Case #1 G.R. No. L-47822 December 22, 1988 PEDRO DE GUZMAN, Petitioner, Court of Appeals and Ernesto Cendana, Respondents

Transportation Law Cases
Nina Sarah P. Pineda, JD 3-1
Case #1 G.R. No. L-47822 December 22, 1988
PEDRO DE GUZMAN, petitioner,

vs.
COURT OF APPEALS and ERNESTO CENDANA, respondents.
Common Carriers; Definition of; Art. 1732 of the Civil Code makes no distinctions between a person or enterprise offering transportation service
on a regular or scheduled basis and such service on an occasional, episodic or unscheduled basis.—The Civil Code defines “common carriers” in the
following terms: “Article 1732. Common carriers are persons, corporations, firms, or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public.” The above article makes
no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only
as an ancillary activity (in local idiom, as “a sideline”). Article 1732 also carefully avoids making any distinction between a person or enterprise
offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis.
Neither does Article 1732 distinguish between a carrier offering its services to the “general public,” i.e., the general community or population,
and one who offers services or solicits business only from a narrow segment of the general population. We think that Article 1733 deliberately
refrained from making such distinctions.
Same; Same; Same; The concept of “common carrier” under Art. 1732 coincides with the notion of “Public Service” under the Public Service
Act (CA No. 1416).—So understood, the concept of “common carrier” under Article 1732 may be seen to coincide neatly with the notion of “public
service,” under the Public Service Act (Commonwealth Act No. 1416, as amended) which at least partially supplements the law on common
carriers set forth in the Civil Code. Under Section 13, paragraph (b) of the Public Service Act, “public service” 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.”
Same; Same; Same; Same; A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions
governing common carriers.—The Court of Appeals referred to the fact that private respondent held no certificate of public convenience, and
concluded he was not a common carrier. This is palpable error. A certificate of public convenience is not a requisite for the incurring of liability
under the Civil Code provisions governing common carriers. That liability arises the moment a person or firm acts as a common carrier, without
regard to whether or not such carrier has also complied with the requirements of the applicable regulatory statute and implementing regulations
and has been granted a certificate of public convenience or other franchise. To exempt private respondent from the liabilities of a common
carrier because he has not secured the necessary certificate of public convenience, would be offensive to sound public policy; that would be to
reward private respondent precisely for failing to comply with applicable statutory requirements. The business of a common carrier impinges
directly and intimately upon the safety and well being and property of those members of the general community who happen to deal with such
carrier. The law imposes duties and liabilities upon common carriers for the safety and protection of those who utilize their services and the law
cannot allow a common carrier to render such duties and liabilities merely facultative by simply failing to obtain the necessary permits and
authorizations.
Same; Same; Same; Liability of common carriers in case of loss, destruction or deterioration or destruction of goods they carry; Extraordinary
diligence, required; Exceptions.—Common carriers, “by the nature of their business and for reasons of public policy,” are held to a very high
degree of care and diligence (“extraordinary diligence”) in the carriage of goods as well as of passengers. The specific import of extraordinary
diligence in the care of goods transported by a common carrier is, according to Article 1733, “further expressed in Articles 1734, 1735 and 1745,
numbers 5, 6 and 7” of the Civil Code. Article 1734 establishes the general rule that common carriers are responsible for the loss, destruction or
deterioration of the goods which they carry, “unless the same is due to any of the following causes only: (1) Flood, storm, earthquake, lightning,
or other natural disaster or calamity; (2) Act of the public enemy in war, whether international or civil; (3) Act or omission of the shipper or owner
of the goods; (4) The character of the goods or defects in the packing or in the containers; and (5) Order or act of competent public authority.”
It is important to point out that the above list of causes of loss, destruction or deterioration which exempt the common carrier for responsibility
therefor, is a closed list. Causes falling outside the foregoing list, even if they appear to constitute a species of force majeure, fall within the
scope of Article 1735.
Same; Same; Same; Same; Same; The hijacking of the carriers truck does not fall within any of the five (5) categories of exempting causes in
Art. 1734.—Applying the above-quoted Articles 1734 and 1735, we note firstly that the specific cause alleged in the instant case—the hijacking of
the carrier’s truck—does not fall within any of the five (5) categories of exempting causes listed in Article 1734. It would follow, therefore, that
the hijacking of the carrier’s vehicle must be dealt with under the provisions of Article 1735, in other words, that the private respondent as
common carrier is presumed to have been at fault or to have acted negligently. This presumption, however, may be overthrown by proof of
extraordinary diligence on the part of private respondent.
Same; Same; Same; Same; Same; Under Art. 1745(6), a common carrier is held responsible even for acts of strangers like thieves or robbers
except where such thieves or robbers acted “with grave or irresistible threat, violence or force.”—As noted earlier, the duty of extraordinary
diligence in the vigilance over goods is, under Article 1733, given additional specification not only by Articles 1734 and 1735 but also by Article
1745, numbers 4, 5 and 6. Article 1745 provides in relevant part: “Any of the following or similar stipulations shall be considered unreasonable,
unjust and contrary to public policy: xxx xxx xxx (5) that the common carrier shall not be responsible for the acts or omissions of his or its
employees; (6) that the common carrier’s liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat,
violence or force, is dispensed with or diminished; and (7) that the common carrier shall not responsible for the loss, destruction or deterioration
of goods on account of the defective condition of the car, vehicle, ship, airplane or other equipment used in the contract of carriage.” Under
Article 1745 (6) above, a common carrier is held responsible and will not be allowed to divest or to diminish such responsibility—even for acts
of strangers like thieves or robbers, except where such thieves or robbers in fact acted “with grave or irresistible threat, violence or force.” We
believe and so hold that the limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the goods are
lost as a result of a robbery which is attended by “grave or irresistible threat, violence or force.”
Page 1 of 29
Same; Same; Same; Same; Same; Common carriers are not made absolute insurers against all risks of travel and of transport of goods and are
not liable for fortuitous events; Case at bar.—In these circumstances, we hold that the occurrence of the loss must reasonably be regarded as
quite beyond the control of the common carrier and properly regarded as a fortuitous event. It is necessary to recall that even common carriers
are not made absolute insurers against all risks of travel and of transport of goods, and are not held liable for acts or events which cannot be
foreseen or are inevitable, provided that they shall have complied with the rigorous standard of extraordinary diligence. We, therefore, agree
with the result reached by the Court of Appeals that private respondent Cendaña is not liable for the value of the undelivered merchandise
which was lost because of an event entirely beyond private respondent’s control.
FELICIANO, J.:
Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and scrap metal in Pangasinan. Upon gathering sufficient
quantities of such scrap material, respondent would bring such material to Manila for resale. He utilized two (2) six-wheeler trucks which he
owned for hauling the material to Manila. On the return trip to Pangasinan, respondent would load his vehicles with cargo which various
merchants wanted delivered to differing establishments in Pangasinan. For that service, respondent charged freight rates which were commonly
lower than regular commercial rates.
Sometime in November 1970, petitioner Pedro de Guzman a merchant and authorized dealer of General Milk Company (Philippines), Inc. in
Urdaneta, Pangasinan, contracted with respondent for the hauling of 750 cartons of Liberty filled milk from a warehouse of General Milk in
Makati, Rizal, to petitioner's establishment in Urdaneta on or before 4 December 1970. Accordingly, on 1 December 1970, respondent loaded in
Makati the merchandise on to his trucks: 150 cartons were loaded on a truck driven by respondent himself, while 600 cartons were placed on
board the other truck which was driven by Manuel Estrada, respondent's driver and employee.
Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes never reached petitioner, since the truck which carried
these boxes was hijacked somewhere along the MacArthur Highway in Paniqui, Tarlac, by armed men who took with them the truck, its driver,
his helper and the cargo.
On 6 January 1971, petitioner commenced action against private respondent in the Court of First Instance of Pangasinan, demanding payment
of P 22,150.00, the claimed value of the lost merchandise, plus damages and attorney's fees. Petitioner argued that private respondent, being a
common carrier, and having failed to exercise the extraordinary diligence required of him by the law, should be held liable for the value of the
undelivered goods.
In his Answer, private respondent denied that he was a common carrier and argued that he could not be held responsible for the value of the
lost goods, such loss having been due to force majeure.
On 10 December 1975, the trial court rendered a Decision 1 finding private respondent to be a common carrier and holding him liable for the value
of the undelivered goods (P 22,150.00) as well as for P 4,000.00 as damages and P 2,000.00 as attorney's fees.
On appeal before the Court of Appeals, respondent urged that the trial court had erred in considering him a common carrier; in finding that he
had habitually offered trucking services to the public; in not exempting him from liability on the ground of force majeure; and in ordering him to
pay damages and attorney's fees.
The Court of Appeals reversed the judgment of the trial court and held that respondent had been engaged in transporting return loads of freight
"as a casual occupation — a sideline to his scrap iron business" and not as a common carrier. Petitioner came to this Court by way of a Petition
for Review assigning as errors the following conclusions of the Court of Appeals:
1. that private respondent was not a common carrier;
2. that the hijacking of respondent's truck was force majeure; and
3. that respondent was not liable for the value of the undelivered cargo. (Rollo, p. 111)
We consider first the issue of whether or not private respondent Ernesto Cendana may, under the facts earlier set forth, be properly
characterized as a common carrier.
The Civil Code defines "common carriers" in the following terms:
Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public.
The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who
does such carrying only as an ancillary activity (in local Idiom as "a sideline"). Article 1732 also carefully avoids making any distinction between a
person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or
unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general community
or population, and one who offers services or solicits business only from a narrow segment of the general population. We think that Article 1733
deliberaom making such distinctions.
Page 2 of 29
So understood, the concept of "common carrier" under Article 1732 may be seen to coincide neatly with the notion of "public service," under
the Public Service Act (Commonwealth Act No. 1416, as amended) which at least partially supplements the law on common carriers set forth in
the Civil Code. Under Section 13, paragraph (b) of the Public Service Act, "public service" includes:
... 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. ... (Emphasis supplied)
It appears to the Court that private respondent is properly characterized as a common carrier even though he merely "back-hauled" goods for
other merchants from Manila to Pangasinan, although such back-hauling was done on a periodic or occasional rather than regular or scheduled
manner, and even though private respondent's principal occupation was not the carriage of goods for others. There is no dispute that private
respondent charged his customers a fee for hauling their goods; that fee frequently fell below commercial freight rates is not relevant here.
The Court of Appeals referred to the fact that private respondent held no certificate of public convenience, and concluded he was not a common
carrier. This is palpable error. A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions
governing common carriers. That liability arises the moment a person or firm acts as a common carrier, without regard to whether or not such
carrier has also complied with the requirements of the applicable regulatory statute and implementing regulations and has been granted a
certificate of public convenience or other franchise. To exempt private respondent from the liabilities of a common carrier because he has not
secured the necessary certificate of public convenience, would be offensive to sound public policy; that would be to reward private respondent
precisely for failing to comply with applicable statutory requirements. The business of a common carrier impinges directly and intimately upon
the safety and well being and property of those members of the general community who happen to deal with such carrier. The law imposes
duties and liabilities upon common carriers for the safety and protection of those who utilize their services and the law cannot allow a common
carrier to render such duties and liabilities merely facultative by simply failing to obtain the necessary permits and authorizations.
We turn then to the liability of private respondent as a common carrier.
Common carriers, "by the nature of their business and for reasons of public policy" 2 are held to a very high degree of care and diligence
("extraordinary diligence") in the carriage of goods as well as of passengers. The specific import of extraordinary diligence in the care of goods
transported by a common carrier is, according to Article 1733, "further expressed in Articles 1734,1735 and 1745, numbers 5, 6 and 7" of the Civil
Code.
Article 1734 establishes the general rule that common carriers are responsible for the loss, destruction or deterioration of the goods which they
carry, "unless the same is due to any of the following causes only:
(1) Flood, storm, earthquake, lightning or other natural disaster or calamity;

