Home Insurance Co.

v American Steamship Agencies

23 SCRA 24 April 4, 1968

Facts:
Consorcio Pasquero Del Perse of South America shipped a freight of 21,740 jute bags of Peruvian
fish meal through the SS Crowborough consigned to the Sam Miguel Brewery and insured by Home
Insurance Company for $202,505.00. It arrived in Manila on March 7, 1963 and was loaded into the
lighters of Luzon Stevedoring Company. However, it arrived with shortages. Thus SMB demanded that
Home Insurance pay the claim of P14,000.00. Home Insurance on the other hand filed for the recovery of
the P14,000.00 from Luzon Stevedoring. The Court of First Instance absolved Luzon Stevedoring, but
ordered the American Steamship Agencies to reimburse the amount to Home Insurance, basing the ruling
on Art. 587 of the Code of Commerce which makes the ship agent civilly liable for damages in favor of
third persons due to conduct of carrier’s captain and that the stipulation in the charter party exempting the
owner from liability is against public policy under Article 1744 of the New Civil Code.

Issue:
Between the provisions of the New Civil Code and the Code of Commerce, which should apply.

Held:
The court rules the affirmative as to the non-applicability of the prohibition of the exemption of the
carrier from liability. The provisions of our Civil Code on common carriers were taken from Anglo-
American Law. Under American Jurisprudence, a common carrier undertakes to carry a special cargo or
chartered to a special person only, becomes a private carrier. And thus, as a private carrier, a stipulation
exempting the owner from liability for the negligence of its agent is not against public policy. The reason
is that there is no strict public policy applied.

De Guzman vs. Court of Appeals (168 SCRA 612)

Facts:

Cendena was a junk dealer and was engaged in buying used bottles and scrap materials in
Pangasinan and brought these to Manila for resale. He used two 6-wheeler trucks. On the return trip to
Pangasinan, he would load his vehicles with cargo which various merchants wanted delivered
toPangasinan. For that service, he charged freight lower than regular rates. General Milk Co. contacted
with him for the hauling of 750 cartons of milk. On the way to Pangasinan, one of the trucks was hijacked
by armed men who took with them the truck and its cargo and kidnapped the driver and his helper. Only
150 cartons of milk were delivered. The Milk Co. sued to claim the value of the lost merchandise based
on an alleged contract of carriage. Cendena denied that he was a common carrier and contended that he
could not be liable for the loss it was due to force majeure. The trial court ruled that the it was a common
carrier. The CA reversed.

Issue:

Whether or not Cendena is a common carrier?

Held:

Yes, Cendena is properly characterized as a common carrier even though he merely backhauled
goods for other merchants, and even if it was done on a periodic basis rather than on a regular basis, and
even if his principal occupation was not the carriage of goods. Article 1732 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. It also avoids making a distinction between a person or enterprise
offering transportation services on a regular or scheduled basis and one offering service on an occasional,
episodic o run scheduled basis. Neither does it make a distinction between a carrier offering its services to
the general public and one who offers services or solicits business only from a narrow segment of
population.
Planters Products, Inc. v. Court of Appeals
G.R. No. 101503

Facts:
Planters Products (Planters) purchased from Mitsubishi International Corporation of USA of 9,000
metric tons of urea fertilizer which the latter shipped abroad the cargo vessel owned by private respondent
Kyosei Kisin Kabushiki Kaisha (KKKK) from America to La Union. Prior to its voyage, a time charter
party was entered into between Mitusbishi as shipper/charterer and KKKK as ship-owner. After the Urea
fertilizer was loaded in bulk by stevedored hired by the shipper, the steel hatches were closed with heavy
iron lids which remained closed during the entire journey.
Upon arrival of the vessel, the hatches were opened with the use of the vessel boom. Planters
unloaded the cargo from the holders into the steel bodied dump trucks. Each time the dump trucks were
filled up, its load of urea was covered with tarpaulin before it was transported to the consignee’s
warehouse located some (50) fifty meteres from the wharf. It took (11) eleven days from planters to
unload the cargo. The report submitted by private marine and cargo surveyors revealed a shortage in the
cargo, and some portion in the cargo was contaminated with dirt, rendering the same unfit for commerce.
Planters filed an action for damages bu the appellate court absolved the carrier from liability.

Issues:
1. Whether or not the respondent is a common carrier.
2. Whether or not the respondent is liable for damages.

Held:
1. The court rules the affirmative as to the respondent being a common carrier. The term common
carrier is defined in Article 1732 of the Civil Code. The definition refers to carriers either by land,
water, or air which holds themselves out as ready to engage in carrying goods on transporting
passengers or both for compensation as a public employment and not as a casual occupation; if
the undertaking is a single transaction, not a part of the general business or corporation, although
involving the carriage of goods for a fee, then the person or corporation offering such services is
a private carrier. In the case at bar respondent carrier transports goods indiscriminately for all
persons. Being such, he is a common carrier.
2. The court rules the negative. True, being a common carrier, respondent must have observed
extraordinary diligence over the goods it carries. In the case at bar it has been proven that the
respondent has sufficiently overcome this, by clear and convincing proof, the prima facie
presumption of negligence, due to the manner of storage of the goals during the vogyage. In fact,
it was pointed out that there was a risk in shipping the urea due to its character.
Coastwise Lighterage Corporation v. CA
245 SCRA 796

Facts:
Pag-asa Sales Inc. entered into a contract to transportmolasses from the province of Negros to Manila
withCoastwise Lighterage Corporation (Coastwise forbrevity), using the latter's dumb barges. The barges
weretowed in tandem by the tugboat MT Marica, which islikewise owned by Coastwise. Upon reaching
ManilaBay, one of the barges, "Coastwise 9", struck anunknown sunken object. The forward
buoyancycompartment was damaged, and water gushed inthrough a hole "two inches wide and twenty-
two incheslong". As a consequence, the molasses at the cargotanks were contaminated. Pag-asa filed a
claim againstPhilippine General Insurance Company, the insurer of itscargo. Philgen paid P700,000 for
the value of themolasses lost.Philgen then filed an action against Coastwise to recoverthe money it paid,
claiming to be subrogated to theclaims which the consignee may have against the carrier.Both the trial
court and the Court of Appeals ruled againstCoastwise.

 
Issues:
(1) Whether Coastwise was transformed into a privatecarrier by virtue of the contract it entered into
with Pag-asa, and whether it exercised the required degree ofdiligence
(2) Whether Philgen was subrogated into the rights of theconsignee against the carrier
Held:
(1) Pag-asa Sales, Inc. only leased three of petitioner'svessels, in order to carry cargo from one point
to another,but the possession, command mid navigation of thevessels remained with petitioner Coastwise
Lighterage.Coastwise Lighterage, by the contract of affreightment,was not converted into a private
carrier, but remained acommon carrier and was still liable as such.
The law and jurisprudence on common carriers both hold that themere proof of delivery of goods in
good order to a carrierand the subsequent arrival of the same goods at theplace of destination in bad order
makes for a prima faciecase against the carrier. It follows then that thepresumption of negligence that
attaches to commoncarriers, once the goods it is sports are lost, destroyed ordeteriorated, applies to the
petitioner. This presumption,which is overcome only by proof of the exercise ofextraordinary diligence,
remained unrebutted in this case.Jesus R. Constantino, the patron of the vessel"Coastwise 9" admitted that
he was not licensed.Coastwise Lighterage cannot safely claim to haveexercised extraordinary diligence,
by placing a person whose navigational skills are questionable, at the helm ofthe vessel which eventually
met the fateful accident. Itmay also logically, follow that a person without license tonavigate, lacks not
just the skill to do so, but also theutmost familiarity with the usual and safe routes taken byseasoned and
legally authorized ones. Had the patronbeen licensed he could be presumed to have both theskill and the
knowledge that would have prevented thevessel's hitting the sunken derelict ship that lay on theirway to
Pier 18. As a common carrier, petitioner is liablefor breach of the contract of carriage, having failed
toovercome the presumption of negligence with the lossand destruction of goods it transported, by proof
of itsexercise of extraordinary diligence.
(2) Article 2207 of the Civil Code is founded on the well-settled principle of subrogation. If the
insured property isdestroyed or damaged through the fault or negligence ofa party other than the assured,
then the insurer, uponpayment to the assured will be subrogated to the rights ofthe assured to recover
from the wrongdoer to the extentthat the insurer has been obligated to pay. Payment bythe insurer to the
assured operated as an equitableassignment to the former of all remedies which the lattermay have against
the third party whose negligence orwrongful act caused the loss. The right of subrogation isnot dependent
upon, nor does it grow out of, any privateof contract or upon written assignment of, claim. Itaccrues
simply upon payment of the insurance claim bythe insurer.

National Steel Corporation v. Court of Appeals

G.R. Nos. 112287/112350

Facts:
 Herein petitioner of G.R. No. 112350, Vlasons Shipping entered into a contract of afreightment on
contract of vogage4 charter line with the petitioner of the other consolidated case, National Steel
Corporation (NSC), whereby the latter hired Vlason’s vessel, the M/V Vlasons I to make a voyage to load
steel products from Ilagan City to Manila. Under the agreement, the loading and unloading of the cargoes
are the responsibility of the charter and the owner shall no be liable of the loss or damage of the cargo
arising from the unseaworthiness unless counsel by want of diligence on the part of the owners to make
the vessel seaworthy and to secure that it is properly manned, equipped and supplied.
Upon arrival on August 12, 1974, it was found that nearly all the tin plates and hot rolled sheets were
wet and rusty. The cargo was unloaded by the charterer Hence the petitioner filed for a claim of damages
amounting to P941,145.58, alleging the negligence of the master and crew of the ship.

