Ganzon v.

CA and Gelacio Tumambing

FACTS:
- Gelacio Tumambing contracted the services of Mauro B. Ganzon to haul 305 tons of
scrap iron from Mariveles, Bataan, to the port of Manila on board the lighter LCT
"Batman"
- Pursuant to that agreement, Mauro B. Ganzon sent his lighter "Batman" to Mariveles
where it docked in three feet of water.
- On December 1, 1956, Gelacio Tumambing delivered the scrap iron to defendant
Filomeno Niza, captain of the lighter, for loading which was actually begun on the same
date by the crew of the lighter under the captain's supervision. When about half of the
scrap iron was already loaded, Mayor Jose Advincula of Mariveles, Bataan, arrived and
demanded P5,000.00 from Gelacio Tumambing. The latter resisted the shakedown and
after a heated argument between them, Mayor Jose Advincula drew his gun and fired
at Gelacio Tumambing. The gunshot was not fatal but Tumambing had to be taken to a
hospital in Balanga, Bataan, for treatment.
- After sometime, the loading of the scrap iron was resumed. Several months after,
Acting Mayor Basilio Rub, accompanied by three policemen, ordered captain Filomeno
Niza and his crew to dump the scrap iron where the lighter was docked. The rest was
brought to the compound of NASSCO. Later on Acting Mayor Rub issued a receipt
stating that the Municipality of Mariveles had taken custody of the scrap iron.
- Tumambing instituted in the CFI an action against petitioner for damages based on
culpa contractual. CFI rendered judgment in favor of Ganzon. Tumambing appealed.
CA reversed.
- Petitioner maintains that he is exempt from any liability because the loss of the scraps
was due mainly to the intervention of the municipal officials of Mariveles which
constitutes a caso fortuito as defined in Article 1174(5) of the Civil Code.

ISSUE: W/N petitioner is exempt from liability by virtue of Art. 1174(5) in the light of the
circumstances mentioned in the case? NO

RULING:
SC cited CA’s ruling that Acting Mayor Basilio Rub had the power to issue the disputed order,
or that it was lawful, or that it was issued under legal process of authority. Ganzon has failed
to establish this. Indeed, no authority or power of the acting mayor to issue such an order was
given in evidence. Neither has it been shown that the cargo of scrap iron belonged to the
Municipality of Mariveles. What we have in the record is the stipulation of the parties that the
cargo of scrap iron was accilmillated by the appellant through separate purchases from
private individuals.

The fact remains that the order given by the acting mayor to dump the scrap iron into the sea
was part of the pressure applied by Mayor Jose Advincula to shakedown the appellant for
P5,000.00. The order of the acting mayor did not constitute valid authority for appellee Mauro
Ganzon and his representatives to carry out.

The intervention of the municipal officials was not in any case, of a character that would
render impossible the fulfilment by the carrier of its obligation. The petitioner was not duty
bound to obey the illegal order to dump into the sea the scrap iron. Moreover, there is
absence of sufficient proof that the issuance of the same order was attended with such force
or intimidation as to completely overpower the will of the petitioner's employees. The mere
difficulty in the fulfilment of the obligation is not considered force majeure. The scraps could
have been properly unloaded at the shore or at the NASSCO compound, so that after the
dispute with the local officials concerned was settled, the scraps could then be delivered in
accordance with the contract of carriage.

Dissent (Melencio-Herrera, J.): Petitioner cannot be held liable in damages for the loss and
destruction of the scrap iron. The loss of said cargo was due to an excepted cause an 'order
or act of competent public authority" (Article 1734[5], Civil Code).

The loading of the scrap iron on the lighter had to be suspended because of Municipal Mayor
Jose Advincula's intervention, who was a "competent public authority." Petitioner had no
control over the situation as, in fact, Tumambing himself, the owner of the cargo, was
impotent to stop the "act' of said official and even suffered a gunshot wound on the occasion.

Through the "order" or "act" of "competent public authority," therefore, the performance of a
contractual obligation was rendered impossible. The scrap iron that was dumped into the sea
was "destroyed" while the rest of the cargo was "seized." The seizure is evidenced by the
receipt issues by Acting Mayor Rub stating that the Municipality of Mariveles had taken
custody of the scrap iron. Apparently, therefore, the seizure and destruction of the goods was
done under legal process or authority so that petitioner should be freed from responsibility.

