1. Dangwa Transportation Co., Inc. vs.

Court of Appeals  Stepping and standing on the platform of the bus is already
considered a passenger and is entitled all the rights and protection
G.R. No. 95582, 202 SCRA 574 , October 07, 1991
pertaining to such a contractual relation
FACTS:
 Duty extends to boarding and alighting
 May 13, 1985: Theodore M. Lardizabal was driving a passenger bus
 GR: By contract of carriage, the carrier assumes the express
belonging to Dangwa Transportation Co. Inc. (Dangwa)
obligation to transport the passenger to his destination safely and
 The bus was at full stop bet. Bunkhouses 53 and 54 when Pedro observe extraordinary diligence with a due regard for all the
alighted circumstances, and any injury that might be suffered by the
passenger is right away attributable to the fault or negligence of the
 Pedro Cudiamat fell from the platform of the bus when it suddenly
carrier
accelerated forward
 EX: carrier to prove that it has exercised extraordinary diligence as
 Pedro was ran over by the rear right tires of the vehicle
prescribed in Art. 1733 and 1755 of the Civil Code
 Theodore first brought his other passengers and cargo to their
 Failure to immediately bring Pedrito to the hospital despite his
respective destinations before bringing Pedro to Lepanto Hospital
serious condition = patent and incontrovertible proof of their
where he expired
negligence
 Private respondents filed a complaint for damages against Dangwa
 Hospital was in Bunk 56
for the death of Pedro Cudiamat
 1st proceeded to Bunk 70 to allow a passenger (who later called the
 Dangwa: observed and continued to observe the extraordinary
family of Pedrito on his own will) to alight and deliver a refrigerator
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  In tort, actual damages is based on net earnings
large
 RTC: in favour of Dangwa holding Pedrito as negligent and his
2. Loadstar Shipping Co., Inc. vs. Court of Appeals
negligence was the cause of his death but still ordered to pay in
equity P 10,000 to the heirs of Pedrito G.R. No. 131621, 315 SCRA 339 , September 28, 1999
 CA: reversed and ordered to pay Pedrito indemnity, moral damages,
actual and compensatory damages and cost of the suit
Facts:
On November 19, 1984, Loadstar received on board its vessel M/V
ISSUE: W/N Dangwa should be held liable for the negligence of its driver Cherokee the following goods for shipment:
Theodore
1. 705 bales of lawanit hardwood
2. 27 boxes and crates of tilewood assemblies and others
HELD: YES. CA affirmed.
3. 49 bundles of mouldings R & W (3) Apitong Bolidenized
 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)
The goods, amounting to P6,067,178, were insured by Manila Insurance
 Duty of the driver: do NOT make acts that would have the effect of
Co. The vessel is insured by Prudential Guarantee and Assurance, Inc.
increasing peril to a passenger while he is attempting to board the
On November 20, 1984, on its way to Manila from Agusan, the vessel
same
sank off Limasawa Island. MIC paid the consignee P6,075,000 for the
 Premature acceleration of the bus in this case = breach of duty value of the goods lost, and filed a complaint against Loadstar and PGAI,
1
claiming subrogation into the rights of the consignee. When PGAI paid Issues:
Loadstar, it was dropped from the complaint. The trial court ruled against
(1) Whether Loadstar was a common carrier or a private carrier
Loadstar, and this was affirmed by the Court of Appeals.
(2) Whether Loadstar exercised the degree of diligence required under
the circumstances
Loadstar submits that the vessel was a private carrier because it was not
(3) Whether the stipulation that the goods are at “the owner’s risk” is valid
issued a certificate of public convenience, it did not have a regular trip or
schedule nor a fixed route, and there was only "one shipper, one (4) Whether the action has prescribed
consignee for a special cargo." In refutation, MIC argues that the issue as
to the classification of the M/V "Cherokee" was not timely raised below;
hence, it is barred by estoppel. While it is true that the vessel had on Held:
board only the cargo of wood products for delivery to one consignee, it
(1) We hold that LOADSTAR is a common carrier. It is not necessary that
was also carrying passengers as part of its regular business. Moreover,
the carrier be issued a certificate of public convenience, and this public
the bills of lading in this case made no mention of any charter party but
character is not altered by the fact that the carriage of the goods in
only a statement that the vessel was a "general cargo carrier." Neither
question was periodic, occasional, episodic or unscheduled. There was
was there any "special arrangement" between LOADSTAR and the
no charter party. The bills of lading failed to show any special
shipper regarding the shipment of the cargo. The singular fact that the
arrangement, but only a general provision to the effect that the M/V
vessel was carrying a particular type of cargo for one shipper is not
"Cherokee" was a "general cargo carrier." Further, the bare fact that the
sufficient to convert the vessel into a private carrier.
vessel was carrying a particular type of cargo for one shipper, which
appears to be purely coincidental, is not reason enough to convert the
vessel from a common to a private carrier, especially where, as in this
LOADSTAR argues that as a private carrier, it cannot be presumed to
case, it was shown that the vessel was also carrying passengers.
have been negligent, and the burden of proving otherwise devolved upon
MIC. It also maintains that the vessel was seaworthy, and that the loss
was due to force majeure. LOADSTAR goes on to argue that, being a
(2) The doctrine of limited liability does not apply where there was
private carrier, any agreement limiting its liability, such as what transpired
negligence on the part of the vessel owner or agent. LOADSTAR was at
in this case, is valid. Since the cargo was being shipped at "owner’s risk,"
fault or negligent in not maintaining a seaworthy vessel and in having
LOADSTAR was not liable for any loss or damage to the same. Finally,
allowed its vessel to sail despite knowledge of an approaching typhoon.
LOADSTAR avers that MIC’s claim had already prescribed, the case
In any event, it did not sink because of any storm that may be deemed as
having been instituted beyond the period stated in the bills of lading for
force majeure, inasmuch as the wind condition in the area where it sank
instituting the same — suits based upon claims arising from shortage,
was determined to be moderate. Since it was remiss in the performance
damage, or non-delivery of shipment shall be instituted within sixty days
of its duties, LOADSTAR cannot hide behind the "limited liability" doctrine
from the accrual of the right of action. MIC, on the other hand, claims that
to escape responsibility for the loss of the vessel and its cargo.
LOADSTAR was liable, notwithstanding that the loss of the cargo was
due to force majeure, because the same concurred with LOADSTAR’s
fault or negligence. Secondly, LOADSTAR did not raise the issue of
(3) Three kinds of stipulations have often been made in a bill of lading.
prescription in the court below; hence, the same must be deemed
The first is one exempting the carrier from any and all liability for loss or
waived. Thirdly, the "limited liability" theory is not applicable in the case at
damage occasioned by its own negligence. The second is one providing
bar because LOADSTAR was at fault or negligent, and because it failed
for an unqualified limitation of such liability to an agreed valuation. And
to maintain a seaworthy vessel. Authorizing the voyage notwithstanding
the third is one limiting the liability of the carrier to an agreed valuation
its knowledge of a typhoon is tantamount to negligence.
unless the shipper declares a higher value and pays a higher rate of
freight. According to an almost uniform weight of authority, the first and
second kinds of stipulations are invalid as being contrary to public policy,