(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character-of the goods or defects in the packing or-in the containers; and
(5) Order or act of competent public authority.
It is important to point out that the above list of causes of loss, destruction or deterioration which exempt the common carrier for responsibility
therefor, is a closed list. Causes falling outside the foregoing list, even if they appear to constitute a species of force majeure fall within the scope
of Article 1735, which provides as follows:
In all cases other than those mentioned in numbers 1, 2, 3, 4 and 5 of the preceding article, if the goods are lost, destroyed or
deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they
observed extraordinary diligence as required in Article 1733. (Emphasis supplied)
Applying the above-quoted Articles 1734 and 1735, we note firstly that the specific cause alleged in the instant case — the hijacking of the carrier's
truck — does not fall within any of the five (5) categories of exempting causes listed in Article 1734. It would follow, therefore, that the hijacking
of the carrier's vehicle must be dealt with under the provisions of Article 1735, in other words, that the private respondent as common carrier is
presumed to have been at fault or to have acted negligently. This presumption, however, may be overthrown by proof of extraordinary diligence
on the part of private respondent.
Petitioner insists that private respondent had not observed extraordinary diligence in the care of petitioner's goods. Petitioner argues that in
the circumstances of this case, private respondent should have hired a security guard presumably to ride with the truck carrying the 600 cartons
of Liberty filled milk. We do not believe, however, that in the instant case, the standard of extraordinary diligence required private respondent
to retain a security guard to ride with the truck and to engage brigands in a firelight at the risk of his own life and the lives of the driver and his
helper.
The precise issue that we address here relates to the specific requirements of the duty of extraordinary diligence in the vigilance over the goods
carried in the specific context of hijacking or armed robbery.
Page 3 of 29
As noted earlier, the duty of extraordinary diligence in the vigilance over goods is, under Article 1733, given additional specification not only by
Articles 1734 and 1735 but also by Article 1745, numbers 4, 5 and 6, Article 1745 provides in relevant part:
Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy:
xxx xxx xxx
(5) that the common carrier shall not be responsible for the acts or omissions of his or its employees;
(6) that the common carrier's liability for acts committed by thieves, or of robbers who donot act
with grave or irresistible threat, violence or force, is dispensed with or diminished; and
(7) that the common carrier shall not responsible for the loss, destruction or deterioration of goods on
account of the defective condition of the car vehicle, ship, airplane or other equipment used in the
contract of carriage. (Emphasis supplied)
Under Article 1745 (6) above, a common carrier is held responsible — and will not be allowed to divest or to diminish such responsibility — even
for acts of strangers like thieves or robbers, except where such thieves or robbers in fact acted "with grave or irresistible threat, violence or
force." We believe and so hold that the limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where
the goods are lost as a result of a robbery which is attended by "grave or irresistible threat, violence or force."
In the instant case, armed men held up the second truck owned by private respondent which carried petitioner's cargo. The record shows that
an information for robbery in band was filed in the Court of First Instance of Tarlac, Branch 2, in Criminal Case No. 198 entitled "People of the
Philippines v. Felipe Boncorno, Napoleon Presno, Armando Mesina, Oscar Oria and one John Doe." There, the accused were charged with willfully
and unlawfully taking and carrying away with them the second truck, driven by Manuel Estrada and loaded with the 600 cartons of Liberty filled
milk destined for delivery at petitioner's store in Urdaneta, Pangasinan. The decision of the trial court shows that the accused acted with grave,
if not irresistible, threat, violence or force.3 Three (3) of the five (5) hold-uppers were armed with firearms. The robbers not only took away the
truck and its cargo but also kidnapped the driver and his helper, detaining them for several days and later releasing them in another province (in
Zambales). The hijacked truck was subsequently found by the police in Quezon City. The Court of First Instance convicted all the accused of
robbery, though not of robbery in band. 4
In these circumstances, we hold that the occurrence of the loss must reasonably be regarded as quite beyond the control of the common carrier
and properly regarded as a fortuitous event. It is necessary to recall that even common carriers are not made absolute insurers against all risks
of travel and of transport of goods, and are not held liable for acts or events which cannot be foreseen or are inevitable, provided that they shall
have complied with the rigorous standard of extraordinary diligence.
We, therefore, agree with the result reached by the Court of Appeals that private respondent Cendana is not liable for the value of the
undelivered merchandise which was lost because of an event entirely beyond private respondent's control.
ACCORDINGLY, the Petition for Review on certiorari is hereby DENIED and the Decision of the Court of Appeals dated 3 August 1977 is AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
Page 4 of 29
Case #2 G.R. No. 111127 July 26, 1996
MR. & MRS. ENGRACIO FABRE, JR. and PORFIRIO CABIL, petitioners,
vs.
COURT OF APPEALS, THE WORD FOR THE WORLD CHRISTIAN FELLOWSHIP, INC., AMYLINE ANTONIO, JOHN RICHARDS, GONZALO
GONZALES, VICENTE V. QUE, JR., ICLI CORDOVA, ARLENE GOJOCCO, ALBERTO ROXAS CORDERO, RICHARD BAUTISTA, JOCELYN GARCIA,
YOLANDA CORDOVA, NOEL ROQUE, EDWARD TAN, ERNESTO NARCISO, ENRIQUETA LOCSIN, FRANCIS NORMAN O. LOPES, JULIUS CAESAR,
GARCIA, ROSARIO MA. V. ORTIZ, MARIETTA C. CLAVO, ELVIE SENIEL, ROSARIO MARA-MARA, TERESITA REGALA, MELINDA TORRES,
MARELLA MIJARES, JOSEFA CABATINGAN, MARA NADOC, DIANE MAYO, TESS PLATA, MAYETTE JOCSON, ARLENE Y. MORTIZ, LIZA MAYO,
CARLOS RANARIO, ROSAMARIA T. RADOC and BERNADETTE FERRER, respondents.
Civil Law; Negligence; Damages; Cabil was grossly negligent and should be held liable for the injuries suffered by private respondent Amyline
Antonio.—Considering the foregoing—the fact that it was raining and the road was slippery, that it was dark, that he drove his bus at 50
kilometers an hour when even on a good day the normal speed was only 20 kilometers an hour, and that he was unfamiliar with the terrain, Cabil
was grossly negligent and should be held liable for the injuries suffered by private respondent Amyline Antonio.
Same; Same; Same; Cabil’s negligence gave rise to the presumption that his employers, the Fabres, were themselves negligent in the selection
and supervision of their employee.—Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave rise to the presumption that his
employers, the Fabres, were themselves negligent in the selection and supervision of their employee.
Same; Same; Same; Employer should also examine the applicant for his qualifications, experience and record of service.—Due diligence in
selection of employees is not satisfied by finding that the applicant possessed a professional driver’s license. The employer should also examine
the applicant for his qualifications, experience and record of service. Due diligence in supervision, on the other hand, requires the formulation
of rules and regulations for the guidance of employees and the issuance of proper instructions as well as actual implementation and monitoring
of consistent compliance with the rules.
Same; Same; Same; The existence of hiring procedures and supervisory policies cannot be casually invoked to overturn the presumption of
negligence on the part of an employer.—In the case at bar, the Fabres, in allowing Cabil to drive the bus to La Union, apparently did not consider
the fact that Cabil had been driving for school children only, from their homes to the St. Scholastica’s College in Metro Manila. They had hired
him only after a two-week apprenticeship. They had tested him for certain matters, such as whether he could remember the names of the
children he would be taking to school, which were irrelevant to his qualification to drive on a long distance travel, especially considering that
the trip to La Union was his first. The existence of hiring procedures and supervisory policies cannot be casually invoked to overturn the
presumption of negligence on the part of an employer.
Same; Same; Same; As common carriers, the Fabres were bound to exercise “extraordinary diligence” for the safe transportation of the
passengers to their destination.—As common carriers, the Fabres were bound to exercise “extraordinary diligence” for the safe transportation
of the passengers to their destination. This duty of care is not excused by proof that they exercised the diligence of a good father of the family
in the selection and supervision of their employee.
Same; Same; Same; On the theory that petitioners are liable for breach of contract of carriage, the award of moral damages is authorized by
Art. 1764, in relation to Art. 2220, since Cabil’s gross negligence amounted to bad faith.—With respect to the other awards, while the decisions of
the trial court and the Court of Appeals do not sufficiently indicate the factual and legal basis for them, we find that they are nevertheless
supported by evidence in the records of this case. Viewed as an action for quasi delict, this case falls squarely within the purview of Art. 2219(2)
providing for the payment of moral damages in cases of quasi delict. On the theory that petitioners are liable for breach of contract of carriage,
the award of moral damages is authorized by Art. 1764, in relation to Art. 2220, since Cabil’s gross negligence amounted to bad faith. Amyline
Antonio’s testimony, as well as the testimonies of her father and copassengers, fully establish the physical suffering and mental anguish she
endured as a result of the injuries caused by petitioners’ negligence.
Same; Same; Same; In Dangwa Trans. Co., Inc. vs. Court of Appeals, the Court held the bus company and the driver jointly and severally liable
for damages for injuries suffered by a passenger.—The decision of the Court of Appeals can be sustained either on the theory of quasi delict or on
that of breach of contract. The question is whether, as the two courts below held, petitioners, who are the owners and driver of the bus, may
be made to respond jointly and severally to private respondent. We hold that they may be. In Dangwa Trans. Co., Inc. v. Court of Appeals, on facts
similar to those in this case, this Court held the bus company and the driver jointly and severally liable for damages for injuries suffered by a
passenger. Again, in Bachelor Express, Inc. v. Court of Appealsa driver found negligent in failing to stop the bus in order to let off passengers
when a fellow passenger ran amuck, as a result of which the passengers jumped out of the speeding bus and suffered injuries, was held also
jointly and severally liable with the bus company to the injured passengers.
MENDOZA, J.:p
This is a petition for review on certiorari of the decision of the Court of Appeals1 in CA-GR No. 28245, dated September 30, 1992, which affirmed
with modification the decision of the Regional Trial Court of Makati, Branch 58, ordering petitioners jointly and severally to pay damages to
private respondent Amyline Antonio, and its resolution which denied petitioners' motion for reconsideration for lack of merit.
Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model Mazda minibus. They used the bus principally in connection with a bus
service for school children which they operated in Manila. The couple had a driver, Porfirio J. Cabil, whom they hired in 1981, after trying him out
for two weeks, His job was to take school children to and from the St. Scholastica's College in Malate, Manila.
On November 2, 1984 private respondent Word for the World Christian Fellowship Inc. (WWCF) arranged with 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.
Page 5 of 29
The group was scheduled to leave on November 2, 1984, at 5:00 o'clock in the afternoon. However, as several members of the party were late,
the bus did not leave the Tropical Hut at the corner of Ortigas Avenue and EDSA until 8:00 o'clock in the evening. Petitioner Porfirio Cabil drove
the minibus.
The usual route to Caba, La Union was through Carmen, Pangasinan. However, the bridge at Carmen was under repair, sot hat 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 Baay in Lingayen,
Pangasinan. At 11:30 that night, petitioner Cabil came upon a sharp curve on the highway, running on a south to east direction, which he
described as "siete." 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.
Several passengers were injured. Private respondent Amyline Antonio was thrown on the floor of the bus and pinned down by a wooden seat
which came down by a wooden seat which came off after being unscrewed. It took three persons to safely remove her from this portion. She
was in great pain and could not move.
The driver, petitioner Cabil, claimed he did not see the curve until it was too late. He said he was not familiar with the area and he could not have
seen the curve despite the care he took in driving the bus, because it was dark and there was no sign on the road. He said that he saw the curve
when he was already within 15 to 30 meters of it. He allegedly slowed down to 30 kilometers per hour, but it was too late.
The Lingayen police investigated the incident the next day, November 3, 1984. On the basis of their finding they filed a criminal complaint against
the driver, Porfirio Cabil. The case was later filed with the Lingayen Regional Trial Court. Petitioners Fabre paid Jesus Escano P1,500.00 for the
damage to the latter's fence. On the basis of Escano's affidavit of desistance the case against petitioners Fabre was dismissed.
Amyline Antonio, who was seriously injured, brought this case in the RTC of Makati, Metro Manila. As a result of the accident, she is now suffering
from paraplegia and is permanently paralyzed from the waist down. During the trial she described the operations she underwent and adduced
evidence regarding the cost of her treatment and therapy. Immediately after the accident, she was taken to the Nazareth Hospital in Baay,
Lingayen. As this hospital was not adequately equipped, she was transferred to the Sto. Niño Hospital, also in the town of Ba-ay, where she was
given sedatives. An x-ray was taken and the damage to her spine was determined to be too severe to be treated there. She was therefore
brought to Manila, first to the Philippine General Hospital and later to the Makati Medical Center where she underwent an operation to correct
the dislocation of her spine.
In its decision dated April 17, 1989, the trial court found that:
No convincing evidence was shown that the minibus was properly checked for travel to a long distance trip and that the driver was properly
screened and tested before being admitted for employment. Indeed, all the evidence presented have shown the negligent act of the defendants
which ultimately resulted to the accident subject of this case.
Accordingly, it gave judgment for private respondents holding:
Considering that plaintiffs Word for the World Christian Fellowship, Inc. and Ms. Amyline Antonio were the only ones who adduced evidence in
support of their claim for damages, the Court is therefore not in a position to award damages to the other plaintiffs.
WHEREFORE, premises considered, the Court hereby renders judgment against defendants Mr. & Mrs. Engracio Fabre, Jr. and Porfirio Cabil y
Jamil pursuant to articles 2176 and 2180 of the Civil Code of the Philippines and said defendants are ordered to pay jointly and severally to the
plaintiffs the following amount:
1) P93,657.11 as compensatory and actual damages;
2) P500,000.00 as the reasonable amount of loss of earning capacity of plaintiff Amyline Antonio;
3) P20,000.00 as moral damages;
4) P20,000.00 as exemplary damages; and
5) 25% of the recoverable amount as attorney's fees;
6) Costs of suit.
SO ORDERED.
The Court of Appeals affirmed the decision of the trial court with respect to Amyline Antonio but dismissed it with respect to the other plaintiffs
on the ground that they failed to prove their respective claims. The Court of Appeals modified the award of damages as follows:
1) P93,657.11 as actual damages;
2) P600,000.00 as compensatory damages;
Page 6 of 29
4) P20,000.00 as exemplary damages;
5) P10,000.00 as attorney's fees; and
6) Costs of suit.
The Court of Appeals sustained the trial court's finding that petitioner Cabil failed to exercise due care and precaution in the operation of his
vehicle considering the time and the place of the accident. The Court of Appeals held that the Fabres were themselves presumptively negligent.
Hence, this petition. Petitioners raise the following issues:
I. WHETHER OR NOT PETITIONERS WERE NEGLIGENT.
II. WHETHER OF NOT PETITIONERS WERE LIABLE FOR THE INJURIES SUFFERED BY PRIVATE
RESPONDENTS.
III WHETHER OR NOT DAMAGES CAN BE AWARDED AND IN THE POSITIVE, UP TO WHAT EXTENT.
Petitioners challenge the propriety of the award of compensatory damages in the amount of P600,000.00. It is insisted that, on the assumption
that petitioners are liable an award of P600,000.00 is unconscionable and highly speculative. Amyline Antonio testified that she was a casual
employee of a company called "Suaco," earning P1,650.00 a month, and a dealer of Avon products, earning an average of P1,000.00 monthly.
Petitioners contend that as casual employees do not have security of tenure, the award of P600,000.00, considering Amyline Antonio's earnings,
is without factual basis as there is no assurance that she would be regularly earning these amounts.
With the exception of the award of damages, the petition is devoid of merit.
First, it is unnecessary for our purpose to determine whether to decide this case on the theory that petitioners are liable for breach of contract
of carriage or culpa contractual or on the theory of quasi delict or culpa aquiliana as both the Regional Trial Court and the Court of Appeals held,
for although the relation of passenger and carrier is "contractual both in origin and nature," nevertheless "the act that breaks the contract may
be also a tort." 2 In either case, the question is whether the bus driver, petitioner Porfirio Cabil, was negligent.
The finding that Cabil drove his bus negligently, while his employer, the Fabres, who owned the bus, failed to exercise the diligence of a good
father of the family in the selection and supervision of their employee is fully supported by the evidence on record. These factual findings of the
two courts we regard as final and conclusive, supported as they are by the evidence. Indeed, it was admitted by Cabil that on the night in
question, it was raining, and as a consequence, the road was slippery, and it was dark. He averred these facts to justify his failure to see that
there lay a sharp curve ahead. However, it is undisputed that Cabil drove his bus at the speed of 50 kilometers per hour and only slowed down
when he noticed the curve some 15 to 30 meters ahead. 3 By then it was too late for him to avoid falling off the road. Given the conditions of the
road and considering that the trip was Cabil's first one outside of Manila, Cabil should have driven his vehicle at a moderate speed. There is
testimony 4 that the vehicles passing on that portion of the road should only be running 20 kilometers per hour, so that at 50 kilometers per
hour, Cabil was running at a very high speed.
Considering the foregoing — the fact that it was raining and the road was slippery, that it was dark, that he drove his bus at 50 kilometers an
hour when even on a good day the normal speed was only 20 kilometers an hour, and that he was unfamiliar with the terrain, Cabil was grossly
negligent and should be held liable for the injuries suffered by private respondent Amyline Antonio.
Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave rise to the presumption that his employers, the Fabres, were themselves
negligent in the selection and supervisions of their employee.
Due diligence in selection of employees is not satisfied by finding that the applicant possessed a professional driver's license. The employer
should also examine the applicant for his qualifications, experience and record of service. 5 Due diligence in supervision, on the other hand,
requires the formulation of rules and regulations for the guidance of employees and issuance of proper instructions as well as actual
implementation and monitoring of consistent compliance with the rules.6
In the case at bar, the Fabres, in allowing Cabil to drive the bus to La Union, apparently did not consider the fact that Cabil had been driving for
school children only, from their homes to the St. Scholastica's College in Metro Manila. 7They had hired him only after a two-week apprenticeship.
They had hired him only after a two-week apprenticeship. They had tested him for certain matters, such as whether he could remember the
names of the children he would be taking to school, which were irrelevant to his qualification to drive on a long distance travel, especially
considering that the trip to La Union was his first. The existence of hiring procedures and supervisory policies cannot be casually invoked to
overturn the presumption of negligence on the part of an employer. 8
Petitioners argue that they are not liable because (1) an earlier departure (made impossible by the congregation's delayed meeting) could have
a averted the mishap and (2) under the contract, the WWCF was directly responsible for the conduct of the trip. Neither of these contentions
hold water. The hour of departure had not been fixed. Even if it had been, the delay did not bear directly on the cause of the accident. With
respect to the second contention, it was held in an early case that:
[A] person who hires a public automobile and gives the driver directions as to the place to which he wishes to be conveyed, but exercises no
other control over the conduct of the driver, is not responsible for acts of negligence of the latter or prevented from recovering for injuries
suffered from a collision between the automobile and a train, caused by the negligence or the automobile driver. 9
Page 7 of 29
As already stated, 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.
As common carriers, the Fabres were found to exercise "extraordinary diligence" for the safe transportation of the
passengers to their destination. This duty of care is not excused by proof that they exercise the diligence of a good father of
the family in the selection and supervision of their employee. As Art. 1759 of the Code provides:
Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former's
employees although such employees may have acted beyond the scope of their authority or in violation of the orders of the
common carriers.
This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a
family in the selection and supervision of their employees.
The same circumstances detailed above, supporting the finding of the trial court and of the appellate court that petitioners are liable under Arts.
2176 and 2180 for quasi delict, fully justify findings them guilty of breach of contract of carriage under Arts. 1733, 1755 and 1759 of the Civil Code.
Secondly, we sustain the award of damages in favor of Amyline Antonio. However, we think the Court of Appeals erred in increasing the amount
of compensatory damages because private respondents did not question this award as inadequate. 11 To the contrary, the award of P500,000.00
for compensatory damages which the Regional Trial Court made is reasonable considering the contingent nature of her income as a casual
employee of a company and as distributor of beauty products and the fact that the possibility that she might be able to work again has not been
foreclosed. In fact she testified that one of her previous employers had expressed willingness to employ her again.
With respect to the other awards, while the decisions of the trial court and the Court of Appeals do not sufficiently indicate the factual and legal
basis for them, we find that they are nevertheless supported by evidence in the records of this case. Viewed as an action for quasi delict, this
case falls squarely within the purview of Art. 2219(2) providing for the payment of moral damages in cases of quasi delict. On the theory that
petitioners are liable for breach of contract of carriage, the award of moral damages is authorized by Art. 1764, in relation to Art. 2220, since
Cabil's gross negligence amounted to bad faith.12 Amyline Antonio's testimony, as well as the testimonies of her father and copassengers, fully
establish the physical suffering and mental anguish she endured as a result of the injuries caused by petitioners' negligence.
The award of exemplary damages and attorney's fees was also properly made. However, for the same reason that it was error for the appellate
court to increase the award of compensatory damages, we hold that it was also error for it to increase the award of moral damages and reduce
the award of attorney's fees, inasmuch as private respondents, in whose favor the awards were made, have not appealed. 13
As above stated, the decision of the Court of Appeals can be sustained either on the theory of quasi delict or on that of breach of contract. The
question is whether, as the two courts below held, petitioners, who are the owners and driver of the bus, may be made to respond jointly and
severally to private respondent. We hold that they may be. In Dangwa Trans. Co. Inc. v. Court of Appeals, 14 on facts similar to those in this case,
this Court held the bus company and the driver jointly and severally liable for damages for injuries suffered by a passenger. Again, in Bachelor
Express, Inc. v. Court of Appeals 15 a driver found negligent in failing to stop the bus in order to let off passengers when a fellow passenger ran
amuck, as a result of which the passengers jumped out of the speeding bus and suffered injuries, was held also jointly and severally liable with
the bus company to the injured passengers.
The same rule of liability was applied in situations where the negligence of the driver of the bus on which plaintiff was riding concurred with the
negligence of a third party who was the driver of another vehicle, thus causing an accident. In Anuran v. Buño, 16 Batangas Laguna Tayabas Bus
Co. v. Intermediate Appellate Court, 17 and Metro Manila Transit Corporation v. Court of Appeals, 18 the bus company, its driver, the operator of the
other vehicle and the driver of the vehicle were jointly and severally held liable to the injured passenger or the latters' heirs. The basis of this
allocation of liability was explained in Viluan v. Court of Appeals, 19 thus:
Nor should it make any difference that the liability of petitioner [bus owner] springs from contract while that of respondents
[owner and driver of other vehicle] arises from quasi-delict. As early as 1913, we already ruled in Gutierrez vs. Gutierrez, 56 Phil.
177, that in case of injury to a passenger due to the negligence of the driver of the bus on which he was riding and of the
driver of another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable for damages.
Some members of the Court, though, are of the view that under the circumstances they are liable on quasi-delict. 20
It is true that in Philippine Rabbit Bus Lines, Inc. v. Court of Appeals 21 this Court exonerated the jeepney driver from liability to the injured
passengers and their families while holding the owners of the jeepney jointly and severally liable, but that is because that case was expressly
tried and decided exclusively on the theory of culpa contractual. As this Court there explained:
Page 8 of 29
The trial court was therefore right in finding that Manalo (the driver) and spouses Mangune and Carreon (the jeepney owners) were negligent.
However, its ruling that spouses Mangune and Carreon are jointly and severally liable with Manalo is erroneous. The driver cannot be held jointly
and severally liable with carrier in case of breach of the contract of carriage. The rationale behind this is readily discernible. Firstly, the contract
of carriage is between the carrier is exclusively responsible therefore to the passenger, even if such breach be due to the negligence of his driver
(see Viluan v. The Court of Appeals, et al., G.R. Nos. L-21477-81, April 29, 1966, 16 SCRA 742). 22
As in the case of BLTB, private respondents in this case and her coplaintiffs did not stake out their claim against the carrier and the driver
exclusively on one theory, much less on that of breach of contract alone. After all, it was permitted for them to allege alternative causes of
action and join as many parties as may be liable on such causes of action 23 so long as private respondent and her coplaintiffs do not recover
twice for the same injury. What is clear from the cases is the intent of the plaintiff there to recover from both the carrier and the driver, thus,
justifying the holding that the carrier and the driver were jointly and severally liable because their separate and distinct acts concurred to produce
the same injury.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED with MODIFICATION as to award of damages. Petitioners are ORDERED to PAY
jointly and severally the private respondent Amyline Antonio the following amounts:
1) P93,657.11 as actual damages;
2) P500,000.00 as the reasonable amount of loss of earning capacity of plaintiff Amyline Antonio;
4) P20,000.00 as exemplary damages;
5) 25% of the recoverable amount as attorney's fees; and
6) costs of suit.
SO ORDERED.
Case #3 G.R. No. 101089. April 7, 1993.
Page 9 of 29
ESTRELLITA M. BASCOS, petitioners,

