CASE TITLE: Estela L. Crisostomo vs. Court of Appeals PONENTE: Ynares-Santiago, J.

FACTS: Crisostomo contracted the services of Caravan Travel and Tours Intl. to arrange and facilitate her booking and accommodation in a tour dubbed "Jewels of Europe", where she was given a discount by reason that the company's ticketing manager, Meriam Menor, was her niece. Thereafter, Menor went to her aunt's house to deliver the latter's travel documents and plane tickets, instructing her to be at the airport on Saturday, June 15, 1992, two days after the delivery of the tickets. Without checking her tickets, Crisostomo went to the airport on Saturday, only to find out that the flight she was supposed to take had already departed the previous day, which was the departure date of her ticket. Upon complaining to Menor, the latter convinced Crisostomo to take another tour - the "British Pageant"- which reuired the payment of an additional S300. Upon her return from her European tour, Crisostomo demanded from respondent the reimbursement of the difference between the sum for the "Jewels of Europe" tour and the amount she owed respondent for the "British Pageant" tour (P61,421.70), to which the respondent company claimed as non-refundable. Consequently, she filed a complaint for breach of contract of carriage and damages against the respondent. Petitioner's Contention: Crisostomo alleged that her failure to join the original tour was due to Menor's faiure to indicate the departure date on the ticket; that respondent was negigent in informing her of the flight schedule; and that the British Pageant tour was merely a substitute to the Jewels of Europe tour, entitling her to rimbursement. It contends that as a common carrier, it should have exercised extraordinary diligence in informing her of the flight's details. Respondent's Contention: the failure of Crisostomo to join the first tour was because of her own doing, because she did not bother to read or confirm her flight schedule as printed on the ticket. It was correct in its contention that it exercised the proper standard of care when it provided her with the opportunity to confirm the schedule before the date of the flight. Lastly, it maintained that the British Pageant tour was not a substitute for the tour which Crisostomo missed, not entitling the latter to be reimbursed. ISSUE: Whether or not respondent Caravan did not observe the standard of care required of a common carrier when it informed the petitioner wrongly of the flight schedule? RULING: TRIAL COURT: Caravan travels was negligent in erroneously advising petitioner of Crisostomo's departure date. CA: Reversed RTC : held that Crisostomo was more negligent, being a well-traveled person and a lawyer, she should have known better than to simply rely on what her niece told her. SC: Petition is DENIED for lack of merit. No. A common carrier is defined under Article 1732 of the Civil Code 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, affecting their services to the public. It is obvious from the above definition that respondent is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier. Respondent did not undertake to transport petitioner from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Respondents services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours. It is in this sense that the contract between the parties in this case was an ordinary one for services and not one of carriage. Hence, the standard of care required of respondent is that of a good father of a family under Article 1173 of the Civil Code. This connotes reasonable care consistent with that which an ordinarily prudent person would have

observed when confronted with a similar situation.It is clear that respondent performed its prestation under the contract as well as everything else that was essential to book petitioner for the tour. Had petitioner exercised due diligence in the conduct of her affairs, there would have been no reason for her to miss the flight. Needless to say, after the travel papers were delivered to petitioners, it became incumbent upon her to take ordinary care of her concerns. This undoubtedly would require that she at least read the documents in order to assure herself of the important details regarding the trip.

CASE TITLE: DE GUZMAN vs. CA KEYWORD: Definition of Common Carriers PONENTE: Feliciano, J. DOCTRINE: Art. 1732 of the Civil Code makes no distinctions between a person or enterprise offering transportation service on a regular or scheduled basis and such service on an occasional, episodic or unscheduled basis. FACTS: 1) Respondent Ernesto Cendaa, a junk dealer, was engaged in buying up used bottles and scrap metal in Pangasinan which it brought to Manila for resale using his 2 six-wheeler trucks. 2) On his return trip, he would load his vehicles with cargo which various merchants wanted delivered to Pangasinan, charging freight rates lower than the regular commercial rates. 3) Petitioner Pedro De Guzman contracted with respondent for the hauling of 750 cartons of Liberty filled milk from General Milk Companys warehouse in Makati and Rizal, to Urdaneta. 4) 150 cartons were loaded on a truck driven by respondent himself, while 100 cartons were loaded on the other truck driven by Manuel Estrada, respondents driver and employee. 5) Only 150 boxes were delivered to petitioner as the truck carrying the other 600 boxes was hijacked along McArthur highway by armed men, who took the truck, its driver, his helper, and the cargo. PETITIONERS CONTENTION: 1) Petitioner alleged that respondent failed to exercise the ordinary diligence required of him by law as a common carrier which resulted to the loss, hence he should be liable for the payment of P22,150, the claimed value of the lost merchandise RESPONDENTS CONTENTION: 1) Private respondent denied that he was a common carrier and argued that he could not be held responsible since the loss was due to force majeure RULING: TRIAL COURT GRANTED the petition -It found private respondent to be a common carrier and held him liable for the value of the undelivered goods APPELLATE COURT DENIED the petition -The CA reversed the judgment and held that respondent had been engaged in transporting return loads of freight as a casual occupationa sideline to his scrap iron business and not as a common carrier, hence cannot be held liable SUPREME COURT DENIED petition for review on certiorari and affirmed CAs decision as to respondents liability for payment of the lost merchandise 1) Private respondent may be properly characterized as a common carrier in accordance with Art . 1732s definition of a common carrierCommon 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. 2) The above Article makes no distinction between one whose principal business activity is the carrying of persons/ goods or both, and one who does such carrying only as an ancillary activity (sideline). 3) Respondent cannot be held liable for the value of the lost goods because under Art. 1745(6), 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/ force. 4) In these circumstances, we 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 to which respondent should not be held liable.

CASE TITLE: IRGINES CALVO doing business under the name and style TRANSORIENT CONTAINER TERMINAL SERVICES, INC., petitioner, vs. UCPB GENERAL INSURANCE CO., INC. (formerly Allied Guarantee Ins. Co., Inc.) respondent. KEYWORD: common carrier =public service PONENTE: MENDOZA, J DOCTRINE: 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 . . . 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. Article 1732 deliberately refrained from making such distinctions. FACTS: A contract was entered into between Calvo and San Miguel Corporation (SMC) for the transfer of certain cargoes from the port area in Manila to the warehouse of SMC. The cargo was insured by UCPB General Insurance Co., Inc. When the shipment arrived and unloaded from the vessel, Calvo withdrew the cargo from the arrastre operator and delivered the same to SMCs warehouse. When it was inspected, it was found out that some of the goods were torn. UCPB, being the insurer, paid for the amount of the damages and as subrogee thereafter, filed a suit against Calvo.Petitioner, on the other hand, contends that it is a private carrier not required to observe such extraordinary diligence in thevigilance over the goods. As customs broker, she does not indiscriminately hold her services out to the public but only to selected parties. PETITIONERS CONTENTION: Petitioner contends that contrary to the findings of the trial court and the Court of Appeals, 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. RESPONDENTS CONTENTION: Defendant, being a customs brother, warehouseman and at the same time a common carrier is supposed [to] exercise [the] extraordinary diligence required by law, hence the extraordinary responsibility lasts from the time the goods are unconditionally placed in the possession of and received by the carrier for transportation until the same are delivered actually or constructively by the carrier to the consignee or to the person who has the right to receive the same. ISSUE: Whether or not Calvo is a common carrier liable for the damages for failure to observe extraordinary diligence in the vigilance over the goods RULING: 1. TRIAL COURT Ordered petitioner to pay respondent, as subrogee, the amount of P93,112.00 with legal interest, representing the value of damaged cargo handled by petitioner, 25% thereof as attorneys fees, and the cost of the suit. 2. APPELLATE COURT Affirmed the decision of the trial court. 3. SUPREME COURT Affirmed the decision of the Court of Appeals. The contention has no merit. In De Guzman v. Court of Appeals, the Court dismissed a similar contention and held the party to be a common carrier, thus -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 law makes no distinction between a carrier offering its services to the general community or solicits business only from an arrow segment of the general population. Note that the transportation of goods holds an integral part of Calvos business, it cannot indeed be doubted that it is a common carrier. So understood, the concept of common carrier under Article 1732 may be seen to coincide neatly with the notion of public service, under the Pub lic Service Act (Commonwealth Act No. 1416, as amended) which at least partially supplements the law on common carriers set forth in the Civil Code.

CASE TITLE: LOADSTAR SHIPPING CO., INC. vs. COURT OF APPEALS and THE MANILA INSURANCE CO., INC. KEYWORD: M/V Cherokee PONENTE: Davide, Jr. DOCTRINE: A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers. That liability arises the moment a person or firm acts as a common carrier, without regard to whether or not such carrier has also complied with the requirements of the applicable regulatory statute and implementing regulations and has been granted a certificate of public convenience or other franchise. SHORT FACTS: On 19 November 1984, LOADSTAR received on board its M/V Cherokee the following goods for shipment: a) 705 bales of lawanit hardwood; b) 27 boxes and crates of tilewood assemblies and others; and c) 49 bundles of mouldings R & W (3) Apitong Bolidenized. The goods, amounting to P6,067,178, were insured for the same amount with Manila Insurance Company against various risks including TOTAL LOSS BY TOTAL LOSS OF THE VESSEL. On 20 November 1984, on its way to Manila from the port of Nasipit, Agusan del Norte, the vessel, along with its cargo, sank off Limasawa Island. 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 P6,075,000 to the insured in full settlement of its claim, and the latter executed a subrogation receipt therefor. PETITIONERS CONTENTION: LOADSTAR denied any liability for the loss of the shippers goods and claimed that the sinking of its vessel was due to force majeure and that it is not considered a common carrier due to the lack of a certificate of public convenience. LOADSTAR also maintains that the vessel was seaworthy and was duly inspected by the maritime safety engineers of the Philippine Coast Guard, who certified that the ship was fit to undertake a voyage. RESPONDENTS CONTENTION: MIC claims that LOADSTAR was liable, notwithstanding that the loss of the cargo was due to force majeure, because the same concurred with LOADSTARs fault or negligence. Also, the limited liability theory is not applicable in the case at bar because LOADSTAR was at fault or negligent, and because it failed to maintain a seaworthy vessel. Authorizing the voyage notwithstanding its knowledge of a typhoon is tantamount to negligence. RULING: The SC 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 and that the doctrine of limited liability does not apply where there was negligence on the part of the vessel owner or agent. LOADSTAR was at fault or negligent in not maintaining a seaworthy vessel and in having allowed its vessel to sail despite knowledge of an approaching typhoon.