2
but the third is valid and enforceable. Since the stipulation in question is paying, which he had left behind, but in so doing, his daughter followed
null and void, it follows that when MIC paid the shipper, it was subrogated him unnoticed by his father. While said Mariano Beltran was on he
to all the rights which the latter has against the common carrier, running board of the bus waiting for the conductor to hand him his
LOADSTAR. bayong which he left under one its seats near the door, the bus, whose
motor was not shut off while unloading suddenly started moving forward,
evidently to resume its trip, notwithstanding the fact that the conductor
(4) MIC’s cause of action had not yet prescribed at the time it was was still attending to the baggage left behind by Mariano Beltran.
concerned. Inasmuch as neither the Civil Code nor the Code of Incidentally, when the bus was again placed in a complete stop, it had
Commerce states a specific prescriptive period on the matter, the traveled about 10 meters from point where plaintiffs had gotten off.
Carriage of Goods by Sea Act (COGSA) — which provides for a one-year
period of limitation on claims for loss of, or damage to, cargoes sustained
during transit — may be applied suppletorily to the case at bar. This one- Sensing the bus was again in motion; Mariano immediately jumped form
year prescriptive period also applies to the insurer of the goods. In this the running board without getting his bayong from conductor. He landed
case, the period for filing the action for recovery has not yet elapsed. on the side of the road almost board in front of the shaded place where
Moreover, a stipulation reducing the one-year period is null and void; it he left his wife and his children. At that time, he saw people beginning to
must, accordingly, be struck down. gather around the body of a child lying prostrate on the ground, her skull
crushed, and without life. The child was none other than his daughter
Raquel, who was run over by the bus in which she rode earlier together
3. La Mallorca vs. Court of Appeals, et al. her parent.
G.R. No. L-20761, 17 SCRA 739 , July 27, 1966
For the death of the said child, plaintiffs comment the suit against the
defendant to recover from the latter damages.
Facts: Plaintiffs, husband and wife, together with their three minor
daughters (Milagros, 13 years old, Raquel, about 4 years old and Fe, 2
years old) boarded the Pambusco at San Fernando Pampanga, bound
Issue: Whether or not the child was no longer the passenger of the bus
for Anao, Mexico, Pampanga. Such bus is owned and operated by the
involved in the incident, and therefore, the contract of carriage was
defendant.
already terminated?

