods in an amount exceeding $500 per package lawful money of the United States xxx
ER: Novartis as consignee imported from Jinsuk packaging materials through Protop as freight forwarder. Protop shipped it through Dongnama
Shipping which loaded the same to MV Heung A whose ship agent in PH is Wallem PH. The cargoes were insured by Novartis to Philam. When it
arrived in Manila, it was discharged into ATI and was withdrawn by Stephanie Customs, its lab technician Caparoso found out that the boxes were
wet and damp so she rejected the entire shipment. Philam as insurer paid Novartis, so Philam (due to subrogation) claimed against Protop, Sagawa,
ATI and Stephanie, which denied the claim of Philam. Wallem as ship agent of Heung-A argued that any liability which may be imputed to it is
limited only to US$8,500.00 pursuant to the Carriage of Goods by Sea Act (COGSA). RTC and CA both ruled that Heung-A (common carrier) through
Wallem (ship agent) and Protop are liable, but the liability is limited to US$8,500.00 pursuant to the liability limitation under the COGSA since the
shipper failed to declare the value of the subject cargo in the bill of lading. SC agreed based on Package Liability Limitation - in the absence a
shipper’s declaration of the value of the goods in the bill of lading provisions of the COGSA shall apply;
FACTS:
1. Novartis imported from Jinsuk in S. Korea, 19 pallets of 200 rolls of Ovaltine Power 18 Glaminated plastic packaging material.
2. In order to ship the goods to the PH, Jinsuk engaged the services of Protop Shipping, a freight forwarder in S. Korea, to forward the goods to
Novartis.
3. Bill of Lading issued by Protop, the cargo was on freight prepaid basis and on "shipper’s load and count" - the container was packed with
cargo by one shipper where the quantity, description, and condition of the cargo is the sole responsibility of the shipper.
4. Sagawa designated as the entity in PH which will get the delivery contract.
5. Protop shipped the cargo through Dongnama Shipping which loaded them on M/V Heung-A owned and operated by Heung-A Shipping,
Korean corporation, pursuant to ‘slot charter agreement’ whereby a space in the latter’s vessel was reserved for the exclusive use of the
former.
6. Wallem PH Shipping is the ship agent of Heung-A in PH.
7. Novartis insured the shipment with Philam against all loss, damage, liability, or expense before, during transit, and even after the discharge
of the shipment from the carrying vessel until its complete delivery its premises.
8. The vessel arrived at the port of Manila which was discharged into the custody of Asian Terminals (ATI) as the customs arrastre operator.
9. The shipment was withdrawn by Novartis’ broker, Stephanie Customs.
10. The shipment reached Novartis’ premises and was inspected by the company’s Laboratory Technician, Caparoso.
11. Caparoso discovered that the boxes of the shipment were wet and damp. Parts of the container van were damaged and rusty. Water droplets
on the walls and floor was wet.
12. Since the damaged packaging materials might contaminate the product they were meant to hold, Caparoso rejected the entire shipment.
13. The survey report stated that the wetting sustained may have reasonably be attributed to the water seepage that gain entry into the sea van
container damaged roofs (minutes hole) during transit period.
14. Aggrieved, Novartis demanded indemnification for the loss from Protop, Sagawa, ATI, and Stephanie; but was denied.
15. Insurance claims were filed with Philam which paid the insured value of the shipment ₱1.9M. Due to subrogation, Philam claimed damages
against Protop, Sagawa, ATI, and Stephanie. Philam added Wallem and Heung-A as defendants. All denied liability for the lost/damaged
shipment.
16. Sagawa refuted the allegation that it is the ship agent of Protop and argued that a ship agent represents the owner of the vessel and not a
mere freight forwarder like Protop.
17. Stephanie asserted that its only role was its physical retrieval from ATI and thereafter its delivery to Novartis. The damage to the shipment
was due to salt water which means that it could not have occurred while Stephanie was in possession thereof.
18. Wallem alleged that the damage and shortages in the shipment were the responsibility of the shipper, Jinsuk, because it was taken on board
on a "shipper’s load and count" basis - it was the shipper that packed, contained, and stuffed the shipment in the container van without the
carrier’s participation.
19. In the alternative, WALLEM averred that any liability which may be imputed to it is limited only to US$8,500.00 pursuant to the Carriage
of Goods by Sea Act (COGSA).
20. Heung-A argued that it is not the carrier. The carrier was either Protop, a freight forwarder or Dongnama which provided the container van.
21. RTC ruled that the damage to the shipment occurred onboard the vessel while in transit from Korea to the Philippines.
a. Heung-A is the common carrier of the shipment. That despite the slot charter agreement, it was still the obligation of Heung-A to
transport the cargo from Korea to Manila and thus any damage to the shipment is the responsibility of the carrier to the
consignee.
b. Wallem is liable as Heung-A’s ship agent in PH, while Protop was liable because the damage sustained was due to the bad condition
of the container van.
22. CA agreed with the RTC. CA limited the liability of Protop, Wallem, and Heung-A to US$8,500.00 (17 x $500) pursuant to the liability
limitation under the COGSA since the shipper failed to declare the value of the subject cargo in the bill of lading and since they could not
be made answerable for the 2 unaccounted pallets because the shipment was on a "shipper’s load, count and seal" basis.
ISSUE: WON the shipment sustained damage while in the possession and custody of Heung-A? YES.
 Negligence occurred while the container van was in transit, in Heung-A’s possession, control and custody as the carrier. Goods were
damaged by sea water while in transit on board Heung-A’s vessel.
 Heung-A was bound to exercise extraordinary diligence in conveying the shipment and its slot charter agreement with Dongnama did not
relieve it of any accountability for the shipment.
 The charter party between Heung-A and Dongnama was a contract of affreightment and not a bare boat or demise charter.