CASE TITLE: FIRST PHILIPPINE INDUSTRIAL CORPORATION VS COURT OF APPEALS KEYWORD: Pipe line operator PONENTE: Martinez, J. DOCTRINE: The fact that petitioner has a limited clientele does not exclude it from the definition of a common carrier. FACTS: Petitioner applied for a mayors permit with the Office of the Mayor of Batangas City. However, before the mayors permit could be issued, the respondent City Treasurer required the petitioner to pay a local tax pursuant to the Local Government Code. In order not to hamper its operations, petitioner paid the tax under protest in the amount of P 239, 019.01 for the first quarter of 1993. PETITIONERS CONTENTION: The Company (FPIC) as a pipeline operator with a government concession granted under the Petroleum Act is exempt from paying tax on gross receipts under Section 133 of the Local Government Code of 1991. Moreover, Transportation contractors are not included in the enumeration of contractors under Section 131, Paragraph 9h) of the Local Government Code. Therefore, the authority to impose tax on contractors and other independent contractors under Section 143, Paragraph 9e) of the Local Government Code does not include the power to levy on transportation contractors. RESPONDENTS CONTENTION: Petitioner cannot be considered engaged in transportation business, thus it cannot claim exemption under Section 133 (j) of the Local Government Code. Pipelines are not included in the term common carrier which refers solely to ordinary carriers such as tru cks, trains, ships and the like. The term common carrier under the said code pertains to the mode or manner by which a product is delivered to its destination. RULING: Petition is GRANTED. 1. TRIAL COURT: The trial court dismissed the complaint ruling that plaintiff is either a contractor or other independent contractor. The exemption granted under Sec. 133 (j) encompasses only commuters with taxes. Plaintiff is not a common carrier, but a special carrier extending its services and facilities to a single specific or special customer under a special contract. 2. APPELATE COURT: The CA affirmed the Trial Courts dismissal of petitioners complaint. 3. SUPREME COURT: Petition is GRANTED. 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.

CASE TITLE: ASIA LIGHTERAGE AND SHIPPING INC. V. CA AND PRUDENTIAL GUARANTEE AND ASSURANCE, INC. KEYWORD/S: No fixed or known routes; no terminals; issues no tickets; typhoon PONENTE: PUNO, J. DOCTRINE: Petitioner is a common carrier whether its carrying of goods is done on an irregular rather than scheduled manner, and with an only limited clientele. A common carrier need not have fixed and publicly known routes. Neither does it have to maintain terminals or issue tickets. FACTS: In 1990, 3,150 metric tons of Better Western White Wheat in bulk was shipped by Marubeni American Corporation on board the vessel M/V NEO CYMBIDIUM V-26 for delivery to the consignee, General Milling Corporation in Manila. Such was insured by Prudential Guarantee and Assurance, Inc. against loss or damage. When the vessel arrived in Manila, the cargo was transferred to the custody of the petitioner, which was contracted by the consignee as carrier to deliver the cargo to its warehouse in Pasig. Thereafter, 900 metric tons of the shipment was loaded on barge for delivery to consignee but the transport of cargo was suspended due to a warning of an incoming typhoon. Later, the petitioner proceeded to pull the barge to Engineering Island off Baseco to seek shelter from the typhoon. A few days after, the barge developed a list because of a hole it sustained after hitting an unseen protuberance underneath the water and thereafter, it sank, resulting to the total loss of the remaining cargoes not recovered. PETITIONERS CONTENTION: Asia Lighterage contends that it is not a common carrier but a private carrier. Allegedly, it has no fixed and publicly known route, maintains no terminals, and issues no tickets. It points out that it is not obliged to carry indiscriminately for any person. It is not bound to carry goods unless it consents. In short, it does not hold out its services to the general public. RESPONDENTS CONTENTION: Petitioner is a common carrier, thus, it is liable to private respondent for the former s failure to exercise extra ordinary diligence. ISSUE: Whether or not petitioner is a common carrier- YES. RULING: PETITION IS DENIED. TC: It ruled in favor of Prudential, ordering petitioner to pay the former the amount of indemnity, attorneys fees and cost of the suit. CA: It affirmed the trial courts decision with modification in the sense that the salvage value of P201,379.75 shall be deducted from the amount of P4,104,654.22. SC: The Supreme Court ruled for Prudential. It declared that the definition of common carriers in Article 1732 of the Civil Code makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity. It also did not distinguish 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. Further, we ruled that Article 1732 does not distinguish between a carrier offering its services to the general public, and one who offers services or solicits business only from a narrow segment of the general population. In the case at bar, the principal business of the petitioner is that of lighterage and drayage and it offers its barges to the public for carrying or transporting goods by water for compensation. Petitioner is clearly a common carrier.

CASE TITLE: FGU Insurance Corporation vs. G.P. Sarmiento Trucking Corporation and Lambert Eroles PONENTE: Vitug, J. DOCTRINES: 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" FACTS: G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver (30) units of Condura S.D. white refrigerators aboard one of its Isuzu truck, driven by Lambert Eroles, from the plant site of Concepcion Industries, Inc., along South Superhighway in Alabang, Metro Manila, to the Central Luzon Appliances in Dagupan City. While the truck was traversing the north diversion road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes. ISSUE: WON GPS is common carrier PETITIONERS CONTENTION: FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., and sought reimbursement 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. RESPONDENTS CONTENTION: Respondents asserted that GPS was the exclusive hauler only of Concepcion Industries, Inc., since 1988, and it was not so engaged in business as a common carrier. Respondents further claimed that the cause of damage was purely accidental RULING: CA decision REVERSED. 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. (Define Common Carrier and cite True Test of a Common Carrier). GPS cannot escape from liability. GPS is liable culpa contractual. The mere proof of existence of contract of carriage and the failure to comply therewith, justify, prima facie, corresponding right of relief. As the driver of the insured was not shown to be at fault, he cannot be ordered to pay FGU because the driver is not the party to the contract of carriage.

CASE TITLE: Bascos v. Court of Appeals KEYWORD: hauling contract PONENTE: Campos, JR., J. DOCTRINE: Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods transported by them FACTS: Rodolfo Cipriano, representing CIPTRADE, entered into a hauling contract with Jibfair Shipping Agency Corporation whereby the former bound itself to haul the latters 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. PETITIONERS CONTENTION: 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. RESPONDENTS CONTENTION: Cipriano demanded reimbursement from petitioner but the latter refused to pay. Cipriano filed a complaint for breach of contract of carriage. ISSUE: Whether or not petitioner is a common carrier. RULING: TRIAL COURT: The trial court ruled against petitioner and granted the writ of preliminary attachment for breach of contract of carriage. CA: The Court of Appeals affirmed the decision of the trail court, holding that petitioner was a common carrier, found that she admitted in her answer that she did business under the name A.M. Bascos Trucking and that said admission dispensed with the presentation by private respondent, Rodolfo Cipriano, of proofs that petitioner was a common carrier. SC: Yes. Petitioner is a common carrier. SC ruled if favor of respondent. (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.

CASE: FABRE V. COURT OF APPEALS KEYWORD: Minibus, 50kph, PONENTE: MENDOZA, J. DOCTRINE: Art. 1732 of the Civil Code makes no distinctions between a person or enterprise offering transportation service on a regular or scheduled basis and such service on an occasional, episodic or unscheduled basis. FACTS: Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model Mazda minibus principally used in connection with a bus service for school children which they operated in Manila. In 1981, they hired Porfirio J. Cabil as a driver whose job is to take school children to and from St. Scholasticas College in Malate, Manila. On November 2, 1984, private respondent World Christian Fellowship, Inc. arranged with the petitioners for the transportation of 33 members of its Young Adults Ministry from Manila to Caba, La Union and back in consideration of which private respondent paid petitioners the amount of P3,000.00. The group is scheduled to leave at 5PM but the bus did not leave Tropical Hut at Ortigas corner EDSA until 8PM because of the late members. Cabil was forced to take a detour through Ba-ay, Lingayen, Pangasinan because the bridge in the usual route (Carmen, Pangasinan) was under repair. At 11:30pm, Cabil came upon a sharp curve on the highway. The road was slippery because it was raining, causing the bus, which was running at the speed of 50kph to skid to the left road shoulder, hitting the traffic brace and sign along the road and the fence of one Jesus Escano, then turned over and landed on its left side. Several passengers were injured, including respondent Amyline Antonio was thrown on the floor of the bus and pinned down by a wooden seat which came off after being unscrewed. PETITIONERS CONTENTION: The petitioners argue that they are not liable because under the contract, World Christian Fellowship was directly responsible for the conduct of the trip. RESPONDENTS CONTENTION: The petitioners should be held liable for negligence. ISSUE: Whether or not petitioners were liable for the injuries suffered by the private respondents. Whether or not the petitioners are common carriers. RULING: RTC: LIABLE. The petitioners are liable and ordered to jointly and severally pay private respondents World Christian Fellowship, Inc. and Amyline Antonio. No convincing evidence was shown that the minibus was properly checked for travel to a long distance trip and that the driver was properly screened and tested before being admitted for employment. Indeed, all the evidence presented have shown the negligent act of the defendants which ultimately resulted to the accident subject of this case CA: AFFIRMED . The Court of Appeals affirmed the decision of the RTC with respect to Amyline Antonio but dismissed it with respect to the other plaintiffs on the ground that they failed to prove their respective claims. Court of Appeals sustained the trial courts finding that petitioner Cabil failed to exercise due care and precaution in the operation of his vehicle considering the time and the place of the accident. The Court of Appeals held that the Fabres were themselves presumptively negligent. SC: AFFIRMED the decision of the CA with modification as to the awards of damages. The case involves a contract of carriage. Petitioners, the Fabres, did not have to be engaged in the business of public transportation for the provisions of the Civil Code on common carriers to apply to them. As this Court has held:

Art. 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. 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. The fact that it was raining and the road was slippery, that it was dark, that he drove his bus at 50 kilometers an hour when even on a good day the normal speed was only 20 kilometers an hour, and that he was unfamiliar with the terrain, Cabil was grossly negligent and should be held liable for the injuries suffered by private respondent Amyline Antonio. Arts. 2176 and 2180 of the Civil Code his negligence gave rise to the presumption that his employers, the Fabres, were themselves negligent in the selection and supervision of their employee.

