A.

Definition; liability of registered owner; common carriers vs private carriers;

Nature and Basis of Liability- (Articles 1732 and 1733 of the New Civil Code)

De Guzman v. CA
Facts:
Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings those that he
gathered to Manila for resale using 2 six-wheeler trucks. On the return trip to Pangasinan, respondent
would load his vehicle with cargo which various merchants wanted delivered, charging fee lower than
the commercial rates. Sometime in November 1970, petitioner Pedro de Guzman contracted with
respondent for the delivery of 750 cartons of Liberty Milk. On December 1, 1970, respondent loaded the
cargo. Only 150 boxes were delivered to petitioner because the truck carrying the boxes was hijacked
along the way. Petitioner commenced an action claiming the value of the lost merchandise. Petitioner
argues that respondent, being a common carrier, is bound to exercise extraordinary diligence, which it
failed to do. Private respondent denied that he was a common carrier, and so he could not be held liable
for force majeure. The trial court ruled against the respondent, but such was reversed by the Court of
Appeals.
Issues:
(1) Whether or not private respondent is a common carrier
(2) Whether private respondent is liable for the loss of the goods
Held:
(1) 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. Article 1732 also
carefully avoids making any distinction between a person or enterprise offering transportation service
on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled
basis. Neither does Article 1732 distinguish between a carrier offering its services to the "general
public," i.e., the general community or population, and one who offers services or solicits business only
from a narrow segment of the general population. It appears to the Court that private respondent is
properly characterized as a common carrier even though he merely "back-hauled" goods for other
merchants from Manila to Pangasinan, although such backhauling was done on a periodic or occasional
rather than regular or scheduled manner, and even though private respondent's principal occupation
was not the carriage of goods for others. There is no dispute that private respondent charged his
customers a fee for hauling their goods; that fee frequently fell below commercial freight rates is not
relevant here. A certificate of public convenience is not a requisite for the incurring of liability under the
Civil Code provisions governing common carriers.
(2) Article 1734 establishes the general rule that common carriers are responsible for the loss,
destruction or deterioration of the goods which they carry, "unless the same is due to any of the
following causes only:
a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;
b. Act of the public enemy in war, whether international or civil;
c. Act or omission of the shipper or owner of the goods;
d. The character of the goods or defects in the packing or in the containers; and
e. Order or act of competent public authority."
The hijacking of the carrier's truck - does not fall within any of the five (5) categories of exempting
causes listed in Article 1734. Private respondent as common carrier is presumed to have been at fault or
to have acted negligently. This presumption, however, may be overthrown by proof of extraordinary
diligence on the part of private respondent.
Under Article 1745 (6) above, a common carrier is held responsible — and will not be allowed to divest
or to diminish such responsibility — even for acts of strangers like thieves or robbers, except where such
thieves or robbers in fact acted "with grave or irresistible threat, violence or force."

The court believe and so hold that the limits of the duty of extraordinary diligence in the vigilance over
the goods carried are reached where the goods are lost as a result of a robbery which is attended by
"grave or irresistible threat, violence or force." The Court hold that the occurrence of the loss must
reasonably be regarded as quite beyond the control of the common carrier and properly regarded as a
fortuitous event. It is necessary to recall that even common carriers are not made absolute insurers
against all risks of travel and of transport of goods, and are not held liable for acts or events which
cannot be foreseen or are inevitable, provided that they shall have complied with the rigorous standard
of extraordinary diligence.

Loadstar Shipping Co., Inc. v. Court of Appeals

G.R. No. 131621, 28 September 1999, 315 SCRA 339

FACTS:

On November 19, 1984, loadstar received on board its M/V (motor vessel) “Cherokee” bales of lawanit
hardwood, tilewood and Apitong Bolidenized for shipment, of which the goods were insured for the
with the Manila Insurance Company against various risks including “Total Loss by Total Loss of the
Vessel”. The vessel sank off at Limasawa Island along with its cargo. As a result of the total loss of its
shipment, the consignee made a claim with loadstar which, however, ignored the same. As the insurer,
MIC paid to the insured in full settlement of its claim, and the latter executed a subrogation receipt
therefor. MIC thereafter filed a complaint against loadstar alleging that the sinking of the vessel was due
to fault and negligence of loadstar and its employees.

In its answer, Loadstar denied any liability for the loss of the shipper’s goods and claimed that the
sinking of its vessel was due to force majeure. The court a quo rendered judgment in favor of MIC,
prompting loadstar to elevate the matter to the Court of Appeals, which however, agreed with the trial
court and affirmed its decision in toto. On appeal, loadstar maintained that the vessel was a private
carrier because it was not 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 consignee for a special cargo”.

ISSUE:

Whether or not M/V Cherokee was a private carrier so as to exempt it from the provisions covering
Common Carrier?
HELD:

Loadstar is a common carrier.