 A charter party has two types.
o First, it could be a contract of affreightment whereby the use of shipping space on vessel is leased in part or as a whole, to carry
goods for others. The voyage remains under the responsibility of the carrier and it is answerable for the loss of goods received
for transportation.
o Second, charter by demise or bareboat charter under which the whole vessel is let to the charterer with a transfer to him of its
entire command and possession over its navigation, including the master and the crew, who are his servants. The charterer
becomes, in effect, the owner for the voyage or service stipulated and hence liable for damages or loss sustained by the goods
transported.
 Heung-A remained responsible as the carrier, hence, answerable for the damages incurred by the goods received for transportation.
 GR: Common carriers are presumed to have been at fault or negligent if the goods they transported deteriorated or got lost or destroyed.
o XPN: they prove that they exercised extraordinary diligence
 Art 1742 of the Civil Code, even if the loss, destruction, or deterioration of the goods should be caused by the faulty nature of the
containers, the common carrier must exercise due diligence to forestall or lessen the loss.
 Here, Heung-A failed to give adequate explanation as to how the shipment inside the container van was handled, stored and preserved to
forestall or prevent any damage or loss while the same was in its custody and control.
 Protop is solidarily liable with Heung-A for the damaged shipment in view of the bill of lading issued to Novartis.
ISSUE: WON HEUNG-A’s liability can be limited to US$500 per package pursuant to the COGSA? YES. Based on Package Liability Limitation.
 Art 1753 of the Civil Code, the law of the country to which the goods are to be transported shall govern the liability of the common carrier
for their loss, destruction or deterioration.
 The shipment was being transported to PH, Civil Code shall apply.
 In all matters not regulated by Civil Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and
by special laws, such as the COGSA.
 Civil Code contains provisions making the common carrier liable for loss/damage to the goods transported, but it failed to outline the manner
of determining the amount of such liability.
 Art 372 of the Code of Commerce fills in this gap.
o Article 372: The value of the goods which the carrier must pay in cases if loss or misplacement shall be determined in accordance
with that declared in the bill of lading, the shipper not being allowed to present proof that among the goods declared therein there
were articles of greater value and money.
 In case, however, of the shipper’s failure to declare the value of the goods in the bill of lading, Sec 4, par 5 of the COGSA provides:
o Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the
transportation of goods in an amount exceeding $500 per package lawful money of the United States, or in case of goods not
shipped in packages, per customary freight unit, or the equivalent of that sum in other currency, unless the nature and value of
such goods have been declared by the shipper before shipment and inserted in the bill of lading. This declaration, if embodied
in the bill of lading shall be prima facie evidence, but shall be conclusive on the carrier.
 Hence, in the absence a shipper’s declaration of the value of the goods in the bill of lading provisions of the COGSA shall apply.
 Heung-A, Wallem, Protop’s liability is limited to $500 per package/ pallet.
PRESCRIPTIVE PERIOD
 Prescriptive period for filing an action for lost/damaged goods governed by contracts of carriage by sea to and from Philippine ports in foreign
trade is governed by par 6, Sec 3 of the COGSA which states:
o (6) Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at
the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof
under the contract of carriage, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described
in the bill of lading. If the loss or damage is not apparent, the notice must be given within three days of the delivery.
 Said notice of loss or damage maybe endorsed upon the receipt for the goods given by the person taking delivery thereof.
 In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year
after delivery of the goods or the date when the goods should have been delivered: Provided, That if a notice of loss or damage, either
apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit
within one year after the delivery of the goods or the date when the goods should have been delivered.
 In this case, the consignee, NOVARTIS, received the subject shipment on January 5, 2001. PHILAM, as the subrogee of NOVARTIS, filed a claim
against PROTOP on June 4, 2001, against WALLEM on October 12, 2001 and against HEUNG-A on December 11, 2001, or all within the one-
year prescriptive period. Verily then, despite NOV AR TIS' failure to comply with the three-day notice requirement, its subrogee PHILAM is
not barred from seeking reimbursement from PROTOP, HEUNG-A and WALLEM because the demands for payment were timely filed.
36 ASIAN TERMINALS, INC., v. PHILAM INSURANCE CO., INC. (NOW CHARTIS PHILIPPINES INSURANCE, INC.) AUTHOR: Ramos
[G.R. 181163, July 24, 2013] Long case. ER muna.
PHILAM INSURANCE CO., INC. (NOW CHARTIS PHILIPPINES INSURANCE, INC.), v. WESTWIND SHIPPING 3 petitions.
CORPORATION AND ASIAN TERMINALS, INC. [G.R. 181262, July 24, 2013] Skipped the discussion on
WESTWIND SHIPPING CORPORATION, v. PHILAM INSURANCE CO., INC. (NOW CHARTIS PHILIPPINES questions of fact.
INSURANCE, INC.) AND ASIAN TERMINALS, INC. [G.R. 181319, July 24, 2013] (exceptions applied as TC
TOPIC: Carriage of Goods by Sea Act (COGSA) PONENTE: Villarama, Jr., J. and CA conflicted)
Didn’t dwell on the insurance
part na din.
DOCTRINE:
 COGSA (Public Act 521 of the 74th US Congress), was made applicable to all contracts for the carriage of goods by sea to and from Philippine
ports in foreign trade by virtue of CA 65, Sec. 1.
 PRESCRIPTIVE PERIOD for filing suit: COGSA Sec 3 (6) states that failure to comply with the notice requirement shall NOT affect or prejudice
the right of the shipper to bring suit within one year after delivery of the goods.
ER: Universal Motors, through a letter of credit, had car parts shipped from Japan to Manila. In a shipment insured by Philam, one of parts in one
of the 219 cases were found to be damaged. Such damage was determined to have been caused by ATI stevedores (arrastre) – under the
supervision and control of Westwind (carrier) – when it unloaded the same using an overtightened cable string hold. Due to ATI and Westwind’s
refusal to pay, Universal Motors filed a claim with Philam, to which they issued a subrogation receipt. Philam filed the complaint in question.
 RTC and CA ruled in favor of Philam, holding ATI and Westwind solidarily liable. However, CA declined Philam’s claim involving six more
damaged parts, as such was raised only on appeal. SC upheld the lower courts’ ruling.
 Westwind, among other things, argued that Philam’s cause of action already prescribed, as the action was brought 4 months after the delivery
of the goods, when the Code of Commerce required a max of 7 days to claim at the most.
 SC disagreed. Under COGSA – which applies to carriage of goods to and from PH by virtue of CA 65 – the prescriptive period for filing suit is
one year after delivery.
FACTS:
 Apr 15, 1995: Nichimen Corporation shipped to Universal Motors Corp. 219 packages containing 120 units of brand new Nissan Pickup Truck
Double Cab 4x2 model, without engine, tires and batteries, on board the vessel S/S “Calayan Iris” from Japan to Manila. The shipment
(declared value of P29.4M) was insured with Philam.
 Apr 20: vessel arrived in Manila. When the shipment was unloaded by ATI, 2 packages were found to be in bad order and were stored in CFS
Warehouse in Pier 5 for safekeeping.
 May 11: the shipment was withdrawn by R.F. Revilla Customs Brokerage, Inc. (broker of Universal Motors) and delivered to the latter’s
warehouse.
o It was found that one Frame Axle Sub without LWR was deeply dented on the buffle plate while six Frame Assembly with Bush
were deformed and misaligned.
o Owing to the extent of the damage to said cargoes, Universal Motors declared them a total loss.
