1. Unsworth Transportation International Philippines v.

Court of Appeals (166250, July 26, 2010)

Facts:

Sylvex Purchasing Corporation delivered 27 drums of various raw materials for pharmaceutical
manufacturing to petitioner who issued the bill of lading covering the aforesaid shipment. The shipment
was insured with Pioneer Insurance and Surety Corporation in favor of the consignee United Laboratories,
Inc. against all risks. The shipment was loaded in a sealed container van, boarded on American President
Lines, Inc. vessel M/V "Pres. Jackson," Voyage 42, and transshipped to M/V "Pres. Taft" for delivery to
petitioner in favor of the consignee. The shipment arrived at the port of Manila. Petitioner received the
shipment in its warehouse after it stamped the Permit to Deliver Imported Goods procured by the Champs
Customs Brokerage. Consequently, the consignee’s quality control representative rejected one paper bag
containing dried yeast and one steel drum containing Vitamin B Complex as unfit for the intended
purpose. The consignee filed a claim against Pioneer Insurance and Surety Corporation and petitioner.

Petitioner denied liability on the basis of the gate pass issued by Jardine indicating the goods were in
complete and good condition but the insurer paid the claimed amount. The insurer then filed a complaint
for damages.

Issue:

Whether or not petitioner observed the required diligence in this case

Held:

No, petitioner has not met extraordinary diligence expected being a common carrier.

A freight forwarder whose liability is limited to damages arising from its own negligence, including
negligence in choosing the carrier. However, where the forwarder contracts to deliver goods to their
destination instead of merely arranging for their transportation, it becomes liable as a common carrier for
loss or damage to goods. A freight forwarder assumes the responsibility of a carrier, which actually
executes the transport, even though the forwarder does not carry the merchandise itself.

Petitioner in this case is liable as a common carrier who is presumed to have been at fault or negligent if
the goods they transported deteriorated or got lost or destroyed. That is, unless they prove that they
exercised extraordinary diligence in transporting the goods. They have the burden of proving that they
observed such diligence. Delivery of the goods in good order to a common carrier and of their arrival in
bad order at their destination constitutes a prima facie case of fault or negligence against the carrier. If
no adequate explanation is given as to how the deterioration, loss, or destruction of the goods happened,
the transporter shall be held responsible.
 2. Phylum American General Insurance Company v. PKS Shipping Company (149038, April 9, 2003)

Facts:

Davao Union Marketing Corporation (DUMC) contracted the services of respondent for the shipment to
Tacloban City of 75,000 bags of cement and the former insured the goods with. The goods were loaded
aboard a barge belonging to respondent. While being towed by a tugboat, the barge sank a couple of
miles off the coast of Zamboanga del Sur, bringing down with it the entire 75,000 bags of cement. DUMC
filed a formal claim with petitioner for the full amount who promptly made payment; it then sought
reimbursement from respondent but the latter refused to pay.

Petitioner contends that respondent is a common carrier and that it is liable for the loss of the subject
cargo. The fact that respondent has a limited clientele, petitioner argues, does not militate against
respondents being a common carrier and that the only way by which such carrier can be held exempt for
the loss of the cargo would be if the loss were caused by natural disaster or calamity.

Issue:

Whether or not respondent is considered a common carrier

Held:

Yes, respondent is a common carrier but shall not be liable for damages. Respondent has engaged itself
in the business of carrying goods for others, although for a limited clientele, undertaking to carry such
goods for a fee. The regularity of its activities in this area indicates more than just a casual activity on its
part. Neither can the concept of a common carrier change merely because individual contracts are
executed or entered into with patrons of the carrier.

As for the liability, the vessel was suddenly tossed by waves of extraordinary height and buffeted by strong
winds resulting in the entry of water into the barge’s hatches, even if it is seaworthy as determined by the
coast guard. As such, pursuant to the mandates of Article 1733 of the Civil Code, respondent is exempt
from liability for loss, destruction, or deterioration of the goods due to flood, storm, earthquake, lightning,
or other natural disaster or calamity, among others, even if respondent is considered as a common carrier.
 3. Travel and Tours Advisers v. Cruz (199282, March 14, 2016)

Facts:

Edgar Hernandez was driving an Isuzu Passenger Jeepney he owns. Meanwhile, a Daewoo passenger bus
from RCJ Bus Lines owned by petitioner and driven by Edgar Calaycay travelled in the same direction as
that of Hernandez. The bus bumped the rear portion of the jeepney causing it to ram into an acacia tree
which resulted in the death of Alberto Cruz, Jr. and the serious physical injuries of Virginia Muñoz.

Respondents Hernandez, Muñoz and Alberto Cruz, Sr., filed a complaint for damages, claiming that the
collision was due to the reckless, negligent and imprudent manner by which Calaycay was driving the bus,
and praying for damages. Petitioner claimed that it exercised the diligence of a good father of a family in
the selection and supervision of its employee Calaycay and further argued that it was Hernandez who was
driving his passenger jeepney in a reckless and imprudent manner by suddenly entering the lane of the
bus without seeing to it that the road was clear for him to enter said lane. In addition, petitioner alleged
that Hernandez violated his franchise by travelling along an unauthorized route and that the jeepney was
overloaded with passengers, and the deceased was clinging at the back thereof.

Issue:

Whether or not the contributory negligence of the jeepney driver will still make him entitled to damages

Held:

Yes, he is entitled to damages but his contributory negligence mitigates the damages he seeks.

Petitioner was not able to prove that it exercised the required diligence needed in the selection and
supervision of its employee. However, the jeepney was in violation of its allowed route, hence, the owner
and driver of the jeepney are likewise guilty of negligence as provided under Article 2179 of the Civil Code:
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.

In the present case, the proximate cause of the death of the deceased is the negligence of petitioner's bus
driver, but the jeepney driver is also guilty of contributory negligence. Petitioner and its driver, therefore,
are not solely liable for the damages and it is only proper to mitigate their liability.