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Transportation Law Digests

Calvo v. UCPB General Insurance G.R. No. 148496 March 19, 2002 Facts: Petitioner Virgines Calvo, owner of Transorient Container Terminal Services, Inc. (TCTSI), and a custom broker, entered into a contract with San Miguel Corporation (SMC) for the transfer of 114 reels of semi-chemical fluting paper and 124 reels of kraft liner board from the port area to the Tabacalera Compound, Ermita, Manila. The cargo was insured by respondent UCPB General Insurance Co., Inc. On July 14, 1990, contained in 30 metal vans, arrived in Manila on board M/V Hayakawa Maru. After 24 hours, they were unloaded from vessel to the custody of the arrastre operator, Manila Port Services, Inc. From July 23 to 25, 1990, petitioner, pursuant to her contract with SMC, withdrew the cargo from the arrastre operator and delivered it to SMCs warehouse in Manila. On July 25, the goods were inspected by Marine Cargo Surveyors, reported that 15 reels of the semi-chemical fluting paper were wet/stained/torn and 3 reels of kraft liner board were also torn. The damages cost P93,112.00. SMC collected the said amount from respondent UCPB under its insurance contract. Respondent on the other hand, as a subrogee of SMC, brought a suit against petitioner in RTC, Makati City. On December 20, 1995, the RTC rendered judgment finding petitioner liable for the damage to the shipment. The decision was affirmed by the CA. Issue: Whether or not Calvo is a common carrier? Held: In this case the contention of the petitioner, that he is not a common carrier but a private carrier, has no merit. Article 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as ancillary activity. Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population. We think that Article 1733 deliberately refrained from making such distinction. (De Guzman v. CA, 68 SCRA 612) Te concept of common carrier under Article 1732 coincide with the notion of public service, under the Public Service Act which partially supplements the law on common carrier. Under Section 13, paragraph (b) of the Public Service Act, it includes: x x x every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, subway motor vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power petroleum, sewerage system, wire or wireless communications systems, wire or wireless broadcasting stations and other similar public services. x x x Philippine Charter Insurance Corp. vs. Unknown Owner FACTS: Petitioner Philippine Charter Insurance Corporation (PCIC) is the insurer of a shipment on board the vessel M/V National Honor, represented in the Philippines by its agent, National Shipping Corporation of the Philippines (NSCP). The M/V National Honor arrived at the Manila International Container Terminal (MICT). The International Container Terminal Services, Incorporated (ICTSI) was furnished with a copy of the crate cargo list and bill of lading, and it knew the contents of the crate. The following day, the vessel started discharging its cargoes using its winch crane. The crane was operated by Olegario Balsa, a winchman from the ICTSI, exclusive arrastre operator of MICT. Denasto Dauz, Jr., the checker-inspector of the NSCP, along with the crew and the surveyor of the ICTSI, conducted an inspection of the cargo. They inspected the hatches, checked the cargo and found it in apparent good condition. Claudio Cansino, the stevedore of the ICTSI, placed two sling cables on each end of Crate No. 1. No sling cable was fastened on the mid-portion of the crate. In Dauzs experience, this was a normal procedure. As the crate was being hoisted from the vessels hatch, the mid-portion of the wooden flooring suddenly snapped in the air, about five feet high from the vessels twin deck, sending all its contents crashing down hard, resulting in extensive damage to the shipment. PCIC paid the damage, and as subrogee, filed a case against M/V National Honor, NSCP and ICTSI. Both RTC and CA dismissed the complaint. ISSUE: Whether or not the presumption of negligence is applicable in the instant case.

Martha Rose C. Serrano

Transportation Law Digests


Defect is the want or absence of something necessary for completeness or perfection; a lack or absence of something essential to completeness; a deficiency in something essential to the proper use for the purpose for which a thing is to be used. On the other hand, inferior means of poor quality, mediocre, or second rate. A thing may be of inferior quality but not necessarily defective. In other words, defectiveness is not synonymous with inferiority. xxx In the present case, the trial court declared that based on the record, the loss of the shipment was caused by the negligence of the petitioner as the shipper: The same may be said with respect to defendant ICTSI. The breakage and collapse of Crate No. 1 and the total destruction of its contents were not imputable to any fault or negligence on the part of said defendant in handling the unloading of the cargoes from the carrying vessel, but was due solely to the inherent defect and weakness of the materials used in the fabrication of said crate. The crate should have three solid and strong wooden batten placed side by side underneath or on the flooring of the crate to support the weight of its contents. x x x IRON BULK SHIPPING CO LTD V. REMINGTON INDUSTRIAL SALES CORP. FACTS: > Remington Industrial ordered 194 hot rolled steel sheets from Wangs. Wangs forwarded the order to its supplier Burwill. The sheets were loaded on MV Indian Reliance in Poland and shipped to the Philippines under a Bill of Lading. Iron Bulk Shipping represented the charterer in the Philippines. > Upon discharge of the cargo, the sheets were found to be wet and with rust extending to 50 to 60% of each sheet. > No one honored the claims of loss and as recourse, Remington filed an action for collection. Both lower and appellate courts ruled in favor of Remington. > The charterers defense (Iron Bulk) was that the sheets were already rusty when they were loaded on the ship. However, the Bill of Lading it issued was found to be a clean bill of lading (i.e. it does not indicate any defect on the goods covered by it). The sheets were found to be in a fair, usually accepted condition. > The suppliers defense (Wangs) was that Iron Bulk did not exercise extraordinary diligence in shipping the sheets. > The appellate court dismissed the case against Wangs and now, only Iron Bulk raised the case on certiorari.

HELD: No. We agree with the contention of the petitioner that common carriers, from the nature of their business and for reasons of public policy, are mandated to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. he Court has defined extraordinary diligence in the vigilance over the goods as follows: The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to it for sale, carriage and delivery. It requires common carriers to render service with the greatest skill and foresight and to use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment, and to exercise due care in the handling and stowage, including such methods as their nature requires. The common carriers duty to observe the requisite diligence in the shipment of goods lasts from the time the articles are surrendered to or unconditionally placed in the possession of, and received by, the carrier for transportation until delivered to, or until the lapse of a reasonable time for their acceptance, by the person entitled to receive them.] >When the goods shipped are either lost or arrive in damaged condition, a presumption arises against the carrier of its failure to observe that diligence, and there need not be an express finding of negligence to hold it liable. To overcome the presumption of negligence in the case of loss, destruction or deterioration of the goods, the common carrier must prove that it exercised extraordinary diligence. However, under Article 1734 of the New Civil Code, the presumption of negligence does not apply to any of the following causes: 1. Flood, storm, earthquake, lightning or other natural disaster or calamity; 2. Act of the public enemy in war, whether international or civil; 3. Act or omission of the shipper or owner of the goods; 4. The character of the goods or defects in the packing or in the containers; 5. Order or act of competent public authority. It bears stressing that the enumeration in Article 1734 of the New Civil Code which exempts the common carrier for the loss or damage to the cargo is a closed list. To exculpate itself from liability for the loss/damage to the cargo under any of the causes, the common carrier is burdened to prove any of the aforecited causes claimed by it by a preponderance of evidence. If the carrier succeeds, the burden of evidence is shifted to the shipper to prove that the carrier is negligent.

ISSUES: 1. Whether or not Iron Bulk exercised extraordinary diligence?

Martha Rose C. Serrano

Transportation Law Digests


No. > Diligence required: Even if the cargo was already in a damaged condition at the time it was accepted for transportation, the carrier is not relieved from its responsibility to exercise due care in handling the merchandise and in employing the necessary precautions to prevent the cargo from further deteriorating. Extraordinary diligence requires the common carrier to know and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to it for safe carriage and delivery. The common carrier must exercise due diligence to forestall or lessen the loss (by applying additional safety measures to make sure that the cargo is protected from corrosion). > Presumption: Except in the cases mentioned under Art. 1734, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence. 2. Whether or not the CA erred in relying on the pro forma Bill of Lading? No. > Two-fold character: A bill of lading operates as both a receipt and a contract. It is a receipt for the goods shipped (dates, place, description, quality and value) and a contract to transport and deliver the same as therein stipulated. Estoppel: Since Iron Bulk shipping failed to annotate in the bill of lading the alleged damaged condition of the cargo when it was loaded, they are bound by the description contained therein and they are now estopped from denying the contents of the said bill of lading. GANZON vs.COURT OF APPEALS and GELACIO E. TUMAMBING (G.R. No. L-48757, May 30, 1988) FACTS: On November 28, 1956, Gelacio Tumambing contracted the services of Mauro B. Ganzon to haul 305 tons of scrap iron from Mariveles, Bataan, to the port of Manila on board the lighter LCT "Batman. Pursuant to that agreement, Mauro B. Ganzon sent his lighter "Batman" to Mariveles where it docked in three feet of water. Gelacio Tumambing delivered the scrap iron to defendant Filomeno Niza, captain of the lighter, for loading which was actually begun on the same date by the crew of the lighter under the captain's supervision. When about half of the scrap iron was already loaded, Mayor Jose Advincula of Mariveles, Bataan, arrived and demanded P5,000.00 from Gelacio Tumambing. The latter resisted the shakedown and after a heated argument between them, Mayor Jose Advincula drew his gun and fired at Gelacio Tumambing who sustained injuries. After sometime, the loading of the scrap iron was resumed. But on December 4, 1956, Acting Mayor Basilio Rub, accompanied by three policemen, ordered captain Filomeno Niza and his crew to dump the scrap iron where the lighter was docked. The rest was brought to the compound of NASSCO. Later on Acting Mayor Rub Before Ganzon could be absolved from responsibility on the ground that he was ordered by competent public authority to unload the scrap iron, it must be shown that Acting Mayor Basilio Rub had the power to issue the disputed order, or that it was lawful, or that it was issued under legal process of authority. The appellee failed to establish this. Indeed, no authority or power of the acting mayor to issue such an order was given in evidence. Neither has it been shown that the cargo of scrap iron belonged to the Municipality of Mariveles. What we have in the record is the stipulation of the parties that the cargo of scrap iron was accumulated by the appellant through separate purchases here and there from private individuals. The fact remains that the order given by the acting mayor to dump the scrap iron into the sea was part of the pressure applied by Mayor Jose Advincula to shakedown Tumambing for P5,000.00. The order of the acting mayor did not constitute valid authority for Ganzon and his representatives to carry out. issued a receipt stating that the Municipality of Mariveles had taken custody of the scrap iron. Tumabing sued Ganzon; the latter alleged that the goods have not been unconditionally placed under his custody and control to make him liable. The trial court dismissed the case but on appeal, respondent Court rendered a decision reversing the decision of the trial court and ordering Ganzon to pay damages. ISSUE: Whether or not a contract of carriage has been perfected. HELD: Yes. By the said act of delivery, the scraps were unconditionally placed in the possession and control of the common carrier, and upon their receipt by the carrier for transportation, the contract of carriage was deemed perfected. Consequently, the petitioner-carrier's extraordinary responsibility for the loss, destruction or deterioration of the goods commenced. Pursuant to Art. 1736, such extraordinary responsibility would cease only upon the delivery, actual or constructive, by the carrier to the consignee, or to the person who has a right to receive them. The fact that part of the shipment had not been loaded on board the lighter did not impair the said contract of transportation as the goods remained in the custody and control of the carrier, albeit still unloaded.

GACAL V. PAL

Martha Rose C. Serrano

Transportation Law Digests


Facts: Gacal et al. boarded the plane of PAL from Davao, heading towards Manila. Unknown to them, six MNLF members were also inside the plane. 10min after take off, they announced a hijack, and forced the pilot to take them to Sabah. Due to lack of fuel, they had to land at the Zamboanga Airport, where military personnel were waiting for them. After a few days, negotiation failed, and battle ensued, where 10 passengers were killed (buti na lang hindi foreigners yung hostage). Gacal et al. filed the case, but was dismissed by the RTC. Issue: Whether hijacking or air piracy during martial law is a caso fortuito which would exempt and aircraft from payment of damages to its passengers whose lives were put in jeopardy and whose personal belongings were lost during the incident (Bernas style of issue) Ruling: Yes it is a case of force majeure. There are four elements of a force majeure: 1. The cause of the breach of the obligation must be independent of the human will 2. The event must be either unforeseeable or unavoidable 3. The event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner 4. The debtor must be free from any participation in, or aggravation of the injury to the creditor The first element, the failure to transport was due to the hijacking done by the MNLF. The second element, although foreseeable, it was due to the military take over of the airport during martial law that made it impossible for PAL to perform its obligations (of frisking and checking the baggage of the passengers). The third element, the hijacking rendered the obligation impossible (doy!). The fourth element was supposedly satisfied, according to the case. Thus, PAL is exempted from the payment of damages to its passengers. Saludo Jr. v. CA Facts: Crispina Galdo Saludo, mother of the petitioners, died in Chicago, Illinois. Pomierski and Son Funeral Home of Chicago, made the necessary preparations and arrangements for the shipment of the remains from Chicago to the Philippines. Pomierski brought the remains to Continental Mortuary Air Services (CMAS) at the Chicago Airport which made the necessary arrangements such as flights, transfers, etc. CMAS booked the shipment with PAL thru the carriers agent Air Care International. PAL Airway Bill Ordinary was issued wherein the requested routing was from Chicago to San Francisco on board Trans World Airline (TWA) and from San Francisco to Manila on board PAL. Salvacion (one of the petitioners), upon arrival at San Francisco, went to the TWA to inquire about her mothers remains. But she was told they did not know anything about it. She then called Pomierski that her mothers remains were not at the West Coast terminal. Pomierski immediately called CMAS which informed that the remains were on a plane to Mexico City, that there were two bodies at the terminal, and somehow they were switched. CMAS called and told Pomierski that they were sending the remains back to California via Texas. Petitioners filed a complaint against TWA and PAL fir the misshipment and delay in the delay of the cargo containing the remains of the late Crispina Saludo. Petitioners alleged that private respondents received the casketed remains of Crispina on October 26, 1976, as evidenced by the issuance of PAL Airway Bill by Air Care and from said date, private respondents were charged with the responsibility to exercise extraordinary diligence so much so that the alleged switching of the caskets on October 27, 1976, or one day after the private respondents received the cargo, the latter must necessarily be liable. Issues: Whether or not there was delivery of the cargo upon mere issuance of the airway bill Whether or not the delay in the delivery of the casketed remains of petitioners mother was due to the fault of respondent airline companies Held: NO to both, but TWA was held to pay petitioners nominal damages of P40,000 for its violation of the degree of diligence required by law to be exercised by every common carrier Ordinarily, a receipt is not essential to a complete delivery of goods to the carrier for transportation but, when issued, is competent and prima facie, but not conclusive, evidence of delivery to the carrier. A bill of lading, when properly executed and delivered to a shipper, is evidence that the carrier has received the goods described therein for shipment. Except as modified by statute, it is a general rule as to the parties to a contract of carriage of goods in connection with which a bill of lading is issued reciting that goods have been received for transportation, that the recital being in essence a receipt alone, is not conclusive, but may be explained, varied or contradicted by parol or other evidence.

