You are on page 1of 28

1. DE GUZMAN VS.

COURT OF APPEALS (168 SCRA 612)

Facts: Cendena was a junk dealer and was engaged in buying used bottles and scrap materials in
Pangasinan and brought these to Manila for resale. He used two 6-wheeler trucks. On the return trip to
Pangasinan, he would load his vehicles with cargo which various merchants wanted delivered to Pangasinan.
For that service, he charged freight lower than regular rates. General Milk Co. contacted with him for the
hauling of 750 cartons of milk. On the way to Pangasinan, one of the trucks was hijacked by armed men who
took with them the truck and its cargo and kidnapped the driver and his helper. Only 150 cartons of milk were
delivered. The Milk Co. sued to claim the value of the lost merchandise based on an alleged contract of
carriage. Cendena denied that he was a common carrier and contended that he could not be liable for the loss it
was due to force majeure. The trial court ruled that he was a common carrier. The CA reversed.

Issue: Whether or not Cendena is a common carrier?

Held: Yes, Cendena is properly characterized as a common carrier even though he merely backhauled
goods for other merchants, and even if it was done on a periodic basis rather than on a regular basis, and even
if his principal occupation was not the carriage of goods.

Article 1732 makes no distinction between one whose principal business activity is the carrying of persons
or goods or both, and one who does such carrying only as an ancillary activity. It also avoids making a
distinction between a person or enterprise offering transportation services on a regular or scheduled basis and
one offering service on an occasional, episodic or unscheduled basis. Neither does it make a distinction
between a carrier offering its services to the general public and one who offers services or solicits business
only from a narrow segment of population.

2. FIRST PHILIPPINE INDUSTRIAL CORP. VS. COURT OF APPEALS


(101 SCRA 661, 1998)

Facts: Petitioner is a grantee of a pipeline concession under R.A. No. 387, as amended, a contract, install
and operate oil pipelines. The original pipeline concession was granted in 1967 and renewed by the Energy
Regulatory Board in 1992.

Sometime in January 1995, petitioner applied for a mayors permit with the Office of the Mayor of
Batangas City. However, before the mayors permit could be issued, the respondent City Treasurer required
petitioner to pay a local tax based on its gross receipts for the fiscal year 1993 pursuant to the Local
Government Code. The respondent City Treasure assessed a business tax on the petitioner amounting to
P956,076.04 payable in four installments based on the gross receipts for products pumped at GPS-1 for the
fiscal year 1993 which amounted to P181,681,151.00. in order not to hamper its operations, petitioner paid the
tax under protest in the amount of P239, 019.01 for the first quarter of 1993.

On June 15, 1994, petitioner filed with the RTC of Batangas City a complaint for tax refund with prayer
for writ of preliminary injunction against respondents City of Batangas and Adoracion Arellano in her capacity
as City Treasurer. In its complaint, petitioner alleged, inter alia, that: (1) the imposition and collection of the
business tax on its gross receipts violates Sec. 133 of the Local Government Code; (2) the authority of cities to
impose and collect a tax on the gross receipts of contractors and independent contractors under Sec. 141(e)
and 151 does not include the authority to collect such taxes on transportation contractors for, as defined under
Sec. 131(h), the term contractors excludes transportation contactors; and (3) the City Treasurer illegally and
erroneously imposed and collected the said tax, thus meriting the immediate refund of the tax paid.
Traversing the complaint, the respondents argued that petitioner cannot be exempt from taxes under
Sec. 133 (J) of the Local Government Code as said exemption applied only to transportation contractors and
persons engaged in the transportation by hire and common carriers by air land and water. Respondents assert
that pipelines are not included in the term common carrier which refers solely to ordinary carriers as trucks,
trains, ships and the like. Respondents further posit that the term common carrier under the said Code
pertains to the mode or manner by which a product is delivered to its destination.

Issue: Whether or not the petitioner is a common carrier so that in the affirmative, he is not liable to pay
the carriers tax under the Local Government Code of 1991?

Held: Petitioner is a common carrier.

A common carrier may be defined, broadly, as one who holds himself out to the public as engaged in
the business of transporting persons or property from place to place, for compensation, offering his services to
the public generally.

Article 1732 of the Civil Code defines a common carrier as any person, corporation, firm or
association engaged in the business of carrying or transporting passengers or goods or both, by land, water, or
air, for compensation, offering their services to the public.

The test for determining whether a party is a common carrier of goods is:
1. He must be engaged in the carrying of goods for others as a public employment, and must hold himself
out as ready to engage in the transportation of goods or persons generally as a business and not as a casual
occupation.
2. He must undertake to carry goods of the kind to which his business is confined;
3. He must undertake to carry by the method by which his business is conducted and over his established
roads; and
4. The transportation must be for hire.

3. PLANTERS PORDUCTS VS. CA (226 SCRA)

Facts: Planters Product Inc. purchased from Mitsubishi international corporation metric tons of Urea
fertilizer, which the latter shipped aboard the cargo vessel M/V Sun Plum owned by private respondent Kyosei
Kisen Kabushiki Kaisha. Prior to its voyage, a time charter-party on the vessel respondent entered into between
Mitsubishi as shipper/charterer and KKKK as ship owner, in Tokyo, Japan.

Before loading the fertilizer aboard the vessel, (4) of her holds were presumably inspected by the
charterers representative and found fit to take a load of urea in bulk. After the Urea fertilizer was loaded in
bulk by stevedores hired by and under the supervision of the shipper, the steel hatches were closed with heavy
iron lids. Upon arrival of vessel at port, the petitioner unloaded the cargo pursuant to the terms and conditions
of the charter-party. The hatches remained open throughout the duration of the discharge.

Upon arrival at petitioners warehouse a survey conducted over the cargo revealed a shortage and the
most of the fertilizer was contaminated with dirt. As such, Planters filed an action for damages. The defendant
argued that the public policy governing common carriers do not apply to them because they have become
private carriers by reason of the provisions of the charter-party.

Issue: Whether or not the charter-party contract between the ship owner and the charterer transforms a
common carrier into a private carrier?
Held: A charter party may either her be time charter wherein the vessel is leased to the charterer, wherein
the ship is leased to the charterer for a fixed period of time or voyage charter, wherein the ship is leased for a
single voyage. In both cases, the charter party provides for the hire of the vessel only, either for a determinate
time or for a single or consecutive voyage.

It is therefor imperative that such common carrier shall remain as such, notwithstanding the charter of
the whole or part of the vessel by one or more persons, provided the charter is limited to the ship only, as in the
case of a time-charter or voyage-charter. It is only when the charter includes both ship and its crew as in
bareboat or demise that it becomes a private carrier. Undoubtedly, a shipowner in a time or voyage charter
retains in possession and control of the ship, although her holds may be the property of the charterer.

4. 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)

The 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

5. FABRE VS. CA (259 SCRA 426 G.R. NO. 111127, JULY 26, 1996)

Facts: Petitioners Engracio Fabre, Jr. and his wife were owners of a Mazda minibus. They used the bus
principally in connection with a bus service for school children which they operated in Manila. It was driven
by Porfirio Cabil.

On November 2, 1984 private respondent Word for the World Christian Fellowship Inc. (WWCF)
arranged with the petitioners for the transportation of 33 members of its Young Adults Ministry from Manila to
La Union and back in consideration of which private respondent paid petitioners the amount of P3,000.00.

The usual route to Caba, La Union was through Carmen, Pangasinan. However, the bridge at Carmen was
under repair, so that petitioner Cabil, who was unfamiliar with the area (it being his first trip to La Union), was
forced to take a detour through the town of Ba-ay in Lingayen, Pangasinan. At 11:30 that night, petitioner
Cabil came upon a sharp curve on the highway. The road was slippery because it was raining, causing the bus,
which was running at the speed of 50 kilometers per hour, to skid to the left road shoulder. The bus hit the left
traffic steel brace and sign along the road and rammed the fence of one Jesus Escano, then turned over and
landed on its left side, coming to a full stop only after a series of impacts. The bus came to rest off the road. A
coconut tree which it had hit fell on it and smashed its front portion. Because of the mishap, several passengers
were injured particularly Amyline Antonio.

Criminal complaint was filed against the driver and the spouses were also made jointly liable. Spouses
Fabre on the other hand contended that they are not liable since they are not a common carrier. The RTC of
Makati ruled in favor of the plaintiff and the defendants were ordered to pay jointly and severally to the
plaintiffs. The Court of Appeals affirmed the decision of the trial court.

Issue: Whether the spouses Fabre are common carriers?

Held: Petition was denied. Spouses Fabre are common carriers.


The Supreme Court held that this case actually involves a contract of carriage. Petitioners, the Fabres,
did not have to be engaged in the business of public transportation for the provisions of the Civil Code on
common carriers to apply to them. As this Court has held: 10 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.

The above article makes no distinction between one whose principal business activity is the carrying of
persons or goods or both, and one who does such carrying only as an ancillary activity (in local idiom, as "a
sideline"). Article 1732 also carefully avoids making any distinction between a person or enterprise offering
transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic
or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the
"general public," i.e., the general community or population, and one who offers services or solicits business
only from a narrow segment of the general population. We think that Article 1732 deliberately refrained from
making such distinctions.
6. FISHER VS. YANGCO STEAMSHIP (31 PHIL 1)

Facts: The complained alleges that plaintiff is a stockholder in Yangco Steamship

Company, the owner of the large steam vessels, duly licensed to engage in the coastwise trade of the
Philippine Island; that on or about June 10, 1912, the directors of the company, adopted a resolution which was
thereafter ratified and affirmed by the stockholders of the company expressly declaring and providing that the
classes of merchandise to be carried by the company in its business as common carrier do not include
dynamite, powder or other explosives, and expressly prohibiting the officers, agents an d servants of the
company from offering to carry, accepting for carriage or carrying said dynamite, powder or other explosives.

