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The passengers, who had put on their life jackets, struggled to get out of the
boat. Upon seeing the captain, Matute and the other passengers who
reached the surface asked him what they could do to save the people who
were still trapped under the boat. The captain replied "Iligtas niyo na lang
ang sarili niyo" (Just save yourselves).
Help came after about 45 minutes when two boats owned by Asia Divers in
Sabang, Puerto Galera passed by the capsized M/B Coco Beach III. Boarded
on those two boats were 22 persons, consisting of 18 passengers and four
crew members, who were brought to Pisa Island. Eight passengers, including
petitioners son and his wife, died during the incident.
At the time of Ruelitos death, he was 28 years old and employed as a
contractual worker for Mitsui Engineering & Shipbuilding Arabia, Ltd. in Saudi
Arabia, with a basic monthly salary of $900.3
Petitioners, by letter of October 26, 2000, 4 demanded indemnification from
respondent for the death of their son in the amount of at least P4,000,000.
Replying, respondent, by letter dated November 7, 2000, 5 denied any
responsibility for the incident which it considered to be a fortuitous event. It
nevertheless offered, as an act of commiseration, the amount of P10,000 to
petitioners upon their signing of a waiver.
As petitioners declined respondents offer, they filed the Complaint, as earlier
reflected, alleging that respondent, as a common carrier, was guilty of
negligence in allowing M/B Coco Beach III to sail notwithstanding storm
warning bulletins issued by the Philippine Atmospheric, Geophysical and
Astronomical Services Administration (PAGASA) as early as 5:00 a.m. of
September 11, 2000.6
In its Answer,7 respondent denied being a common carrier, alleging that its
boats are not available to the general public as they only ferry Resort guests
and crew members. Nonetheless, it claimed that it exercised the utmost
diligence in ensuring the safety of its passengers; contrary to petitioners
allegation, there was no storm on September 11, 2000 as the Coast Guard in
fact cleared the voyage; and M/B Coco Beach III was not filled to capacity
and had sufficient life jackets for its passengers. By way of Counterclaim,
respondent alleged that it is entitled to an award for attorneys fees and
litigation expenses amounting to not less than P300,000.
Carlos Bonquin, captain of M/B Coco Beach III, averred that the Resort
customarily requires four conditions to be met before a boat is allowed to
sail, to wit: (1) the sea is calm, (2) there is clearance from the Coast Guard,
(3) there is clearance from the captain and (4) there is clearance from the
Resorts assistant manager.8 He added that M/B Coco Beach III met all four
v.
Court
of
Appeals 17 in
The first factor, i.e., life expectancy, is computed by applying the formula
(2/3 x [80 age at death]) adopted in the American Expectancy Table of
Mortality or the Actuarial of Combined Experience Table of Mortality.31
The second factor is computed by multiplying the life expectancy by the net
earnings of the deceased, i.e., the total earnings less expenses necessary in
the creation of such earnings or income and less living and other incidental
expenses.32 The loss is not equivalent to the entire earnings of the deceased,
but only such portion as he would have used to support his dependents or
heirs. Hence, to be deducted from his gross earnings are the necessary
expenses supposed to be used by the deceased for his own needs. 33
In computing the third factor necessary living expense, Smith Bell Dodwell
Shipping Agency Corp. v. Borja34teaches that when, as in this case, there is
no showing that the living expenses constituted the smaller percentage of
the gross income, the living expenses are fixed at half of the gross income.
Applying the above guidelines, the Court determines Ruelito's life expectancy
as follows:
Life expectancy =
Life expectancy =
35
from such finality until its satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of credit.
(emphasis supplied).
Since the amounts payable by respondent have been determined with
certainty only in the present petition, the interest due shall be computed
upon the finality of this decision at the rate of 12% per annum until
satisfaction, in accordance with paragraph number 3 of the immediately
cited guideline in Easter Shipping Lines, Inc.
WHEREFORE, the Court of Appeals Decision of August 19, 2008 is REVERSED
and SET ASIDE. Judgment is rendered in favor of petitioners ordering
respondent to pay petitioners the following: (1) P50,000 as indemnity for the
death of Ruelito Cruz; (2) P8,316,000 as indemnity for Ruelitos loss of
earning capacity; (3) P100,000 as moral damages; (4) P100,000 as
exemplary damages; (5) 10% of the total amount adjudged against
respondent as attorneys fees; and (6) the costs of suit.
The total amount adjudged against respondent shall earn interest at the rate
of 12% per annum computed from the finality of this decision until full
payment.
SO ORDERED.
Footnotes
27
Art. 1764. Damages in cases comprised in this Section shall be awarded in accordance
with Title XVIII of this Book concerning Damages. Article 2206 shall also apply to the death
of a passenger caused by the breach of contract by a common carrier.
28
Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at
least three thousand pesos, even though there may have been mitigating circumstances. In
addition:
(1) The defendant shall be liable for the loss of the earning capacity of the deceased,
and the indemnity shall be paid to the heirs of the latter; such indemnity shall in
every case be assessed and awarded by the court, unless the deceased on account of
permanent physical disability not caused by the defendant, had no earning capacity
at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of article
291, the recipient who is not an heir called to the decedent's inheritance by the law
of testate or intestate succession, may demand support from the person causing the
death, for a period not exceeding five years, the exact duration to be fixed by the
court;
(3) The spouse, legitimate and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental
39
Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other
than judicial costs, cannot be recovered, except:
thus
issued
Subrogation
Receipt [30] in
favor
of
FGU
for certiorari on March 6, 2001 cannot serve as a substitute for the lost
remedy of appeal.
In another vein, the rule is well settled that in a petition for certiorari,
the petitioner must prove not merely reversible error but also grave abuse of
discretion amounting to lack or excess of jurisdiction.
Petitioner alleges that the appellate court erred in reversing and setting
aside the decision of the trial court based on its finding that petitioner is
liable for the damage to the cargo as a common carrier. What petitioner is
ascribing is an error of judgment, not of jurisdiction, which is properly the
subject of an ordinary appeal.
Where the issue or question involves or affects the wisdom or legal
soundness of the decision not the jurisdiction of the court to render said
decision the same is beyond the province of a petition for certiorari.[41] The
supervisory jurisdiction of this Court to issue a cert writ cannot be exercised
in order to review the judgment of lower courts as to its intrinsic
correctness, either upon the law or the facts of the case.[42]
Procedural technicalities aside, the petition still fails.
The appellate court did not err in finding petitioner, a customs broker, to
be also a common carrier, as defined under Article 1732 of the Civil Code, to
wit:
Art. 1732. Common carriers are persons, corporations, firms or associations
engaged in the business of carrying or transporting passengers or goods or
both, by land, water, or air, for compensation, offering their services to the
public.
Anacleto F. Sanchez, Jr., the Manager and Principal Broker of Sanchez
Brokerage, himself testified that the services the firm offers include the
delivery of goods to the warehouse of the consignee or importer.
ATTY. FLORES:
Q: What are the functions of these license brokers, license customs
broker?