The Court held that LOADSTAR is a common carrier. It is not necessary that the carrier be issued a
certificate of public convenience, and this public character is not altered by the fact that the carriage of
the goods in question was periodic, occasional, episodic or unscheduled. Further, the bare fact that the
vessel was carrying a particular type of cargo for one shipper, which appears to be purely co-incidental;
it is no reason enough to convert the vessel from a common to a private carrier, especially where, as in
this case, it was shown that the vessel was also carrying passengers.
Moving on to the second assigned error, the court find that the M/V "Cherokee" was not seaworthy
when it embarked on its voyage on 19 November 1984. The vessel was not even sufficiently manned at
the time. "For a vessel to be seaworthy, it must be adequately equipped for the voyage and manned
with a sufficient number of competent officers and crew. The failure of a common carrier to maintain in
seaworthy condition its vessel involved in a contract of carriage is a clear breach of its duty prescribed in
Article 1755 of the Civil Code."
Article 1732 also carefully avoids making any distinction between a person or enterprise offering
transportation service on a regular or scheduled basis and one offering such service on an occasional,
episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its
services to the “general public,” i.e., the general community or population, and one who offers services
or solicits business only from a narrow segment of the general population.

Virgines Calvo doing business under the name and style Transorient Container Terminal Services, Inc.
vs. UCPB General Insurance Co., Inc. (formerly Allied Guarantee Ins. Co., Inc.)
G.R. No. 148496, March 19, 2002

FACTS:
Petitioner Virgines Calvo is the owner of Transorient Container Terminal Services, Inc. (TCTSI), a sole
proprietorship customs broker. She 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
in Manila to SMC’s warehouse in Ermita, Manila. The cargo was insured by respondent UCPB General
Insurance Co., Inc. Upon delivery, the goods were inspected and 15 reels of the semi-chemical fluting
paper and 3 reels of kraft liner board were found damaged.
Petitioner contends that she is not a common carrier but a private carrier because, as a customs broker
and warehouseman, she does not indiscriminately hold her services out to the public but only offers the
same to select parties with whom she may contract in the conduct of her business.

ISSUE:
1. Is a customs broker or warehouseman who offers his services to select clients a common carrier?
2. Is petitioner liable for the damage of the goods?

RULING:
1. Pursuant to Article 1732, petitioner is a common carrier as transportation of goods is an integral part
of her business. Article 1732 defines “common carriers” as persons, corporations, firms or associations
engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air
for compensation, offering their services to the public. This article makes no distinction between one
whose principal business activity is the carrying of persons or goods or both, and one who does such
carrying only as an ancillary activity . . . Article 1732 also carefully avoids making any distinction between
a person or enterprise offering transportation service on a regular or scheduled basis and one offering
such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish
between a carrier offering its services to the “general public,” i.e., the general community or population,
and one who offers services or solicits business only from a narrow segment of the general population.

2. Petitioner is liable because she failed to prove that she exercised extraordinary diligence in the
carriage of goods, the presumption of negligence as provided under Art. 1735 applies. Under Article
1735 of the Civil Code, if the goods are proved to have been lost, destroyed or deteriorated, common
carriers are presumed to have been at fault or to have acted negligently, unless they prove that they
have observed the extraordinary diligence required by law. The burden of the plaintiff is to prove merely
that the goods he transported have been lost, destroyed or deteriorated. Thereafter, the burden is
shifted to the carrier to prove that he has exercised the extraordinary diligence required by law. Thus, it
has been held that 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.

NOTES:

Extraordinary diligence in the vigilance over goods, meaning

The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common
carrier to know and to follow the required precaution for avoiding damage to, or destruction of the
goods entrusted to it for sale, carriage and delivery. It requires common carriers to render service with
the greatest skill and foresight and “to use all reasonable means to ascertain the nature and
characteristic of goods tendered for shipment, and to exercise due care in the handling and stowage,
including such methods as their nature requires.

Bascos v. CA
Facts:

Rodolfo Cipriano, representing CIPTRADE, entered into a hauling contract with Jibfair Shipping Agency
Corporation whereby the former bound itself to haul the latter’s 2000m/tons of soya bean meal from
Manila to Calamba. CIPTRADE subcontracted with petitioner Estrellita Bascos to transport and deliver
the 400 sacks of soya beans. Petitioner failed to deliver the cargo, and as a consequence, Cipriano paid
Jibfair the amount of goods lost in accordance with their contract. Cipriano demanded reimbursement
from petitioner but the latter refused to pay. Cipriano filed a complaint for breach of contract of
carriage. Petitioner denied that there was no contract of carriage since CIPTRADE leased her cargo truck,
and that the hijacking was a force majeure. The trial court ruled against petitioner.

Issues:

(1) Was petitioner a common carrier?

(2) Was the hijacking referred to a force majeure?

Held:

(1) Article 1732 of the Civil Code defines a common carrier as "(a) person, corporation or firm, or
association engaged in the business of carrying or transporting passengers or goods or both, by land,
water or air, for compensation, offering their services to the public." 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 this case, petitioner herself has made the admission that she was in the trucking
business, offering her trucks to those with cargo to move. Judicial admissions are conclusive and no
evidence is required to prove the same.

(2) Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods
transported by them. Accordingly, they are presumed to have been at fault or to have acted negligently
if the goods are lost, destroyed or deteriorated. There are very few instances when the presumption of
negligence does not attach and these instances are enumerated in Article 1734. In those cases where
the presumption is applied, the common carrier must prove that it exercised extraordinary diligence in
order to overcome the presumption. The presumption of negligence was raised against petitioner. It was
petitioner's burden to overcome it. Thus, contrary to her assertion, private respondent need not
introduce any evidence to prove her negligence. Her own failure to adduce sufficient proof of
extraordinary diligence made the presumption conclusive against her.