They were carrying with them four pieces of baggage containing their
Held: There can be no controversy that as far as the father is concerned,
personal belonging. The conductor of the b us issued three tickets
when he returned to the bus for his bayong which was not unloaded, the
covering the full fares of the plaintiff and their eldest child Milagros. No
relation of passenger and carrier between him and the petitioner
fare was charged on Raquel and Fe, since both were below the height
remained subsisting. The relation of carrier and passenger does not
which fare is charged in accordance with plaintiff’s rules and regulations.
necessarily cease where the latter, after alighting from the car aids the
carrier’s servant or employee in removing his baggage from the car.
After about an hour’s trip, the bus reached Anao where it stopped to
allow the passengers bound therefore, among whom were the plaintiffs
It is a rule that the relation of carrier and passenger does not cease the
and their children to get off. Mariano Beltran, carrying some of their
moment the passenger alights from the carrier’s vehicle at a place
baggage was the first to get down the bus, followed by his wife and
selected by the carrier at the point of destination but continues until the
children. Mariano led his companion to a shaded spot on the left
passenger has had a reasonable time or a reasonable opportunity to
pedestrian side of the road about four or five meters away from the
leave the carrier’s premises.
vehicle. Afterwards, he returned to the bus in controversy to get his

3
 damage to property and physical injuries. The original complaint was
amended twice: first impleading Auto Palace Car Exchange as
The father returned to the bus to get one of his baggages which was not
commercial agent and/or buyer-seller and second, impleading Albert
unloaded when they alighted from the bus. Raquel must have followed
Jaucian as principal defendant doing business under the name and style
her father. However, although the father was still on the running board of
of Auto Palace Car Exchange. Except Ocfemia, all defendants filed
the bus awaiting for the conductor to hand him the bag or bayong, the
separate answers to the complaint.
bus started to run, so that even he had jumped down from the moving
vehicle. It was that this instance that the child, who must be near the bus,
was run over and killed. In the circumstances, it cannot be claimed that
Petitioner Nostradamus Villanueva claimed that he was no longer the
the carrier’s agent had exercised the “utmost diligence” of a “very
owner of the car at the time of the mishap because it was swapped with a
cautious person” required by Article 1755 of the Civil Code to be
Pajero owned by Albert Jaucian/Auto Palace Car Exchange. Linda
observed by a common carrier in the discharge of its obligation to
Gonzales declared that her presence at the scene of the accident was
transport safely its passengers. The driver, although stopping the bus,
upon the request of the actual owner of the Mitsubishi Lancer PHK 201,
nevertheless did not put off the engine. He started to run the bus even
Albert Jaucian for whom she had been working as agent/seller. Auto
before the conductor gave him the signal to go and while the latter was
Palace Car Exchange represented by Albert Jaucian claimed that he was
still unloading part of the baggage of the passengers Beltran and family.
not the registered owner of the car. Moreover, it could not be held
The presence of the said passengers near the bus was not unreasonable
subsidiarily liable as employer of Ocfemia because the latter was off-duty
and they are, therefore, to be considered still as passengers of the
as utility employee at the time of the incident. Neither was Ocfemia
carrier, entitled to the protection under their contract of carriage.
performing a duty related to his employment.