 Aug 4: Universal Motors filed a claim for damages (P643,963.84) against Westwind, ATI and R.F. Revilla Customs Brokerage, Inc. (Unheeded)
It then sought reparation from and was compensated (P633,957.15) by Philam. Universal Motors issued a Subrogation Receipt in favor of
Philam
 Jan 18, 1996: Philam filed a Complaint for damages against Westwind, ATI and R.F. Revilla Customs Brokerage
 RTC: Westwind and ATI to pay Philam P633,957.15, with 12% p.a. int. + P158,989.28 atty’s fees
o the subject cargoes were compressed while being hoisted using a cable that was too short and taut.
o while the staff of ATI undertook the physical unloading of the cargoes from the carrying vessel, Westwind’s duty officer exercised
full supervision and control throughout the process.
o absolved R.F. Revilla Customs Brokerage, Inc. from liability as the cargoes were damaged before delivery
 CA: Affirmed RTC, with modifications: Westwind and ATI to pay Philam, jointly and severally, P190,684.48 with 12% p.a. int. until fully paid +
P47,671 atty’s fees
o Philam may NOT modify its allegations on appeal (new claims on the 6 pcs of frame assembly excluded)
 In its complaint, it claimed that 1 pc. FRAME AXLE SUB W/O LWR from Case 03-245-42K/1 and 6 pcs. of FRAME ASSEMBLY
WITH BUSH from Case 03-245-51K were deformed.
 BUT in its Appellee’s Brief, it claimed for the first time that the 6 pcs. of Frame Assembly with Bush purportedly damaged
were ALSO inside Case No. 03-245-42K/1
Parties’ arguments
 ATI: disowns liability for the damage and shifts the blame to Westwind, whom it charges with negligence in the supervision of the stevedores
who unloaded the cargoes.
o damage could have been averted had Westwind observed extraordinary diligence in handling the goods.
o Case 03-245-42K/1 was weak and defective as it alone sustained damage (of 219 packeges)
 Philam: agrees with CA in holding Westwind and ATI liable, but appeals the disallowance of its claim for the value of six Chassis Frame
Assembly which were likewise supposedly inside Case 03-245-51K and 03-245-42K/1
 Westwind: denies joint liability with ATI
o It ceased to have responsibility over the cargoes as provided in par. 4 of the Bill of Lading – responsibility of the carrier shall cease
when the goods are taken into the custody of the arrastre
o sole liability rests on ATI since it was its stevedores who operated the ship’s gear to unload the cargoes.
 ATI is an independent company, over whose employees and operations it does not control.
 ATI’s employees selected and used the wrong cable to lift the cargo which was damaged
o Philam’s cause of action has prescribed [TOPIC!!!]
 It filed a formal claim 4 months after the cargoes arrived on April 20, 1995.
 Under clause 20, par. 224 of the Bill of Lading and Art. 366 of the Code of Commerce, the consignee had until April 20,
1995 to make a claim considering the readily apparent nature of the damage, or until April 27, 1995 at the latest, assuming
the damage was not readily apparent
o contests the 12% int. It should be 6% since the damages claimed are not loans or forbearance of money
ISSUE:
1. [TOPIC!!] Has Philam’s right/cause of action prescribed? [NO, it has not]
2. Who between ATI and Westwind is liable? [BOTH concurrently liable]
HELD: CA decision AFFIRMED with MODIFICATIONS – interest on the P190,684.48 award is reduced to 6% per annum from the date of extrajudicial
demand (obligation is not a loan or forbearance of money)
 [INSURANCE] Philam has adequately established the basis of its claim against ATI and Westwind.
o Philam was subrogated to the rights of the consignee, Universal Motors, via Subrogation Receipt. (duly authenticated by Philam’s
claims officer, Ricardo Ongchangco, Jr.)
1. [TOPIC!!] Philam’s right has NOT prescribed.
o The Carriage of Goods by Sea Act (COGSA) or Public Act No. 521 of the 74th US Congress, was accepted to be made applicable to
all contracts for the carriage of goods by sea to and from Philippine ports in foreign trade by virtue of Commonwealth Act (C.A.)
No. 65, Sec. 1.
o The prescriptive period for filing an action for the loss or damage of the goods is in par. (6), Sec. 3, COGSA:
 “Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his
agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled
to delivery thereof under the contract of carriage, such removal shall be prima facie evidence of the delivery by the carrier
of the goods as described in the bill of lading. If the loss or damage is not apparent, the notice must be given within 3
days of the delivery.
 Said notice of loss or damage maybe endorsed upon the receipt for the goods given by the person taking delivery thereof.
 The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint
survey or inspection.
 In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought
within ONE YEAR after delivery of the goods OR the date when the goods should have been delivered: Provided, That
if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall NOT
affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when
the goods should have been delivered.”
o A letter of credit is a convenient financial device and relatively safe mode of dealing with sales of goods to satisfy the seemingly
irreconcilable interests of a seller (who refuses to part with his goods before he is paid) and a buyer (who wants to have control of
his goods before paying).
 RCBC = consignee; Nichimen Corporation = seller; Universal Motors = buyer (requested LOC).
 buyer should be regarded as the person entitled to delivery of the goods.
 For the purpose of reckoning when notice of loss or damage should be given to the carrier or its agent, the date of
delivery to Universal Motors is controlling.
o Pertinent dates:
 Apr 20, 1995: S/S “Calayan Iris” arrived in Manila; cargoes were discharged to ATI the next day.
 May 11, 1995: goods were withdrawn from the CFS Warehouse. The last of the packages were delivered to Universal
Motors on May 17, 1995. (Delivery)
 May 12, 1995: Universal Motors filed a Request for Bad Order Survey following a joint inspection where it was discovered
that 6 pieces of Chassis Frame Assembly were deformed and 1 Front Axle Sub without Lower from a steel case was
dented.
 Aug 4, 1995: Universal Motors filed a formal claim for damages against Westwind.
 Jan 18, 1996: Philam (subrogee) filed the complaint for damages
o North America v. Asian Terminals: a request for, and the result of a bad order examination, done within the reglementary period
for furnishing notice of loss or damage to the carrier, serves the purpose of a claim.
 A claim must be filed within the reglementary period to afford the carrier or depositary reasonable opportunity and
facilities to check the validity of the claims while facts are still fresh in the minds of the persons who took part in the
transaction and documents are still available.
 Universal Motors filed a request for bad order survey on May 12, 1995, even before all the packages could be unloaded
to its warehouse.
o COGSA Sec 3 (6) states that failure to comply with the notice requirement shall NOT affect or prejudice the right of the shipper to
bring suit within one year after delivery of the goods.
 Philam filed the Complaint for damages just eight months after all the packages were delivered to its possession. Philam’s
action against Westwind and ATI was seasonably filed.
2. Westwind and ATI are concurrently liable
o Solidarily liable for the damage to one Frame Axle Sub without Lower
 while the staff of ATI undertook the physical unloading of the cargoes, Westwind’s duty officer exercised full supervision
and control over the entire process. (Westwind’s Operation Assistant, testified on the presence of a ship officer who
supervised the unloading of the cargo)
 The Damage Survey Report: Case 03-245-42K/1 was damaged by ATI stevedores due to overtightening of a
cable sling hold during discharge from the vessel’s hatch to the pier.
 [WESTWIND NEGLIGENT] COGSA Sec 3 (2) states that among the carrier’s responsibilities are to properly load, handle,
stow, carry, keep, care for and discharge the goods carried.
 cargoes generally remain under the custody of the carrier while being unloaded.
 Since the damage to the cargo was incurred during the discharge of the shipment and while under the
supervision of the carrier, the latter is liable for the damage caused to the cargo.