WITNESS:
As customs broker, we calculate the taxes that has to be paid in
cargos, and those upon approval of the importer, we prepare the
entry together for processing and claims from customs and
finally deliver the goods to the warehouse of the importer.[43]
Article 1732 does not distinguish between one whose principal business
activity is the carrying of goods and one who does such carrying only as an
ancillary activity.[44] The contention, therefore, of petitioner that it is not a
common carrier but a customs broker whose principal function is to prepare
cargo under protest or with reservations duly noted on the receipt issued by
PSI. But it made no such protest or reservation.[57]
Moreover, as observed by the appellate court, if indeed petitioners
employees only examined the cargoes outside the PSI warehouse and found
some to be wet, they would certainly have gone back to PSI, showed to the
warehouseman the damage, and demanded then and there for Bad Order
documents or a certification confirming the damage. [58] Or, petitioner would
have presented, as witness, the employees of the PSI from whom Morales
and Domingo took delivery of the cargo to prove that, indeed, part of the
cargoes was already damaged when the container was allegedly opened
outside the warehouse.[59]
Petitioner goes on to posit that contrary to the report of Elite Surveyors,
no rain fell that day. Instead, it asserts that some of the cargoes were
already wet on delivery by PSI outside the PSI warehouse but such
notwithstanding Calicdan directed Morales to proceed with the delivery to
Hizon Laboratories, Inc.
While Calicdan testified that he received the purported telephone call of
Morales on July 29, 1992, he failed to specifically declare what time he
received the call. As to whether the call was made at the PSI warehouse
when the shipment was stripped from the airport containers, or when the
cargoes were already in transit to Antipolo, it is not determinable. Aside from
that phone call, petitioner admitted that it had no documentary evidence to
prove that at the time it received the cargoes, a part of it was wet, damaged
or in bad condition.[60]
The 4-page weather data furnished by PAGASA[61] on request of Sanchez
Brokerage hardly impresses, no witness having identified it and interpreted
the technical terms thereof.
The possibility on the other hand that, as found by Hizon Laboratories,
Inc., the oral contraceptives were damaged by rainwater while in transit to
Antipolo City is more likely then. Sanchez himself testified that in the past,
there was a similar instance when the shipment of Wyeth-Suaco was also
found to be wet by rain.
ATTY. FLORES:
Q: Was there any instance that a shipment of this nature, oral
contraceptives, that arrived at the NAIA were damaged and
claimed by the Wyeth-Suaco without any question?
WITNESS:
A: Yes sir, there was an instance that one cartoon (sic) were wetted
(sic) but Wyeth-Suaco did not claim anything against us.
ATTY. FLORES:
Q: HOW IS IT?
WITNESS:
A: We experienced, there was a time that we experienced that there
was a cartoon (sic) wetted (sic) up to the bottom are wet specially
during rainy season.[62]
Since petitioner received all the cargoes in good order and condition at
the time they were turned over by the PSI warehouseman, and upon their
delivery to Hizon Laboratories, Inc. a portion thereof was found to be in bad
order, it was incumbent on petitioner to prove that it exercised extraordinary
diligence in the carriage of the goods. It did not, however. Hence, its
presumed negligence under Article 1735 of the Civil Code remains
unrebutted.
WHEREFORE, the August 10, 2000 Decision of the Court of Appeals is
hereby AFFIRMED.
Costs against petitioner.
SO ORDERED.
Panganiban, (Chairman), Sandoval-Gutierrez, and Garcia, JJ., concur.
Corona, J., on leave.
[45]
Art. 1733. Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence
in the vigilance over the goods and for the safety of the passengers
transported by them, according to all the circumstances of each case.
xxx
[46]
Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and
5 of the preceding article, if the goods are lost, destroyed or
deteriorated, common carriers are presumed to have been at fault or
to have acted negligently, unless they prove that they observed
extraordinary diligence as required on Article 1733.
[55]
Art. 1734. Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the
following causes only:
xxx
(4) The character of the goods or defects in the packing or in the
containers;
&
DECISION
YNARES-SANTIAGO, J.:
In May 1991, petitioner Estela L. Crisostomo contracted the services of
respondent Caravan Travel and Tours International, Inc. to arrange and
facilitate her booking, ticketing and accommodation in a tour dubbed Jewels
of Europe. The package tour included the countries of England, Holland,
Germany, Austria, Liechstenstein, Switzerland and France at a total cost of
P74,322.70. Petitioner was given a 5% discount on the amount, which
included airfare, and the booking fee was also waived because petitioners
niece, Meriam Menor, was respondent companys ticketing manager.
Pursuant to said contract, Menor went to her aunts residence on June 12,
1991 a Wednesday to deliver petitioners travel documents and plane
tickets. Petitioner, in turn, gave Menor the full payment for the package
tour. Menor then told her to be at the Ninoy Aquino International Airport
(NAIA) on Saturday, two hours before her flight on board British Airways.
Without checking her travel documents, petitioner went to NAIA on
Saturday, June 15, 1991, to take the flight for the first leg of her journey
from Manila to Hongkong. To petitioners dismay, she discovered that the
flight she was supposed to take had already departed the previous day. She
learned that her plane ticket was for the flight scheduled on June 14, 1991.
She thus called up Menor to complain.
Subsequently, Menor prevailed upon petitioner to take another tour the
British Pageant which included England, Scotland and Wales in its itinerary.
For this tour package, petitioner was asked anew to pay US$785.00 or
P20,881.00 (at the then prevailing exchange rate of P26.60). She gave
respondent US$300 or P7,980.00 as partial payment and commenced the
trip in July 1991.
Upon petitioners return from Europe, she demanded from respondent the
reimbursement of P61,421.70, representing the difference between the sum
she paid for Jewels of Europe and the amount she owed respondent for the
British Pageant tour. Despite several demands, respondent company refused
to reimburse the amount, contending that the same was non-refundable.
[1]
Petitioner was thus constrained to file a complaint against respondent for
breach of contract of carriage and damages, which was docketed as Civil
Case No. 92-133 and raffled to Branch 59 of the Regional Trial Court of
Makati City.
Thus, even if the petitioner and private respondent were both negligent, the
petitioner cannot be considered to be equally, or worse, more guilty than the
private respondent. At best, petitioners negligence is only contributory while
the private respondent [is guilty] of gross negligence making the principle of
pari delicto inapplicable in the case;
II
The Honorable Court of Appeals also erred in not ruling that the Jewels of
Europe tour was not indivisible and the amount paid therefor refundable;
III
The Honorable Court erred in not granting to the petitioner the
consequential damages due her as a result of breach of contract of carriage.
[8]
Petitioner contends that respondent did not observe the standard of care
required of a common carrier when it informed her wrongly of the flight
schedule. She could not be deemed more negligent than respondent since
the latter is required by law to exercise extraordinary diligence in the
fulfillment of its obligation. If she were negligent at all, the same is merely
contributory and not the proximate cause of the damage she suffered. Her
loss could only be attributed to respondent as it was the direct consequence
of its employees gross negligence.
Petitioners contention has no merit.
By definition, a contract of carriage or transportation is one whereby a
certain person or association of persons obligate themselves to transport
persons, things, or news from one place to another for a fixed price. [9] Such
person or association of persons are regarded as carriers and are classified
as private or special carriers and common or public carriers. [10] A common
carrier is defined under Article 1732 of the Civil Code as persons,
corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water or air, for
compensation, offering their services to the public.
It is obvious from the above definition that respondent is not an entity
engaged in the business of transporting either passengers or goods and is
therefore, neither a private nor a common carrier. Respondent did not
undertake to transport petitioner from one place to another since its
covenant with its customers is simply to make travel arrangements in their
behalf. Respondents services as a travel agency include procuring tickets and
facilitating travel permits or visas as well as booking customers for tours.
While petitioner concededly bought her plane ticket through the efforts of
respondent company, this does not mean that the latter ipso facto is a
that petitioner could prepare for the trip. It performed all its obligations to
enable petitioner to join the tour and exercised due diligence in its dealings
with the latter.
We agree with respondent.
Respondents failure to present Menor as witness to rebut petitioners
testimony could not give rise to an inference unfavorable to the former.