Martha Rose C. Serrano

Transportation Law Digests


In other words, on October 26, 1976 the cargo containing the casketed remains of Crispina Saludo was booked for PAL Flight Number PR-107 leaving San Francisco for Manila on October 27, 1976, PAL Airway Bill No. 079-01180454 was issued, not as evidence of receipt of delivery of the cargo on October 26, 1976, but merely as a confirmation of the booking thus made for the San Francisco-Manila flight scheduled on October 27, 1976. Actually, it was not until October 28, 1976 that PAL received physical delivery of the body at San Francisco, as duly evidenced by the Interline Freight Transfer Manifest of the American Airline Freight System and signed for by Virgilio Rosales at 1945H, or 7:45 P.M. on said date. Explicit is the rule under Article 1736 of the Civil Code that the extraordinary responsibility of the common carrier begins from the time the goods are delivered to the carrier. This responsibility remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner exercises the right of stoppage in transitu, and terminates only after the lapse of a reasonable time for the acceptance, of the goods by the consignee or such other person entitled to receive them. And, there is delivery to the carrier when the goods are ready for and have been placed in the exclusive possession, custody and control of the carrier for the purpose of their immediate transportation and the carrier has accepted them. Where such a delivery has thus been accepted by the carrier, the liability of the common carrier commences eo instanti. Hence, while we agree with petitioners that the extraordinary diligence statutorily required to be observed by the carrier instantaneously commences upon delivery of the goods thereto, for such duty to commence there must in fact have been delivery of the cargo subject of the contract of carriage. Only when such fact of delivery has been unequivocally established can the liability for loss, destruction or deterioration of goods in the custody of the carrier, absent the excepting causes under Article 1734, attach and the presumption of fault of the carrier under Article 1735 be invoked. As already demonstrated, the facts in the case at bar belie the averment that there was delivery of the cargo to the carrier on October 26, 1976. Rather, as earlier explained, the body intended to be shipped as agreed upon was really placed in the possession and control of PAL on October 28, 1976 and it was from that date that private respondents became responsible for the agreed cargo under their undertakings in PAL Airway Bill No. 079-01180454. Consequently, for the switching of caskets prior thereto which was not caused by them, and subsequent events caused thereby, private respondents cannot be held liable. The oft-repeated rule regarding a carrier's liability for delay is that in the absence of a special contract, a carrier is not an insurer against delay in transportation of goods. When a common carrier undertakes to convey goods, the law implies a contract that they shall be delivered at destination within a reasonable time, in the absence, of any agreement as to the time of delivery. But where a carrier has made an express contract to transport and deliver property within a specified time, it is bound to fulfill its contract and is liable for any delay, no matter from what cause it may have arisen. This result logically follows from the well-settled rule that where the law creates a duty or charge, and the party is disabled from performing it without any default in himself, and has no remedy over, then the law will excuse him, but where the party by his own contract creates a duty or charge upon himself, he is bound to make it good notwithstanding any accident or delay by inevitable necessity because he might have provided against it by contract. Whether or not there has been such an undertaking on the part of the carrier to be determined from the circumstances surrounding the case and by application of the ordinary rules for the interpretation of contracts. Echoing the findings of the trial court, the respondent court correctly declared that In a similar case of delayed delivery of air cargo under a very similar stipulation contained in the airway bill which reads: "The carrier does not obligate itself to carry the goods by any specified aircraft or on a specified time. Said carrier being hereby authorized to deviate from the route of the shipment without any liability therefor", our Supreme Court ruled that common carriers are not obligated by law to carry and to deliver merchandise, and persons are not vested with the right to prompt delivery, unless such common carriers previously assume the obligation. Said rights and obligations are created by a specific contract entered into by the parties (Mendoza vs. PAL, 90 Phil. 836). There is no showing by plaintiffs that such a special or specific contract had been entered into between them and the defendant airline companies. And this special contract for prompt delivery should call the attention of the carrier to the circumstances surrounding the case and the approximate amount of damages to be suffered in case of delay (See Mendoza vs. PAL, supra). There was no such contract entered into in the instant case.

Martha Rose C. Serrano

Transportation Law Digests


A common carrier undertaking to transport property has the implicit duty to carry and deliver it within reasonable time, absent any particular stipulation regarding time of delivery, and to guard against delay. In case of any unreasonable delay, the carrier shall be liable for damages immediately and proximately resulting from such neglect of duty. As found by the trial court, the delay in the delivery of the remains of Crispina Saludo, undeniable and regrettable as it was, cannot be attributed to the fault, negligence or malice of private respondents, a conclusion concurred in by respondent court and which we are not inclined to disturb. YOBIDO vs. CA and TUMBOYG.R. No. 113003 October 17, 1997 Facts: Spouses Tito and Leny Tumboy and their minor children boarded at Mangagoy, Surigao del Sur a Yobido Liner bus bound for Davao City. Along Picop Road in, the left front tire of the bus exploded. The bus fell into a ravine and struck a tree. The incident resulted in the death of Tito Tumboy and physical injuries to other passengers. The winding road was not cemented and was wet due to the rain; it was rough with crushed rocks. The bus which was full of passengers had cargoes on top. Leny testified that it was running fast and she cautioned the driver to slow down but he merely stared at her through the mirror. However, Salce, the bus conductor, testified that the bus was running speed for only 50-60 kmh. The left front tire that exploded was a brand new Goodyear tire that he mounted on the bus only 5 days before the incident. She stated that all driver applicants in Yobido Liner underwent actual driving tests before they were employed. The defendant is invoking that the tire blowout was a caso fortuito. Issue:1. WON the tire blowout was purely caso fotuito? NO2. WON the defendant bus liner is liable for damages resulting from the death of Tito? YES Held: 1.The explosion of the tire is not in itself a fortuitous event. The cause of the blowout, if due to a factory defect, improper mounting, excessive tire pressure, is not an unavoidable event. On the other hand, there may have been adverse conditions on the road that were unforeseeable and/or inevitable, which could make the blow-out a caso fortuito. The fact that the cause of the blow-out was not known does not relieve the carrier of liability. There are human factors involved in the situation. The fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle. Neither may the fact that the tire bought and used in the vehicle is of a brand name noted for quality, resulting in the conclusion that it could not explode within five days use. Be that as it may, it is settled that an accident caused either by defects in the automobile or through the negligence of its driver is not a caso fortuito that would exempt the carrier from liability for damages. 2.A common carrier may not be absolved from liability in case of force majeure or fortuitous event alone. The common carrier must still prove that it was not negligent in causing the death or injury resulting from an accident. Having failed to discharge its duty to overthrow the presumption of negligence with clear and convincing evidence, petitioners are hereby held liable for damages. Moral damages are generally not recoverable in culpa contractual except when bad faith had been proven. However, the same damages may be recovered when breach of contract of carriage results in the death of a passenger. Because petitioners failed to exercise the extraordinary diligence required of a common carrier, which resulted in the death of Tito Tumboy, it is deemed to have acted recklessly (Article 1756). Lasam vs. Smith (GR 19495, 2 February 1924) Facts: On 27 February 1918, Frank Smith Jr. was of San Fernando, La Union, and engaged in the business of carrying passengers for hire from one point to another in the Province of La Union and the surrounding provinces. On the date mentioned, he undertook to convey Honrion Lasam and Joaquina Sanchez-Lasam from San Fernando to Currimao, Ilocos Norte, in a Ford automobile. On leaving San Fernando, the automobile was operated by a licensed chauffeur, but after having reached the town of San Juan, the chauffeur allowed his assistant, Remigio Bueno, to drive the car. Bueno held to drivers license, but had some experience in driving, and with the exception of some slight engine trouble while passing through the town of Luna, the car functioned well until after the crossing of the Abra River in Tagudin, when defects developed in the steering gear so as to make accurate steering impossible, and after zigzagging for a distance of about half a kilometer, the car left the road and went down a steep embankment. In going over the bank of the road, the automobile was overturned and the spouses pinned down under it. Mr. Lasam escaped with a few contusions and a dislocated rib, but his wife, Joaquina Sanchez, received serious injuries, among which was a compound fracture of one of

Martha Rose C. Serrano

Transportation Law Digests


the bones in her left wrist. She also appears to have suffered a nervous breakdown from which she had not fully recovered at the time of the trial. The Spouses brought the action, one and a half year after the occurrence, to recover damages in the sum of P20,000 for physical injuries sustained by them in an automobile accident. The trial court rendered a judgment in their favor for the sum of P1,254.10, with legal interest from the date of the judgment. Both the spouses and Smith appealed, the former maintaining that the damages awarded are insufficient while the latter denies all liability for any damages whatever. The Supreme Court affirmed the judgment appealed from, without costs. 1. Articles 1101 to 1107 NCC, not Article 1903, applicable The cause of action rests on Smiths breach of the contract of carriage and that, consequently, articles 1101-1107 of the Civil Code, and not article 1903, are applicable. Herein, the source of Smiths legal liability is the contract of carriage; the by en tering into that contract he bound himself to carry the spouses safely and securely to their destination; and that having failed to do so he is liable in damages unless he shows that the failure to fulfill his obligation was due to causes mentioned in article 1105 of the Civil Code 2. Cases distinguishing extra-contractual and contractual liabilities Upon the facts stated, the defendants liability, if any, is contractual, is well settled by previous decisions of the court, beginning with the case of Rakes vs. Atlantic, Gulf & Pacific Co. (7 Phil., 359), and the distinction between extra-contractual liability and contractual liability has been so ably and exhaustively discussed in various other cases, that nothing further need be said upon that subject. (See Cangco vs. Manila Railroad Co. 38 Phil., 768; Manila Railroad Co. Compania Trasatlantica and Atlantic, Gulf & Pacific Co., 38 Phil., 875; De Guia vs. Manila Electric Railroad & Light ) 3. Article 1105 NCC Article 1105 reads as no one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, with the exception of the cases in which the law expressly provides otherwise and those in which the obligation itself imposes such liability. 4. Caso fortuito, events which cannot be foreseen and which having been foreseen, are inevitable; Spanish construction The Spanish authorities regard the language employed as an effort to define the term caso fortuito and hold that the two expressions are synonymous. (Manresa, Comentarios al Co Civil Espaol, vol. 8, pp. 88 et seq.; Scaevola, Codigo Civil, vol. 19, pp. 526 et seq.) 5. Article 1105s antecedent: Law II, Title 33, Partida 7 The antecedent to article 1105 is found in Law 11, Title 33, Partida 7, which defines caso fortuito as ocasion que acaese por aventura deque non se puede ante ver. E son estos, derrivamientos de casas e fuego que se enciende so ora, e quebrantamiento de navio, fuerca de ladrones. . . . ( An event that takes place by accident and could not have been foreseen, Examples of this are destruction of houses, unexpected fire, shipwreck, violence of robbers. . . .) 6. Caso fortuito defined; Escriche Escriche defines caso fortuito as an unexpected event such as floods, torrents, shipwrecks, conflagrations, lightning, compulsion, insurrections, destruction of buildings by unforeseen accidents and other occurrences of a similar nature. 7. Caso fortuito defined; Enciclopedia Juridica Espanola In discussing and analyzing the term caso fortuito the Enciclopedia Juridica Espaola says: In a legal sense and, consequently, also in relation to contracts, a caso fortuito presents the following essential characteristics: (1) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will. (2) It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid. (3) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. And (4) the obligor (debtor) must be free from any participation in the aggravation of the injury resulting to the creditor. (5 Enciclopedia Juridica Espaola, 309.) 8. Extraordinary circumstance independent of obligors will an essential element of caso fortuito Authorities agree that some extraordinary circumstance independent of the will of the obligor, or of his employees, is an essential element of a caso fortuito. Herein, it is at once apparent that this elements is lacking. It is not suggested that the accident in question was due to an act of God or to adverse road conditions which could not have been foreseen. As far as the record shows, the accident was caused either by defects in the automobile or else through the negligence of its driver. That is not a caso fortuito. 9. Carrier of passenger not an absolute insurer against risks of travel; However, Alba vs. Sociedad Anonima de Tranvias does not apply Neither under the American nor Spanish law is a carrier of passengers an absolute insurer against the risks of travel from which the passenger may protect himself by exercising ordinary care and diligence. The case of Alba vs. Sociedad Anonima de Tranvias, Jurisprudencia Civil, vol. 102, p. 928 affords a good illustration of the application of this principle. In that case Alba, a passenger on a street car, was standing on the platform of the car while it was in motion. The car rounded a curve causing Alba to lose his balance and fall off the platform, sustaining sever injuries. In an action brought by him to recover damages, the supreme court of Spain held that inasmuch as the car at the time of the accident was travelling at a moderate rate of speed and there was no infraction of the regulations, and the plaintiff was exposed to no greater danger than that inherent in that particular mode of travel, the plaintiff could not recover, especially so since he should have been on his guard against a contingency as natural as that of losing his balance to a greater or less extent when the car rounded the curve. Herein, however, the passengers had no means of avoiding the danger or escaping the injury. 10. Discretion of the court to moderate liability according to circumstances Although the expenses incurred by the spouses as a result of the accident greatly exceeded the amount of the damages awarded, the courts have a discretionary power to moderate the liability according to the circumstances especially in

Martha Rose C. Serrano

Transportation Law Digests


determining the extent of the liability for losses or damages resulting from negligence in the fulfillment of a contractual obligation. The Court does not think that the evidence is such as to justify in interfering with the discretion of the court below in this respect. Herein, by far the greater part of the damages claimed by the spouses resulted from the fracture of a bone in the left wrist of Joaquina Sanchez and from her objections to having a decaying splinter of the bone refusal to submit to such an operation, a series of infections ensued and which required constant and expensive medical treatment for several years. Vda. da Bataclan v. Medina Facts: The deceased Juan Bataclan was among the passengers of Medina Transportation, driven by Conrado Saylon and operated by Mariano Medina. On its way from Cavite to Pasay, the front tires burst and the vehicle fell into a canal. Some passengers were able to escape by themselves or with some help, while there were 4, including Bataclan, who could not get out. Their cries were heard in the neighbourhood. Then there came about 10 men, one of them carrying a torch. As they approached the bus, it caught fire and the passengers died. The fire was due to gasoline leak and the torch. Salud Villanueva Vda. de Bataclan, in her name and on behalf of her 5 minor children, sought to claim damages from the bus company. The CFI favored the plaintiff, and the Court of Appeals forwarded the case to the Supreme Court due to the amount involved. Issue: What was the proximate cause of the death of Juan and the other passengers? blow-out, must have applied the brakes in order to stop the bus, but because of the velocity at which the bus must have been running, its momentum carried it over a distance of 150 meters before it fell into the canal and turned turtle. There is no question that under the circumstances, the defendant carrier is liable. The only question is to what degree. A satisfactory definition of proximate cause is found in Volume 38, pages 695-696 of American jurisprudence, cited by plaintiffsappellants in their brief. It is as follows: . . . 'that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred.' And more comprehensively, 'the proximate legal cause is that acting first and producing the injury, either immediately or by setting other events in motion, all constituting a natural and continuous chain of events, each having a close causal connection with its immediate predecessor, the final event in the chain immediately effecting the injury as a natural and probable result of the cause which first acted, under such circumstances that the person responsible for the first event should, as an ordinary prudent and intelligent person, have reasonable ground to expect at the moment of his act or default that an injury to some person might probably result therefrom. In the present case under the circumstances obtaining in the same, we do not hesitate to hold that the proximate cause was the overturning of the bus, this for the reason that when the vehicle turned not only on its side but completely on its back, the leaking of the gasoline from the tank was not unnatural or unexpected; that the coming of the men with a lighted torch was in response to the call for help, made not only by the passengers, but most probably, by the driver and the conductor themselves, and that because it was dark (about 2:30 in the morning), the rescuers had to carry a light with them, and coming as they did from a rural area where lanterns and flashlights were not available; and what was more natural than that said rescuers should innocently approach the vehicle to extend the aid and effect the rescue requested from them. In other words, the coming of the men with a torch was to be expected and was a natural sequence of the overturning of the bus, the trapping of some of its passengers and the call for outside help. What is more, the burning of the bus can also in part be attributed to the negligence of the carrier, through is driver and its conductor. According to the witness, the driver and the conductor were on the road walking back and forth. They, or at least, the driver should and must have known that in the position in which the overturned bus was, gasoline could and must have leaked from the gasoline tank and soaked the area in and around the bus, this aside from the fact that gasoline when spilled, specially over a large area, can be smelt and directed even from a distance, and yet neither

Held: We agree with the trial court that the case involves a breach of contract of transportation for hire, the Medina Transportation having undertaken to carry Bataclan safely to his destination, Pasay City. We also agree with the trial court that there was negligence on the part of the defendant, through his agent, the driver Saylon. There is evidence to show that at the time of the blow out, the bus was speeding, as testified to by one of the passengers, and as shown by the fact that according to the testimony of the witnesses, including that of the defense, from the point where one of the front tires burst up to the canal where the bus overturned after zig-zaging, there was a distance of about 150 meters. The chauffeur, after the

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Transportation Law Digests


the driver nor the conductor would appear to have cautioned or taken steps to warn the rescuers not to bring the lighted torch too near the bus. JOSE PILAPIL vs. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY, INC. (G.R. No. 52159, December 22, 1989) FACTS: Petitioner Pilapil, on board respondents bus was hit above his eye by a stone hurled by an unidentified bystander. Respondents personnel lost no time in bringing him to a hospital, but eventually petitioner partially lost his left eyes vision and sustained a permanent scar. Thus, Petitioner lodged an action for recovery of damages before the Court of First Instance of Camarines Sur which the latter granted. On appeal, the Court of Appeals reversed said decision.