4. Villanueva vs. Domingo

RTC found petitioner Villanueva liable and ordered him to pay
G.R. No. 144274, 438 SCRA 485 , September 20, 2004 respondent actual, moral and exemplary damages plus appearance and
attorney’s fees. In conformity with equity and the ruling in First Malayan
Lending and Finance Corp. vs CA, Albert Jaucian is hereby ordered to
FACTS: Priscilla Domingo is the registered owner of a silver Mitsubishi indemnify Villanueva for whatever amount the latter is hereby ordered to
Lancer Car model 1980 with Plate No. NDW 781 with co-respondent pay under the judgment.
Leandro Luis Domingo as authorized driver. Petitioner Nostradamus
Villanueva was then the registered “owner” of a green Mitsubishi Lancer
bearing Plate No. PHK 201. CA upheld trial court’s decision but deleted the award for appearance
and attorney’s fees as the same was not justified in the body of the
decision.
On Oct. 22, 1991, 9:45 PM, following a green traffic light, Priscilla
Domingo silver Lancer then driven by Leandro Domingo was cruising the
middle lane of South Superhighway at moderate speed when suddenly, a ISSUE: May the registered owner of a motor vehicle be held liable for
green Mitsubishi Lancer with Plate No. PHK 201 driven by Renato Dela damages arising from a vehicular accident involving his motor vehicle
Cruz Ocfemia darted from Vito Cruz St. towards the South Superhighway while being operated by the employee of its buyer without the latter’s
directly into the path of Domingo’s car thereby hitting and bumping its left consent and knowledge?
front portion. As a result of the impact, NDW 781 hit two parked vehicles
at the roadside, the second hitting another car parked in front of it.
RULING: YES, the registered owner of any vehicle is directly and
Traffic accident report found Ocfemia driving with expired license and
primarily responsible for the public and third persons while it is being
positive for alcoholic breath. Manila Asst. Prosecutor Pascua
operated. The rationale behind such doctrine was explained way back in
recommended filing of information for reckless imprudence resulting to
1957 in
4
Erezo vs. Jepte. 5. Equitable Leasing Corporation vs. Suyom
The principle upon which this doctrine is based is that in dealing with G.R. No. 143360, 388 SCRA 445 , September 05, 2002
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 Facts:
they may have for injuries caused to them by the vehicles being
On July 17, 1994, a Fuso Road Tractor driven by Raul Tutor rammed into
negligently operated if the public should be required to prove who the
the house cum store of Myrna Tamayo in Tondo, Manila. A portion of the
actual owner is. How would the public or third persons know against
house was destroyed which caused death and injury. Tutor was charged
whom to enforce their rights in case of subsequent transfers of the
with and later convicted of reckless imprudence resulting in multiple
vehicles? We do not imply by his doctrine, however, that the registered
homicide and multiple physical injuries.
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.
Upon verification with the Land Transportation Office, it was known that
the registered owner of the tractor was Equitable Leasing
Corporation/leased to Edwin Lim. On April 15, 1995, respondents filed
Under the same principle the registered owner of any vehicle, even if not
against Raul Tutor, Ecatine Corporation (Ecatine) and Equitable Leasing
used for a public service, should primarily be responsible to the public or
Corporation (Equitable) a Complaint for damages.
to third persons for injuries caused the latter while the vehicle is being
driven on the highways or streets. The members of the Court are in The petitioner alleged that the vehicle had already been sold to Ecatine
agreement that the defendant-appellant should be held liable to plaintiff- and that the former was no longer in possession and control thereof at
appellee for the injuries occasioned to the latter because of the the time of the incident. It also claimed that Tutor was an employee, not
negligence of the driver, even if the defendant-appellant was no longer of Equitable, but of Ecatine.
the owner of the vehicle at the time of the damage because he had
previously sold it to another
Issue:
Whether or not the petitioner was liable for damages based on quasi
A registered owner who has already sold or transferred a vehicle has the
delict for the negligent acts.
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
Held:
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. The Lease Agreement between petitioner and Edwin Lim stipulated that it
is the intention of the parties to enter into a finance lease agreement.
Ownership of the subject tractor was to be registered in the name of
In synthesis, we hold that the registered owner, the defendant-appellant petitioner, until the value of the vehicle has been fully paid by Edwin Lim.
herein, is primarily responsible for the damage caused to the vehicle of
Lim completed the payments to cover the full price of the tractor. Thus, a
the plaintiff-appellee, but he (defendant-appellant) has a right to be
Deed of Sale over the tractor was executed by petitioner in favor of
indemnified by the real or actual owner of the amount that he may be
Ecatine represented by Edwin Lim. However, the Deed was not
required to pay as damage for the injury caused to the plaintiff-appellant.
registered with the LTO.
PETITION DENIED.