Menor was already working in France at the time of the filing of the
complaint,[15] thereby making it physically impossible for respondent to
present her as a witness. Then too, even if it were possible for respondent to
secure Menors testimony, the presumption under Rule 131, Section 3(e)
would still not apply. The opportunity and possibility for obtaining Menors
testimony belonged to both parties, considering that Menor was not just
respondents employee, but also petitioners niece. It was thus error for the
lower court to invoke the presumption that respondent willfully suppressed
evidence under Rule 131, Section 3(e). Said presumption would logically be
inoperative if the evidence is not intentionally omitted but is simply
unavailable, or when the same could have been obtained by both parties. [16]
In sum, we do not agree with the finding of the lower court that Menors
negligence concurred with the negligence of petitioner and resultantly
caused damage to the latter. Menors negligence was not sufficiently proved,
considering that the only evidence presented on this score was petitioners
uncorroborated narration of the events. It is well-settled that the party
alleging a fact has the burden of proving it and a mere allegation cannot
take the place of evidence. [17] If the plaintiff, upon whom rests the burden of
proving his cause of action, fails to show in a satisfactory manner facts upon
which he bases his claim, the defendant is under no obligation to prove his
exception or defense.[18]
Contrary to petitioners claim, the evidence on record shows that
respondent exercised due diligence in performing its obligations under the
contract and followed standard procedure in rendering its services to
petitioner. As correctly observed by the lower court, the plane
ticket[19] issued to petitioner clearly reflected the departure date and time,
contrary to petitioners contention. The travel documents, consisting of the
tour itinerary, vouchers and instructions, were likewise delivered to
petitioner two days prior to the trip. Respondent also properly booked
petitioner for the tour, prepared the necessary documents and procured the
plane tickets. It arranged petitioners hotel accommodation as well as food,
land transfers and sightseeing excursions, in accordance with its avowed
undertaking.
Therefore, it is clear that respondent performed its prestation under the
contract as well as everything else that was essential to book petitioner for
the tour. Had petitioner exercised due diligence in the conduct of her affairs,
there would have been no reason for her to miss the flight. Needless to say,
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, Carpio, and Azcuna, JJ., concur.
and
LEANDRO
LUIS
R.
DECISION
CORONA, J.:
This is a petition to review the decision [1] of the Court of Appeals in CAG.R. CV No. 52203 affirming in turn the decision of the trial court finding
petitioner liable to respondent for damages. The dispositive portion read:
WHEREFORE, the appealed decision is hereby AFFIRMED except the award of
attorneys fees including appearance fees which is DELETED.
SO ORDERED.[2]
The facts of the case, as summarized by the Court of Appeals, are as
follows:
[Respondent] Priscilla R. Domingo is the registered owner of a silver
Mitsubishi Lancer Car model 1980 bearing plate No. NDW 781 91 with [corespondent] Leandro Luis R. Domingo as authorized driver. [Petitioner]
Nostradamus Villanueva was then the registered owner of a green Mitsubishi
Lancer bearing Plate No. PHK 201 91.
On 22 October 1991 at about 9:45 in the evening, following a green traffic
light, [respondent] Priscilla Domingos silver Lancer car with Plate No. NDW
781 91 then driven by [co-respondent] Leandro Luis R. Domingo was
cruising along the middle lane of South Superhighway at moderate speed
from north to south. Suddenly, a green Mitsubishi Lancer with plate No. PHK
201 91 driven by Renato Dela Cruz Ocfemia darted from Vito Cruz Street
towards the South Superhighway directly into the path of NDW 781 91
thereby hitting and bumping its left front portion. As a result of the impact,
NDW 781 91 hit two (2) parked vehicles at the roadside, the second hitting
another parked car in front of it.
Per Traffic Accident Report prepared by Traffic Investigator Pfc. Patrocinio N.
Acido, Renato dela Cruz Ocfemia was driving with expired license and
positive for alcoholic breath. Hence, Manila Assistant City Prosecutor Oscar
A. Pascua recommended the filing of information for reckless imprudence
resulting to (sic) damage to property and physical injuries.
The original complaint was amended twice: first, impleading Auto Palace Car
Exchange as commercial agent and/or buyer-seller and second, impleading
Albert Jaucian as principal defendant doing business under the name and
style of Auto Palace Car Exchange.
Except for Ocfemia, all the defendants filed separate answers to the
complaint. [Petitioner] Nostradamus Villanueva claimed that he was no
longer the owner of the car at the time of the mishap because it was
swapped with a Pajero owned by Albert Jaucian/Auto Palace Car Exchange.
For her part, Linda Gonzales declared that her presence at the scene of the
accident was upon the request of the actual owner of the Mitsubishi Lancer
(PHK 201 91) [Albert Jaucian] for whom she had been working as
agent/seller. On the other hand, Auto Palace Car Exchange represented by
Albert Jaucian claimed that he was not the registered owner of the car.
Moreover, it could not be held subsidiary liable as employer of Ocfemia
because the latter was off-duty as utility employee at the time of the
incident. Neither was Ocfemia performing a duty related to his employment.
[3]
After trial, the trial court found petitioner liable and ordered him to pay
respondent actual, moral and exemplary damages plus appearance and
attorneys fees:
WHEREFORE, judgment is hereby rendered for the plaintiffs, ordering
Nostradamus Villanueva to pay the amount of P99,580 as actual
damages, P25,000.00 as moral damages, P25,000.00 as exemplary
damages and attorneys fees in the amount of P10,000.00 plus appearance
fees of P500.00 per hearing with legal interest counted from the date of
judgment. In conformity with the law on equity and in accordance with the
ruling in First Malayan Lending and Finance Corporation vs. Court of Appeals
(supra), Albert Jaucian is hereby ordered to indemnify Nostradamus
Villanueva for whatever amount the latter is hereby ordered to pay under
the judgment.
SO ORDERED.[4]
The CA upheld the trial courts decision but deleted the award for
appearance and attorneys fees because the justification for the grant was
not stated in the body of the decision. Thus, this petition for review which
raises a singular issue:
MAY THE REGISTERED OWNER OF A MOTOR VEHICLE BE HELD LIABLE FOR
DAMAGES ARISING FROM A VEHICULAR ACCIDENT INVOLVING HIS MOTOR
VEHICLE WHILE BEING OPERATED BY THE EMPLOYEE OF ITS BUYER
WITHOUT THE LATTERS CONSENT AND KNOWLEDGE?[5]
Yes.
There is a presumption that the owner of the guilty vehicle is the defendantappellant as he is the registered owner in the Motor Vehicles Office. Should
he not be allowed to prove the truth, that he had sold it to another and thus
shift the responsibility for the injury to the real and actual owner? The
defendant holds the affirmative of this proposition; the trial court held the
negative.
The Revised Motor Vehicle Law (Act No. 3992, as amended) provides that no
vehicle may be used or operated upon any public highway unless the same is
property registered. It has been stated that the system of licensing and the
requirement that each machine must carry a registration number,
conspicuously displayed, is one of the precautions taken to reduce the
danger of injury to pedestrians and other travelers from the careless
management of automobiles. And to furnish a means of ascertaining the
identity of persons violating the laws and ordinances, regulating the speed
and operation of machines upon the highways (2 R.C.L. 1176). Not only are
vehicles to be registered and that no motor vehicles are to be used or
operated without being properly registered for the current year, but that
dealers in motor vehicles shall furnish thee Motor Vehicles Office a report
showing the name and address of each purchaser of motor vehicle during
the previous month and the manufacturers serial number and motor number.
