TRANSPORTATION LAW (Case Digests)

CASE TITLE SCHMITZ TRANSPORT & BROKERAGE CORPORATION V. TRANSPORT VENTURE INCORPORATED ET.AL
Parties to Schmitz Transport— Their services were engaged by Little Giant to secure requisite clearances, to receive
the case the cargoes from the ship-side and to deliver them to Little Giant’s warehouse in Cainta, Rizal.
Transport Venture— Their services were engaged by Schmitz Transport to send a barge and tugboat at
shipside
Black Sea Shipping— Owner of the vessel that shipped the goods from Russia to Manila
Little Giant— Consignee who hired Black Sea to ship the cargoes, ST to receive and the deliver the cargoes
and Industrial Insurance to insure the cargoes.
Industrial Insurance Company— Insured the cargoes against all risks under a Marine Policy.
Facts A. On September 25, 1991, SYTCO shipped 545 hot rolled steel sheets in coil on board M/V Alexander
Saveliev (owned by Black Sea) to the port of Manila in favor of Little Giant.
B. The vessel arrived at the port of Manila October 24, 1991 and the Philippine Port Authority (PPA)
assigned it at the outside breakwater of at the Manila South Harbor
C. On October 26, 1991; 4:30 pm, TVI’s tugboat towed the barge named Erika V to shipside and by 7:00
pm the tugboat left and returned to the port terminal after poitioning the bargee alongside the
vessel.
D. 9:00 pm of the same day, Arrastre Ocean Terminal began to unload 37 of the 545 coils from the vessel
unto the barge.
E. 12:30 am the next day, the weather had become inclement and the loading of the 37 coils was
accomplished. However, no tugboat pulled the barge back to the pier and at around 5:30 due to the
strong waves, the crew of the barge abandoned it and transferred to the vessel.
F. The barge capsized and washed the 37 coils into the sea. It was only at 7:00 am when a tugboat finally
arrived to pull the already empty and damaged barge back to the pier.
G. Little Giant and Industrial Insurance tried to recover the lost cargoes but failed.
H. Little Gian filed a formal claim against industrial insurance which paid them and thus Little giant
issued Industrial Insurance a subrogation receipt.
I. Industrial Insurance in turn, filed a complaint against ST, TVI and BS before the RTC for the recovery
of the amount it paid to little Giant including adjustment fees, attorney’s fees and litigation expenses
faulting them for unloading the cargoes despite the storm warning. RTC ruled against defendants.
J. The CA affirmed in toto the decision of the RTC finding all defendants common carriers and holding
that there was no fortuitous event in the case.
K. In the present petition ST filed a petition against TVI, II and BS claiming that in chartering the barge
and tugboat of TVI, it was acting for its principal Little Giant hence the transportation contract was
between LG and TVI
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
2. If there was negligence, whether liability for the loss may attach to BS, ST and TVI
Ratio 1. NO. The proximate cause of the loss was the fact that no tugboat towed back the barge to the pier
Decidendi after the cargoes have been completely loaded. Had it been there, the loss could have been avoided.
This said, the Fortuitous Event defense cannot be appreciated for there was human intervention in
the form of contributory negligence that resulted in the loss of the cargoes.
2. Schmitz Transport and TVI are solidarily liable.
a. First, despite ST’s contention, it being a customs broker makes it a common carrier since the
transportation of goods is an integral part of their job. Art. 1732 does not distinguish between
one whose principal business activity is the carrying of goods and one who does such carrying
only as an ancillary activity.
b. ST’s argument that any negligence it may have committed was deemed the negligence of its
principal (Little Giant) is wrong. In effecting the transportation of the cargoes from ship side and
into LG’s warehouse, it was discharging its own personal obligation under a contract of carriage.
c. TVI who acted as a private carrier was only required to observe ordinary diligence but in this case
they failed in exerting ordinary diligence due to their failure to promptly provide a tugboat which
 not only increased the risk that might have been reasonable anticipated during the ship side
operation but was the proximate cause of the loss.
d. For ST to be relieved of liability is should have exercised due diligence pursuant to Art. 1730.
While it sent checkers and a supervisor on board the vessel, it failed to take all available and
reasonable precautions to avoid the loss.
e. As for BS, it’s duty as a common carrier extended only from the time the goods were surrendered
or unconditionally placed in the its possession and received for transportation until they were
delivered or actually or constructively to consignee little giant. Since BS constructively delivered
the cargoes to LG through ST, it has discharged its duty.
Case Title SPS. PERENA v. SPS. ZARATE & PHILIPPINE NATIONAL RAILWAYS
Parties to Sps. Zarate— Couple who engaged the school bus services of Sps. Zarate for their son Aaron
the case Sps. Perena— Owner of a School Bus Service
Aaron— Son of Sps. Zarate who died from an accident involving the school bus he was riding.
Clemente Alfaro— Driver of the school bus, employee of Sps. Perena.
PNR— Party to the case given that the accident involved one of its trains who collided with the School
bus service.
Facts A. In June 1996, Sps. Zarate engaged the school bus services of Sps. Perena for their son which involved
picking him up from their residence in Paranaque and bringing him to Don Bosco in Makati.
B. On August 22, 1996, the school bus picked up Aaron as usual and the other children. Due to heavy
traffic the bus was already running late to Alfaro to the van to an alternate route.
C. He traversed the narrow path underneath the Magallanes interchange that was commonly used as a
shortcut by Makati-bound vehicles. In fact, the bamboo barandilla was up leaving the railroad
crossing open to traversing motorists.
D. As the train neared the railroad crossing, Alfaro drove the van eastward across the railroad tracks,
closely tailing a large passenger bus.
E. His view of the train was blocked because he overtook the passenger bus on its left side.
F. When the train was about 50 meters away from the passenger bus and the van, Alano applied the
ordinary breaks of the train. He only applied the emergency breaks when he saw that a collision was
imminent.
G. The passenger bus successfully crossed but the van driven by Alfaro did not. The train hit the rear