Clearly under the above provision, a tort committed by a stranger which causes injury to a passenger does not accord the latter a cause of action against the carrier. The negligence for which a common carrier is held responsible is the negligent omission by the carrier's employees to prevent the tort from being committed when the same could have been foreseen and prevented by them. Further, under the same provision, it is to be noted that when the violation of the contract is due to the willful acts of strangers, as in the instant case, the degree of care essential to be exercised by the common carrier for the protection of its passenger is only that of a good father of a family. PAL vs. CA and ZAPATOSG.R. No. L-82619 September 15, 1993 Facts: Private respondent was among the 21 passengers of Flight 477 that took off from Cebu bound for Ozamiz City. The routing of this flight was Cebu-OzamizCotabato. The pilot received a radio message that Ozamiz airport was closed due to heavy rains and inclement weather and that he should proceed to Cotabato City instead. Upon arrival at Cotabato City, the PAL Station Agent informed the passengers of their options to return to Cebu on the same day and then to Ozamiz, or take the next flight to Cebu the following day, or remain at Cotabato and take the next available flight to Ozamiz City. Flight 560 bound for Manila would make a stop-over at Cebu to bring some of the diverted passengers; that there were only 6 seats available. Private respondent chose to return to Cebu but was not accommodated because he checked-in as passenger No. 9 on Flight 477. He was forced to stay at Cotabato City despite the local war between the military and the muslim rebels. He tried to ferry the Ford Fiera loaded with PAL personnel but said pick-up vehicle did not accommodate him. The personnel of PAL did not secure his accommodation in Cotabato City. He received a free ticket on a flight to Iligan, but chose to buy his own. He lost his personal belongings, including a camera. Issue: 1. WON PAL can properly invoke the defense of fortuitous event of bad weather in Ozamiz to exempt itself from paying damages to the PR? NO

ISSUE: Whether or not common carriers assume risks to passengers such as the stoning in this case? HELD: In consideration of the right granted to it by the public to engage in the business of transporting passengers and goods, a common carrier does not give its consent to become an insurer of any and all risks to passengers and goods. It merely undertakes to perform certain duties to the public as the law imposes, and holds itself liable for any breach thereof.

While the law requires the highest degree of diligence from common carriers in the safe transport of their passengers and creates a presumption of negligence against them, it does not, however, make the carrier an insurer of the absolute safety of its passengers.

Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission.

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Transportation Law Digests


2. WON the exemplary damages was properly awarded by the appellate court? NO De Gillaco vs. Manila Railroad Co. (GR L-8034, 18 November 1955) Facts: On 1 April 1946, 7:30 a.m., Lt. Tomas Gillaco, husband of Cornelia A. de Gillaco, was a passenger in the early morning train of the Manila Railroad Company from Calamba, Laguna to Manila. When the train reached the Paco Railroad station, Emilio Devesa, a train guard of the Manila Railroad Company assigned in the Manila-San Fernando, La Union Line, happened to be in said station waiting for the same train which would take him to Tutuban Station, where he was going to report for duty. Devesas tour of duty on that day was from 9:00 a.m., until the train to which he was assigned reached La Union at 7:00 p.m. of the same day. Devesa had a long standing personal grudge against Tomas Gillaco, same dating back during the Japanese occupation. And because of this personal grudge, Devesa shot Gillaco with the carbine furnished to him by the Manila Railroad Company for his use as such train guard, upon seeing him inside the train coach. Tomas Gillaco died as a result of the would which he sustained from the shot fired by Devesa. Devesa was convicted of homicide by final judgment of the Court of Appeals. Cornelia A. de Gillaco filed an action against the Manila Railroad Company with the CFI Laguna. The trial court sentenced the railroad company to pay P4,000 damages to the de Gillacos, the widow and children of the late Tomas Gillaco shot by an employee of said company. The railroad company appealed. The Supreme Court reversed the judgment appealed from, and dismissed the complaint, without costs. 1. Obligation to transport passenger safely to destination; Exception: unforeseen event A passenger is entitled to protection from personal violence by the carrier or its agents or employees, since the contract of transportation obligates the carrier to transport a passenger safely to his destination. But under the law of the case, this responsibility extends only to those that the carrier could foresee or avoid through the exercise of the degree of care and diligence required of it. As held in Lasam vs. Smith, that by entering into that contract the carrier bound himself to carry the plaintiff safely and securely to their destination; and that having failed to do so he is liable in damages unless he shows that the failure to fulfill his obligation was due to causes mentioned in article 1105 of the Civil Code, which reads as follows: No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, with the exception of the cases in which the law expressly provides otherwise and those in which the obligation itself imposes such liability. 2. Act of Devesa entirely unforeseen by railroad company The act of guard Devesa in shooting passenger Gillaco (because of a personal grudge nurtured against the latter since the Japanese occupation) was entirely unforseeable by the Manila Railroad Co. The latter had no means to ascertain or anticipate that the two would meet, nor could it reasonably foresee every personal rancor that might exist between each one of its many employees and any one of the thousands of eventual passengers riding in its trains. The shooting in question was

Held:1.PAL remissed in its duty of extending utmost care to private respondent while being stranded in Cotabato City.PALs diversion of its flight due to inclement weather was a fortuitous event. Nonetheless, such occurrence did not terminate PALs contract with its passengers. Being in the business of air carriage and the sole one to operate in the country, PAL is deemed equipped to deal with situations as in the case at bar. The relation of carrier and passenger continues until the latter has been landed at the port of destination and has left the carriers premises. Hence, PAL necessarily would still have to exercise extraordinary diligence in safeguarding the comfort, convenience and safety of its stranded passengers until they have reached their final destination. PAL grossly failed considering the then ongoing battle between government forces and Muslim rebels in Cotabato City and the fact that the private respondent was a stranger to the place. A contract to transport passengers is quite different in kind and degree from any other contractual relation. Because of the relation which an air carrier sustains with the public. Its business is mainly with the travelling public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore, generates a relation attended with a public duty. Since part of the failure to comply with the obligation of common carrier to deliver its passengers safely to their destination lay in the defendants failure to provide comfort and convenience to its stranded passengers using extra-ordinary diligence, the cause of non-fulfillment is not solely and exclusively due to fortuitous event, but due to something which defendant airline could have prevented, PAL becomes liable to plaintiff. 2. The award of moral damages was excessive and was reduced by the Court. There was no clear basis that PAL failed to entertain the plaintiff and answer its queries. In fact, the manager accommodated him in his office. Moral damages are not intended to enrich the private respondent. They are awarded only to enable the injured party to obtain means, diversion or amusements that will serve to alleviate the moral suffering he has undergone by reason of the defendants culpable action. The plaintiffs claim on loss of business opportunities was based only on pure speculation. It must depend on competent proof.

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Transportation Law Digests


therefore caso fortuito within the definition of article 1105 of the old Civil Code, being both unforeseeable and inevitable under the given circumstances; and pursuant to established doctrine, the resulting breach of Manila Railroads contract of safe carriage with the late Tomas Gillaco was excused thereby. 3. Degree of care and diligence of a common carrier A common carrier is held to a very high degree of care and diligence in the protection of its passengers; but, considering the vast and complex activities of modern rail transportation, to require the railroadcompany that it should guard against all possible misunderstanding between each and every one of its employees and every passenger that might chance to ride in its conveyances at any time, strikes as demanding diligence beyond what human care and foresight can provide. 4. Liability of a carrier as an insurer not recognized in Philippine Jurisdiction; Civil Code of 1889 The basis of a carriers liability was under the old Civil Code of 1889 (which was in force in 1946, when Gillaco was shot), and that it can be inferred from the previous jurisprudence of the Court, the Civil Code of 1889 did not impose absolute liability (Lasam vs. Smith, supra). Although American authorities hold carriers to be insurers of the safety of their passengers against willful assault and intentional ill-treatment on the part of their servants, it being immaterial that the act should be one of private retribution on the part of the servant, impelled by personal malice toward the passenger, the liability of a carrier as an insurer was not recognized in this jurisdiction. 5. Railroad company guard had no duties to discharge in connection with the transportation of the deceased; No breach of contract of transportation by employee of carrier When the crime took place, the guard Devesa had no duties to discharge in connection with the transportation of the deceased from Calamba to Manila. The stipulation of facts is clear that when Devesa shot and killed Gillaco, Devesa was assigned to guard the Manila-San Fernando (La Union) trains, and he was at Paco Station awaiting transportation to Tutuban, the starting point of the train that he was engaged to guard. In fact, his tour of duty was to start at 9:00 a.m., two hours after the commission of the crime. Devesa was therefore under no obligation to safeguard the passengers of the Calamba-Manila train, where the deceased was riding; and the killing of Gillaco was not done in line of duty. The position of Devesa at the time was that of another would be passenger, a stranger also awaiting transportation, and not that of an employee assigned to discharge any of the duties that the Railroad had assumed by its contract with the deceased. As a result, Devesas assault cannot be deemed in law a breach of Gillacos contract of transportation by a servant or employee of the carrier. 6. Rationale why carrier is made responsible by misconduct of employees The only good reason for making the carrier responsible for the misconduct of the servant perpetrated in his own interest, and not in that of his employer, or otherwise within the scope of his employment, is that the servant is clothed with the delegated authority, and charged with the duty by the carrier, to execute his undertaking with the passenger. And it cannot be said that there is any such delegation to the employees at a station with reference to passengers embarking at another or traveling on the train. Of course, this speaks only of the principle which holds a carrier responsible for wrongs done to passengers by servants acting in their own interest, and not in that of the employer. That principle is not the ordinary rule, respondent superior, by which the employer is held responsible only for acts or omissions of the employee in the scope of his employment; but the only reason in our opinion for a broader liability arises from the fact that the servant, in mistreating the passenger wholly for some private purpose of his own, in the very act, violates the contractual obligation of the employer for the performance of which he has put the employee in his place. That reason does not exist where the employee who committed the assault was never in a position in which it became his duty to his employer to represent him in discharging any duty of the latter towards the passenger. The proposition that the carrier clothes every employee engaged in the transportation business with the comprehensive duty of protecting every passenger with whom he may in any way come in contact, and thereby makes himself liable for every assault committed by each servant, without regard to the inquiry whether or not the passenger has come within the sphere of duty of that servant as indicated by the employment, is regarded as not only not sustained by the authorities, but as being unsound and oppressive both to the employer and the employee.

BACHELOR EXPRESS, vs.CA Facts: The bus owned by Petitioners came from Davao City on its way to Cagayan de Oro City passing Butuan City. While at Tabon-Tabon, Butuan City, the bus picked up a passenger, that about fifteen minutes later, a passenger at the rear portion suddenly stabbed a PC soldier which caused commotion and panic among the passengers. When the bus stopped, passengers Ornominio Beter and Narcisa Rautraut were found lying down the road, the former already dead as a result of head injuries and the latter also suffering from severe injuries which caused her death later. The passenger assailant alighted from the bus and ran toward the bushes but was killed by the police. Thereafter, the heirs of Ornominio Beter and Narcisa Rautraut, private respondents herein filed a complaint for "sum of money" against Bachelor Express, Inc., its alleged owner and the driver Rivera. The lower court dismissed the complaint. CA reversed the decision, hence the instant petition. Issue: Whether or not petitioner is negligent. Held: Yes. The liability, if any, of the petitioners is anchored on culpa contractual or breach of contract of carriage. Art. 1732, 1733, 1755 and 1756 are applicable. There is no question that Bachelor is a common carrier. Hence, Bachelor is bound to carry its passengers safely as far as human care and foresight can provide using the utmost

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Transportation Law Digests


diligence of very cautious persons, with a due regard for all the circumstances. In the case at bar, Ornominio Beter and Narcisa Rautraut were passengers of a bus belonging to Bachelor and, while passengers of the bus, suffered injuries which caused their death. Consequently, pursuant to Article 1756 of the Civil Code, Bachelor is presumed to have acted negligently unless it can prove that it had observed extraordinary diligence in accordance with Articles 1733 and 1755 of the New Civil Code. Bachelor denies liability for the death of Beter and Rautraut in that their death was caused by a third person who was beyond its control and supervision. In effect, the petitioner, in order to overcome the presumption of fault or negligence under the law, states that the vehicular incident resulting in the death of passengers Beter and Rautraut was caused by force majeure or caso fortuito over which the common carrier did not have any control. The running amuck of the passenger was the proximate cause of the incident as it triggered off a commotion and panic among the passengers such that the passengers started running to the sole exit shoving each other resulting in the falling off the bus by passengers Beter and Rautraut causing them fatal injuries. The sudden act of the passenger who stabbed another passenger in the bus is within the context of force majeure. However, in order that a common carrier may be absolved from liability in case of force majeure, it is not enough that the accident was caused by force majeure. The common carrier must still prove that it was not negligent in causing the injuries resulting from such accident. In this case, Bachelor was negligent. Considering the factual findings of the Court of Appeals-the bus driver did not immediately stop the bus at the height of the commotion; the bus was speeding from a full stop; the victims fell from the bus door when it was opened or gave way while the bus was still running; the conductor panicked and blew his whistle after people had already fallen off the bus; and the bus was not properly equipped with doors in accordance with law-it is clear that the petitioners have failed to overcome the presumption of fault and negligence found in the law governing common carriers. The petitioners' argument that the petitioners "are not insurers of their passengers" deserves no merit in view of the failure of the petitioners to prove that the deaths of the two passengers were exclusively due to force majeure and not to the failure of the petitioners to observe extraordinary diligence in transporting safely the passengers to their destinations as warranted by law. from liability in case of force majeure, it is not enough that the accident was caused by force majeure. The common carrier must still prove that it was not negligent in causing the injuries resulting from such accident. In this case, Bachelor was negligent. Considering the factual findings of the Court of Appeals-the bus driver did not immediately stop the bus at the height of the commotion; the bus was speeding from a full stop; the victims fell from the bus door when it was opened or gave way while the bus was still running; the conductor panicked and blew his whistle after people had already fallen off the bus; and the bus was not properly equipped with doors in accordance with law.

NECESITO V. PARAS FACTS: Serverina Garces and her 1 yr old son, Precillano Necesito were passengers on a Philippine Rabbit bus form Pangasinan to Manila driven by Bardonell. As the bus was traversing a wooden bridge, its wheels swerved to the right and the driver lost control. The bus fell into a creek and the mother, Severina drowned while the baby suffered injuries. An action for damages was filed by the heirs of Severina Garces( the husband) but the TC dismissed the claim saying the accident was not caused by the negligence of the driver, who was driving slowly due to the bad road conditions, but by a fracture in the right steering knuckle of the bus i.e. defective parts. ISSUE: Whether or not the carrier is liable for damages for the manufacturing defect of the steering knuckle and if it discharged its duty under Art. 1755 HELD: YES. ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for the all the circumstances. It is clear that the carrier is not the passengers insurer, his liability is based on negligence and Art. 1756 states that if a passenger dies, the carrier has the burden to prove that the carrier exercised the requisite diligence. American jurisprudence holds: "The preponderance of authority is in favor of the doctrine that a passenger is entitled to recover damages from a carrier for an injury resulting from a defect in an appliance purchased from a manufacturer, whenever it appears that the defect would have been discovered by the carrier if it had exercised the degree of care which under the circumstances was incumbent upon it, with regard to inspection and application of the necessary tests. For the purposes of this doctrine, the manufacturer is

Bachelor Express Inc vs. CA The running amuck of the passenger was the proximate cause of the incident as it triggered off a commotion and panic among the passengers such that the passengers started running to the sole exit shoving each other resulting in the falling off the bus by passengers Beter and Rautraut causing them fatal injuries. The sudden act of the passenger who stabbed another passenger in the bus is within the context of force majeure. However, in order that a common carrier may be absolved

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Transportation Law Digests


considered as being in law the agent or servant of the carrier, as far as regards the work of constructing the appliance. According to this theory, the good repute of the manufacturer will not relieve the carrier from liability The rationale of the carrier's liability is the fact that the passenger has neither choice nor control over the carrier in the selection and use of the equipment and appliances in use by the carrier. Having no privity whatever with the manufacturer or vendor of the defective equipment, the passenger has no remedy against him, while the carrier usually has. It is but logical, therefore, that the carrier, while not in insurer of the safety of his passengers, should nevertheless be held to answer for the flaws of his equipment if such flaws were at all discoverable. Under the first, which is the minority view, the carrier is liable only when the act of the employee is within the scope of his authority and duty. It is not sufficient that the act be within the course of employment only. Under the second view, upheld by the majority and also by the later cases, it is enough that the assault happens within the course of the employee's duty. It is no defense for the carrier that the act was done in excess of authority or in disobedience of the carrier's orders. The carrier's liability here is absolute in the sense that it practically secures the passengers from assaults committed by its own employees. As can be gleaned from Art. 1759, the Civil Code of the Philippines evidently follows the rule based on the second view. At least three very cogent reasons underlie this rule. (1) the special undertaking of the carrier requires that it furnish its passenger that full measure of protection afforded by the exercise of the high degree of care prescribed by the law, inter alia from violence and insults at the hands of strangers and other passengers, but above all, from the acts of the carrier's own servants charged with the passenger's safety; (2) said liability of the carrier for the servant's violation of duty to passengers, is the result of the formers confiding in the servant's hands the performance of his contract to safely transport the passenger, delegating therewith the duty of protecting the passenger with the utmost care prescribed by law; and (3) as between the carrier and the passenger, the former must bear the risk of wrongful acts or negligence of the carrier's employees against passengers, since it, and not the passengers, has power to select and remove them. Accordingly, it is the carrier's strict obligation to select its drivers and similar employees with due regard not only to their technical competence and physical ability, but also, no less important, to their total personality, including their patterns of behavior, moral fibers, and social attitude. Applying this stringent norm to the facts in this case, therefore, the lower court rightly adjudged the defendant carrier liable pursuant to Art. 1759 of the Civil Code. The dismissal of the claim against the defendant driver was also correct. Plaintiff's action was predicated on breach of contract of carriage7 and the cab driver was not a party thereto. His civil liability is covered in the criminal case wherein he was convicted by final judgment.