(Section 5(c), Act No. 3992, as amended.)
Registration is required not to make said registration the operative act by
which ownership in vehicles is transferred, as in land registration cases,
because the administrative proceeding of registration does not bear any
essential relation to the contract of sale between the parties (Chinchilla vs.
Rafael and Verdaguer, 39 Phil. 888), but to permit the use and operation of
the vehicle upon any public highway (section 5 [a], Act No. 3992, as
amended). The main aim of motor vehicle registration is to identify the
owner so that if any accident happens, or that any damage or injury is
caused by the vehicle on the public highways, responsibility therefore can be
fixed on a definite individual, the registered owner. Instances are numerous
where vehicles running on public highways caused accidents or injuries to
pedestrians or other vehicles without positive identification of the owner or
drivers, or with very scant means of identification. It is to forestall these
circumstances, so inconvenient or prejudicial to the public, that the motor
vehicle registration is primarily ordained, in the interest of the determination
of persons responsible for damages or injuries caused on public highways:
One of the principal purposes of motor vehicles legislation is identification of
the vehicle and of the operator, in case of accident; and another is that the
knowledge that means of detection are always available may act as a
deterrent from lax observance of the law and of the rules of conservative
and safe operation. Whatever purpose there may be in these statutes, it is
subordinate at the last to the primary purpose of rendering it certain that
the violator of the law or of the rules of safety shall not escape because of
lack of means to discover him. The purpose of the statute is thwarted, and
the displayed number becomes a share and delusion, if courts would
entertain such defenses as that put forward by appellee in this case. No
responsible person or corporation could be held liable for the most
outrageous acts of negligence, if they should be allowed to pace a
middleman between them and the public, and escape liability by the manner
in which they recompense servants. (King vs. Brenham Automobile Co., Inc.
145 S.W. 278, 279.)
With the above policy in mind, the question that defendant-appellant poses
is: should not the registered owner be allowed at the trial to prove who the
actual and real owner is, and in accordance with such proof escape or evade
responsibility by and lay the same on the person actually owning the
vehicle? We hold with the trial court that the law does not allow him to do
so; the law, with its aim and policy in mind, does not relieve him directly of
the responsibility that the law fixes and places upon him as an incident or
consequence of registration. Were a registered owner allowed to evade
vs.
SPOUSES LORENZO DOLOR and MARGARITA DOLOR, FRED PANOPIO,
JOSEPH SANDOVAL, RENE CASTILLO, SPOUSES FRANCISCO
VALMOCINA and VIRGINIA VALMOCINA, SPOUSES VICTOR PANOPIO
and MARTINA PANOPIO, and HON. COURT OF APPEALS, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review under Rule 45 of the Rules of Court seeking
the reversal of the decision[1] of the Court of Appeals, dated April 29, 2003,
in CA-G.R. CV No. 60357, which affirmed with modification the amount of
damages awarded in the November 24, 1997 decision [2] of the Regional Trial
Court of Batangas City, Branch IV.
The undisputed facts are as follows:
At about 3:00 p.m. of December 19, 1986, Lorenzo Menard Boyet Dolor,
Jr. was driving an owner-type jeepney with plate no. DEB 804 owned by her
mother, Margarita, towards Anilao, Batangas. As he was traversing the road
at Barangay Anilao East, Mabini, Batangas, his vehicle collided with a
passenger jeepney bearing plate no. DEG 648, driven by petitioner Juan
Gonzales and owned by his co-petitioner Francisco Hernandez, which was
travelling towards Batangas City.
Boyet Dolor and his passenger, Oscar Valmocina, died as a result of the
collision. Fred Panopio, Rene Castillo and Joseph Sandoval, who were also on
board the owner-type jeep, which was totally wrecked, suffered physical
injuries. The collision also damaged the passenger jeepney of Francisco
Hernandez and caused physical injuries to its passengers, namely, Virgie
Cadavida, Fiscal Artemio Reyes and Francisca Corona.[3]
Consequently, respondents commenced an action [4] for damages against
petitioners before the Regional Trial Court of Batangas City, alleging that
driver Juan Gonzales was guilty of negligence and lack of care and that the
Hernandez spouses were guilty of negligence in the selection and supervision
of their employees.[5]
Petitioners countered that the proximate cause of the death and injuries
sustained by the passengers of both vehicles was the recklessness of Boyet
Dolor, the driver of the owner-type jeepney, who was driving in a zigzagging
manner under the influence of alcohol. Petitioners also alleged that Gonzales
was not the driver-employee of the Hernandez spouses as the former only
leased the passenger jeepney on a daily basis. The Hernandez spouses
further claimed that even if an employer-employee relationship is found to
exist between them, they cannot be held liable because as employers they
exercised due care in the selection and supervision of their employee.
During the trial of the case, it was established that the drivers of the two
vehicles were duly licensed to drive and that the road where the collision
occurred was asphalted and in fairly good condition. [6] The owner-type jeep
was travelling uphill while the passenger jeepney was going downhill. It was
further established that the owner-type jeep was moderately moving and
had just passed a road bend when its passengers, private respondents
Joseph Sandoval and Rene Castillo, saw the passenger jeepney at a distance
of three meters away. The passenger jeepney was traveling fast when it
bumped the owner type jeep.[7] Moreover, the evidence presented by
respondents before the trial court showed that petitioner Juan Gonzales
obtained his professional drivers license only on September 24, 1986, or
three months before the accident. Prior to this, he was holder of a student
drivers permit issued on April 10, 1986.[8]
On November 24, 1997, the trial court rendered a decision in favor of
respondents, the dispositive portion of which states:
Premises duly considered and the plaintiffs having satisfactorily convincingly
and credibly presented evidence clearly satisfying the requirements of
preponderance of evidence to sustain the complaint, this Court hereby
declares judgment in favor of the plaintiffs and against the defendants.
Defendants-spouses Francisco Hernandez and Aniceta Abel Hernandez and
Juan Gonzales are therefore directed to pay jointly and severally, the
following:
1) To spouses Lorenzo Dolor and Margarita Dolor:
a) P50,000.00 for the death of their son, Lorenzo Menard Boyet Dolor,
Jr.;
b) P142,000.00 as actual and necessary funeral expenses;
c) P50,000.00 reasonable value of the totally wrecked owner-type
jeep with plate no. DEB 804 Phil 85;
d) P20,000.00 as moral damages;
e) P20,000.00 as reasonable litigation expenses and attorneys fees.
2) To spouses Francisco Valmocina and Virginia Valmocina:
a) P50,000.00 for the death of their son, Oscar Balmocina (sic);
b) P20,000.00 as moral damages;
c) P18,400.00 for funeral expenses;
d) P10,000.00 for litigation expenses and attorneys fees.
3) To spouses Victor Panopio and Martina Panopio:
a) P10,450.00 for the cost of the artificial leg and crutches being used
by their son Fred Panopio;
b) P25,000.00 for hospitalization and medical expenses they incurred
for the treatment of their son, Fred Panopio.
4) To Fred Panopio:
a) P25,000.00 for the loss of his right leg;
b) P10,000.00 as moral damages.
5) To Joseph Sandoval:
Hauler filed its answer with compulsory counterclaim and cross-claim against
FGU Insurance.
Petitioner claimed that the spouses Baylon had no cause of action against it
because under its lease contract with BG Hauler, petitioner was not liable for
any loss, damage, or injury that the leased oil tanker might cause. Petitioner
claimed that no employer-employee relationship existed between petitioner
and the driver.