National Trucking VS Lorenzo Shipping (CP)

Westwind Vs UCPB (CP)

Regional Container Lines Vs The Netherlands Insurance

Lu Do vs Netherlands (CP)

LRTA vs Navidad (CP)

Dangwa vs CA
FACTS:
May 13, 1985: Theodore M. Lardizabal was driving a passenger bus belonging to
Dangwa Transportation Co. Inc. (Dangwa)
The bus was at full stop bet. Bunkhouses 53 and 54 when Pedro alighted
Pedro Cudiamat fell from the platform of the bus when it suddenly accelerated forward
Pedro was ran over by the rear right tires of the vehicle
Theodore first brought his other passengers and cargo to their respective destinations
before bringing Pedro to Lepanto Hospital where he expired
 Private respondents filed a complaint for damages against Dangwa for the death of Pedro
Cudiamat
Dangwa: observed and continued to observe the extraordinary diligence required in the
operation of the co. and the supervision of the employees even as they are not absolute
insurers of the public at large
RTC: in favour of Dangwa holding Pedrito as negligent and his negligence was the cause
of his death but still ordered to pay in equity P 10,000 to the heirs of Pedrito
CA: reversed and ordered to pay Pedrito indemnity, moral damages, actual and
compensatory damages and cost of the suit

ISSUE: W/N Dangwa should be held liable for the negligence of its driver Theodore

HELD: YES. CA affirmed.

A public utility once it stops, is in effect making a continuous offer to bus riders (EVEN
when moving as long as it is still slow in motion)
Duty of the driver: do NOT make acts that would have the effect of increasing peril to a
passenger while he is attempting to board the same
Premature acceleration of the bus in this case = breach of duty
Stepping and standing on the platform of the bus is already considered a passenger and
is entitled all the rights and protection pertaining to such a contractual relation
Duty extends to boarding and alighting
GR: By contract of carriage, the carrier assumes the express obligation to transport the
passenger to his destination safely and observe extraordinary diligence with a due regard
for all the circumstances, and any injury that might be suffered by the passenger is right
away attributable to the fault or negligence of the carrier
EX: carrier to prove that it has exercised extraordinary diligence as prescribed in Art.
1733 and 1755 of the Civil Code
Failure to immediately bring Pedrito to the hospital despite his serious condition = patent
and incontrovertible proof of their negligence
Hospital was in Bunk 56
1st proceeded to Bunk 70 to allow a passenger (who later called the family of Pedrito on
his own will) to alight and deliver a refrigerator
In tort, actual damages is based on net earnings

EDGAR COKALIONG SHIPPING LINES, INC., petitioner, vs.

UCPB GENERAL INSURANCE COMPANY, INC., respondent.

PANGANIBAN, J.:
DOCTRINE: The liability of a common carrier for the loss of goods may, by stipulation in the
bill of lading, be limited to the value declared by the shipper. On the other hand, the liability of
the insurer is determined by the actual value covered by the insurance policy and the
insurance premiums paid therefor, and not necessarily by the value declared in the bill of
lading.
FACTS:
Shipper: ZosimaMercardo, Nestor Amelia
Carrier: EDGAR COKALIONG SHIPPING LINES, INC.
Vessel: M/V Tandag
Insurer: UCPB General Insurance Co. Inc. (Feliciana Legaspi insured the cargoes)
Event: FIRE

Edgar did not pay UCPB. UCPB filed a complaint. RTC absolved Edgar of any liability. CA
affirmed.