MARANAN vs. PEREZ Facts: Rogelio Corachea, on October 18, 1960, was a passenger in a taxicab owned and operated by Pascual Perez when he was stabbed and killed by the driver, Simeon Valenzuela. Valenzuela was prosecuted for homicide in the Court of First Instance of Batangas and was found guilty. While appeal was pending in the Court of Appeals, Antonia Maranan, Rogelio's mother, filed an action to recover damages. The court decided in plaintiffs favor. Hence the instant petition. Issue: Whether or not defendant- operators could be held liable for damages Held: Yes. Defendant-appellant relies solely on the ruling enunciated in Gillaco v. Manila Railroad Co., 97 Phil. 884, that the carrier is under no absolute liability for assaults of its employees upon the passengers. The attendant facts and controlling law of that case and the one at bar are very different however. In the Gillaco case, the passenger was killed outside the scope and the course of duty of the guilty employee. Now here, the killing was perpetrated by the driver of the very cab transporting the passenger, in whose hands the carrier had entrusted the duty of executing the contract of carriage. In other words, unlike the Gillaco case, the killing of the passenger here took place in the course of duty of the guilty employee and when the employee was acting within the scope of his duties. Moreover, the Gillaco case was decided under the provisions of the Civil Code of 1889 which, unlike the present Civil Code, did not impose upon common carriers absolute liability for the safety of passengers against wilful assaults or negligent acts committed by their employees. The death of the passenger in the Gillaco case was truly a fortuitous event which exempted the carrier from liability. The Civil Code provisions on the subject of Common Carriers are new and were taken from Anglo-American Law. There, the basis of the carrier's liability for assaults on passengers committed by its drivers rests either on (1) the doctrine of respondeat superior or (2) the principle that it is the carrier's implied duty to transport the passenger safely.

Tiu vs. Arriesgado G.R. No. 138060, September 1, 2004 Facts: At about 10:00 p.m. of March 15, 1987, the cargo truck marked "Condor Hollow Blocks and General Merchandise" bearing plate number GBP-675 was loaded with firewood in Bogo, Cebu and left for Cebu City. Upon reaching Sitio Aggies, Poblacion, Compostela, Cebu, just as the truck passed over a bridge, one of its rear tires exploded. The driver, Sergio Pedrano, then parked along the right side of the national highway and removed the damaged tire to have it vulcanized at a nearby shop, about 700 meters away. Pedrano left his helper, Jose Mitante, Jr. to keep

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Transportation Law Digests


watch over the stalled vehicle, and instructed the latter to place a spare tire six fathoms away behind the stalled truck to serve as a warning for oncoming vehicles. The trucks tail lights were also left on. It was about 12:00 a.m., March 16, 1987. At about 4:45 a.m., D Rough Riders passenger bus with plate number PBP-724 driven by Virgilio Te Laspias was cruising along the national highway of Sitio Aggies, Poblacion, Compostela, Cebu. The passenger bus was also bound for Cebu City, and had come from Maya, Daanbantayan, Cebu. Among its passengers were the Spouses Pedro A. Arriesgado and Felisa Pepito Arriesgado, who were seated at the right side of the bus, about three (3) or four (4) places from the front seat. As the bus was approaching the bridge, Laspias saw the stalled truck, which was then about 25 meters away. He applied the breaks and tried to swerve to the left to avoid hitting the truck. But it was too late; the bus rammed into the trucks left rear. The impact damaged the right side of the bus and left several passengers injured. Pedro Arriesgado lost consciousness and suffered a fracture in his right colles. His wife, Felisa, was brought to the Danao City Hospital. She was later transferred to the Southern Island Medical Center where she died shortly thereafter. Respondent Pedro A. Arriesgado then filed a complaint for breach of contract of carriage, damages and attorneys fees before the Regional Trial Court of Cebu City, Branch 20, against the petitioners, D Rough Riders bus operator William Tiu and his driver, Virgilio Te Laspias on May 27, 1987. The respondent alleged that the passenger bus in question was cruising at a fast and high speed along the national road, and that petitioner Laspias did not take precautionary measures to avoid the accident. The petitioners, for their part, filed a Third-Party Complaint against the following: respondent Philippine Phoenix Surety and Insurance, Inc. (PPSII), petitioner Tius insurer; respondent Benjamin Condor, the registered owner of the cargo truck; and respondent Sergio Pedrano, the driver of the truck. They alleged that petitioner Laspias was negotiating the uphill climb along the national highway of Sitio Aggies, Poblacion, Compostela, in a moderate and normal speed. It was further alleged that the truck was parked in a slanted manner, its rear portion almost in the middle of the highway, and that no early warning device was displayed. Petitioner Laspias promptly applied the brakes and swerved to the left to avoid hitting the truck headon, but despite his efforts to avoid damage to property and physical injuries on the passengers, the right side portion of the bus hit the cargo trucks left rear. HELD: The rules which common carriers should observe as to the safety of their passengers are set forth in the Civil Code, Articles 1733, 1755and 1756. It is undisputed that the respondent and his wife were not safely transported to the destination agreed upon. In actions for breach of contract, only the existence of such contract, and the fact that the obligor, in this case the common carrier, failed to transport his passenger safely to his destination are the matters that need to be proved. This is because under the said contract of carriage, the petitioners assumed the express obligation to transport the respondent and his wife to their destination safely and to observe extraordinary diligence with due regard for all circumstances. Any injury suffered by the passengers in the course thereof is immediately attributable to the negligence of the carrier. Upon the happening of the accident, the presumption of negligence at once arises, and it becomes the duty of a common carrier to prove that he observed extraordinary diligence in the care of his passengers. It must be stressed that in requiring the highest possible degree of diligence from common carriers and in creating a presumption of negligence against them, the law compels them to curb the recklessness of their drivers. While evidence may be submitted to overcome such presumption of negligence, it must be shown that the carrier observed the required extraordinary diligence, which means that the carrier must show the utmost diligence of very cautious persons as far as human care and foresight can provide, or that the accident was caused by fortuitous event. As correctly found by the trial court, petitioner Tiu failed to conclusively rebut such presumption. The negligence of petitioner Laspias as driver of the passenger bus is, thus, binding against petitioner Tiu, as the owner of the passenger bus engaged as a common carrier. PHILIPPINE RABBIT BUS LINES vs. IAC Facts: Catalina Pascua with several others boarded the jeep owned by spouses Isidro Mangune and Guillerma Carreon and driven by Tranquilino Manalo bound for Carmen, Rosales, Pangasinan. Upon reaching Tarlac the right rear wheel of the jeepney was detached, so it was running in an unbalanced position. Manalo stepped on the brake, as a result of which, the jeepney which was then running on the eastern lane (its right of way) made a U-turn, invading and eventually stopping on the western lane and was hit by the petitioner companys bus causing the death of Catalina Pascua and two other passengers. Issue: Wether or not the Doctrine of Last Clear Chance applies in the case at bar?

Held: No, The principle about "the last clear" chance, would call for application in a suit between the owners and drivers of the two colliding vehicles. It does not arise where a passenger demands responsibility from the carrier to enforce its contractual obligations. For it would be inequitable to exempt the negligent driver of the jeepney and its owners on the ground that the other driver was likewise guilty of negligence." It is the rule under the substantial factor test that if the actor's conduct is a substantial factor in bringing about harm to another, the fact that the actor neither

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Transportation Law Digests


foresaw nor should have foreseen the extent of the harm or the manner in which it occurred does not prevent him from being liable. The bus driver's conduct is not a substantial factor in bringing about harm to the passengers of the jeepney. It cannot be said that the bus was travelling at a fast speed when the accident occurred because the speed of 80 to 90 kilometers per hour, assuming such calculation to be correct, is yet within the speed limit allowed in highways. The driver cannot be held jointly and severally liable with the carrier in case of breach of the contract of carriage. The rationale behind this is readily discernible. Firstly, the contract of carriage is between the carrier and the passenger, and in the event of contractual liability, the carrier is exclusively responsible therefore to the passenger, even if such breach be due to the negligence of his driver. In other words, the carrier can neither shift his liability on the contract to his driver nor share it with him, for his driver's negligence is his. Secondly, if We make the driver jointly and severally liable with the carrier, that would make the carrier's liability personal instead of merely vicarious and consequently, entitled to recover only the share which corresponds to the driver, contradictory to the explicit provision of Article 2181 of the New Civil Code.

Magellan Manufacturing Marketing Corporation Respondent: Inc. J.Regalado: FACTS: On May 20, 1980, Magellan Manufacturing Marketing Corp., (MMMC) entered into a contract with Choji Co. of Yokohama, Japan to export 136,000 of anahaw fans for a consideration of $23,220. As payment Magellan received from Choji a letter of credit> Magellan (MMMC) through its president James Cu, contracted F.E. Zuellig a shipping agent, through its solicitor, one Mr. King, to ship the Anahaw through Orient Overseas Container Lines Inc., (OOCL) specifying that he needed an on board bill of lading and that the transhipment is not allowed under the letter of credit. On June 30, 1980, Magellan paid F.E Zuellig the freight charges and secured a copy of the bill of lading which was presented to Allied Bank. The bank then credited the amount of US$ 23,220 covered by the letter of credit to Magellans account. However, James Cu, Magellans president went back to the bank he was informed that the payment was refused by the buyer allegedly because there was no on board bill of lading and there was a transhipment of goods. As a result of the buyers refusal, the anahaw fans are shipped back to Manila by the respondents shippers for which demanded from Magellan pay of 246,043. 43. Petitioner Magellan abandoned the whole cargo and appellees for damages. The lower court decided the case in favor of private respondents. It dismissed the complaint on the ground that Magellan had given its consent to the contents of the bill of lading where it is clearly indicated that there will be transhipment. On appeal the appellate court affirmed the decision of the lower court but modified the liability of the petitioner because private respondent did not timely informed the petitioner that the goods were already Manila in addition to the fact that the private respondent had given petitioner the option of abandoning the goods in exchange for the demurrages. ISSUE: Whether or not there is transhipment when the goods are transferred from one vessel to another which belong to the same owner. HELD: Transhipment, in maritime law, is defined as the act of taking cargo out of one ship and loading it in another, or the transfer of goods from the vessel stipulated in the contract of affreightment to another vessel before the place of destination named in the contract has been reached, or the transfer for further transportation from one ship or conveyance to another. Court Of Appeals, Orient Overseas Container Lines And F.E. Zuellig,

ISAAC vs. A.L. AMMEN TRANS. CO. Facts: Plaintiff boarded defendants bus as paying passenger from Albay. The bus collided with a pick-up truck which was coming from opposite direction trying to swerve from a pile of gravel. As a result, his left arm was completely severed. Plaintiff chose to hold defendant liable on its contractual obligation. Plaintiff brought an action for damages which the lower court dismissed holding the driver of the pick-up car negligent and not that of the bus. Issue: Whether or not the common carrier is liable. Held: The bus was running at a moderate speed. The driver of the bus upon the speeding pick-up truck swerved the bus to the very extreme right of the road. Said driver would not move the bus further without endangering the safety of his passengers. Notwithstanding all these efforts, the rear left side was hit. This finding of the lower court was sustained. Also, of the carriers employee is confronted with a sudden emergency, he is not held to the same degree of care he would otherwise, he required in the absence of such emergency. By placing his left arm on the window, he is guilty of contributory negligence cannot relieve the carrier but can only reduce its liability (ART. 1762), this is a circumstance which further militates against plaintiffs position. It is a prevailing rule that it is negligence per se for passengers on a railroad to protrude any part of his body and that no recovery can be had for an injury.

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Transportation Law Digests


Clearly, either in its ordinary or its strictly legal acceptation, there is transhipment whether or not the same person, from or entity owns the vessels. In other words, the fact of transhipment is not dependent upon the ownership of the transporting ships or conveyances or in the change of carriers, as the petitioner seems to suggest, but rather on the fact of actual physical transfer of cargo from one vessel to another. Moreover, it is a well-known commercial usage that transhipment of freight without legal excuse, however competent and safe the vessel into which the transfer is made, is a violation of the contract and an infringement of the right of the shipper, and subjects the carrier to liability if the freight is lost even by a cause otherwise excepted. It is highly improbable to suppose that private respondents, having been engaged in the shipping business for so long, would be unaware of such a custom of the trade as to have undertaken such transhipment without petitioners consent and unnecessarily expose themselves to a possible liability. It is a long standing jurisprudential rule that a bill of lading operates both as a receipt and as a contract. It is a receipt for the goods shipped and a contract to transport and deliver the same as therein stipulated. As a contract, it names the parties, which includes the consignee, fixes the route, destination, and freight rates or charges, and stipulates the rights and obligations assumed by the parties. Being a contract, it is the law between the parties who are bound by its terms and conditions provided that these are not contrary to law, morals, good customs, public order and public policy. A bill of lading usually becomes effective upon its delivery to and acceptance by the shipper. It is presumed that the stipulations of the bill were, in the absence of fraud, concealment or improper conduct, known to the shipper, and he is generally bound by his acceptance whether he reads the bill or not. The holding in most jurisdictions has been that a shipper who receives a bill of lading without objection after an opportunity to inspect -it, and permits the carrier to act on it by proceeding with the shipment is presumed to have accepted it as correctly stating the contract and to have assented to its terms. In other words, the acceptance of the bill without dissent raises the presumption that all the terms therein were brought to the knowledge of the shipper and agreed to by him and, in the absence of fraud or mistake, he is estopped from thereafter denying that be assented to such terms. This rule applies with particular force where a shipper accepts a bill of lading with full knowledge of its contents and acceptance under such circumstances makes it a binding contract. An on board bill of lading is one in which it is stated that the goods have been received on board the vessel which is to carry the goods, whereas a received for shipment bill of lading is one in which it is stated that the goods have been received for shipment with or without specifying the vessel by which the goods are to be shipped. Received far shipment bills of lading are issued whenever conditions are not normal and there is insufficiency of shipping space. An on board bill of lading is issued when the goods have been actually placed aboard the ship with every reasonable expectation that the shipment is as good as on its way. It will be recalled that petitioner entered into the contract with Choju Co., Ltd. way back on May 20? 1980 or over a month before the expiry date of the letter of credit on June 30, 1980, thus giving it more than ample time to find a carrier that could comply with the requirements of shipment under the letter of credit. It is conceded that bills of lading constitute a class of contracts of adhesion. However, as ruled in the earlier case of Ong Yiu vs. Court of Appeals, et al. and reiterated in Servando, et al. vs, Philippine Steam Navigation Co., plane tickets as well as bills of lading are contracts not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent. The respondent court correctly observed in the present case that when the appellant received the bi ll of lading, it was tantamount to appellants adherence to the terms and conditions as embodied therein. Demurrage, in its strict sense, is the compensation provided for in the contract of affireightment for the detention of the vessel beyond the time agreed on for loading and unloading. Essentially, demurrage is the claim for damages for failure to accept delivery. In a broad sense, every improper detention of a vessel may be considered a demurrage. Liability for demurrage, using the word in its strictly technical sense, exists only when expressly stipulated in the contract. Using the term in its broader sense, damages in the nature of demurrage are recoverable for a breach of the implied obligation to load or unload the cargo with reasonable dispatch, but only by the party to whom the duty is owed and only against one who is a party to the shipping contract. NOCUM vs. LAGUNA TAYABAS BUS CO. Facts: A passenger boarded the respondents bus carrying a box which such person attested to the conductor as containing clothes and miscellaneous items. Appellee, who was a passenger in appellant's Bus No. 120 then making a trip within the barrio of Dita, Municipality of Bay, Laguna, was injured as a consequence of the explosion of firecrackers, contained in the box brought by the co-passenger. Issue: Did LTB Co. exercise the extraordinary diligence required? Held: Yes, fairness demands that in measuring a common carrier's duty towards its passengers, allowance must be given to the reliance that should be reposed on the sense of responsibility of all the passengers in regard to their common safety. It is to be presumed that a passenger will not take with him anything dangerous to the lives and limbs of his co-passengers, not to speak of his own. Not to be lightly considered must be the right to privacy to which each passenger is entitled. He cannot be subjected to any unusual search, when he protests the innocuousness of his baggage and nothing appears to indicate the contrary, as in the case at bar. In other