FGU INSURANCE CORPORATION v. G.P. SARMIENTO TRUCKING CORPORATION, GR No. 141910, 2002-
08-06

Facts:
G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver thirty units of Condura white
refrigerators aboard one of its Isuzu truck, driven by Lambert Eroles, from the plant site of Concepcion
Industries, Inc., to the Central Luzon Appliances in Dagupan City. While the truck was traversing the
north diversion road along McArthur highway, it collided with an unidentified truck, causing it to fall into
a deep canal, resulting in damage to the cargoes.
FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the
value of the covered cargoes. FGU, in turn, being the subrogee of the rights and interests of Concepcion
Industries, Inc., sought reimbursement of the amount it had paid to the latter from GPS. Since the
trucking company failed to heed the claim, FGU filed a complaint for damages and breach of contract of
carriage against GPS and its driver Lambert Eroles with the Regional Trial Court, which dismissed the
case on the basis that GPS is not a common carrier  . Thus, the laws governing the contract between the
owner of the cargo to whom the plaintiff was subrogated and the owner of the vehicle which transports
the cargo are the laws on obligation and contract of the Civil Code as well as the law on quasi delicts.
"Thus, the laws governing the contract between the owner of the cargo to whom the plaintiff was
subrogated and the owner of the vehicle which transports the cargo are the laws on obligation and
contract of the Civil Code as well as the law on quasi delicts.
"Considering that plaintiff failed to adduce evidence that defendant is a common carrier and
defendant's driver was the one negligent, defendant cannot be made liable for the damages of the
subject cargoes."
Issue:
WHETHER RESPONDENT GPS MAY BE CONSIDERED AS A COMMON CARRIER AS DEFINED UNDER THE
LAW
Ruling:
Defendant GPS is not a common Carrie. GPS, being an exclusive contractor and hauler of Concepcion
Industries, Inc., rendering or offering its services to no other individual or entity, cannot be considered a
common carrier. Common carriers are persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water, or air, for hire or
compensation, offering their services to the public whether to the public in general or to a limited
clientele in particular, but never on an exclusive basis. The true test of a common carrier is the carriage
of passengers or goods, providing space for those who opt to avail themselves of its transportation
service for a fee. Given accepted standards, GPS scarcely falls within the term common carrier.
The above conclusion nothwithstanding, GPS cannot escape from liability.

First Philippine Industrial Co. v. Court of Appeals

G.R. No. 125948, 29 December 1998, 101 SCAD 1098
FACTS:
Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in January 1995,
petitioner applied for mayor’s permit in Batangas. However, the Treasurer required petitioner to pay a
local tax based on gross receipts amounting to P956,076.04 pursuant to the Local Government Code. In
order not to hamper its operations, petitioner paid the taxes for the first quarter of 1993 amounting to
P239,019.01 under protest.
On January 20, 1994, petitioner filed a letter-protest to the City Treasurer, claiming that it is exempt
from local tax since it is engaged in transportation business. The respondent City Treasurer denied the
protest, thus, petitioner filed a complaint before the Regional Trial Court of Batangas on June 15, 1994
for tax refund. Respondents assert that pipelines are not included in the term “common carrier” which
refers solely to ordinary carriers or motor vehicles. The trial court dismissed the complaint, and such was
affirmed by the Court of Appeals.
ISSUE:
Whether a pipeline business is included in the term “common carrier” so as to entitle the petitioner to
the exemption
HELD:
Article 1732 of the Civil Code defines a “common carrier” as “any person, corporation, firm or
association engaged in the business of carrying or transporting passengers or goods or both, by land,
water, or air, for compensation, offering their services to the public.”
The test for determining whether a party is a common carrier of goods is:
(1) He must be engaged in the business of carrying goods for others as a public employment, and must
hold himself out as ready to engage in the transportation of goods for person generally as a business
and not as a casual occupation;
(2) He must undertake to carry goods of the kind to which his business is confined;
(3) He must undertake to carry by the method by which his business is conducted and over his
established roads; and
(4) The transportation must be for hire.
Based on the above definitions and requirements, there is no doubt that petitioner is a common carrier.
It is engaged in the business of transporting or carrying goods, i.e. petroleum products, for hire as a
public employment. It undertakes to carry for all persons indifferently, that is, to all persons who choose
to employ its services, and transports the goods by land and for compensation. The fact that petitioner
has a limited clientele does not exclude it from the definition of a common carrier.

Planters Products Inc V. CA (1993)

G.R. No. 101503 September 15, 1993
Lessons Applicable: Charter Party (Transportation)