BG Hauler alleged that neither do the spouses Baylon have a cause of action
against it since the oil tanker was not registered in its name. BG Hauler
contended that the victim was guilty of contributory negligence in crossing
the street. BG Hauler claimed that even if its driver was at fault, BG Hauler
exercised the diligence of a good father of a family in the selection and
supervision of its driver. BG Hauler also contended that FGU Insurance is
obliged to assume all liabilities arising from the use of the insured oil tanker.
For its part, FGU Insurance averred that the victim was guilty of contributory
negligence. FGU Insurance concluded that the spouses Baylon could not
expect to be paid the full amount of their claims. FGU Insurance pointed out
that the insurance policy covering the oil tanker limited any claim to a
maximum of P400,000.00.
During trial, FGU Insurance moved that (1) it be allowed to deposit in court
the amount of P450,000.00 in the joint names of the spouses Baylon,
petitioner, and BG Hauler and (2) it be released from further participating in
the proceedings. After the RTC granted the motion, FGU Insurance deposited
in the Branch Clerk of Court a check in the names of the spouses Baylon,
petitioner, and BG Hauler. The RTC then released FGU Insurance from its
contractual obligations under the insurance policy.
The Ruling of the RTC
After weighing the evidence submitted by the parties, the RTC found that the
death of Loretta was due to the negligent act of the driver. The RTC held that
BG Hauler, as the employer, was solidarily liable with the driver. The RTC
further held that petitioner, as the registered owner of the oil tanker, was
also solidarily liable.
The RTC found that since FGU Insurance already paid the amount of
P450,000.00 to the spouses Baylon, BG Hauler, and petitioner, the insurer's
obligation has been satisfactorily fulfilled. The RTC thus dismissed the crossclaim of BG Hauler against FGU Insurance. The decretal part of the RTC's
decision reads:
hold the registered owner free from any liabilities, damages, suits, claims, or
judgments arising from SUGECO's use of the leased motor vehicle.
In the instant case, Section 5.1 of the lease contract between petitioner and
BG Hauler provides:
Sec. 5.1. It is the principle of this Lease that while the title or ownership of
the EQUIPMENT, with all the rights consequent thereof, are retained by the
LESSOR, the risk of loss or damage of the EQUIPMENT from whatever source
arising, as well as any liability resulting from the ownership, operation
and/or possession thereof, over and above those actually
compensated by insurance, are hereby transferred to and assumed
by the LESSEE hereunder which shall continue in full force and effect.
[17]
(Emphasis supplied)
If it so wishes, petitioner may proceed against BG Hauler to seek
enforcement of the latter's contractual obligation under Section 5.1 of the
lease contract. In the present case, petitioner did not file a cross-claim
against BG Hauler. Hence, this Court cannot require BG Hauler to reimburse
petitioner for the latter's liability to the spouses Baylon. However, as the
registered owner of the oil tanker, petitioner may not escape its liability to
third persons.
Under Section 5 of Republic Act No. 4136, [18] as amended, all motor vehicles
used or operated on or upon any highway of the Philippines must be
registered with the Bureau of Land Transportation (now Land Transportation
Office) for the current year.[19] Furthermore, any encumbrances of motor
vehicles must be recorded with the Land Transportation Office in order to be
valid against third parties.[20]
In accordance with the law on compulsory motor vehicle registration, this
Court has consistently ruled that, with respect to the public and third
persons, the registered owner of a motor vehicle is directly and primarily
responsible for the consequences of its operation regardless of who the
actual vehicle owner might be. [21] Well-settled is the rule that the registered
owner of the vehicle is liable for quasi-delicts resulting from its use. Thus,
even if the vehicle has already been sold, leased, or transferred to another
person at the time the vehicle figured in an accident, the registered vehicle
owner would still be liable for damages caused by the accident. The sale,
transfer or lease of the vehicle, which is not registered with the Land
Transportation Office, will not bind third persons aggrieved in an accident
involving the vehicle. The compulsory motor vehicle registration underscores
the importance of registering the vehicle in the name of the actual owner.
The policy behind the rule is to enable the victim to find redress by the
expedient recourse of identifying the registered vehicle owner in the records
of the Land Transportation Office. The registered owner can be reimbursed
by the actual owner, lessee or transferee who is known to him. Unlike the
registered owner, the innocent victim is not privy to the lease, sale, transfer
or encumbrance of the vehicle. Hence, the victim should not be prejudiced
by the failure to register such transaction or encumbrance. As the Court held
in PCI Leasing:
The burden of registration of the lease contract is minuscule compared to the
chaos that may result if registered owners or operators of vehicles are freed
from such responsibility. Petitioner pays the price for its failure to obey the
law on compulsory registration of motor vehicles for registration is a prerequisite for any person to even enjoy the privilege of putting a vehicle on
public roads.[22]
In the landmark case of Erezo v. Jepte,[23] the Court succinctly laid down the
public policy behind the rule, thus:
The main aim of motor vehicle registration is to identify the owner so that if
any accident happens, or that any damage or injury is caused by the vehicle
on the public highways, responsibility therefor can be fixed on a definite
individual, the registered owner. Instances are numerous where vehicles
running on public highways caused accidents or injuries to pedestrians or
other vehicles without positive identification of the owner or drivers, or with
very scant means of identification. It is to forestall these circumstances, so
inconvenient or prejudicial to the public, that the motor vehicle registration
is primarily ordained, in the interest of the determination of persons
responsible for damages or injuries caused on public highways.
xxx
Were a registered owner allowed to evade responsibility by proving who the
supposed transferee or owner is, it would be easy for him, by collusion with
others or, or otherwise, to escape said responsibility and transfer the same
to an indefinite person, or to one who possesses no property with which to
respond financially for the damage or injury done. A victim of recklessness
on the public highways is usually without means to discover or identify the
person actually causing the injury or damage. He has no means other than
by a recourse to the registration in the Motor Vehicles Office to determine
who is the owner. The protection that the law aims to extend to him would
become illusory were the registered owner given the opportunity to escape
liability by disproving his ownership. If the policy of the law is to be enforced
and carried out, the registered owner should not be allowed to prove the
contrary to the prejudice of the person injured, that is to prove that a third
Endnotes:
"SEC. 12. Liability of Lessors. ? Financing companies shall not be liable for
loss, damage or injury caused by a motor vehicle, aircraft, vessel, equipment
or other property leased to a third person or entity except where the motor
vehicle, aircraft, vessel, equipment or other property is operated by the
financing company, its employees or agents at the time of the loss, damage
or injury.
that the vessel would, at any time, resume pumping, did not shut the
storage tank gate valve. As all the gate valves remained open, the diesel oil
that was earlier discharged from the vessel into the shore tank backflowed.
Due to non-availability of a pump boat, the vessel could not send somebody
ashore to inform the people at the depot about what happened. After almost
an hour, a gauger and an assistant surveyor from the Caltexs Bulk Depot
Office boarded the vessel. It was only then that they found out what had
happened. Thereafter, the duo immediately went ashore to see to it that the
shore tank gate valve was closed. The loss of diesel oil due to spillage was
placed at 113.788 k/l while some 435,081 k/l thereof backflowed from the
shore tank.
As a result of spillage and backflow of diesel oil, Caltex sought recovery of
the loss from Delsan, but the latter refused to pay. As insurer, AHAC paid
Caltex the sum of P479,262.57 for spillage, pursuant to Marine Risk Note No.
34-5093-6, and P1,939,575.37 for backflow of the diesel oil pursuant to
Inland Floater Policy No. AH-1F64-1011549P.
On February 19, 1985, AHAC, as Caltexs subrogee, instituted Civil Case No.