 [ATI NEGLIGENT] An arrastre operator handles cargo deposited on the wharf or between the establishment of the
consignee or shipper and the ship’s tackle. Being the custodian of the goods, an arrastre operator’s duty is to take good
care of the goods and to turn them over to the party entitled to their possession
 that 218 of the 219 packages were unloaded without harm while using the same sling is telling of the inadequate
care with which ATI handled Case 03-245-42K/1
o Liability should be confined ONLY to the value of the one piece Frame Axle Sub without Lower
 There is NOTHING in the records to show conclusively that the six Frame Assembly with Bush were contained in and
damaged inside Case 03-245-42K/1.
EDNA DIAGO LHULLIER vs. BRITISH AIRWAYS 037 REYES
G.R. No. 171092. March 15, 2010.

Transportation Law: Air Transportation; Warsaw Convention
Del Castillo, J.
CASE LAW/ DOCTRINE:
 The Warsaw Convention applies to all international carriage of persons. International carriage means when the place of departure and the
place of destination in a contract of carriage are situated within the territories of two High Contracting Parties to the convention.
 Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the action for damages before –
1. the court where the carrier is domiciled;
2. the court where the carrier has its principal place of business;
3. the court where the carrier has an establishment by which the contract has been made; or
4. 4. the court of the place of destination.
Emergency Recit: Edna Lhullier (Petitioner) rode British Airways’ (Respondent) flight from London to Rome. However, she received humiliating
and rude treatment from its flight attendants. When Respondent’s ground manager refused to apologize to her, she filed an action for damages
against Respondent before the RTC-Makati. The SC ruled that the Philippine courts have no jurisdiction over the case because according to Art.
28 (1) of the Warsaw Convention, the action for damages can only be brought before the courts of London, UK or Rome since these places have
jurisdiction over the case.
FACTS:
1. Edna Lhullier (Petitioner) took British Airways (Respondent) Flight 548 from London, United Kingdom to Rome, Italy. She requested flight
attendant Julian Halliday to assist her in placing her luggage in the overhead bin but the latter refused. Another flight attendant Nickolas
Kerrigan singled her out from all the passengers in the business class section to lecture on plane safety thus embarrassing her.
2. Upon arrival in Rome, Petitioner complained to Respondent’s ground manager and demanded an apology but he only responded with
“they’re only doing their job.” Petitioner thus filed for damages including P5M for moral damages against Respondent before RTC-Makati
City.
3. Respondent argued that under Art. 28 (1) of the Warsaw Convention, only the court of London, UK, or Rome has jurisdiction over the
complaint for damages.
4. RTC: Ruled in Respondent’s favor. Petitioner argued that the cause of action arose not from the contract of carriage but the tortuous conduct
of Respondent’s employees.
ISSUE(S): Whether Petitioner can file the action before Philippine courts.
HELD: No. Petitioner cannot file the action in the Philippines under the Warsaw Convention.
RATIO:
 The Philippines is a party to the Warsaw Convention which has force and effect in its jurisdiction. The Warsaw Convention applies because
the air travel, where the alleged tortious conduct occurred, was between the UK and Italy, which are both signatories to the Warsaw
Convention.
 Article 1 of the Warsaw Convention provides:
1. This Convention applies to all international carriage of persons, luggage or goods performed by aircraft for reward. It applies equally
to gratuitous carriage by aircraft performed by an air transport undertaking.
2. For the purposes of this Convention the expression "international carriage" means any carriage in which, according to the contract made
by the parties, the place of departure and the place of destination, whether or not there be a break in the carriage or a transhipment,
are situated either within the territories of two High Contracting Parties, or within the territory of a single High Contracting Party, if
there is an agreed stopping place within a territory subject to the sovereignty, suzerainty, mandate or authority of another Power, even
though that Power is not a party to this Convention. A carriage without such an agreed stopping place between territories subject to the
sovereignty, suzerainty, mandate or authority of the same High Contracting Party is not deemed to be international for the purposes of
this Convention.
 Thus, when the place of departure and the place of destination in a contract of carriage are situated within the territories of two High
Contracting Parties, said carriage is deemed an "international carriage". In the case at bar, petitioner’s place of departure was London, UK
while her place of destination was Rome, Italy. Both the UK and Italy signed and ratified the Warsaw Convention. As such, the transport of
the petitioner is deemed to be an "international carriage" within the contemplation of the Warsaw Convention.
 Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the action for damages before –
1. the court where the carrier is domiciled;
2. the court where the carrier has its principal place of business;

3. the court where the carrier has an establishment by which the contract has been made; or
4. the court of the place of destination.
 In this case, respondent is a British corporation domiciled in London, UK with London as its principal place of business. Hence, under the first
and second jurisdictional rules, the petitioner may bring her case before the courts of London in the UK. In the passenger ticket and baggage
check presented by both the petitioner and respondent, it appears that the ticket was issued in Rome, Italy. Consequently, under the third
jurisdictional rule, the petitioner has the option to bring her case before the courts of Rome in Italy. Finally, the place of destination is Rome,
Italy, which is properly designated given the routing presented in the said passenger ticket and baggage check so petitioner may bring her
action before the courts of Rome, Italy.
38) Philippine Airlines, Inc. vs. Hon. Adriano Savillo, Presiding Judge of AUTHOR: REYES
RTC Br. 30, Iloilo City, and Simplicio Griño, G.R. No. 14954, July 4, 2008 Notes:
TOPIC: Air Transport Warsaw Convention
PONENTE: Chico Nazario
CASE LAW/ DOCTRINE:
 In the case at hand, Singapore Airlines barred private respondent from boarding the Singapore Airlines flight because PAL allegedly failed to
endorse the tickets of private respondent and his companions, despite PAL’s assurances to respondent that Singapore Airlines had already
confirmed their passage.
 While this fact still needs to be heard and established by adequate proof before the RTC, an action based on these allegations will not fall
under the Warsaw Convention, since the purported negligence on the part of PAL did not occur during the performance of the contract of
carriage but days before the scheduled flight.
 Thus, the present action cannot be dismissed based on the statute of limitations provided under Article 29 of the Warsaw Convention
Emergency Recit: Grino, wanting to participate in a golf tournament to be held in Jakarta, booked tickets with PAL for Manila Singapore-Jakarta
Singapore-Manila, with PAL to take charge of the Manila-Singapore leg and Singapore Airlines to take charge of the Singapore Jakarta leg however,
upon arrival at Singapore, Grino was informed by Singapore Airlines that it could not honor the tickets presented because PAL had not endorsed
them While Grino and his companions were able to secure a flight with another airline, the ordeal caused Grino to fall ill and he was unable to
participate in the golf tournament years later, Grino filed a complaint praying for the award of moral damages against PAL, for the emotional
harm allegedly suffered by him as a result of having been unreasonably and unjustly prevented from boarding the plane PAL filed a MTC ,arguing
that the Warsaw Convention was applicable and under that Convention, the complaint had already prescribed, having been filed beyond the 2
year prescriptive period provided therein. The TC denied the MTD, holding that the Civil Code and not the Warsaw Convention was applicable,
thus, the complaint had not yet prescribed. The CA affirmed TC. (SEE ABOVE BUT SC DISMISSED PETITION OF PAL)
FACTS:
 Simplicio Grino was invited to participate in the 1993 ASEAN Seniors Annual Golf Tournament held in Jakarta, Indonesia.
 He and several companions decided to purchase their respective passenger tickets from PAL with the following points of passage: MANILA-
SINGAPORE-JAKARTA-SINGAPORE-MANILA.
 Private respondent and his companions were made to understand by PAL that its plane would take them from Manila to Singapore, while
Singapore Airlines would take them from Singapore to Jakarta.
 On 3 October 1993, private respondent and his companions took the PAL flight to Singapore and arrived at about 6:00 o’clock in the evening.
 Upon their arrival, they proceeded to the Singapore Airlines office to check-in for their flight to Jakarta scheduled at 8:00 o’clock in the same
evening.
 Singapore Airlines rejected the tickets of private respondent and his group because they were not endorsed by PAL.
 It was explained to private respondent and his group that if Singapore Airlines honored the tickets without PAL’s endorsement, PAL would
not pay Singapore Airlines for their passage.
 Private respondent tried to contact PAL’s office at the airport, only to find out that it was closed.
 Stranded at the airport in Singapore and left with no recourse, Grino was in panic and at a loss where to go; and was subjected to humiliation,
embarrassment, mental anguish, serious anxiety, fear and distress. Eventually, Grino and his companions were forced to purchase tickets
from Garuda Airlines and board its last flight bound for Jakarta.
 When they arrived in Jakarta at about 12:00 o’clock midnight, the party who was supposed to fetch them from the airport had already left
and they had to arrange for their transportation to the hotel at a very late hour.
 After the series of nerve-wracking experiences, Grino became ill and was unable to participate in the tournament.
 Upon his return to the Philippines, private respondent brought the matter to the attention of PAL. He sent a demand letter to PAL on 20
December 1993 and another to Singapore Airlines on 21 March 1994. However, both airlines disowned liability and blamed each other for
the fiasco.
 On 15 August 1997, private respondent filed a Complaint for Damages before the RTC docketed as Civil Case No. 23773, seeking compensation
for moral damages in the amount of P1,000,000.00 and attorney’s fees.
 Instead of filing an answer to private respondent’s Complaint, PAL filed a Motion to Dismiss on the ground that the said complaint was barred
on the ground of prescription under Section 1(f) of Rule 16 of the Rules of Court.
 PAL argued that the Warsaw Convention, particularly Article 29 thereof, governed this case, as it provides that any claim for damages in
connection with the international transportation of persons is subject to the prescription period of two years.
 Since the Complaint was filed on 15 August 1997, more than three years after PAL received the demand letter on 25 January 1994, it was
already barred by prescription.
 On 9 June 1998, the RTC issued an Order denying the Motion to Dismiss. It maintained that the provisions of the Civil Code and other pertinent
laws of the Philippines, not the Warsaw Convention, were applicable to the present case.