vs.
COURT OF APPEALS and RODOLFO A. CIPRIANO, respondents.
Civil Law; Common Carriers defined.—Article 1732 of the Civil Code defines a common carrier as “(a) person, corporation or firm, or
association engaged in the business of carrying or transporting passengers or goods or both, by land, water or air, for compensation, offering
their services to the public.” The test to determine a common carrier is “whether the given undertaking is a part of the business engaged in by
the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business transacted.” In this
case, petitioner herself has made the admission that she was in the trucking business, offering her trucks to those with cargo to move. Judicial
admissions are conclusive and no evidence is required to prove the same.
Same; Same; No distinction between person offering service on regular basis and one offering service on occasional basis.—But petitioner
argues that there was only a contract of lease because they offer their services only to a select group of people and because the private
respondents, plaintiffs in the lower court, did not object to the presentation of affidavits by petitioner where the transaction was referred to as
a lease contract. Regarding the first contention, the holding of the Court in De Guzman vs. Court of Appeals is instructive. In referring to Article
1732 of the Civil Code, it held thus: “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 ancillaryactivity (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.”
Same; Same; Obligation of carrier to observe extraordinary diligence; Presumption of negligence.—Common carriers are obliged to observe
extraordinary diligence in the vigilance over the goods transported by them. Accordingly, they are presumed to have been at fault or to have
acted negligently if the goods are lost, destroyed or deteriorated. There are very few instances when the presumption of negligence does not
attach and these instances are enumerated in Article 1734. In those cases where the presumption is applied, the common carrier must prove
that it exercised extraordinary diligence in order to overcome the presumption.
Same; Same; Same; Liability arising from hijacking.—To exculpate the carrier from liability arising from hijacking, he must prove that the
robbers or the hijackers acted with grave or irresistible threat, violence, or force. This is in accordance with Article 1745 of the Civil Code which
provides: “Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy: x x x x x
x (6) That the common carrier’s liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violence or
force, is dispensed with or diminished.”
2. ID.; ID.; DILIGENCE REQUIRED IN VIGILANCE OVER GOODS TRANSPORTED; WHEN PRESUMPTION OF NEGLIGENCE ARISES; HOW
PRESUMPTION OVERCAME; WHEN PRESUMPTION MADE ABSOLUTE. — Common carriers are obliged to observe extraordinary diligence in the
vigilance over the goods transported by them. Accordingly, they are presumed to have been at fault or to have acted negligently if the goods
are lost, destroyed or deteriorated. There are very few instances when the presumption of negligence does not attach and these instances are
enumerated in Article 1734. In those cases where the presumption is applied, the common carrier must prove that it exercised extraordinary
diligence in order to overcome the presumption . . . The presumption of negligence was raised against petitioner. It was petitioner's burden to
overcome it. Thus, contrary to her assertion, private respondent need not introduce any evidence to prove her negligence. Her own failure to
adduce sufficient proof of extraordinary diligence made the presumption conclusive against her.
3. ID.; ID.; HIJACKING OF GOODS; CARRIER PRESUMED NEGLIGENT; HOW CARRIER ABSOLVED FROM LIABILITY. — In De Guzman vs. Court of
Appeals, the Court held that hijacking, not being included in the provisions of Article 1734, must be dealt with under the provisions of Article 1735
and thus, the common carrier is presumed to have been at fault or negligent. To exculpate the carrier from liability arising from hijacking, he
must prove that the robbers or the hijackers acted with grave or irresistible threat, violence, or force. This is in accordance with Article 1745 of
the Civil Code which provides: "Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to
public policy . . . (6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or irresistible
threat, violences or force, is dispensed with or diminished"; In the same case, the Supreme Court also held that: "Under Article 1745 (6) above,
a common carrier is held responsible — and will not be allowed to divest or to diminish such responsibility — even for acts of strangers like
thieves or robbers, except where such thieves or robbers in fact acted "with grave of irresistible threat, violence of force," We believe and so
hold that the limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the goods are lost as a result
of a robbery which is attended by "grave or irresistible threat, violence or force."
4. REMEDIAL LAW; EVIDENCE; JUDICIAL ADMISSIONS CONCLUSIVE. — In this case, petitioner herself has made the admission that she was in
the trucking business, offering her trucks to those with cargo to move. Judicial admissions are conclusive and no evidence is required to prove
the same.
5. ID.; ID.; BURDEN OF PROOF RESTS WITH PARTY WHO ALLEGES A FACT. — Petitioner presented no other proof of the existence of the contract
of lease. He who alleges a fact has the burden of proving it.
6. ID.; ID.; AFFIDAVITS NOT CONSIDERED BEST EVIDENCE IF AFFIANTS AVAILABLE AS WITNESSES. — While the affidavit of Juanito Morden, the
truck helper in the hijacked truck, was presented as evidence in court, he himself was a witness as could be gleaned from the contents of the
petition. Affidavits are not considered the best evidence if the affiants are available as witnesses.
7. CIVIL LAW; OBLIGATIONS AND CONTRACTS; CONTRACT IS WHAT LAW DEFINES IT TO BE. — Granting that the said evidence were not self-
serving, the same were not sufficient to prove that the contract was one of lease. It must be understood that a contract is what the law
defines it to be and not what it is called by the contracting parties.
DECISION
Page 10 of 29
CAMPOS, JR., J p:
This is a petition for review on certiorari of the decision ** of the Court of Appeals in "RODOLFO A. CIPRIANO, doing business under the name
CIPRIANO TRADING ENTERPRISES plaintiff-appellee, vs. ESTRELLITA M. BASCOS, doing business under the name of BASCOS TRUCKING,
defendant-appellant," C.A.-G.R. CV No. 25216, the dispositive portion of which is quoted hereunder:
"PREMISES considered, We find no reversible error in the decision appealed from, which is hereby affirmed in toto. Costs against appellant." 1
The facts, as gathered by this Court, are as follows:
Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE for short) entered into a hauling contract 2 with Jibfair Shipping Agency
Corporation whereby the former bound itself to haul the latter's 2,000 m/tons of soya bean meal from Magallanes Drive, Del Pan, Manila to the
warehouse of Purefoods Corporation in Calamba, Laguna. To carry out its obligation, CIPTRADE, through Rodolfo Cipriano, subcontracted with
Estrellita Bascos (petitioner) to transport and to deliver 400 sacks of soya bean meal worth P156,404.00 from the Manila Port Area to Calamba,
Laguna at the rate of P50.00 per metric ton. Petitioner failed to deliver the said cargo. As a consequence of that failure, Cipriano paid Jibfair
Shipping Agency the amount of the lost goods in accordance with the contract which stated that:
"1. CIPTRADE shall be held liable and answerable for any loss in bags due to theft, hijacking and non-delivery or damages to the cargo during
transport at market value, . . ." 3
Cipriano demanded reimbursement from petitioner but the latter refused to pay. Eventually, Cipriano filed a complaint for a sum of money and
damages with writ of preliminary attachment 4 for breach of a contract of carriage. The prayer for a Writ of Preliminary Attachment was
supported by an affidavit 5 which contained the following allegations:
"4. That this action is one of those specifically mentioned in Sec. 1, Rule 57 the Rules of Court, whereby a writ of preliminary attachment may
lawfully issue, namely:
"(e) in an action against a party who has removed or disposed of his property, or is about to do so, with intent to defraud his creditors;"
5. That there is no sufficient security for the claim sought to be enforced by the present action;
6. That the amount due to the plaintiff in the above-entitled case is above all legal counterclaims;"
The trial court granted the writ of preliminary attachment on February 17, 1987.
In her answer, petitioner interposed the following defenses: that there was no contract of carriage since CIPTRADE leased her cargo truck to
load the cargo from Manila Port Area to Laguna; that CIPTRADE was liable to petitioner in the amount of P11,000.00 for loading the cargo; that
the truck carrying the cargo was hijacked along Canonigo St., Paco, Manila on the night of October 21, 1988; that the hijacking was immediately
reported to CIPTRADE and that petitioner and the police exerted all efforts to locate the hijacked properties; that after preliminary investigation,
an information for robbery and carnapping were filed against Jose Opriano, et al.; and that hijacking, being a force majeure, exculpated
petitioner from any liability to CIPTRADE.
After trial, the trial court rendered a decision *** the dispositive portion of which reads as follows:
"WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendant ordering the latter to pay the former:
1. The amount of ONE HUNDRED FIFTY-SIX THOUSAND FOUR HUNDRED FOUR PESOS (P156,404.00) as an (sic) for actual damages with legal
interest of 12% per cent per annum to be counted from December 4, 1986 until fully paid;
2. The amount of FIVE THOUSAND PESOS (P5,000.00) as and for attorney's fees; and
3. The costs of the suit.
The "Urgent Motion To Dissolve/Lift preliminary Attachment" dated March 10, 1987 filed by defendant is DENIED for being moot and academic.
SO ORDERED." 6
Petitioner appealed to the Court of Appeals but respondent Court affirmed the trial court's judgment.
Consequently, petitioner filed this petition where she makes the following assignment of errors; to wit:
"I. THE RESPONDENT COURT ERRED IN HOLDING THAT THE CONTRACTUAL RELATIONSHIP BETWEEN PETITIONER AND PRIVATE RESPONDENT
WAS CARRIAGE OF GOODS AND NOT LEASE OF CARGO TRUCK.
II. GRANTING, EX GRATIA ARGUMENTI, THAT THE FINDING OF THE RESPONDENT COURT THAT THE CONTRACTUAL RELATIONSHIP BETWEEN
PETITIONER AND PRIVATE RESPONDENT WAS CARRIAGE OF GOODS IS CORRECT, NEVERTHELESS, IT ERRED IN FINDING PETITIONER LIABLE
THEREUNDER BECAUSE THE LOSS OF THE CARGO WAS DUE TO FORCE MAJEURE, NAMELY, HIJACKING.
Page 11 of 29
III. THE RESPONDENT COURT ERRED IN AFFIRMING THE FINDING OF THE TRIAL COURT THAT PETITIONER'S MOTION TO DISSOLVE/LIFT THE
WRIT OF PRELIMINARY ATTACHMENT HAS BEEN RENDERED MOOT AND ACADEMIC BY THE DECISION OF THE MERITS OF THE CASE." 7
The petition presents the following issues for resolution: (1) was petitioner a common carrier?; and (2) was the hijacking referred to a force
majeure?
The Court of Appeals, in holding that petitioner was a common carrier, found that she admitted in her answer that she did business under the
name A.M. Bascos Trucking and that said admission dispensed with the presentation by private respondent, Rodolfo Cipriano, of proofs that
petitioner was a common carrier. The respondent Court also adopted in toto the trial court's decision that petitioner was a common carrier,
Moreover, both courts appreciated the following pieces of evidence as indicators that petitioner was a common carrier: the fact that the truck
driver of petitioner, Maximo Sanglay, received the cargo consisting of 400 bags of soya bean meal as evidenced by a cargo receipt signed by
Maximo Sanglay; the fact that the truck helper, Juanito Morden, was also an employee of petitioner; and the fact that control of the cargo was
placed in petitioner's care.
In disputing the conclusion of the trial and appellate courts that petitioner was a common carrier, she alleged in this petition that the contract
between her and Rodolfo A. Cipriano, representing CIPTRADE, was lease of the truck. She cited as evidence certain affidavits which referred to
the contract as "lease". These affidavits were made by Jesus Bascos 8 and by petitioner herself. 9 She further averred that Jesus Bascos
confirmed in his testimony his statement that the contract was a lease contract. 10 She also stated that: she was not catering to the general
public. Thus, in her answer to the amended complaint, she said that she does business under the same style of A.M. Bascos Trucking, offering
her trucks for lease to those who have cargo to move, not to the general public but to a few customers only in view of the fact that it is only a
small business. 11
We agree with the respondent Court in its finding that petitioner is a common carrier.
Article 1732 of the Civil Code defines a common carrier as "(a) person, corporation or firm, or association engaged in the business of carrying or
transporting passengers or goods or both, by land, water or air, for compensation, offering their services to the public." The test to determine
a common carrier is "whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general
public as his occupation rather than the quantity or extent of the business transacted." 12 In this case, petitioner herself has made the admission
that she was in the trucking business, offering her trucks to those with cargo to move. Judicial admissions are conclusive and no evidence is
required to prove the same. 13
But petitioner argues that there was only a contract of lease because they offer their services only to a select group of people and because the
private respondents, plaintiffs in the lower court, did not object to the presentation of affidavits by petitioner where the transaction was
referred to as a lease contract.
Regarding the first contention, the holding of the Court in De Guzman vs. Court of Appeals 14 is instructive. In referring to Article 1732 of the Civil
Code, it held thus:
"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."
Regarding the affidavits presented by petitioner to the court, both the trial and appellate courts have dismissed them as self-serving and
petitioner contests the conclusion. We are bound by the appellate court's factual conclusions. Yet, granting that the said evidence were not self-
serving, the same were not sufficient to prove that the contract was one of lease. It must be understood that a contract is what the law defines
it to be and not what it is called by the contracting parties. 15 Furthermore, petitioner presented no other proof of the existence of the contract
of lease. He who alleges a fact has the burden of proving it. 16
Likewise, We affirm the holding of the respondent court that the loss of the goods was not due to force majeure.
Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods transported by them. 17 Accordingly, they are
presumed to have been at fault or to have acted negligently if the goods are lost, destroyed or deteriorated. 18 There are very few instances
when the presumption of negligence does not attach and these instances are enumerated in Article 1734. 19 In those cases where the
presumption is applied, the common carrier must prove that it exercised extraordinary diligence in order to overcome the presumption.
In this case, petitioner alleged that hijacking constituted force majeure which exculpated her from liability for the loss of the cargo. In De Guzman
vs. Court of Appeals, 20 the Court held that hijacking, not being included in the provisions of Article 1734, must be dealt with under the provisions
of Article 1735 and thus, the common carrier is presumed to have been at fault or negligent. To exculpate the carrier from liability arising from
hijacking, he must prove that the robbers or the hijackers acted with grave or irresistible threat, violence, or force. This is in accordance with
Article 1745 of the Civil Code which provides:
"Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy;
xxx xxx xxx
Page 12 of 29
(6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violences or
force, is dispensed with or diminished;"
In the same case, 21 the Supreme Court also held that:
"Under Article 1745 (6) above, a common carrier is held responsible — and will not be allowed to divest or to diminish such responsibility —
even for acts of strangers like thieves or robbers except where such thieves or robbers in fact acted with grave or irresistible threat, violence or
force. We believe and so hold that the limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the
goods are lost as a result of a robbery which is attended by "grave or irresistible threat, violence or force."
To establish grave and irresistible force, petitioner presented her accusatory affidavit, 22 Jesus Bascos' affidavit, 23 and Juanito Morden's 24
"Salaysay". However, both the trial court and the Court of Appeals have concluded that these affidavits were not enough to overcome the
presumption. Petitioner's affidavit about the hijacking was based on what had been told her by Juanito Morden. It was not a first-hand account.
While it had been admitted in court for lack of objection on the part of private respondent, the respondent Court had discretion in assigning
weight to such evidence. We are bound by the conclusion of the appellate court. In a petition for review on certiorari, We are not to determine
the probative value of evidence but to resolve questions of law. Secondly, the affidavit of Jesus Bascos did not dwell on how the hijacking took
place. Thirdly, while the affidavit of Juanito Morden, the truck helper in the hijacked truck, was presented as evidence in court, he himself was
a witness as could be gleaned from the contents of the petition. Affidavits are not considered the best evidence if the affiants are available as
witnesses. 25 The subsequent filing of the information for carnapping and robbery against the accused named in said affidavits did not
necessarily mean that the contents of the affidavits were true because they were yet to be determined in the trial of the criminal cases.
The presumption of negligence was raised against petitioner. It was petitioner's burden to overcome it. Thus, contrary to her assertion, private
respondent need not introduce any evidence to prove her negligence. Her own failure to adduce sufficient proof of extraordinary diligence
made the presumption conclusive against her.
Having affirmed the findings of the respondent Court on the substantial issues involved, We find no reason to disturb the conclusion that the
motion to lift/dissolve the writ of preliminary attachment has been rendered moot and academic by the decision on the merits.
In the light of the foregoing analysis, it is Our opinion that the petitioner's claim cannot be sustained. The petition is DISMISSED and the decision
of the Court of Appeals is hereby AFFIRMED. SO ORDERED.
Case #4 G.R. No. 141910 August 6, 2002
Page 13 of 29
FGU INSURANCE CORPORATION, petitioner,