CASE TITLE: Home Insurance Co. vs. American Steamship Agencies, Inc. KEYWORD: Shortage on Peruvian fish meal PONENTE: Bengzon, J.P., J. DOCTRINE: As a private carrier, a stipulation exempting the owner of the vessel from liability for the negligence of its agent is not against public policy, and is deemed valid. FACTS: The case involves a charter party contract which is one of affreightment over the whole vessel; and section 2, paragraph 2 of said charter provides that the owner is liable for loss or damage to the goods caused by the personal act or default of the owner or its manager, but however exempts the owner of the vessel from any loss or damage or delay arising from any other source even from the neglect or fault of the captain or crew. Here, 21,740 jute bags of Peruvian fish meal through SS Crowborough were covered by clean bills of lading, consigned to San Miguel Brewery, insured by plaintiff-appellee Home Insurance Company, and were discharged into the lighters of defendant Luzon Stevedoring Company upon its arrival in Manila. When the cargo was delivered to consignee San Miguel Brewery, Inc. there were shortages amounting to P12,033.85; and consequently plaintiff-appellee Home Insurance Company, as subrogee to consignee San Miguel, filed a complaint against defendant Luzon Stevedoring Corporation and defendant-appellant American Steamship Agencies. Defendant Luzon Stevedoring Corporation alleged that it delivered with due diligence the goods in the same quantity and quality that it had received the same from the carrier. Defendant-appellant American Steamship denied liability by alleging that under the provisions of the Charter party referred to in the bills of lading, the charterer, not the shipowner, was responsible for any loss or damage of the cargo. The Court of First Instance absolved defendant Luzon Stevedoring Corporation, having found the latter to have merely delivered what it received from the carrier in the same condition and quality. However, it ordered defendant-appellant American Steamship Agencies to pay plaintiff since the stipulation in the charter party contract exempting the owner of the vessel from liability is against public policy; and that in case of loss, destruction or deterioration of goods, common carriers are presumed at fault or negligent. Subsequently, defendant-appellant American Steamship appealed directly to the SC. ISSUE: Whether or not the stipulation in the charter party of the owner's non-liability is valid so as to absolve the defendant-appellant American Steamship Agencies from liability for loss. RULING: Yes, the stipulation is valid. A common carrier undertaking to carry a special cargo or chartered to a special person only, becomes a private carrier; and the Civil Code provisions on common carriers should not be applied where the carrier is a private carrier. And as stated in the charter party, recovery cannot be had, for loss or damage to the cargo, against the shipowners, unless the same is due to personal acts or negligence of said owner or its manager, as distinguished from its other agents or employees. In this case, no such personal act or negligence has been proved. Petition denied. The judgment appealed from is reversed and defendant-appellant American Steamship Agencies is absolved from liability to plaintiff-appellee Home Insurance Company.

CASE TITLE: PLANTERS PRODUCTS INC. VS. COURT OF APPEALS KEYWORD: FERTILIZER PONENTE: BELLOSILLO, J. DOCTRINE: Rule on Presumption of negligence and; 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 least insofar as the particular voyage covering the charter-party is concerned. Indubitably, a shipowner 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. FACTS: Planters Products, Inc., purchased from Mitsubishi International Corporation of New York, U.S.A., Urea 46% fertilizer which the latter shipped in bulk on aboard the cargo vessel M/V Sun Plum owned by private respondent Kyosei Kisen Kabushiki Kaisha from Kenai, Alaska to Poro Point, San Fernando, La Union, Philippines. A time charter-party on the vessel M/V Sun Plum was entered into between Mitsubishi as shipper/charterer and KKKK as shipowner, in Tokyo, Japan. After the Urea fertilizer was loaded in bulk by stevedores hired by and under the supervision of the shipper, the steel hatches were closed with heavy iron lids, covered with three (3) layers of tarpaulin, then tied with steel bonds. Upon arrival of the vessel at her port of call, the steel pontoon hatches were opened with the use of the vessels boom. Petitioner unloaded the cargo from the holds into its steel -bodied dump trucks which were parked alongside the berth, using metal scoops attached to the ship, pursuant to the terms and conditions of the charter-party. The 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 consignees warehouse located some fifty (50) meters from the wharf. 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. Cargo Superintendents Company Inc. (CSCI), hired by petitioner, determined the outrun of the cargo shipped. It turned out that there was a shortage and some fertilizers were rendered unfit for commerce, having been polluted with sand, rust, and dirt. Petitioner sent a claim letter 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. ISSUE: Whether a common carrier becomes a private carrier by reason of a charter party; in the negative, whether the shipowner in the instant case was able to prove that he had exercised that degree of diligence required of him under the law. PETITIONER'S CONTENTION: Petitioner argues that since the possession and control of the vessel remain with the shipowner, absent any stipulation to the contrary, such shipowner should be made liable for the negligence of the captain and crew. In fine, PPI faults the appellate court in not applying the presumption of negligence against respondent carrier, and instead shifting the onus probandi on the shipper to show want of due diligence on the part of the carrier, when he was not even at hand to witness what transpired during the entire voyage RESPONDENT'S CONTENTION: The defendant carrier argued that the strict public policy governing common carriers does not apply to them because they have become private carriers by reason of the provisions of the charter-party RULING TRIAL COURT: Prescinding from the provision of the law that a common carrier is presumed negligent in case of loss or damage of the goods it contracts to transport, all that a shipper has to do in a suit to recover for loss or damage is to show receipt by the carrier of the goods and delivery by it of less than what it received. After that, the burden of proving that the loss or damage was due to any of the causes which exempt him from liability is shifted to the carrier,

common or private. The defendants considered private carriers, it was still incumbent upon them to prove that the shortage or contamination sustained by the cargo is attributable to the fault or negligence on the part of the shipper or consignee in the loading, stowing, trimming and discharge of the cargo. This they failed to do. By this omission, coupled with their failure to destroy the presumption of negligence against them, the defendants are liable". CA: Court of Appeals reversed the lower court and absolved the carrier from liability for the value of the cargo that was lost or damaged. The cargo vessel M/V Sun Plum owned by private respondent KKKK was a private carrier and not a common carrier by reason of the time charter-party. The Civil Code provisions on common carriers which set forth a presumption of negligence do not find application in the case at bar. SC: A charter-party is defined as a contract by which an entire ship, or some principal part thereof, is let by the owner to another person for a specified time or use; a contract of affreightment by which the owner of a ship or other vessel lets the whole or a part of her to a merchant or other person for the conveyance of goods, on a particular voyage, in consideration of the payment of freight; Charter parties are of two types: (a) contract of affreightment which involves the use of shipping space on vessels leased by the owner in part or as a whole, to carry goods for others; and, (b) charter by demise or bareboat charter, by the terms of which the whole vessel is let to the charterer with a transfer to him of its entire command and possession and consequent control over its navigation, including the master and the crew, who are his servants. Contract of affreightment may either be time charter, wherein the vessel is leased to the charterer for a fixed 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 consecutive voyage, the shipowner to supply the ships stores, pay for the wages of the master and the crew, and defray the expenses for the maintenance of the ship. The distinction between a common or public carrier and a private or special carrier lies in the character of the business, such that if the undertaking is a single transaction, not a part of the general business or occupation, although involving ing the carriage of goods for a fee, the person or corporation offering such service is a private carrier. Article 1733 of the New Civil Code mandates that common carriers, by reason of the nature of their business, should observe extraordinary diligence in the vigilance over the goods they carry. In the case of private carriers, however, the exercise of ordinary diligence in the carriage of goods will suffice. Moreover, in case of loss, destruction or deterioration of the goods, common carriers are presumed to have been at fault or to have acted negligently, and the burden of proving otherwise rests on them. On the contrary, no such presumption applies to private carriers, for whosoever alleges damage to or deterioration of the goods carried has the onus of proving that the cause was the negligence of the carrier. (CONCEPT) It is not disputed that respondent carrier, in the ordinary course of business, operates as a common carrier, transporting goods indiscriminately for all persons. When petitioner 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. This is evident in the present case considering that the steering of the ship, the manning of the decks, the determination of the course of the voyage and other technical incidents of maritime navigation were all consigned to the officers and crew who were screened, chosen and hired by the shipowner. Respondent carrier has sufficiently overcome, by clear and convincing proof, the prima facie presumption of negligence. The master of the carrying vessel, Captain Lee Tae Bo, testified that before the fertilizer was loaded, the four (4) hatches of the vessel were cleaned, dried and fumigated. After completing the loading of the cargo in bulk in the ships holds, the steel pontoon hatches were closed and sealed with iron lids, then covered with three (3) layers of serviceable tarpaulins which were tied with steel bonds. 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 ships boom. It was also shown during the trial that the hull of the vessel was in good co ndition, foreclosing the possibility of spillage of the cargo into the sea or seepage of water inside the hull of the vessel. When M/V Sun Plum docked at its berthing place, representatives of the consignee boarded, and in the presence of a representative of the shipowner, the foreman, the stevedores, and a cargo surveyor representing CSCI, opened the hatches and inspected the condition of the hull of the vessel. The stevedores unloaded the cargo under the watchful eyes of the shipmates who were overseeing the whole operation on rotation basis.