ISSUE: 1. W/N Edgar is liable

2. What is the basis of liability? Amount in the bill of lading or actual amount?
RULING:
1. Yes. The uncontroverted findings of the Philippine Coast Guard show that the M/V
Tandag sank due to a fire, which resulted from a crack in the auxiliary engine fuel oil service
tank. Fuel spurted out of the crack and dripped to the heating exhaust manifold, causing the
ship to burst into flames. The crack was located on the side of the fuel oil tank, which had a
mere two-inch gap from the engine room walling, thus precluding constant inspection and
care by the crew.
Having originated from an unchecked crack in the fuel oil service tank, the fire could not have
been caused by force majeure. May refer to Eastern Shipping Lines, Inc. v. Intermediate
Appellate Court.
A stipulation that limits liability is valid as long as it is not against public policy.
Art. 1749. A stipulation that the common carrier’s liability is limited to the value of the goods
appearing in the bill of lading, unless the shipper or owner declares a greater value, is
binding.’
‘Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the
loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the
circumstances, and has been freely and fairly agreed upon.’
2. Bill of lading. The bill of lading subject of the present controversy specifically provides,
among others:
’18. All claims for which the carrier may be liable shall be adjusted and settled on the basis of
the shipper’s net invoice cost plus freight and insurance premiums, if paid, and in no event
shall the carrier be liable for any loss of possible profits or any consequential loss.
‘The carrier shall not be liable for any loss of or any damage to or in any connection with,
goods in an amount exceeding One Hundred Thousand Yen in Japanese Currency
(¥100,000.00) or its equivalent in any other currency per package or customary freight unit
(whichever is least) unless the value of the goods higher than this amount is declared in
writing by the shipper before receipt of the goods by the carrier and inserted in the Bill of
Lading and extra freight is paid as required.’
In the present case, the stipulation limiting petitioner’s liability is not contrary to public policy.
In fact, its just and reasonable character is evident. The shippers/consignees may recover the
full value of the goods by the simple expedient of declaring the true value of the shipment in
the Bill of Lading. Other than the payment of a higher freight, there was nothing to stop them
from placing the actual value of the goods therein. In fact, they committed fraud against the
common carrier by deliberately undervaluing the goods in their Bill of Lading, thus depriving
the carrier of its proper and just transport fare.
It is well to point out that, for assuming a higher risk (the alleged actual value of the goods)
the insurance company was paid the correct higher premium by Feliciana Legaspi; while
petitioner was paid a fee lower than what it was entitled to for transporting the goods that had
been deliberately undervalued by the shippers in the Bill of Lading. Between the two of them,
the insurer should bear the loss in excess of the value declared in the Bills of Lading.

PARMANAND SHEWARAM V. PAL

G.R. No. L-20099, July 7, 1966

FACTS:
 Shewaram was a paying passenger on defendant’s aircraft from Zamboanga City
bound for Manila.
 He checked in 3 pieces of baggages- a suitcase and 2 other pieces. The suitcase was
mistagged by defendant’s personnel in Zamboanga as IGN (Iligan) instead of MNL
(Manila).
 Plaintiff made a claim with defendant’s personnel in Manila airport and another
suitcase similar to his own which was the only baggage left for that flight was given to
the plaintiff for him to take delivery but he refused to take the delivery of the same
because it was not his, alleging that all his clothes were white and the National
transistor 7 and a Rollflex camera were not found inside the suitcase, and moreover, it
contained a pistol which he did not have nor placed it inside the suitcase.
 It was found out that the suitcase shown to and given to the plaintiff belonged to a
certain Del Rosario who was bound for Iligan in the same flight with Shewaram.
 Shewaram made demand for these 2 items or for the value thereof but the same was
not complied with by defendant.
 The municipal trial court rendered decision in favor of plaintiff. The said court had
found that the suitcase of the appellee was tampered and the transistor radio and the
camera contained therein were lost, and that the loss of those articles was due to the
negligence of the employees of the appellant.
ISSUE: Whether or not the limited liability rule applies.
HELD: No. Article 1750 of the NCC provides that the pecuniary liability of a common carrier
may, by contract, be limited to a fixed amount. It is required, however, that the contract must
be “reasonable and just under the circumstances and has been fairly agreed upon.” In the
case at bar, the requirements have not been met. It cannot be said that the appellee had
actually entered into a contract with the appellant, embodying the conditions as printed at the
back of the ticket stub that was issued by the appellant to the appellee. The fact that those
conditions are printed at the back of the tickets stub in letters so small that they are hard to
read would not warrant the presumption that the appellee was aware of those conditions such
that he had fairly and freely agreed to those conditions.
The liability of the appellant should be governed by the provisions of Article 1734 and 1735 of
the NCC. It having been clearly found by the trial court that the transistor radio and the
camera of the appellee were lost as a result of the negligence of the appellant as a common
carrier, the liability of the appellant is clear- it must pay the appellee the value of those
articles.