vs.
G.P. SARMIENTO TRUCKING CORPORATION and LAMBERT M. EROLES, respondents.
Transportation; Common Carriers; A trucking company which is an exclusive contractor and hauler of another company, rendering or offering
its services to no other individual or entity, cannot be considered a common carrier.—On the first issue, the Court finds the conclusion of the trial
court and the Court of Appeals to be amply justified. GPS, being an exclusive contractor and hauler of Concepcion Industries, Inc., rendering or
offering its services to no other individual or entity, cannot be considered a common carrier. Common carriers are persons, corporations, firms
or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for hire or compensation,
offering their services to the public, whether to the public in general or to a limited clientele in particular, but never on an exclusive basis. The
true test of a common carrier is the carriage of passengers or goods, providing space for those who opt to avail themselves of its transportation
service for a fee. Given accepted standards, GPS scarcely falls within the term “common carrier.”
Same; Contracts; Breach of Contracts; In culpa contractual, the mere proof of the existence of the contract and the failure of its compliance
justify, prima facie, a corresponding right of relief; Indeed, agreements can accomplish little, either for their makers or for society, unless they are
made the basis for action—the effect of every infraction is to create a new duty, that is, to make recompense to the one who has been injured by
the failure of another to observe his contractual obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence
or of the attendance of fortuitous event, to excuse him from his ensuing liability.—In culpa contractual,upon which the action of petitioner rests
as being the subrogee of Concepcion Industries, Inc., the mere proof of the existence of the contract and the failure of its compliance
justify, prima facie, a corresponding right of relief. The law, recognizing the obligatory force of contracts, will not permit a party to be set free
from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach upon the contract
confers upon the injured party a valid cause for recovering that which may have been lost or suffered. The remedy serves to preserve the
interests of the promisee that may include his “expectation interest,” which is his interest in having the benefit of his bargain by being put in as
good a position as he would have been in had the contract been performed, or his “reliance interest,” which is his interest in being reimbursed
for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made; or his
“restitution interest,” which is his interest in having restored to him any benefit that he has conferred on the other party. Indeed, agreements
can accomplish little, either for their makers or for society, unless they are made the basis for action. The effect of every infraction is to create a
new duty, that is, to make recompense to the one who has been injured unless he can show extenuating circumstances, like proof of his exercise
of due diligence (normally that of the diligence of a good father of a family or, exceptionally by stipulation or by law such as in the case of
common carriers, that of extraordinary diligence) or of the attendance of fortuitous event, to excuse him from his ensuing liability.
Same; Same; Same; Quasi-Delicts; Torts; The driver, not being a party to the contract of carriage, may not be held liable under the agreement—
action against him can only be based on culpa aquiliana, which, unlike culpa contractual, would require the claimant for damages to prove negligence
or fault on his part.—Respondent driver, on the other hand, without concrete proof of his negligence or fault, may not himself be ordered to
pay petitioner. The driver, not being a party to the contract of carriage between petitioner’s principal and defendant, may not be held liable
under the agreement. A contract can only bind the parties who have entered into it or their successors who have assumed their personality or
their juridical position. Consonantly with the axiom res inter alios acta aliis neque nocet prodest,such contract can neither favor nor prejudice a
third person. Petitioner’s civil action against the driver can only be based on culpa aquiliana, which, unlike culpa contractual, would require the
claimant for damages to prove negligence or fault on the part of the defendant.
Same; Same; Same; Same; Same; Res Ipsa Loquitur; Requisites; Words and Phrases; Res ipsa loquitur is not a rule of substantive law and, as
such, it does not create an independent ground of liability—instead, it is regarded as a mode of proof, and relieves the plaintiff of the burden of
producing specific proof of negligence.—A word in passing. Res ipsa loquitur, a doctrine being invoked by petitioner, holds a defendant liable
where the thing which caused the injury complained of is shown to be under the latter’s management and the accident is such that, in the
ordinary course of things, cannot be expected to happen if those who have its management or control use proper care. It affords reasonable
evidence, in the absence of explanation by the defendant, that the accident arose from want of care. It is not a rule of substantive law and, as
such, it does not create an independent ground of liability. Instead, it is regarded as a mode of proof, or a mere procedural convenience since it
furnishes a substitute for, and relieves the plaintiff of, the burden of producing specific proof of negligence. The maxim simply places on the
defendant the burden of going forward with the proof.Resort to the doctrine, however, may be allowed only when (a) the event is of a kind
which does not ordinarily occur in the absence of negligence; (b) other responsible causes, including the conduct of the plaintiff and third
persons, are sufficiently eliminated by the evidence; and (c) the indicated negligence is within the scope of the defendant’s duty to the plaintiff.
Thus, it is not applicable when an unexplained accident may be attributable to one of several causes, for some of which the defendant could not
be responsible.
Same; Same; Same; Same; Same; Same; While res ipsa loquitur generally finds relevance whether or not a contractual relationship exists
between the plaintiff and the defendant—for the inference of negligence arises from the circumstances and nature of the occurrence and not from
the nature of the relation of the parties—the requirement that responsible causes other than those due to defendant’s conduct must first be
eliminated, for the doctrine to apply, should be understood as being confined only to cases of pure (non-contractual) tort since obviously the
presumption of negligence in culpa contractual immediately attaches by a failure of the covenant or its tenor.—Res ipsa loquitur generally finds
relevance whether or not a contractual relationship exists between the plaintiff and the defendant, for the inference of negligence arises from
the circumstances and nature of the occurrence and not from the nature of the relation of the parties. Nevertheless, the requirement that
responsible causes other than those due to defendant’s conduct must first be eliminated, for the doctrine to apply, should be understood as
being confined only to cases of pure (non-contractual) tort since obviously the presumption of negligence in culpa contractual, as previously so
pointed out, immediately attaches by a failure of the covenant or its tenor. In the case of the truck driver, whose liability in a civil action is
predicated on culpa acquiliana,while he admittedly can be said to have been in control and management of the vehicle which figured in the
accident, it is not equally shown, however, that the accident could have been exclusively due to his negligence, a matter that can allow,
forthwith, res ipsa loquitur to work against him.
Actions; Pleadings and Practice; Demurrer to Evidence; If a demurrer to evidence is granted but on appeal the order of dismissal is reversed,
the movant shall be deemed to have waived the right to present evidence.— If a demurrer to evidence is granted but on appeal the order of
dismissal is reversed, the movant shall be deemed to have waived the right to present evidence. Thus, respondent corporation may no longer
offer proof to establish that it has exercised due care in transporting the cargoes of the assured so as to still warrant a remand of the case to
the trial court.
Page 14 of 29
VITUG, J.:
G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994 thirty (30) units of Condura S.D. white refrigerators aboard one
of its Isuzu truck, driven by Lambert Eroles, from the plant site of Concepcion Industries, Inc., along South Superhighway in Alabang, Metro
Manila, to the Central Luzon Appliances in Dagupan City. While the truck was traversing the north diversion road along McArthur highway in
Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes.
FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the value of the covered cargoes in the sum
of P204,450.00. FGU, in turn, being the subrogee of the rights and interests of Concepcion Industries, Inc., sought reimbursement of the amount
it had paid to the latter from GPS. Since the trucking company failed to heed the claim, FGU filed a complaint for damages and breach of contract
of carriage against GPS and its driver Lambert Eroles with the Regional Trial Court, Branch 66, of Makati City. In its answer, respondents asserted
that GPS was the exclusive hauler only of Concepcion Industries, Inc., since 1988, and it was not so engaged in business as a common carrier.
Respondents further claimed that the cause of damage was purely accidental.1âwphi1.nêt
The issues having thus been joined, FGU presented its evidence, establishing the extent of damage to the cargoes and the amount it had paid
to the assured. GPS, instead of submitting its evidence, filed with leave of court a motion to dismiss the complaint by way of demurrer to
evidence on the ground that petitioner had failed to prove that it was a common carrier.
The trial court, in its order of 30 April 1996, 1 granted the motion to dismiss, explaining thusly:
"Under Section 1 of Rule 131 of the Rules of Court, it is provided that ‘Each party must prove his own affirmative allegation, xxx.’
"In the instant case, plaintiff did not present any single evidence that would prove that defendant is a common carrier.
"x x x xxx xxx
"Accordingly, the application of the law on common carriers is not warranted and the presumption of fault or negligence on the part
of a common carrier in case of loss, damage or deterioration of goods during transport under 1735 of the Civil Code is not availing.
"Thus, the laws governing the contract between the owner of the cargo to whom the plaintiff was subrogated and the owner of the
vehicle which transports the cargo are the laws on obligation and contract of the Civil Code as well as the law on quasi delicts.
"Under the law on obligation and contract, negligence or fault is not presumed. The law on quasi delict provides for some presumption
of negligence but only upon the attendance of some circumstances. Thus, Article 2185 provides:
‘Art. 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at
the time of the mishap, he was violating any traffic regulation.’
"Evidence for the plaintiff shows no proof that defendant was violating any traffic regulation. Hence, the presumption of negligence
is not obtaining.
"Considering that plaintiff failed to adduce evidence that defendant is a common carrier and defendant’s driver was the one negligent,
defendant cannot be made liable for the damages of the subject cargoes."2
The subsequent motion for reconsideration having been denied,3 plaintiff interposed an appeal to the Court of Appeals, contending that the
trial court had erred (a) in holding that the appellee corporation was not a common carrier defined under the law and existing jurisprudence;
and (b) in dismissing the complaint on a demurrer to evidence.
The Court of Appeals rejected the appeal of petitioner and ruled in favor of GPS. The appellate court, in its decision of 10 June
1999,4 discoursed, among other things, that -
"x x x in order for the presumption of negligence provided for under the law governing common carrier (Article 1735, Civil Code) to
arise, the appellant must first prove that the appellee is a common carrier. Should the appellant fail to prove that the appellee is a
common carrier, the presumption would not arise; consequently, the appellant would have to prove that the carrier was negligent.
"x x x xxx xxx
"Because it is the appellant who insists that the appellees can still be considered as a common carrier, despite its `limited clientele,’
(assuming it was really a common carrier), it follows that it (appellant) has the burden of proving the same. It (plaintiff-appellant) `must
establish his case by a preponderance of evidence, which means that the evidence as a whole adduced by one side is superior to that
of the other.’ (Summa Insurance Corporation vs. Court of Appeals, 243 SCRA 175). This, unfortunately, the appellant failed to do --
hence, the dismissal of the plaintiff’s complaint by the trial court is justified.
"x x x xxx xxx
"Based on the foregoing disquisitions and considering the circumstances that the appellee trucking corporation has been `its exclusive
contractor, hauler since 1970, defendant has no choice but to comply with the directive of its principal,’ the inevitable conclusion is
that the appellee is a private carrier.
Page 15 of 29
"x x x xxx xxx
"x x x the lower court correctly ruled that 'the application of the law on common carriers is not warranted and the presumption of
fault or negligence on the part of a common carrier in case of loss, damage or deterioration of good[s] during transport under [article]
1735 of the Civil Code is not availing.' x x x.
"Finally, We advert to the long established rule that conclusions and findings of fact of a trial court are entitled to great weight on
appeal and should not be disturbed unless for strong and valid reasons."5
Petitioner's motion for reconsideration was likewise denied;6 hence, the instant petition,7 raising the following issues:
WHETHER RESPONDENT GPS MAY BE CONSIDERED AS A COMMON CARRIER AS DEFINED UNDER THE LAW AND EXISTING
JURISPRUDENCE.
II
WHETHER RESPONDENT GPS, EITHER AS A COMMON CARRIER OR A PRIVATE CARRIER, MAY BE PRESUMED TO HAVE BEEN
NEGLIGENT WHEN THE GOODS IT UNDERTOOK TO TRANSPORT SAFELY WERE SUBSEQUENTLY DAMAGED WHILE IN ITS PROTECTIVE
CUSTODY AND POSSESSION.
III
WHETHER THE DOCTRINE OF RES IPSA LOQUITUR IS APPLICABLE IN THE INSTANT CASE.
On the first issue, the Court finds the conclusion of the trial court and the Court of Appeals to be amply justified. GPS, being an exclusive
contractor and hauler of Concepcion Industries, Inc., rendering or offering its services to no other individual or entity, cannot be considered a
common carrier. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for hire or compensation, offering their services to the public,8 whether to the public in
general or to a limited clientele in particular, but never on an exclusive basis. 9 The true test of a common carrier is the carriage of passengers or
goods, providing space for those who opt to avail themselves of its transportation service for a fee. 10Given accepted standards, GPS scarcely
falls within the term "common carrier."
The above conclusion nothwithstanding, GPS cannot escape from liability.
In culpa contractual, upon which the action of petitioner rests as being the subrogee of Concepcion Industries, Inc., the mere proof of the
existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief.11 The law, recognizing the obligatory
force of contracts,12 will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a
contravention of the tenor thereof.13 A breach upon the contract confers upon the injured party a valid cause for recovering that which may
have been lost or suffered. The remedy serves to preserve the interests of the promisee that may include his "expectation interest," which is his
interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed, or his
"reliance interest," which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he
would have been in had the contract not been made; or his "restitution interest," which is his interest in having restored to him any benefit that
he has conferred on the other party.14 Indeed, agreements can accomplish little, either for their makers or for society, unless they are made the
basis for action.15 The effect of every infraction is to create a new duty, that is, to make recompense to the one who has been injured by the
failure of another to observe his contractual obligation 16 unless he can show extenuating circumstances, like proof of his exercise of due
diligence (normally that of the diligence of a good father of a family or, exceptionally by stipulation or by law such as in the case of common
carriers, that of extraordinary diligence) or of the attendance of fortuitous event, to excuse him from his ensuing liability.
Respondent trucking corporation recognizes the existence of a contract of carriage between it and petitioner’s assured, and admits that the
cargoes it has assumed to deliver have been lost or damaged while in its custody. In such a situation, a default on, or failure of compliance with,
the obligation – in this case, the delivery of the goods in its custody to the place of destination - gives rise to a presumption of lack of care and
corresponding liability on the part of the contractual obligor the burden being on him to establish otherwise. GPS has failed to do so.
Respondent driver, on the other hand, without concrete proof of his negligence or fault, may not himself be ordered to pay petitioner. The
driver, not being a party to the contract of carriage between petitioner’s principal and defendant, may not be held liable under the agreement.
A contract can only bind the parties who have entered into it or their successors who have assumed their personality or their juridical
position.17 Consonantly with the axiom res inter alios acta aliis neque nocet prodest, such contract can neither favor nor prejudice a third person.
Petitioner’s civil action against the driver can only be based on culpa aquiliana, which, unlike culpa contractual, would require the claimant for
damages to prove negligence or fault on the part of the defendant.18
A word in passing. Res ipsa loquitur, a doctrine being invoked by petitioner, holds a defendant liable where the thing which caused the injury
complained of is shown to be under the latter’s management and the accident is such that, in the ordinary course of things, cannot be expected
to happen if those who have its management or control use proper care. It affords reasonable evidence, in the absence of explanation by the
defendant, that the accident arose from want of care.19 It is not a rule of substantive law and, as such, it does not create an independent ground
of liability. Instead, it is regarded as a mode of proof, or a mere procedural convenience since it furnishes a substitute for, and relieves the
plaintiff of, the burden of producing specific proof of negligence. The maxim simply places on the defendant the burden of going forward with
the proof.20 Resort to the doctrine, however, may be allowed only when (a) the event is of a kind which does not ordinarily occur in the absence
Page 16 of 29
of negligence; (b) other responsible causes, including the conduct of the plaintiff and third persons, are sufficiently eliminated by the evidence;
and (c) the indicated negligence is within the scope of the defendant's duty to the plaintiff. 21 Thus, it is not applicable when an unexplained
accident may be attributable to one of several causes, for some of which the defendant could not be responsible. 22
Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists between the plaintiff and the defendant, for the
inference of negligence arises from the circumstances and nature of the occurrence and not from the nature of the relation of the
parties.23 Nevertheless, the requirement that responsible causes other than those due to defendant’s conduct must first be eliminated, for the
doctrine to apply, should be understood as being confined only to cases of pure (non-contractual) tort since obviously the presumption of
negligence in culpa contractual, as previously so pointed out, immediately attaches by a failure of the covenant or its tenor. In the case of the
truck driver, whose liability in a civil action is predicated on culpa acquiliana, while he admittedly can be said to have been in control and
management of the vehicle which figured in the accident, it is not equally shown, however, that the accident could have been exclusively due
to his negligence, a matter that can allow, forthwith, res ipsa loquitur to work against him.
If a demurrer to evidence is granted but on appeal the order of dismissal is reversed, the movant shall be deemed to have waived the right to
present evidence.24 Thus, respondent corporation may no longer offer proof to establish that it has exercised due care in transporting the
cargoes of the assured so as to still warrant a remand of the case to the trial court.1âwphi1.nêt
WHEREFORE, the order, dated 30 April 1996, of the Regional Trial Court, Branch 66, of Makati City, and the decision, dated 10 June 1999, of the
Court of Appeals, are AFFIRMED only insofar as respondent Lambert M. Eroles is concerned, but said assailed order of the trial court and decision
of the appellate court are REVERSED as regards G.P. Sarmiento Trucking Corporation which, instead, is hereby ordered to pay FGU Insurance
Corporation the value of the damaged and lost cargoes in the amount of P204,450.00. No costs.
SO ORDERED.
Case # 5 G.R. No. 147246 August 19, 2003
ASIA LIGHTERAGE AND SHIPPING, INC., petitioner,