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words, inquiry may be verbally made as to the nature of a passenger's baggage when such is not outwardly perceptible, but beyond this, constitutional boundaries are already in danger of being transgressed. Calling a policeman to his aid, as suggested by the service manual invoked by the trial judge, in compelling the passenger to submit to more rigid inspection, after the passenger had already declared that the box contained mere clothes and other miscellaneous, could not have justified invasion of a constitutionally protected domain. Held: Yes. Art. 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a passenger on account of wilfull acts of other passengers, if the employees of the common carrier could have prevented the act through the exercise of the diligence of a good father of a family. In the present case, it is clear that because of the negligence of petitioner's employees, the seizure of the bus by Mananggolo and his men was made possible. Despite warning by the Philippine Constabulary at Cagayan de Oro that the Maranaos were planning to take revenge on the petitioner by burning some of its buses and the assurance of petitioner's operation manager, Diosdado Bravo, that the necessary precautions would be taken, petitioner did nothing to protect the safety of its passengers. Had petitioner and its employees been vigilant they would not have failed to see that the malefactors had a large quantity of gasoline with them. Under the circumstances, simple precautionary measures to protect the safety of passengers, such as frisking passengers and inspecting their baggages, preferably with non-intrusive gadgets such as metal detectors, before allowing them on board could have been employed without violating the passenger's constitutional rights. Petitioner invokes the ruling in Pilapil v. Court of Appeals, and De Guzman v. Court of Appeals, in support of its contention that the seizure of its bus by the assailants constitutes force majeure. In Pilapil v. Court of Appeals, it was held that a common carrier is not liable for failing to install window grills on its buses to protect the passengers from injuries cause by rocks hurled at the bus by lawless elements. On the other hand, in De Guzman v. Court of Appeals, it was ruled that a common carriers is not responsible for goods lost as a result of a robbery which is attended by grave or irresistable threat, violence, or force. It is clear that the cases of Pilapil and De Guzman do not apply to the prensent case. Art. 1755 of the Civil Code provides that "a common carrier is bound to carry the passengers as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances." Thus, we held in Pilapil and De Guzman that the respondents therein were not negligent in failing to take special precautions against threats to the safety of passengers which could not be foreseen, such as tortious or criminal acts of third persons. In the present case, this factor of unforeseeability (the second requisite for an event to be considered force majeure) is lacking. As already stated, despite the report of PC agent Generalao that the Maranaos were planning to burn some of petitioner's buses and the assurance of petitioner's operation manager (Diosdado Bravo) that the necessary precautions would be taken, nothing was really done by petitioner to protect the safety of passengers. The petitioner contends that Atty. Caorong was guilty of contributory negligence in returning to the bus to retrieve something. But Atty. Caorong did not act recklessly. It should be pointed out that the intended targets of the violence were petitioners and its employees, not its passengers. The assailant's motive was to retaliate for the loss of life of two Maranaos as a result of the collision between petitioner's bus and the jeepney in which the two Maranaos were riding.

Fairness demands that in measuring a common carrier's duty towards its passengers, allowance must be given to the reliance that should be reposed on the sense of responsibility of all the passengers in regard to their common safety. It is to be presumed that a passenger will not take with him anything dangerous to the lives and limbs of his co-passengers, not to speak of his own. Not to be lightly considered must be the right to privacy to which each passenger is entitled. He cannot be subjected to any unusual search, when he protests the innocuousness of his baggage and nothing appears to indicate the contrary, as in the case at bar. In other words, inquiry may be verbally made as to the nature of a passenger's baggage when such is not outwardly perceptible, but beyond this, constitutional boundaries are already in danger of being transgressed. Calling a policeman to his aid, as suggested by the service manual invoked by the trial judge, in compelling the passenger to submit to more rigid inspection, after the passenger had already declared that the box contained mere clothes and other miscellaneous, could not have justified invasion of a constitutionally protected domain. Fortune Express Inc. vs. CA Facts: A bus of petitioner figured in an accident with a jeepney in Kauswagan, Lanao del Norter, resulting in the death of several passengers of the jeepney, including two Maranaos. A constabulary agent investigated and found out that the owner of the jeepney was a Maranao and that certain Maranaos were planning to take revenge on the petitioner by burning some of its buses. The operations manager of petitioner was advised to take precautionary measures. Four days after the accident, three armed Maranaos who pretended to be passengers seized a bus petitioner bound for Iligan City and set it on fire. Atty. Talib Caorong, whose heirs are private respondents herein was a passenger of the bus and was shot and killed during the incident. The private respondents brought this suit for breach of contract of carriage. Complaint was dismissed in the lower court but its decision was reversed in CA, hence the instant petition, with petitioners contention that the acts of the Maranaos is caso fortuito. Issue: Was there breach of contract of carriage?

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Transportation Law Digests


Mananggolo, the leader of the group which had hijacked the bus, ordered the passengers to get off the bus as they intended to burn it and its driver. The armed men actually allowed Atty. Caorong to retrieve something from the bus. What apparently angered them was his attempt to help the driver of the bus by pleading for his life. He was playing the role of the good Samaritan. Certainly, this act cannot be considered an act of negligence, let alone recklessness. Llamoso inquired from his conductor if they could still accommodate passengers and learning that they were already full, he decided to bypass Pila and instead, to proceed along the national highway. Virgilio admitted that there was another vehicle ahead of him. The general rule is that the vehicle on the national highway has the right of way as against a feeder road. Another general rule is that a vehicle coming from the right has the right of way voer the vehicle coming from the left.The general rules on right of way may be invoked only if both the vehicles approach the intersection at almost the same time. In the case at bar, both roads are national roads. Also, the KBL Bus was still far from the intersection when the jeepney reached the same. As testified by Atty. Conrado Manicad, he stopped at the intersection to give way to the jeepney driven by Grajera. However, there was a collision between the jeepney and the bus. The KBL bus ignored the stopped vehicles and the other vehicles behind Atty. Manicad and overtook both vehicles at the intersection therefore causing the accident. Kapalaran filed a suit against the owner of the jeepney and its driver. However, it lost the case. Furthermore, the Court did not hold as liable the driver of the bus. ISSUE: Whether or not KBL is accountable, considering the driver of the bus was not held liable by the Courts. HELD: Yes, Kapalaran is liable. The driver violated certain general rules, and provisions in the Land Transportation and Traffice Code. Hence, he can be presumed negligent. The patent and gross negligence on the part of Kapalarans driver raised the legal presumption that Kapalaran as employer was guilty of negligene either in the selection or supervision of its bus drivers. Where the employer is held liable for damages, it has of course a right of recourse against its own negligent employee. If petitioner Kapalaran was interested in maintaining its right of recourse against or reimbursement from its own driver, it should have appealed from that portion of the trial courts decision which had failed to hold the bus driver accountable for damages. The liability of employer under Article 2180 of the Civil Code is direct and immediate; it is not conditioned upon prior recourse against the negligent on its own part. The law requires Kapalaran as common carrier to exercise extraordinary diligence in carrying and transporting their passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances. In requiring the highest possible degree of diligence from common carriers and creating a presumption of negligence against them, the law compels them to curb the recklessness of their drivers. The law seeks to stop and prevent the slaughter and maiming of people (whether passengers or not) and the

Art. 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a passenger on account of wilfull acts of other passengers, if the employees of the common carrier could have prevented the act through the exercise of the diligence of a good father of a family. In the present case, it is clear that because of the negligence of petitioner's employees, the seizure of the bus by Mananggolo and his men was made possible. Despite warning by the Philippine Constabulary at Cagayan de Oro that the Maranaos were planning to take revenge on the petitioner by burning some of its buses and the assurance of petitioner's operation manager, Diosdado Bravo, that the necessary precautions would be taken, petitioner did nothing to protect the safety of its passengers. Had petitioner and its employees been vigilant they would not have failed to see that the malefactors had a large quantity of gasoline with them. Under the circumstances, simple precautionary measures to protect the safety of passengers, such as frisking passengers and inspecting their baggages, preferably with non-intrusive gadgets such as metal detectors, before allowing them on board could have been employed without violating the passenger's constitutional rights. The acts of Maranaos could not be considered as caso fortuito because there was already a warning by the PC. No contributory negligence could be attributed to the deceased. The assailant's motive was to retaliate for the loss of life of two Maranaos as a result of the collision between petitioner's bus and the jeepney in which the two Maranaos were riding. The armed men actually allowed deceased to retrieve something from the bus. What apparently angered them was his attempt to help the driver of the bus by pleading for his life. KAPALARAN BUS LINE V. CORONADO FACTS: On August, 1982, the jeepney driven by Lope Grajera was coming from Laguna on its way to Sta. Cruz. As it reached the intersection where there is a traffic sign yield, it stopped an cautiously treated the intersection as a Thru Stop street, which it is not. The Kapalaran Bus Line was on its way from Sta. Cruz, Laguna driven by its driver, Virgilio Llamoso, on its way towards Manila. As the KBL neared the intersection,

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destruction of property (whether freight or not) on our highways by buses, the very size and power of which seem often to inflame the minds of their drivers. Standard Vacuum Oil Co. vs. Luzon Stevedoring Co. (GR L-5203, 18 April 1956) Facts: Standard Vacuum Oil Co. entered into a contract with Luzon Stevedoring Co. Inc. to transport between the ports of Manila and Nin Bay, Sagay, Iloilo, 2,916.44 barrels of bulk gasoline belonging to the former. The gasoline was delivered in accordance with the contract but Luzon Stevedoring failed to transport it to its place of destination. It appeared that the tugboat towing barge L-522 which was laden with gasoline, among others, stalled due to a broken idler during the morning of 4 February 1947. The barges that tied to it broke off due to the rough condition of the sea during the afternoon. The tugboat and the barges were dashed against rocks, the tugboat sunk, and barge L-522 was so badly damaged that the gasoline leaked out. Standard Vacuum Oil brought an action in the CFI of Manila to recover the sum of P75,578.60 as damages. Luzon Stevedoring, in its answer, pleaded that its failure to deliver the gasoline was due to fortuitous event or caused by circumstances beyond its control and not to its fault or negligence or that of any of its employees. The court, after receiving the evidence, rendered decision finding that the disaster that had befallen the tugboat was the result of an unavoidable accident and the loss of the gasoline was due to a fortuitous event which was beyond the control of Luzon Stevedoring and, consequently, dismissed the case with costs against Standard Vacuum Oil. The Supreme Court reversed the decision appealed from; and ordered Luzon Stevedoring to pay to Standard Vacuum Oil Co. the sum of P75,578.50, with legal interest from the date of the filing of the complaint, with costs. 1. Luzon Stevedoring Co. not a common carrier but has earned level of a public utility; Contract covered by Code of Commerce Luzon Stevedoring is a private stevedoring company engaged in transporting local products, including gasoline in bulk and has a fleet of about 140 tugboats and about 90 per cent of its business is devoted to transportation. Though it is engaged in a limited contract of carriage in the sense that it chooses its customers and is not opened to the public, nevertheless, the continuity of its operations in this kind of business have earned for it the level of a public utility. Herein, the contract between Standard Vacuum Oil and Luzon Stevedoring comes therefore under the provisions of the Code of Commerce. 2. Article 361 of the Code of Commerce Article 361 of the Code of Commerce provides that the merchandise shall be transported at the risk and venture of the shipper, if the contrary was not expressly stipulated. Therefore, all damages and impairment suffered by the goods during the transportation, by reason of accident, force majeure, or by virtue of the nature or defect of the articles, shall be for the account and risk of the shipper. The proof of these accidents is incumbent on the carrier. 3. Merchandise transported at risk of shipper unless otherwise stipulated; Damages due to force majeure to be proven by carrier Whenever merchandise is transported on the sea by virtue of a contract entered into between the shipper and the carrier, the merchandise is deemed transported at the risk and venture of the shipper, if the contrary is not stipulated, and all damages suffered by the merchandise during the transportation by reason of accident or force majeure shall be for the account and risk of the shipper, but the proof of these accidents is incumbent on the carrier. 4. Proof required of carrier All a shipper has to prove in connection with sea carriage is delivery of the merchandise in good condition and its non-delivery at the place of destination in order that the burden of proof may shift to the carrier to prove any of the accidents above adverted to. Shippers who are forced to ship goods on an ocean liner or any other ship have some legal rights, and when goods are delivered on board a ship in good order and condition, and the shipowner delivers them to the shipper in bad order and condition, it then devolves upon the shipowner to both allege and prove that the goods were damaged by reason of some fact which legally exempts him from liability (Mirasol vs. Robert Dollar Co., 53 Phil., 129). 5. Tugboat Snapper not seaworthy The tugboat Snapper was acquired by Luzon Stevedoring from the Foreign Liquidation Commission. It was a surplus property. It was a deep-sea tugboat that had been in the service of the United States Armed Forces prior to its purchase by the Luzon Stevedoring Co. The tugboat was put into operation without first submitting it to an overhaul in a dry-dock. The tugboat had previously made several trips and each time it had to obtain a special permit from the Bureau of Customs because it had never been dry-docked and did not have complete equipment to be able to obtain a permanent permit. The special permits that were issued by said Bureau specifically state that they were issued pending submission of plans and load line certificate, including test and final inspection of equipment. When the tugboat was inspected by the Bureau of Customs on 18 October 1946, it found it to be inadequately equipped and so the Bureau required Luzon Stevedoring to provide it with the requisite equipment but it was never able to complete it. 6. Dry-dock facilities; No justification for Luzon Stevedoring to put unequipped tugboat in business Although there were then no dry-dock facilities in the Philippines, this does not mean that they could not be obtained elsewhere. It being a surplus property, a drydock inspection was a must to put the tugboat in a sea going condition. The fact that the deficiency in the equipment was due to the fact that no such equipment was available at the time, this did not justify Luzon Stevedoring in putting such tugboat in business even if unequipped merely to make a profit. Nor could the fact that the tugboat was given a special permit by the Bureau of Customs to make the trip relieve Luzon Stevedoring from liability. 7. Luzon Stevedoring negligent, did not use reasonable diligence The fact that the tugboat was a surplus property, has not been dry-docked, and was not provided with the requisite equipment to make it seaworthy, shows that Luzon Stevedoring did not use reasonable diligence in putting the tugboat in such a