Issue: Whether the refusal of the owner and officer of a steam vessel, to accept for carriage dynamite,
powder or other explosives for carriage can be held to be a lawful act?

Held: The traffic in dynamite gun powder and other explosive is vitally essential to the material and
general welfare of the inhabitants of this islands and it these products are to continue in general use throughout
the Philippines they must be transported from water to port to port in various island which make up the
Archipelago.

It follows that a refusal by a particular vessel engage as a common carrier of merchandise in coastwise
trade in the Philippine Island to accept such explosives for carriage constitutes a violation.

The prohibition against discrimination penalized under the statute, unless it can be shown that there is
so Real and substantial danger of disaster necessarily involved in the courage of any or all of this article of
merchandise as to render such refusal a due or unnecessary or a reasonable exercise or prudence and
discreation on the part of the ship owner.

7. LOADSTAR SHIPPING VS. CA (315 SCRA 339, 1999)

Facts: On November 19, 1984, loadstar received on board its M/V Cherokee bales of lawanit hardwood,
tilewood and Apitong Bolidenized for shipment. The goods, amounting to P6,067, 178. Were insured for the
same amount with the Manila Insurance Company against various risks including Total Loss by Total Loss of
the Vessel. On November 20, 1984, on its way to Manila from the port of Nasipit, Agusan Del Norte, the
vessel, along with its cargo, sank off Limasawa Island. As a result of the total loss of its shipment, the
consignee made a claim with loadstar which, however, ignored the same. As the insurer, MIC paid to the
insured in full settlement of its claim, and the latter executed a subrogation receipt therefor. MIC thereafter
filed a complaint against loadstar alleging that the sinking of the vessel was due to fault and negligence of
loadstar and its employees.

In its answer, Loadstar denied any liability for the loss of the shippers goods and claimed that the
sinking of its vessel was due to force majeure. The court a quo rendered judgment in favor of MIC., prompting
loadstar to elevate the matter to the Court of Appeals, which however, agreed with the trial court and affirmed
its decision in toto. On appeal, loadstar maintained that the vessel was a private carrier because it was not
issued a Certificate of Public Convenience, it did not have a regular trip or schedule nor a fixed route, and there
was only one shipper, one consignee for a special crago.

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

Held: Loadstar is a common carrier.


The Court held that LOADSTAR is a common carrier. It is not necessary that the carrier be issued a
certificate of public convenience, and this public character is not altered by the fact that the carriage of the
goods in question was periodic, occasional, episodic or unscheduled. Further, the bare fact that the vessel was
carrying a particular type of cargo for one shipper, which appears to be purely co-incidental; it is no reason
enough to convert the vessel from a common to a private carrier, especially where, as in this case, it was shown
that the vessel was also carrying passengers.

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.

8. HOME INSURANCE VS. AMEARICAN STEAMSHIP (23 SCRA 24)

Facts: The Consorcio Pesquero del Peru of South America shipped jute bags of Peruvian fishmeal through
SS Crowborough, consigned to San Miguel Brewery, Inc. The cargo, which was insured by Home Insurance
Company, arrived at the port of Manila and was discharged to the lighters of the Luzon Stevedoring
Corporation. When the same was delivered to the consignee, there were shortages amounting to P 12, 033.85,
prompting the latter to pay against Luzon Stevedoring Co.

Because the others denied liability, Home Insurance paid San Miguel the insurance value loss. This cost
was brought by the former to recover indemnity from Luzon Stevedoring and the ship owner. Luzon
Stevedoring raised the defense that it deliver with due diligence in the same from the carrier. Mexican
Steamship Agencies denied liability on the ground that the charter party referred to in the bills of lading, the
charter, not the ship owner, was responsible for any loss or damage of the cargo. Furthermore, it claimed to
have exercised due diligence in stowing the goods and as a mere forwarding agent, it was not responsible for
losses or damages to the cargo.

Issue: Whether or not the stipulation in the charter party to owners non-liability was valid as to absolve
the American Steamship from liability loss?

Held: The Civil Code provision on common carriers should not be applied where the carrier is not acting
as such but as a private carrier. The stipulation in the charter party absolving the owner from liability for loss
due to the negligence of its agent is void only if the strict public policy governing common carriers is applied.
Such policy has no force where the public at large is not involved, as in the case of a ship totally chartered for
the use of a single party.

9. SAN PABLO VS. PANTRANCO (153 SCRA 199)

Facts: The Pantranco South Express, Inc., hereinafter referred to as PANTRANCO is a domestic
corporation engaged in the land transportation business with PUB service for passengers and freight and
various certificates for public conveniences (CPC) to operate passenger buses from Metro Manila to Bicol
Region and Eastern Samar. On March 27,1980 PANTRANCO through its counsel wrote to Maritime Industry
Authority (MARINA) requesting authority to lease/purchase a vessel named MN "Black Double" "to be used
for its project to operate a ferryboat service from Matnog, Sorsogon and Allen, Samar that will provide service
to company buses and freight trucks that have to cross San Bernardo Strait. In a reply of April 29,1981
PANTRANCO was informed by MARINA that it cannot give due course to the request.
PANTRANCO nevertheless acquired the vessel MN "Black Double" on May 27, 1981 for P3 Million
pesos. It wrote the Chairman of the Board of Transportation (BOT) through its counsel, that it proposes to
operate a ferry service to carry its passenger buses and freight trucks between Allen and Matnog in connection
with its trips to Tacloban City. PANTRANCO claims that it can operate a ferry service in connection with its
franchise for bus operation in the highway from Pasay City to Tacloban City "for the purpose of continuing the
highway, which is interrupted by a small body of water, the said proposed ferry operation is merely a necessary
and incidental service to its main service and obligation of transporting its passengers from Pasay City to
Tacloban City. Such being the case there is no need to obtain a separate certificate for public convenience to
operate a ferry service between Allen and Matnog to cater exclusively to its passenger buses and freight trucks.

Without awaiting action on its request PANTRANCO started to operate said ferry service. Acting
Chairman Jose C. Campos, Jr. of BOT ordered PANTRANCO not to operate its vessel until the application for
hearing on Oct. 1, 1981. In another order BOT enjoined PANTRANCO from operating the MN "Black
Double" otherwise it will be cited to show cause why its CPC should not be suspended or the pending
application denied.

Epitacio San Pablo (now represented by his heirs) and Cardinal Shipping Corporation who are franchise
holders of the ferry service in this area interposed their opposition. They claim they adequately service the
PANTRANCO by ferrying its buses, trucks and passengers. BOT then asked the legal opinion from the
Minister of Justice whether or not a bus company with an existing CPC between Pasay City and Tacloban City
may still be required to secure another certificate in order to operate a ferry service between two terminals of a
small body of water. On October 20, 1981 then Minister of Justice Ricardo Puno rendered an opinion to the
effect that there is no need for bus operators to secure a separate CPC to operate a ferryboat service.

Thus on October 23, 1981 the BOT rendered its decision holding that the ferryboat service is part of its
CPC to operate from Pasay to Samar/Leyte by amending PANTRANCO's CPC so as to reflect the same.

Cardinal Shipping Corporation and the heirs of San Pablo filed separate motions for reconsideration of
said decision and San Pablo filed a supplemental motion for reconsideration that were denied by the BOT on
July 21, 1981. Hence, San Pablo filed the herein petition for review on certiorari with prayer for preliminary
injunction seeking the revocation of said decision, and pending consideration of the petition the issuance of a
restraining order or preliminary injunction against the operation by PANTRANCO of said ferry service

Issue: Whether or not the ferry boat is a common carrier?

Held: Considering the environmental circumstances of the case, the conveyance of passengers, trucks and
cargo from Matnog to Allen is certainly not a ferryboat service but a coastwise or interisland shipping service.
Under no circumstance can the sea between Matnog and Allen be considered a continuation of the highway.
While a ferryboat service has been considered as a continuation of the highway when crossing rivers or even
lakes, which are small body of waters separating the land, however, when as in this case the two terminals,
Matnog and Allen are separated by an open sea it can not be considered as a continuation of the highway.

The contention of private respondent PANTRANCO that its ferry service operation is as a private
carrier, not as a common carrier for its exclusive use in the ferrying of its passenger buses and cargo trucks is
absurd. PANTRANCO does not deny that it charges its passengers separately from the charges for the bus trips
and issues separate tickets whenever they board the MN "Black Double" that crosses Matnog to Allen.
Nevertheless, considering that the authority granted to PANTRANCO is to operate a private ferry, it can still
assert that it cannot be held to account as a common carrier towards its passengers and cargo. Such an
anomalous situation that will jeopardize the safety and interests of its passengers and the cargo owners cannot
be allowed.
Thus the Court holds that the water transport service between Matnog and Allen is not a ferryboat
service but a coastwise or interisland shipping service. Before private respondent may be issued a franchise or
CPC for the operation of the said service as a common carrier, it must comply with the usual requirements of
filing an application, payment of the fees, publication, adducing evidence at a hearing and affording the
oppositors the opportunity to be heard, among others, as provided by law.

10. SAMAR MINING CO., INC. VS. NORDEUTSCHER LLOYD (132 SCRA 529)

Facts: Samar Mining imported 1 crate optima welded wire (amounting to around USD 424 or PhP 1,700)
from Germany, which was shipped on a vessel owned by Nordeutscher Lloyd (M/S Schwabenstein). The
shipment was unloaded in Manila into a barge for transshipment to Davao and temporarily stored in a bonded
warehouse owned by AMCYL. The goods never reached Davao and were never delivered to or received by
the consignee, Samar Mining Co.

CFI ruled in favor of Samar Mining holding Nordeutscher Lloyd liable. However, defendants may recoup
whatever they may pay Samar Mining by enforcing the judgment against third party defendant AMCYL.