85-29357 against Delsan before the Manila RTC, Branch 9, for loss caused
by the spillage. It likewise prayed that it be indemnified for damages
suffered in the amount of P652,432.57 plus legal interest thereon.
Also, on May 5, 1985, in the Manila RTC, Branch 31, AHAC instituted Civil
Case No. 85-30559 against Delsan for the loss caused by the backflow. It
likewise prayed that it be awarded the amount of P1,939,575.37 for
damages and reasonable attorneys fees. As counterclaim in both cases,
AHAC prayed for attorneys fees in the amount of P200,000.00 and P500.00
for every court appearance.
Since the cause of action in both cases arose out of the same incident and
involved the same issues, the two were consolidated and assigned to Branch
9 of the court.
On August 31, 1989, the trial court rendered its decision 2 in favor of AHAC
holding Delsan liable for the loss of the cargo for its negligence in its duty as
a common carrier. Dispositively, the decision reads:
WHEREFORE, judgment is hereby rendered:
A). In Civil Case No. 85-30559:
(1) Ordering the defendant (petitioner Delsan) to pay plaintiff (respondent
AHAC) the sum of P1,939,575.37 with interest thereon at the legal rate from
November 21, 1984 until fully paid and satisfied; and
(2) Ordering defendant to pay plaintiff the sum of P10,000.00 as and for
attorneys fees.
For lack of merit, the counterclaim is hereby dismissed.
Delsan would have the Court absolve it from liability for the loss of its cargo
on two grounds. First, the loss through spillage was partly due to the
contributory negligence of Caltex; and Second, the loss through backflow
should not be borne by Delsan because it was already delivered to Caltexs
shore tank.
Common carriers are bound to observe extraordinary diligence in the
vigilance over the goods transported by them. They are presumed to have
been at fault or to have acted negligently if the goods are lost, destroyed or
deteriorated. 6 To overcome the presumption of negligence in case of loss,
destruction or deterioration of the goods, the common carrier must prove
that it exercised extraordinary diligence. There are, however, exceptions to
this rule. Article 1734 of the Civil Code enumerates the instances when the
presumption of negligence does not attach:
Art. 1734. Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the following
causes only:
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.
Both the trial court and the CA uniformly ruled that Delsan failed to prove its
claim that there was a contributory negligence on the part of the owner of
the goods Caltex. We see no reason to depart therefrom. As aptly pointed
out by the CA, it had been established that the proximate cause of the
spillage and backflow of the diesel oil was due to the severance of the port
bow mooring line of the vessel and the failure of the shore tender to close
the storage tank gate valve even as a check on the drain cock showed that
there was still a product on the pipeline. To the two courts below, the
actuation of the gauger and the escort surveyor, both personnel from the
Caltex Bulk Depot, negates the allegation that Caltex was remiss in its
duties. As we see it, the crew of the vessel should have promptly informed
the shore tender that the port mooring line was cut off. However, Delsan did
not do so on the lame excuse that there was no available banca. As it is,
Delsans personnel signaled a "red light" which was not a sufficient warning
because such signal only meant that the pumping of diesel oil had been
finished. Neither did the blowing of whistle suffice considering the distance of
more than 2 kilometers between the vessel and the Caltex Bulk Depot, aside
from the fact that it was not the agreed signal. Had the gauger and the
escort surveyor from Caltex Bulk Depot not gone aboard the vessel to make
inquiries, the shore tender would have not known what really happened. The
crew of the vessel should have exerted utmost effort to immediately inform
the shore tender that the port bow mooring line was severed.
To be sure, Delsan, as the owner of the vessel, was obliged to prove that the
loss was caused by one of the excepted causes if it were to seek exemption
from responsibility. 7 Unfortunately, it miserably failed to discharge this
burden by the required quantum of proof.
Delsans argument that it should not be held liable for the loss of diesel oil
due to backflow because the same had already been actually and legally
delivered to Caltex at the time it entered the shore tank holds no water. It
had been settled that the subject cargo was still in the custody of Delsan
because the discharging thereof has not yet been finished when the backflow
occurred. Since the discharging of the cargo into the depot has not yet been
completed at the time of the spillage when the backflow occurred, there is
no reason to imply that there was actual delivery of the cargo to the
consignee. Delsan is straining the issue by insisting that when the diesel oil
entered into the tank of Caltex on shore, there was legally, at that moment,
a complete delivery thereof to Caltex. To be sure, the extraordinary
responsibility of common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by, the carrier for
transportation until the same are delivered, actually or constructively, by the
carrier to the consignee, or to a person who has the right to receive
them. 8 The discharging of oil products to Caltex Bulk Depot has not yet
been finished, Delsan still has the duty to guard and to preserve the cargo.
The carrier still has in it the responsibility to guard and preserve the goods,
a duty incident to its having the goods transported.
To recapitulate, common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in
vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case. 9 The mere proof of
delivery of goods in good order to the carrier, and their arrival in the place of
destination in bad order, make out a prima facie case against the carrier, so
that if no explanation is given as to how the injury occurred, the carrier must
be held responsible. It is incumbent upon the carrier to prove that the loss
was due to accident or some other circumstances inconsistent with its
liability. 10
All told, Delsan, being a common carrier, should have exercised
extraordinary diligence in the performance of its duties. Consequently, it is
obliged to prove that the damage to its cargo was caused by one of the
excepted causes if it were to seek exemption from responsibility. 11 Having
failed to do so, Delsan must bear the consequences.
SECOND DIVISION
G.R. No. 149019 August 15, 2006
DELSAN TRANSPORT LINES, INC., Petitioner,
vs.
AMERICAN HOME ASSURANCE CORPORATION, Respondent.
DECISION
GARCIA, J.:
By this petition for review on certiorari under Rule 45 of the Rules of Court,
petitioner Delsan Transport Lines, Inc. (Delsan hereafter) assails and seeks
to set aside the Decision, 1 dated July 16, 2001, of the Court of Appeals (CA)
in CA-G.R. CV No. 40951 affirming an earlier decision of the Regional Trial
Court (RTC) of Manila, Branch IX, in two separate complaints for damages
docketed as Civil Case No. 85-29357 and Civil Case No. 85-30559.
The facts:
Delsan is a domestic corporation which owns and operates the vessel MT
Larusan. On the other hand, respondent American Home Assurance
Corporation (AHAC for brevity) is a foreign insurance company duly licensed
to do business in the Philippines through its agent, the AmericanInternational Underwriters, Inc. (Phils.). It is engaged, among others, in
insuring cargoes for transportation within the Philippines.
On August 5, 1984, Delsan received on board MT Larusan a shipment
consisting of 1,986.627 k/l Automotive Diesel Oil (diesel oil) at the Bataan
Refinery Corporation for transportation and delivery to the bulk depot in
Bacolod City of Caltex Phils., Inc. (Caltex), pursuant to a Contract of
Afreightment. The shipment was insured by respondent AHAC against all
risks under Inland Floater Policy No. AH-IF64-1011549P and Marine Risk
Note No. 34-5093-6.