end of the van which threw 9 of the 12 students in the rear including Aaron out of the van.
H. Aaron landed in the path of the train which dragged his body and severed his head, killing him
instantly.
I. Sps. Zarate sued PNR and Sps. Perena based on a quasi-delict under Art. 2176 and breach of contract
of carriage for the safe transport of Aaron respectively.
J. RTC and CA found Sps. Zarate and PNR solidarily liable. Hence, Sps. Perena raised the matter to the
Supreme Court.
Issue/s 1. Whether or not Sps. Perena and PNR are solidarily liable for damages
2. Whether or not the indemnity for loss of Aaron’s earning capacity was proper
3. Whether or not the amount of damage awarded was excessive
Ratio 1. Yes. PNR and Sps. Perena are solidarily liable
Decidendi a. Sps. Perena operated as a common carrier. Their standard of care was EOD not the ordinary
diligence of a good father of a family. 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, not a
common, 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.
b. Applying these considerations to the case before us, there is no question that the Pereñas as the
operators of a school bus service were: (a) engaged in transporting passengers generally as a
business, not just as a casual occupation; (b) undertaking to carry passengers over established
roads by the method by which the business was conducted; and (c) transporting students for a
fee. Despite catering to a limited clientèle, the Pereñas operated as 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.
c. RTC rightly found the PNR also guilty of negligence despite the school van of the Pereñas
traversing the railroad tracks at a point not dedicated by the PNR as a railroad crossing for
pedestrians and motorists, because the PNR did not ensure the safety of others through the
placing of crossbars, signal lights, warning signs, and other permanent safety barriers to prevent
 vehicles or pedestrians from crossing there. The RTC observed that the fact that a crossing guard
had been assigned to man that point from 7 a.m. to 5 p.m. was a good indicium that the PNR was
aware of the risks to others as well as the need to control the vehicular and other traffic there. V
2. Yes. The RTC and CA were not speculating that Aaron would be some highly-paid professional.
Instead, the computation was based on him being a lowly minimum wage earner despite being then
enrolled at a prestigious high school like Don Bosco in Makati, a fact that would have likely ensured
his success in his later years in life and at work. Also, the fact that Aaron was without a history of
earnings should not taken against his parents and in favor of the defendants whose negligence not
only cost Aaron his life and his right to work and earn money, but also deprived his parents of their
right to his presence and his services as well. The compensation of this nature is awarded not for loss
of time or earnings but for loss of the deceased’s power or ability to earn money.
3. No. The moral damages of 2.5 million were really just and reasonable under the circumstances
surrounding the case because the were intended by the law to assuage the the Zarate’s deep mental
anguish over their son’s unexpected and violent death, and their moral shock over the senseless
accident. The exemplary damages awarded should not be reduced also, to render an effective
example for the public good.
Case Title SPS. CRUZ v. SUN HOLIDAYS INC.
Parties to Sps. Cruz— Parents of Ruelito who died in the incident in Coco Beach
the case Sun Holidays Inc.— Owner of the Resort and the transport service thereof
Ruelito—Man who died with his wife due to the capsizing of the boat they were on owned by Respondent
Coco Beach Island Resort— Resort owned by Sun Holidays Inc. where the incident happened.
Facts A. Newlywed Ruelito and his wife stayed at the resort of respondent from September 9-11, 2000 by
virtue of a tour package-contract with Sun Holidays Inc. that included transportation to and from the
resort and the point of departure in Batangas.
B. September 11, 2000 the couple trekked the side of the Coco Beach Mountain that was sheltered from
the wind. There, they boarded the M/B Coco Beach III, which was to ferry them to Batangas.
C. After the boat sailed, it started to rain and as it moved farther away from Puerto Galera and into the
open seas, the rain and wind got stronger causing the boat to tilt side to side and the captain to step
froward to the front and leave the wheel to a crew member.
D. Soon after the rains and wind grew stronger and the boat capsized putting all passengers underwater.
The captain told the passengers to save themselves when pressed what they could do to help those
still underwater.
E. Help came 45 minutes after but 8 passengers including Ruelito and his wife didn’t make it alive.
F. Sps. Cruz filed a complaint for indemnity for damages but the RTC and CA denied the claim ruling that
the respondent is a private carrier which is only required to observe ordinary diligence and that the
proximate cause of the incident was a squall which is a fortuitous event.
Issue/s 1. Whether or not Respondent, Sun Holidays Inc. is a common carrier
2. Whether or not the proximate cause of the incident is a fortuitous event
Ratio 1. Yes. Art. 1732 makes no distinction between one whose principal business activity is the carrying of
Decidendi persons or goods or both and one who does such carrying only as an ancillary activity (sideline). Art.
1732 also 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 it distinguish between a carrier offering its services to the general
public and one who offers services or solicits business only from a narrow segment of the general
population.
a. 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 operation is underscored by it 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. Thus, these services are available to the public.
2. No. To fully free a common carrier from any liability, the fortuitous event must have been the
proximate and only cause of the loss and it should have exercised due diligence to prevent or
minimize the loss before, during and after the occurrence of the fortuitous event.
a. Respondent cites the squall that occurred during the voyage as the fortuitous event HOWEVER ,
the occurrence of squalls was expected under the weather condition of September 11, 2000.
MOREOVER, evidence shows that M/B Coco Beach III suffered engine trouble before it capsized
and sank. The incident was, therefore, not completely free from human intervention.