Issue: Whether Nordeustscher Lloyd is liable for the loss of the goods as common carrier?

Held: No. At the time of the loss of the goods, the character of possession of Nordeutscher Lloyd shifted
from common carrier to agent of Samar Mining Co.

The Bill of Lading is serves both as a receipt of goods and is likewise the contract to transport and deliver
the same as stipulated. It is a contract and is therefore the law between the parties. The Bill of Lading in
question stipulated that Nordeutscher Lloyd only undertook to transport the goods in its vessel only up to the
port of discharge from ship, which is Manila. The Bill of Lading further stipulated that the goods were to be
transshipped by the carrier from Manila to the port of destination Davao. By unloading the shipment in
Manila and delivering the goods to the warehouse of AMCYL, the appellant was acting within the contractual
stipulations contained in the Bill of Lading.

Article 1736 of the Civil Code relives the carrier of responsibility over the shipment as soon as the carrier
makes actual or constructive delivery of the goods to the consignee or to the person who has a right to receive
them.

Under the Civil Code provisions governing Agency, an agent can only be held liable in cases where his
acts are attended by fraud, negligence, deceit or if there is a conflict of interest between him and the principal.
Under the same law an agent is likewise liable if he appoints a substitute when he was not given the power to
appoint one or otherwise appoints one that is notoriously incompetent or insolvent. These facts were not
proven in the record.

11. EASTERN SHIPPING LINES INC. VS. INTERMEDIATE APPELLATE COURT (150 SCRA
463)

Facts: Sometime in or prior to June 1977, the M/S Asiatica, a vessel operated by petitioner Eastern
Shipping Lines Inc., loaded at Kobe, Japan for transportation to Manila loaded 5,000 pieces of calorized pipes
valued at P256,039.00 which was consigned to Philippine Blooming Mills Co, Inc. and 7 cases of spare parts
valued at P92, 361.75 consigned to Central Textile Mills. Both sets of goods were inured against marine risk
for their stated value with respondent Development Insurance and Surety Corp.
In the same vessel, 2 containers of garment fabrics were also loaded which was consigned to Mariveles
Apparel Corp worth $46,583. The said cargoes were consigned to Nisshin Fire and Marine Insurance. Another
cargo loaded to the vessel was the surveying instruments consigned to Aman Enterprises and General
Merchandise and insured against respondent Dowa Fire & Marine Insurance for $1,385.00.

On the way to Manila, M/S Asiatica caught fire and sank. This resulted to the loss of the ship and its
cargoes. The respective Insurers paid the corresponding marine insurance values and were thus subrogated to
the rights of the insured.
The insurers filed a suit against the petitioner carrier for recovery of the amounts paid to the insured.
However, petitioner contends that it is not liable on the ground that the loss was due to an extraordinary
fortuitous event.

Issue: Whether the Civil Code provisions on Common Carriers or the Carriage of the Goods by Sea Act
will govern the case at bar?

Held: The law of the country to which the goods are to be transported governs the liability of common
carrier in case of their loss, destruction or deterioration. The liability of petitioner is governed primarily by the
Civil Code however, in all matters not regulated by the Civil Code, the Code of Commerce and Special Laws
will govern with respect to the rights and obligations of the carrier. Therefore COGSA is suppletory to the
provisions of the Civil Code.

12. GELISAN VS. ALDAY (154 SCRA 388)

Facts: Bienvenido Gelisan and Roberto Espiritu entered into a contract where the former hired the truck of
Gelisan for the purpose of transporting goods at the price of P18.00. It is also agreed that Espiritu shall bear
and pay all losses and damages attending the carriage of the goods to be hauled by him. Benito Alday, a
trucking operator, had a contract to haul the fertilizers of the Atlas Fertilizer Corporation from Pier 4, North
Harbor, to its Warehouse in Mandaluyong. Alday met Espiritu at the gate of Pier 4 and the latter offered the use
of his truck with the driver and helper at 9 centavos per bag of fertilizer. The offer was accepted by plaintiff
Alday and he instructed his checker Celso Henson to let Roberto Espiritu haul the fertilizer. Espiritu made two
hauls of 200 bags of fertilizer per trip. The fertilizer was delivered to the driver and helper of Espiritu with the
necessary way bill receipts, Exhibits A and B. Espiritu, however, did not deliver the fertilizer to the Atlas
Fertilizer bodega at Mandaluyong.

Subsequently, plaintiff Alday saw the truck in question on Sto. Cristo St. and he notified the Manila Police
Department, and it was impounded by the police. It was claimed by Bienvenido Gelisan. As a result of the
impounding of the truck according to Gelisan and that for the release of the truck he paid the premium of P300
to the surety company.

Benito Alday was compelled to pay the value of the 400 bags of fertilizer, in the amount of P5,397.33, to
Atlas Fertilizer Corporation so that, on 12 February 1962, he (Alday) filed a complaint against Roberto
Espiritu and Bienvenido Gelisan with the CFI Manila

Bienvenido Gelisan, upon the other hand, claimed that he had no contractual relations with the plaintiff
Benito Alday.

Issue: Whether Gelisan being a registered owner is responsible for damages?

Held: The Court has invariably held in several decisions that the registered owner of a public service
vehicle is responsible for damages that may arise from consequences incident to its operation or that may be
caused to any of the passengers therein. The claim of the petitioner that he is not able in view of the lease
contract executed by and between him and Roberto Espiritu which exempts him from liability to third persons,
cannot be sustained because it appears that the lease contract, adverted to, had not been approved by the Public
Service Commission. It is settled in our jurisprudence that if the property covered by a franchise is transferred
or leased to another without obtaining the requisite approval, the transfer is not binding upon the public and
third persons.

Bienvenido Gelisan, the registered owner, is not however without recourse. He has a right to be
indemnified by Roberto Espiritu for the amount that he may be required to pay as damages for the injury
caused to Benito Alday, since the lease contract in question, although not effective against the public for not
having been approved by the Public Service Commission, is valid and binding between the contracting parties.

13. BENEDICTO VS.CA (187 SCRA 547)

Facts: Private respondent Greenhills Wood Industries Company, Inc. a lumber manufacturing firm in
Dagupan City, operates a sawmill in Maddela, Quirino.

In May 1980, private respondent bound himself to sell and deliver to Bluestar Mahogony, Inc. 100,000
board feet of sawn lumber with the understanding that the initial delivery would be made on 15 May 1980. To
effect its first delivery, private respondents resident manager in Maddela, Dominador Cruz, contracted Virgilio
Licuden, the driver of a cargo truck to transport its sawn lumber to the consignee Blue Star in Valenzuela,
Bulacan. This cargo truck was registered in the name of petitioner Ma. Luis Benedicto, the proprietor of
Macoven Trucking, business enterprise engaged in hauling freight, with the main office in B.F. Homes,
Paraaque.

On 15 May 1980, Cruz in the presence and with the consent of driver Licuden, supervised the
loading of 7,690 board feet of sawn lumber with invoice value of P16, 918.00 aboard the cargo truck. The
cargo never reached Blue Star.

Issue: Whether the registered owner is liable even though the vehicle have been transferred to another
person?

Held: Supreme Court held that the prevailing rule on common carrier makes the registered owner liable
for consequences flowing from the operations of the common carrier, even though the specific vehicle involve
may already have been transferred to another person. This doctrine rest upon the principle that in dealing with
the vehicles registered under the Public Service Law, the public has the right to assume that the registered
owner is the actual or lawful owner thereof.

The prevailing doctrine on common carriers makes the registered owner liable for consequences flowing
from the operations of the carrier, even though the specific vehicle involved may already have been transferred
to another person. This doctrine rests upon the principle that in dealing with vehicles registered under the
Public Service Law, the public has the right to assume that the registered owner is the actual or lawful owner
thereof. It would be very difficult and often impossible as a practical matter, for members of the general public
to enforce the rights of action that they may have for injuries inflicted by the vehicles being negligently
operated if they should be required to prove who the actual owner is. The registered owner is not allowed to
deny liability by proving the identity of the alleged transferee. Thus, contrary to petitioners claim, private
respondent is not required to go beyond the vehicles certificate of registration to ascertain the owner of the
carrier.

Clearly, to permit a common carrier to escape its responsibility for the passengers or goods transported by
its proving a prior sale of the vehicle or means of transportation to an alleged vendee would be to attenuate
drastically the carriers duty of extraordinary diligence.
14. SANTOS VS. SIBUG (104 SCRA 520)

Facts: Petitioner Adolfo Santos was the owner of a passenger jeep, but he had no certificate of public
conveyance for the operation of the vehicle as a public passenger jeep. Santos then transferred his jeep to the
name of Vidad so that it could be operated under the latters certificate of public convenience. In other words,
Santos became what is known as kabit operator. Vidad executed a re-transfer document presumably to be
registered it and when it was decided that the passenger jeep of Santos was to be withdrawn from kabit
arrangement.

On the accident date, Abraham Sibug was bumped by the said passenger jeep.

Issue: Whether the Vidad is liable being the registered owner of the jeepney?

Held: As the jeep in question was registered in the name of Vidad, the government or any person affected
by the representation that said vehicle is registered under the name of the particular person had the right to rely
on his declaration of his ownership and registration. And the registered owner or any other person for that
matter cannot be permitted to repudiate said declaration with the objective of proving that the said registered
vehicle is owned by another person and not by the registered owner.

Santos, as the kabit, should not be allowed to defeat the levy in his vehicle and to avoid his responsibility
as a kabit owner for he had led the public to believe that the vehicle belongs to Vidad. This is one way of
curbing the pernicious kabit system that facilitates the commissions of fraud against the traveling public.