Issue:
Whether or not Vlasons Shipping is made liable notwithstanding the Charter Party stipulations.

Held:
The courts rule the negative. At bottom, this appeal really hinges on a factual issue as to then, how,
and who caused the damages to the cargo. Ranged against NSC are two formidable truhs. First, it was
found that such damage was brought about during the unloading process when the rain seeped into the
cargo due to the negligence of the stevedores employed by it.
Second and more importantly, the agreement between the parties “The Contact of Voyage Charter
Party for Hire” placed the burden of proof of such loss or damage upon the shipper, not upon the ship
owner. Such stipulation, while disadvantageous to the NSC, is valid because the parties entered into a
contract of private charter, not one of common carriage.
Basic too is the doctrine that courts cannot relieve a party from the effects of a private contract fully
entered into, on the ground that it is allegedly one-sided or unfair to the plaintiff. It has been held that the
true test of a common carrier of passengers/goods is the carriage of the same, provided it has space, for all
who opt to avail for its transportation service for a fee.

Calvo vs. UCPB General Insurance (G.R. NO. 148496 MARCH 19,2002)

Facts:

Petitioner Virgines Calvo, owner of Trans-orient Container Terminal Services, Inc. (TCTSI), and a
custom broker, entered into a contract with San Miguel Corporation (SMC) for the transfer of 114 reels of
semi-chemical fluting paper and 124 reels of kraft liner board from the port area to the Tabacalera
Compound, Ermita, Manila. The cargo was insured by respondent UCPB General Insurance Co., Inc. On
July 14, 1990, contained in 30 metal vans, arrived in Manila onboard “M/V Hayakawa Maru”. After 24
hours, they were unloaded from vessel to the custody of the arrastre operator, Manila Port Services, Inc.
From July 23 to 25, 1990, petitioner, pursuant to her contract with SMC, withdrew the cargo from the
arrastre operator and delivered it to SMC’s warehouse in Manila. On July 25, the goods were inspected by
Marine Cargo Surveyors, reported that 15 reels of the semi-chemical fluting paper 5. “wet/stained/torn”
and 3 reels of kraft liner board were also torn. The damages cost P93,112.00. SMC collected the said
amount from respondent UCPB under its insurance contract. Respondent on the other hand, as a subrogee
of SMC, brought a suit against petitioner in RTC, Makati City. On December 20, 1995,the RTC rendered
judgment finding petitioner liable for the damage to the shipment. The decision was affirmed by the CA.

Issue:

Whether or not Calvo is a common carrier?

Held:

In this case the contention of the petitioner, that he is not a common carrier but a private carrier, has
no merit. Article 1732 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 ancillary activity. Article 1732 also
carefully avoids making any distinction between a person or enterprise offering transportation service on
a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled
basis. Neither does Article1732 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 distinction. (De Guzman v. CA, 68 SCRA 612) Te concept of “common carrier” under
Article 1732 coincide with the notion of “public service”, under the Public Service Act which partially
supplements the law on common carrier. Under Section 13, paragraph (b) of the Public Service Act, it
includes: “ x x x 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 freightor
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. x x x”

Asia Lighterage Shipping Inc v CA

Facts: Wheat in bulk, was shipped by Marubeni American Corporation of Portland, Oregon on board the
vessel M/V NEO for delivery to the consignee, General Milling Corporation in Manila. The shipment was
insured by the private respondent Prudential Guarantee and Assurance, Inc. against loss or damage. The
carrying vessel arrived in Manila and the cargo was transferred to the custody of the petitioner Asia
Lighterage and Shipping, Inc. The petitioner was contracted by the consignee as carrier to deliver the
cargo to consignee's warehouse. On, 900 metric tons of the shipment was loaded on barge PSTSI III  for
delivery to consignee. The cargo did not reach its destination.
It appears that the transport of said cargo was suspended due to a warning of an incoming typhoon. The
petitioner proceeded to pull the barge to Engineering Island off Baseco to seek shelter from the
approaching typhoon. A few days after, the barge developed a list because of a hole it sustained after
hitting an unseen protuberance underneath the water. The barge was then towed to ISLOFF terminal
before it finally headed towards the consignee's wharf. Upon reaching the Sta. Mesa spillways, the barge
again ran aground due to strong current. To avoid the complete sinking of the barge, a portion of the
goods was transferred to three other barges.
The next day, the towing bits of the barge broke. It sank completely, resulting in the total loss of the
remaining cargo. Private respondent indemnified the consignee. 15Thereafter, as subrogee, it sought
recovery of said amount from the petitioner, but to no avail.
The private respondent filed a complaint against the petitioner for recovery of the amount of indemnity,
attorney's fees and cost of suit.
The Regional Trial Court ruled in favor of the private respondent.
Petitioner appealed to the Court of Appeals insisting that it is not a common carrier.
Issue: Whether the petitioner is a common carrier

Held: Common Carrier. 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. To be
sure, petitioner fits the test of a common carrier as laid down in Bascos vs. Court of Appeals. 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." In the case at bar, the petitioner admitted that it is engaged in the business of
shipping and lighterage, offering its barges to the public, despite its limited clientele for carrying or
transporting goods by water for compensation.

PANTRANCO vs. Public Service Commission (PSC)

G.R. No. 47065 June 26, 1940
Delegation of Powers, Separation of Powers, Certificate of Public Convenience

FACTS: 

PANTRANCO, a holder of an existing Certificate of Public Convenience is applying to operate additional

buses with the Public Service Commission (PSC) has been engaged in transporting passengers in certain
provinces by means of public transportation utility. Patranc applied for authorization to operate 10
additional trucks. The PSC granted the application but added several conditions for PANTRANCO’s
compliance. One is that the service can be acquired by government upon payment of the cost price less
depreciation, and that the certificate shall be valid only for a definite period of time.
ISSUE: 

Whether or not PSC can impose said conditions. If so, wouldn’t this power of the PSC constitute undue
delegation of powers?

RULING:  

The Supreme Court held that there was valid delegation of powers.

The theory of the separation of powers is designed by its originators to secure action at the same time
forestall overaction which necessarily results from undue concentration of powers and thereby obtain
efficiency and prevent deposition. But due to the growing complexity of modern life, the multiplication of
subjects of governmental regulation and the increased difficulty of administering laws, there is a
constantly growing tendency toward the delegation of greater powers by the legislature, giving rise to the
adoption, within certain limits, of the principle of “subordinate legislation.”

All that has been delegated to the Commission is the administrative function, involving the use of
discretion to carry out the will of the National Assembly having in view, in addition, the promotion of
public interests in a proper and suitable manner.

CANGCO VS MANILA RAILROAD COMPANY G.R. L-12191 OCTOBER 14, 1918

FACTS:

On January 20, 1915, Jose Cangco was riding the train of Manila Railroad Company where he was an
employee. As the train drew near to his destination, he arose from his seat. When he was about to alight
from the train, Cangco accidentally stepped on a sack of watermelons which he failed to notice because it
was already 7:00pm and it was dim when it happened. As a result, he slipped and fell violently on the
platform. His right arm was badly crushed and lacerated which was eventually amputated.

Cangco sued Manila Railroad Company on the ground of negligence of its employees placing the sacks of
melons upon the platform and in leaving them so placed as to be a menace to the security of passenger
alighting from the company’s trains.

The company’s defense was that granting that its employees were negligent in placing an obstruction
upon the platform, the direct and proximate cause of the injury suffered by plaintiff was his own
contributing negligence.

ISSUE: Whether or not there was a contributing negligence on the part of the plaintiff.

HELD: In determining the question of contributory negligence in performing such act – that is to say,
whether the passenger acted prudently or recklessly – the age, sex, and physical condition of the
passenger are circumstances necessarily affecting the safety of the passenger, and should be considered.

The place was perfectly familiar to the plaintiff as it was his daily custom to get on and off the train at the
station. There could, therefore, be no uncertainty in his mind with regard either to the length of the step
which he was required to take or the character of the platform where he was alighting. The Supreme
Court’s conclusion was that the conduct of the plaintiff in undertaking to alight while the train was yet
slightly under way was not characterized by imprudence and that therefore he was not guilty of
contributory negligence. As a general rule . . . it is logical that in case of extra-contractual culpa, a suing
creditor should assume the burden of proof of its existence, as the only fact upon which his action is
based; while on the contrary, in a case of negligence which presupposes the existence of a contractual
obligation, if the creditor shows that it exists and that it has been broken, it is not necessary for him to
prove negligence.

The test by which to determine whether the passenger has been guilty of negligence in attempting to
alight from a moving railway train, is that of ordinary or reasonable care. It is to be considered whether an
ordinarily prudent person, of the age, sex and condition of the passenger, would have acted as the
passenger acted under the circumstances disclosed by the evidence. This care has been defined to be, not
the care which may or should be used by the prudent man generally, but the care which a man of ordinary
prudence would use under similar circumstances, to avoid injury.