TITLE: NATIONAL STEEL CORPORATION VS CA KEYWORD: Common Carrier; Private Carrier; Burden of Proof PONENTE: PANGANIBAN, J. DOCTRINE: The true test of a common carrier is the carriage of passengers or goods, provided it has space, for all who opt to avail themselves of its transportation service for a fee. A carrier which does not qualify under the above test is deemed a private carrier. Generally, private carriage is undertaken by special agreement and the carrier does not hold himself out to carry goods for the general public. The most typical, although not the only form of private carriage, is the charter party, a maritime contract by which the charterer, a party other than the shipowner, obtains the use and service of all or some part of a ship for a period of time or a voyage or voyages. FACTS: The MV Vlasons I is a vessel which renders tramping service and does not transport cargo or shipment for the general public. Its services are available only to specific persons who enter into a special contract of charter party with its owner. Vlasons Shipping, Inc., owner of MV Vlasons I, entered into a contract of affreightment or contract of voyage charter hire with National Steel Corporation. On August 6, 7 and 8, 1974, the MV VLASONS I loaded at the pier at Iligan City, the NSCs shipment of 1,677 skids of tinplates and 92 packages of hot rolled sheets for carriage to Manila. The shipment was placed in the three (3) hatches of the ship. The vessel arrived with the cargo at Pier 12, North Harbor, Manila, on August 12, 1974. The following day, when the vessels three hatches containing the shipment were opened by NSCs agents, nearly al l the skids of tinplates and hot rolled sheets were allegedly found to be wet and rusty. The cargo was discharged and unloaded by stevedores hired by the Charterer. NSC filed with VSI its claim for damages suffered. On October 3, 1974, plaintiff formally demanded payment of said claim but defendant VSI refused and failed to pay. Plaintiff filed its complaint against defendant on April 21, 1976 in the CFI, Rizal. PETITIONERS (NSC) CONTENTION: It sustained losses as a result of 1. the act, neglect and default of the master and crew in the management of the vessel as well as 2. the want of due diligence on the part of the defendant a. to make the vessel seaworthy and b. to make the holds and all other parts of the vessel in which the cargo was carried, fit and safe for its reception, carriage and preservation all in violation of defendants undertaking under their Contract of Voyage Charter Hire. PRIVATE RESPONDENTS (VSI) CONTENTION: 1. MV VLASONS I was seaworthy in all respects for the carriage of plaintiffs cargo; 2. Said vessel was not a common carrier inasmuch as she was under voyage charter contract with NSC as charterer under the charter party; 3. In the course of the voyage from Iligan City to Manila, the MV VLASONS I encountered very rough seas, strong winds and adverse weather condition, causing strong winds and big waves to continuously pound against the vessel and seawater to overflow on its deck and hatch covers, which may be considered as force majeure; 4. Under the Contract of Voyage Charter Hire, defendant shall not be responsible for losses/damages except on proven willful negligence of the officers of the vessel, a. the officers of said MV VLASONS I exercised due diligence and proper seamanship and were not

willfully negligent RULING: TRIAL COURT: In favor of VSI, NSC was ordered to pay the unpaid freight due and demurrage for the delay in payment. (italized related to the topic in Transpo) 1. The MV VLASONS I is a vessel of Philippine registry engaged in the tramping service and is available for hire only under special contracts of charter party as in this particular case. 2. The evidence shows that the MV VLASONS I was seaworthy and properly manned, equipped and supplied when it undertook the voyage. It had all the required certificates of seaworthiness. 3. The cargo/shipment was securely stowed in three (3) hatches of the ship. The hatch openings were covered by hatchboards which were in turn covered by two or double tarpaulins. The hatch covers were water tight and, under the hatchboards were steel beams to give support. 4. The claim of the plaintiff that defendant violated the contract of carriage is not supported by evidence. As to the damage to the tinplates, there is unrebutted testimony of witness Vicente Angliongto that tinplates sweat by themselves when packed even without being in contract (sic) with water from outside especially when the weather is bad or raining. CA: Affirmed with modification reducing the demurrage from P88,000.00 to P44,000.00 and deleting the award of attorneys fees and expenses of litigation. SC: (only related to the topic) Issue: WON MV Vlason I is a private carrier? Held: YES. In the instant case, it is undisputed that VSI did not offer its services to the general public. As found by the RTC, it carried passengers or goods only for those it chose under a special contract of charter party.As correctly concluded by the CA, the MV Vlasons I was not a common but a private carrier. Consequently, the rights and obligations of VSI and NSC, including their respective liability for damage to the cargo, are determined primarily by stipulations in their contract of private carriage or charter party. Extent of VSI s Responsibility and Liability Over NSC s Cargo It is clear from the parties Contract of Voyage Charter Hire that VSI shall not be responsible for losses except on proven willful negligence of the officers of the vessel. Burden of Proof Ineluctably, the burden of proof was placed on N SC by the parties agreement.

CASE TITLE: Valenzuela Hardwood vs CA KEYWORD/s: charter party stipulation, 7brothers PONENTE: PANGANIBAN DOCTRINE: In case of a private carrier, a stipulation exempting the owner from liability even for the negligence of its agent is valid. FACTS: On Jan 16, 1984 Valenzuela hardwood entered into a contract w Seven Brothers whereby the latter undertook an agreement to load on board it's vessel M/V Seven Ambassador said Lauan round logs(940) of Valenzuela at port of Isabela to Manila. On Jan. 25, 1984 M/V 7 Ambassador sank resulting in the loss of the insured logs, the cause of the loss was the snapping of the iron chains & subsequent rolling of the logs due to the fault of its captain in stowing and securing the logs. There was a stipulation in the said contract that "owners shall not be responsible for loss, split, short handling, breakages, and any kind of damages to the cargo". PETITIONERS CONTENTION: Valenzuela contends that the said stipulation in the charter party executed between Valenzuela and 7 brothers exempting the latter from liability for loss of the former's logs arising from negligence of its captain is not valid, thus, 7 brothers should be held liable for the loss. RESPONDENTS CONTENTION: Seven brothers argued that said stipulation in the contract exempting them from liability in case of loss is valid. RULING: TRIAL COURT: Trial court ruled in favor of Valenzuela on the ground that the cause of loss was due to the negligence of the captain in stowing and and securing the logs on board. That the said stipulation in the charter party is void for being contrary to public policy. CA: CA affirmed in part the decision of RTC by sustaining the liability of Seven Brothers but modified by holding that Seven Brothers was not liable for the lost cargo on the ground that the said stipulation is valid. SC: SC ruled in favor of Seven Brothers that Seven Brothers as a private carrier when it contracted to transport the cargo of Valenzuela. In a contract of private carrier, the parties may validly stipulate that responsibility for the cargo rests solely on the charterer, exempting the shipowner from liability for loss or damage to the cargo caused even by the negligence of the ship captain such stipulation is valid because it's is freely entered into by the parties and the same is not contrary to law, morals, good customs, public order or public policy. As compared to common carriers, private carriers are free to stipulate certain conditions in their contracts while the general public enters into a contract of transportation with common carriers without a hand or voice in preparation thereof.

CASE TITLE: SAMAR MINING COMPANY, INC. vs. NORDEUTSCHER LLOYD and CF. SHARP & COMPANY, INC KEYWORD: Article 1736, New Civil Code. PONENTE: Cuevas, J. DOCTRINE: The liability of the common carrier for the loss, destruction or deterioration of goods transported from a foreign country to the Philippines is governed primarily by the New Civil Code. In all matters not regulated by said Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws. FACTS: SAMAR MINING COMPANY, INC. (SMCI) imported one (1) crate Optima welded wedge wire sieves from Germany, through a vessel owned by common carrier, NORDEUTSCHER LLOYD, represented in the Philippines by its agent, CF. SHARP & CO., INC. which shipment is covered by Bill of Lading No. 18 duly issued to consignee, SMCI. Upon arrival of the vessel at the port of Manila, the goods were unloaded and delivered by the carrier to the bonded warehouse of AMCYL where the goods were stored before its transshipment to Davao, which was the agreed point of destination. However, the goods were never transhipped to Davao hence, were not received by the consignee. Consequently, SMCI filed an extrajudicial claim for the value of the goods against the carrier, but was not paid. Hence, SMCI filed the instant suit to enforce such payment. The trial court rendered a decision in favor of SMCI, ordering defendants to pay the value of the goods. Hence, this petition. ISSUE: WON the petitioners are liable for the loss of the shipment. RULING: NO. The liability of the common carrier for the loss, destruction or deterioration of goods transported from a foreign country to the Philippines is governed primarily by the New Civil Code. In all matters not regulated by said Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws. Here, Article 1736 of the New Civil Code provisions on common carriers was applied by the Supreme Court. Under said article, the carrier may be RELIEVED of the responsibility for loss or damage to the goods UPON ACTUAL or constructive delivery of the same by the carrier to the consignee, or to the person who has a right to receive them. There is ACTUAL delivery in contracts for the transport of goods when possession has been turned over to the consignee or to his DULY AUTHORIZED AGENT and a reasonable time is given him to remove the goods. In finding that the appellant was not responsible for the loss of the goods since there was actual delivery to the consignee through his duly authorized agent, who turned out to be carrier-appellant herein, the Court ruled in this wise: Under the bill of lading, the appellant-carrier assumed 2 undertakings: The first is FOR THE TRANSPORT OF GOODS from Bremen, Germany to Manila. The second, THE TRANSSHIPMENT OF THE SAME GOODS from Manila to Davao, with appellant acting as agent of the consignee.

At the hiatus between these two undertakings of appellant, which is the moment when the subject goods are discharged in Manila, its personality changes from that of carrier TO THAT OF AGENT of the consignee. Thus, the character of appellants possession also changes, FROM possession in its own name AS CARRIER, into possession in the name of consignee AS THE LATTER'S AGENT. Such being the case, there was, in effect, actual delivery of the goods from appellant AS CARRIER to the same appellant AS AGENT of the consignee. Upon such delivery, the appellant, as erstwhile carrier, CEASES to be responsible for any loss or damage that may befall the goods from that point onwards. This is the full import of Article 1736 as applied in this case.