FACTS:
 June 16 1974: Mitsubishi International Corporation (Mitsubishi) of New York, U.S.A., 9,329.7069
M/T of Urea 46% fertilizer bought by Planters Products, Inc. (PPI) on aboard the cargo vessel
M/V "Sun Plum" owned by private Kyosei Kisen Kabushiki Kaisha (KKKK) from Kenai, Alaska,
U.S.A., to Poro Point, San Fernando, La Union, Philippines, as evidenced by Bill of Lading 
 May 17 1974: a time charter-party on the vessel M/V "Sun Plum" pursuant to the Uniform
General Charter was entered into between Mitsubishi as shipper/charterer and KKKK as
shipowner, in Tokyo, Japan
 Before loading the fertilizer aboard the vessel, 4 of her holds were all presumably inspected by
the charterer's representative and found fit
 The hatches remained closed and tightly sealed throughout the entire voyage
 July 3, 1974: PPI unloaded the cargo from the holds into its steelbodied dump trucks which were
parked alongside the berth, using metal scoops attached to the ship, pursuant to the terms and
conditions of the charter-partly 
 hatches remained open throughout the duration of the discharge
 Each time a dump truck was filled up, its load of Urea was covered with tarpaulin before
it was transported to the consignee's warehouse located some 50 meters from the
wharf
 Midway to the warehouse, the trucks were made to pass through a weighing scale
where they were individually weighed for the purpose of ascertaining the net weight of
the cargo. 
  The port area was windy, certain portions of the route to the warehouse were sandy
and the weather was variable, raining occasionally while the discharge was in progress.
 Tarpaulins and GI sheets were placed in-between and alongside the trucks to contain
spillages of the ferilizer
 It took 11 days for PPI to unload the cargo
 Cargo Superintendents Company Inc. (CSCI), private marine and cargo surveyor, was hired by PPI
to determine the "outturn" of the cargo shipped, by taking draft readings of the vessel prior to
and after discharge
 shortage in the cargo of 106.726 M/T and that a portion of the Urea fertilizer
approximating 18 M/T was contaminated with dirt
 Certificate of Shortage/Damaged Cargo prepared by PPI 
 short of 94.839 M/T and about 23 M/T were rendered unfit for commerce, having been
polluted with sand, rust and dirt 
 PPI sent a claim letter 1974 to Soriamont Steamship Agencies (SSA), the resident agent of the
carrier, KKKK, for P245,969.31 representing the cost of the alleged shortage in the goods
shipped and the diminution in value of that portion said to have been contaminated with dirt
 SSA: what they received was just a request for shortlanded certificate and not a formal
claim, and that they "had nothing to do with the discharge of the shipment 
 RTC: failure to destroy the presumption of negligence against them, SSA are liable
 CA: REVERSED - failed to prove the basis of its cause of action
ISSUE: W/N a time charter between a shipowner and a charterer transforms a common carrier into a
private one as to negate the civil law presumption of negligence in case of loss or damage to its cargo

HELD: NO. petition is DISMISSED

 When PPI chartered the vessel M/V "Sun Plum", the ship captain, its officers and compliment
were under the employ of the shipowner and therefore continued to be under its direct
supervision and control. Hardly then can we charge the charterer, a stranger to the crew and to
the ship, with the duty of caring for his cargo when the charterer did not have any control of the
means in doing so
 carrier has sufficiently overcome, by clear and convincing proof, the  prima facie presumption of
negligence. The hatches remained close and tightly sealed while the ship was in transit as the
weight of the steel covers made it impossible for a person to open without the use of the ship's
boom.
 bulk shipment of highly soluble goods like fertilizer carries with it the risk of loss or damage.
More so, with a variable weather condition prevalent during its unloading
 This is a risk the shipper or the owner of the goods has to face. Clearly, KKKK has
sufficiently proved the inherent character of the goods which makes it highly vulnerable
to deterioration; as well as the inadequacy of its packaging which further contributed to
the loss. 
 On the other hand, no proof was adduced by the petitioner showing that the carrier was
remise in the exercise of due diligence in order to minimize the loss or damage to the
goods it carried.
Loadstar Shipping Co., Inc vs Pioneer Asia Insurance Corp
G.R. NO. 157481, January 24, 2006
515 Phil. 615
FACTS: Petitioner Loadstar Shipping Co., Inc. is the registered owner and operator of the vessel M/V
Weasel. It entered into a voyage-charter with Northern Mindanao Transport Company, Inc. for the
carriage of 65,000 bags of cement from Iligan City to Manila. The shipper was Iligan Cement
Corporation, while the consignee in Manila was Market Developers, Inc.
The cement were loaded on board M/V Weasel and stowed in the cargo holds for delivery to the
consignee. Prior to the voyage, the consignee insured the shipment of cement with respondent Pioneer
Asia Insurance Corporation.
The weather was good when they left but the following morning the captain ordered the vessel to be
forced aground and the entire shipment of cement was exposed to sea water. Petitioner thus failed to
deliver the goods to the consignee in Manila.
The consignee demanded from petitioner full reimbursement of the cost of the lost shipment.
Petitioner, however, refused to reimburse the consignee despite repeated demands.
Respondent insurance company paid the consigneefor the value of the lost shipment of cement. In
return, the consignee executed a Loss and Subrogation Receipt in favor of respondent concerning the
latter’s subrogation rights against petitioner.
ISSUE:
Had the voyage-charter entered into by Loadstar with the Northern Mindanao Transport Company, Inc.
converted the former into a private carrier?
RULING:
No.The voyage-charter agreement between petitioner and Northern Mindanao Transport Company, Inc.
did not in any way convert the common carrier into a private carrier since the said charter is limited to
the ship only and does not involve both the vessel and its crew.
As a common carrier, petitioner is required to observe extraordinary diligence in the vigilance over the
goods it transports. When the goods placed in its care are lost, petitioner is presumed to have been at
fault or to have acted negligently. Petitioner therefore has the burden of proving that it observed
extraordinary diligence in order to avoid responsibility for the lost cargo. However, petitioner failed to
substantiate its claim that the loss of the goods was due to a fortuitous event. Records show that the
sea and weather conditions in the vicinity of Negros Occidental were calm.