Women, it has been observed, as a general rule are less capable than men of alighting with safety under
such conditions, as the nature of their wearing apparel obstructs the free movement of the limbs. Again, it
may be noted that the place was perfectly familiar to the plaintiff as it was his daily custom to get on and
off the train at this station. There could, therefore, be no uncertainty in his mind with regard either to the
length of the step which he was required to take or the character of the platform where he was alighting.
Our conclusion is that the conduct of the plaintiff in undertaking to alight while the train was yet slightly
under way was not characterized by imprudence and that therefore he was not guilty of contributory
negligence.

At the time of the accident, was earning P25 a month as a copyist clerk, and that the injuries he has
suffered have permanently disabled him from continuing that employment. Defendant has not shown that
any other gainful occupation is open to plaintiff. His expectancy of life, according to the standard
mortality tables, is approximately thirty-three years. We are of the opinion that a fair compensation for
the damage suffered by him for his permanent disability is the sum of P2, 500, and that he is also entitled
to recover of defendant the additional sum of P790.25 for medical attention, hospital services, and other
incidental expenditures connected with the treatment of his injuries.

Medina v Cresencia 99 Phil 506

Facts:

On May 31, 1953 a passenger jeep driven by Brigido Avorque smashed into a Meralco post on
Azcarraga Street, resulting in the death of Vicente Medina (passenger). A criminal case for homicide thru
reckless imprudence was filed against driver to which he pleaded guilty on September 09, 1953.

Heirs o Medina reserved their right to file a separate action for damages and brought suit on June
16, 1953 against the driver and Cresencia (registered owner and operator of jeep). Cresencia disclaimed
liability saying that he had sold the jeep in question to Cudiamat (and that there were many subsequent
sales after that until it was purchased in 1953 by Rosario Avorque. The complaint was amended to
include Rosario who admitted to buying the jeep but denied being the public utility operator of the same.
C & R made manifestations admitting that based on the records of the Motor Vehicles Office and Public
Service Commission, Cresencia was still the registered operator of the jeep while Rosario was the owner
at the time of the accident

The Lower Court ruled that as far as the public concerned, Cresencia is still the owner and is liable
solidarily with Brigido and was awarded Php 6, 000.00 compensatory damages, Php 30,000.00 moral
damages, Php 10, 000.00 exemplary damages, Php 10, 000.00 nominal damages, Php 5,000.00 Attorney’s
fees and costs. Rosario was absolved from liability.

Issues:

Who is liable with Brigido?

What is the basis of the liability?

Won the award of Nominal damages was proper.

Ruling:

Cresencia. As held in the case of Montoya v Ignacio, Sec 20 (g) CA No. 146 as amended, requires
approval of the Public Service Commission (PSC) in order a franchise/any privilege pertaining thereto
may be sold/leased without infringing the certificate issued to the grantee. This means that:

a. if property covered by the franchise is transferred / leased without this requisite approval, the
transfer is not binding against the public or the PSC; and
b. the contemplation of laws the grantee of record continues to be responsible under the franchise in
relation to the Commission and to the public.
The basis of the action of the ER’s subsidiary liability under the RPC for damages arising from EE’s
criminal acts. Since Rosario admitted that she is the employer, she should be the one subsidiarily liable
for Brigido’s acts.

2. Culpa Contractual. The SC ruled that the basis for the action is not ER’s subsidiary liability but on a
breach of the carrier’s contractual obligation to carry its passengers safely to their destination. Since the
liability for culpa contractual is direct and immediate, there is no need to prove Brigido’s insolvency
before damages can be recovered from Cresencia.

3. Nominal damages deleted. Decision affirmed. While the award is not questioned, the Ct said the award
of nominal damages in this case is untenable since the same cannot co-exist with compensatory damages.
The purpose for nominal damages is to vindicate or recognize a right that has been violated and not to
indemnify the plaintiff for any loss suffered by him (Article 2223, 2223 NCC). Since the LC already
awarded compensatory and exemplary damages, the award for nominal damages is unnecessary and
improper.

Isaac v. A.L. Ammen Transport Co., Inc.

G.R. No. L-9671, 23 August 1957, 101 Phil. 1046

FACTS:

Cesar Isaac boarded Bus No. 31 from Ligao, Albay bound for Pili, Camarines Sur and seated himself on
the left side resting his left arm on the window and with his left elbow outside the window. Before
reaching his destination, a pick-up car at full speed and was running outside of its proper lane came from
the opposite direction.

The driver of the bus swerved the bus to the very extreme right of the road until its front and rear wheels
have gone over the pile of stones or gravel situated on the rampart of the road. He was rushed to a
hospital in Iriga, Camarines Sur where he was given blood transfusion to save his life. After four (4) days,
he was transferred to another hospital in Tabaco, Albay. Where he underwent treatment for 3 months. He
incurred expenses of Php623.40, excluding medical fees which were paid by A.L. Ammen Trans. Co.

ISSUE:

Whether or not there is no negligence on the part of the common carrier since the accident resulting in
injuries is due to causes which are inevitable and which could not have been avoided or anticipated
notwithstanding the exercise of that high degree of care and skill which the carrier is bound to exercise
for the safety of its passengers neither the common carrier nor the driver is liable therefore.

HELD:

Yes. Considering all the circumstances, we are persuaded to conclude that the driver of the bus has done
what a prudent man could have done to avoid the collision. It is true that Isaac’s contributory negligence
cannot relieve A.L. Ammen of its liability but will only entitle it to a reduction of the amount of damage
caused (Article 1762, new Civil Code), but this is a circumstance which further militates against the
position taken by Isaac.

Where a carrier’s employee is confronted with a sudden emergency, the fact that he is obliged to act
quickly and without a chance for deliberation must be taken into account, and he is held to the some
degree of care that he would otherwise be required to exercise in the absence of such emergency but must
exercise only such care as an ordinary prudent person would exercise under like circumstances and
conditions, and the failure on his part to exercise the best judgment the case renders possible does not
establish lack of care and skill on his part.

Principles governing the liability of a common carrier:

1. the liability of a carrier is contractual and arises upon breach of its obligation. There is breach if it fails
to exert extraordinary diligence according to all circumstances of each case.

2. a carrier is obliged to carry its passenger with the utmost diligence of a very cautious person, having
due regard for all the circumstances.
3. a carrier is presumed to be at fault or to have acted negligently in case of death of, or injury, to
passengers, it being its duty to prove that it exercised extraordinary diligence.

4. the carrier is not an insurer against all risks of travel.

Fores v. Miranda

Facts:

Respondent was one of the passengers of a jeepney driven by Eugenio Luga. While the vehicle was
descending the Sta. Mesa Bridge at an excessive speed, the driver lost control, and the jeepney swerved to
the bridge wall. Serious injuries were suffered by the defendant. The driver was charged with serious
physical injuries through reckless imprudence, and upon interposing a plea of guilty was sentenced
accordingly. Petitioner denies liability for breach of contract of carriage, contending that a day before the
accident, the jeepney was sold to a certain Carmen Sackerman.

Issues:

(1) Is the approval of the Public Service Commission necessary for the sale of a public service vehicle
even without conveying therewith the authority to operate the same?

(2) To what damages is the respondent entitled?

Held:

(1) Assuming the dubious sale to be a fact, the court of Appeals answered the query in the affirmative.
The ruling should be upheld. The provisions of the statute are clear and prohibit the sale, alienation, lease,
or encumbrance of the property, franchise, certificate, privileges or rights, or any part thereof of the
owner or operator of the public service Commission. The law was designed primarily for the protection of
the public interest; and until the approval of the public Service Commission is obtained the vehicle is, in
contemplation of law, still under the service of the owner or operator standing in the records of the
Commission which the public has a right to rely upon.

(2) The P10, 000 actual damages awarded by the Court of First Instance of Manila were reduced by the
Court of Appeals to only P2, 000, on the ground that a review of the records failed to disclose a sufficient
basis for the trial court's appraisal, since the only evidence presented on this point consisted of
respondent's bare statement that his expenses and loss of income amounted to P20, 000. On the other
hand, "it cannot be denied," the lower court said, "that appellee (respondent) did incur expenses"' It is
well to note further that respondent was a painter by profession and a professor of Fine Arts, so that the
amount of P2,000 awarded cannot be said to be excessive. The attorney's fees in the sum of P3,000 also
awarded to the respondent are assailed on the ground that the Court of First Instance did not provided for
the same, and since no appeal was interposed by said respondent, it was allegedly error for the Court of
Appeals to award them motu proprio. Petitioner fails to note that attorney's fees are included in the
concept of actual damages under the Civil Code and may be awarded whenever the court deems it is just
and equitable. We see no reason to alter these awards.

Anent the moral damages ordered to be paid to the respondent, the same must be discarded. We have
repeatedly ruled that moral damages are not recoverable in damage actions predicted on a breach of the
contract of transportation. Where the injured passenger does not die, moral damages are not recoverable
unless it is proved that the carrier was guilty of malice or bad faith. We think it is clear that the mere
carelessness of the carrier's driver does not per se constitute of justify an inference of malice or bad faith
on the part of the carrier; and in the case at bar there is no other evidence of such malice to support the
award of moral damages by the Court of Appeals.
Phil. Rabbit Bus Lines v. Intermediate Appellate Court

G.R. No. 66102-04, 30 August 1990, 189 SCRA 158

FACTS:

On December 24, 1966, passengers boarded the jeepney owned by spouses Isidro Mangune and
Guillerma Carreon and driven by Tranquilino Manalo at Pampanga bound for Pangasinan for P24.00.
Upon reaching Tarlac, the right rear wheel of the jeepney detached causing it to run in an unbalanced
position. Driver Manalo stepped on the brake, causing the jeepney to make a U-turn, invading and
eventually stopping on the opposite lane of the road (the jeepney’s front faced the south (from where it
came) and its rear faced the north (towards where it was going).The jeepney occupied and blocked the
greater portion of the western lane, which is the right of way of vehicles coming from the north.