5
Petitioner is liable for the deaths and the injuries complained of, because YES. Under Section 5 of Republic Act No. 4136, as amended, all motor
it was the registered owner of the tractor at the time of the accident.The vehicles used or operated on or upon any highway of the Philippines
Court has consistently ruled that, regardless of sales made of a motor must be registered with the Bureau of Land Transportation (now Land
vehicle, the registered owner is the lawful operator insofar as the public Transportation Office) for the current year. Furthermore, any
and third persons are concerned. encumbrances of motor vehicles must be recorded with the Land
Transportation Office in order to be valid against third parties. In
Since Equitable remained the registered owner of the tractor, it could not
accordance with the law on compulsory motor vehicle registration, this
escape primary liability for the deaths and the injuries arising from the
Court has consistently ruled that, with respect to the public and third
negligence of the driver.
persons, the registered owner of a motor vehicle is directly and primarily
responsible for the consequences of its operation regardless of who the
actual vehicle owner might be. Well-settled is the rule that the registered
6. FEB Leasing and Finance Corporation vs. Baylon
owner of the vehicle is liable for quasi-delicts resulting from its use. The
G.R. No. 181398, 653 SCRA 22 , June 29, 2011 policy behind the rule is to enable the victim to find redress by the
expedient recourse of identifying the registered vehicle owner in the
records of the LTO. The registered owner can be reimbursed by the
FACTS: actual owner, lessee or transferee who is known to him. Unlike the
registered owner, the innocent victim is not privy to the lease, sale,
An Isuzu oil tanker running along Del Monte Avenue, Quezon City and
transfer or encumbrance of the vehicle. Hence, the victim should not be
bearing plate number TDY 712 hit Loretta V. Baylon, daughter of
prejudiced by the failure to register such transaction or encumbrance. In
respondent spouses Baylon. At the time of the accident, the oil tanker
this case, petitioner admits that it is the registered owner of the oil tanker
was registered in the name of petitioner FEB Leasing and Finance
that figured in an accident causing the death of Loretta. As the registered
Corporation. The oil tanker was leased to BG Hauler
owner, it cannot escape liability for the loss arising out of negligence in
and was being driven by the latter’s driver, the operation of the oil tanker. Its liability remains even if at the time of
the accident, the oil tanker was leased to BG Hauler and was being
M. Estilloso. The oil tanker was insured by FGU Insurance. Spouses
driven by the latter’s driver, and despite a provision in the lease contract
Baylon filed with the RTC a Complaint for damages against petitioner,
exonerating the registered owner from liability.
BG Hauler, the driver, and FGU Insurance. Petitioner FEB contended
that the lease contract between BG Hauler and petitioner specifically
provides that BG Hauler shall be liable for any loss, damage, or injury the
7. Erezo, et al. vs. Jepte
leased oil tanker may cause even if petitioner is the registered owner of
the said oil tanker. It further claimed that the CA erred in holding G.R. No. L-9605, 102 Phil. 103 , September 30, 1957
petitioner solidarily liable with BG Hauler despite having found the latter
liable under the lease contract. RTC found FEB Leasing, BG Hauler, and
driver jointly and severally liable; While, the insurer’s obligation has been Facts:
satisfactorily fulfilled upon payment of P450, 000.00. CA affirmed with
Defendant-appellant is the registered owner of a six by six truck bearing.
RTC.
On August, 9, 1949, while the same was being driven by Rodolfo Espino
ISSUE: Whether registered owner (FEB Leasing) of a financially leased y Garcia, it collided with a taxicab at the intersection of San Andres and
vehicle remains liable for loss, damage, or injury caused by the vehicle Dakota Streets, Manila. As the truck went off the street, it hit Ernesto
notwithstanding an exemption provision in the financial lease contract. Erezo and another, and the former suffered injuries, as a result of which
he died.

RULING:
The driver was prosecuted for homicide through reckless negligence.
The accused pleaded guilty and was sentenced to suffer imprisonment
6
and to pay the heirs of Ernesto Erezo the sum of P3,000. As the amount vehicles are to be used or operated without being properly registered for
of the judgment could not be enforced against him, plaintiff brought this the current year, but that dealers in motor vehicles shall furnish the Motor
action against the registered owner of the truck, the defendant-appellant. Vehicles Office a report showing the name and address of each
purchaser of motor vehicle during the previous month and the
manufacturer's serial number and motor number.
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 Registration is required not to make said registration the operative act by
which he was the broker at the time of the accident. He explained, and which ownership in vehicles is transferred, as in land registration cases,
his explanation was corroborated by Policarpio Franco, the manager of because the administrative proceeding of registration does not bear any
the corporation, that the trucks of the corporation were registered in his essential relation to the contract of sale between the parties, but to permit
name as a convenient arrangement so as to enable the corporation to the use and operation of the vehicle upon any public
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. The main aim of motor vehicle registration is to identify the owner so that
if any accident happens, or that any damage or injury is caused by the
vehicles on the public highways, responsibility therefore can be fixed on a
The trial court held that as the defendant-appellant represented himself definite individual, the registered owner.
to be the owner of the truck and the Motor Vehicle Office, relying on his
representation, registered the vehicles in his name, the Government and
all persons affected by the representation had the right to rely on his A registered owner who has already sold or transferred a vehicle has the
declaration of ownership and registration. It, therefore, held that the recourse to a third-party complaint, in the same action brought against
defendant-appellant is liable because he cannot be permitted to him to recover for the damage or injury done, against the vendee or
repudiate his own declaration. transferee of the vehicle.