 The Court of Appeals, in its assailed Decision dated 17 August 2001, likewise dismissed the Petition for Certiorari filed by PAL and affirmed
the 9 June 1998 Order of the RTC.
 It pronounced that the application of the Warsaw Convention must not be construed to preclude the application of the Civil Code and other
pertinent laws. By applying Article 1144 of the Civil Code, which allowed for a ten-year prescription period, the appellate court declared that
the Complaint filed by Grino should not be dismissed.
Issue: Whether or not CA had erred in not applying Warsaw Convention principles, and whether or not the proper prescription period was applied.
RATIO: No PAL PETITION DISMISSED FOR BEING WITHOUT MERIT
 In determining whether PAL’s Motion to Dismiss should have been granted by the trial court, it must be ascertained if all the claims made by
the private respondent in his Complaint are covered by the Warsaw Convention, which effectively bars all claims made outside the two-year
prescription period provided under Article 29 thereof.
 If the Warsaw Convention covers all of private respondent’s claims, then Civil Case No. 23773 has already prescribed and should therefore
be dismissed. On the other hand, if some, if not all, of respondent’s claims are outside the coverage of the Warsaw Convention, the RTC may
still proceed to hear the case.
 The Warsaw Convention applies to "all international transportation of persons, baggage or goods performed by any aircraft for hire." It seeks
to accommodate or balance the interests of passengers seeking recovery for personal injuries and the interests of air carriers seeking to limit
potential liability. It employs a scheme of strict liability favoring passengers and imposing damage caps to benefit air carriers.
 The cardinal purpose of the Warsaw Convention is to provide uniformity of rules governing claims arising from international air travel; thus,
it precludes a passenger from maintaining an action for personal injury damages under local law when his or her claim does not satisfy the
conditions of liability under the Convention.
 Article 19 of the Warsaw Convention provides for liability on the part of a carrier for "damages occasioned by delay in the transportation by
air of passengers, baggage or goods."
 Article 24 excludes other remedies by further providing that "(1) in the cases covered by articles 18 and 19, any action for damages, however
founded, can only be brought subject to the conditions and limits set out in this convention."
 Therefore, a claim covered by the Warsaw Convention can no longer be recovered under local law, if the statute of limitations of two years
has already lapsed.
 Nevertheless, the SC noted that jurisprudence in the Philippines and the United States also recognizes that the Warsaw Convention does not
"exclusively regulate" the relationship between passenger and carrier on an international flight. This Court finds that the present case is
substantially similar to cases in which the damages sought were considered to be outside the coverage of the Warsaw Convention.
 SC COMPARED THIS TO LATHIGRA V BRITISH AIRWAYS Case.
 In the case at hand, Singapore Airlines barred private respondent from boarding the Singapore Airlines flight because PAL allegedly failed to
endorse the tickets of private respondent and his companions, despite PAL’s assurances to respondent that Singapore Airlines had already
confirmed their passage.
 While this fact still needs to be heard and established by adequate proof before the RTC, an action based on these allegations will not fall
under the Warsaw Convention, since the purported negligence on the part of PAL did not occur during the performance of the contract of
carriage but days before the scheduled flight.
 Thus, the present action cannot be dismissed based on the statute of limitations provided under Article 29 of the Warsaw Convention
JURISPRUDENCE ON SCOPE OF WARSAW CONVENTION

1. United Airlines v. Uy, the Supreme Court distinguished between the (1) damage to the passenger’s baggage and (2) humiliation he suffered
at the hands of the airline’s employees. The first cause of action was covered by the Warsaw Convention which prescribes in two years, while
the second was covered by the provisions of the Civil Code on torts, which prescribes in four years
2. In Lathigra v. British Airways, it was held that the airlines’ negligent act of reconfirming the passenger’s reservation days before departure
and failing to inform the latter that the flight had already been discontinued is not among the acts covered by the Warsaw Convention, since
the alleged negligence did not occur during the performance of the contract of carriage but, rather, days before the scheduled flight
39 SPOUSES JESUS FERNANDO and ELIZABETH S. FERNANDO vs. AUTHOR: ROJAS

NORTHWEST AIRLINES, INC., NOTES:
[G.R. No. 212038|February 8, 2017]
TOPIC: Air Transportation
PONENTE: PERALTA
CASE LAW/ DOCTRINE: when an airline issues a ticket to a passenger confirmed for a particular flight on a certain date, a contract of carriage
arises. The passenger then has every right to expect that he would fly on that flight and on that date. If he does not, then the carrier opens itself
to a suit for breach of contract of carriage
Emergency Recit: Spouses Fernandos are frequent flyers of Northwest Airlines, Inc. and are holders of Elite Platinum World Perks Card, the highest
category given to frequent flyers of the carrier. The instant case arose from 2 separate incidents: when Jesus Fernando arrived at LA Airport and
when the Fernandos were to depart from the LA Airport. Jesus arrived at the LA Airport via Northwest Airlines Flight, when he presented his docs
at the immigration counter, he was asked by the Immigration Officer to have his return ticket verified and validated since the date reflected
thereon is Aug 2001. So he approached a Northwest personnel Puntawongdaycha, but the latter merely glanced at his ticket without checking its
status with the computer and peremptorily said that the ticket has been used and could not be considered as valid. The Immigration Officer
brought Jesus to the interrogation room, when he was finally cleared by the Immigration Officer, he was granted only a 12-day stay in the US,
instead of the usual 6 mos. Also on the way back to Manila, Northwest did not allow the Fernandos to board their flight for Manila, in spite of
confirmed tickets. SC: there was breach of contract of carriage and Northwest is liable for the payment of moral damages, exemplary damages
and attorney's fees.
FACTS:
1. Spouses Jesus and Elizabeth S. Fernando (Fernandos), owners of JB Music and JB Sports, 5 star Hotel Elizabeth in Baguio City and Cebu City,
and the chain of Fersal Hotels and Apartelles in the country, are frequent flyers of Northwest Airlines, Inc. and are holders of Elite Platinum
World Perks Card, the highest category given to frequent flyers of the carrier.
2. The Fernandos initiated the filing of the instant case which arose from 2 separate incidents: first, when Jesus Fernando arrived at LA Airport
on Dec 20, 2001; second, when the Fernandos were to depart from the LA Airport on Jan 29, 2002.
3. The arrival at Los Angeles Airport on Dec 20, 2001:
 Jesus Fernando arrived at the LA Airport via Northwest Airlines Flight to join his family who flew earlier to the said place for a reunion
for the Christmas holidays. When Jesus Fernando presented his documents at the immigration counter, he was asked by the Immigration
Officer to have his return ticket verified and validated since the date reflected thereon is Aug 2001. So he approached a Northwest
personnel Linda Puntawongdaycha, but the latter merely glanced at his ticket without checking its status with the computer and
peremptorily said that the ticket has been used and could not be considered as valid. He then explained to the personnel that he was
about to use the said ticket on Aug 20 or 21, 2001 on his way back to Manila from LA but he could not book any seat bec of some ticket
restrictions so he, instead, purchased new business class ticket on the said date. Hence, the ticket remains unused and perfectly valid.
 Jesus Fernando gave the personnel the number of his Elite Platinum World Perks Card for the latter to access the ticket control record
with the airline's computer and for her to see that the ticket is still valid. But Linda Puntawongdaycha refused to check the validity of
the ticket in the computer but, instead, looked at Jesus Fernando with contempt, then informed the Immigration Officer that the ticket
is not valid because it had been used.
 The Immigration Officer brought Jesus Fernando to the interrogation room of the Immigration and Naturalization Services (INS) where
he was asked humiliating questions for more than 2 hrs. When he was finally cleared by the Immigration Officer, he was granted only a
12-day stay in the US, instead of the usual 6 mos.
 Since Jesus Fernando was granted only 12-day stay in the US, his scheduled plans with his family as well as his business commitments
were disrupted. He was forced to fly back to Manila before the twelve 12-day stay expired and flew back to the US on Jan 15, 2002.
4. The departure from the LA Airport on Jan 29, 2002:
 the Fernandos were on their way back to the Phil. They have confirmed bookings on Northwest Airlines NW Flight for Narita, Japan and
for Manila. They checked in with their luggage at the LA Airport and were given their respective boarding passes for business class seats
and claim stubs for 6 pcs of luggage. With boarding passes, tickets and other proper travel docs, they were allowed entry to the departure
area
 When it was announced that the plane was ready for boarding, the Fernandos joined the long queue of business class passengers along
with their business associates.
 When the Fernandos reached the gate area where boarding passes need to be presented, Northwest supervisor Linda Tang stopped
them and demanded for the presentation of their paper tickets (coupon type). They failed to present the same since, according to them,
Northwest issued electronic tickets (attached to the boarding passes) which they showed to the supervisor.
 Linda Tang rudely pulled them out of the queue. Elizabeth Fernando explained to Linda Tang that the matter could be sorted out by
simply verifying their electronic tickets in her computer and all she had to do was click and punch in their Elite Platinum World Perks
Card number. But Linda Tang arrogantly told them that if they wanted to board the plane, they should produce their credit cards and
pay for their new tickets, otherwise Northwest would order their luggage off-loaded from the plane.
 the Fernandos rushed to the Northwest Airline Ticket counter to clarify the matter. They were assisted by Northwest personnel Meyer
who retrieved their control number from her computer and was able to ascertain that the Fernandos' electronic tickets were valid and
they were confirmed passengers .To ensure that the Fernandos would no longer encounter any problem with Linda Tang, Meyer printed
coupon tickets for them who were then advised to rush back to the boarding gates since the plane was about to depart. But when the
Fernandos reached the boarding gate, the plane had already departed. They were able to depart, instead, the day after.
5. A complaint for damages was instituted by the Fernandos against Northwest before the RTC. RTC ruled in favor of the plaintiffs. CA affirmed
ISSUE(S):
 whether there was breach of contract of carriage and whether it was done in a wanton, malevolent or reckless manner amounting to
bad faith
 whether Northwest is liable for the payment of moral damages, exemplary damages and attorney's fees
HELD: all yes
RATIO:
 A contract is a meeting of minds between two persons whereby one agrees to give something or render some service to another for a
consideration. There is no contract unless the following requisites concur: (1) consent of the contracting parties; (2) an object certain which
is the subject of the contract; and (3) the cause of the obligation which is established.
 A contract of carriage is one whereby a certain person or association of persons obligate themselves to transport persons, things, or goods
from one place to another for a fixed price. Under Art 1732 of the Civil Code, this "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" is called a common carrier.
 Undoubtedly, a contract of carriage existed between Northwest and the Fernandos. They voluntarily and freely gave their consent to an
agreement whose object was the transportation of the Fernandos from LA to Manila, and whose cause or consideration was the fare paid by
the Fernandos to Northwest.
 when an airline issues a ticket to a passenger confirmed for a particular flight on a certain date, a contract of carriage arises. The passenger
then has every right to expect that he would fly on that flight and on that date. If he does not, then the carrier opens itself to a suit for breach
of contract of carriage. When Northwest confirmed the reservations of the Fernandos, it bound itself to transport the Fernandos