On August 7, 1984, the shipment arrived in Bacolod City. Immediately
thereafter, unloading operations commenced. The discharging of the diesel
oil started at about 1:30 PM of the same day. However, at about 10:30 PM,
the discharging had to be stopped on account of the discovery that the port
bow mooring of the vessel was intentionally cut or stolen by unknown
persons. Because there was nothing holding it, the vessel drifted westward,
dragged and stretched the flexible rubber hose attached to the riser, broke
the elbow into pieces, severed completely the rubber hose connected to the
tanker from the main delivery line at sea bed level and ultimately caused the
diesel oil to spill into the sea. To avoid further spillage, the vessels crew
tried water flushing to clear the line of the diesel oil but to no avail. In the
meantime, the shore tender, who was waiting for the completion of the
water flushing, was surprised when the tanker signaled a "red light" which
meant stop pumping. Unaware of what happened, the shore tender, thinking
that the vessel would, at any time, resume pumping, did not shut the
storage tank gate valve. As all the gate valves remained open, the diesel oil
that was earlier discharged from the vessel into the shore tank backflowed.
Due to non-availability of a pump boat, the vessel could not send somebody
ashore to inform the people at the depot about what happened. After almost
an hour, a gauger and an assistant surveyor from the Caltexs Bulk Depot
Office boarded the vessel. It was only then that they found out what had
happened. Thereafter, the duo immediately went ashore to see to it that the
shore tank gate valve was closed. The loss of diesel oil due to spillage was
placed at 113.788 k/l while some 435,081 k/l thereof backflowed from the
shore tank.
As a result of spillage and backflow of diesel oil, Caltex sought recovery of
the loss from Delsan, but the latter refused to pay. As insurer, AHAC paid
Caltex the sum of P479,262.57 for spillage, pursuant to Marine Risk Note No.
34-5093-6, and P1,939,575.37 for backflow of the diesel oil pursuant to
Inland Floater Policy No. AH-1F64-1011549P.
On February 19, 1985, AHAC, as Caltexs subrogee, instituted Civil Case No.
85-29357 against Delsan before the Manila RTC, Branch 9, for loss caused
by the spillage. It likewise prayed that it be indemnified for damages
suffered in the amount of P652,432.57 plus legal interest thereon.
Also, on May 5, 1985, in the Manila RTC, Branch 31, AHAC instituted Civil
Case No. 85-30559 against Delsan for the loss caused by the backflow. It
likewise prayed that it be awarded the amount of P1,939,575.37 for
damages and reasonable attorneys fees. As counterclaim in both cases,
AHAC prayed for attorneys fees in the amount of P200,000.00 and P500.00
for every court appearance.
Since the cause of action in both cases arose out of the same incident and
involved the same issues, the two were consolidated and assigned to Branch
9 of the court.
On August 31, 1989, the trial court rendered its decision 2 in favor of AHAC
holding Delsan liable for the loss of the cargo for its negligence in its duty as
a common carrier. Dispositively, the decision reads:
WHEREFORE, judgment is hereby rendered:
A). In Civil Case No. 85-30559:
(1) Ordering the defendant (petitioner Delsan) to pay plaintiff (respondent
AHAC) the sum of P1,939,575.37 with interest thereon at the legal rate from
November 21, 1984 until fully paid and satisfied; and
(2) Ordering defendant to pay plaintiff the sum of P10,000.00 as and for
attorneys fees.
For lack of merit, the counterclaim is hereby dismissed.
B). In Civil Case No. 85-29357:
(1) Ordering defendant to pay plaintiff the sum of P479,262.57 with interest
thereon at the legal rate from February 6, 1985 until fully paid and satisfied;
(2) Ordering defendant to pay plaintiff the sum of P5,000.00 as and for
attorneys fees.
For lack of merit, the counterclaim is hereby dismissed.
Costs against the defendant.
SO ORDERED.
In time, Delsan appealed to the CA whereat its recourse was docketed as
CA-G.R. CV No. 40951.
In the herein challenged decision, 3 the CA affirmed the findings of the trial
court. In so ruling, the CA declared that Delsan failed to exercise the
extraordinary diligence of a good father of a family in the handling of its
cargo. Applying Article 1736 4 of the Civil Code, the CA ruled that since the
discharging of the diesel oil into Caltex bulk depot had not been completed
at the time the losses occurred, there was no reason to imply that there was
actual delivery of the cargo to Caltex, the consignee. We quote the fallo of
the CA decision:
WHEREFORE, premises considered, the appealed Decision of the Regional
Trial Court of Manila, Branch 09 in Civil Case Nos. 85-29357 and 85-30559 is
hereby AFFIRMED with a modification that attorneys fees awarded in Civil
Case Nos. 85-29357 and 85-30559 are hereby DELETED.
SO ORDERED.
Delsan is now before the Court raising substantially the same issues
proffered before the CA.
Principally, Delsan insists that the CA committed reversible error in ruling
that Article 1734 of the Civil Code cannot exculpate it from liability for the
loss of the subject cargo and in not applying the rule on contributory
negligence against Caltex, the shipper-owner of the cargo, and in not taking
into consideration the fact that the loss due to backflow occurred when the
diesel oil was already completely delivered to Caltex.
We are not persuaded.
In resolving this appeal, the Court reiterates the oft-stated doctrine that
factual findings of the CA, affirmatory of those of the trial court, are binding
on the Court unless there is a clear showing that such findings are tainted
with arbitrariness, capriciousness or palpable error. 5
Delsan would have the Court absolve it from liability for the loss of its cargo
on two grounds. First, the loss through spillage was partly due to the
contributory negligence of Caltex; and Second, the loss through backflow
should not be borne by Delsan because it was already delivered to Caltexs
shore tank.
Common carriers are bound to observe extraordinary diligence in the
vigilance over the goods transported by them. They are presumed to have
been at fault or to have acted negligently if the goods are lost, destroyed or
deteriorated. 6 To overcome the presumption of negligence in case of loss,
destruction or deterioration of the goods, the common carrier must prove
that it exercised extraordinary diligence. There are, however, exceptions to
this rule. Article 1734 of the Civil Code enumerates the instances when the
presumption of negligence does not attach:
Art. 1734. Common carriers are responsible for the loss, destruction,
or deterioration of the goods, unless the same is due to any of the
following causes only:
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.
Both the trial court and the CA uniformly ruled that Delsan failed to prove its
claim that there was a contributory negligence on the part of the owner of
the goods Caltex. We see no reason to depart therefrom. As aptly pointed
out by the CA, it had been established that the proximate cause of the
spillage and backflow of the diesel oil was due to the severance of the port
bow mooring line of the vessel and the failure of the shore tender to close
the storage tank gate valve even as a check on the drain cock showed that
there was still a product on the pipeline. To the two courts below, the
actuation of the gauger and the escort surveyor, both personnel from the
Caltex Bulk Depot, negates the allegation that Caltex was remiss in its
duties. As we see it, the crew of the vessel should have promptly informed
the shore tender that the port mooring line was cut off. However, Delsan did
not do so on the lame excuse that there was no available banca. As it is,
Delsans personnel signaled a "red light" which was not a sufficient warning
because such signal only meant that the pumping of diesel oil had been
finished. Neither did the blowing of whistle suffice considering the distance of
more than 2 kilometers between the vessel and the Caltex Bulk Depot, aside
from the fact that it was not the agreed signal. Had the gauger and the
escort surveyor from Caltex Bulk Depot not gone aboard the vessel to make
inquiries, the shore tender would have not known what really happened. The
crew of the vessel should have exerted utmost effort to immediately inform
the shore tender that the port bow mooring line was severed.
To be sure, Delsan, as the owner of the vessel, was obliged to prove that the
loss was caused by one of the excepted causes if it were to seek exemption
from responsibility. 7 Unfortunately, it miserably failed to discharge this
burden by the required quantum of proof.