BA Finance Corp vs. CA G.R. No. 98275 November 13, 1992

Facts:
Amare, the driver of an Isuzu truck was involved in an accident which caused the death of three persons.
Amare was found guilty beyond reasonable doubt of reckless imprudence. BA Finance was found liable
for damages since the truck was registered in its name. BA Finance contends that it should not be held
liable since it was not Amare’s employer at the time of the accident. It also contends that the Isuzu truck
was in the possession of Rock Component Phil, by virtue of a lease agreement. Hence, BA Finance wants
to prove who the actual/real owner is at the time of the accident, and in accordance with such proof,
evade liability and lay the same on the person actually owning the vehicle.
Issues:
1 WON BA Finance should be held liable.
2 WON BA Finance can escape liability by proving the actual/real owner of the truck.
Held:
1 Yes, BA Finance is liable.
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. Under the same principle the registered owner of any
vehicle, even if not used for a public service, should primarily be responsible to the public or to the third
persons for injuries caused the latter while the vehicle is being driven on the highways or streets.
2 No, the law does not allow him. The law, with its aim and policy in mind, does not relieve him
directly of the responsibility that the law fixes and places upon him as an incident or consequence of
registration. This may appear harsh but nevertheless, 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.
While the registered owner is primarily responsible for the damage caused, he has a right to be
indemnified by the real or actual owner of the amount that he may be required to pay as damage for
the injury caused.

PAL V. CA (1981)

FACTS:
The complaint filed on July 1, 1954 by plaintiff Jesus V. Samson, private respondent herein, averred that
on January 8, 1951, he flew as co-pilot on a regular flight from Manila to Legaspi with stops at Daet,
Camarines Norte and Pili, Camarines Sur, with Captain Delfin Bustamante as commanding pilot of a C-47
plane belonging to defendant Philippine Air Lines, Inc., now the herein petitioner; that on attempting to
land the plane at Daet airport, Captain Delfin Bustamante due to his very slow reaction and poor
judgment overshot the airfield and as a result, notwithstanding the diligent efforts of the plaintiff co-
pilot to avert an accident, the airplane crashlanded beyond the runway; that the jolt caused the head of
the plaintiff to hit and break through the thick front windshield of the airplane causing him severe brain
concussion, wounds and abrasions on the forehead with intense pain and suffering cranad(par. 6,
complaint).:onad
DECISION OF LOWER COURTS:
1. RTC: ordering the defendant to pay the plaintiff,
2. CA: Plaintiff-Appellee, who has been deprived of his job since 1954, is entitled to the legal rate of
interest on the P198,000.00 unearned income from the filing of the complaint

ISSUE:
Whether or not PAL exercised utmost diligence required of them as a common carriage

RULING:
The court find the imputation of gross negligence by respondent court to PAL for having allowed Capt.
Delfin Bustamante to fly on that fateful day of the accident on January 8, 1951
The pilot was sick. He admittedly had tumor of the nasopharynx cranad(nose). He is now in the Great
Beyond. The spot is very near the brain and the eyes. Tumor on the spot will affect the sinus, the
breathing, the eyes which are very near it. No one will certify the fitness to fly a plane of one suffering
from the disease. The evidence shows that the overshooting of the runway and crash-landing at the
mangrove was caused by the pilot for which acts the defendant must answer for damages caused
thereby. And for this negligence of defendant’s employee, it is liable
The fact that private respondent suffered physical injuries in the head when the plane crash- landed due
to the negligence of Capt. Bustamante is undeniable. The negligence of the latter is clearly a quasi-delict
and therefore Article 2219, cranad(2) New Civil Code is applicable, justifying the recovery of moral
damages.
The justification in the award of moral damages under Art. 19 of the New Civil Code on Human Relations
which requires that every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith

Spouses Dante Cruz and Leonora Cruz vs. Sun Holidays, Inc. G.R. No. 186312, June 29, 2010
Facts:

Petitioner lodged a Complaint against Sun Holidays, Inc. for damages arising from the death of
their son Ruelito who perished with his wife on board the boat M/B Coco Beach III that capsized en
route to Batangas from Puerto Galera, Oriental Mindoro where the couple had stayed at Coco Beach
Island Resort owned and operated by respondent.

Petitioners alleged that respondent, as a common carrier, was guilty of negligence in allowing M/B Coco
Beach III to sail notwithstanding storm warning bulletins issued by PAGASA.

Issue:

Whether or not Sun Holidays, Inc, is common carrier since by its tour package, the transporting of
its guests is an integral part of its resort business.

Ruling:

Yes. The Civil Code defines “common carriers” in the following terms:

“Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business
of carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering
their services to the public.
The above article makes no distinction between one whose principal business activity is the carrying of
persons or goods or both, and one who does such carrying only as an ancillary activity (in local idiom, as
“a sideline”). Article 1732 also carefully avoids making any distinction between a person or enterprise
offering transportation service on a regular or scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier
offering its services to the “general public,” i.e., the general community or population, and one who
offers services or solicits business only from a narrow segment of the general population. We think that
Article 1733 deliberately refrained from making such distinctions.

Indeed, respondent is a common carrier. Its ferry services are so intertwined with its main business as to
be properly considered ancillary thereto. The constancy of respondent’s ferry services in its resort
operations is underscored by its having its own Coco Beach boats. And the tour packages it offers, which
include the ferry services, may be availed of by anyone who can afford to pay the same. These services
are thus available to the public.