 In an action based on a breach of contract of carriage, the aggrieved party does not have to prove that the common carrier was at fault or
was negligent. All that he has to prove is the existence of the contract and the fact of its non-performance by the carrier.
 Therefore, having proven the existence of a contract of carriage between Northwest and the Fernandos, and the fact of non-performance by
Northwest of its obligation as a common carrier, it is clear that Northwest breached its contract of carriage with the Fernandos. Thus,
Northwest opened itself to claims for compensatory, actual, moral and exemplary damages, attorney's fees and costs of suit.
 Northwest committed a breach of contract "in failing to provide the spouses with the proper assistance to avoid any inconvenience" and that
the actuations of Northwest in both subject incidents "fall short of the utmost diligence of a very cautious person expected of it".
 Northwest is in bad faith. While We agree that the discrepancy between the date of actual travel and the date appearing on the tickets of
the Fernandos called for some verification, however, the Northwest personnel failed to exercise the utmost diligence in assisting the
Fernandos. The actuations of Northwest personnel in both subject incidents are constitutive of bad faith.
 The failure to promptly verify the validity of the ticket connotes bad faith on the part of Northwest. Bad faith does not simply connote bad
judgment or negligence. It imports a dishonest purpose or some moral obliquity and conscious doing of a wrong. It means breach of a known
duty through some motive, interest or ill will that partakes of the nature of fraud. A finding of bad faith entitles the offended party to moral
damages.
 there was likewise fraud or bad faith on the part of Northwest when it did not allow the Fernandos to board their flight for Manila, in spite
of confirmed tickets.
 "(i)n contracts of common carriage, in attention and lack of care on the part of the carrier resulting in the failure of the passenger to be
accommodated in the class contracted for amounts to bad faith or fraud which entitles the passengers to the award of moral damages in
accordance with Article 2220 of the Civil Code."
 Under Art 2220 of the CC, an award of moral damages, in breaches of contract, is in order upon a showing that the defendant acted
fraudulently or in bad faith. Clearly, in this case, the Fernandos are entitled to an award of moral damages. The purpose of awarding moral
damages is to enable the injured party to obtain means, diversion or amusement that will serve to alleviate the moral suffering he has
undergone by reason of defendant's culpable action.
 Exemplary damages, which are awarded by way of example or correction for the public good, may be recovered in contractual obligations,
if defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent manner. Hence, given the facts and circumstances of this case,
We hold Northwest liable for the payment of exemplary damages in the amount of ₱2M.
 As to the payment of attorneys fees, Fernandos were ultimately compelled to litigate and incurred expenses to protect their rights and
interests, and bec the Fernandos are entitled to an award for exemplary damages. Pursuant to Article 2208 of the Civil Code, attorney's fees
may be awarded when exemplary damages are awarded, or a party is compelled to litigate or incur expenses to protect his interest, or where
the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim.
40. Cathay Pacific Airways vs Spouses Daniel Vazquez and Maria Luisa AUTHOR: The Taliño
Madrigal Vazquez NOTES: The famous stupid case lol. Why would anyone get mad if their
[G.R. No. 150843; March 14, 2003] accommodations were upgraded to first class amp.
TOPIC: Air Transportation (Warsaw Convention) CPA – Cathay Pacific Airways
PONENTE: Davide, Jr., C.J.
CASE LAW/ DOCTRINE: By insisting on the upgrade, CPA breached its contract of carriage with the respondents.
Emergency Recit: CPA gives privileges to its frequent flyers such as priority for upgrading of booking without any extra charge whenever an
opportunity arises. Respondents are frequent flyers of CPA and are gold card members of its Marco Polo Club. Upon their return trip from Hong
Kong back to Manila, respondents were informed that their seats will be upgraded from Business Class to First Class due to the Business Class
already being fully booked. Respondents initially refused, but eventually yielded. Respondents then filed a case for damages against CPA. The
RTC ruled in favour of the respondents. The CA affirmed the decision of the RTC but deleted the award of the damages awarded by the RTC except
for Moral and Nominal Damages, as well as the award for Attorney’s Fee. The SC affirmed the decision of the CA but deleted the award for Moral
Damages and Attorney’s Fees, and reduced the Nominal Damages awarded. (Refer above)
FACTS:
 CPA is a common carrier engaged in the business of transporting passengers and goods by air. As part of its marketing strategy, it accords its
frequent flyers membership in its Marco Polo Club. The members enjoy several privileges, such as priority for upgrading of booking without
any extra charge whenever an opportunity arises. Thus, a frequent flyer booked in the Business Class has priority for upgrading to First Class
if the Business Class Section is fully booked.
 Respondents are frequent flyers of CPA and are Gold Card members of its Marco Polo Club. On Sept. 24, 1996, the respondents, together
with their maid and two friends Pacita Cruz and Josefina Vergel de Dios, went to Hongkong for pleasure and business.
 For their return flight to Manila on Sept. 28, 1996, they were booked on CPA’s Flight CX-905. Two hours before their time of departure, the
respondents and their companions checked in their luggage at CPA’s check-in counter at Kai Tak Airport and were given their respective
boarding passes, to wit:
o Business Class boarding passes for the respondents and their two friends; and
o Economy Class for their maid.
 When boarding time was announced, the respondents and their two friends went to Departure Gate No. 28, which was designated for
Business Class passengers. Dr. Vazquez presented his boarding pass to the ground stewardess, who in turn inserted it into an electronic
machine reader or computer at the gate. The ground stewardess was assisted by a ground attendant by the name of Clara Lai Han Chiu.
When Chiu glanced at the computer monitor, she saw a message that there was a "seat change" from Business Class to First Class for the
respondents.
 Chiu approached Dr. Vazquez and told him that the respondents’ accommodations were upgraded to First Class. Dr. Vazquez refused the
upgrade, and stated that:
o it would not look nice for them as hosts to travel in First Class and their guests, in the Business Class;
o they were going to discuss business matters during the flight;
o she could have other passengers instead transferred to the First Class Section.
 Chiu informed the respondents that the Business Class was fully booked, and that since they were Marco Polo Club members they had the
priority to be upgraded to the First Class.
 Dr. Vazquez continued to refuse, so Chiu told them that if they would not avail themselves of the privilege, they would not be allowed to
take the flight. Eventually, after talking to his two friends, Dr. Vazquez gave in.
 Upon their return to Manila, the respondents, in a letter addressed to CPA’s Country Manager, demanded that:
o they be indemnified in the amount of Php 1M for the "humiliation and embarrassment" caused by its employees.
o a written apology from the management of CPA, preferably a responsible person with a rank of no less than the Country Manager,
as well as the apology from Chiu within 15 days from receipt of the letter, be issued.
 Larry Yuen, the assistant to CPA’s Country Manager Argus Guy Robson, informed the respondents that CPA would investigate the incident
and get back to them within a week’s time.
 After CPA’s failure to give them any feedback within its self-imposed deadline, the respondents instituted before the RTC of Makati City an
action for damages against CPA. Respondents alleged that:
o when they informed Chiu that they preferred to stay in Business Class, she obstinately, uncompromisingly and in a loud,
discourteous and harsh voice threatened that they could not board and leave with the flight unless they go to First Class, since the
Business Class was overbooked;
o Chiu’s loud and stringent shouting annoyed, embarrassed, and humiliated them because the incident was witnessed by all the
other passengers waiting for boarding;
o they were unjustifiably delayed to board the plane, and when they were finally permitted to get into the aircraft, the forward
storage compartment was already full;
o A flight stewardess instructed Dr. Vazquez to put his roll-on luggage in the overhead storage compartment. Because he was not
assisted by any of the crew in putting up his luggage, his bilateral carpal tunnel syndrome was aggravated, causing him extreme
pain on his arm and wrist;
o they "belong to the uppermost and absolutely top elite of both Philippine Society and the Philippine financial community, and that
they were among the wealthiest persons in the Philippines.
 CPA alleged that:
o it is a practice among commercial airlines to upgrade passengers to the next better class of accommodation, whenever an
opportunity arises, such as when a certain section is fully booked;
o Priority in upgrading is given to its frequent flyers, who are considered favored passengers like the respondents. Thus, when the
Business Class Section of Flight CX-905 was fully booked, CPA’s computer sorted out the names of favored passengers for
involuntary upgrading to First Class;
o When Chiu informed the respondents that they were upgraded to First Class, Dr. Vazquez refused. He then stood at the entrance
of the boarding apron, blocking the queue of passengers from boarding the plane, which inconvenienced other passengers. He
shouted that it was impossible for them to be upgraded without his two friends who were traveling with them;
o Because of Dr. Vazquez’s outburst, Chiu thought of upgrading the companions of the respondents. But when she checked the
computer, she learned that the respondents’ companions did not have priority for upgrading;
o Chiu then tried to book the respondents again to their original seats. However, since the Business Class Section was already fully
booked, she politely informed Dr. Vazquez of such fact and explained that the upgrading was in recognition of their status as CPA’s
valued passengers;
o After talking to their guests, the respondents eventually decided to take the First Class accommodation;
o its employees at the Hong Kong airport acted in good faith in dealing with the respondents;
o none of them shouted, humiliated, embarrassed, or committed any act of disrespect against the respondents.
o Assuming that there was indeed a breach of contractual obligation, CPA acted in good faith, which negates any basis for their claim
for damages.
 RTC: ruled in favour of the respondents. CPA offers various classes of seats from which passengers are allowed to choose regardless of their
reasons or motives, whether it be due to budgetary constraints or whim. The choice imposes a clear obligation on CPA to transport the
passengers in the class chosen by them. The carrier cannot, without exposing itself to liability, force a passenger to involuntarily change his
choice. The upgrading of the respondents’ accommodation over and above their vehement objections was due to the overbooking of the
Business Class. It was a pretext to pack as many passengers as possible into the plane to maximize CPA’s revenues. CPA’s actuations in this
case displayed deceit, gross negligence, and bad faith, which entitled the respondents to awards for damages.
 CA: Modified the decision of the RTC with regard to the damages (only retained award for moral and nominal damages).
o It ruled that by upgrading the respondents to First Class, CPA novated the contract of carriage without the respondents’ consent.
There was a breach of contract not because CPA overbooked the Business Class Section of Flight CX-905 but because the latter
pushed through with the upgrading despite the objections of the respondents.
o It was not convinced that Chiu shouted at, or meant to be discourteous to, Dr. Vazquez, although it might seemed that way to the
latter, who was a member of the elite in Philippine society and was not therefore used to being harangued by anybody. Chiu was
a Hong Kong Chinese whose fractured Chinese was difficult to understand and whose manner of speaking might sound harsh or
shrill to Filipinos because of cultural differences. She did not act with deliberate malice, deceit, gross negligence, or bad faith. If at
all, she was negligent in not offering the First Class accommodations to other passengers. Neither can the flight stewardess in the
First Class Cabin be said to have been in bad faith when she failed to assist Dr. Vazquez in lifting his baggage into the overhead
storage bin. There is no proof that he asked for help and was refused even after saying that he was suffering from "bilateral carpal
tunnel syndrome."
 Hence, this case.
o CPA invokes the decision in United Airlines, Inc. vs. CA where it was ruled that, in accordance with the Civil Aeronautics Board’s
Economic Regulation No. 7, as amended, an overbooking that does not exceed 10% cannot be considered deliberate and done in
bad faith.
o Respondents assert that issuance of passenger tickets more than the seating capacity of each section of the plane is in itself
fraudulent, malicious and tainted with bad faith.
ISSUE(S): WON an involuntary upgrading of an airline passenger’s accommodation from one class to a more superior class, at no extra cost,
considered a breach of contract of carriage that would entitle the passenger to an award of damages?
HELD: No. Although there was a breach of contract, it was not attended by bad faith. The most that can be adjudged to respondents is an award
for nominal damages for breach of contract.
RATIO:
Upgrading of Seat Constitutes Breach of Contract