Requisites of a Fortuitous Event:

1. The cause of the unforeseen and unexpected occurrence, or the failure of the debtors to comply
with their obligations must have been independents of human will
2. The event that constituted the fortuitous event must have been impossible to foresee or if
foreseeable, impossible to avoid.
3. The occurrence must have been such as to render it impossible for the debtors to fulfill their
obligation in a normal manner
4. The obligor must have been free from any participation in the aggravation of the resulting injury
to the creditor.
Case Title FE PEREZ v. JOSEFINA GUTIERREZ & PANFILO ALAJAR
Parties to Fe Perez— One of the teacher who was injured and hospitalized when the jeepney she was riding met an
the case accident
Josefina Gutierrez— owner of the jeepney who claims she had sold the sam to Alajar
Panfilo Alajar— Buyer of Gutierrez’ jeepney
Leopoldo Cordero- Driver of the jeepney when the accident occurred.
Facts A. On September 6, 1959, while Perez and 9 co-teachers were passengers of an AX jeepney registered
under Gutierrez.
B. Due to alleged reckless negligence of its driver Cordero, the vehicle met an accident, resulting in the
injuries to herself that required hospitalization.
C. Perez filed a complaint with the CFI against Gutierrez for breach of contract of carriage.
D. Gutierrez contended that if Perez’ claims are justified, the responsibility should devolve on Alajar who
is the actual owner by purchase of the said passenger jeepney when the accident occurred.
E. Alajar in his answer, disclaimed responsibility for the accident, alleging that a) the deed of sale is null
and void because it has not been registered with the public service commission despite his repeated
demands and b) said passenger jeepney remained in the control of Gutierrez who together with her
husband, has been collecting rentals from him for the use of said vehicle and c) by express agreement,
title to the vehicle remained with Gutierrez pending approval of the sale by the public service
commission.
F. RTC found Cordero guilty of reckless imprudence and Alajar as the owner.
Issue/s 1. Whether or not the judgment finding Alajar as the owner instead of Gutierrez is correct.
2. Whether or not the contentions of Fe Perez that the registered owner of a motor vehicle should be
the one held liable for damages resulting from breach of contract of carriage by a common carrier.
Ratio 1&2: Yes. In Erezo v. Jepte, the court held that the doctrine of making the registered owner of a common
Decidendi carrier answerable to the public for negligence injuries to its passengers or third persons, even though
the vehicle has already been transferred to another, is based upon the principle that in dealing with
vehicles under the Public Service Law, the public has the right to assume or presume that the registered
owner is the actual owner thereof, for it would be difficult for the public to enforce the actions that
they may have for injuries caused to them by the vehicles being negligently operated if the public
should be requires to prove who the actual owner is.