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condition as would make its use safe for operation. Where owner buys old tug, licensed coastwise, and equips it for ocean going, it is negligence to send tug out without knowing something of her stability and especially without stability test, where history and performance with respect to crankiness and tenderness are matters of official record. 8. Lack of spare parts show lack of precaution and diligence Another circumstance which shows the lack of precaution and diligence taken by Luzon Stevedoring to make the travel of the tugboat safe, is the failure to carry on board the necessary spare parts. When the idler was broken, the engineer of the tugboat examined it for the first time and it was only then that he found that there were no spare parts to use except a worn out spare driving chain. Vessels motored by diesel engines it is necessary always to carry spare chains, ball bearings and chain drives. This was not done. 9. Tug liable for damage to barges cargo by faulty equipment A tug engaged to tow a barge is liable for damage to the cargo of the barge caused by faulty equipment of the tug. 10. Deficiency or incompetence in the manpower of the tugboat Another circumstance, which shows the lack of precaution and diligence, refers to the deficiency or incompetence in the manpower of the tugboat. According to law, a tugboat of the tonnage and powers of one like the Snapper is required to have a complement composed of one first mate, one second mate, one third mate, one chief engineer, one second engineer, and one third engineer, (section 1203, Revised Administrative Code), but when the trip in question was undertaken, it was only manned by one master, who was merely licensed as a bay, river, and lake patron, one second mate, who was licensed as a third mate, one chief engineer who was licensed as third motor engineer, one assistant engineer, who was licensed as a bay, river, and lake motor engineer, and one second assistant engineer, who was unlicensed. The employment of this crew to perform functions beyond its competence and qualifications is not only risky but against the law and if a mishap is caused, one cannot but surmise that such incompetence has something to do with the mishap. The fact that the tugboat had undertaken several trips before with practically the same crew without any untoward consequence, cannot furnish any justification for continuing in its employ a deficient or incompetent personnel contrary to law and the regulations of the Bureau of Customs. 11. Seaworthiness defined Generally, seaworthiness is that strength, durability and engineering skill made a part of a ships construction and continued maintenance, together with a competent and sufficient crew, which would withstand the vicissitudes and dangers of the elements which might reasonably be expected or encountered during her voyage without loss or damage to her particular cargo. 12. Efforts fall short of diligence and precaution required in the situtation The efforts made by Luzon Stevedoring fall short of that diligence and precaution that are demanded by the situation to save the tugboat and the barge it was towing from disaster. More than 24 hours had elapsed before the tug Tamban showed up to extend help. The delay was caused not so much because of the lack of available ships in the vicinity where the Snapper stalled but because Luzon Stevedoring did not have in readiness any tugboat sufficient in tonnage and equipment to attend to the rescue. The tug Tamban that was ordered to extend help was fully inadequate for that purpose. It was a small vessel that was authorized to operate only within Manila Bay and did not even have any map of the Visayan Islands. A public utility that is engaged in sea transportation even for a limited service with a fleet of 140 tugboats should have a competent tug to rush for towing or repairs in the event of untoward happening overseas. If Luzon Stevedoring had only such a tug ready for such an emergency, this disaster would not have happened. Luzon Stevedoring could have avoided sending a poorly equipped tug which failed to do job. 13. Cause of disaster attributed to negligence or lack of precaution While the breaking of the idler may be due to an accident, or to something unexpected, the cause of the disaster which resulted in the loss of the gasoline can only be attributed to the negligence or lack of precaution to avert it on the part of Luzon Stevedoring. It had enough time to effectuate the rescue if it had only a competent tug for the purpose because the weather was good from 3:00 a.m. to 12:00 p.m. of 4 February 1947 and it was only in the afternoon that the wind began to blow with some intensity, but failed to do so because of that shortcoming. The loss of the gasoline certainly cannot be said to be due to force majeure or unforeseen event but to the failure of Luzon Stevedoring to extend adequate and proper help. DELSAN TRANSPORT LINES, INC. vs. COURT OF APPEALS G.R. No. 127897 - November 15, 2001 FACTS: Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport Lines, Inc., for a period of one year whereby the said common carrier agreed to transport Caltexs industrial fuel oil from the Batangas-Bataan Refinery to different parts of the country. Under the contract, petitioner took on board its vessel, MT Maysun, 2,277.314 kiloliters of industrial fuel oil of Caltex to be delivered to the Caltex Oil Terminal in Zamboanga City. The shipment was insured with the private respondent, American Home Assurance Corporation. On August 14, 1986, MT Maysun set sail from Batangas for Zamboanga City. Unfortunately, the vessel sank in the early morning of August 16, 1986 near Panay Gulf in the Visayas taking with it the entire cargo of fuel oil. Subsequently, private respondent paid Caltex the sum of Five Million Ninety-Six Thousand Six Hundred Thirty-Five Pesos and Fifty-Seven Centavos (P5,096,635.57) representing the insured value of the lost cargo. Exercising its right of subrogation under Article 2207 of the New Civil Code, private respondent demanded of the

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Transportation Law Digests


petitioner the same amount it paid to Caltex. Due to its failure to collect from the petitioner despite prior demand, private respondent filed a complaint with the Regional Trial Court of Makati, Branch 137, for collection of a sum of money. After trial, the trial court rendered a decision on November 29, 1990 dismissing the complaint. The trial court found that the vessel, MT Maysun, was seaworthy and that the incident was caused by unexpected inclement weather condition or force majeure, thus, exempting the common carrier from liability for the loss of its cargo. The decision of the trial court, however, was reversed, on appeal, by the Court of Appeals. The appellate court ruled that petitioner is liable on its obligation as common carrier to herein private respondent insurance company as subrogee of Caltex. The subsequent motion for reconsideration was denied by the appellate court. Hence, petitioner filed the instant petition before the Supreme Court. ISSUE: Whether or not the payment made by private respondent to Caltex amounted to an automatic admission of the vessels seaworthiness. RULING: No. humiliation She prayed that she be awarded moral damages of P500,000.00, exemplary damages of P200,000.00, attorney's fees of P100,000.00 and actual damages sustained by her in the amount of US$1,546.15. Defendant denied that plaintiff was a confirmed passenger since the ticket issued to her was on an open space basis which meant that she could only be accommodated if any of the confirmed passengers failed to show up at the airport before departure. The lower court rendered judgment in favor of plaintiff and awarded the amount of damages as prayed for. Said decision was affirmed hence the instant petition. Issue: Whether or not the award of damages was proper. Held: Yes, but subject to modifications. Findings of fact show that plaintiff, a businesswoman and a multimillionaire in her own right as evidenced (proprietor of Sampaguita Restaurant, New York City USA; Treasurer of the Molave Development Corp., Phil., proprietor of Cavite Household Appliances and Rowena's Handicraft, Phil.), was on a business trip with a Pan-Am ticket. While in Sto. Domingo, after talking thru the telephone with a certain Mrs. Lilibeth Warner, the former said that she (plaintiff) must be in San Juan that same day, to sign her contract or lose it. Plaintiff expected to make a profit of $1,000 in said contract but since she wasnt able to board the flight, said profit was lost. Other instances which caused moral damage to the plaintiff are the following: 1. While plaintiff was standing in line preparatory to boarding the aircraft, Rene Nolasco, a Pan Am employee ordered her in a loud voice to step out of line because her ticket was not confirmed to her consternation and embarrassment in the presence of several people who heard and order. Despite her Pleas she was not allowed to board the aircraft. And as if to add insult to injury, she saw that her seat was given to a white man. 2. When the plane took off without her but with her luggage on board. She was forced to return to her hotel without any luggage much less an extra dress. It was a good thing that the Hotel people remembered her because they do not usually accommodate female guests, without any luggage to stay in the hotel. While normally, hotel accommodation was paid before departure, plaintiff was made to pay the room accommodation petition in advance. It is clear from the evidence that defendant issued a Passenger Ticket and Baggage Check with assigned seat and the corresponding pass and baggage claim symbol. Plaintiff was made to pay the fare and terminal fee. At the immigration section, plaintiff's passport was stamped accordingly. Plaintiff's name was included in the passenger manifest. And these show that plaintiff was indeed a confirmed passenger of defendant's Flight 431 for San Juan. There was, therefore, a contract or carriage perfected between plaintiff and defendant for the latter to take plaintiff to her place of destination. By refusing to accommodate plaintiff in said flight, defendant had willfully and knowingly violated the contract of carriage and failed to

The payment made by the private respondent for the insured value of the lost cargo operates as waiver of its (private respondent) right to enforce the term of the implied warranty against Caltex under the marine insurance policy. However, the same cannot be validly interpreted as an automatic admission of the vessels seaworthiness by the private respondent as to foreclose recourse against the petitioner for any liability under its contractual obligation as a common carrier. The fact of payment grants the private respondent subrogatory right which enables it to exercise legal remedies that would otherwise be available to Caltex as owner of the lost cargo against the petitioner common carrier. EDGAR COKALIONG SHIPPING LINES, INCvs. UCPB GENERAL INSURANCE COMPANY, INC., PAN AMERICAN WORLD AIRWAYS, INC. vs. IAC Facts: Private respondent Teofista P. Tinitigan, filed a complaint against petitioner for damages arising from defendant's alleged refusal to accommodate her on Pan Am Flight No. 431 from Sto. Domingo, Republica Dominica to San Juan, Puerto Rico notwithstanding the fact that she possessed a confirmed plane ticket purchased from Pan Ams Office at Sto. Domingo and thus causing her to suffer mental anguish, serious anxiety, besmirched reputation, wounded feelings and social

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Transportation Law Digests


bring the plaintiff to her place of destination under its contract with plaintiff. Bad faith was also present. Self enrichment or fraternal interest and not personal ill will may have been the motive of defendant, but it is malice nevertheless. The fact that plaintiff was ordered out under some pretext in order to accommodate a white man in an airline owned by an American firm with a reputation for bumping off nonCaucasian to accommodate whites is very regrettable. Defendant having breached its contract with plaintiff in bad faith, it is not error to have awarded exemplary damages. The rational behind exemplary or corrective damages is, as the name implies, to provide an example or correction for public good . In view of it nature, it should be imposed in such amount as to sufficiently and effectively deter similar breach of contract in the future by defendant and other airlines. An award of attorney's fees is also in order, having found bad faith on the part of defendant. We believe, however the amount of some damages awarded to be exorbitant: We therefore reduce the moral and exemplary damages to the combined total sum of Two Hundred Thousand (P200,000.00) Pesos and the attorney's fees to Twenty Thousand (P20,000.00) Pesos. The award of actual damages in the amount of One Thousand Five Hundred Forty Six American dollars and fifteen cents (US$1,546.15) computed at the exchange rate prevailing at the time of payment is hereby retained and granted. By refusing to accommodate plaintiff in said flight, defendant had willfully and knowingly violated the contract of carriage and failed to bring the plaintiff to her place of destination under its contract with plaintiff. Bad faith was also present. Self enrichment or fraternal interest and not personal ill will may have been the motive of defendant, but it is malice nevertheless. The fact that plaintiff was ordered out under some pretext in order to accommodate a white man in an airline owned by an American firm with a reputation for bumping off non- Caucasian to accommodate whites is very regrettable. Defendant having breached its contract with plaintiff in bad faith, it is not error to have awarded exemplary damages. The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction for public good . In view of it nature, it should be imposed in such amount as to sufficiently and effectively deter similar breach of contract in the future by defendant and other airlines. An award of attorney's fees is also in order, having found bad faith on the part of defendant. CALALAS vs. CA Facts: Private respondent Eliza Sunga, then a college freshman majoring in Physical Education at the Siliman University, took a passenger jeepney owned and operated by petitioner Vicente Calalas. As the jeepney was filled to capacity of about 24 passengers, Sunga was given by the conductor an "extension seat," a wooden stool at the back of the door at the rear end of the vehicle. On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger off. As she was seated at the rear of the vehicle, Sunga gave way to the outgoing passenger. Just as she was doing so, an Isuzu truck driven by Iglecerio Verena and owned by Francisco Salva bumped the left rear portion of the jeepney. As a result, Sunga was injured. Sunga filed a complaint for damages against Calalas, alleging violation of the contract of carriage by the former in failing to exercise the diligence required of him as a common carrier. Calalas, on the other hand, filed a third-party complaint against Francisco Salva, the owner of the Isuzu truck. The lower court rendered judgment against Salva as third-party defendant and absolved Calalas of liability, holding that it was the driver of the Isuzu truck who was responsible for the accident. It took cognizance of another case (Civil Case No. 3490), filed by Calalas against Salva and Verena, for quasi-delict, in which the same court held Salva and his driver Verena jointly liable to Calalas for the damage to his jeepney. On appeal to the Court of Appeals, the ruling of the lower court was reversed on the ground that Sunga's cause of action was based on a contract of carriage, not quasi-delict, and that the common carrier failed to exercise the diligence required under the Civil Code. The appellate court dismissed the third-party complaint against Salva and adjudged Calalas liable for damages to Sunga. Hence, this petition. Petitioner contends that the ruling in Civil Case No. 3490 that the negligence of Verena was the proximate cause of the accident negates his liability and that to rule otherwise would be to make the common carrier an insurer of the safety of its passengers. He contends that the bumping of the jeepney by the truck owned by Salva was a caso fortuito. Petitioner further assails the award of moral damages to Sunga on the ground that it is not supported by evidence. Issue: Should be petitioner be absolved if his contentions are considered? Held: No. There is no basis for the contention that the ruling in Civil Case No. 3490, finding Salva and his driver Verena liable for the damage to petitioner's jeepney, should be binding on Sunga. It is immaterial that the proximate cause of the collision between the jeepney and the truck was the negligence of the truck driver. The doctrine of proximate cause is applicable only in actions for quasi-delict, not in actions involving breach of contract. The doctrine is a device for imputing liability to a person where there is no relation between him and another party. In such a case, the obligation is created by law itself. But, where there is a pre-existing contractual relation between the parties, it is the parties themselves who create the obligation, and the function of the law is merely to regulate the relation thus created. Insofar as

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contracts of carriage are concerned, some aspects regulated by the Civil Code are those respecting the diligence required of common carriers with regard to the safety of passengers as well as the presumption of negligence in cases of death or injury to passengers. In quasi-delict, the negligence or fault should be clearly established because it is the basis of the action, whereas in breach of contract, the action can be prosecuted merely by proving the existence of the contract and the fact that the obligor, in this case the common carrier, failed to transport his passenger safely to his destination. In case of death or injuries to passengers, Art. 1756 of the Civil Code provides that common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code. This provision necessarily shifts to the common carrier the burden of proof. Now, did the driver of jeepney carry Sunga "safely as far as human care and foresight could provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances" as required by Art. 1755? We do not think so. First, the jeepney was not properly parked, its rear portion being exposed about two meters from the broad shoulders of the highway, and facing the middle of the highway in a diagonal angle. The petitioner's driver took in more passengers than the allowed seating capacity of the jeepney. These are violations of the Land Transportation and Traffic Code. Petitioner should have foreseen the danger of parking his jeepney with its body protruding two meters into the highway. As a general rule, moral damages are not recoverable in actions for damages predicated on a breach of contract for it is not one of the items enumerated under Art. 2219 of the Civil Code. As an exception, such damages are recoverable: (1) in cases in which the mishap results in the death of a passenger, as provided in Art. 1764, in relation to Art. 2206(3) of the Civil Code; and (2) in the cases in which the carrier is guilty of fraud or bad faith, as provided in Art. 2220.In this case, there is no legal basis for awarding moral damages since there was no factual finding by the appellate court that petitioner acted in bad faith in the performance of the contract of carriage. It is immaterial that the proximate cause of the collision between the jeepney and the truck was the negligence of the truck driver. The doctrine of proximate cause is applicable only in actions for quasi-delict, not in actions involving breach of contract. The doctrine is a device for imputing liability to a person where there is no relation between him and another party. In such a case, the obligation is created by law itself. But, where there is a pre-existing contractual relation between the parties, it is the parties themselves who create the obligation, and the function of the law is merely to regulate the relation thus created. Insofar as contracts of carriage are concerned, some aspects regulated by the Civil Code are those respecting the diligence required of common carriers with regard to the safety of passengers as well as the presumption of negligence in cases of death or injury to passengers. In case of death or injuries to passengers, Art. 1756 of the Civil Code provides that common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code. This provision necessarily shifts to the common carrier the burden of proof. The driver of jeepney did not carry safely as far as human care and foresight could provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances" as required by Art. 1755. First, the jeepney was not properly parked, its rear portion being exposed about two meters from the broad shoulders of the highway, and facing the middle of the highway in a diagonal angle. The petitioner's driver took in more passengers than the allowed seating capacity of the jeepney. These are violations of the Land Transportation and Traffic Code. Therefore, there is no assumption of risk by the passenger.