 Undoubtedly, a contract of carriage existed between CPA and the respondents. They voluntarily and freely gave their consent to an
agreement whose object was the transportation of the respondents from Manila to Hong Kong and back to Manila, with seats in the Business
Class Section of the aircraft, and whose cause or consideration was the fare paid by the respondents to CPA.
 Breach of contract is defined as the "failure without legal reason to comply with the terms of a contract." It is also defined as the "[f]ailure,
without legal excuse, to perform any promise which forms the whole or part of the contract."
 We note that in all their pleadings, the respondents never denied that they were members of CPA’s Marco Polo Club. They knew that as
members of the Club, they had priority for upgrading of their seat accommodation at no extra cost when an opportunity arises. But, just like
other privileges, such priority could be waived. The respondents should have been consulted first whether they wanted to avail themselves
of the privilege or would consent to a change of seat accommodation before their seat assignments were given to other passengers. Normally,
one would appreciate and accept an upgrading, for it would mean a better accommodation. But, whatever their reason was and however
odd it might be, the respondents had every right to decline the upgrade and insist on the Business Class accommodation they had booked
for and which was designated in their boarding passes. They clearly waived their priority or preference when they asked that other passengers
be given the upgrade. It should not have been imposed on them over their vehement objection. By insisting on the upgrade, CPA breached
its contract of carriage with the respondents.
Bad Faith Not Present in the Breach Committed