*It is not implied that the registered owner may not recover whatever amount he had paid by virtue of his
liability to third persons from the person to whom he has actually sold, assigned or conveyed the vehicle.

*The court also failed to hold Cordero solidarily liable with Gutierrez for being guilty of reckless
imprudence.
Case Title JOSE MENDOZA v. PHILIPPINE AIR LINES INC.
Parties to Jose Mendoza— Owner of a theater who sought to show a film
the case Philippine Air Lines Inc. — Carrier of the can of film to be used by Mendoza
LVN Pictures— A movie producer form whom the movie to be shown came from.
Facts A. Mendoza, owner of the Cita theater wanted to show the film “Himala ng Birhen” in time for the town
fiesta (Pena Francia)
B. A month before the holiday, he contracted with LVN Pictures Inc., a movie producer in Manila for him
to show the film during the town fiesta.
C. He made extensive preparations such as printing posters and advertising in newspapers.
D. In pursuance of the agreement between LVN pictures Inc. and Mendoza, LVN Pictures Inc. delivered
to PAL a can containing the film consigned to the Cita theater.
E. The plane with the can arrived on September 17 but it was not unloaded and as such it was brought
back to Manila.
F. Mendoza inquired about it on the same day but only received the can on September 20.
G. Mendoza brought an action against PAL to recoup his losses for missing to show the movie on time.
H. The RTC dismissed the complaint finding PAL not liable for said damages.
I. PAL in its part contended, to avoid liability that paragraph 6 of the Way Bill states that the carrier
does not obligate itself to carry the goods by any specific aircraft or on a specified time. Thereby the
carrier is authorized to deviate from the route of shipment without any liability therefore.
J. Mendoza for his part contends that Art. 358 of the code of commerce should should govern the award
of damages in his favor. Said article provides that if there was no period fixed for the delivery of
goods, the carrier shall be bound to forward them in the first shipment of the same or similar
merchandise which he may make to the point of delivery and that upon failure to do so, the damages
caused by the delay should be suffered by the carrier. (RTC disagreed and opined that air
transportation not being expressly covered by the code of commerce cannot be governed by its
provisions.
Issue/s 1. Are Aircrafts common carriers?
2. Whether or not PAL is liable for the loss of profit suffered by Mendoza.
Ratio 1. Yes. Air transportation is clearly similar or analogous to land and water transportation. The obvious
Decidendi reason for its non inclusion in the code of commerce was that at the time of its promulgation,
transportation by air on a commercial basis was not yet known. In the United States where air
transportation has reached its highest development, an airline company engaged in the
transportation business is regarded as a common carrier.
*The test whether one is a common carrier by air is whether he holds out that he will carry for hire, so
long as he has room, goods of everyone brining goods to him for carriage, not whether he is carrying as a
public employment or whether he carries to a fixed place.

2. No. Common carriers are not obligated by law to carry and to deliver merchandise, and persons are
not vested with the right to prompt delivery, unless such common carriers previously assume the
obligation. Said rights and obligations are created by a specific contract entered into by the parties.
In the present case, the findings of the trial court which as already stated, are accepted by the parties
and which we must accept are to the effect that the LVN Pictures Inc. and Jose Mendoza on one side,
and the defendant company on the other, entered into a contract of transportation. (p. 29, Rec. on
Appeal).

One can readily sympathize with the appellant herein for his loss of profits which he expected to realize.
But he overlooked the legal angle. In situations like the present where failure to exhibit films on a certain
day would spell substantial damages or considerable loss of profits, including waste of efforts on
preparations and expenses incurred in advertisements, exhibitors, for their security, may either get hold
of the films well ahead of the time of exhibition in order to make allowance for any hitch in the delivery,
or else enter into a special contract or make a suitable arrangement with the common carrier for the
prompt delivery of the films, calling the attention of the carrier to the circumstances surrounding the case
and the approximate amount of damages to be suffered in case of delay.