Petitioner Phil. Rabbit Bus Lines claims that almost immediately after the sudden U-turn the bus bumped
the right rear portion of the jeep. Defendants, on the other hand, claim that the bus stopped a few minutes
before hitting the jeepney. Either way, as a result of the collision, three passengers of the jeepney
(Catalina Pascua, Erlinda Meriales and Adelaida Estomo) died while the other jeepney passengers
sustained physical injuries. A criminal complaint was filed against the two drivers for Multiple Homicide.
The case against delosReyes (driver of Phil. Rabbit) was dismissed for insufficiency of evidence. Manalo
(jeepney driver) was convicted and sentenced to suffer imprisonment.

Three complaints for recovery of damages were then filed before the CFI of Pangasinan: (1) Spouses
Casiano Pascua and Juana Valdez sued as heirs of Catalina Pascua while Caridad Pascua sued in her
behalf; (2) Spouses Manuel Millares and Fidencia Arcica sued as heirs of Erlinda Meriales; and (3)
spouses Mariano Estomo and Dionisia Sarmiento sued as heirs of Adelaida Estomo. All three cases
impleaded spouses Mangune and Carreon, Manalo (jeepney owners), Rabbit and delos Reyes as
defendants. Plaintiffs anchored their suits against spouses Mangune and Carreon and Manalo on their
contractual liability. As against Rabbit and delos Reyes, plaintiffs based their suits on their culpability for
a quasi-delict.

The respondent court applied primarily (1) the doctrine of last clear chance, (2) the presumption that
drivers who bump the rear of another vehicle guilty and the cause of the accident unless contradicted by
other evidence, and (3) the substantial factor test concluded that delos Reyes was negligent.

ISSUE:

Whether or not the doctrine of last clear chance is applicable in this case.

RULING:

No. The doctrine is not applicable.

The principle about “the last clear” chance, would call for application in a suit between the owners and
drivers of the two colliding vehicles. It does not arise where a passenger demands responsibility from the
carrier to enforce its contractual obligations. For it would be inequitable to exempt the negligent driver of
the jeepney and its owners on the ground that the other driver was likewise guilty of negligence.” This
was the ruling in Anuran, et al. v. Buño et al., G.R. Nos. L-21353 and L-21354, May 20, 1966, 17 SCRA
224. Thus, the respondent court erred in applying said doctrine.

On the presumption that drivers who bump the rear of another vehicle guilty and the cause of the
accident, unless contradicted by other evidence, the respondent court said:
. . . the jeepney had already executed a complete turnabout and at the time of impact was already facing
the western side of the road. Thus the jeepney assumed a new frontal position vis a vis, the bus, and the
bus assumed a new role of defensive driving. The spirit behind the presumption of guilt on one who
bumps the rear end of another vehicle is for the driver following a vehicle to be at all times prepared of a
pending accident should the driver in front suddenly come to a full stop, or change its course either
through change of mind of the front driver, mechanical trouble, or to avoid an accident. The rear vehicle
is given the responsibility of avoiding a collision with the front vehicle for it is the rear vehicle who has
full control of the situation as it is in a position to observe the vehicle in front of it.

The above discussion would have been correct were it not for the undisputed fact that the U-turn made by
the jeepney was abrupt. The jeepney, which was then traveling on the eastern shoulder, making a straight,
skid mark of approximately 35 meters, crossed the eastern lane at a sharp angle, making a skid mark of
approximately 15 meters from the eastern shoulder to the point of impact (Exhibit “K” Pascua). Hence,
delos Reyes could not have anticipated the sudden U-turn executed by Manalo. The respondent court did
not realize that the presumption was rebutted by this piece of evidence.

Ynchausti Steamship, Co. v. Dexter, 41 Phil 289 (1920)

FACTS:
 
On July 23, 1918, the Government of the Philippine Islands, acting by and through the respondent
Insular Purchasing Agent, employed the services of the petitioner, Ynchausti Steamship Co., a
common carrier,for the transportation, on board the steamship Venus, from the port of Manila to the port
of Aparri, Cagayan, of a consignment of merchandise, consisting of thirty (30) cases of "White Rose"
mineral oil of two five-gallon cans to the case;
 
On September 18, 1918, the said Government likewise employed the services of petitioner for the
transportation on board the steamship
Venus , from Manila to Aparri, Cagayan, of ninety-six cases of "Cock" Brand mineral oil, ten gallons
to the case.
 
The goods were delivered by the shipper to the carrier, which accordingly received them, and to evidence
the contract of transportation, the parties duly executed and delivered what is popularly called the
Government bill of lading.
 
It was stipulated that the carrier, the petitioner Ynchausti & Co., received the above-mentioned supplies
in apparent good condition, obligating itself to carry said supplies to the place agreed upon.
 
Upon the delivery of the above stated products the consignee claimed that
one case each was delivered empty , and noted said claims upon the bill of lading.
 
Acting Insular Purchasing Agent of the Philippine Islands notified the petitioners herein that after due
investigation the Insular Auditor found and decided that the leakages of the two whole cases were due to
its negligence and that the deduction of the sum of P22.53.8.
 
Petitioner thereupon protested against the threatened deduction, and demanded that it be paid the full
amount due for the transportation of the two said shipments of merchandise.
 
The Insular Auditor, in conformity with his ruling, declined and tendered to it a warrant for the
sum ofP60.26, which the petitioner has refused to accept.

ISSUE
whether or not that the leakages of the two whole cases were due to its negligence of Ynchausti Steamship

HELD
Yes, The mere proof of delivery of goods in good order to a carrier, and of their arrival at the place of destination in bad order,
makes out a prima facie case against the carrier, so that if no explanation is given as to how the injury occurred, the carrier must
be held responsible.

In section 646 of the Administrative Code it is provided that when Government property is transmitted
from one place to another by carrier, it shall be upon proper bill of lading, or receipt, from such carrier,
and it shall be the duty of the consignee, or his representative, to make full notation of any evidence of
loss, shortage, or damage, upon the bill of lading, or receipt, before accomplishing it. It is admitted by the
petitioner in the agreed statement of facts that the consignee, at the time the oil was delivered, noted
the loss in the present case upon the two respective bills of lading. The notation of these losses by the
consignee, in obedience to the precept of section646 of the Administrative Code, is competent evidence to
show that the shortage in fact existed. As the petitioner admits that the oil was received by it for carriage
and inasmuch as the fact of loss is proved in themanner just stated, it results that there is a presumption
that the petitioner was to blame for the loss; and it was incumbent upon the petitioner in order to entitle it
to relief in the case to rebut that presumption by proving, as is alleged in the petition, that the loss was
not due to any fault or negligence of the petitioner.

The mere proof of delivery of goods in good order to a carrier, and of their arrival at the place ofdestination in bad
order, makes out a  p r i m a f a c i e  
 case against the carrier, so that if no explanation is given as to how the injury occurred, the carrier must be held
responsible

 It is incumbent upon the carrier to prove that the loss was due to accident or some other circumstance
inconsistent with its liability (Articles 361-363, Code of Commerce.)It is a rule of universal application
that a petition for extraordinary relief of the character here sought must show merit. That is, the
petitioner's right to relief must be clear. Such cannot be said to be the case where, as here, a presumption
of responsibility on the part of the petitioner stands unrefuted upon the records,

Mirasol v. The Robert Dollar Co. 53 Phil.124 (G.R. No. L-29721)

Facts:

Plaintiff Mirasol alleges that he is the the owner and consignee of two cases of books, shipped in good
order and condition at New York, U.S.A., on board the defendant’s steamship President Garfield, for
transport and delivery to him in the City of Manila, all freight charges paid. The two cases arrived in bad
order and damaged condition, resulting in the total loss of one case and a partial loss of the other. He filed
claims but defendant refused and neglected to pay, giving as its reason that the damage in question “was
caused by sea water.” The lower court rendered judgment for the plaintiff from which both parties
appealed.

Issue:

Whether or not defendant Dollar may be held liable.

Ruling: YES.

The defendant having received the two boxes in good condition, its legal duty was to deliver them to the
plaintiff in the same condition in which it received them. From the time of their delivery to the defendant
in New York until they are delivered to the plaintiff in Manila, the boxes were under the control and
supervision of the defendant and beyond the control of the plaintiff. The defendant having admitted that
the boxes were damaged while in transit and in its possession, the burden of proof then shifted, and it
devolved upon the defendant to both allege and prove that the damage was caused by reason of some fact
which exempted it from liability. As to how the boxes were damaged, when or where, was a matter
peculiarly and exclusively within the knowledge of the defendant and in the very nature of things could
not be in the knowledge of the plaintiff. To require the plaintiff to prove as to when and how the damage
was caused would force him to call and rely upon the employees of the defendant’s ship, which in legal
effect would be to say that he could not recover any damage for any reason. That is not the law.