CASE TITLE: Eastern Shipping Lines v IAC KEYWORD/S: Governing Laws; Subrogation; Liability of Common Carriers PONENTE: Melencio-Herrera DOCTRINE: 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. FACTS: M/S ASIATICA, a vessel operated by Eastern Shipping Lines loaded at Kobe, Japan for transportation to Manila, 5,000 pieces of calorized lance pipes consigned to Philippine Blooming Mills Co., Inc., and 7 cases of spare parts consigned to Central Textile Mills, Inc., both sets of goods were insured against marine risk with Development Insurance and Surety Corporation. The same vessel took on board 128 cartons of garment fabrics and accessories consigned to Mariveles Apparel Corporation and insured by Nisshin Fire & Marine Insurance Co., and surveying instruments consigned to Aman Enterprises and General Merchandise and insured by Dowa Fire & Marine Insurance. Enroute for Kobe, Japan, to Manila, the vessel caught fire and sank, resulting in the total loss of ship and cargo. The respective Insurers paid the corresponding marine insurance values to the consignees concerned and were thus subrogated unto the rights of the latter as the insured. PETITIONERS CONTENTION: st 1 issue: It is not the operator of the M/S Asiatica but merely a charterer thereof nd 2 issue: loss was due to an extraordinary fortuitous event, hence, it is not liable under the law. RESPONDENTS CONTENTION: st 1 issue: Subrogation nd 2 issue: It is not an extraordinary fortuitous event RULING Trial court: In favor of Insurance companies CA: SC: Affirmed the CAs decision with modifications as to the monetary award 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. As the cargoes in question were transported from Japan to the Philippines, the liability of Petitioner Carrier is governed primarily by the Civil Code. However, 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 special laws. Thus, the Carriage of Goods by Sea Act, a special law, is suppletory to the provisions of the Civil Code. (This case is placed under the heading Governing Laws in the syllabus, but if you want, heres the collateral issue discussed by the Supreme Court which I think is also covered by the hw) ISSUE HELD Affirmed the trial courts decision

Burden of proof

Common carriers are responsible for the loss, destruction, or deterioration of the goods unless the same is due to any of the following causes only: o Flood, storm, earthquake, lightning or other natural disaster or calamity; xxx Loss is due to fire Fire may NOT be considered a natural disaster or calamity. This must be so as it arises almost invariably from some act of man or by human means. It does not fall within the category of an act of God unless caused by lightning or by other natural disaster or calamity. The burden then is upon Petitioner Carrier to prove that it has exercised the extraordinary diligence required by law And even if fire were to be considered a "natural disaster" within the meaning of Article 1734 of the Civil Code, it is required under Article 1739 of the same Code that the "natural disaster" must have been the "proximate and only cause of the loss," and that the carrier has "exercised due diligence to prevent or minimize the loss before, during or after the occurrence of the disaster . There was "actual fault" of the carrier shown by "lack of diligence" in that "when the smoke was noticed, the fire was already big; that the fire must have started twenty-four (24) hours before the same was noticed; " and that "after the cargoes were stored in the hatches, no regular inspection was made as to their condition during the voyage.

TITLE: National Development Company vs. Court of Appeals KEYWORD/s: Common carriers; Carriage of Goods by Sea Act Extraordinary Diligence; goods in question are transported from San Francisco, California and Tokyo, Japan to the Philippines and that they were lost or damaged due to a collision PONENTE: PARAS, J. DOCTRINE: 1. Common carriers; Carriage of Goods by Sea Act; Rule that for cargoes transported from Japan to the Philippines, the liability of the carrier in case of loss, destruction or deterioration of goods is governed primarily by the Civil Code, but on all other matters, the Code of Commerce and special laws shall apply; The Carriage of Goods by Sea Act is suppletory to the Civil Code. 2. Extraordinary Diligence; Common carriers, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of passengers transported by them according to all circumstances of each case. ***Nature of the case: These are appeals by certiorari from the decision of the Court of Appeals in CA G.R. No. L46513-R entitled Development Insurance and surety Corporation (DISC) plaintiff -appellee vs. Maritime Company of the Philippines (MCP) and National Development Company (NDC) defendant-appellants, affirming in toto the decision in Civil Case No. 60641 of the then CFI of Manila, Sixth Judicial District ordering the defendants MDC and MCP, to pay jointly and severally, to the plaintiff Development Insurance and Surety Corp P 364,915.86 FACTS: In accordance with a memorandum entered into between defendants NDC and MCP on September 13, 1962, defendant NDC as the first preferred mortgagee of three ocean-going vessels including one the name Doa Nati appointed defendant MCP as its agent to manage and operate said vessels in its behalf. The E. Phillipp Corporation of the New York loaded on board the vessel Doa Nati at San Francisco, California, a tota l of 1,200 bales of American raw cotton consigned to Manila Banking Corporation, Manila and the Peoples Bank and Trust Company acting for and in behalf of the Pan Asiatic Commercial Company, Inc., who represents Riverside Mills Corporation. The vessel figured in a collision at Ise Bay, Japan with a Japanese vessel as a result of which 550 bales of aforesaid cargo were lost and/or destroyed. The damage and lost cargo was worth P344,977.86 which amount, the plaintiff Development Insurance and Surety Corporation as insurer, paid to the Riverside Mills Corporation as holder of the negotiable bills of lading duly endorsed. The insurer filed before the CFI of Manila an action for the recovery of said amount from NDC and MCP.

PETITIONERS (NDC and MCP) CONTENTION: The main thrust of NDC's argument is to the effect that the Carriage of Goods by Sea Act should apply to the case at bar and not the Civil Code or the Code of Commerce. 1. Under Section 4 (2) of said Act, the carrier is not responsible for the loss or damage resulting from the "act, neglect or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship." 2. NDC insists that based on the findings of the trial court which were adopted by the Court of Appeals, both pilots of the colliding vessels were at fault and negligent, NDC would have been relieved of liability under the Carriage of Goods by Sea Act. 3. Instead, Article 287 of the Code of Commerce was applied and both NDC and MCP were ordered to reimburse the insurance company for the amount the latter paid to the consignee as earlier stated. PRIVATE RESPONDENTS (DISC) CONTENTION: Plaintiff (herein respondent DISC) had paid as insurer the total amount of P364,915.86 to the consignees or their successors-in-interest, for the said lost or damaged cargoes. Hence, plaintiff filed this complaint to recover said amount from the defendants-NDC and MCP as owner and ship agent respectively, of the said 'Dofia Nati' vessel.

RULING: TRIAL COURT: Trial court rendered a decision ordering the defendants MCP and NDC to pay jointly and solidarity to DISC the sum of P364,915.86 plus the legal rate of interest to be computed from the filing of the complaint on April 22, 1965, until fully paid and attorney's fees of P10,000.00. Likewise, in said decision, the trial court granted MCP's crossclaim against NDC. COURT OF APPEALS: On November 17,1978, the Court of Appeals promulgated its decision affirming in toto the decision of the trial court. SUPREME COURT (only related to the topic) Issue: Which laws govern loss or destruction of goods due to collision of vessels outside Philippine waters, and the extent of liability as well as the rules of prescription provided thereunder. Held: The subject petitions are DENIED for lack of merit and the assailed decision of the respondent Appellate Court is AFFIRMED. Philippine Laws will apply. Ratio: 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 special laws (Article 1766, Civil Code). Hence, the Carriage of Goods by Sea Act, a special law, is merely suppletory to the provisions of the Civil Code. In the case at bar, it has been established that the goods in question are transported from San Francisco, California and Tokyo, Japan to the Philippines and that they were lost or damaged due to a collision which was found to have been caused by the negligence or fault of both captains of the colliding vessels. Under the above ruling, it is evident that the laws of the Philippines will apply, and it is immaterial that the collision actually occurred in foreign waters, such as Ise Bay, Japan. Under Article 1733 of the Civil Code, common carriers from the nature of their business and for reasons of public policy are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them according to all circumstances of each case. Accordingly, under Article 1735 of the same Code, in all cases other than those mentioned in Article 1734 thereof, the common carrier shall be presumed to have been at fault or to have acted negligently, unless it proves that it has observed the extraordinary diligence required by law. 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.

CASE TITLE: Fisher vs. Yangco Steamship Company KEYWORD: dynamite, explosives PONENTE: Justice Carson DOCTRINE: CONTROL AND REGULATION OF CARRIERS, The nature of the business of a common carrier as a public employment is such that it is clearly within the power of the state to impose such just and reasonable regulations thereon in the interest of the public as the legislator may deem proper. Of course such regulations must not have the effect of depriving an owner of his property without due course of law, nor of confiscating or appropriating private property without just compensation, nor of limiting or prescribing irrevocably vested rights or privileges lawfully acquired under a charter or franchise. But aside from such constitutional limitations, the determination of the nature and extent of the regulations, which should be prescribed, rests in the hands of the legislator. SHORT FACTS: ORIGINAL ACTION in the Supreme Court. Prohibition. The parties to the case are - FC Fisher (stockholder of Yangco Streamship Company) - Yangco Steamship Company - J.S. Stanley (Acting Collector of Customs of the Philippines) On or about June 10, 1912 the directors of Yangco Steamship Company adopted a resolution (ratified and affirmed by the shareholders of the company) that declares and provides that goods that are to be carried by their vessels shall not include dynamite, powder or other explosives. J.S Stanley however demanded and required the company to accept and carry such explosives for carriage. Notwithstanding the demands of Fisher, the manager, agents and servants of the company decline and refuse to cease the carriage of such explosives. PETITIONERS CONTENTIONS: 1. That the Acting Collector of Customs erroneously construes the provisions of Act No. 98 in holding that they require the company to accept such explosives for carriage notwithstanding the above mentioned resolution of the directors and stockholders of the company, and 2. That if the Act does in fact require the company to carry such explosives it is to that extent unconstitutional and void 3. That a common carrier in the Philippine Islands -may decline to accept for carriage any shipment of' merchandise of a class which it expressly or impliedly declines to accept from all shippers alike, because, as he contends "the duty of a common carrier to carry for all who offer arises from the public profession he has made, and is limited by it. RESPONDENTS CONTENTIONS: 1. That should the company decline to accept such explosives for carriage, the respondent Attorney- General of the Philippine Islands and the respondent prosecuting attorney of the city of Manila intend to institute proceedings under the penal provisions of Act No. 98 of the Philippine Commission against the company, its managers, agents and servants, to enforce the requirements of the Acting Collector of Customs as to the acceptance of such explosives for carriage 2. That Sec. 3 of Act No. 98 impose an imperative duty on all common carriers to accept for carriage, and to carry all and any kind of freight which may be offered for carriage without regard to the facilities which they may have at their disposal. ISSUE: Whether or not the refusal of the owners and officers of a steam vessel to accept for carriage "dynamite, powder or other explosives" [from any and all shippers who may offer such explosives for carriage] can be held to be a lawful act without regard to any question as to the conditions under which such explosives are offered for carriage, or as to the suitableness of the vessel for the transportation of such explosives, or as to the possibility that the