When a passenger dies or is injured in the discharge of a contract of carriage, it is presumed that the
common carrier is at fault or negligent. In fact, there is even no need for the court to make an express
finding of fault or negligence on the part of the common carrier. This statutory presumption may only be
overcome by evidence that the carrier exercised extraordinary diligence.

The evidence shows that PAGASA issued 24-hour public weather forecasts and tropical cyclone warnings
for shipping on September 10 and 11, 2000 advising of tropical depressions in Northern Luzon which
would also affect the province of Mindoro. A very cautious person exercising the utmost diligence would
thus not brave such stormy weather and put other people’s lives at risk. The extraordinary diligence
required of common carriers demands that they take care of the goods or lives entrusted to their hands
as if they were their own. This respondent failed to do.

ANNIE TAN, PETITIONER, v. GREAT HARVEST ENTERPRISES, INC., RESPONDENT.

Facts:
On February 3, 1994, Great Harvest hired Tan to transport 430 bags of soya beans worth P230,000.00
from Tacoma Integrated Port Services, Inc. (Tacoma) in Port Area, Manila to Selecta Feeds in Camarin,
Novaliches, Quezon City.5

That same day, the bags of soya beans were loaded into Tan's hauling truck. Her employee, Rannie
Sultan Cabugatan (Cabugatan), then delivered the goods to Selecta Feeds.6

At Selecta Feeds, however, the shipment was rejected. Upon learning of the rejection, Great Harvest
instructed Cabugatan to deliver and unload the soya beans at its warehouse in Malabon. Yet, the truck
and its shipment never reached Great Harvest's warehouse.
Great Harvest asked Tan about the missing delivery. At first, Tan assured Great Harvest that she would
verify the whereabouts of its shipment, but after a series of follow-ups, she eventually admitted that she
could not locate both her truck and Great Harvest's goods.

On February 19, 1994, the National Bureau of Investigation informed Tan that her missing truck had
been found in Cavite. However, the truck had been cannibalized and had no cargo in it.10 Tan spent
over P200,000.00 to have it fixed.

Great Harvest, through counsel, sent Tan a letter demanding full payment for the missing bags of soya
beans. On April 26, 1994, it sent her another demand letter. Still, she refused to pay for the missing
shipment or settle the matter with Great Harvest.15 Thus, on June 2, 1994, Great Harvest filed a
Complaint for sum of money against Tan. an denied that she entered into a hauling contract with Great
Harvest, insisting that she merely accommodated it. Tan also pointed out that since Great Harvest
instructed her driver to change the point of delivery without her consent, it should bear the loss brought
about by its deviation from the original unloading point.

Issue:
Whether or not Tan is not liable for the value of the lost soya beans since the truck hijacking was a
fortuitous event

Held:
The Rules of Court is categorical that only questions of law may be raised in petitions filed under Rule
45, as this Court is not a trier of facts. Further, factual findings of appellate courts, when supported by
substantial evidence, are binding upon this Court. A careful review of the records of this case convinces
us that the assailed judgments of the Court of Appeals are supported by substantial evidence.

Here, petitioner is a common carrier obligated to exercise extraordinary diligence42 over the goods
entrusted to her. Her responsibility began from the time she received the soya beans from respondent's
broker and would only cease after she has delivered them to the consignee or any person with the right
to receive them.43

Petitioner's argument is that her contract of carriage with respondent was limited to delivering the soya
beans to Selecta Feeds. Thus, when Selecta Feeds refused to accept the delivery, she directed her driver
to return the shipment to the loading point. Respondent refutes petitioner's claims and asserts that
their standing agreement was to deliver the shipment to respondent's nearest warehouse in case the
consignee refused the delivery.

After listening to the testimonies of both parties, the trial court found that respondent was able to prove
its contract of carriage with petitioner. It also found the testimony of respondent's witness, Cynthia
Chua (Chua), to be more believable over that of petitioner when it came to the details of their contract
of carriage
LTFRB VS VALENZUELA

FACTS

On May 8, 2015, the Department of Transportation and Communications (DOTC), the predecessor of
DOTr, issued Department Order No. (DO) 2015-11,3 amending DO 97-1097,4 which set the standard
classifications for public transport conveyances to be used as basis for the issuance of a Certificate of
Public Convenience (CPC)5 for public utility vehicles (PUVs). In recognition of technological innovations
which allowed for the proliferation of new ways of delivering and offering public transportation, the
DOTC, through DO 2015-11, created two (2) new classifications, namely, Transportation Network
Companies (TNC) and Transportation Network Vehicle Service (TNVS). a TNC is defined as an
"organization whether a corporation, partnership, sole proprietor, or other form, that provides pre-
arranged transportation services for compensation using an online-enabled application or platform
technology to connect passengers with drivers using their personal vehicles

On May 26, 2016, DBDOYC registered its business with the Securities and Exchange Commission (SEC),
and subsequently, in December 2016, launched "Angkas," an online and on-demand motorcycle-hailing
mobile application (Angkas or Angkas app) that pairs drivers of motorcycles with potential passengers
without, however, obtaining the mandatory certificate of TNC accreditation from the LTFRB. In this
regard, DBDOYC accredited Angkas drivers and allowed them to offer their transport services to the
public despite the absence of CPCs.