vs.
COURT OF APPEALS and PRUDENTIAL GUARANTEE AND ASSURANCE, INC., respondents.
Civil Law; Contracts; Common Carriers; Definition.—The definition of common carriers in Article 1732 of the Civil Code makes no distinction
between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary
Page 17 of 29
activity. We also did not distinguish between a person or enterprise offering transportation service on a regular or scheduled basis and one
offering such service on an occasional, episodic or unscheduled basis. Further, we ruled that Article 1732 does not distinguish between a carrier
offering its services to the general public, and one who offers services or solicits business only from a narrow segment of the general population.
Same; Same; Same; Determination of a common carrier.—The test to determine a common carrier is “whether the given undertaking is a
part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent
of the business transacted.”
Same; Same; Same; Presumption of Negligence; Common carriers are presumed to have been at fault or to have acted negligently if the goods
are lost, destroyed or deteriorated.—Common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported
by them. They are presumed to have been at fault or to have acted negligently if the goods are lost, destroyed or deteriorated. To overcome
the presumption of negligence in the case of loss, destruction or deterioration of the goods, the common carrier must prove that it exercised
extraordinary diligence. There are, however, exceptions to this rule. Article 1734 of the Civil Code enumerates the instances when the
presumption of negligence does not attach.
PUNO, J.:
On appeal is the Court of Appeals' May 11, 2000 Decision1 in CA-G.R. CV No. 49195 and February 21, 2001 Resolution2 affirming with modification
the April 6, 1994 Decision3 of the Regional Trial Court of Manila which found petitioner liable to pay private respondent the amount of indemnity
and attorney's fees.
First, the facts.
On June 13, 1990, 3,150 metric tons of Better Western White Wheat in bulk, valued at US$423,192.354 was shipped by Marubeni American
Corporation of Portland, Oregon on board the vessel M/V NEO CYMBIDIUM V-26 for delivery to the consignee, General Milling Corporation in
Manila, evidenced by Bill of Lading No. PTD/Man-4.5The shipment was insured by the private respondent Prudential Guarantee and Assurance,
Inc. against loss or damage for P14,621,771.75 under Marine Cargo Risk Note RN 11859/90.6
On July 25, 1990, the carrying vessel arrived in Manila and the cargo was transferred to the custody of the petitioner Asia Lighterage and
Shipping, Inc. The petitioner was contracted by the consignee as carrier to deliver the cargo to consignee's warehouse at Bo. Ugong, Pasig City.
On August 15, 1990, 900 metric tons of the shipment was loaded on barge PSTSI III, evidenced by Lighterage Receipt No. 0364 7 for delivery to
consignee. The cargo did not reach its destination.
It appears that on August 17, 1990, the transport of said cargo was suspended due to a warning of an incoming typhoon. On August 22, 1990,
the petitioner proceeded to pull the barge to Engineering Island off Baseco to seek shelter from the approaching typhoon. PSTSI III was tied
down to other barges which arrived ahead of it while weathering out the storm that night. A few days after, the barge developed a list because
of a hole it sustained after hitting an unseen protuberance underneath the water. The petitioner filed a Marine Protest on August 28, 1990.8 It
likewise secured the services of Gaspar Salvaging Corporation which refloated the barge.9 The hole was then patched with clay and cement.
The barge was then towed to ISLOFF terminal before it finally headed towards the consignee's wharf on September 5, 1990. Upon reaching the
Sta. Mesa spillways, the barge again ran aground due to strong current. To avoid the complete sinking of the barge, a portion of the goods was
transferred to three other barges.10
The next day, September 6, 1990, the towing bits of the barge broke. It sank completely, resulting in the total loss of the remaining cargo.11 A
second Marine Protest was filed on September 7, 1990.12
On September 14, 1990, a bidding was conducted to dispose of the damaged wheat retrieved and loaded on the three other barges.13 The total
proceeds from the sale of the salvaged cargo was P201,379.75.14
On the same date, September 14, 1990, consignee sent a claim letter to the petitioner, and another letter dated September 18, 1990 to the
private respondent for the value of the lost cargo.
On January 30, 1991, the private respondent indemnified the consignee in the amount of P4,104,654.22.15Thereafter, as subrogee, it sought
recovery of said amount from the petitioner, but to no avail.
On July 3, 1991, the private respondent filed a complaint against the petitioner for recovery of the amount of indemnity, attorney's fees and cost
of suit.16 Petitioner filed its answer with counterclaim.17
The Regional Trial Court ruled in favor of the private respondent. The dispositive portion of its Decision states:
WHEREFORE, premises considered, judgment is hereby rendered ordering defendant Asia Lighterage & Shipping, Inc. liable to pay
plaintiff Prudential Guarantee & Assurance Co., Inc. the sum of P4,104,654.22 with interest from the date complaint was filed on July
3, 1991 until fully satisfied plus 10% of the amount awarded as and for attorney's fees. Defendant's counterclaim is hereby DISMISSED.
With costs against defendant.18
Petitioner appealed to the Court of Appeals insisting that it is not a common carrier. The appellate court affirmed the decision of the trial court
with modification. The dispositive portion of its decision reads:
Page 18 of 29
WHEREFORE, the decision appealed from is hereby AFFIRMED with modification in the sense that the salvage value of P201,379.75
shall be deducted from the amount of P4,104,654.22. Costs against appellant.
SO ORDERED.
Petitioner's Motion for Reconsideration dated June 3, 2000 was likewise denied by the appellate court in a Resolution promulgated on February
21, 2001.
Hence, this petition. Petitioner submits the following errors allegedly committed by the appellate court, viz:19
(1) THE COURT OF APPEALS DECIDED THE CASE A QUO IN A WAY NOT IN ACCORD WITH LAW AND/OR WITH THE APPLICABLE
DECISIONS OF THE SUPREME COURT WHEN IT HELD THAT PETITIONER IS A COMMON CARRIER.
DECISIONS OF THE SUPREME COURT WHEN IT AFFIRMED THE FINDING OF THE LOWER COURT A QUO THAT ON THE BASIS OF THE
PROVISIONS OF THE CIVIL CODE APPLICABLE TO COMMON CARRIERS, "THE LOSS OF THE CARGO IS, THEREFORE, BORNE BY THE CARRIER
IN ALL CASES EXCEPT IN THE FIVE (5) CASES ENUMERATED."
DECISIONS OF THE SUPREME COURT WHEN IT EFFECTIVELY CONCLUDED THAT PETITIONER FAILED TO EXERCISE DUE DILIGENCE
AND/OR WAS NEGLIGENT IN ITS CARE AND CUSTODY OF THE CONSIGNEE'S CARGO.
The issues to be resolved are:
(1) Whether the petitioner is a common carrier; and,
(2) Assuming the petitioner is a common carrier, whether it exercised extraordinary diligence in its care and custody of the consignee's
cargo.
On the first issue, we rule that petitioner is a common carrier.
Article 1732 of the Civil Code defines common carriers as persons, corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public.
Petitioner contends that it is not a common carrier but a private carrier. Allegedly, it has no fixed and publicly known route, maintains no
terminals, and issues no tickets. It points out that it is not obliged to carry indiscriminately for any person. It is not bound to carry goods unless
it consents. In short, it does not hold out its services to the general public.20
We disagree.
In De Guzman vs. Court of Appeals,21 we held that the definition of common carriers in Article 1732 of the Civil Code makes no distinction between
one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity.
We also did not distinguish between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such
service on an occasional, episodic or unscheduled basis. Further, we ruled that Article 1732 does not distinguish between a carrier offering its
services to the general public, and one who offers services or solicits business only from a narrow segment of the general population.
In the case at bar, the principal business of the petitioner is that of lighterage and drayage 22 and it offers its barges to the public for carrying or
transporting goods by water for compensation. Petitioner is clearly a common carrier. In De Guzman, supra,23 we considered private respondent
Ernesto Cendaña to be a common carrier even if his principal occupation was not the carriage of goods for others, but that of buying used
bottles and scrap metal in Pangasinan and selling these items in Manila.
We therefore hold that petitioner is a common carrier whether its carrying of goods is done on an irregular rather than scheduled manner, and
with an only limited clientele. A common carrier need not have fixed and publicly known routes. Neither does it have to maintain terminals or
issue tickets.
To be sure, petitioner fits the test of a common carrier as laid down in Bascos vs. Court of Appeals.24 The test to determine a common carrier is
"whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation
rather than the quantity or extent of the business transacted."25 In the case at bar, the petitioner admitted that it is engaged in the business of
shipping and lighterage,26 offering its barges to the public, despite its limited clientele for carrying or transporting goods by water for
compensation.27
On the second issue, we uphold the findings of the lower courts that petitioner failed to exercise extraordinary diligence in its care and custody
of the consignee's goods.
Common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported by them. 28 They are presumed to
have been at fault or to have acted negligently if the goods are lost, destroyed or deteriorated.29 To overcome the presumption of negligence
in the case of loss, destruction or deterioration of the goods, the common carrier must prove that it exercised extraordinary diligence. There
Page 19 of 29
are, however, exceptions to this rule. Article 1734 of the Civil Code enumerates the instances when the presumption of negligence does not
attach:
Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the
following causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.
In the case at bar, the barge completely sank after its towing bits broke, resulting in the total loss of its cargo. Petitioner claims that this was
caused by a typhoon, hence, it should not be held liable for the loss of the cargo. However, petitioner failed to prove that the typhoon is the
proximate and only cause of the loss of the goods, and that it has exercised due diligence before, during and after the occurrence of the typhoon
to prevent or minimize the loss.30 The evidence show that, even before the towing bits of the barge broke, it had already previously sustained
damage when it hit a sunken object while docked at the Engineering Island. It even suffered a hole. Clearly, this could not be solely attributed
to the typhoon. The partly-submerged vessel was refloated but its hole was patched with only clay and cement. The patch work was merely a
provisional remedy, not enough for the barge to sail safely. Thus, when petitioner persisted to proceed with the voyage, it recklessly exposed
the cargo to further damage. A portion of the cross-examination of Alfredo Cunanan, cargo-surveyor of Tan-Gatue Adjustment Co., Inc., states:
CROSS-EXAMINATION BY ATTY. DONN LEE:31
xxx xxx xxx
q - Can you tell us what else transpired after that incident?
a - After the first accident, through the initiative of the barge owners, they tried to pull out the barge from the place of the accident,
and bring it to the anchor terminal for safety, then after deciding if the vessel is stabilized, they tried to pull it to the consignee's
warehouse, now while on route another accident occurred, now this time the barge totally hitting something in the course.
q - You said there was another accident, can you tell the court the nature of the second accident?
a - The sinking, sir.
q - Can you tell the nature . . . can you tell the court, if you know what caused the sinking?
a - Mostly it was related to the first accident because there was already a whole (sic) on the bottom part of the barge.
xxx xxx xxx
This is not all. Petitioner still headed to the consignee's wharf despite knowledge of an incoming typhoon. During the time that the barge was
heading towards the consignee's wharf on September 5, 1990, typhoon "Loleng" has already entered the Philippine area of responsibility.32 A
part of the testimony of Robert Boyd, Cargo Operations Supervisor of the petitioner, reveals:
DIRECT-EXAMINATION BY ATTY. LEE:33
xxx xxx xxx
q - Now, Mr. Witness, did it not occur to you it might be safer to just allow the Barge to lie where she was instead of towing it?
a - Since that time that the Barge was refloated, GMC (General Milling Corporation, the consignee) as I have said was in a hurry for
their goods to be delivered at their Wharf since they needed badly the wheat that was loaded in PSTSI-3. It was needed badly by the
consignee.
q - And this is the reason why you towed the Barge as you did?
a - Yes, sir.
xxx xxx xxx
CROSS-EXAMINATION BY ATTY. IGNACIO:34
Page 20 of 29
xxx xxx xxx
q - And then from ISLOFF Terminal you proceeded to the premises of the GMC? Am I correct?
a - The next day, in the morning, we hired for additional two (2) tugboats as I have stated.
q - Despite of the threats of an incoming typhoon as you testified a while ago?
a - It is already in an inner portion of Pasig River. The typhoon would be coming and it would be dangerous if we are in the vicinity
of Manila Bay.
q - But the fact is, the typhoon was incoming? Yes or no?
a - Yes.
q - And yet as a standard operating procedure of your Company, you have to secure a sort of Certification to determine the
weather condition, am I correct?
a - Yes, sir.
q - So, more or less, you had the knowledge of the incoming typhoon, right?
a - Yes, sir.
q - And yet you proceeded to the premises of the GMC?
a - ISLOFF Terminal is far from Manila Bay and anytime even with the typhoon if you are already inside the vicinity or inside Pasig
entrance, it is a safe place to tow upstream.
Accordingly, the petitioner cannot invoke the occurrence of the typhoon as force majeure to escape liability for the loss sustained by the private
respondent. Surely, meeting a typhoon head-on falls short of due diligence required from a common carrier. More importantly, the
officers/employees themselves of petitioner admitted that when the towing bits of the vessel broke that caused its sinking and the total loss of
the cargo upon reaching the Pasig River, it was no longer affected by the typhoon. The typhoon then is not the proximate cause of the loss of
the cargo; a human factor, i.e., negligence had intervened.
IN VIEW THEREOF, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No. 49195 dated May 11, 2000 and its Resolution
dated February 21, 2001 are hereby AFFIRMED. Costs against petitioner.
SO ORDERED.
Case # 6 G.R. No. 125948 December 29, 1998
FIRST PHILIPPINE INDUSTRIAL CORPORATION, petitioner,