refusal to accept such articles of commerce in a particular case may have the effect of subjecting any person or locality or the traffic in such explosives to an undue, unreasonable or unnecessary prejudice or discrimination. RULING: NO. The nature of the business of a common carrier as a public employment is such that it is clearly within the power of the state to impose such just and reasonable regulations thereon in the interest of the public, as the legislator may deem proper. Of course such regulations must not have the effect of depriving an owner of his property without due course of law, nor of confiscating or appropriating private property without just compensation, nor of limiting or prescribing irrevocably vested rights or privileges lawfully acquired under a charter or franchise. But aside from such constitutional limitations, the determination of the nature and extent of the regulations, which should be prescribed, rests in the hands of the legislator. The said provision which provides that no common carrier shall under the pretense whatsoever, fail or refuse to receive for carriage any person or property is not to be construed in its literal sense and without regard to the context, so as to impose an imperative duty to all common carriers to accept and carry all and any kind of freight which may be offered for carriage without regard to their facilities. The statute more so does not require of a common carrier, as a condition to the continuing in said business, that he must carry anything and everything, and thereby renders useless the facilities he may have for the carriage of certain types of freight. The prayer for petition cannot be granted. It cannot be doubted that the refusal of the said company, owner of a large number of vessels engaged in trade to receive for carriage such explosives in any of their vessels would subject the traffic of such goods to manifest prejudice and discrimination. Such prejudice and discrimination being unnecessary and unreasonable given the fact that it has not been alleged that dynamite, gunpowder, and other explosives cannot be transported with reasonable safety on board a vessel engaged in the business of common carriers. Further, it has not been alleged that the companys vessels are unsound for such purposes. The mere fact that violent and destruct can be obtained by the use of dynamite would not be sufficient in itself to justify the refusal of the vessel, duly licensed as common carrier of merchandise to accept if for carriage. If it cannot be proven that the condition, which it is to be transported, offers real danger to the carriage or that there be reasonable fear that the vessel will be exposed to unnecessary risks then such refusal is a violation of the prohibition against discrimination prohibited by the Act.

CASE TITLE: Kilusang Mayo Uno (KMU) Labor Center vs. Hon. Jesus Garcia, Jr. KEYWORD: Fare Range Scheme (15% ; +20% -25%) PONENTE: Kapunan, J. DOCTRINE: Rate fixing (a delicate and sensitive government function that requires dexterity of judgment and sound discretion with the settled goal of arriving at a just and reasonable rate acceptable to both the public utility and the public) must not be relinquished in favor of those who would benefit and profit from the industry. FACTS: 1. The DOTC and the LTFRB issued the following memoranda, circulars and/or orders: a. DOTC Memorandum Order 90-395 (June 26, 1990) - implementation of a fare range scheme for provincial bus services in the country; (+15% -15% of the LTFRB official rate for a period of 1yr) b. DOTC Department Order No.92-587 (March 30, 1992) -defining the policy framework on the regulation of transport services; c. DOTC Memorandum (October 8, 1992) -laying down rules and procedures to implement Department Order No. 92-587; d. LTFRB Memorandum Circular No. 92-009 (February 17, 1993) -providing implementing guidelines on the DOTC Department Order No. 92-587 -Challenged Portions: i. The presumption of public need for a service shall be deemed in favor of the applicant, while burden of proving that there is no need for the proposed service shall be the oppositor'(s) . ii. The existing authorized fare range system of plus or minus 15 per cent for provincial buses and jeepneys shall be widened to 20% and -25% limit in 1994 with the authorized fare to be replaced by an indicative or reference rate as the basis for the expanded fare range ; e. LTFRB Order (March 24, 1994) -dismissing KMU's petition opposing the upward adjustment of bus fare 2. Sometime in March, 1994, Provincial Bus Operators Association of the Philippines, Inc. (PBOAP) PBOAP, availing itself of the deregulation policy of the DOTC allowing provincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the purpose and without the benefit of a public hearing, announced a fare increase of twenty (20%) percent of the existing fares. On the date the said increased fares were to be made effective KMU, opposing the upward adjustment of bus fares, filed a petition seeking to nullify all 5 memoranda, circulars and/or orders (mentioned in #1).

3.

PETITIONERS CONTENTION: Petitioner KMU anchors its claim on two (2) grounds. First: the authority given by respondent LTFRB to provincial bus operators to set a fare range of plus or minus fifteen (15%) percent, later increased to plus twenty (20%) and minus twenty-five (-25%) percent, over and above the existing authorized fare without having to file a petition for the purpose, is unconstitutional, invalid and illegal. Second: the establishment of a presumption of public need in favor of an applicant for a proposed transport service without having to prove public necessity, is illegal for being violative of the Public Service Act and the Rules of Court. RESPONDNENTS CONTENTION: PBOAP -asserts that the petitioner has no legal standing to sue or has no real interest in the case at bench and in obtaining the reliefs prayed for. DOTC Secretary Jesus B. Garcia, Jr. and the LTFRB -asserts that the petitioner does not have the standing to maintain the instant suit.

-they further claim that it is within DOTC and LTFRB's authority to set a fare range scheme and establish a presumption of public need in applications for certificates of public convenience. RULING: LTFRB: Petition of KMU is dismissed for lack of merit hence, the instant petition for certiorari with an urgent prayer for the issuance of a TRO (Straight to SC. No RTC or CA involved) SC: 1. On Fare Range Scheme The policy of allowing the provincial bus operators to change and increase their fares at will would result not only to a chaotic situation but to an anarchic state of affairs as this would leave the riding public at the mercy of transport operators who may increase fares whenever it pleases them or whenever they deem it "necessary" to do so. 2. On the Presumption of Public Need Advocacy of liberalized franchising and regulatory process is tantamount to an abdication by the government of its inherent right to exercise police power, that is, the right of government to regulate public utilities for protection of the public and the utilities themselves. The Ruling: The instant petition is GRANTED & DOTC Dept. Order#92-587, LTFRB Memo Circ #92-009, and March 24, 1994LTFRB order are declared contrary to law and invalid insofar as they affect provisions therein: (a) Delegating to provincial bus and jeepney operators the authority to increase or decrease the duly prescribed transportation fares; and (b) Creating a presumption of public need for a service in favor of the applicant for a certificate of public convenience and placing the burden of proving that there is no need for the proposed service to the oppositor.

3.

CASE TITLE: Bienvenido Gelisan vs Benito Alday KEYWORD/S: freight truck, contract of lease PONENTE: Justice Padilla DOCTRINE: If the properties covered by a franchise is transferred or leased to another without the required approval of the Public Service Commission (PSC), the transfer is not binding upon the public and third persons. FACTS: Gelisan entered into an unregistered contract of lease with Espiritu, allowing the latter to use his freight truck for the purpose of hauling goods at an agreed price of Php18.00 per trip. Espiritu, subsequently entered into a contract with Benito Alday to deliver 400 sacks of fertilizers to the warehouse of Atlas Fertilizer Corporation (Atlas) in Mandaluyong. Espiritu, however, failed to deliver the fertilizers and was subsequently arrested for theft while the truck was impounded. Alday then sought for the recovery of damages because he was made to pay the value of the undelivered fertilizers to Atlas. PETITIONERS CONTENTION: The petitioner argued that by virtue of the lease contract between him and Espiritu, he is exempt from liability to Alday because he has no contractual relations with the latter regarding the delivery of the 400 sacks of fertilizers and Espiritus actions are beyond his control. He also contends that the contract between him and Espiritu specifically stated that all liability arising from the use of the freight truck shall be borne by Espiritu. He further contends that the previous approval of the Public Service Commission regarding the transfer or lease of vehicle applies only when there is no positive identification of the driver or owner or there is scant means of identification, but not in instances where the identity of the person responsible was determined. He also reiterated that if he should be held liable, his liability is only subsidiary. RESPONDENTS CONTENTION: The petitioners should pay for the damages suffered by the respondent due to the criminal act committed by Espiritu. (The court did not elaborate on the respondents contention. It focused on the ruling of the SC) ISSUE: Whether or not Gelisan, the registered owner of the vehicle, should be held solidarily liable with Espiritu, the lessee, despite the fact that freight truck was leased to the latter at the time the incident occurred. RULING: The petition was denied. Trial Court: The CFI of Manila ruled that Espiritu alone was liable to Alday, since Gelisan was not privy to the contract between Espiritu and Alday. CA: The CA found Gelisan solidarily liable with Espiritu for being the registered owner of the vehicle, and the lease contract executed by and between Gelisan and Espiritu is not binding upon Alday for not having previously approved by the Public Service Commission. SC: The SC affirmed the CAs ruling. The court ruled that the registered owner of a vehicle which is responsible for damages that may arise from consequences incident to its operation or that may be caused to any of the passengers therein and shall be held jointly and severally liable with the person who caused the damage. It further stated that the fact that the properties covered by a franchise is transferred or leased to another shall not exempt the registered owner from liability unless the said transfer or lease was previously approved by the PSC. The reason for this rule is that a franchise is personal in nature and any transfer or lease should be notified to the PSC so that the latter may take proper safeguard to protect the interest of the public.

The registered owner, however, is not left without recourse. Gelisan has the right to be indemnified by Espiritu for the amount he may be required to pay Alday because although the lease contract at issue is not binding upon Alday, is valid and binding between the contracting parties.