Shippers who are forced to ship goods on an ocean liner or any other ship have some legal rights, and
when goods are delivered on board ship in good order and condition, and the shipowner delivers them to
the shipper in bad order and condition, it then devolves upon the shipowner to both allege and prove that
the goods were damaged by the reason of some fact which legally exempts him from liability; otherwise,
the shipper would be left without any redress, no matter what may have caused the damage.
GAUDIOSO EREZO v. AGUEDO JEPTE  102 Phil. 103

 GR No. L-9605, Sep 30, 1957 ]

FACTS

Defendant-appellant is the registered owner of a six by six truck. OnAugust, 9, 1949, while the
same was being driven by Rodolfo Espino yGarcia, it collided with a taxicab at the intersection of San
Andres and Dakota Streets, Manila. As the truck went off the street, it hit Ernesto Erezo and another, and
the former suffered injuries, as a result of which he died. The driver was prosecuted for homicide through
reckless negligence. The accused pleaded guilty and was sentenced to suffer imprisonment and to pay the
heirs of Ernesto Erezo the sum of P3,000. As the amount of the judgment could not be enforced against
him, plaintiff brought this action against the registered owner of the truck, the defendant appellant. The
circumstances material to the case are stated by the court in its decision. The defendant does not deny at
the time of the fatal accident the cargo truck driven by Rodolfo Espino y Garcia was registered in his
name. He, however, claims that the vehicle belonged to the Port Brokerage, of which he was the broker at
the time of the accident. He explained, and his explanation was corroborated by Policarpio Franco, the
manager of the corporation, that the trucks of the corporation were registered in his name as a convenient
arrangement so as to enable the corporation to pay the registration fee with his backpay as a pre-war
government employee. Franco, however, admitted that the arrangement was not known to the Motor
Vehicle Office.

ISSUES:

Whether or not the registered owner of the vehicle which caused an accident should be held liable despite
the transfer of the ownership of the vehicle.

HELD:

YES. We find no merit or justice in the above contention. In previous decisions, We already
have held that the registered owner of a certificate of public convenience is liable to the
public for the injuries or damages suffered by passengers or third persons caused by the
operation of said vehicle, even though the same had been transferred to a third person.
The principle upon which this doctrine is based is that in dealing with vehicles registered
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 required to prove who the actual owner is. How would the
public or third persons know against whom to enforce their rights in case of subsequent
transfers of the vehicles? We do not imply by this doctrine, however, 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 had actually sold, assigned or conveyed the vehicle.

ISSUE: Whether or not the registered owner of the vehicle mayprove the transfer and sale of the vehicle
to the real and actual owner.

HELD: NO.

The main aim of motor vehicle registration is to identify the owner sothat if any accident happens, or that
any damage or injury is caused by the vehicles on the public highways, responsibility therefore can be
fixed on a definite individual, the registered owner. Instances are numerous where vehicles running on
public highways caused accidents or injuries to pedestrians or other vehicles without positive
identification of the owner or drivers, or with very scant means of identification. It is to forestall those
circumstances, so inconvenient or prejudicial to the public, that the motor vehicle registration is primarily
ordained, in the interest of the determination of persons responsible for damages or injuries caused on
public highways.Were a registered owner allowed to evade responsibility by proving who the supposed
transferee or owner is, it would be easy for him, by collusion with others or otherwise, to escape said
responsibility and transfer the same to an indefinite person, or to one who possesses no property with
which to respond financially for the damage or injury done. A victim of recklessness on the public
highways is usually,without means to discover or identify the person actually causing the injury or
damage. He has no means other than by a recourse to the registration in the Motor Vehicles Office to
determine who is the owner. The protection that the law aims to extend to him would become illusory
were the registered owner given the opportunity to escape liability by disproving his ownership. If the
policy of the law is to be enforced and carried out, the registered owner should be allowed to prove the
contrary to the prejudice of the person injured that is, to prove that a third person or another has become
the owner, so that he may thereby be relieved of the responsibility to the injured person.

The above policy and application of the law may appear quite harsh and would seem to conflict with truth
and justice. We do not think it is so. A registered owner who has already sold or transferred a vehicle has
the recourse to a third-party complaint, in the same action brought against him to recover for the damage
or injury done, against the vendee or transferee of the vehicle. The inconvenience of the suit is no
justification for relieving him of liability; said inconvenience is the price he pays for failure to comply
with the registration that the law demands and requires.

Abelardo Lim V. CA 373 SCRA 394

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.1âwphi1.nêt

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. petitioner Esmadito Gunnaban.  Gunnaban owned responsibility for the
accident
Petitioner Lim negotiated with private respondent and offered to have the passenger jeepney repaired at
his shop.

Respondent however did not accept the offer instead, private respondent demanded a brand-new jeep or
the amount of P236,000.00.

Issues:
When a passenger jeepney covered by a certificate of public convenience is sold to another who continues
to operate it under the same certificate of public convenience under the so-called kabit system, and in the
course thereof the vehicle meets an... accident through the fault of another vehicle, may the new owner
sue for damages against the erring vehicle?
Ruling:
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. Octavio[10] 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.
For the safety of passengers and the public who may have been wronged and deceived through t
 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.

Private respondent has the right to proceed against petitioners for the damage caused on his passenger
jeepney as well as on his business.

HERNANDEZ V. DOLOR 435 SCRA 668

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.  Fred Panopio, Rene
Castillo and Joseph Sandoval, who were also on board the owner-type jeep, which was totally wrecked,
suffered physical injuries.  The collision also damaged the... passenger jeepney of Francisco Hernandez
and caused physical injuries to its passengers, namely, Virgie Cadavida, Fiscal Artemio Reyes and
Francisca Corona.
Issues:
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
Ruling:
The Hernandez spouses argues that since they were not inside the jeepney at the time of the collision, the
provisions of Article 2180 of the Civil Code, which does not provide for solidary liability between
employers and employees, should be applied.
We are not persuaded.
Article 2180 provides:
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.
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 or industry.
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.[14] 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.
19.
HERMINIO MARIANO v. ILDEFONSO C. CALLEJAS, GR No. 166640, 2009-07-31
Facts:
Petitioner Herminio Mariano, Jr. is the surviving spouse of Dr. Frelinda Mariano who was a passenger of
a Celyrosa Express bus bound for Tagaytay when she met her death. Respondent Ildefonso C. Callejas is
the registered owner of Celyrosa Express, while respondent Edgar de Borja... was the driver of the bus on
which the deceased was a passenger.
At around 6:30 p.m. on November 12, 1991, along Aguinaldo Highway, San Agustin, Dasmariñas,
Cavite, the Celyrosa Express bus, carrying Dr. Mariano as its passenger, collided with an Isuzu truck with
trailer bearing plate numbers PJH 906 and TRH 531. The passenger bus was bound... for Tagaytay while
the trailer truck came from the opposite direction, bound for Manila. The trailer truck bumped the
passenger bus on its left middle portion. Due to the impact, the passenger bus fell on its right side on the
right shoulder of the highway and caused the death... of Dr. Mariano and physical injuries to four other
passengers. Dr. Mariano was 36 years old at the time of her death. She left behind three minor children,
aged four, three and two years.
Petitioner filed a complaint for breach of contract of carriage and damages against respondents for their
failure to transport his wife and mother of his three minor children safely to her destination. Respondents
denied liability for the death of Dr. Mariano. They claimed that... the proximate cause of the accident was
the recklessness of the driver of the trailer truck which bumped their bus while allegedly at a halt on the
shoulder of the road in its rightful lane. Thus, respondent Callejas filed a third-party complaint against
Liong Chio Chang, doing... business under the name and style of La Perla Sugar Supply, the owner of the
trailer truck, for indemnity in the event that he would be held liable for damages to petitioner.
In the case at bar, the trial court, in its Decision dated September 13, 1999, found respondents Ildefonso
Callejas and Edgar de Borja, together with Liong Chio Chang, jointly and severally liable to pay
petitioner damages and costs of suit.
Respondents Callejas and De Borja appealed to the Court of Appeals, contending that the trial court erred
in holding them guilty of breach of contract of carriage.
Issues:
THE DECISION OF THE HONORABLE COURT OF APPEALS, SPECIAL FOURTEENTH
DIVISION IS NOT IN ACCORD WITH THE FACTUAL BASIS OF THE CASE.
Ruling:
In accord with the above provisions, Celyrosa Express, a common carrier, through its driver, respondent
De Borja, and its registered owner, respondent Callejas, has the express obligation "to 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,"[11] and to observe extraordinary diligence
in the discharge of its duty. The death of the wife of the petitioner in the course of transporting her to her
destination... gave rise to the presumption of negligence of the carrier. To overcome the presumption,
respondents have to show that they observed extraordinary diligence in the discharge of their duty, or that
the accident was caused by a fortuitous event.
While the law requires the highest degree of diligence from common carriers in the safe transport of their
passengers and creates a presumption of negligence against them, it does not, however, make the carrier
an insurer of the absolute safety of its... passengers.
Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the
common carrier when its passenger is injured, merely relieves the latter, for the time being, from
introducing evidence to fasten the negligence on the former, because the... presumption stands in the
place of evidence. 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.
Thus, it is clear that neither the law nor the nature of the business of a transportation company makes it an
insurer of the passenger's safety, but that its liability for personal injuries sustained by its passenger rests
upon its negligence, its failure to exercise the... degree of diligence that the law requires.
In the case at bar, petitioner cannot succeed in his contention that respondents failed to overcome the
presumption of negligence against them. The totality of evidence shows that the death of petitioner's
spouse was caused by the reckless negligence of the driver of the Isuzu... trailer truck which lost its
brakes and bumped the Celyrosa Express bus, owned and operated by respondents.
Principles:
The following are the provisions of the Civil Code pertinent to the case at bar:
ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances... of each case.
ART. 1755. A common carrier is bound to 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.
ART. 1756. In 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.