vs.
COURT OF APPEALS, HONORABLE PATERNO V. TAC-AN, BATANGAS CITY and ADORACION C. ARELLANO, in her official capacity as City
Treasurer of Batangas, respondents.
Contracts; Common Carriers; A “common carrier” is 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.—There is merit in the petition. 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,
Page 21 of 29
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.”
Same; Same; Test for determining whether a party is a common carrier of goods.—The test for determining whether a party is a common
carrier of goods is: 1. He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as
ready to engage in the transportation of goods for person generally as a business and not as a casual occupation; 2. He must undertake to carry
goods of the kind to which his business is confined; 3. He must undertake to carry by the method by which his business is conducted and over
his established roads; and 4. The transportation must be for hire.
Same; Same; The fact that petitioner has a limited clientele does not exclude it from the definition of a common carrier.—Based on the above
definitions and requirements, there is no doubt that petitioner is a common carrier. It is engaged in the business of transporting or carrying
goods, i.e. petroleum products, for hire as a public employment. It undertakes to carry for all persons indifferently, that is, to all persons who
choose to employ its services, and transports the goods by land and for compensation. The fact that petitioner has a limited clientele does not
exclude it from the definition of a common carrier.
Same; Same; Words and Phrases; The definition of “common carriers” in the Civil Code makes no distinction as to the means of transporting,
as long as it is by land, water or air.—As correctly pointed out by petitioner, the definition of “common carriers” in the Civil Code makes no
distinction as to the means of transporting, as long as it is by land, water or air. It does not provide that the transportation of the passengers or
goods should be by motor vehicle. In fact, in the United States, oil pipe line operators are considered common carriers.
Same; Same; Taxation; Legislative intent in excluding from the taxing power of the local government unit the imposition of business tax
against common carriers is to prevent a duplication of the so-called “common carrier’s tax.”—It is clear that the legislative intent in excluding from
the taxing power of the local government unit the imposition of business tax against common carriers is to prevent a duplication of the so-called
“common carrier’s tax.” Petitioner is already paying three (3%) percent common carrier’s tax on its gross sales/earnings under the National
Internal Revenue Code. To tax petitioner again on its gross receipts in its transportation of petroleum business would defeat the purpose of the
Local Government Code.
MARTINEZ, J.:
This petition for review on certiorari assails the Decision of the Court of Appeals dated November 29, 1995, in CA-G.R. SP No. 36801, affirming
the decision of the Regional Trial Court of Batangas City, Branch 84, in Civil Case No. 4293, which dismissed petitioners' complaint for a business
tax refund imposed by the City of Batangas.
Petitioner is a grantee of a pipeline concession under Republic Act No. 387, as amended, to contract, install and operate oil pipelines. The original
pipeline concession was granted in 19671 and renewed by the Energy Regulatory Board in 1992. 2
Sometime in January 1995, petitioner applied for a mayor's permit with the Office of the Mayor of Batangas City. However, before the mayor's
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 Code3. The respondent City Treasurer 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 January 20, 1994, petitioner filed a letter-protest addressed to the respondent City Treasurer, the pertinent portion of which reads:
Please note that our Company (FPIC) is a pipeline operator with a government concession granted under the Petroleum Act.
It is engaged in the business of transporting petroleum products from the Batangas refineries, via pipeline, to Sucat and JTF
Pandacan Terminals. As such, our Company is exempt from paying tax on gross receipts under Section 133 of the Local
Government Code of 1991 . . . .
Moreover, Transportation contractors are not included in the enumeration of contractors under Section 131, Paragraph (h)
of the Local Government Code. Therefore, the authority to impose tax "on contractors and other independent contractors"
under Section 143, Paragraph (e) of the Local Government Code does not include the power to levy on transportation
contractors.
The imposition and assessment cannot be categorized as a mere fee authorized under Section 147 of the Local Government
Code. The said section limits the imposition of fees and charges on business to such amounts as may be commensurate to
the cost of regulation, inspection, and licensing. Hence, assuming arguendo that FPIC is liable for the license fee, the
imposition thereof based on gross receipts is violative of the aforecited provision. The amount of P956,076.04 (P239,019.01
per quarter) is not commensurate to the cost of regulation, inspection and licensing. The fee is already a revenue raising
measure, and not a mere regulatory imposition.4
On March 8, 1994, the respondent City Treasurer denied the protest contending that petitioner cannot be considered engaged in transportation
business, thus it cannot claim exemption under Section 133 (j) of the Local Government Code.5
On June 15, 1994, petitioner filed with the Regional Trial Court of Batangas City a complaint 6 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 Section 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
Page 22 of 29
transportation contractors; and, (3) the City Treasurer illegally and erroneously imposed and collected the said tax, thus meriting the immediate
refund of the tax paid.7
Traversing the complaint, the respondents argued that petitioner cannot be exempt from taxes under Section 133 (j) of the Local Government
Code as said exemption applies 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
such 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.8
On October 3, 1994, the trial court rendered a decision dismissing the complaint, ruling in this wise:
. . . Plaintiff is either a contractor or other independent contractor.
. . . the exemption to tax claimed by the plaintiff has become unclear. It is a rule that tax exemptions are to be strictly
construed against the taxpayer, taxes being the lifeblood of the government. Exemption may therefore be granted only by
clear and unequivocal provisions of law.
Plaintiff claims that it is a grantee of a pipeline concession under Republic Act 387. (Exhibit A) whose concession was lately
renewed by the Energy Regulatory Board (Exhibit B). Yet neither said law nor the deed of concession grant any tax exemption
upon the plaintiff.
Even the Local Government Code imposes a tax on franchise holders under Sec. 137 of the Local Tax Code. Such being the
situation obtained in this case (exemption being unclear and equivocal) resort to distinctions or other considerations may be
of help:
1. That the exemption granted under Sec. 133 (j) encompasses only common carriers so
as not to overburden the riding public or commuters with taxes. Plaintiff is not a
common carrier, but a special carrier extending its services and facilities to a single
specific or "special customer" under a "special contract."
2. The Local Tax Code of 1992 was basically enacted to give more and effective local
autonomy to local governments than the previous enactments, to make them
economically and financially viable to serve the people and discharge their functions
with a concomitant obligation to accept certain devolution of powers, . . . So,
consistent with this policy even franchise grantees are taxed (Sec. 137) and contractors
are also taxed under Sec. 143 (e) and 151 of the Code.9
Petitioner assailed the aforesaid decision before this Court via a petition for review. On February 27, 1995, we referred the case to the respondent
Court of Appeals for consideration and adjudication. 10 On November 29, 1995, the respondent court rendered a decision 11 affirming the trial
court's dismissal of petitioner's complaint. Petitioner's motion for reconsideration was denied on July 18, 1996. 12
Hence, this petition. At first, the petition was denied due course in a Resolution dated November 11, 1996. 13Petitioner moved for a
reconsideration which was granted by this Court in a Resolution 14 of January 22, 1997. Thus, the petition was reinstated.
Petitioner claims that the respondent Court of Appeals erred in holding that (1) the petitioner is not a common carrier or a transportation
contractor, and (2) the exemption sought for by petitioner is not clear under the law.
There is merit in the petition.
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.
Art. 1732 of the Civil Code defines a "common carrier" as "any person, corporation, firm or association engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public."
The test for determining whether a party is a common carrier of goods is:
1. He must be engaged in the business of carrying goods for others as a public