15. LITA ENTERPRISES VS. IAC (129 SCRA 464)

Facts: Spouses Nicasio Ocampo and Francisca Garcia (private respondents) purchased in installment from
the Delta Motor Sales Corporation five (5) Toyota Corona Standard cars to be used as taxi. Since they had no
franchise to operate taxicabs, they contracted with petitioner Lita Enterprise, Inc., through its representative
Manuel Concordia, for the use of the latters certificate of public convenience for a consideration of P1, 000.00
and a monthly rental of P200.00/taxicab unit. For the agreement to take effect, the cars were registered in the
name of Lita Enterprises, Inc. The possession, however, remains with spouses Ocampo and Garcia who
operated and maintained the same under Acme Taxi, petitioners trade name.

A year later, one of the taxicabs, driven by their employee, Emeterio Martin, collided with a motorcycle.
Unfortunately the driver of the motorcycle, Florante Galvez died from the injuries it sustained.

Criminal case was filed against Emeterio Martin, while a civil case was filed by the heir of the victim
against Lita Enterprises. In the decision of the lower court Lita Enterprises was held liable for damages for the
amount of P25, 000.00 and P7, 000.00 for attorneys fees.

A writ of execution for the decision followed, 2 of the cars of the respondents spouses were levied and
were sold to a public auction.

On March 1973, respondent Ocampo decided to register his taxicabs in his own name. The manager of
petitioner refused to give him the registration papers. Thus, making spouses file a complaint against petitioner.
In the decision, Lita Enterprise was ordered to return the three certificate of registration not levied in the prior
case.

Petitioner now prays that private respondent be held liable to pay the amount they have given to the heir of
Galvez.
Issue: Whether or not petitioner can recover from private respondent, knowing they are in an arrangement
known as kabit system.

Held: Kabit system is defined as, when a person who has been granted a certificate of convenience
allows another person who owns a motor vehicle to operate under such franchise for a fee. This system is not
penalized as a criminal offense but is recognized as one that is against public policy; therefore it is void and
inexistent.

It is fundamental that the court will not aid either of the party to enforce an illegal contract, but will
leave them both where it finds them. Upon this premise, it was flagrant error on the part of both trial and
appellate courts to have accorded the parties relief from their predicament. Specifically Article 1412 states
that:

If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the
following rules shall be observed: when the fault, is on the part of both contracting parties, neither may
recover what he has given by virtue of the contract, or demand the performance of the others undertaking.

The principle of in pari delicto is evident in this case. the proposition is universal that no action arises, in
equity or at law, from an illegal contract; no suit can be maintained for its specific performance, or to recover
the property agreed to sold or delivered, or damages for its property agreed to be sold or delivered, or damages
for its violation. The parties in this case are in pari delicto, therefore no affirmative relief can be granted to
them.

16. TEJA MARKETING V. IAC (148 SCRA 347)

Facts: Pedro Nale bought from Teja Marketing a motorcycle with complete accessories and a sidecar. A
chattel mortgage was constituted as a security for the payment of the balance of the purchase price. The
records of the Land Transportation Commission show that the motorcycle sold to the defendant was first
mortgaged to the Teja Marketing by Angel Jaucian though the Teja Marketing and Angel Jaucian are one and
the same, because it was made to appear that way only as the defendant had no franchise of his own and he
attached the unit to the plaintiff's MCH Line. The agreement also of the parties here was for the plaintiff to
undertake the yearly registration of the motorcycle with the Land Transportation Commission. The plaintiff,
however failed to register the motorcycle on that year on the ground that the defendant failed to comply with
some requirements such as the payment of the insurance premiums and the bringing of the motorcycle to the
LTC for stenciling, the plaintiff said that the defendant was hiding the motorcycle from him. Lastly, the
plaintiff also explained that though the ownership of the motorcycle was already transferred to the defendant,
the vehicle was still mortgaged with the consent of the defendant to the Rural Bank of Camaligan for the
reason that all motorcycle purchased from the plaintiff on credit was rediscounted with the bank.

Teja Marketing made demands for the payment of the motorcycle but just the same Nale failed to comply,
thus forcing Teja Marketing to consult a lawyer and file an action for damage before the City Court of Naga in
the amount of P546.21 for attorney's fees and P100.00 for expenses of litigation. Teja Marketing also claimed
that as of 20 February 1978, the total account of Nale was already P2, 731, 05 as shown in a statement of
account; includes not only the balance of P1, 700.00 but an additional 12% interest per annum on the said
balance from 26 January 1976 to 27 February 1978; a 2% service charge; and P546.21 representing attorney's
fees. On his part, Nale did not dispute the sale and the outstanding balance of P1,700.00 still payable to Teja
Marketing; but contends that because of this failure of Teja Marketing to comply with his obligation to register
the motorcycle, Nale suffered damages when he failed to claim any insurance indemnity which would amount
to no less than P15,000.00 for the more than 2 times that the motorcycle figured in accidents aside from the
loss of the daily income of P15.00 as boundary fee beginning October 1976 when the motorcycle was
impounded by the LTC for not being registered. The City Court rendered judgment in favor of Teja Marketing,
dismissing the counterclaim, and ordered Nale to pay Teja Marketing On appeal to the Court of First Instance
of Camarines Sur, the decision was affirmed in toto. Nale filed a petition for review with the Intermediate
Appellate Court. On 18 July 1983, the appellate court set aside the decision under review on the basis of
doctrine of "pari delicto," and accordingly, dismissed the complaint of Teja Marketing, as well as the
counterclaim of Nale; without pronouncements as to costs. Hence, the petition for review was filed by Teja
Marketing and/or Angel Jaucian.

Issue: Whether the defendant can recover damages against the plaintiff?

Held: Unquestionably, the parties herein operated under an arrangement, commonly known as the "kabit
system" whereby a person who has been granted a certificate of public convenience allows another person who
owns motor vehicles to operate under such franchise for a fee. A certificate of public convenience is a special
privilege conferred by the government. Abuse of this privilege by the grantees thereof cannot be countenanced.

The "kabit system" has been identified as one of the root causes of the prevalence of graft and corruption
in the government transportation offices. Although not out rightly penalized as a criminal offense, the kabit
system is invariably recognized as being contrary to public policy and, therefore, void and in existent under
Article 1409 of the Civil Code. It is a fundamental principle that the court will not aid either party to enforce an
illegal contract, but will leave both where it finds then. Upon this premise it would be error to accord the
parties relief from their predicament.

17. MAGBOO V. BERNARDO 7 SCRA 952

Facts: Urbano and Emilia Magboo are the parents of Cesar Magboo, a child of 8 years old, who lived with
them and was under their custody until his death on 24 October 1956 when he was killed in a motor vehicle
accident, the fatal vehicle being a passenger jeepney owned by Delfin Bernardo. At the time of the accident,
said passenger jeepney was driven by Conrado Roque. The contract between Roque and Bernardo was that
Roque was to pay to Bernardo the sum of P8.00, which he paid to Bernardo, for privilege of driving the
jeepney, it being their agreement that whatever earnings Roque could make out of the use of the jeepney in
transporting passengers from one point to another in the City of Manila would belong entirely to Roque. As a
consequence of the accident and as a result of the death of Cesar Magboo in said accident, Roque was
prosecuted for homicide thru reckless imprudence before the CFI Manila. Roque was sentenced to 6 months of
arresto mayor, with the accessory penalties of the law; to indemnify the heirs of the deceased in, with
subsidiary imprisonment in case of insolvency, and to pay the costs. Pursuant to said judgment Roque served
his sentence but he was not able to pay the indemnity because he was insolvent. An action was filed by the
spouses Magboo against Bernardo is for enforcement of his subsidiary liability. The trial court ordered
Bernardo to pay the. Bernardo appealed to the Court of Appeals, which certified the case to the Supreme Court
on the ground that only questions of law are involved.

Issue: Whether or not an employer-employee relationship between the jeepney operator and the driver?

Held: An employer-employee relationship exists between a jeepney owner and a driver under a boundary
system arrangement. The features which characterize the boundary system - namely the fact that the driver
does not receive a fixed wage but gets only the excess of the amount of fares collected by him over the amount
he pays to the jeep-owner, and the gasoline consumed by the jeep is for the amount of the driver - are not
sufficient to withdraw the relationship between them from that of employee and employer. Consequently, the
jeepney owner is subsidiary liable as employer in accordance with Art.103, Revised Penal Code.

18. AIR FRANCE VS CARRASCOSO (18 SCRA 155)


Facts: Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for
Lourdes on March 30, 1958.

On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines, Inc.,
issued to plaintiff a "first class" round trip airplane ticket from Manila to Rome. From Manila to Bangkok,
plaintiff traveled in "first class", but at Bangkok, the Manager of the defendant airline forced plaintiff to vacate
the "first class" seat that he was occupying because, in the words of the witness Ernesto G. Cuento, there was a
"white man", who, the Manager alleged, had a "better right" to the seat. When asked to vacate his "first class"
seat, the plaintiff, as was to be expected, refused, and told defendant's Manager that his seat would be taken
over his dead body; a commotion ensued, and, according to said Ernesto G. Cuento, "many of the Filipino
passengers got nervous in the tourist class; when they found out that Mr. Carrascoso was having a hot
discussion with the white man [manager], they came all across to Mr. Carrascoso and pacified Mr. Carrascoso
to give his seat to the white man" and plaintiff reluctantly gave his "first class" seat in the plane after being
threatened that he will be thrown out of the plane if he does not oblige. The captain of the plane, when asked
to intervene, refused to do so.

Issue: Whether or not there was bad faith on the part of Air France, petitioner, entitling Rafael Carrascoso,
respondent for moral and exemplary damages as against the petitioner?

Held: The court held in favor of the respondent, Carrascoso.

The responsibility of an employer for the tortious act of its employees need not be essayed. It is well
settled in law. For the willful malevolent act of petitioner's manager, petitioner, his employer, must answer.