20. COMPAÑIA MARITIMA v. INSURANCE COMPANY OF NORTH AMERICA, GR No. L-18965,

1964-10-30
Facts:
Macleod and Company of the Philippines contracted by telephone the services of the Compañia Maritima,
a shipping corporation, for the shipment of 2,645 bales of hemp from the former's Sasa private pier at
Davao City to Manila and... for their subsequent trans-shipment to Boston, Massachusetts, U.S.A. on
board the S.S. Steel Navigator... his oral contract was later on confirmed by a formal and written booking
issued by Macleod's branch office in Sasa and hand carried to Compañia Maritima's branch office in
Davao
During the night of October
29, 1952, or at the early hours of October 30, LCT No. 1025 sank resulting in the damage or loss of 1,162
bales of hemp loaded therein.
All abaca shipments of Macleod, including the 1,162 bales loaded on the carrier's LCT No. 1025, were
insured with the Insurance Company of North America against all losses and damages
Having failed to recover from the carrier the sum of P60,421.02, which is the only amount supported by
receipts, the insurance company instituted the present action... he court a quo rendered judgment ordering
the carrier to pay the insurance company
Issues:
Was there a contract of carriage between the carrier and the shipper even if the loss occurred when the
hemp was loaded on a barge owned by the carrier which was loaned free of charge and was not actually
loaded on the S.S. Bowline Knot... which would carry the hemp to Manila and no bill of lading was
issued therefor?
Ruling:
This issue should be answered in the affirmative. As found by the Court of Appeals, Macleod and
Company contracted by telephone the services of petitioner to ship the hemp in question from the
former's private pier at Sasa, Davao City, to Manila, to be subsequently... transhipped to Boston,
Massachusettes, U.S.A., which oral contract was later confirmed by a formal and written booking issued
by the shipper's branch office, Davao City, in virtue of which the carrier sent two of its lighters to
undertake the service. It also appears that the... patrons of said lighters were employees of the carrier with
due authority to undertake the transportation and to sign the documents that may be necessary therefor so
much so that the patron of LCT No. 1025 signed the receipt covering the cargo of hemp loaded therein
Received in behalf of S.S. Bowline Knot in good order and condition from MACLEOD AND
COMPANY OF THE PHILIPPINES, Sasa, Davao, for transhipment at Manila onto S.S. Steel Navigator.
"FINAL DESTINATION: Boston."
The fact that the carrier sent its lighters free of charge to take the hemp from Macleod's wharf at Sasa
preparatory to its loading unto the ship Bowline Knot does not in any way impair the contract of carriage
already entered into between the carrier and the shipper, for... that preparatory steps is but a part and
parcel of said contract of carriage.
we have a complete contract of carriage the consummation of which has already begun: the shipper
delivering the cargo to the carrier, and the latter taking possession thereof by... placing it on a lighter
manned by its authorized employees, under which Macleod became entitled to the privilege secured to
him by law for its safe transportation and delivery, and the carrier to the full payment of its freight upon
completion of the voyage.
"The receipt of goods by the carrier has been said to lie at the foundation of the contract to carry and
deliver, and if actually no goods are received there can be no contract. The liability and responsibility of
the carrier under a contract for the carriage of goods... commence on their actual delivery to, or receipt by,
the carrier or an authorized agent. * * * and delivery to a lighter in charge of a vessel for shipment on the
vessel, where it is the custom to deliver in that way, is a good delivery and binds the... vessel receiving
the freight, the liability commencing at the time of delivery to the lighter.* * * and, similarly, where there
is a contract to carry goods from one port to another, and they cannot be loaded directly on the vessel, and
lighters are sent by the vessel to... bring the goods to it, the lighters are for the time its substitutes, so that
the bill of lading is applicable to the goods as soon as they are placed on the lighters.
Whenever the control and possession of goods passes to the carrier and... nothing remains to be done by
the shipper, then it can be said with certainty that the relation of shipper and carrier has been established
The claim that there can be no contract of affreightment because the hemp was not actually loaded on the
ship that was to take it from Davao City to Manila is of no moment, for, as already stated, the delivery of
the hemp to the carrier's lighter is in line with the contract.
In fact, the receipt signed by the patron of the lighter that carried the hemp stated that he was receiving
the cargo "in behalf of S.S. Bowline Knot in good order and condition."
21. LU DO & LU YM CORPORATION vs. I. V. BINAMIRA (1957) –

Delta shipped 6 cases of film and photo supplies to consignee Binarmina. Petioner Lu Do, agent of
carrier, hired Cebu Stevedoring to unload. It was received by Visayan Cebu, arrastre operator. Both
stevedoring and arrastre had checkers for bad cargo. Neither one made any record of bad cargo. When
received by respondent Binarmina, there were signs of pilferage. Is carrier liable?

Nope. Although the extraordinary diligence of a Common Carrier extends up to the time the goods are
delivered to the consignee, such diligence can be subject of stipulation that limits liability during the time
when goods are not under the control of the carrier. Here, there was such a stipulation in the Bill of
Lading.

It stipulated that upon reaching customs authorities, carrier shall not be liable. Shipper: Delta Photo,
Agent of Carrier: Lu Do (Petitioner), Consignee: Binarmina, Who won: Lu Do.

Facts:

1. On August 10, 1951, the Delta Photo Supply Company of New York shipped on board the M/S
"Fernside" at New York, U.S.A., six cases of films and/or photographic supplies.

a. It was consigned to the order of respondent I. V. BINARMINA.

b. For this shipment, Bill of Lading No. 29 was issued.

c. The ship discharged her cargo on September 23, and 24, 1951, including the shipment in question,
placing it in the possession and custody of the arrastre operator of said port, the Visayan Cebu Terminal
Company, Inc.

2. Petitioner, LU DO, as agent of the carrier, hired the Cebu Stevedoring Company, Inc. to unload its
cargo.

a. It prepared a separate list of good order cargo and bar order cargo.

b. It had a designated checker to do this (Villamor)

3. All the cargo unloaded was received by Visayan Cebu Terminal Company, Inc., the arrastre operator.

a. This company also had it’s checker (Quijano)

b. It also prepared separate lists of good and bad cargo.

4. This shipment in question was not included in the report of bad order cargo of both checkers,
indicating that it was discharged from the ship in good order and condition.

5. Three days after the unloading from the ship, respondent Binarmina took delivery of his six cases of
photographic supplies from the arrastre operator.

a. He discovered that the cases showed signs of pilferage and, consequently, he hired marine surveyors,
R. J. del Pan & Company, Inc., to examine them.
b. The surveyors examined the cases and made a physical count of their contents in the presence of
representatives of petitioner Lu Do, respondent Binarmina and the stevedoring company.

c. The finding of the surveyors showed that some films and photographic supplies were missing valued at
P324.63.

Issue: W/N the carrier is responsible for the loss considering that the same occurred after the shipment
was discharged from the ship and placed in the possession and custody of the customs authorities?

Ratio:

The Court of Appeals found for the affirmative, making on this point the following comment:

we believe delivery to the customs authorities is not the delivery contemplated by Article
1736, supra, in connection with second paragraph of Article 1498, supra, because, in such a case,
the goods are then still in the hands of the Government and their owner could not exercise
dominion whatever over them until the duties are paid. In the case at bar, the presumption against
the carrier, represented appellant as its agent, has not been successfully rebutted.

It is now contended that the Court of Appeals erred in its finding not only because it made wrong
interpretation of the law on the matter, but also because it ignored the . provisions of the bill of lading
covering the shipment wherein it was stipulated that the responsibility of the carrier is limited only
to losses that may occur while the cargo is still under its custody and control.

We believe this contention is well taken. It is true that, as a rule, a common carrier is responsible for the
loss, destruction or deterioration of the goods it assumes to carry from one place to another unless the
same is due to any to any of the causes mentioned in Article 1734 on the new Civil Code, and that, if the
goods are lost, destroyed or deteriorated, for causes other that those mentioned, the common carrier is
presumed to have been at fault or to have acted negligently, unless it proves that it has observed
extraordinary diligence in their care (Article 1735, Idem.), and that this extraordinary liability lasts from
the time the goods are placed in the possession of the carrier until they are delivered to the consignee, or
"to the person who has the right to receive them" (Article 1736, Idem.), but these provisions only apply
when the loss, destruction or deterioration takes place while the goods are in the possession of the
carrier, and not after it has lost control of them.

The reason is obvious. While the goods are in its possession, it is but fair that it exercise extraordinary
diligence in protecting them from damage, and if loss occurs, the law presumes that it was due to its fault
or negligence. This is necessary to protect the interest of the owner who is at its mercy. The situation
changes after the goods are delivered to the consignee.

We believe however that the parties may agree to limit the liability of the carrier considering that the
goods have still to through the inspection of the customs authorities before they are actually turned over
to the consignee. This is a situation where we may say that the carrier losses control of the goods because
of a custom regulation and it is unfair that it be made responsible for what may happen during the
interregnum. And this is precisely what was done by the parties herein. In the bill of lading that was
issued covering the shipment in question, both the carrier and the consignee have stipulated to limit the
responsibility of the carrier for the loss or damage that may because to the goods before they are actually
delivered by inserting therein the following provisions:

1. . . . The Carrier shall not be liable in any capacity whatsoever for any delay, nondelivery or
misdelivery, or loss of or damage to the goods occurring while the goods are not in the actual custody of
the Carrier. . . . (Emphasis ours.)