employment, and must hold himself out as ready to engage in the transportation of
goods for person generally as a business and not as a casual occupation;
2. He must undertake to carry goods of the kind to which his business is confined;
3. He must undertake to carry by the method by which his business is conducted and
over his established roads; and
4. The transportation must be for hire. 15
Page 23 of 29
Based on the above definitions and requirements, there is no doubt that petitioner is a common carrier. It is engaged in the business of
transporting or carrying goods, i.e. petroleum products, for hire as a public employment. It undertakes to carry for all persons indifferently, that
is, to all persons who choose to employ its services, and transports the goods by land and for compensation. The fact that petitioner has a
limited clientele does not exclude it from the definition of a common carrier. In De Guzman vs. Court of Appeals 16we ruled that:
The above article (Art. 1732, Civil Code) makes no distinction between one whose principal business
activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary
activity (in local idiom, as a "sideline"). Article 1732 . . . 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
1877 deliberately refrained from making such distinctions.
So understood, the concept of "common carrier" under Article 1732 may be seen to coincide neatly with
the notion of "public service," under the Public Service Act (Commonwealth Act No. 1416, as amended)
which at least partially supplements the law on common carriers set forth in the Civil Code. Under Section
13, paragraph (b) of the Public Service Act, "public service" includes:
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 andpower petroleum, sewerage system, wire or wireless communications
systems, wire or wireless broadcasting stations and other similar public services.
(Emphasis Supplied)
Also, respondent's argument that the term "common carrier" as used in Section 133 (j) of the Local Government Code refers only to common
carriers transporting goods and passengers through moving vehicles or vessels either by land, sea or water, is erroneous.
As correctly pointed out by petitioner, the definition of "common carriers" in the Civil Code makes no distinction as to the means of transporting,
as long as it is by land, water or air. It does not provide that the transportation of the passengers or goods should be by motor vehicle. In fact,
in the United States, oil pipe line operators are considered common carriers. 17
Under the Petroleum Act of the Philippines (Republic Act 387), petitioner is considered a "common carrier." Thus, Article 86 thereof provides
that:
Art. 86. Pipe line concessionaire as common carrier. — A pipe line shall have the preferential right to utilize
installations for the transportation of petroleum owned by him, but is obligated to utilize the remaining
transportation capacity pro rata for the transportation of such other petroleum as may be offered by
others for transport, and to charge without discrimination such rates as may have been approved by the
Secretary of Agriculture and Natural Resources.
Republic Act 387 also regards petroleum operation as a public utility. Pertinent portion of Article 7 thereof provides:
that everything relating to the exploration for and exploitation of petroleum . . . and everything relating
to the manufacture, refining, storage, or transportation by special methods of petroleum, is hereby
declared to be a public utility. (Emphasis Supplied)
The Bureau of Internal Revenue likewise considers the petitioner a "common carrier." In BIR Ruling No. 069-83, it declared:
. . . since [petitioner] is a pipeline concessionaire that is engaged only in transporting petroleum products,
it is considered a common carrier under Republic Act No. 387 . . . . Such being the case, it is not subject to
withholding tax prescribed by Revenue Regulations No. 13-78, as amended.
From the foregoing disquisition, there is no doubt that petitioner is a "common carrier" and, therefore, exempt from the business tax as
provided for in Section 133 (j), of the Local Government Code, to wit:
Sec. 133. Common Limitations on the Taxing Powers of Local Government Units. — Unless otherwise
provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall
not extend to the levy of the following:
xxx xxx xxx
Page 24 of 29
(j) Taxes on the gross receipts of transportation contractors and

persons engaged in the transportation of passengers or freight by
hire and common carriers by air, land or water, except as provided
in this Code.
The deliberations conducted in the House of Representatives on the Local Government Code of 1991 are illuminating:
MR. AQUINO (A). Thank you, Mr. Speaker.
Mr. Speaker, we would like to proceed to page 95, line
1. It states: "SEC. 121 [now Sec. 131]. Common Limitations on the Taxing Powers of Local Government
Units." . . .
MR. AQUINO (A.). Thank you Mr. Speaker.
Still on page 95, subparagraph 5, on taxes on the business of transportation. This appears to be one of
those being deemed to be exempted from the taxing powers of the local government units. May we know
the reason why the transportation business is being excluded from the taxing powers of the local
government units?
MR. JAVIER (E.). Mr. Speaker, there is an exception contained in Section 121 (now Sec. 131), line 16,
paragraph 5. It states that local government units may not impose taxes on the business of transportation,
except as otherwise provided in this code.
Now, Mr. Speaker, if the Gentleman would care to go to page 98 of Book II, one can see there that
provinces have the power to impose a tax on business enjoying a franchise at the rate of not more than
one-half of 1 percent of the gross annual receipts. So, transportation contractors who are enjoying a
franchise would be subject to tax by the province. That is the exception, Mr. Speaker.
What we want to guard against here, Mr. Speaker, is the imposition of taxes by local government units on
the carrier business. Local government units may impose taxes on top of what is already being imposed
by the National Internal Revenue Code which is the so-called "common carriers tax." We do not want a
duplication of this tax, so we just provided for an exception under Section 125 [now Sec. 137] that a
province may impose this tax at a specific rate.
MR. AQUINO (A.). Thank you for that clarification, Mr. Speaker. . . . 18
It is clear that the legislative intent in excluding from the taxing power of the local government unit the imposition of business tax against
common carriers is to prevent a duplication of the so-called "common carrier's tax."
Petitioner is already paying three (3%) percent common carrier's tax on its gross sales/earnings under the National Internal Revenue Code. 19 To
tax petitioner again on its gross receipts in its transportation of petroleum business would defeat the purpose of the Local Government Code.
WHEREFORE, the petition is hereby GRANTED. The decision of the respondent Court of Appeals dated November 29, 1995 in CA-G.R. SP No.
36801 is REVERSED and SET ASIDE.
SO ORDERED.
Case # 7 G.R. No. 138334 August 25, 2003
ESTELA L. CRISOSTOMO, Petitioner,