A contract to transport passengers is quite different in kind and degree from any other contractual
relation. And this, because of the relation which an air-carrier sustains with the public. Its business is mainly
with the traveling 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. Neglect or malfeasance of the carrier's
employees, naturally, could give ground for an action for damages.

Passengers do not contract merely for transportation. They have a right to be treated by the carrier's
employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against
personal misconduct, injurious language, indignities and abuses from such employees. So it is that any rule or
discourteous conduct on the part of employees towards a passenger gives the latter an action for damages
against the carrier.

The court held that the judgment of the Court of Appeals does not suffer from reversible error. CA
decision affirmed.

19. 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 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
head-on, 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.
20. REPUBLIC OF THE PHIL., represented by the DEPARTMENT OF HEALTH, NATIONAL
TRUCKING AND FORWARDING CORPORATION (NTFC) and COOPERATIVE FOR AMERICAN
RELIEF EVERYWHERE, INC. (CARE) VS. LORENZO SHIPPING CORPORATION (LSC)G.R. No.
153563. February 7, 2005

Facts: The Philippine government entered into a contract of carriage of goods with petitioner NTFC whereby
the latter shipped bags of non-fat dried milk through respondent LSC. The consignee named in the bills of
lading issued by the respondent was Abdurahma Jama, petitioners branch supervisor in Zamboanga City.
On reaching the port of Zamboanga City, the respondents agent unloaded the goods and delivered the same to
petitioners warehouse. Before each delivery, the delivery checkers of respondents agent requested Jama to
surrender the original bills of lading, but the latter merely presented certified true copies thereof. Upon
completion of each delivery, the delivery checkers asked Jama to sign the delivery receipts. However, at times
when Jama had to attend to other business before a delivery was completed, he instructed his subordinates to
sign the delivery receipts for him.
Notwithstanding the precautions taken, petitioner NTFC allegedly did not receive the good and filed a formal
claim for non-delivery of the goods shipped through respondent. Respondent explained that the cargo had
already been delivered to Jama. The government through the DOH, CARE and NTFC as plaintiffs filed an
action for breach of contract of carriage against respondent as defendant.

Issue: Whether or not respondent is presumed at fault or negligent as common carrier for the loss or
deterioration of the goods.

Held: Article 1733 of the Civil Code demands that a common carrier observe extraordinary diligence over the
goods transported by it. Extraordinary diligence is that extreme measure of care and caution which persons of
unusual prudence and circumspection use for securing and preserving their own property or rights. This
exacting standard imposed on common carriers in a contract of carriage of goods is intended to tilt the scales in
favor of the shipper who is at the mercy of the common carrier once the goods have been lodged for shipment.
Hence, in case of loss of goods in transit, the common carrier is presumed under the law to have been at fault
or negligent. However, the presumption of fault or negligence may be overturned by competent evidence
showing that the common carrier has observed extraordinary diligence over the goods.

The respondent has observed such extraordinary diligence in the delivery of the goods. Prior to releasing the
goods to Jama, the delivery checkers required the surrender of the original bills of lading, and in their absence,
the certified true copies showing that Jama was indeed the consignee of the goods. In addition, they required
Jama or his designated subordinates to sign the delivery receipts upon completion of each delivery.

21. CENTRAL SHIPPING CO. VS. INSURANCE CO. (SEPTEMBER 20, 200, 121 SCRA 769)

Facts: On July 25, 1990 at Puerto Princesa, Palawan, the petitioner received on board its vessel, the M/V
Central Bohol, 376 pieces of Round Logs and undertook to transport said shipment to Manila for delivery to
Alaska Lumber Co., Inc. The cargo is insured for P3, 000, 000.00 against total lost under respondents
MarineCargo Policy.

After loading the logs, the vessel starts its voyage. After few hours of the trip, the ship tilts 10 degrees to
its side, due to the shifting of the logs in the hold. It continues to tilt causing the captain and the crew to
abandon ship. The ship sank.
Respondent alleged that the loss is due to the negligence and fault of the captain. While petitioner
contends that the happening is due to monsoons which is unforeseen or casa fortuito.

Issue: Whether or not petitioner is liable for the loss of cargo?

Held: From the nature of their business and for reasons of public policy, common carriers are bound to
observe extraordinary diligence over the goods they transport, according to all the circumstances of each case.
In the event of loss, destruction or deterioration of the insured goods, common carriers are responsible; that is,
unless they can prove that such loss, destruction or deterioration was brought about -- among others -- by
"flood, storm, earthquake, lightning or other natural disaster or calamity." In all other cases not specified under
Article 1734 of the Civil Code, common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence.

The contention of the petitioner that the loss is due to casa fortuito exempting them from liability is
untenable. Petitioner failed to show that such natural disaster or calamity was the proximate and only cause of
the loss. Human agency must be entirely excluded from the cause of injury or loss. In other words, the
damaging effects blamed on the event or phenomenon must not have been caused, contributed to, or worsened
by the presence of human participation. The defense of fortuitous event or natural disaster cannot be
successfully made when the injury could have been avoided by human precaution.

The monsoon is not the proximate cause of the sinking but is due to the improper stowage of logs. The
logs were not secured by cable wires, causing the logs to shift and later on the sinking the ship. This shows
that they did not exercise extraordinary diligence, making them liable for such loss.

22. SWEET LINES INC, VS. CA (121 SCRA 769)

Facts: Herein private respondents purchased first-class tickets from petitioner at the latters office in Cebu
City. They were to board M/V Sweet Grace bound for Catbalogan, Western Samar. Instead of departing at the
scheduled hour of about midnight on July 8, 1972, the vessel set sail at 3:00 am of July 9, 1972 only to be
towed back to Cebu due to engine trouble, arriving there on the same day at about 4:00 pm. The vessel lifted
anchor again on July 10, 1972 at around 8:00 am. Instead of docking at Catbalogan (the first port of call), the
vessel proceeded direct to Tacloban. Private respondents had no recourse but to disembark and board a ferry
boat to Catbalogan. Hence, the suit for breach of contract of carriage.

Issue: Whether or not the mechanical defect constitutes a fortuitous event which would exempt the carrier
from liability.

Held: No. As found by the trial court and the Court of Appeals, there was no fortuitous event or force
majeure which prevented the vessel from fulfilling its undertaking of taking the private respondents to
Catbalogan. In the first place, mechanical defects in the carrier are not considered a caso fortuito that exempts
the carrier from responsibility. In the second place, even granting arguendo that the engine failure was a
fortuitous event, it accounted on for the delay of departure. When the vessel finally left the port, there was no
longer any force majeure that justified by-passing a port of call.

23. EASTERN SHIPPING LINES VS. CA 234 SCRA 7

Facts: On December 4, 1981, two fiber drums of riboflavin were shipped from Yokohama, Japan for
delivery vessel "SS EASTERN COMET" owned by defendant Eastern Shipping Lines under a bill of lading.
The shipment was insured under plaintiff's Marine Insurance Policy. Upon arrival of the shipment in Manila on
December 12, 1981, it was discharged unto the custody of defendant Metro Port Service, Inc. The latter
excepted to one drum, said to be in bad order, which damage was unknown to plaintiff.
On January 7, 1982 defendant Allied Brokerage Corporation received the shipment from defendant Metro
Port Service, Inc., one drum opened and without seal. On January 8 and 14, 1982, defendant Allied Brokerage
Corporation made deliveries of the shipment to the consignee's warehouse. The latter excepted to one drum
which contained spillages, while the rest of the contents was adulterated/fake.

Plaintiff contended that due to the losses/damage sustained by said drum, the consignee suffered losses
totaling P19, 032.95, due to the fault and negligence of defendants. Claims were presented against defendants
who failed and refused to pay the same. As a consequence of the losses sustained, plaintiff was compelled to
pay the consignee P19, 032.95 under the aforestated marine insurance policy, so that it became subrogated to
all the rights of action of said consignee against defendants.

Issue: Whether or not a claim for damage sustained on a shipment of goods can be a solidary or joint and
several, liability of the common carrier, the arrastre operator and the customs broker?

Held: The common carrier's 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 (Arts. 1736-1738, Civil Code). When the goods shipped either are 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 (Art. 1735, Civil Code). There are, of course,
exceptional cases when such presumption of fault is not observed but these cases, enumerated in Article 1734
of the Civil Code, are exclusive, not one of which can be applied to this case.

As to The question of charging both the carrier and the arrastre operator with the obligation of properly
delivering the goods to the consignee, the legal relationship between the consignee and the arrastre operator is
akin to that of a depositor and warehouseman while the relationship between the consignee and the common
carrier is similar to that of the consignee and the arrastre operator. Since it is the duty of the arrastre to take
good care of the goods that are in its custody and to deliver them in good condition to the consignee, such
responsibility also devolves upon the carrier. Both the arrastre and the carrier are therefore charged with the
obligation to deliver the goods in good condition to the consignee. A factual finding of both the Supreme Court
and the appellate court was that there was sufficient evidence that the shipment sustained damage while in the
successive possession of appellants. Accordingly, the liability imposed on Eastern Shipping Lines, Inc., the
sole petitioner in this case, is inevitable regardless of whether there are others solidarily liable with it.

24. LA MALLORCA VS. CA (G.R. NO. L-20761, 27 JULY 1966, 17 SCRA 739)

Facts: Plaintiffs, husband and wife, together with their three minor daughters (Milagros, 13 years old,
Raquel, about 4 years old and Fe, 2 years old) boarded the Pambusco at San Fernando Pampanga, bound for
Anao, Mexico, Pampanga. Such bus is owned and operated by the defendant.

They were carrying with them four pieces of baggage containing their personal belonging. The
conductor of the b us issued three tickets covering the full fares of the plaintiff and their eldest child Milagros.
No fare was charged on Raquel and Fe, since both were below the height which fare is charged in accordance
with plaintiffs rules and regulations.