ISAAC vs. A.L. AMMEN TRANS. CO.,SUPRA Del Prado v. Meralco Facts: Teodorico Florenciano, Meralcos motorman, was driving the companys street car along Hidalgo Street. Plaintiff Ignacio Del Prado ran across the street to catch the car. The motorman eased up but did not put the car into complete stop. Plaintiff was able to get hold of the rail and step his left foot when the car accelerated. As a result, plaintiff slipped off and fell to the ground. His foot was crushed by the wheel of the car. He filed a complaint for culpa contractual. Issues: (1) Whether the motorman was negligent (2) Whether Meralco is liable for breach of contract of carriage (3) Whether there was contributory negligence on the part of the plaintiff Held: (1) We may observe at the outset that there is no obligation on the part of a street railway company to stop its cars to let on intending passengers at other points than those appointed for stoppage. Nevertheless, although the motorman of this car was

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Transportation Law Digests


not bound to stop to let the plaintiff on, it was his duty to do no act that would have the effect of increasing the plaintiff's peril while he was attempting to board the car. The premature acceleration of the car was, in our opinion, a breach of this duty. (2) The relation between a carrier of passengers for hire and its patrons is of a contractual nature; and a failure on the part of the carrier to use due care in carrying its passengers safely is a breach of duty (culpa contractual). Furthermore, the duty that the carrier of passengers owes to its patrons extends to persons boarding the cars as well as to those alighting therefrom. Where liability arises from a mere tort (culpa aquiliana), not involving a breach of positive obligation, an employer, or master, may exculpate himself by proving that he had exercised due diligence to prevent the damage; whereas this defense is not available if the liability of the master arises from a breach of contractual duty (culpa contractual). In the case before us the company pleaded as a special defense that it had used all the diligence of a good father of a family to prevent the damage suffered by the plaintiff; and to establish this contention the company introduced testimony showing that due care had been used in training and instructing the motorman in charge of this car in his art. But this proof is irrelevant in view of the fact that the liability involved was derived from a breach of obligation. (3) It is obvious that the plaintiff's negligence in attempting to board the moving car was not the proximate cause of the injury. The direct and proximate cause of the injury was the act of appellant's motorman in putting on the power prematurely. Again, the situation before us is one where the negligent act of the company's servant succeeded the negligent act of the plaintiff, and the negligence of the company must be considered the proximate cause of the injury. The rule here applicable seems to be analogous to, if not identical with that which is sometimes referred to as the doctrine of "the last clear chance." In accordance with this doctrine, the contributory negligence of the party injured will not defeat the action if it be shown that the defendant might, by the exercise of reasonable care and prudence, have avoided the consequences of the negligence of the injured party. The negligence of the plaintiff was, however, contributory to the accident and must be considered as a mitigating circumstance. petitioner for the voyage of M/V Asia Thailand vessel to Cagayan de Oro City from Cebu City on November 12, 1991. At around 5:30 in the evening of November 12, 1991, respondent boarded the M/V Asia Thailand vessel during which he noticed that some repairs were being undertaken on the engine of the vessel. The vessel departed at around 11:00 in the evening with only one (1) engine running. After an hour of slow voyage, the vessel stopped near Kawit Island and dropped its anchor thereat. After half an hour of stillness, some passengers demanded that they should be allowed to return to Cebu City for they were no longer willing to continue their voyage to Cagayan de Oro City. The captain acceded to their request and thus the vessel headed back to Cebu City. In Cebu City, plaintiff together with the other passengers who requested to be brought back to Cebu City, were allowed to disembark. Thereafter, the vessel proceeded to Cagayan de Oro City. Petitioner, the next day, boarded the M/V Asia Japan for its voyage to Cagayan de Oro City, likewise a vessel of defendant. On account of this failure of defendant to transport him to the place of destination on November 12, 1991, respondent Arroyo filed before t he trial court an action for damage arising from bad faith, breach of contract and from tort, against petitioner. The trial court ruled only for breach of contract. The CA reversed and set aside said decision on appeal. ISSUE: Whether or not the petitioner Trans-Asia was negligent? HELD: Yes. Before commencing the contracted voyage, the petitioner undertook some repairs on the cylinder head of one of the vessels engines. But even before it could finish these repairs, it allowed the vessel to leave the port of origin on only one functioning engine, instead of two. Moreover, even the lone functioning engine was not in perfect condition as sometime after it had run its course, it conked out. This caused the vessel to stop and remain adrift at sea, thus in order to prevent the ship from capsizing, it had to drop anchor. Plainly, the vessel was unseaworthy even before the voyage began. For a vessel to be seaworthy, it must be adequately equipped for the voyage and manned with a sufficient number of competent officers and crew.[21] The failure of a common carrier to maintain in seaworthy condition its vessel involved in a contract of carriage is a clear breach of is duty

Trans-Asia Shipping Lines vs. CA (GR 118126, 4 March 1996) FACTS: Respondent Atty. Renato Arroyo, a public attorney, bought a ticket from herein

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prescribed in Article 1755 of the Civil Code. Inter Orient Maritime Enterprises Inc, et al vs NLRC Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie! INTERORIENT MARITIME ENTERPRISES, INC., FIRCROFT SHIPPING CORPORATION and TIMES SURETY & INSURANCE CO., INC., petitioners, vs NATIONAL LABOR RELATIONS COMMISSION and CONSTANCIA PINEDA, respondents. G.R. No. 115497 September 16, 1996 Facts: The instant petition seeks the reversal and/or modification of the Resolution dated March 30, 1994 of public respondent National Labor Relations Commission dismissing the appeals of petitioners and affirming the decision dated November 16, 1992 of Philippine Overseas Employment Administration (POEA) Administrator Felicisimo C. Joson, This is a claim for death compensation benefits filed by Constancia Pineda as heir of her deceased son, seaman Jeremias Pineda, against Interorient Maritime Enterprises, Inc. and its foreign principal, Fircroft Shipping Corporation and the Times Surety and Insurance Co., Inc. The following facts were found by the POEA Administrator. On September 28, 1989, he finished his contract and was discharged from the port of Dubai for repatriation to Manila; that his flight schedule from Dubai to the Philippines necessitated a stopover at Bangkok, Thailand, and during said stopover he disembarked on his own free will and failed to join the connecting flight to Hongkong with final destination to Manila; that on October 5, 1990, it received a fax transmission from the Department of Foreign Affairs to the effect that Jeremias Pineda was shot by a Thai Officer on duty on October 2, 1989 at around 4:00 P.M.; that the police report submitted to the Philippine Embassy in Bangkok confirmed that it was Pineda who "approached and tried to stab the police sergeant with a knife and that therefore he was forced to pull out his gun and shot Pineda" Petitioner contends that they are not liable to pay any death/burial benefits pursuant to the provisions of Par. 6, Section C. Part II, POEA Standard Format of Employment which state(s) that "no compensation shall be payable in respect of any injury, (in)capacity, disability or death resulting from a willful (sic) act on his own life by the seaman"; that the deceased seaman died due to his own willful (sic) act in attacking a policeman in Bangkok who shot him in self-defense. After the parties presented their respective evidence, the POEA Administrator rendered his decision holding petitioners liable for death compensation benefits and burial expenses. Petitioners appealed the POEA decision to the public respondent. In a Decision dated March 30, 1994, public respondent upheld the POEA. Thus, this recourse to this Court by way of a special civil action for certiorari per Rule 65 of the Rules of Court. Issue: Whether the petitioners can be held liable for the death of seaman Jeremias Pineda? Held: The petitioners contention that the assailed Resolution has no factual and legal bases is belied by the adoption with approval by the public respondent of the findings of the POEA Administrator, which recites at length the reasons for holding that the deceased Pineda was mentally sick prior to his death and concomitantly, was no longer in full control of his mental faculties. In this instance, seaman Pineda, who was discharged in Dubai, a foreign land, could not reasonably be expected to immediately resort to and avail of psychiatric examination, assuming that he was still capable of submitting himself to such examination at that time, not to mention the fact that when he disembarked in Dubai, he was already discharged and without employment his contract having already run its full term and he had already been put on a plane bound for the Philippines. Such mental disorder became evident when he failed to join his connecting flight to Hongkong, having during said stopover wandered out of the Bangkok airport's immigration area on his own. This Court agrees with the POEA Administrator that seaman Pineda was no longer acting sanely when he attacked the Thai policeman. The report of the Philippine Embassy in Thailand dated October 9, 1990 depicting the deceased's strange behavior shortly before he was shot dead, after having wandered around Bangkok for four days, clearly shows that the man was not in full control of his own self. The POEA Administrator ruled, and this Court agrees, that since Pineda attacked the Thai policeman when he was no longer in complete control of his mental faculties, the aforequoted provision of the Standard Format Contract of Employment exemption the employer from liability should not apply in the instant case. Firstly,

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Transportation Law Digests


the fact that the deceased suffered from mental disorder at the time of his repatriation means that he must have been deprived of the full use of his reason, and that thereby, his will must have been impaired, at the very least. Thus, his attack on the policeman can in no wise be characterized as a deliberate, willful or voluntary act on his part. Secondly, and apart from that, we also agree that in light of the deceased's mental condition, petitioners "should have observed some precautionary measures and should not have allowed said seaman to travel home alone", and their failure to do so rendered them liable for the death of Pineda. Petitioners further argue that the cause of Pineda's death "is not one of the occupational diseases listed by law", and that in the case of De Jesus vs. Employee's Compensation Commission, this Court held that ". . . for the sickness and the resulting disability or death to be compensable, the sickness must be the result of an occupational disease listed under Annex 'A' of the Rules (the Amended Rules on Employee's Compensation) with the conditions set therein satisfied; otherwise, proof must be shown that the risk of contracting the disease is increased by the working conditions." The foreign employer may not have been obligated by its contract to provide a companion for a returning employee, but it cannot deny that it was expressly tasked by its agreement to assure the safe return of said worker. The uncaring attitude displayed by petitioners who, knowing fully well that its employee had been suffering from some mental disorder, nevertheless still allowed him to travel home alone, is appalling to say the least. Such attitude harks back to another time when the landed gentry practically owned the serfs, and disposed of them when the latter had grown old, sick or otherwise lost their usefulness. WHEREFORE, premises considered, the petition is hereby DISMISSED and the Decision assailed in this petition is AFFIRMED. Costs against petitioners. SO ORDERED. ground, which happened to be the nearest port of Manila. IHCR demanded HAL to continue the journey by transferring the cargoes to a non-German ship (as agreed upon in the Bill of Lading in case of war). HAL declined. IHCR sued HAL in Manila. RTC Manila issued a writ of replevin hence IHCR recovered its cargoes, it then contracted a separate ship to continue the transport. HAL claimed that IHCR is liable for general averages for the expenses of the Suevia while at the port of Manila. IHCR claimed that HAL is liable for the expenses incurred by ICHR in contracting a different shipping line. ISSUE: Whether or not IHCR is liable for general averages. HELD: No. The cargoes were not contraband and are not in danger at war. Suevias captain merely thought about the safety of the ship, not of the cargos hence there is no common benefit here between the ship and the cargo; therefore, general averages do not exist. HAL is liable for the expenses incurred by IHCR in contracting a different shipper. By the terms of the contract of affreightment HAL was bound to forward the cargo to Vladivostock at the steamers expense, not necessarily by a steamer belonging to HAL; and it does not by any means follow that it is not liable for the expense incurred by IHCR in completing the unfinished portion of the voyage in another ship. Cokaliong v. UCPB Summa Insurance vs. CA Yangco vs. Lacerna Facts: At about one o'clock in the afternoon of May 26, 1927, the steamer S.S. Negros, belonging to petitioner here, Teodoro R. Yangco, left the port of Romblon on its return trip to Manila. Typhoon signal No. 2 was then up, of which fact the captain was duly advised and his attention thereto called by the passengers themselves before the vessel set sail. The boat was overloaded as indicated by the load line which was 6 to 7 inches below the surface of the water. The passengers, numbering about 180, were overcrowded, the vessel's capacity being limited to only 123 passengers. As the sea became increasingly violent, the captain ordered the vessel to turn left, evidently to return to port, but in the maneuver, the vessel was caught sidewise by a big wave which caused it to capsize and sink. Many of the passengers died in the mishap. Separate civil actions were filed against petitioner to recover damages for the death of the passengers.

Compagnie de Commerce vs. Hamburg IHCR, an American Company, contracted HAL to transport 852 crates of agricultural machinery from Baltimore, MD to Hamburg, Germany and that after it reached Hamburg, the crates were to be delivered, at the order of the consignor, to Vladivostock, Russia. The crates were delivered via the vessel Bulgaria to Hamburg, at the expense of HAL. It was transferred to the German ship Suevia to resume journey from Hamburg to Russia. During Suevias journey, war broke out between Russia and Germany. Suevias captain ordered the ship to be placed on neutral

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Transportation Law Digests

Issue: May the shipowner or agent, notwithstanding the total loss of the vessel as a result of the negligence of its captain, be properly held liable in damages for the consequent death of its passengers? Held: No. This question is controlled by the provisions of article 587 of the Code of Commerce. Said article reads: The agent shall also be civilly liable for the indemnities in favor of third persons which arise from the conduct of the captain in the care of the goods which the vessel carried; but he may exempt himself therefrom by abandoning the vessel with all her equipments and the freight he may have earned during the voyage. The provisions accords a shipowner or agent the right of abandonment; and by necessary implication, his liability is confined to that which he is entitled as of right to abandon "the vessel with all her equipment and the freight it may have earned during the voyage." Lawful acts and obligations of the captain beneficial to the vessel may be enforced as against the agent for the reason that such obligations arise from the contract of agency while as to any liability incurred by the captain through his unlawful acts, the ship agent is simply subsidiarily civilly liable. This liability of the agent is limited to the vessel and it does not extend further. For this reason the Code of Commerce makes the agent liable to the extent of the value of the vessel, as the codes of the principal maritime nations provide with the vessel, and not individually. If the shipowner or agent may in any way be held civilly liable at all for injury to or death of passengers arising from the negligence of the captain in cases of collisions or shipwrecks, his liability is merely co-extensive with his interest in the vessel such that a total loss thereof results in its extinction. Assuming that petitioner is liable for a breach of contract of carriage, the exclusively "real and hypothecary nature" of maritime law operates to limit such liability to the value of the vessel, or to the insurance thereon, if any. In the instant case it does not appear that the vessel was insured. Whether the abandonment of the vessel sought by the petitioner in the instant case was in accordance with law of not, is immaterial. The vessel having totally perished, any act of abandonment would be an idle ceremony. Yangco is therefore absolved from the complaints. CHUA YEK HONG vs. INTERMEDIATE APPELLATE COURT, MARIANO GUNO, and DOMINADOR OLIT

G.R. No. 74811 September 30, 1988 FACTS: Petitioner contracted with the herein private respondent to deliver 1,000 sacks of copra, valued at P101,227.40, on board the vessel M/V Luzviminda I owned by the latter. However it did not reach its destination, the vessel capsized and sank with all its cargo. Petitioner instituted a complaint against private respondent for breach of contract incurring damages. Private respondents defense is that even assuming that the alleged cargo was truly loaded aboard their vessel, their liability had been extinguished by reason of the total loss of said vessel. RTC rendered judgment in favor of Chua Yek Hong however CA reversed the decision by applying Article 587 of the Code of Commerce and the doctrine in Yangco vs. Lasema (73 Phil. 330 [1941]) and held that private respondents' liability, as ship owners, for the loss of the cargo is merely co-extensive with their interest in the vessel such that a total loss thereof results in its extinction. ISSUE: Whether or not respondent Appellate Court erred in applying the doctrine of limited liability under Article 587 of the Code of Commerce as expounded in Yangco vs. Laserna, supra. HELD: As this Court held: If the ship owner or agent may in any way be held civilly liable at all for injury to or death of passengers arising from the negligence of the captain in cases of collisions or shipwrecks, his liability is merely co-extensive with his interest in the vessel such that a total loss thereof results in its extinction. (Yangco vs. Laserna, et al., supra). The limited liability rule, however, is not without exceptions, namely: (1) where the injury or death to a passenger is due either to the fault of the ship owner, or to the concurring negligence of the ship owner and the captain (Manila Steamship Co., Inc. vs. Abdulhaman supra); (2) where the vessel is insured; and (3) in workmen's compensation claims Abueg vs. San Diego, supra). In this case, there is nothing in the records to show that the loss of the cargo was due to the fault of the private