2. . . . The responsibility of the Carrier in any capacity shall altogether cease and the goods shall be
considered to be delivered and at their own risk and expense in every respect when taken into the custody
of customs or other authorities. The Carrier shall not be required to give any notification of disposition of
the goods. . . . (Emphasis ours.)

3. Any provisions herein to the contrary notwithstanding, goods may be . . . by Carrier at ship's tackle . . .
and delivery beyond ship's tackle shall been entirely at the option of the Carrier and solely at the expense
of the shipper or consignee. It therefore appears clear that the carrier does not assume liability for any loss
or damage to the goods once they have been "taken into the custody of customs or other authorities", or
when they have been delivered at ship's tackle. These stipulations are clear. They have been adopted
precisely to mitigate the responsibility of the carrier considering the present law on the matter, and we
find nothing therein that is contrary to morals or public policy that may justify their nullification. We are
therefore persuaded to conclude that the carrier is not responsible for the loss in question, it appearing that
the same happened after the shipment had been delivered to the customs authorities.

22. Dangwa Transportation Co. Inc. V. CA Et Al. (1991)

G.R. No. 95582  October 7, 1991

Lessons Applicable: Actionable Document (Transportation)
Laws Applicable: Art. 1733, Art. 1755

FACTS:
 May 13, 1985: Theodore M. Lardizabal was driving a passenger bus belonging to Dangwa
Transportation Co. Inc. (Dangwa)  
 The bus was at full stop bet. Bunkhouses 53 and 54 when Pedro alighted
 Pedro Cudiamat fell from the platform of the bus when it suddenly
accelerated forward
 Pedro was ran over by the rear right tires of the vehicle
 Theodore first brought his other passengers and cargo to their respective destinations
before bringing Pedro to Lepanto Hospital where he expired
 Private respondents filed a complaint for damages against Dangwa for the death of Pedro
Cudiamat
 Dangwa: observed and continued to observe the extraordinary diligence required in
the operation of the co. and the supervision of the employees even as they are not
absolute insurers of the public at large
 RTC: in favour of Dangwa holding Pedrito as negligent and his negligence was the cause of
his death but still ordered to pay in equity P 10,000 to the heirs of Pedrito
 CA: reversed and ordered to pay Pedrito indemnity, moral damages, actual and compensatory
damages and cost of the suit

ISSUE: W/N Dangwa should be held liable for the negligence of its driver Theodore

HELD: YES. CA affirmed.

 A public utility once it stops, is in effect making a continuous offer to bus riders (EVEN
when moving as long as it is still slow in motion)
 Duty of the driver: do NOT make acts that would have the effect of increasing peril
to a passenger while he is attempting to board the same
 Premature acceleration of the bus in this case = breach of duty
 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
 Duty extends to boarding and alighting
 GR: By contract of carriage, the carrier assumes the express obligation to transport the
passenger to his destination safely and observe extraordinary diligence with a due regard for
all the circumstances, and any injury that might be suffered by the passenger is right away
attributable to the fault or negligence of the carrier
 EX: carrier to prove that it has exercised extraordinary diligence as prescribed in Art. 1733
and 1755 of the Civil Code
 Failure to immediately bring Pedrito to the hospital despite his serious condition = patent and
incontrovertible proof of their negligence
 Hospital was in Bunk 56
  1st proceeded to Bunk 70 to allow a passenger (who later called the family of Pedrito
on his own will) to alight and deliver a refrigerator
 In tort, actual damages is based on net earnings
23. Vicente Calalas vs. Court of Appeals, Eliza Jujeurche Sunga and Francisco Salva
G.R. No. 122039, May 31, 2000
332 SCRA 356
FACTS:
Respondent, Eliza Sunga took a passenger jeepney owned and operated by petitioner Vicente Calalas.
The jeepney was already filled with passengers so she was given by the conductor an “extension seat,” a
wooden stool at the back of the door. As she was seated at the rear end of the vehicle, Sunga gave way to
the outgoing passenger. Unfortunately, a truck driven by Iglecerio Verena and owned by Francisco Salva
bumped the left rear portion of the jeepney. As a result, Sunga was injured.
Sunga then filed a complaint for damages against Calalas, alleging violation of the contract of carriage by
the former in failing to exercise the diligence required of him as a common carrier. Calalas, on the other
hand, filed a third-party complaint against Francisco Salva, the owner of the truck.

RTC’s decision: Absolved Calalas of liability and ruled that Salva as third-party defendant was
responsible for the accident. It took cognizance of another case (Civil Case No. 3490), filed by Calalas
against Salva and Verena, for quasi-delict, in which Branch 37 of the same court held Salva and his driver
Verena jointly liable to Calalas for the damage to his jeepney.
CA’s decision: reversed RTC’s ruling on the ground that Sunga’s cause of action was based on a contract
of carriage, not quasi-delict, and that the common carrier failed to exercise the diligence required under
the Civil Code. It also dismissed the third-party complaint against Salva and adjudged Calalas liable for
damages to Sunga.
ISSUES:
1. Whether or not respondent passenger is bound by the ruling in Civil Case No. 3490 finding the driver
and the owner of the truck liable for quasi-delict.
2. Whether or not respondent carrier is responsible for the injury caused to its passenger when the
accident was caused by another vehicle.
3. Whether or not the bumping of the jeepney by the truck owned by Salva was a caso fortuito.
4. Whether or not respondent passenger is entitled to moral damages.
RULING:
1. No. The principle of res judicata does not apply where a party in a pending case was never a party in a
previous one. And besides, the issues in Civil Case No. 3490 and in the present case are not the same. The
issue in Civil Case No. 3490 was whether Salva and his driver Verena were liable for quasi-delict for the
damage caused to petitioner’s jeepney. On the other hand, the issue in this case is whether petitioner is
liable on his contract of carriage. The first, quasi-delict, also known as culpa aquiliana or culpa extra
contractual, has as its source the negligence of the tortfeasor. The second, breach of contract or  culpa
contractual, is premised upon the negligence in the performance of a contractual obligation.
2. Yes. The liability of petitioner arises from his negligence in the performance of his contractual
obligation or breach of contract of carriage. Art. 1756 of the Civil Code provides that common carriers
are presumed to have been at fault or to have acted negligently in case of death or injuries to passengers,
unless they prove that they observed extraordinary diligence as defined in Arts. 1733 and 1755 of the
Code. This provision necessarily shifts to the common carrier the burden of proof. It is now the duty of
petitioner to prove that he observed extraordinary diligence in the care of his passengers. However, in this
case, petitioner failed to prove that he observed extraordinary diligence in the care of his passengers. It
was found that the jeepney was not properly parked and he took more passengers than the allowed seating
capacity.

3. No. The taking of an “extension seat” is not an implied assumption of risk on the part of the passenger.
A caso fortuito is an event which could not be foreseen, or which, though foreseen, was inevitable. This
requires that the following requirements be present: (a) the cause of the breach is independent of the
obligor’s will; (b) the event is unforeseeable or unavoidable; (c) the event is such as to render it
impossible for the obligor to fulfill his obligation in a normal manner, and (d) the obligor did not take part
in causing the injury to the creditor. Petitioner should have foreseen the danger of parking his jeepney
with its body protruding two meters into the highway.
4. No. Petitioner did not act in bad faith in the performance of the contract of carriage. As a general rule,
moral damages are not recoverable in actions for damages predicated on a breach of contract for it is not
one of the items enumerated under Art. 2219 of the Civil Code. As an exception, such damages are
recoverable: (1) in cases in which the mishap results in the death of a passenger, as provided in Art. 1764,
in relation to Art. 2206(3) of the Civil Code; and (2) in the cases in which the carrier is guilty of fraud or
bad faith, as provided in Art. 2220.

NOTES:
In quasi-delict, the negligence or fault should be clearly established because it s the basis of the action,
whereas in breach of contract, the action can be prosecuted merely by proving the existence of the
contract and the fact that the obligor, in this case the common carrier failed to transport his passenger
safely to his destination.