ONG YIU V. CA AND PAL

G.R. No. L-40597, June 29, 1979

FACTS:
 On August 26, 1967, petitioner, a practicing lawyer and businessman, was a fare
paying passenger of respondent PAL on board a flight from Cebu bound for Butuan
City. He was scheduled to attend a trial in CFI Butuan on August 28-31, 1967.He
checked in a blue maleta.Upon arrival in Butuan, petitioner claimed his luggage but it
could not be found.
 PAL Butuan sent a message to PAL Cebu inquiring about the missing luggage. It was
later on relayed to PAL Manila.PAL Manila wired PAL Cebu advising that the luggage
had been over carried to Manila and it would be forwarded to Cebu. Instructions were
also given that the luggage be immediately forwarded to Butuan on the first available
flight. At 5 PM, PAL Cebu sent a message to PAL Butuan that the luggage would be
forwarded the following day, August 27, 1967. However, this message was not
received by PAL Butuan as all personnel had already left since there were no more
incoming flights that afternoon.
 Petitioner was worried about the missing luggage because it contained vital documents
needed for trial. Petitioner wired PAL Cebu demanding the delivery of his baggage
before noon the next day otherwise he would hold PAL liable for damages. This
telegram was received by the PAL Cebu supervisor but the latter felt no need to wire
the petitioner that his luggage had already been forwarded on the assumption that by
the time the message reached Butuan City, the luggage would have arrived.
 On August 27, 1967, petitioner went to Bancasi Airport. He did not wait for the morning
flight which arrived at 10 AM. The porter paged petitioner but the latter had already left.
A certain Emilio Dagorro, a driver who used to drive the petitioner, volunteered to take
the luggage to petitioner. As Maximo Gomez knew Dagorro to be the same driver used
by petitioner whenever the latter was in Butuan City, Gomez took that luggage and
placed it on the counter. Dagorro examined the lock, pressed it, and it opened. After
calling the attention of Gomez, Gomez took a look at its contents, but did not touch
them.
 Dagorro delivered the maleta to petitioner, informing him that the lock was open. Upon
inspection, petitioner found that the folder containing documents in civil case were
missing, aside from 2 gift items for his parents-in-law. Petitioner refused to accept the
luggage. Dagorro returned it to the porter clerk who sealed it and forwarded the same
to PAL Cebu.
 Petitioner asked for postponement of the hearing due to the loss of his documents,
which was granted by the court. He returned to Cebu. In a letter to PAL Cebu, he
demanded that his luggage be produced intact, and that he be compensated for
damages. Petitioner sent a letter to PAL Cebu inquiring the results of the investigation
to pinpoint responsibility for the unauthorized opening of the maleta. PAL Cebu failed to
found the lost folder and failed to pinpoint the personnel who allegedly pilfered the
baggage.
 Petitioner filed a complaint against PAL for damages for breach of contract of
 transportation. The trial court found PAL to have acted in bad faith and with malice and
declared petitioner entitled to damages. CA found that PAL was guilty only of simple
negligence.
ISSUE: Whether or not PAL acted in bad faith.
HELD:No. Bad faith means a breach of a known duty though some motive of interest or ill
will. It was the duty of PAL to look for petitioner’s luggage which had been miscarried. PAL
exerted due diligence in complying with such duty. In the absence of a wrongful act or
omission or fraud or bad faith, petitioner is not entitled to moral damages. Petitioner is neither
entitled to exemplary damages. It can be granted if the defendant acted in a wanton,
fraudulent, reckless, oppressive, or malevolent manner, which has not been proven in this
case.
Petitioner further contends that respondent court committed grave error when it limited PAL’s
carriage liability to the amount of P100 as stipulated at the back of the ticket; and that there is
nothing in the evidence to show that he actually entered into a contract with PAL limiting the
latter’s liability for the loss or delay of the baggage of its passengers.
While it may be true that petitioner had not signed the plane ticket, he is nevertheless bound
by the provisions thereof. Such provisions have been held to be part of the contract of
carriage and valid and binding upon the passenger regardless of the latter’s lack of
knowledge or assent to the regulation. It is what is known as contract of adhesion wherein
one party imposes a readymade form of contract on the other. The one who adheres to the
contract is in reality free to reject it entirely; if he adheres, he gives his consent.