After about an hours trip, the bus reached Anao where it stopped to allow the passengers bound
therefore, among whom were the plaintiffs and their children to get off. Mariano Beltran, carrying some of
their baggage was the first to get down the bus, followed by his wife and children. Mariano led his companion
to a shaded spot on the left pedestrian side of the road about four or five meters away from the vehicle.
Afterwards, he returned to the bus in controversy to get his paying, which he had left behind, but in so doing,
his daughter followed him unnoticed by his father. While said Mariano Beltran was on he running board of the
bus waiting for the conductor to hand him his bayong which he left under one its seats near the door, the bus,
whose motor was not shut off while unloading suddenly started moving forward, evidently to resume its trip,
notwithstanding the fact that the conductor was still attending to the baggage left behind by Mariano Beltran.
Incidentally, when the bus was again placed in a complete stop, it had traveled about 10 meters from point
where plaintiffs had gotten off.

Sensing the bus was again in motion; Mariano immediately jumped form the running board without
getting his bayong from conductor. He landed on the side of the road almost board in front of the shaded place
where he left his wife and his children. At that time, he saw people beginning to gather around the body of a
child lying prostrate on the ground, her skull crushed, and without life. The child was none other than his
daughter Raquel, who was run over by the bus in which she rode earlier together her parent.

For the death of the said child, plaintiffs comment the suit against the defendant to recover from the
latter damages.

Issue: Whether or not the child was no longer the passenger of the bus involved in the incident, and
therefore, the contract of carriage was already terminated?

Held: There can be no controversy that as far as the father is concerned, when he returned to the bus for
his bayong which was not unloaded, the relation of passenger and carrier between him and the petitioner
remained subsisting. The relation of carrier and passenger does not necessarily cease where the latter, after
alighting from the car aids the carriers servant or employee in removing his baggage from the car.

It is a rule that the relation of carrier and passenger does not cease the moment the passenger alights
from the carriers vehicle at a place selected by the carrier at the point of destination but continues until the
passenger has had a reasonable time or a reasonable opportunity to leave the carriers premises.

The father returned to the bus to get one of his baggages which was not unloaded when they alighted
from the bus. Raquel must have followed her father. However, although the father was still on the running
board of the bus awaiting for the conductor to hand him the bag or bayong, the bus started to run, so that even
he had jumped down from the moving vehicle. It was that this instance that the child, who must be near the
bus, was run over and killed. In the circumstances, it cannot be claimed that the carriers agent had exercised
the utmost diligence of a very cautious person required by Article 1755 of the Civil Code to be observed
by a common carrier in the discharge of its obligation to transport safely its passengers. The driver, although
stopping the bus, nevertheless did not put off the engine. He started to run the bus even before the conductor
gave him the signal to go and while the latter was still unloading part of the baggage of the passengers Beltran
and family. The presence of the said passengers near the bus was not unreasonable and they are, therefore, to
be considered still as passengers of the carrier, entitled to the protection under their contract of carriage.

25. ABOITIZ SHIPPING CORP. VS. CA (179 SCRA 95)

Facts: On May 11, 1975, Anacleto Viana boarded M/|V Antonio from Occidental Mindoro bound for
Manila. Upon arrival on May 12, 1975, the passengers therein disembarked through a gangplank connecting
the vessel to the pier. Viana, instead of disembarking through the gangplank, disembarked through the third
deck, which was at the same level with the pier. An hour after the passengers disembarked, Pioneer stevedoring
started to operate in unloading the cargo from the ship. Viana then went back, remembering some of his
cargoes left at the vessel. At that time, while he was pointing at the crew of the vessel to where his cargoes
were loaded, the crane hit him, pinning him between the crane and the side of the vessel. He was brought to the
hospital where he died 3 days after (May 15). The parents of Anacleto filed a complaint against Aboitiz for
breach of contract of carriage.
The trial court ruled in favor of the plaintiffs. Then both Aboitiz and Pioneer filed a motion for
reconsideration, upon which the trial court issued an order absolving Pioneer from liability but not Aboitiz. On
appeal, CA affirmed the trial court ruling. Hence, this petition.

Issue: Whether or not Viana is still considered a passenger at the time of the incident?

Held: Yes. The La Mallorca case is applicable in the case at bar.

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 owners dock or premises. Once created, the relationship will not
ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carriers
conveyance or had a reasonable opportunity to leave the carriers 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 carrier-passenger 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 carriers premises to claim his baggage.

The reasonableness of the time should be made to depend on the attending circumstances of the case, such
as the kind of common carrier, the nature of its business, the customs of the place, and so forth, and therefore
precludes a consideration of the time element per se without taking into account such other factors.

Where a passenger dies or is injured, the common carrier is presumed to have been at fault or to have
acted negligently. This gives rise to an action for breach of contract where all that is required of plaintiff is to
prove the existence of the contract of carriage and its non-performance by the carrier, that is, the failure of the
carrier to carry the passenger safely to his destination, which, in the instant case, necessarily includes its failure
to safeguard its passenger with extraordinary diligence while such relation subsists.

26. BRINAS VS. PEOPLE (125 SCRA 687)

Facts: In the afternoon of January 6, 1957, Juanito Gesmundo bought a train ticket at the railroad station in
Tagkawayan, Quezon for his 55-year old mother Martina Bool and his 3-year old daughter Emelita Gesmundo.
The two were bound for Lusacan in Tiaong, Quezon.

They boarded the train of Manila Railroad Company at about 2pm. Upon approaching Barrio Lagalag
at 8pm, the train slowed down and the conductor, accused-appellant, Clemente Brinas, shouted Lusacan,
Lusacan!

The old woman walked towards the train exit carrying the child with one hand and holding her baggage
with the other. When they were near the door, the train suddenly picked up speed. The old woman and the child
stumbled from the train causing them to fall down the tracks and were hit by an oncoming train, causing their
instant death.

A criminal information was filed against Victor Milan, the driver, Hermogenes Buencamino, the
assistant conductor and Clemente Brinas for Double Homicide thru Reckless Imprudence. But the lower court
acquitted Milan and Buencamino. On appeal to the CA, respondent CA affirmed the decision.

Issue: Whether or not the CA erred in ruling the accused-appellant was negligent?
Held: There was no error in the factual findings of the respondent court and in the conclusion drawn from
the findings.

It is a matter of common knowledge and experience about common carriers like trains and buses that
before reaching a station or flagstop they slow down and the conductor announces the name of the place. It is
also a matter of common experience that as the train or bus slackens its speed, some passengers usually stand
and proceed to the nearest exit, ready to disembark as the train or bus comes to a full stop. This is especially
true of a train because passengers feel that if the train resumes its run before they are able to disembark; there
is no way to stop it as a bus may be stopped.
The appellant was negligent because his announcement was premature and erroneous, for it took a full 3
minutes more before the next barrio of Lusacan was reached. The premature announcement prompted the two
victims to stand and proceed to the nearest exit. Without said announcement, the victims would have been
safely seated in their respective seats when the train jerked and picked up speed. The proximate cause of the
death of the victims was the premature and erroneous announcement of petitioner-appellant.

27. GACAL VS. PAL (183 SCRA 189, G.R. NO. 55300 MARCH 16, 1990)

Facts: Plaintiffs Franklin Gacal, his wife and three others were passengers of PAL plane at Davao Airport
for a flight to Manila, not knowing that the flight, were Commander Zapata with other members of Moro
National Liberation Front. They were armed with grenades and pistols. After take off, the members of MNLF
announced a hijacking and directed the pilot to fly directly to Libya, later to Sabah. They were, however,
forced to land in Zamboanga airport for refueling, because the plane did not have enough fuel to make direct
flight to Sabah. When the plane began to taxi at the runaway of Zamboanga airport, it was met by two armored
cars of the military.

An armored car subsequently bumped the stairs leading inside the plane. That commenced the battle
between the military and the hijackers, which led ultimately to the liberation of the planes surviving crew and
passengers with the final score of ten passengers and three hijackers dead.

Issue: Whether or not hijacking is a case fortuito or force majeure, which would exempt an aircraft from
liability for, damages to its passengers and personal belongings that were lost during the incident?

Held: In order to constitute a caso fortuito that would exempt from liability under Art 1174 of the civil
code, it is necessary that the following elements must occur: (a) the cause of the breach of obligation must be
independent of human will; (b) the event must be unforeseeable or unavoidable; (c) the event must be such as
to render it impossible for the debtor to fulfill his obligation in a normal manner; (d) the debtor must be free
from any participation in or aggravation of the injury to the creditor.

Applying the above guidelines, the failure to transport the petitioners safely from Davao to Manila was
due to the skyjacking incident staged buy the MNLF without connection to the private respondent, hence,
independent of will of PAL or its passengers.

The events rendered it impossible for PAL to perform its obligation in a normal manner and it cannot be
faulted for negligence on the duty performed by the military. The existence of force majeure has been
established thus exempting PAL from payment of damages.

28. PILAPIL VS. CA 180 SCRA 546

Facts: On September 16, 1971, Jose Pilapil boarded defendants bus bearing No. 409 at San Nicolas, Iriga
City at about 6:00PM. Upon reaching the vicinity of the cemetery of the Municipality of Baao, Camarines Sur,
on the way to Naga City City, an unidentified man ( a bystander) hurled a stone at the left side of the bus,
which apparently hit petitioner above his left eye. He was then immediately brought by private respondents
personnel to the provincial hospital in Naga City.

Issue: Whether or not the nature of the business of a transportation company requires the assumption of
certain risks and the stroking of the bus by a bystander resulting in injury to petitioner-passenger is one such
risk from which the common carrier may not exempt itself from liability?

Held: The Supreme Court held that 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 absolute safety of its passengers. A tort, committed by a stranger
which causes an injury to a passenger does not accord the latter a cause of action against the carrier. The
negligence for which a common carrier is responsible is the negligent omission by the carriers employees to
prevent the tort from being committed when the same could have been foreseen and prevented by them.
Further, 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 the family.