 We find no persuasive proof of fraud or bad faith in this case. The respondents were not induced to agree to the upgrading through insidious
words or deceitful machination or through willful concealment of material facts. Upon boarding, Chiu told the respondents that their
accommodations were upgraded to First Class in view of their being Gold Card members of CPA’s Marco Polo Club. She was honest in telling
them that their seats were already given to other passengers and the Business Class Section was fully booked. Chiu might have failed to
consider the remedy of offering the First Class seats to other passengers. But, we find no bad faith in her failure to do so, even if that
amounted to an exercise of poor judgment.
 Neither was the transfer of the respondents effected for some evil or devious purpose. Needless to state, an upgrading is for the better
condition and, definitely, for the benefit of the passenger.
 We are not persuaded by the respondents’ argument that the overbooking of the Business Class Section constituted bad faith on the part of
CPA. Sec. 3 of the Economic Regulation No. 7 of the Civil Aeronautics Board, as amended, provides:
Sec 3. Scope. – This regulation shall apply to every Philippine and foreign air carrier with respect to its operation of flights or portions of
flights originating from or terminating at, or serving a point within the territory of the Republic of the Philippines insofar as it denies
boarding to a passenger on a flight, or portion of a flight inside or outside the Philippines, for which he holds confirmed reserved space.
Furthermore, this Regulation is designed to cover only honest mistakes on the part of the carriers and excludes deliberate and willful
acts of non-accommodation. Provided, however, that overbooking not exceeding 10% of the seating capacity of the aircraft shall not be
considered as a deliberate and willful act of non-accommodation.
 It is clear from this section that an overbooking that does not exceed 10% is not considered deliberate and therefore does not amount to
bad faith. Here, while there was admittedly an overbooking of the Business Class, there was no evidence of overbooking of the plane beyond
ten percent, and no passenger was ever bumped off or was refused to board the aircraft.
Damages Awarded
 Moral damages predicated upon a breach of contract of carriage may only be recoverable in instances where the carrier is guilty of fraud or
bad faith or where the mishap resulted in the death of a passenger. Where in breaching the contract of carriage the airline is not shown to
have acted fraudulently or in bad faith, liability for damages is limited to the natural and probable consequences of the breach of the
obligation which the parties had foreseen or could have reasonably foreseen. In such a case the liability does not include moral and exemplary
damages.
 In this case, we have ruled that the breach of contract of carriage, which consisted in the involuntary upgrading of the respondents’ seat
accommodation, was not attended by fraud or bad faith. The CA’s award of moral damages has, therefore, no leg to stand on.
 The deletion of the award for exemplary damages by the CA is correct. It is a requisite in the grant of exemplary damages that the act of the
offender must be accompanied by bad faith or done in wanton, fraudulent or malevolent manner. Such requisite is absent in this case.
Moreover, to be entitled thereto the claimant must first establish his right to moral, temperate, or compensatory damages. Since the
respondents are not entitled to any of these damages, the award for exemplary damages has no legal basis. And where the awards for moral
and exemplary damages are eliminated, so must the award for attorney’s fees.

 The most that can be adjudged in favor of the respondents for CPA’s breach of contract is an award for nominal damages under Art. 2221 of
the Civil Code, which reads as follows:
Article 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant,
may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.
 Worth noting is the fact that in CPA’s Memorandum filed with this Court, it prayed only for the deletion of the award for moral damages. It
deferred to the CA’s discretion in awarding nominal damages.


Private Carrier Liability

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1. MALAYAN INSURANCE CO., INC., Petitioner, AUTHOR: K.

CASE LAW/ DOCTRINE:

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 1

HELD: VSI is a private carrier.

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 3

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 4

Standard of care: Extraordinary diligence

Article 1732, Civil Code

04 SCHMITZ TRANSPORT & BROKERAGE CORPORATION, petitioner, AUTHOR: Mendoza, J.D.

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 5

HELD: YES, ASIA LIGHTERAGE IS A COMMON CARRIER

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 7

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 8

3. TMBI and BMT are not solidarily liable to Mitsui

5. BMT is liable to TMBI for breach of their contract of carriage

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 10

ISSUE(S): Whether or not respondent Sun Holidays is a common carrier.

HELD: Yes. Respondent Sun Holidays is a common carrier.

8. First Phil. Industrial Corp. v. CA AUTHOR: JC

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 12

HELD: No, presumption of negligence will not apply.

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 15

ABOITIZ SHIPPING CORPORATION 012 REYES

G.R. No. 84458. November 6, 1989

13. La Mallorca vs. Court of Appeals, 17 SCRA 793 AUTHOR: REYES

14 GREENSTAR EXPRESS, INC. AND FRUTO L. SAYSON, JR., v. AUTHOR: ROJAS

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 19

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 20

DOCTRINE OF LAST CLEAR CHANCE:

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 21

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 22

Respondent Quinguillera’s contributory negligence:

Respondent Bandoquillo’s contributory negligence:

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 24

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 25

Ruling: No, the Court ruled in the negative.

21 TEJA MARKETING AND/OR ANGEL JAUCIAN, petitioner, vs. AUTHOR: CASANO

CASE LAW/ DOCTRINE:

The Suit from the Accident

The Suit from the Fallout

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 28

24. PAGUIO TRANSPORT CORPORATION v. NLRC and WILFREDO AUTHOR: Delgado

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 30

HELD: Yes. Petition is not meritorious. Dismissed for lack of merit.

25 SPOUSES FRANCISCO M. HERNANDEZ and ANICETA ABEL-HERNANDEZ AUTHOR: David

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 31

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 32

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 33

ELEMENTS of RES IPSA LOQUITUR

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 34

The result of the collision speaks for itself.

Respondent's right to proceed against petitioner, therefore, is based on two grounds.

HELD: LIM, registered owner of the bus.

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 38

HELD: No. Shin Yang is not liable.

33. Designer Baskets Inc v. Air Sea Transport Inc. AUTHOR: JC

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 39

35. PHILAM INSURANCE v. HEUNG-A SHIPPING and WALLEM Panganiban

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 42

Commercial Law Review – G04 | Atty. Sergio M. Ceniza 45

EDNA DIAGO LHULLIER vs. BRITISH AIRWAYS 037 REYES

G.R. No. 171092. March 15, 2010.