Issue: WoN Jepte should be liable to Erezo for the injuries occasioned to 8. Equitable Leasing Corporation vs. Suyom
the latter because of the negligence of the driver even if he was no longer
G.R. No. 143360, 388 SCRA 445 , September 05, 2002
the owner of the vehicle at the time of the damage (because he had
previously sold it to another)
9. Caltex (Philippines), Inc. vs. Sulpicio Lines, Inc.
Held: YES. G.R. No. 131166, 315 SCRA 709 , September 30, 1999
The registered owner, the defendant-appellant herein, is primarily Facts:
responsible for the damage caused to the vehicle of the plaintiff-appellee,
On December 20, 1987, motor tanker MV Vector, carrying petroleum
but he (defendant-appellant) has a right to be indemnified by the real or
products of Caltex, collided in the open sea with passenger ship MV
actual owner of the amount that he may be required to pay as damage
Doña Paz, causing the death of all but 25 of the latter’s passengers.
for the injury caused to the plaintiff-appellant
Among those who died were Sebastian Canezal and his daughter
Corazon Canezal. On March 22, 1988, the board of marine inquiry found
that Vector Shipping Corporation was at fault. On February 13, 1989,
The Revised Motor Vehicle Law provides that no vehicle may be used or
Teresita Cañezal and Sotera E. Cañezal, Sebastian Cañezal’s wife and
operated upon any public highway unless the same is properly
mother respectively, filed with the Regional Trial Court of Manila a
registered. Not only are vehicles to be registered and that no motor
complaint for damages arising from breach of contract of carriage against
7
Sulpicio Lines. Sulpicio filed a third-party complaint against Vector and The charter party agreement did not convert the common carrier into a
Caltex. The trial court dismissed the complaint against Caltex, but the private carrier. The parties entered into a voyage charter, which retains
Court of Appeals included the same in the liability. Hence, Caltex filed the character of the vessel as a common carrier. It is imperative that a
this petition. public carrier shall remain as such, notwithstanding the charter of the
whole or portion of a vessel by one or more persons, provided the charter
is limited to the ship only, as in the case of a time-charter or voyage
Issue: charter. It is only when the charter includes both the vessel and its crew,
as in a bareboat or demise that a common carrier becomes private, at
Is the charterer of a sea vessel liable for damages resulting from a
least insofar as the particular voyage covering the charter-party is
collision between the chartered vessel and a passenger ship?
concerned. Indubitably, a ship-owner in a time or voyage charter retains
possession and control of the ship, although her holds may, for the
moment, be the property of the charterer. A common carrier is a person
Held:
or corporation whose regular business is to carry passengers or property
First: The charterer has no liability for damages under Philippine Maritime for all persons who may choose to employ and to remunerate him. 16 MT
laws. Vector fits the definition of a common carrier under Article 1732 of the
Civil Code.

Petitioner and Vector entered into a contract of affreightment, also known

as a voyage charter. The public must of necessity rely on the care and skill of common carriers
in the vigilance over the goods and safety of the passengers, especially
because with the modern development of science and invention,
A charter party is a contract by which an entire ship, or some principal transportation has become more rapid, more complicated and somehow
part thereof, is let by the owner to another person for a specified time or more hazardous. For these reasons, a passenger or a shipper of goods
use; a contract of affreightment is one by which the owner of a ship or is under no obligation to conduct an inspection of the ship and its crew,
other vessel lets the whole or part of her to a merchant or other person the carrier being obliged by law to impliedly warrant its seaworthiness.
for the conveyance of goods, on a particular voyage, in consideration of
the payment of freight. A contract of affreightment may be either time
charter, wherein the leased vessel is leased to the charterer for a fixed Third: Is Caltex liable for damages under the Civil Code?
period of time, or voyage charter, wherein the ship is leased for a single
voyage. In both cases, the charter-party provides for the hire of the
vessel only, either for a determinate period of time or for a single or The charterer of a vessel has no obligation before transporting its cargo
consecutive voyage, the ship owner to supply the ship’s store, pay for the to ensure that the vessel it chartered complied with all legal
wages of the master of the crew, and defray the expenses for the requirements. The duty rests upon the common carrier simply for being
maintenance of the ship. If the charter is a contract of affreightment, engaged in "public service." The relationship between the parties in this
which leaves the general owner in possession of the ship as owner for case is governed by special laws. Because of the implied warranty of
the voyage, the rights and the responsibilities of ownership rest on the seaworthiness, shippers of goods, when transacting with common
owner. The charterer is free from liability to third persons in respect of the carriers, are not expected to inquire into the vessel’s seaworthiness,
ship. genuineness of its licenses and compliance with all maritime laws. To
demand more from shippers and hold them liable in case of failure
exhibits nothing but the futility of our maritime laws insofar as the
Second: MT Vector is a common carrier protection of the public in general is concerned. Such a practice would be
an absurdity in a business where time is always of the essence.
Considering the nature of transportation business, passengers and

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shippers alike customarily presume that common carriers possess all the paid therefor, and not necessarily by the value declared in the bill of
legal requisites in its operation. lading.