29. COMPANIA MARITIMA VS COURT OF APPEALS AND VICENTE CONCEPCION (162


SCRA 685)

Facts: Vicente Concepcion is doing business under the name of Consolidated Construction. Being a
Manila based contractor, Concepcion had to ship his construction equipment to Cagayan de Oro. On August
28, 1964, Concepcion shipped 1 unit pay loader, 4 units of 6x6 Roe trucks, and 2 pieces of water tanks. The
aforementioned equipment was loaded aboard the MV Cebu, which left Manila on August 30, 1964 and arrived
at Cagayan de Oro on September 1, 1964. The Reo trucks and water tanks were safely unloaded however the
pay loader suffered damage while being unloaded. The damaged pay loader was taken to the petitioners
compound in Cagayan de Oro.

Consolidated Construction thru Vicente Concepcion wrote Compania Maritima to demand a


replacement of the broken pay loader and also asked for damages. Unable to get a response, Concepcion sent
another demand letter. Petitioner meanwhile, sent the damaged payloader to Manila, it was weighed at San
Miguel Corporation, where it was found that the payloader actually weighed 7.5 tons and not 2.5 tons as
declared in its bill of lading. Due to this, petitioner denied the claim for damages of Consolidated Construction.
Consolidated then filed an action for damages against petitioner with the Court of First Instance of Manila. The
Court of First Instance dismissed the complaint stating that the proximate cause of the fall of the payloader
which caused its damage was the act or omission of Vicente Concepcion for misrepresenting the weight of the
payloader as 2.5 tons instead of its true weight of 7.5 tons. On appeal, the Court of Appeals, reversed the
decision of the Court of First Instance and ordered the plaintiff to pay Concepcion damages. Hence this
petition.

Issue: Whether or not the act of respondent Concepcion of misdeclaring the true weight of the payloader
the proximate and only cause of the damage of the payloader?

Held: No, Compania Maritima is liable for the damage to the payloader. The General rule under Articles
1735 and 1752 of the Civil Code is that common carriers are presumed to be at fault or to have acted
negligently in case the goods transported by them are lost, destroyed, or had deteriorated. To overcome the
presumption of liability for the loss destruction or deterioration common carriers must prove that they have
exercised extraordinary diligence as required by Article 1733 of the Civil Code.

Extraordinary Diligence in the vigilance over the goods tendered for shipment requires the common
carrier to know and follow the required precaution fro avoiding damage 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.

The Supreme Court further held that the weight in a bill of lading are prima facie evidence of the
amount received and the fact that the weighing was done by another will not relieve the common carrier where
it accepted such weight and entered it in on the bill of lading. The common carrier can protect themselves
against mistakes in the bill of lading as to weight by exercising extraordinary diligence before issuing such.

30. SERVANDO VS. PHILIPPINE STEAM NAVIGATION CO.(117 SCRA 832)

Facts: Bico and Servando loaded on board the FS-176 the following cargoes: 1.528 cavans of rice and 44
cartons of colored paper, toys and general merchandise. Upon the arrival of the vessel, the cargoes were
discharged, complete and in good order to the warehouse of the Bureau of Customs. At 2:00 pm of the same
day, a fire of unknown reasons razed the warehouse. Before the fire, Bico was able to take delivery of 907
cavans of rice. The petitioners are now claiming for the value of the destroyed goods from the common carrier.

The Trial Court ordered the respondent to pay the plaintiffs the amount of their lost goods on the basis that
the delivery of the shipment to the warehouse is not the delivery contemplated by Article 1736 of the New
Civil Code, since the loss occurred before actual or constructive delivery. The petitioners argued that the
stipulation in the bills of lading does not bind them because they did not sign the same. The stipulation states
that the carrier shall not be responsible for loss unless such loss was due to the carriers negligence. Neither
shall it be liable for loss due to fortuitous events such as dangers of the sea and war.

Issue: Whether or not the carrier should be held liable for the destruction of the goods

Held: No. There is nothing on record to show that the carrier incurred in delay in the performance of its
obligation. Since the carrier even notified the plaintiffs of the arrival of their shipments and had demanded that
they be withdrawn.

The carrier also cannot be charged with negligence since the storage of the goods was in the Customs
warehouse and was undoubtedly made with their knowledge and consent. Since the warehouse belonged and
maintained by the Government, it would be unfair to impute negligence to the appellant since it has no control
over the same.

31. DSR SENATOR LINES VS. FEDERAL PHOENIX 7 OCTOBER 2003

Facts: Berde plants, Inc. delivered 632 units of artificial trees to C.F. Sharp and Company, Inc., the
General Sip Agent of DSR- Senator Lines, a foreign shipping corporation, for transportation and delivery to the
consignee, Al-Mohr International Group, in Riyadh, Saudi Arabia. Sharp issued an international bill of landing
for the cargo, with a stipulation that the port of discharge for the cargo was at the Khor Fakkan port and the
port of delivery was Riyadh, Saudi Arabia.

On June 7, 1993, the vessel left Manila for Saudi Arabia with the cargo on board. When the vessel
arrived in Khor Fakkan Port, the cargo was reloaded on board DSR-Senator Lines feeder vessel, however
while in transit, the vessel and all its cargo caught fire.
Consequently, Federal Phoenix Assurance paid Berde Plants corresponding to the amount of the
insurance for the cargo. In turn, Berde Plants executed in its favor a Subrogation Receipt.

Federal Phoenix demanding payment on the basis of the subrogation receipt. C.f. Sharp denied any
liability that such liability was extinguished when the vessel carrying the cargo was gutted by fire. Thus,
Federal Phoenix filed a complaint for damages against DSR-Senator Lines and C.F, Sharp.

Issue: Whether or not there was a breach of contract of carriage.

Held: Fire is not one of those enumerated under Article 1734 of the Civil Code to wit,

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 civil;
3. Act or omission of the shipper or the 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.
6. Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods
transported by them. Accordingly, they are presumed to have been at fault or to have acted negligently of the
goods are lost, destroyed or deteriorated. In those cases where the presumption is applied, the common carrier
must prove that it exercised extraordinary diligence in order to overcome the presumption.

32. SARREAL VS. JAPAN AIRLINES (117 SCRA 832)

Facts: On September 14, 1979, the petitioner purchased in Bangkok from private respondent Japan Air
Lines (JAL) ticket no. 131-4442-517-368, having various foreign destinations from Bangkok and back to
Bangkok.

On or about June 23, 1980, he was in Los Angeles, USA with his business representative Atty. Pol Tiglao,
and Luis Espada, the boxing manager of World Flyweight Boxing Champion Hilario Zapata. They were
negotiating a possible match between the latter and the winner of the " Netrnoi Vorasing - Brigildo Caada"
main event fight which was scheduled on July 4, 1980 in Manila. This agreement was to be confirmed by the
petitioner through overseas call in Manila on or before July 2, 1980.

The petitioner then flew from Los Angeles to Tokyo arriving thereat on June 26, 1980.

At the Narita Airport Office, the petitioner inquired if there was a JAL flight from Bangkok to Manila on
July 2, 1980. He explained to a lady employee of JAL that he had a very important business in Manila on July
2, 1980. He also told her that if he could not take a flight from Bangkok to Manila on that date, he would not
be going to Bangkok anymore.

The JAL lady employee looked into her scheduled book put a stamp on the petitioner's ticket and told him
not to worry because she has endorsed his JAL ticket to Thai International leaving Bangkok on July 2, 1980 for
Manila.

Relying on the assurance of the lady employee, the petitioner then proceeded to Bangkok.
However, in the morning of July 2, 1980, when the petitioner was about to board the said Thai
International, he was not allowed to board the said plane through it had available seats because he was told that
his ticket was not endorsable.

Since the petitioner failed to reach Manila by July 2, 1980, Espada cancelled his transaction with the
petitioner and decided to have the champion fight in Japan instead.

This led the petitioner to file an action for damages with the Regional Trail Court (RTC ), Pasay City
against private respondent JAL premised on the breach of contract of carriage.

Issue: Whether or not the assurance of an airline employee, not evidenced by any hard proof, is sufficient
as an assurance of a passenger securing his seat?

Held: The petitioner is said to be a well-traveled person who average two long trips to Europe and two
trips to Bangkok every month since 1945. He claims to have used practically all the airlines but mostly
Philippine Airlines whenever he travels abroad in connection with his occupation as international boxing
matchmaker and manager of world-champion boxers.

Certainly, a man of such stature was aware of the restrictions carried by his ticket and the usual procedure
that goes with traveling. The petitioner ought to know that it was still necessary to verify first from Thai
International if they would honor the endorsement of his JAL ticket or confirm with the airline if he had a seat
in the July 2 flight.

The court finds no justification for the relief prayed for by the petitioner. He has failed to show that the
findings of the respondent court are not based on substantial evidence or that it conclusions are contrary to law
and applicable jurisprudence.

33. VASQUEZ VS. COURT OF APPEALS (138 SCRA 553)

Facts: MV Pioneer Cebu left the port of Manila and bounded for Cebu. Its officers were aware of the
upcoming typhoon Klaring that is already building up somewhere in Mindanao. There being no typhoon
signals on their route, they proceeded with their voyage. When they reached the island of Romblon, the captain
decided not to seek shelter since the weather was still good. They continued their journey until the vessel
reached the island of Tanguingui, while passing through the island the weather suddenly changed and heavy
rains fell. Fearing that they might hit Chocolate island due to zero visibility, the captain ordered to reverse
course the vessel so that they could weather out the typhoon by facing the strong winds and waves.
Unfortunately, the vessel struck a reef near Malapascua Island, it sustained a leak and eventually sunk.