CASE TITLE: MA. LUISA BENEDICTO vs.IAC KEYWORD: Lumbar manufacturer PONENTER: FELICIANO, J. DOCTRINE: The registered owner is liable for consequences flowing from the operations of the carrier, even though the specific vehicle involved may already have been transferred to another person. This doctrine rests upon the principle that in dealing with vehicles registered under the Public Service Law, the public has the right to assume that the registered owner is the actual or lawful owner thereof It would be very difficult and often impossible as a practical matter, for members of the general public to enforce the rights of action that they may have for injuries inflicted by the vehicles being negligently operated if they should be required to prove who the actual owner is. FACTS: Sometime in May 1980, private respondent Greenhills, a lumber manufacturing firm with business address at Dagupan City, operates sawmill in Maddela, Quirino, bound itself to sell and deliver to Blue Star Mahogany, Inc., ("Blue Star") a company with business operations in Valenzuela, Bulacan 100,000 board feet of sawn lumber with the understanding that an initial delivery would be made on 15 May 1980. To effect its first delivery, private respondent's resident manager in Maddela, Dominador Cruz, contracted Virgilio Licuden, the driver of a cargo truck bearing Plate No. 225 GA TH to transport its sawn lumber to the consignee Blue Star in Valenzuela, Bulacan. This cargo truck was registered in the name of petitioner Ma. Luisa Benedicto, the proprietor of Macoven Trucking, a business enterprise engaged in hauling freight, with main office in B.F. Homes, Paraaque. On 15 May 1980, Cruz in the presence and with the consent of driver Licuden, supervised the loading of 7,690 board feet of sawn aboard the cargo truck. On 16 May 1980, the Manager of Blue Star called up by long distance telephone Greenhills' president, Henry Lee Chuy, informing him that the sawn lumber on board the subject cargo truck had not yet arrived in Valenzuela, Bulacan. In a letter, Blue Star's administrative and personnel manager, Manuel R. Bautista, formally informed Greenhills' president and general manager that Blue Star still had not received the sawn lumber which was supposed to arrive on 15 May 1980 and because of this delay, "they were constrained to look for other suppliers." Private respondent Greenhill's filed Criminal Case against driver Licuden for estafa. Greenhills also filed against petitioner Benedicto Civil for recovery of the value of the lost sawn lumber plus damages before the RTC of Dagupan City. PETITIONERS CONTENTION: Petitioner Benedicto denied liability alleging that she was a complete stranger to the contract of carriage, the subject truck having been earlier sold by her to Benjamin Tee, on 28 February 1980 as evidenced by a deed of sale. She claimed that the truck had remained registered in her name notwithstanding its earlier sale to Tee because the latter had paid her only P50,000.00 out of the total agreed price of P68,000.00 However, she averred that Tee had been operating the said truck in Central Luzon from that date (28 February 1980) onwards, and that, therefore, Licuden was Tee's employee and not hers. RESPONDENTS CONTENTION: Since petitioner was the registered owner of the subject vehicle, Licuden the driver of the truck, was her employee, and that accordingly petitioner should be responsible for the negligence of said driver and bear the loss of the sawn lumber plus damages. Petitioner moved for reconsideration, without success. ISSUE: Whether the Petitioner, being the registered owner of the carrier, should be held liable for the value of the undelivered or lost sawn lumber RULING: 1. TRIAL COURT:

Ruled against Benedicto based on the finding that petitioner Benedicto was still the registered owner of the subject truck, and holding that Licuden was her employee. 2. CA: Affirmed the Decision In toto 3. SC: Affirmed the Decision of both Trial court and IAC. There is no dispute that petitioner Benedicto has been holding herself out to the public as engaged in the business of hauling or transporting goods for hire or compensation. Petitioner Benedicto is, in brief, a common carrier. Private respondent Greenhills Woods is not required to go beyond the vehicle's certificate of registration to ascertain the owner of the carrier. In this regard, the letter presented by petitioner allegedly written by Benjamin Tee admitting that Licuden was his driver, had no evidentiary value not only because Benjamin Tee was not presented in court to testify on this matter but also because of the aforementioned doctrine. To permit the ostensible or registered owner to prove who the actual owner is, would be to set at naught the purpose or public policy which infuses that doctrine. This presumption may be overcome only by proof of extraordinary diligence on the part of the carrier. Clearly, to permit a common carrier to escape its responsibility for the passengers or goods transported by it by proving a prior sale of the vehicle or means of transportation to an alleged vendee would be to attenuate drastically the carrier's duty of extraordinary diligence. It would also open wide the door to collusion between the carrier and the supposed vendee and to shifting liability from the carrier to one without financial capability to respond for the resulting damages. In other words, the thrust of the public policy here involved is as sharp and real in the case of carriage of goods as it is in the transporting of human beings. Thus, to sustain petitioner Benedicto's contention, that is, to require the shipper to go behind a certificate of registration of a public utility vehicle, would be utterly subversive of the purpose of the law and doctrine.

CASE TITLE: Philtranco Service Enterprises, Inc. vs. CA KEYWORD: Bicycle PONENTE: Davide, Jr., J. DOCTRINE: The liability of the registered owner of a public service vehicle for damages arising from the tortious acts of the driver is primary, direct, and joint and several or solidary with the driver. FACTS: At 6:00 in the morning of March 24, 1990, Ramon Acuesta was riding his bicycle along Gomez Street of Calbayog City when he was bumped by a bus of Philtranco Service Enterprises, Inc. driven by Rogasiones Manilhig. The said bus was being pushed by some persons for its engine to start and when its engine started, the bus continued running and bumped Acuesta. The bus, however, did not stop running. P/Sgt. Yabao, who was jogging, saw the victim being run over by Philtranco bus and tried to stop Manilhig but the latter refused. It was only until Yabao jumped into the bus and introduced himself as a policeman that Manilhig stopped the bus. PETITIONERS CONTENTION: Philtranco contended that it should not be held liable because they exercised diligence of a good father of a family in the selection and supervision of its employees and that Manilhig had an excellent records as a driver and had undergone months of rigid training before he was hired. RESPONDENTS CONTENTION: Philtranco should be held solidarily liable with Manilhig pursuant to Article 2194 of the Civil Code. ISSUE: Whether or not Philtranco is liable. RULING: RTC: LIABLE -- Philtranco and Manilhig are liable and ordered to jointly and severally pay the private respondents (Heirs of Ramon Acuesta). CA: AFFIRMED the decision -- The CA held that Manilhig was at fault and not Acuesta, or at least did not contribute to, his unfortunate accident. It awarded damages to private respondents and found that Philtranco was solidarily liable with Manilhig. SC: PARTLY GRANTED only in so far as the damages. The damages were reduced. It held Philtranco solidarily liable with Manilhig. The Supreme Court stated that, We have consistently held that the liability of the registered owner of a public service vehicle, like petitioner Philtranco, for damages arising from the tortuous acts of the driver is primary, direct, and joint and several or solidary with the driver. As to solidarity, Article 2194 expressly provides: ART. 2194. The responsibility of two or more persons who are liable for a quasi-delict is solidary. Since the employer's liability is primary, direct and solidary, its only recourse if the judgment for damages is satisfied by it is to recover what it has paid from its employee who committed the fault or negligence which gave rise to the action based on quasi-delict. Article 2181 of the Civil Code provides: ART. 2181. Whoever pays for the damage caused by his dependents or employees may recover from the latter what he has paid or delivered in satisfaction of the claim.

CASE TITLE: Santos vs Sibug KEYWORD: Third Party Claim PONENTE: Justice Melencio-Herrera DOCTRINE: The true owner of a vehicle registered under the name of another cannot claim ownership once the same has been subject to levy because although the general rule is that a strangers property cannot be subject to levy, the person under whose name the vehicle is registered is, in a legal sense, not a stranger. FACTS: A jeepney was registered under the name of Vicente Vidad because Adolfo Santos, its true owner, does not have the necessary certificate of public convenience and the former has. On April 26, 1963, Abraham Sibug was bumped by a passenger jeepney operated by Severe Gargas and registered under the name of Vicente Vidad, causing Sibug to file for damages with the CFI of Manila Branch XVII. The decision of Branch XVII, caused Santos to file a third party claim with the CFI of Manila Branch X. PETITIONERS CONTENTION: The petitioner filed a third party claim, claiming actual ownership of the property in question and alleged that the vehicle was registered only under the name of Vidad to make use of the latters Certificate of Public Convenience. RESPONDENTS CONTENTION: Respondent was silent, aside from claiming damages for the accident caused by Gargas and Vidad. ISSUE: Whether or not the third party claimant has the right to vindicate his claim to the vehicle levied upon in a separate action. RULING: TRIAL COURT: Branch XVII - Branch XVII of the CFI of Manila held Vidad and Gargas liable for damages, causing the Sheriff of Manila to levy the vehicle. Branch X - Branch X, upon a third party claim by Santos, issued a restraining order enjoining the Sheriff from conducting a public auction to sell the levied vehicle and ordering the return of the vehicle to the plaintiff. COURT OF APPEALS: The CA enjoined the enforcement of the decision of Branch X and nullified the same holding that the decision was an interference with the power and authority of Branch XVII, a court having co-equal and coordinate jurisdiction. It was also decided that since the vehicle was registered under the name of Vidad, the government or any person affected by the representation that the vehicle is registered under his name had the right to rely on his declaration of ownership and registration pursuant to Section 68(a) Rule 123 and Article 1431 of the New Civil Code. SUPREME COURT: The Supreme Court upheld the decision of the Court of Appeals in nullifying the decision of Branch X because although ordinarily a strangers property is not ordinarily subject to levy, the vehicle in question cannot be legally claimed as a strangers property. The fact of the matter is, the vehicle was registered under the name of Vidad, the judgment debtor, who cannot be claimed to be a stranger. Whatever legal technicalities may be invoked, the court found that the judgement of the CA to be in consonance with justice.