Sarkies Tours Phils. V. IAC

KEYWORD: DAMAGES
PONENTE: ROMERO, J
DOCTRINE: Kinds of damages to be awarded

Facts:
On August 31, 1984, Fatima boarded petitioner’s bus from Manila to Legazpi. Her belongings
consisting of 3 bags were kept at the baggage compartment of the bus, but during the
stopover in Daet, it was discovered that only one remained. The others might have dropped
along the way. Other passengers suggested having the route traced, but the driver ignored it.
Fatima immediately told the incident to her mother, who went to petitioner’s office in Legazpi
and later in Manila. Petitioner offered P1,000 for each bag, but she turned it down.
Disapointed, she sought help from Philtranco bus drivers and radio stations. One of the bags
was recovered. She was told by petitioner that a team is looking for the lost luggage. After
nine months of fruitless waiting, respondents filed a case to recover the lost items, as well as
moral and exemplary damages, attorney’s fees and expenses of litigation. The trial court ruled
in favor of respondents, which decision was affirmed with modification by the Court of Appeals
awarding P30,000.00 for the lost items and P30,000.00 for the transportation expenses, moral
and exemplary damages in the amount of P20,000.00 and P5,000.00, respectively.
PETITIONERS CONTENTIONS:
1) Fatima did not bring any piece of luggage with her, and even if she did, none was
declared at the start of the trip.
2) petitioner questions the award of actual damages to respondent
RESPONDENT’S CONTENTION: Extraordinary diligence on the part of petitioner;
Issues:
(1) Whether petitioner is liable for the loss of the luggage
(2) Whether the damages sought should be recovered
RULING:
(1) The cause of the loss in the case at bar was petitioner's negligence in not ensuring that
the doors of the baggage compartment of its bus were securely fastened. As a result of this
lack of care, almost all of the luggage was lost, to the prejudice of the paying passengers.
(2) There is no dispute that of the three pieces of luggage of Fatima, only one was
recovered. Respondents had to shuttle between Bicol and Manila in their efforts to be
compensated for the loss. During the trial, Fatima and Marisol had to travel from the
United States just to be able to testify. Expenses were also incurred in reconstituting
their lost documents. Under these circumstances, the Court agrees with the Court of
Appeals in awarding P30,000.00 for the lost items and P30,000.00 for the
transportation expenses, but disagrees with the deletion of the award of moral and
exemplary damages which, in view of the foregoing proven facts, with negligence and
bad faith on the fault of petitioner having been duly established, should be granted to
respondents in the amount of P20,000.00 and P5,000.00, respectively.

Philippine Charter Insurance Corp. v. Unknown Owner of Vessel M/V “National Honor”,
National Shipping Corp. and International Container Services, Inc.

[G.R. No. 161833. July 8, 2005]

PHILIPPINE CHARTER INSURANCE CORPORATION, petitioner,

vs
UNKNOWN OWNER OF THE VESSEL M/V “NATIONAL HONOR,”
NATIONAL SHIPPING CORPORATION OF THE PHILIPPINES and
INTERNATIONAL CONTAINER SERVICES, INC., respondents.

FACTS:
 Carrier - National Shipping Corporation of the Philippines (NSCP)
 Consignee - Blue Mono International Company, Incorporated (BMICI)
 Insurer - Philippine Charter Insurance Corporation (PCIC)
 Arrastre Operator - International Container Terminal Services, Incorporated
(ICTSI)
 On November 5, 1995, J. Trading Co. Ltd. of Seoul, Korea, loaded a shipment of
four units of parts and accessories in the port of Pusan, Korea, on board the vessel
M/V “National Honor,” represented in the Philippines by its agent, National Shipping
Corporation of the Philippines (NSCP). The goods were to be delivered to the
ultimate consignee Blue Mono International Company, Incorporated (BMICI). The
shipment was contained in two wooden crates, namely, Crate No. 1 and Crate No. 2,
complete and in good order condition. There were no markings on the outer portion of
the crates except the name of the consignee.[7]
 Crate No. 1 measured 24 cubic meters and weighed 3,620 kgs. On the flooring
of the wooden crates were three wooden battens placed side by side to support
the weight of the cargo.
  Crate No. 2, on the other hand, measured 10 cubic meters and weighed 2,060
kgs.
 It was insured for P2,547,270.00 with the Philippine Charter Insurance
Corporation (PCIC). Upon arrival, the International Container Terminal Services,
Incorporated (ICTSI) was furnished with a copy of the crate cargo list and bill of
lading, and it knew the contents of the crate. [11] The following day, the vessel started
discharging its cargoes using its winch crane. Claudio Cansino, the stevedore of the
ICTSI, placed two sling cables on each end of Crate No. 1. [15] No sling cable was
fastened on the mid-portion of the crate. In Dauz’s experience, this was a normal
procedure.[16] As the crate was being hoisted from the vessel’s hatch, the mid-portion
of the wooden flooring suddenly snapped in the air, about five feet high from the
vessel’s twin deck, sending all its contents crashing down hard, [17]resulting in
extensive damage to the shipment. BMICI’s customs broker, JRM Incorporated, took
delivery of the cargo in such damaged condition. [18] Upon receipt of the damaged
shipment, BMICI found that the same could no longer be used for the intended
purpose. ]BMICI subsequently filed separate claims against the NSCP, [20] the ICTSI,
[21]
and its insurer, the PCIC, [22] for US$61,500.00. When the other companies denied
liability, PCIC paid the claim and was issued a Subrogation
[23]
Receipt for P1,740,634.50. On March 22, 1995, PCIC, as subrogee, filed with the
RTC of Manila, Branch 35, a Complaint for Damages [24] against the “Unknown owner
of the vessel M/V National Honor,” NSCP and ICTSI, as defendants. PCIC alleged
that the loss was due to the fault and negligence of the defendants.
 RTC - rendered judgment for PCIC and ordered the complaint dismissed.
 The loss was due to the internal defect and weakness of the materials used
in the fabrication of the crates. The middle wooden batten had a hole
(bukong-bukong).
 CA – affirmed in toto the RTC’s decision
 The loss of the shipment was due to an excepted cause – “[t]he character of
the goods or defects in the packing or in the containers” and the failure of the
shipper to indicate signs to notify the stevedores that extra care should be
employed in handling the shipment.