The LTFRB issued a press release on January 27, 2017 informing the riding public that DBDOYC, which is
considered as a TNC, cannot legally operate.17 Despite such warning, however, DBDOYC continued to
operate and offer its services to the riding public sans any effort to obtain a certificate of TNC
accreditation.
DBOYC alleged that (a) it is not a public transportation provider since Angkas app is a mere tool that
connects the passenger and the motorcycle driver; (b) Angkas and its drivers are not engaged in the
delivery of a public service; (c) alternatively, should it be determined that it is performing a public
service that requires the issuance of a certificate of accreditation and/or CPC, then DO 2017-11 should
be declared invalid because it violates Section 7 of Republic Act No. (RA) 4136 or the "Land and
Transportation Traffic Code,"20 which does not prohibit motorcycles from being used as a PUV; and (d)
neither the LTFRB nor the DOTr has jurisdiction to regulate motorcycles for hire.

Issue
Whether or not DBDOYC is a transportation provider and its accredited drivers are common carriers
engaged in rendering public service which is subject to LTFRB’s regulation.

Held:
it seems that DBDOYC's proffered operations is not enough to extricate its business from the definition
of common carriers, which, as mentioned, fall under the scope of the term "public service." As the
DBDOYC itself describes, Angkas is a mobile application which seeks to "pair an available and willing
Angkas biker with a potential passenger, who requested for a motorcycle ride, relying on geo-location
technology."52 Accordingly, it appears that it is practically functioning as a booking agent, or at the very
least, acts as a third-party liaison for its accredited bikers. Irrespective of the application's limited market
scope, i.e., Angkas users, it remains that, on the one hand, these bikers offer transportation services to
wiling public consumers, and on the other hand, these services may be readily accessed by anyone who
chooses to download the Angkas app.

G.R. No.179446: January 10, 2011

LOADMASTERS CUSTOMS SERVICES, INC. Petitioner vs. GLODEL BROKERAGE CORPORATION and R&B
INSURANCE CORPORATION Respondents

MENDOZA, J.:

FACTS: Columbia Wire and Cable Corporation (Columbia) insured a cargo of copper cathodes through
R&B Insurance Corporation (R&B). Columbia also engaged the services of Glodel Brokerage Corporation
(Glodel) for the transport of the cargo to Columbia facilities. Glodel then engaged the services of
Loadmasters Customs Services (Loadmasters) for the delivery of said cargo to Columbia. Out of 12
trucks, owned by Loadmasters, used to deliver the cargo of Columbia, only 11 made it to their respective
destinations. /span>Columbia claimed the amount of loss from R&B, which sued both Glodel and
Loadmasters. The RTC ruled in favor of R&B, but did not hold Loadmasters liable. Both R&B and
Glodelappealed the judgement. The Court of Appeals modified the decision of the RTC and ruled that
Loadmasters, being the agent of Glodel, is liable to Glodel for all the damages it might be required to
pay.

ISSUES: Whether or not Loadmasters is an agent of Glodel, and whether or not it may be held liable
under the transaction between Glodel and Columbia.

HELD: Petition is partly meritorious

Civil Law: Glodel and Loadmasters are both common carriers, as they hold out their carriage services to
the public. As such, under the Civil Code, they are mandated to show extraordinary diligence in the
conduct of transport. In the case at bar, both Glodel and Loadmasters were negligent as the cargo failed
to reach its destination. Loadmasters failed to ensure that its employees would not tamper with the
cargo. Glodel failed to ensure that Loadmasters is sufficiently capable of completing the delivery. Glodel
and Loadmasters are therefore joint tortfeasors and are solidarily liable to R&B Insurance.

Loadmasters cannot be considered an agent of Glodel. Loadmasters in no way represented itself as

such, and in the transfer of cargo, did not represent itself as doing such in behalf of Glodel. In fact,
Loadmasters is not privy to the agreement between Glodel and Columbia. It cannot be considered an
agent of Glodel, and cannot be held liable to Glodel.

B. Laws Applicable; State Regulation of Common Carriers (Articles 1753, 1766,

New Civil Code)

Philippine Airlines vs Hon. Court of Appeals and Isidro Co

G.R. No. 92501, March 6, 1992
207 SCRA 100
FACTS:
Isidro Co boarded petitioner airline’s PAL flight from San Francisco to Manila. Upon arrival, his checked-
in baggage was nowhere to be found despite diligent search. He sued the airline for damages and the
trial court ordered PAL to pay him P42,766.02 by way of actual damages, P20,000 by way of exemplary
damages and P10,000 attorney’s fees.
ISSUE:
Should the limits of lability under the Warsaw Convention limiting the liability of an air crrier for loss,
delay or damages to checked-in baggage to USD20 based on weight be applied? Which law should
govern, the Civil Code or the Warsaw Convention?
RULING:
No. The New Civil Code shall govern. Under the New Civil Code, Art. 1753, the law of the country to
which the goods are to be transported shall govern the liability of the common carrier for their loss,
destruction or deterioration.
The passenger’s destination was the Philippines so Philippine law governs the liability of the carrier for
the loss of passenger’s luggage.
PAL failed to overcome Co’s evidence proving that the carrier’s negligence was the proximate loss of his
baggage. It also acted in bad faith in faking a retrieval receipt to bail itself out of having to pay Co’s
claim.