10. Duavit vs. Court of Appeals FACTS: Shipper: ZosimaMercardo, Nestor Amelia Carrier: EDGAR
COKALIONG SHIPPING LINES, INC. Vessel: M/V Tandag Insurer:
G.R. No. 82318, 173 SCRA 490, May 18, 1989
UCPB General Insurance Co. Inc. (Feliciana Legaspi insured the
cargoes) Event: FIRE Edgar did not pay UCPB. UCPB filed a complaint.
RTC absolved Edgar of any liability. CA affirmed.
Facts:
Private respondents were on board a jeep when they met an accident
with another jeep driven by Sabiniano. This accident caused injuries to ISSUE:
private respondents, thus they filed a case for damages against driver
1. W/N Edgar is liable
Salbiniano and owner of the jeep Duavit. Duavit admits ownership of the
jeep but contends that he should not be held liable since Salbiniano is not 2. What is the basis of liability? Amount in the bill of lading or actual
his employee and that the jeep was taken by Salbiniano without his amount?
(Duavit) consent.

RULING: 1. Yes. The uncontroverted findings of the Philippine Coast

Issue: Whether or not the owner of a private vehicle which figured in an Guard show that the M/V Tandag
accident can be held liable as an employer when the said vehicle was
sank due to a fire, which resulted from a crack in the auxiliary engine fuel
neither driven by an employee of the owner nor taken with his consent.
oil service tank. Fuel spurted out of the crack and dripped to the heating
exhaust manifold, causing the ship to burst into flames. The crack was
located on the side of the fuel oil tank, which had a mere two-inch gap
Held: No, an owner of a vehicle cannot be held liable for an accident
from the engine room walling, thus precluding constant inspection and
involving the said vehicle if the same was driven without his consent or
care by the crew. Having originated from an unchecked crack in the fuel
knowledge and by a person not employed by him.
oil service tank, the fire could not have been caused by force majeure.
May refer to
To hold the petitioner liable for the accident caused by the negligence of Eastern Shipping Lines, Inc. v. Intermediate Appellate Court.
Sabiniano who was neither his driver nor employee would be absurd as it
A stipulation that limits liability is valid as long as it is not against public
would be like holding liable the owner of a stolen vehicle for an accident
policy.
caused by the person who stole such vehicle.
Art. 1749. A stipulation that the common carrier’s liability is limited to the
value of the goods appearing in the bill of lading, unless the shipper or
11. Edgar Cokaliong Shipping Lines, Inc. vs. UCPB General owner declares a greater value, is binding.
Insurance Company, Inc.
G.R. No. 146018, 404 SCRA 706 , June 25, 2003
‘Art. 1750. A contract fixing the sum that may be recovered by the owner
DOCTRINE: The liability of a common carrier for the loss of goods may, or shipper for the loss, destruction, or deterioration of the goods is valid, if
by stipulation in the bill of lading, be limited to the value declared by the it is reasonable and just under the circumstances, and has been freely
shipper. On the other hand, the liability of the insurer is determined by the and fairly agreed upon.’
actual value covered by the insurance policy and the insurance premiums

9
2. Bill of lading. The bill of lading subject of the present controversy Pursuant to said terms and arrangements, Yau Yae through Tokyo boeki
specifically provides, among others: LTD of Tokyo Japan, shipped the articles at Yakata, Japan and later to
Manila which was processed by American Staemship Agencies INC. in
’18. All claims for which the carrier may be liable shall be adjusted and
which under a shipping agreement or bill of lading it consigned to order of
settled on the basis of the shipper’s net invoice cost plus freight and
the shipper with Mr Teves.
insurance premiums, if paid, and in no event shall the carrier be liable for
any loss of possible profits or any consequential loss. On May 9, 1961 the article arrived in manila, and under the bill of lading
of the arrival of the goods and requested payments of the demand draft
‘The carrier shall not be liable for any loss of or any damage to or in any
representing the purchased price of the article, however, Mr Teves did
connection with, goods in an amount exceeding One Hundred Thousand
not pay the demand draft to Hongkong and Shanghai bank where it was
Yen in Japanese Currency (¥100,000.00) or its equivalent in any other
to be processed the payments. Prompting the bank to make
currency per package or customary freight unit (whichever is least)
corresponding protest and the bank likewise returned the bill of lading
unless the value of the goods higher than this amount is declared in and demand draft to Yau Yae which later endorsed the bill of lading to
writing by the shipper before receipt of the goods by the carrier and Domingo Ang.
inserted in the Bill of Lading and extra freight is paid as required.