The parents of the passengers who were lost due to that incident filed an action against Filipinas Pioneer
Lines for damages. The defendant pleaded force majeure but the Trial Court ruled in favor of the plaintiff. On
appeal to the Court of Appeals, it reversed the decision of the lower stating that the incident was a force
majeure and absolved the defendants from liability.

Issue: Whether of not Filipinas Pioneer Lines is liable for damages and presumed to be at fault for the
death of its passenger?

Held: The Supreme Court held the Filipinas Pioneer Lines failed to observe that extraordinary diligence
required of them by law for the safety of the passengers transported by them with due regard for all necessary
circumstance and unnecessarily exposed the vessel to tragic mishap. Despite knowledge of the fact that there
was a typhoon, they still proceeded with their voyage relying only on the forecast that the typhoon would
weaken upon crossing the island of Samar. The defense of caso fortuito is untenable. To constitute caso fortuito
to exempt a person from liability it necessary that the event must be independent from human will, the
occurrence must render it impossible for the debtor to fulfill his obligation in a normal manner, the obligor
must be free from any participation or aggravation to the injury of the creditor. Filipina Pioneer Lines failed to
overcome that presumption o fault or negligence that arises in cases of death or injuries to passengers.

34. QUISUMBING VS. CA

Facts: Norberto Quisumbing, Sr. and Gunther Leoffler were among the of ... (PAL's) Fokker 'Friendship'
PIC-536 plane in its flight of November 6, 1968 which left Mactan City at about 7:30 in the evening with
Manila for its destination.

After the plane had taken off, Florencio O. Villarin, a Senior NBI Agent who was also a passenger of the
said plane, noticed a certain 'Zaldy,' a suspect in the killing of Judge Valdez, seated at the front seat near the
door leading to the cockpit of the plane. A check by Villarin with the passenger's ticket in the possession of
flight Stewardess Annie Bontigao, who was seated at the last seat right row, revealed that 'Zaldy' had used the
name 'Cardente,' one of his aliases known to Villarin. Villarin also came to know from the stewardess that
'Zaldy' had three companions on board the plane."

Villarin then scribbled a note addressed to the pilot of the plane requesting the latter to contact NBI
duty agents in Manila for the said agents to ask the Director of the NBI to send about six NBI agents to meet
the plane because the suspect in the killing of Judge Valdez was on board (Exh. 'G'). The said note was handed
by Villarin to the stewardess who in turn gave the same to the pilot.

After receiving the note, which was about 15 minutes after take off, the pilot of the plane, Capt. Luis
Bonnevie, Jr., came out of the cockpit and sat beside Villarin at the rear portion of the plane and explained that
he could not send the message because it would be heard by all ground aircraft stations. Villarin, however, told
the pilot of the danger of commission of violent acts on board the plane by the notorious 'Zaldy' and his three
companions.

While the pilot and Villarin were talking, 'Zaldy' and one of his companions walked to the rear
and stood behind them. Capt. Bonnevie then stood up and went back to the cockpit. 'Zaldy' and his companions
returned to their seats, but after a few minutes they moved back to the rear throwing ugly looks at Villarin who,
sensing danger, stood up and went back to his original seat across the aisle on the second to the last seat near
the window. 'Zaldy and his companion likewise went back to their respective seats in front.

Soon thereafter an exchange of gunshots ensued between Villarin and 'Zaldy' and the latter's
companions. 'Zaldy' announced to the passengers and the pilots in the cockpit that it was a hold-up and ordered
the pilot not to send any SOS. The hold-uppers divested passengers of their belongings.

Issue: Whether or not Pal is liable for damages against the passengers for loss caused by the robbers on
board?

Held: It is illusive to assume that had these precautions been taken, the hijacking or the robbery would not
have succeeded. The mandatory use of the most sophisticated electronic detection devices and magnetometers,
the imposition of severe penalties, the development of screening procedures, the compilation of hijacker
behavioral profiles, the assignment of sky marshals, and the weight of outraged world opinion may have
minimized hijackings but all these have proved ineffective against truly determined hijackers. World
experience shows that if a group of armed hijackers want to take over a plane in flight, they can elude the latest
combined government and airline industry measures. And as our own experience in Zamboanga City
illustrates, the use of force to overcome hijackers, results in the death and injury of innocent passengers and
crew members. We are not in the least bit suggesting that the Philippine Airlines should not do everything
humanly possible to protect passengers from hijackers' acts. We merely state that where the defendant has
faithfully complied with the requirements of government agencies and adhered to the established procedures
and precautions of the airline industry at any particular time, its failure to take certain steps that a passenger in
hindsight believes should have been taken is not the negligence or misconduct which mingles with force
majeure as an active and cooperative cause.

35. BRITISH AIRWAYS VS. CA (285 SCRA 450)

Facts: On April 16, 1989, Mahtani is on his way to Bombay, India from Manila. His trip was Manila-
Hong Kong via PAL and then Hong Kong-India via British Airways. Prior to his departure, he checked in two
pieces of luggage containing his clothing and other personal effects, confident that the same would be
transferred to his BA flight.

Unfortunately, when he arrived in India, he discovered that his luggage was missing.

The RTC awarded Mahtani damages which was affirmed by CA.


Issue: Whether or not in a contract of air carriage a declaration by the passenger is needed to recover a
greater amount?

Held: American jurisprudence provides that an air carrier is not liable for the loss of baggage in an
amount in excess of the limits specified in the tariff which was filed with the proper authorities, such tariff
being binding on the passenger regardless of the passengers lack of knowledge thereof or assent thereto. This
doctrine is recognized in this jurisdiction.

The inescapable conclusion that BA had waived the defense of limited liability when it allowed
Mahtani to testify as to the actual damages he incurred due to misplacement of his luggage, without any
objection.

It is a well-settled doctrine that where the proponent offers evidence deemed by counsel of the adverse
party to be inadmissible for any reason, the latter has the right to object. However, such right is a mere
privilege which can be waived. Necessarily, the objection must be made at the earliest opportunity, in case of
silence when there is opportunity to speak may operate as a waiver of objections.

36. KLM ROYAL DUTCH AIRLINES VS CA (65 SCRA 237)

Facts: Spouses Mendoza approached Mr. Reyes, the branch manager of Philippine Travel Bureau, for
consultation about a world tour which they were intending to make with their daughter and niece. Three
segments of the trip, the longest, was via KLM. Respondents decided that one of the routes they will take was a
Barcelona-Lourdes route with knowledge that only one airline, Aer Lingus, served it. Reyes made the
necessary reservations. To this, KLM secured seat reservations for the Mendozas and their companions from
the carriers which would ferry them throughout their trip, which the exception of Aer Lingus. When the
Mendozas left the Philippines, they were issued KLM tickets for the entire trip. However, their coupon for Aer
Lingus was marked on request.

When they were in Germany, they went to the KLM office and obtained a confirmation from Aer Lingus.
At the airport in Barcelona, the Mendozas and their companions checked in for their flight to Lourdes.
However, although their daughter and niece were allowed to take the flight, the spouses Mendozas were off
loaded on orders of the Aer Lingus manager, who brusquely shoved them aside and shouted at them. So the
spouses Mendozas took a train ride to Lourdes instead.
Thus, they filed a complaint for damages against KLM for breach of contract of carriage. The trial court
decided in favor of the Mendozas. On appeal, the CA affirmed the decision. Hence, KLM brings this petition to
the Supreme Court. KLM cites Art 30 of the Warsaw Convention, which states: the passenger or his
representatives can take action only against the carrier who performed the transportation during which the
accident or delay occurred. Also, KLM avers that the front cover of each ticket reads: that liability of the
carrier for damages shall be limited to occurrences on its own line.

Issue: Whether or not KLM is liable for breach of contract of carriage?

Held: The applicability of Art. 30 of the Warsaw Convention cannot be sustained. The article presupposes
the occurrence of delay or accident. What is manifest here is that the Aer Lingus refused to transport the
spouses Mendozas to their planned and contracted destination.

As the airline which issued the tickets, KLM was chargeable with the duty and responsibility of
specifically informing the spouses of the conditions prescribed in their tickets or to ascertain that the spouses
read them before they accepted their passage tickets.

The Supreme Court held that KLM cannot be merely assumed as a ticket-issuing agent for other airlines
and limit its liability to untoward occurrences on its own line.

The court found, that the passage tickets provide that the carriage to be performed therein by several
successive carriers is to be regarded as a single operation.

37. CHINA AIRLINES VS. CHIOK (23 JULY 2003)

Facts: Daniel Chiok purchased from China Airlines a passenger ticket for air transportation covering
Manila-Taipei-Hong Kong-Manila. The said ticket was exclusively endorsable to PAL.

Before Chiok his trip, the trips covered by the ticket were pre-scheduled and confirmed by the former.
When petitioner arrived in Taipei, he went to CAL to confirm his Hong Kong- Manila trip on board PAL. The
CAL office attached a yellow sticker indicating the status was OK.

When Chiok reached Hong Kong, he then went to PAL office to confirm his flight back to Manila. The
PAL also confirmed the status of his ticket and attached a ticket indicating a status OK. Chiok proceeded to
Hong Kong airport for his trip to Manila. However, upon reaching the PAL counter, he was told that the flight
to Manila was cancelled due to typhoon. He was informed that all confirmed flight ticket holders of PAL were
automatically booked for the next flight the following day.

The next day, Chiok was not able to board the plane because his name did not appear on the computer
as passenger for the said flight to Manila.

Issue: Whether or not CAL is liable for damages?

Held: The contract of air transportation between the petitioner and respondent, with the former endorsing
PAL the segment of Chioks journey. Such contract of carriage has been treated in this jurisprudence as a single
operation pursuant to Warsaw Convention, to which the Philippines is a party.

In the instant case, PAL as the carrying agent of CAL, the latter cannot evade liability to respondent,
Chiok, even though it may have been only a ticket issuer for Hong Kong- Manila sector.