Doctrine of Proximate Cause

The doctrine of proximate cause is applicable only in actions for quasi-delicts, not in actions involving
breach of contract.
Presumption of Negligence
Upon the happening of the accident, the presumption of negligence at once arises, and it becomes the duty
of a common carrier to prove that he observed extraordinary diligence in the care of his passengers.
Bad faith
The common carrier’s admission in open court that his driver failed to assist the injured passenger in
going to a nearby hospital cannot be construed as an admission of bad faith.
The rules on extraordinary responsibility of common carriers remain basically unchanged even when the
contract is breached by tort although noncontradictory principles on quasi-delict may then be assimilated
as also forming part of the governing law. (Sabena Belgian World Airlines vs. Court of Appeals, 255
SCRA 38 [1996])

Proximate cause, which is determined by a mixed consideration of logic, common sense, policy and
precedent, is that cause which, in natural and continuous sequence, unbroken by any efficient intervening
cause, produces the injury, and without which the result would not have occured. (Bank of the Philippine
Islands vs. Court of Appeals, 641 SCRA 326 [2000])
While the driver of an improperly parked vehicle may be liable in case of collision, the driver of a moving
vehicle who had no opportunity to avoid the collision due to his own making is not relieved of liability,
such as when his negligence is the immediate and proximate cause of the collision. (Austria vs. Court of
Appeals, 327 SCRA 668 [2000])

24. Kapalaran Bus Line vs. Coronado [G.R. No. 85331. August 25, 1989]

Note: See RTC, CA & SC ruling on exemplary damages – doon ung discussion ata nung safety of
passengers na topic – izzy

1. Grajera, jeepney driver, came from Pila Laguna & was on its way towards Sta. Cruz traversing
the highway. The jeep reached the intersection and stopped.
2. The bus was from Sta Cruz going to Manila. The regular itinerary of the bus was to pass thru the
town proper of Pila Laguna but in case the bus is already full, it would pass thru the highway. The
bus driver asked its conductor if they could still accommodate passengers but the conductor said
the bus was already full.
 Here, boath roads are national roads. The bus was still far from the intersection when the jeepney
first reacher there. Atty. Manicad driving his Mustang, & was 2 vehicles ahead of the bus testified
that he & the other 2 vehicle behind him stopped at the intersection to GIVE WAY to the
jeepney. But the bus ignored the stopped vehicles & overtook both vehicles.
 The 1st vehicle to arrive at the intersection was the jeepney. The jeepney driver upon seeing that
the road was clear, began to move forward to which the lawyer stopped his car to give way to the
jeepney.
 While the bus was approaching the intersection, the driver was busy asking his conductor if the
bus was full or not. And when he turned his attention to the road & saw the stopped vehicles &
the jeepney crossing the intersection, there was no more room to stop without slamming into the
stopped vehicles. The bus driver chose to gamble on proceeding & even had to overtake the
stopped vehicles but collided w/ the jeepney, which was at the right of way and was crossing at
the intersection.

RTC: In favor of jeepney & the injured passenger Shinyo; Bus company liable for damages

a. 40 k - pay the owner of the wrecked jeepney + 5k - atty’s fees & litigation expenses
b. 35K - the medical expenses of the injured passenger
c. 30k - 2nd operation of the injured passenger to remove nail from his femur
d. 50k - moral damages for pain & suffering inflicted upon defendant
e. 10k - exemplary damages; to serve as a deterrent to others who, like the bus company, may
be minded to induce accident victims to perjure themselves in a sworn statement
f. 15k - atty’s fees & litigation expenses to the injured passenger

CA: Affirmed but set aside the grant of exemplary damages & the atty’s fees & litigation expenses to
the injured passenger
Bus company: It was the fault of the jeepney driver. The jeepney should have stopped since there is a
possibility that another vehicle behind the cars might not actually stop & might swerve to the left.

ISSUE: Was it right to hold the bus company liable? YES.

HELD:

Kapalaran’s driver had become aware that some vehicles ahead of the bus and

travelling in the same direction had already stopped at the intersection obviously to give way either to
pedestrians or to another vehicle about to enter the intersection. The bus was driving at a high speed on
the highway to hight to slow down & stop & chose to swerve to the left land & overtake the stopped
vehicles ahead of it & directly smashed into the jeepney. Immediately before the collision, the bus driver
was actually violating traffic rules. 1

 The presumption arose that the bus driver was negligent which it failed to overthrow such. The
bus driver tried to shift the blame upon the jeepney driver for the latter’s failure to stop. But the
jeepney driver, seeing the cars closest to the intersection on the opposite side of the highway
come to a stop to give way to him, had the right to assume that other vehicles further away and
behind the stopped cars would similarly come to a stop.
 The bus driver has the responsibility to see to it that before overtaking, the left lane of the road
within the intersection & beyond it was clear. Here, the point of impact was on the left side of the
intersection, which was precisely the lane, or side on which the jeepney had a right to be.
As to the moral damages:

 The owners (employer) of the bus assails the moral damages since it was the bus driver who was
negligent & not them.

SC: The patent and gross negligence on the part of petitioner Kapalaran’s driver raised the legal
presumption that Kapalaran as employer was guilty of negligence either in the selection or in the
supervision of its bus drivers.

 Where the employer is held liable for damages, it has of course a right of recourse against its own
negligent employee.
 The employer’s liability for the for the acts and negligence of its bus driver is not “merely
subsidiary,” and is not limited to cases where the employee “cannot pay his liability,” nor are
private respondents compelled first to proceed against the bus driver.
 The liability of the employer under Article 2180 of the Civil Code is direct and immediate ; it is
not conditioned upon prior recourse against the negligent employee and a prior showing of the
insolvency of such employee.
 The injured passenger died during the pendency of the this petition, which was hastened due to
the serious nature of his injuries due to the collision.

As to the exemplary damages deleted by the CA:

 CA said there was no basis for the award since it was not such a reprehensible act to try to gather
witnesses for one’s cause and that there was no evidence of use of pressure or influence to induce
the accident victims to perjure themselves.

SC: The lower courts overlooked the fact that the bus driver was grossly & criminally negligent in his
reckless disregard of the rights of other vehicles and their passengers and of pedestrians as well. SC is
entitled to take judicial notice of the gross negligence and the appalling disregard of the physical
safety and property of others so commonly exhibited today by the drivers of passenger buses and
similar vehicles on our highways.

1
The law requires petitioner as common carrier to exercise extraordinary diligence in carrying and
transporting their 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.”

 In requiring the highest possible degree of diligence from common carriers and creating a
presumption of negligence against them, the law compels them to curb the recklessness of their
drivers.
 While the immediate beneficiaries of the standard of extraordinary diligence are, of course, the
passengers and owners of cargo carried by a common carrier, they are not the only persons
that the law seeks to benefit.
 For if common carriers carefully observed the statutory standard of extraordinary diligence in
respect of their own passengers, they cannot help but simultaneously benefit pedestrians and
the owners and passengers of other vehicles who are equally entitled to the safe and
convenient use of our roads and highways.
 The law seeks to stop and prevent the slaughter and maiming of people (whether passengers or
not) and the destruction of property (whether freight or not) on our highways by buses, the
very size and power of which seem often to inflame the minds of their drivers.
 Article 2231 of the Civil Code explicitly authorizes the imposition of exemplary damages in
cases of quasi-delicts “if the defendant acted with gross negligence.”

Here, it is not only the demands of social justice but also the compelling considerations of public policy
noted above which impelled the SC to restore the award of exemplary damages.

CA decision affirmed but award of damages modified:

a. Examplary damages to Shinyo restored & increased from 10k to 25k

b. 15k of atty’s fees to Shinyo restored

25. REGIONAL CONTAINER LINES OF SINGAPORE v. NETHERLANDS INSURANCE CO.,

GR No. 168151, 2009-09-04
Facts:
filed a complaint for subrogation of... insurance settlement with the Regional Trial Court,... EDSA
Shipping, RC
Specifically, RCL and EDSA Shipping denied negligence in the transport of the cargo; they attributed any
negligence that may... have caused the loss of the shipment to their co-defendants.
RCL and EDSA Shipping, in their motion, insisted that Netherlands Insurance had (1) failed to prove...
failed to establish that any negligence on their part or that the loss was sustained while the cargo was in
their custody.
trial court handed down an Order dismissing Civil Case No. 96-78612... the defendants could not be held
liable for the loss or damage, as their respective liabilities ended... at the time of the discharge of the
cargo from the ship at the Port of Manila.
CA... dismissal of the complaint against defendants Regional Container Lines and Its local agent, EDSA
Shipping Agency, is REVERSED and SET ASIDE.
are ordered to reimburse plaintiff
Issues:
whether the CA correctly held RCL and EDSA Shipping liable as common carriers under the theory of
presumption of negligence.
Ruling:
are bound to observe extraordinary diligence in the vigilance over the goods an
ART. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods,
unless the same is due to any of the following causes only:
ART. 1735. In... if the goods are lost, destroyed, or deteriorated, common carriers are presumed to have
been at fault or to have acted negligently, unless they prove that they observed... extraordinary diligence
as required by article 1733.
extraordinary liability of the common carrier continues to be operative even during the time the goods are
stored in a warehouse of the carrier at the place of destination, until the consignee has been advised of the
arrival of the goods and has had reasonable... opportunity thereafter to remove them or otherwise dispose
of them.
They contend that the cause of the damage to the cargo was the "fluctuation of the temperature in the
reefer van," which fluctuation occurred after the... cargo had already been discharged from the vessel; no
fluctuation, they point out, arose when the cargo was still on board M/V Piya Bhum. As the cause of the
damage to the cargo occurred after the same... was already discharged from the vessel and was under the
custody of... the arrastre operator (International Container Terminal Services, Inc. or ICTSI), RCL and
EDSA Shipping posit that the presumption of negligence provided in Article 1735 of the Civil Code
should not apply. W
To overcome the presumption of negligence, the common carrier must establish by adequate proof that it
exercised extraordinary diligence over the goods. It must do more than merely show that some other party
could be responsible for the damage
RCL and EDSA Shipping failed to prove that they did exercise that degree of diligence required by law
over the goods they transported.
This evidence, however, does not disprove that the condenser fan - which caused the fluctuation of the...
temperature in the refrigerated container - was not damaged whi... the cargo was being unloaded from the
ship. It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under
the custody of the carrier;[11]
RCL and EDSA Shipping failed to dispute this.