Martha Rose C. Serrano

Transportation Law Digests


respondent as shipowners, or to their concurrent negligence with the captain of the vessel. The judgment sought to be reviewed is hereby AFFIRMED ABOITIZ SHIPPING CORPORATION vs. NEW INDIA ASSURANCE COMPANY, LTD G..R. No. 156978 May 2, 2006 FACTS: Societe Francaise Des Colloides loaded a cargo of textiles and auxiliary chemicals from France on board a vessel owned by Franco-Belgian Services, Inc. The cargo was consigned to General Textile, Inc., in Manila and insured by respondent New India Assurance Company, Ltd. While in Hong Kong, the cargo was transferred to M/V P. Aboitiz for transshipment to Manila. Before departing, the vessel was advised by the Japanese Meteorological Center that it was safe to travel to its destination. But while at sea, the vessel received a report of a typhoon moving within its general path. To avoid the typhoon, the vessel changed its course. However, it was still at the fringe of the typhoon when its hull leaked. On October 31, 1980, the vessel sank, but the captain and his crew were saved. Both the trial and the appellate courts found that the sinking was not due to the typhoon but to its unseaworthiness. ISSUE: Whether the limited liability doctrine, which limits respondents award of damages to its pro-rata share in the insurance proceeds, applies in this case. HELD: No. x x x An exception to the limited liability doctrine is when the damage is due to the fault of the shipowner or to the concurrent negligence of the shipowner and the captain. In which case, the shipowner shall be liable to the full-extent of the damage. xxx In the present case, petitioner has the burden of showing that it exercised extraordinary diligence in the transport of the goods it had on board in order to invoke the limited liability doctrine. Differently put, to limit its liability to the amount of the insurance proceeds, petitioner has the burden of proving that the unseaworthiness of its vessel was not due to its fault or negligence. Considering the evidence presented and the circumstances obtaining in this case, we find that petitioner failed to discharge this burden. It initially attributed the sinking to the typhoon and relied on the BMI findings that it was not at fault. However, both the trial and the appellate courts, in this case, found that the sinking was not due to the typhoon but to its unseaworthiness. Evidence on record showed that the weather LOADSTAR SHIPPING CO., INC. vs.COURT OF APPEALS Facts: On November 19, 1984, LOADSTAR received on board its M/V Cherokee goods(certain types of wood) for shipment. The goods were insured with Manila Insurance Co.(MIC) against various risks including TOTAL LOSS BY TOTAL LOSS OF THE VESSEL. The vessel, in turn, was insured by Prudential Guarantee & Assurance, Inc.(PGAI) for P4 Million. On November 20, 1984, on its way to Manila from Nasipit, Agusan del Norte, the vessel sank off Limasawa Island. As a result of the total loss of its was moderate when the vessel sank. These factual findings of the Court of Appeals, affirming those of the trial court are not to be disturbed on appeal, but must be accorded great weight. These findings are conclusive not only on the parties but on this Court as well. Aboitiz shipping vs. General Accident Fire and Life (GR No. 100446 January 21, 1993) Facts: Petitioner is a corporation engaged in the business of maritime trade as a carrier. As such, it owned and operated the M/V P/ ABOITIZ, a common carrier that sank on voyage from Hong Kong to Manila. Private respondent GAFLAC is a foreign insurance company pursuing its remedy as a subrogee of several cargo consignees whose respective cargo sank with the said vessel and for which it has priory paid. The sinking of vessel gave rise to filling of suit to recover the lost cargo either by shippers, their successors-in-interest, or the cargo insurers like GAFLAC as subrogees. The sinking was initially investigated by the Board of Marine Inquiry, which found that such sinking was due to fortuitous event. Issue: Whether or not the doctrine of limited liability is applicable to the case? Held: The real an hypothecary nature of maritime law simple means that the liability of the carrier in connection with losses related to maritime contracts is confined to the vessel, which is hypothecated for such obligations or which stands as the guaranty for their settlement. It has its origin by reason of the conditions and risks attending maritime trade in its earliest years when such trade was replete with innumerable and unknown hazards since vessels had to go through largely uncharted waters to ply their trade. Thus, the liability of the vessel owner and agent arising form the operation of such vessel were confined to the vessel itself, its equipment, freight and insurance, if any, which limitation served to induce capitalist into effectively wagering their resources against consideration of the large attainable in the trade.

Martha Rose C. Serrano

Transportation Law Digests


shipment, the consignee made a claim with LOADSTAR which, however ignored the same. As the insurer, MIC paid the insured in full settlement of its claim. On February 4, 1985, MIC filed a complaint against Loadstar and PGAI, alleging that the sinking of the vessel was due to the fault and negligence of Loadstar and its employees. Loadstar claimed force majeur. PGAI averred that MIC has no cause of action against it, Loadstar being the party insured. PGAI was later dropped as a party defendant after it paid the insurance proceeds to Loadstar. The trial court rendered judgment for MIC, prompting Loadstar to go to the CA which affirmed the decision. Issue: Whether or not Loadstar is a private carrier. Held: No. Loadstar submits that the vessel was a private carrier because it was not issued a CPC; it did not have a regular trip or schedule nor a fixed route; and there was only one shipper, one consignee for a special cargo. The SC held that Loadstar is a common carrier. It is not necessary that the carrier be issued a CPC, and this character is not altered by the fact that the carriage of the goods in question was periodic, occasional, episodic or unscheduled. In support of its position Loadstar relied on the 1968 case of Home Insurance Co. v. American Steamship Agencies, where the Court held that a common carrier transporting special cargo or chartering the vessel to a special person becomes a private carrier that is not subject to the provisions of the Civil Code. This case however is not applicable in the case at bar for the simple reason that the actual settings are different. The records do not disclose that the M/V Cherokee, on the date in question, undertook to carry a special cargo or was chartered to a special person only. There was no charter party. The bills of lading failed to show any special arrangement, but only a general provision to the effect that the M/V Cherokee was a general cargo carrier. Further, the bare fact that the vessel was carrying a particular type of cargo for one shipper, which appears to be purely coincidental, is not reason enough to convert the vessel from a common carrier to a private carrier, especially where, as in this case, it was shown that the vessel was also carrying passengers. Under the facts and circumstances obtaining in this case, Loadstar fits the definition of a common carrier under Article 1732 of the NCC. The doctrine enunciated in the case of De Guzman v. CA was also mentioned. CA decision is hereby affirmed. Loadstar submits that the vessel was a private carrier because it was not issued a CPC; it did not have a regular trip or schedule nor a fixed route; and there was only one shipper, one consignee for a special cargo. The SC held that Loadstar is a common carrier. It is not necessary that the carrier be issued a CPC, and this character is not altered by the fact that the carriage of the goods in question was periodic, occasional, episodic or unscheduled. NEGROS NAVIGATION CO. vs. CA

Facts: Private respondent Ramon Miranda purchased from the Negros Navigation Co., Inc. four special cabin tickets for his wife, daughter, son and niece who were going to Bacolod City to attend a family reunion boarding the Don Juan. Don Juan collided off the Tablas Strait in Mindoro, with the M/T Tacloban City, an oil tanker owned by the Philippine National Oil Company (PNOC) and the PNOC Shipping and Transport Corporation (PNOC/STC). As a result, the M/V Don Juan sank. Several of her passengers perished in the sea tragedy. The bodies of some of the victims were found and brought to shore, but the four members of private respondents' families were never found. Issue: Whether or not the petitioners exercised the extraordinary diligence required? Held: No. As with the Mecenas case, this Court found petitioner guilty of negligence in (1) allowing or tolerating the ship captain and crew members in playing mahjong during the voyage, (2) in failing to maintain the vessel seaworthy and (3) in allowing the ship to carry more passengers than it was allowed to carry. Also, the duty to exercise due diligence includes the duty to take passengers or cargoes that are within the carrying capacity of the vessel.

The Duty to exercise due diligence includes the duty to take passengers or cargoes that are within the carrying capacity of the vessel. (Same Ruling with Mecenas)

Manila Steamship Co. Inc. VS. Insa Abdulhaman (100 Phil 32) Facts: Insa Abdulhaman together with his wife and five children boarded M/L Consuelo V in Zamboanga City. The said ship was bound for Siokon under the command of Faustino Macrohon. On that same night, M/S Bowline Knot was navigating from Marijoboc towards Zamboanga. Around 9:30 to 10:00 in the evening of May 4, 1948, while some of the passengers of the M/L Consuelo V were then sleeping and some lying down awake, a shocking collision suddenly occurred. The ship that collided was later on identified as the M/V Bowline Knot. M/L Consuelo V capsized that resulted to the death of 9 passengers and the loss of the cargoes on board.

Martha Rose C. Serrano

Transportation Law Digests


vessel to the place where his cargoes were loaded that the crane hit him, pinning him between the side of the vessel and the crane. He was thereafter brought to the hospital where he later died. Private respondents Vianas filed a complaint for damages against Aboitiz for breach of contract of carriage. Aboitiz denied responsibility contending that at the time of the accident, the vessel was completely under the control of Pioneer as the which handled the unloading of cargoes from the vessel of Aboitiz. It is also averred that since the crane operator was not an employee of Aboitiz, the latter cannot be held liable under the fellow-servant rule. Judgment is rendered in favor of the plantiffs. The trial court absolved Pioneer from liability for failure of the Vianas and Aboitiz to preponderantly established a case of negligence against the crane operator which the court ruled is never presumed. Aboitiz appealed the same to respondent Court of Appeals which affirmed the findings of of the trial court except as to the amount of damages awarded to the Vianas. Hence the instant petition. Issue: Whether or not the responsibility of Aboitiz to the victim ceased when it disembarked from the vessel. Held: No. The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock or premises. Once created, the relationship will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances, and includes a reasonable time to see after his baggage and prepare for his departure. The carrierpassenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if, for example, such person remains in the carrier's premises to claim his baggage. When the accident occurred, the victim was in the act of unloading his cargoes, which he had every right to do, from petitioner's vessel. Even if he had already disembarked an hour earlier, his presence in petitioner's premises was not without cause. The victim had to claim his baggage which was possible only one hour after the vessel arrived since it was admittedly standard procedure in the case of petitioner's vessels that the unloading operations shall start only after that time. Consequently, under the foregoing circumstances, the victim Anacleto Viana is still deemed a passenger of said carrier at the time of his tragic death. As found by the Court of Appeals, the evidence does not show that there was a cordon of drums around the perimeter of the crane, as claimed by petitioner. It also adverted to the fact that the alleged presence of visible warning signs in the vicinity was disputable and not indubitably established. Thus, we are not inclined to accept petitioner's explanation that the victim and other passengers were sufficiently warned that merely venturing into the area in question was fraught with

The Court held the owners of both vessels solidarily liable to plaintiff for damages caused to the latter under Article 827 of the Code of Commerce but exempted defendant Lim Hong To from liability due to the sinking and total loss of his vessel. While Manila steamship, owner of the Bowline Knot was ordered to pay all of plaintiffs damages. Petitioner Manila Steamship Co. pleads that it is exempt from any liability under Article 1903 of the Civil Code because it had exercised the diligence of a good father of a family in the selection of its employees, particularly the officer in command of the M/S Bowline Knot. Issue: Whether or not petitioner Manila Steamship Co. is exempt from any liability under Art. 1903 of the Civil Code? Held: NO. Petitioner is not exempted from liabilities. While it is true that plaintiffs action against petitioner is based on a tort or quasi delict, the tort in question is not a civil tort under the Civil Code but a maritime tort resulting in a collision at sea, governed by Articles 826-939 of the Code of Commerce. Under Art. 827 of the Code of Commerce, in case of collision between two vessels imputable to both of them, each vessel shall suffer her own damage and both shall be solidarily liable for the damages occasioned to their cargoes. The shipowner is directly and primarily responsible in tort resulting in a collision at sea, and it may not escape liability on the ground that exercised due diligence in the selection and supervision of the ves sels officers and crew. ABOITIZ SHIPPING CORPORATION vs. CA Facts: Anacleto Viana boarded the vessel owned by defendant ABOITIZ, at the port at San Jose, Occidental Mindoro, bound for Manila. Said vessel arrived at Pier 4, North Harbor, Manila, and the passengers therein disembarked, a gangplank having been provided connecting the side of the vessel to the pier. Instead of using said gangplank Anacleto Viana disembarked on the third deck which was on the level with the pier. After said vessel had landed, the Pioneer Stevedoring Corporation took over the exclusive control of the cargoes loaded on said vessel pursuant to the Memorandum of Agreement between the third party defendant Pioneer Stevedoring Corporation and defendant Aboitiz. The crane owned by the third party defendant and operated by its crane operator Alejo Figueroa was placed alongside the vessel and one hour after the passengers of said vessel had disembarked, it started operation by unloading the cargoes from said vessel. While the crane was being operated, Anacleto Viana who had already disembarked from said vessel obviously remembering that some of his cargoes were still loaded in the vessel, went back to the vessel, and it was while he was pointing to the crew of the said

Martha Rose C. Serrano

Transportation Law Digests


serious peril. Hence, Aboitiz is negligent. Pioneer had taken the necessary safeguards insofar as its unloading operations were concerned, a fact which appears to have been accepted by the plaintiff therein by not impleading Pioneer as a defendant, and likewise inceptively by Aboitiz by filing its third-party complaint only after ten months from the institution of the suit against it. Parenthetically, Pioneer is not within the ambit of the rule on extraordinary diligence required of, and the corresponding presumption of negligence foisted on, common carriers like Aboitiz. matter was attended by the porter clerk which however, the later denied. When the luggage was delivered to the petitioner with the information that the lock was open, he found out that the folder containing documents and transcripts were missing, aside from the two gift items for his parents-in-law. Petitioner refused to accept the luggage. Petitioner filed a Complaint against PAL for damages for breach of contract of transportation. The lower Court found PAL to have acted in bad faith and with malice and declared petitioner entitled to moral damages. CA held that PAL was guilty only of simple negligence, reversed the judgment of the trial Court granting petitioner moral and exemplary damages, but ordered PAL to pay plaintiff the sum of P100.00, the baggage liability assumed by it under the condition of carriage printed at the back of the ticket. Hence the present petition. Issue: Whether or not PAL acted with gross negligence. Held: No. PAL did not act in bad faith. It was the duty of PAL to look for petitioners luggage which had been miscarried. PAL exerted diligent efforts to locate the plaintiffs baggage. Petitioner is neither entitled to exemplary damages. Exemplary damages can only be granted if the defendant asked in a wanton, fraudulent, reckless, oppressive or malevolent manner, which loss, in accordance with the stipulation written at the back of the ticket is limited to P100 per luggage plaintiff not having declared a greater value and not having called the attention of the defendant on its value ad paid the tariff thereon. While it may be true that petitioner had not signed the plane ticket, he is nevertheless bound by the provisions thereof. "Such provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation". It is what is known as a contract of "adhesion", in regards which it has been said that contracts of adhesion wherein one party imposes a ready made form of contract on the other, as the plane ticket in the case at bar, are contracts not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent. A contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from contracting against his own negligence. While it may be true that the passenger had not signed the plane ticket, he is nevertheless bound by the provisions thereof. "Such provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation". It is what is known as a contract of "adhesion", in regards which it has been said that contracts of adhesion wherein one party imposes a ready made form of contract on the other, as the plane ticket in the case at bar, are contracts not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent. A contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from contracting against his own negligence.

The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock or premises. Once created, the relationship will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances, and includes a reasonable time to see after his baggage and prepare for his departure. The carrierpassenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if, for example, such person remains in the carrier's premises to claim his baggage. When the accident occurred, the victim was in the act of unloading his cargoes, which he had every right to do, from petitioner's vessel. Even if he had already disembarked an hour earlier, his presence in petitioner's premises was not without cause. The victim had to claim his baggage which was possible only one hour after the vessel arrived since it was admittedly standard procedure in the case of petitioner's vessels that the unloading operations shall start only after that time.

Tiu vs. Ariesgado ONG YIU vs. COURT OF APPEALS

Facts: Petitioner was paying passenger of respondent Philippine Airlines on board flight No. 946-R from Mactan Cebu bound for Butuan City. He was scheduled to attend the trial in the Court of First instance , Br. II thereat. As a passenger, he checked in one piece of luggage, a bull maleta. The plane left Mactan Airport, Cebu City at about 1pm and arrived at Bacasi Airport, Butuan City at past 2pm of the same day. Upon arrival, petitioner claimed his luggage but it could not be found. According to petitioner, it was only after reacting indignantly to the loss that the

Martha Rose C. Serrano

Transportation Law Digests

Martha Rose C. Serrano

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