CASE TITLE: LITA ENTERPRISES vs Court of Appeals KEYWORD: Kabit System PONENTE: ESCOLIN, J. DOCTRINE: Although not outrightly penalized, the kabit system is invariably recognized as being contrary to public policy and, therefore, void and inexistent under Article 1409 of the Civil Code. FACTS: Private respondents, Nicasio Ocampo and Francisca Garcia, contracted petitioner Lita Enterprises, Inc. for the use of the latters Certificate of Public Convenience (CPC) involving 5 units of taxicabs since they had no franchise to operate them. To effectuate the agreement, the taxicabs were registered in the name of Lita Enterprises while the possession of the taxicabs remained with spouses Ocampo. One of the aforementioned taxicabs was involved in an accident in 1967 which resulted in the filing of a civil case for damages against Lita Enterprises, as registered owner. Thereafter, in 1973, Ocampo decided to register his taxicabs in his name. He requested Lita Enterprises to turn over the registration papers to him, but the latter allegedly refused. PETITIONERS CONTENTION: Spouses Ocampo filed a complaint against Lita Enterprises, Inc., Rosita Sebastian Vda. De Galvez, Visayan Surety & Insurance Co. And Sheriff of Manila of reconveyance of motor vehicles with damages. RESPONDENTS CONTENTION: Lita Enterprises moved for reconsideration. Private respondents should be declared liable to petitioner for whatever amount the latter has paid or was declared liable (in Civil Case No. 72067) of the Court of First Instance of Manila to Rosita Sebastian Vda. de Galvez, as heir of the victim Florante Galvez, who died as a result of the gross negligence of private respondents' driver while driving one private respondents' taxicabs. ISSUE: Whether private respondents may be held liable for the amount Lita Enterprises paid to the victim of the formers driver while driving one of their taxicabs. RULING: 1. RTC: GRANTED. The CFI of Manila ordered Lita Enterprises to transfer the registration certificate of the 3 Toyota cars not levied upon by executing a deed of conveyance in favour of Spouses Ocampo. 2. COURT OF APPEALS: CFI DECISION MODIFIED. 3. SUPREME COURT: DENIED. The parties operated under an arrangement, commonly known as the kabit system, whereby a person who has been granted a certificate of convenience allows another person who owns motor vehicles to operate under such franchise for a fee. The kabit system has been identified as one of th e root causes of the prevalence of graft and corruption. Although not outrightly penalized, the kabit system is invariably recognized as being contraey to public policy and, therefore, void and inexistent under Article 1409 of the Civil Code. It is a fundamental principle that the court will not aid either party to enforce an illegal contract, but will leave them both where it finds them.

CASE TITLE: TEJA MARKETING AND/OR ANGEL JAUCIAN vs. IAC & PEDRO N. NALE KEYWORD: KABIT SYSTEM & EX PACTO DELICTO NON ORITUR ACTIO PONENTE: JUSTICE PARAS DOCTRINE: Kabit System, although not expressly penalized as a criminal offense, is contrary to public policy and is void and in existent under Article 1409; the parties being both at fault cannot maintain any action against each other. FACTS: On May 9, 1975, the defendant bought from the plaintiff a motorcycle with complete accessories and a sidecar in the total consideration of P8,000.00, but only managing to pay P 1,700.00 as downpayment. Despite repeated demands, defendant failed to comply with his promise and so upon his own request, the period of paying the balance was extended to one year in monthly installments until January 1976, which in turn never materialized causing plaintiff to file an action for sum of money with damages. It appears that the motorcycle sold to the defendant was first mortgaged to the Teja Marketing by Angel Jaucian, though the Teja Marketing and Angel Jaucian are one and the same, being made only to show that since defendant had no franchise of his own and had attached the unit to the plaintiff's MCH Line. PETITIONERS CONTENTION: The agreement between them was for the plaintiff to undertake the yearly registration of the motorcycle with the Land Transportation Commission, pursuant to which, defendant gave the plaintiff P90.00 (P8.00 for the mortgage fee and P82.00 for the registration fee of the motorcycle), but plaintiff, however failed to register the motorcycle on that year on the ground that defendant failed to comply with some requirements such as the payment of insurance premiums and bringing of the motorcycle to LTC for stenciling, the plaintiff saying that the defendant was hiding the motorcycle from him. Lastly, plaintiff explained that though the ownership of the motorcycle was already transferred to the defendant the vehicle was still mortgaged with the consent of the defendant to the Rural Bank of Camaligan for the reason that all motorcycle purchased from the plaintiff on credit was rediscounted with the bank. RESPONDENTS CONTENTION: The defendant disputed the claim of the plaintiff that he was hiding from the plaintiff the motorcycle resulting in its not being registered, the truth being that the motorcycle was being used for transporting passengers and it kept on travelling from one place to another. The motor vehicle sold to him was mortgaged by the plaintiff with the Rural Bank of Camaligan without his consent and knowledge and the defendant was not even given a copy of the mortgage deed; and consequently puts the blame on the plaintiff for not registering the motorcycle with the LTC and for not giving him the registration papers despite the demands made. ISSUE: Whether or not plaintiff is entitled to the sum claimed, attorneys fees a nd costs RULING: CITY COURT OF NEGA CITY: GRANTED The Court ordered defendant to pay plaintiff P1,700.00 as the unpaid balance of the purchase price with legal rate of interest from the date of the filing of the complaint until the same is fully paid; to pay plaintiff the sum of P546.21 as attorney's fees; to pay plaintiff the sum of P200.00 as expenses of litigation; and to pay the costs. COURT OF FIRST INSTANCE OF CAMARINES SUR: Decision was affirmed in toto. INTERMEDIATE APPELLATE COURT: DISMIISSED The purchase of the motorcycle for operation as a trimobile under the franchise of the private respondent Jaucian, pursuant to what is commonly known as the "kabit system", without the prior approval of the Board of Transportation (formerly the Public Service Commission) was an illegal transaction involving the fictitious registration of the motor vehicle in the name of the private respondent so that he may traffic with the privileges of

his franchise, or certificate of public convenience, to operate a tricycle service, the parties being in pari delicto, neither of them may bring an action against the other to enforce their illegal contract [Art. 1412 (a), Civil Code]. SUPREME COURT (SECOND DIVISION): DISMISSED (Affirming decision of IAC) Issue: Whether or not the principle of in pari delicto is applicable in the instant case. Yes. Unquestionably, the parties herein operated under an arrangement, commonly known as the " kabit system" whereby a person who has been granted a certificate of public convenience allows another person who owns motor vehicles to operate under such franchise for a fee. A certificate of public convenience is a special privilege conferred by the government; consequently, abuse of this privilege by the grantees thereof cannot be countenanced. Although not outrightly penalized as a criminal offense, the kabit system is recognized as being contrary to public policy and, therefore, void and in existent under Article 1409 of the Civil Code and this defect in existence of a contract is permanent and cannot be cured by ratification or by prescription. Being in parti delicto, the court will not aid either parties to enforce an illegal contract, but will leave both where it finds then, as provided under Article 1412: Art. 1412. If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the following rules shall be observed: 1. When the fault is on the part of both contracting parties, neither may recover that he has given by virtue of the contract, or demand, the performance of the other's undertaking.

CASE TITLE: LIM v COURT OF APPEALS KEYWORDS: Kabit System, Actual damages, actual loss, indemnification PONENTE: Bellosillo J FACTS: Private respondent herein purchased an Isuzu passenger jeepney from Gomercino Vallarta, a holder of acertificate of public convenience for the operation of a public utility vehicle. He continued to operate thepublic transport business without transferring the registration of the vehicle to his name. Thus, theoriginal owner remained to be the registered owner and operator of the vehicle. Unfortunately, thevehicle got involved in a road mishap which caused it severe damage. The ten-wheeler-truck whichcaused the accident was owned by petitioner Lim and was driven by co-petitioner Gunnaban. Gunnabanadmitted responsibility for the accident, so that petitioner Lim shouldered the costs of hospitalization of those wounded, compensation for the heirs of the deceased passenger and the restoration of the othervehicle involved. He also negotiated for the repair of the private respondent's jeepney but the latterrefused and demanded for its replacement. Hence, private respondent filed a complaint for damagesagainst petitioners. Meanwhile, the jeepney was left by the roadside to corrode and decay. The trialcourt decided in favor of private respondent and awarded him his claim. On appeal, the Court of Appeals affirmed the decision of the trial court. Hence, petitioner filed this petition. ISSUE: whether or not the new owner of a passenger jeepney who continued to operate the same under theso-called kabit system and in the course thereof met an accident has the legal personality to bring theaction for damages against the erring vehicle. RULING: The Supreme Court affirmed the subject decision with modification as to the computation of interest.According to the Court, the thrust of the law in enjoining the kabit system is not much as to penalize theparties but to identify the person upon whom responsibility may be fixed in case of an accident with theend view of protecting the riding public. In the present case, it is once apparent that the evil sought tobe prevented in enjoining the kabit system does not exist. Hence, the private respondent has the rightto proceed against petitioners for the damage caused on his passenger jeepney as well as on his business.

CASE TITLE: URBANO MAGBOO and EMILIA C. MAGBOO, plaintiffs-appellees, vs. DELFIN BERNARDO, defendantappellant. KEYWORD: Boundary system PONENTE: MAKALINTAL, J. DOCTRINE: An employer-employee relationship exists between a jeepney owner and a driver under a boundary system arrangement. FACTS: The spouses Magboo are the parents of Cesar Magboo, a child of 8 years old, was killed in a motor vehicle accident, the fatal vehicle being the passenger jeepney owned by Bernardo but it was driven by Conrado Roques. The contract between Roque and Bernardo was that Roque was to pay the latter P8.00 for the privilege of driving the jeepney and whatever earnings he could make out of the use of the jeepney would belong entirely to Roque. As a consequence of the accident, Roque was prosecuted for homicide thru reckless imprudence and was sentenced to six months of arresto mayor and to indemnify the heirs in the sum of P3,000. Roque was not able to pay the indemnity because he was insolvent. PETITIONERS CONTENTION: The spouses Magboo contend that Bernardo, as an employer of Roque, is subsidiarily liable for the payment of the indemnity. RESPONDENTS CONTENTION: Bernardo contends that the relationship is essentially that of lessor and lessee. ISSUE: WON there exists an employer-employee relationship. RULING: YES. An employer-employee relationship exists between a jeepney owner and a driver under a boundary system arrangement. The features which characterize the boundary system - namely the fact that the driver does not receive a fixed wage but gets only the excess of the amount of fares collected by him over the amount he pays to the jeep-owner, and the gasoline consumed by the jeep is for the amount of the driver - are not sufficient to withdraw the relationship between them from that of employee and employer. Consequently, the jeepney owner is subsidiary liable as employer in accordance with Art.103, Revised Penal Code. Indeed to exempt from liability the owner of a public vehicle who operates it under the "boundary system" on the ground that he is a mere lessor would be not only to abet flagrant violations of the Public Service Law but also to place the riding public at the mercy of reckless and irresponsible drivers reckless because the measure of their earnings depends largely upon the number of trips they make and, hence, the speed at which they drive; and irresponsible because most if not all of them are in no position to pay the damages they might cause.