National Development Corporation v. Court of Appeals

G.R. No. L-49407, 19 August 1988, 164 SCRA 593
FACTS:
NDC as the first preferred mortgagee of three ocean going vessels including one with the name ‘Dona
Nati’ appointed MCP as its agent to manage and operate said vessel for and in its behalf and account.
Thus, the E. Philipp Corporation of New York loaded on board the vessel “Dona Nati” at San Francisco,
California, a total of 1,200 bales of American raw cotton consigned to the order of Manila Banking
Corporation, Manila and the People’s Bank and Trust Company acting for and in behalf of the Pan Asiatic
Commercial Company, Inc., who represents Riverside Mills Corporation. Also loaded on the same vessel
at Tokyo, Japan, were the cargo of Kyokuto Boekui, Kaisa, Ltd., consigned to the order of Manila Banking
Corporation consisting of 200 cartons of sodium lauryl sulfate and 10 cases of aluminum foil.
En route to Manila the vessel Dofia Nati figured in a collision at Ise Bay, Japan with a Japanese vessel ‘SS
Yasushima Maru’ as a result of which 550 bales of aforesaid cargo of American raw cotton were lost
and/or destroyed. The damaged and lost cargoes were paid by the insurer to the Riverside Mills
Corporation as holder of the negotiable bills of lading duly endorsed.
Also considered totally lost were the aforesaid shipment of Kyokuto, Boekui Kaisa Ltd., consigned to the
order of Manila Banking Corporation, Manila, acting for Guilcon, Manila. The total loss was paid by the
insurer to Guilcon as holder of the duly endorsed bill of lading. Hence, plaintiff filed this complaint to
recover said amount from the NDC and MCP as owner and ship agent respectively, of the said ‘Dofia
Nati’ vessel.
ISSUE:
Which laws govern loss or destruction of goods due to collision of vessels outside Philippine waters?
HELD:
This issue has already been laid to rest by this Court in Eastern Shipping Lines Inc. v. IAC where it was
held under similar circumstance “that the law of the country to which the goods are to be transported
governs the liability of the common carrier in case of their loss, destruction or deterioration” (Article
1753, Civil Code). Thus, the rule was specifically laid down that for cargoes transported from Japan to
the Philippines, the liability of the carrier is governed primarily by the Civil Code and in all matters not
regulated by said Code, the rights and obligations of common carrier shall be governed by the Code of
commerce and by laws (Article 1766, Civil Code). Hence, the Carriage of Goods by Sea Act, a special law,
is merely suppletory to the provision of the Civil Code.
It is immaterial that the collision actually occurred in foreign waters, such as Ise Bay, Japan. It appears,
however, that collision falls among matters not specifically regulated by the Civil Code, so that no
reversible error can be found in respondent courses application to the case at bar of Articles 826 to 839,
Book Three of the Code of Commerce, which deal exclusively with collision of vessels.
G.R. No. 94149 May 5, 1992
AMERICAN HOME ASSURANCE, COMPANY, petitioner,
vs.
THE COURT OF APPEALS and NATIONAL MARINE CORPORATION and/or NATIONAL MARINE
CORPORATION (Manila), respondents.

FACTS:
 
American Home Assurance vs. CA Case Digest American Home Assurance vs. Court of Appeals (208 SCRA
343)

Facts: On or about June 19, 1998, Cheng Hwa Pulp Corp. shipped 5,000 bales of bleached kraft
pulp from Haulien, Taiwan on board “SS Kaunlaran” (owned by National Marine Corporation). The
shipment was consigned to Mayleen Paper, Inc. which insured the same with American Home
 Assurance Co. On June 22, 1998, the shipment arrived in manila and was discharged onto the
custody of the Marina Port Services, Inc. However, upon delivery to Mayleen Paper Inc., it was found
that 122 bales had either been damaged or lost with the value of P61, 263.41.

Mayleen Paper Inc, duly demanded indemnification from NMC but was not heeded. Mayleen then
sought recovery from American Home Assurance, the insurer, which was adjusted to P31, 506.75.
 As subrogee, American Home then filed a suit against NMC for the recovery of the said amount. NMC
filed a motion to dismiss on the ground that there was no cause of action based on Art 848 of  the Code
of Commerce which provides “that claims for averages shall not be admitted if they do not exceed 5% of
the interest which the claimant may have in the vessel or in the cargo if it be gross average and 1% of
the goods damaged if particular average, deducting in both cases the expenses of appraisal, unless there
is an agreement to the contrary. NMC contended that based on the allegations of the complaint, the loss
sustained in the case was P35, 506.75 which is only .18% the total value of the cargo.

The trial court dismissed the case for lack of cause of action. American Home then filed a petition
for certiorari with the Court of Appeals which later dismissed as constituting plain errors of law.
Hence, this petition.

Issue: Whether or not the law on averages applies when there is negligence?

Held: NO. Common carriers cannot limit their liability for injury or loss of goods where such injury or was
caused by its own negligence. Otherwise stated, the law on averages under the Code cannot be applied
in determining liability where there is negligence. It is reasonable to conclude that the issue of
negligence must first be addressed before the proper provisions of the Code of Commerce on the extent
of liability may be applied.
Instead of presenting proof of the exercise of extraordinary diligence as requires by law, NMC filed

its motion to dismiss, hypothetically admitting the truth of the facts alleged in the complaint to the
effect that the loss or damage to the 122 bales was due to the negligence or fault of NMC.