Meanwhile, despite his non-payments of the purchase price of the

In the present case, the stipulation limiting petitioner’s liability is not articles. Teves was able to obtain a bank guaranty in favor of American
contrary to public policy. In fact, its just and reasonable character is Steamship agencies INC. as carriers agent to the effect that he would
evident. The shippers/consignees may recover the full value of the goods surrender the negotiable bill of lading duly endorsed by Yau Yae on the
by the simple expedient of declaring the true value of the shipment in the strength of this guaranty. Teves succeded in securing a permit to deliver
Bill of Lading. Other than the payment of a higher freight, there was imported goods from the carriers agent, which he presented to Bureau of
nothing to stop them from placing the actual value of the goods therein. customs which in turn release to him the articles covered by the bill of
In fact, they committed fraud against the common carrier by deliberately lading.
undervaluing the goods in their Bill of Lading, thus depriving the carrier of
its proper and just transport fare. It is well to point out that, for assuming
a higher risk (the alleged actual value of the goods) the insurance Subsequently, Domingo Ang claimed for the articles from the American
company was paid the correct higher premium by Feliciana Legaspi; steamship agencies Inc. by presenting the indorsed bill of lading, but he
while petitioner was paid a fee lower than what it was entitled to for was informed by the latter that the articled he claimed was already
transporting the goods that had been deliberately undervalued by the delivered to Mr. Teves.
shippers in the Bill of Lading. Between the two of them, the insurer
should bear the loss in excess of the value declared in the Bills of Lading
ISSUE:
Whether or not the American Steamship Agencies Inc. punishable under
12. Ang vs. American Steamship Agencies, Inc.
carriage of goods by Sea act for misdelivery of goods?
G.r. No. L-22491, 19 SCRA 123 , January 27, 1967
FACTS:
HELD:
Yau Yae comerical Bank LTD of Hongkong represented by Yau Yae
When the delivery of articles carried by the herein defendant-appellee
agreed to sell 140 packsges of galvanized steel dursink sheets to one
(American steamship agencies Inc) on May 9, 1961 to Herminio Teves
Herminio G Teves. Said agreement was subject to the terms and
but supposedly to Mr Domingo Ang ,plaintiff-appellant and upon knowing
arrangements.
by the plaintiff-appellant that the articles intended to him was
misdelivered to other person, he filed in court of first instance of Manila

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on October 30, 1963 against American Steamship agencies Inc for article 18 of the same code. To read” in matters which are governed by
allegedly wrongful delivery of goods belonging to him. the code of commerce and special laws, their deficiency shall be supplied
by the provision of this code.”

The defendant-appellee filed motion to dismissed with the contention that

the ground of the plaintiff’s caused of action is prescribed under the Wherefore, suits predicated not upon loss or damage but misdelivery of
carriage of goods by sea act particular section 3(6) paragraph 4, which goods that so, the defendant was not held liable for carriage of goods by
provides that; sea act and the court hereby reversed the dismissal order afterwards
remanded to the lower court for further proceedings.

“In any event, the carrier and the ship shall be discharge from all liability
in respect to loss or damage unless suit is brought within one year, after
delivery of the goods or date when the goods should have been
delivered”

The defendant further contented that the action of the plaintiff-appellant

even allowing a reasonable time from the date of delivery on May 9,
1961, still initiated his action on October 30, 1963 which beyond the
prescribed period of One (1) year under the preceding paragraph.

The court rendered it decision dismissing the complaint of the plaintiff,

appellant for the ground of prescription, however the provision involved in
this case as mentioned earlier speaks ”loss or damage” despite that the
plaintiff filed motion for reconsideration and it has been denied by the
lower court, afterwards, the plaintiff directly appealed to the higher court
for the matter that; has plaintiff-appellant cause of action prescribed
under section 3(6) paragraph 4 of the carriage of goods by sea act?

The court ruled that, the word” loss or damage “as speaks to the
provision in this case was not transpired because only the misdelivery of
goods occurred to the defendant, and upon admitted by the defendant in
motion to dismissed that the articles belongs for Mr. Ang has been
misdelivered to Mr. Teves.

Therefore it clearly shows that the defendant violates the provision of

civil code of the Philppines particular in Article 1144, which provides; the
following actions must be brought within ten (10) years from the time the
right of the action accrues, paragraph (1) upon a written contract and
Article 1146, the following action must be instituted within four(4) years,
paragraph (2) quasi delict, wherein it supplies the deficiency provided in
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