Delsans argument that it should not be held liable for the loss of diesel oil
due to backflow because the same had already been actually and legally
delivered to Caltex at the time it entered the shore tank holds no water. It
had been settled that the subject cargo was still in the custody of Delsan
because the discharging thereof has not yet been finished when the backflow
occurred. Since the discharging of the cargo into the depot has not yet been
completed at the time of the spillage when the backflow occurred, there is
no reason to imply that there was actual delivery of the cargo to the
consignee. Delsan is straining the issue by insisting that when the diesel oil
entered into the tank of Caltex on shore, there was legally, at that moment,
a complete delivery thereof to Caltex. To be sure, the extraordinary
responsibility of common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by, the carrier for
transportation until the same are delivered, actually or constructively, by the
carrier to the consignee, or to a person who has the right to receive
them. 8 The discharging of oil products to Caltex Bulk Depot has not yet
been finished, Delsan still has the duty to guard and to preserve the cargo.
The carrier still has in it the responsibility to guard and preserve the goods,
a duty incident to its having the goods transported.
To recapitulate, common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in
vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case. 9 The mere proof of
delivery of goods in good order to the carrier, and their arrival in the place of
destination in bad order, make out a prima facie case against the carrier, so
that if no explanation is given as to how the injury occurred, the carrier must
be held responsible. It is incumbent upon the carrier to prove that the loss
was due to accident or some other circumstances inconsistent with its
liability. 10
All told, Delsan, being a common carrier, should have exercised
extraordinary diligence in the performance of its duties. Consequently, it is
obliged to prove that the damage to its cargo was caused by one of the
11
Having
issued indicating that the corn grains had 18.56% moisture content and the
wetting was due to contact with salt water. The mold growth was only
incipient and not sufficient to make the corn grains toxic and unfit for
consumption. In fact the mold growth could still be arrested by drying.
Republic Flour Mills Corporation rejected the entire cargo and formally
demanded from North Front Shipping Services, Inc., payment for the
damages suffered by it. The demands however were unheeded. The
insurance companies were perforce obliged to pay Republic Flour Mills
Corporation P2,189,433.40.
By virtue of the payment made by the insurance companies they were
subrogated to the rights of Republic Flour Mills Corporation. Thusly, they
lodged a complaint for damages against North Front Shipping Services, Inc.,
claiming that the loss was exclusively attributable to the fault and negligence
of the carrier. The Marine Cargo Adjusters hired by the insurance companies
conducted a survey and found cracks in the bodega of the barge and heavy
concentration of molds on the tarpaulins and wooden boards. They did not
notice any seals in the hatches. The tarpaulins were not brand new as there
were patches on them, contrary to the claim of North Front Shipping
Services, Inc., thus making it possible for water to seep in.They also
discovered that the bulkhead of the barge was rusty.
North Front Shipping Services, Inc., averred in refutation that it could not
be made culpable for the loss and deterioration of the cargo as it was never
negligent. Captain Solomon Villanueva, master of the vessel, reiterated that
the barge was inspected prior to the actual loading and was found adequate
and seaworthy. In addition, they were issued a permit to sail by the Coast
Guard. The tarpaulins were doubled and brand new and the hatches were
properly sealed. They did not encounter big waves hence it was not possible
for water to seep in. He further averred that the corn grains were farm wet
and not properly dried when loaded.
The court below dismissed the complaint and ruled that the contract
entered into between North Front Shipping Services, Inc., and Republic Flour
Mills Corporation was a charter-party agreement. As such, only ordinary
diligence in the care of goods was required of North Front Shipping Services,
Inc. The inspection of the barge by the shipper and the representatives of
the shipping company before actual loading, coupled with the Permit to
Sail issued by the Coast Guard, sufficed to meet the degree of diligence
required of the carrier.
On the other hand, the Court of Appeals ruled that as a common carrier
required to observe a higher degree of diligence North Front
777 satisfactorily complied with all the requirements hence was issued
a Permit to Sail after proper inspection.Consequently, the complaint was
dismissed and the motion for reconsideration rejected.
the outset that corn grains that were farm wet and not properly dried would
eventually deteriorate when stored in sealed and hot compartments as in
hatches of a ship. Equipped with this knowledge, the master of the vessel
and his crew should have undertaken precautionary measures to avoid or
lessen the cargo's possible deterioration as they were presumed
knowledgeable about the nature of such cargo. But none of such measures
was taken.
In Compania Maritima v. Court of Appeals[5] we ruled x x x x Mere proof of delivery of the goods in good order to a common
carrier, and of their arrival at the place of destination in bad order, makes
out prima facie case against the common carrier, so that if no explanation is
given as to how the loss, deterioration or destruction of the goods occurred,
the common carrier must be held responsible. Otherwise stated, it is
incumbent upon the common carrier to prove that the loss, deterioration or
destruction was due to accident or some other circumstances inconsistent
with its liability x x x x
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 safe 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 characteristics of goods tendered for shipment,
and to exercise due care in the handling and stowage, including such
methods as their nature requires' (underscoring supplied).
In
fine,
we
find
that the carrier
failed to
observe the
required extraordinary diligence in the vigilance over the goods placed in its
care. The proofs presented by North Front Shipping Services, Inc.,
were
insufficient to rebut the prima faciepresumption of private respondent's
negligence, more so if we consider the evidence adduced by petitioners.
It is not denied by the insurance companies that the vessel was indeed
inspected before actual loading and that North Front 777 was issued
a Permit to Sail. They proved the fact of shipment and its consequent loss or
damage while in the actual possession of the carrier. Notably, the carrier
failed to volunteer any explanation why there was spoilage and how it
occurred. On the other hand, it was shown during the trial that the vessel
had rusty bulkheads and the wooden boards and tarpaulins bore heavy
concentration of molds. The tarpaulins used were not new, contrary to the
claim of North Front Shipping Services, Inc., as there were already several
patches on them, hence, making it highly probable for water to enter.
Laboratory analysis revealed that the corn grains were contaminated with
salt water. North Front Shipping Services, Inc., failed to rebut all these
arguments. It did not even endeavor to establish that the loss, destruction
or deterioration of the goods was due to the following: (a) flood, storm,
earthquake, lightning, or other natural disaster or calamity; (b) act of the
public enemy in war, whether international or civil; (c) act or omission of the
shipper or owner of the goods; (d) the character of the goods or defects in
the packing or in the containers; (e) order or act of competent public
authority.[6] This is a closed list. If the cause of destruction, loss or
deterioration is other than the enumerated circumstances, then the carrier is
rightly liable therefor.
However, we cannot attribute the destruction, loss or deterioration of the
cargo solely to the carrier. We find the consignee Republic Flour Mills
Corporation guilty of contributory negligence. It was seasonably notified of
the arrival of the barge but did not immediately start the unloading
operations. No explanation was proffered by the consignee as to why there
was a delay of six (6) days. Had the unloading been commenced
immediately the loss could have been completely avoided or at least
minimized. As testified to by the chemist who analyzed the corn samples,
the mold growth was only at its incipient stage and could still be arrested by
drying. The corn grains were not yet toxic or unfit for consumption. For its
contributory negligence, Republic Flour Mills Corporation should share at
least 40% of the loss.[7]
WHEREFORE, the Decision of the Court of Appeals of 22 December 1994
and
its
Resolution
of
16
February
1995
are
REVERSED and
SET ASIDE. Respondent North Front Shipping Services, Inc., is ordered to
pay petitioners Tabacalera Insurance Co., Prudential Guarantee & Assurance,
Inc., and New Zealand Insurance Co. Ltd., P1,313,660.00 which is 60% of
the amount paid by the insurance companies to Republic Flour Mills
Corporation, plus interest at the rate of 12% per annum from the time this
judgment becomes final until full payment.
SO ORDERED.