vs.
The Court of Appeals and CARAVAN TRAVEL & TOURS INTERNATIONAL, INC., Respondents.
Civil Law; Common Carriers; Damages; Definition of common carrier.—By definition, a contract of carriage or transportation is one whereby
a certain person or association of persons obligate themselves to transport persons, things, or news from one place to another for a fixed price.
Such person or association of persons are regarded as carriers and are classified as private or special carriers and common or public carriers. A
common carrier is defined under Article 1732 of the Civil Code as persons, corporations, firms or associations engaged in the business of carrying
or transporting passengers or goods or both, by lane, water or air, for compensation, offering their services to the public.
Page 25 of 29
Same; Same; Same; Respondent is not an entity engaged in the business of transporting either passengers or goods and is therefore neither a
private nor a common carrier.—It is obvious from the above definition that respondent is not an entity engaged in the business of transporting
either passengers or goods and is there fore, neither, a private nor a common carrier. Respondent did not undertake to transport petitioner
from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Respondent’s services as
a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours.
Same; Same; Same; Respondent not being a common carrier but a travel agency is not bound under the law to observe extraordinary diligence
in the performance of its obligation.—The nature of the contractual relation between petitioner and respondent is determinative of the degree
of care required in the performance of the latter’s obligation under the contract. For reasons of public policy, a common carrier in a contract of
carriage is bound by law to carry passengers as far as human care and foresight can provide using the utmost diligence of very cautious persons
and with due regard for all the circumstances. As earlier stated, however, respondent is not a common carrier but a travel agency. It is thus not
bound under the law to observe extraordinary diligence in the performance of its obligation, as petitioner claims.
Same; Same; The degree of diligence required depends on the circumstances of the specific obligation and whether one has been negligent is
a question of fact.—The negligence of the obligor in the performance of the obligation renders him liable for damages for the resulting loss
suffered by the obligee. Fault or negligence of the obligor consists in his failure to exercise due care and prudence in the performance of the
obligation as the nature of the obligation so demands. There is no fixed standard of diligence applicable to each and every contractual obligation
and each case must be determined upon its particular facts. The degree of diligence required depends on the circumstances of the specific
obligation and whether one has been negligent is a question of fact that is to be determined after taking into account the particulars of each
case.
DECISION
YNARES-SANTIAGO, J.:
In May 1991, petitioner Estela L. Crisostomo contracted the services of respondent Caravan Travel and Tours International, Inc. to arrange and
facilitate her booking, ticketing and accommodation in a tour dubbed "Jewels of Europe". The package tour included the countries of England,
Holland, Germany, Austria, Liechstenstein, Switzerland and France at a total cost of P74,322.70. Petitioner was given a 5% discount on the
amount, which included airfare, and the booking fee was also waived because petitioner’s niece, Meriam Menor, was respondent company’s
ticketing manager.
Pursuant to said contract, Menor went to her aunt’s residence on June 12, 1991 – a Wednesday – to deliver petitioner’s travel documents and
plane tickets. Petitioner, in turn, gave Menor the full payment for the package tour. Menor then told her to be at the Ninoy Aquino International
Airport (NAIA) on Saturday, two hours before her flight on board British Airways.
Without checking her travel documents, petitioner went to NAIA on Saturday, June 15, 1991, to take the flight for the first leg of her journey from
Manila to Hongkong. To petitioner’s dismay, she discovered that the flight she was supposed to take had already departed the previous day.
She learned that her plane ticket was for the flight scheduled on June 14, 1991. She thus called up Menor to complain.
Subsequently, Menor prevailed upon petitioner to take another tour – the "British Pageant" – which included England, Scotland and Wales in its
itinerary. For this tour package, petitioner was asked anew to pay US$785.00 or P20,881.00 (at the then prevailing exchange rate of P26.60).
She gave respondent US$300 or P7,980.00 as partial payment and commenced the trip in July 1991.
Upon petitioner’s return from Europe, she demanded from respondent the reimbursement of P61,421.70, representing the difference between
the sum she paid for "Jewels of Europe" and the amount she owed respondent for the "British Pageant" tour. Despite several demands,
respondent company refused to reimburse the amount, contending that the same was non-refundable.1 Petitioner was thus constrained to file
a complaint against respondent for breach of contract of carriage and damages, which was docketed as Civil Case No. 92-133 and raffled to
Branch 59 of the Regional Trial Court of Makati City.
In her complaint,2 petitioner alleged that her failure to join "Jewels of Europe" was due to respondent’s fault since it did not clearly indicate the
departure date on the plane ticket. Respondent was also negligent in informing her of the wrong flight schedule through its employee Menor.
She insisted that the "British Pageant" was merely a substitute for the "Jewels of Europe" tour, such that the cost of the former should be
properly set-off against the sum paid for the latter.
For its part, respondent company, through its Operations Manager, Concepcion Chipeco, denied responsibility for petitioner’s failure to join the
first tour. Chipeco insisted that petitioner was informed of the correct departure date, which was clearly and legibly printed on the plane ticket.
The travel documents were given to petitioner two days ahead of the scheduled trip. Petitioner had only herself to blame for missing the flight,
as she did not bother to read or confirm her flight schedule as printed on the ticket.
Respondent explained that it can no longer reimburse the amount paid for "Jewels of Europe", considering that the same had already been
remitted to its principal in Singapore, Lotus Travel Ltd., which had already billed the same even if petitioner did not join the tour. Lotus’ European
tour organizer, Insight International Tours Ltd., determines the cost of a package tour based on a minimum number of projected participants.
For this reason, it is accepted industry practice to disallow refund for individuals who failed to take a booked tour. 3
Lastly, respondent maintained that the "British Pageant" was not a substitute for the package tour that petitioner missed. This tour was
independently procured by petitioner after realizing that she made a mistake in missing her flight for "Jewels of Europe". Petitioner was allowed
to make a partial payment of only US$300.00 for the second tour because her niece was then an employee of the travel agency. Consequently,
respondent prayed that petitioner be ordered to pay the balance of P12,901.00 for the "British Pageant" package tour.
After due proceedings, the trial court rendered a decision,4 the dispositive part of which reads:
Page 26 of 29
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. Ordering the defendant to return and/or refund to the plaintiff the amount of Fifty Three Thousand Nine Hundred Eighty Nine Pesos
and Forty Three Centavos (P53,989.43) with legal interest thereon at the rate of twelve percent (12%) per annum starting January 16,
1992, the date when the complaint was filed;
2. Ordering the defendant to pay the plaintiff the amount of Five Thousand (P5,000.00) Pesos as and for reasonable attorney’s fees;
3. Dismissing the defendant’s counterclaim, for lack of merit; and
4. With costs against the defendant.
SO ORDERED.5
The trial court held that respondent was negligent in erroneously advising petitioner of her departure date through its employee, Menor, who
was not presented as witness to rebut petitioner’s testimony. However, petitioner should have verified the exact date and time of departure by
looking at her ticket and should have simply not relied on Menor’s verbal representation. The trial court thus declared that petitioner was guilty
of contributory negligence and accordingly, deducted 10% from the amount being claimed as refund.
Respondent appealed to the Court of Appeals, which likewise found both parties to be at fault. However, the appellate court held that petitioner
is more negligent than respondent because as a lawyer and well-traveled person, she should have known better than to simply rely on what was
told to her. This being so, she is not entitled to any form of damages. Petitioner also forfeited her right to the "Jewels of Europe" tour and must
therefore pay respondent the balance of the price for the "British Pageant" tour. The dispositive portion of the judgment appealed from reads
as follows:
WHEREFORE, premises considered, the decision of the Regional Trial Court dated October 26, 1995 is hereby REVERSED and SET ASIDE. A new
judgment is hereby ENTERED requiring the plaintiff-appellee to pay to the defendant-appellant the amount of P12,901.00, representing the
balance of the price of the British Pageant Package Tour, the same to earn legal interest at the rate of SIX PERCENT (6%) per annum, to be
computed from the time the counterclaim was filed until the finality of this decision. After this decision becomes final and executory, the rate
of TWELVE PERCENT (12%) interest per annum shall be additionally imposed on the total obligation until payment thereof is satisfied. The award
of attorney’s fees is DELETED. Costs against the plaintiff-appellee.
SO ORDERED.6
Upon denial of her motion for reconsideration,7 petitioner filed the instant petition under Rule 45 on the following grounds:
It is respectfully submitted that the Honorable Court of Appeals committed a reversible error in reversing and setting aside the decision
of the trial court by ruling that the petitioner is not entitled to a refund of the cost of unavailed "Jewels of Europe" tour she being
equally, if not more, negligent than the private respondent, for in the contract of carriage the common carrier is obliged to observe
utmost care and extra-ordinary diligence which is higher in degree than the ordinary diligence required of the passenger. Thus, even if
the petitioner and private respondent were both negligent, the petitioner cannot be considered to be equally, or worse, more guilty
than the private respondent. At best, petitioner’s negligence is only contributory while the private respondent [is guilty] of gross
negligence making the principle of pari delicto inapplicable in the case;
II
The Honorable Court of Appeals also erred in not ruling that the "Jewels of Europe" tour was not indivisible and the amount paid
therefor refundable;
III
The Honorable Court erred in not granting to the petitioner the consequential damages due her as a result of breach of contract of
carriage.8
Petitioner contends that respondent did not observe the standard of care required of a common carrier when it informed her wrongly of the
flight schedule. She could not be deemed more negligent than respondent since the latter is required by law to exercise extraordinary diligence
in the fulfillment of its obligation. If she were negligent at all, the same is merely contributory and not the proximate cause of the damage she
suffered. Her loss could only be attributed to respondent as it was the direct consequence of its employee’s gross negligence.
Petitioner’s contention has no merit.
By definition, a contract of carriage or transportation is one whereby a certain person or association of persons obligate themselves to transport
persons, things, or news from one place to another for a fixed price. 9 Such person or association of persons are regarded as carriers and are
classified as private or special carriers and common or public carriers. 10 A common carrier is defined under Article 1732 of the Civil Code as
persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water or
air, for compensation, offering their services to the public.
Page 27 of 29
It is obvious from the above definition that respondent is not an entity engaged in the business of transporting either passengers or goods and
is therefore, neither a private nor a common carrier. Respondent did not undertake to transport petitioner from one place to another since its
covenant with its customers is simply to make travel arrangements in their behalf. Respondent’s services as a travel agency include procuring
tickets and facilitating travel permits or visas as well as booking customers for tours.
While petitioner concededly bought her plane ticket through the efforts of respondent company, this does not mean that the latter ipso facto
is a common carrier. At most, respondent acted merely as an agent of the airline, with whom petitioner ultimately contracted for her carriage
to Europe. Respondent’s obligation to petitioner in this regard was simply to see to it that petitioner was properly booked with the airline for
the appointed date and time. Her transport to the place of destination, meanwhile, pertained directly to the airline.
The object of petitioner’s contractual relation with respondent is the latter’s service of arranging and facilitating petitioner’s booking, ticketing
and accommodation in the package tour. In contrast, the object of a contract of carriage is the transportation of passengers or goods. It is in
this sense that the contract between the parties in this case was an ordinary one for services and not one of carriage. Petitioner’s submission is
premised on a wrong assumption.
The nature of the contractual relation between petitioner and respondent is determinative of the degree of care required in the performance
of the latter’s obligation under the contract. For reasons of public policy, a common carrier in a contract of carriage is bound by law to carry
passengers as far as human care and foresight can provide using the utmost diligence of very cautious persons and with due regard for all the
circumstances.11 As earlier stated, however, respondent is not a common carrier but a travel agency. It is thus not bound under the law to observe
extraordinary diligence in the performance of its obligation, as petitioner claims.
Since the contract between the parties is an ordinary one for services, the standard of care required of respondent is that of a good father of a
family under Article 1173 of the Civil Code.12 This connotes reasonable care consistent with that which an ordinarily prudent person would have
observed when confronted with a similar situation. The test to determine whether negligence attended the performance of an obligation is: did
the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in
the same situation? If not, then he is guilty of negligence. 13
In the case at bar, the lower court found Menor negligent when she allegedly informed petitioner of the wrong day of departure. Petitioner’s
testimony was accepted as indubitable evidence of Menor’s alleged negligent act since respondent did not call Menor to the witness stand to
refute the allegation. The lower court applied the presumption under Rule 131, Section 3 (e) 14 of the Rules of Court that evidence willfully
suppressed would be adverse if produced and thus considered petitioner’s uncontradicted testimony to be sufficient proof of her claim.
On the other hand, respondent has consistently denied that Menor was negligent and maintains that petitioner’s assertion is belied by the
evidence on record. The date and time of departure was legibly written on the plane ticket and the travel papers were delivered two days in
advance precisely so that petitioner could prepare for the trip. It performed all its obligations to enable petitioner to join the tour and exercised
due diligence in its dealings with the latter.
We agree with respondent.
Respondent’s failure to present Menor as witness to rebut petitioner’s testimony could not give rise to an inference unfavorable to the former.
Menor was already working in France at the time of the filing of the complaint, 15 thereby making it physically impossible for respondent to
present her as a witness. Then too, even if it were possible for respondent to secure Menor’s testimony, the presumption under Rule 131, Section
3(e) would still not apply. The opportunity and possibility for obtaining Menor’s testimony belonged to both parties, considering that Menor
was not just respondent’s employee, but also petitioner’s niece. It was thus error for the lower court to invoke the presumption that respondent
willfully suppressed evidence under Rule 131, Section 3(e). Said presumption would logically be inoperative if the evidence is not intentionally
omitted but is simply unavailable, or when the same could have been obtained by both parties. 16
In sum, we do not agree with the finding of the lower court that Menor’s negligence concurred with the negligence of petitioner and resultantly
caused damage to the latter. Menor’s negligence was not sufficiently proved, considering that the only evidence presented on this score was
petitioner’s uncorroborated narration of the events. It is well-settled that the party alleging a fact has the burden of proving it and a mere
allegation cannot take the place of evidence.17 If the plaintiff, upon whom rests the burden of proving his cause of action, fails to show in a
satisfactory manner facts upon which he bases his claim, the defendant is under no obligation to prove his exception or defense.18
Contrary to petitioner’s claim, the evidence on record shows that respondent exercised due diligence in performing its obligations under the
contract and followed standard procedure in rendering its services to petitioner. As correctly observed by the lower court, the plane
ticket19 issued to petitioner clearly reflected the departure date and time, contrary to petitioner’s contention. The travel documents, consisting
of the tour itinerary, vouchers and instructions, were likewise delivered to petitioner two days prior to the trip. Respondent also properly booked
petitioner for the tour, prepared the necessary documents and procured the plane tickets. It arranged petitioner’s hotel accommodation as well
as food, land transfers and sightseeing excursions, in accordance with its avowed undertaking.
Therefore, it is clear that respondent performed its prestation under the contract as well as everything else that was essential to book petitioner
for the tour. Had petitioner exercised due diligence in the conduct of her affairs, there would have been no reason for her to miss the flight.
Needless to say, after the travel papers were delivered to petitioner, it became incumbent upon her to take ordinary care of her concerns. This
undoubtedly would require that she at least read the documents in order to assure herself of the important details regarding the trip.
The negligence of the obligor in the performance of the obligation renders him liable for damages for the resulting loss suffered by the obligee.
Fault or negligence of the obligor consists in his failure to exercise due care and prudence in the performance of the obligation as the nature of
the obligation so demands.20 There is no fixed standard of diligence applicable to each and every contractual obligation and each case must be
determined upon its particular facts. The degree of diligence required depends on the circumstances of the specific obligation and whether one
has been negligent is a question of fact that is to be determined after taking into account the particulars of each case. 21 1âwphi1
Page 28 of 29
The lower court declared that respondent’s employee was negligent. This factual finding, however, is not supported by the evidence on record.
While factual findings below are generally conclusive upon this court, the rule is subject to certain exceptions, as when the trial court overlooked,
misunderstood, or misapplied some facts or circumstances of weight and substance which will affect the result of the case. 22
In the case at bar, the evidence on record shows that respondent company performed its duty diligently and did not commit any contractual
breach. Hence, petitioner cannot recover and must bear her own damage.
WHEREFORE, the instant petition is DENIED for lack of merit. The decision of the Court of Appeals in CA-G.R. CV No. 51932 is AFFIRMED.
Accordingly, petitioner is ordered to pay respondent the amount of P12,901.00 representing the balance of the price of the British Pageant
Package Tour, with legal interest thereon at the rate of 6% per annum, to be computed from the time the counterclaim was filed until the finality
of this Decision. After this Decision becomes final and executory, the rate of 12% per annum shall be imposed until the obligation is fully settled,
this interim period being deemed to be by then an equivalent to a forbearance of credit.23
SO ORDERED.
Page 29 of 29

Case #1 G.R. No. L-47822 December 22, 1988 PEDRO DE GUZMAN, Petitioner, Court of Appeals and Ernesto Cendana, Respondents

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Case #1 G.R. No. L-47822 December 22, 1988 PEDRO DE GUZMAN, Petitioner, Court of Appeals and Ernesto Cendana, Respondents

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Transportation Law Cases

Nina Sarah P. Pineda, JD 3-1

Case #1 G.R. No. L-47822 December 22, 1988

PEDRO DE GUZMAN, petitioner,

1. that private respondent was not a common carrier;

2. that the hijacking of respondent's truck was force majeure; and

The Civil Code defines "common carriers" in the following terms:

We turn then to the liability of private respondent as a common carrier.

(1) Flood, storm, earthquake, lightning or other natural disaster or calamity;

xxx xxx xxx

Case #2 G.R. No. 111127 July 26, 1996

Accordingly, it gave judgment for private respondents holding:

1) P93,657.11 as compensatory and actual damages;

3) P20,000.00 as moral damages;

4) P20,000.00 as exemplary damages; and

5) 25% of the recoverable amount as attorney's fees;

1) P93,657.11 as actual damages;

2) P600,000.00 as compensatory damages;

3) P50,000.00 as moral damages;

4) P20,000.00 as exemplary damages;

5) P10,000.00 as attorney's fees; and

I. WHETHER OR NOT PETITIONERS WERE NEGLIGENT.

1) P93,657.11 as actual damages;

3) P20,000.00 as moral damages;

4) P20,000.00 as exemplary damages;

5) 25% of the recoverable amount as attorney's fees; and

Case #3 G.R. No. 101089. April 7, 1993.

ESTRELLITA M. BASCOS, petitioners,

The facts, as gathered by this Court, are as follows:

3. The costs of the suit.

xxx xxx xxx

In the same case, 21 the Supreme Court also held that:

Case #4 G.R. No. 141910 August 6, 2002

FGU INSURANCE CORPORATION, petitioner,

"x x x xxx xxx

"x x x xxx xxx

"x x x xxx xxx

"x x x xxx xxx

The above conclusion nothwithstanding, GPS cannot escape from liability.

Case # 5 G.R. No. 147246 August 19, 2003

ASIA LIGHTERAGE AND SHIPPING, INC., petitioner,

First, the facts.

The issues to be resolved are:

(1) Whether the petitioner is a common carrier; and,

On the first issue, we rule that petitioner is a common carrier.

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

(2) Act of the public enemy in war, whether international or civil;

(3) Act or omission of the shipper or owner of the goods;

(5) Order or act of competent public authority.

CROSS-EXAMINATION BY ATTY. DONN LEE:31

xxx xxx xxx

q - Can you tell us what else transpired after that incident?

a - The sinking, sir.

xxx xxx xxx

DIRECT-EXAMINATION BY ATTY. LEE:33

xxx xxx xxx

xxx xxx xxx

CROSS-EXAMINATION BY ATTY. IGNACIO:34

xxx xxx xxx

q - Despite of the threats of an incoming typhoon as you testified a while ago?

q - And yet you proceeded to the premises of the GMC?

Case # 6 G.R. No. 125948 December 29, 1998

FIRST PHILIPPINE INDUSTRIAL CORPORATION, petitioner,