ISSUE:
W/N respondents should be held liable for the damage of the goods.

HELD:
NO. Common carriers, from the nature of their business and for reasons of public
policy, are mandated to observe extraordinary diligence in the vigilance over the goods and
for the safety of the passengers transported by them, according to all the circumstances of
each case.The extraordinary diligence in the vigilance over the goods tendered for shipment
requires the common carrier to know and to follow the required precaution for avoiding
damage to, or destruction of the goods entrusted to it for sale, carriage and delivery. It
requires common carriers to render service with the greatest skill and foresight and “to use all
reasonable means to ascertain the nature and characteristic of goods tendered for shipment,
and to exercise due care in the handling and stowage, including such methods as their nature
requires.”[42]
The common carrier’s duty to observe the requisite diligence in the shipment of goods
lasts from the time the articles are surrendered to or unconditionally placed in the possession
of, and received by, the carrier for transportation until delivered to, or until the lapse of a
reasonable time for their acceptance, by the person entitled to receive them. [43] When the
goods shipped are either lost or arrive in damaged condition, a presumption arises against
the carrier of its failure to observe that diligence, and there need not be an express finding of
negligence to hold it liable. [44] 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.[45]
However, under Article 1734 of the New Civil Code, the presumption of negligence does
not apply to any of the following causes:
1. Flood, storm, earthquake, lightning or other natural disaster or calamity;
2. Act of the public enemy in war, whether international or civil;
3. Act or omission of the shipper or owner of the goods;
4. The character of the goods or defects in the packing or in the containers;
5. Order or act of competent public authority.
“Defect” is the want or absence of something necessary for completeness or perfection;
a lack or absence of something essential to completeness; a deficiency in something
essential to the proper use for the purpose for which a thing is to be used. [48] On the other
hand, inferior means of poor quality, mediocre, or second rate. [49] A thing may be of inferior
quality but not necessarily defective. In other words, “defectiveness” is not synonymous with
“inferiority.”
In the present case, the trial court declared that based on the record, the loss of the
shipment was caused by the negligence of the petitioner as the shipper:
The case at bar falls under one of the exceptions mentioned in Article 1734 of the Civil Code,
particularly number (4) thereof, i.e., the character of the goods or defects in the packing or in
the containers. The trial court found that the breakage of the crate was not due to the fault or
negligence of ICTSI, but to the inherent defect and weakness of the materials used in the
fabrication of the said crate.
It appears that the wooden batten used as support for the flooring was not made of good
materials, which caused the middle portion thereof to give way when it was lifted. The
shipper also failed to indicate signs to notify the stevedores that extra care should be
employed in handling the shipment.
The petitioner failed to rebut the evidence of respondent, that the crates were sealed and
that the contents thereof could not be seen from the outside. [52] While it is true that the crate
contained machineries and spare parts, it cannot thereby be concluded that the respondents
knew or should have known that the middle wooden batten had a hole, or that it was not
strong enough to bear the weight of the shipment.

BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V. and JARDINE DAVIES

TRANSPORT SERVICES, INC., petitioners,
vs.
PHILIPPINE FIRST INSURANCE CO., INC., respondents.
PANGANIBAN, J.:
DOCTRINE: Proof of the delivery of goods in good order to a common carrier and of their
arrival in bad order at their destination constitutes prima facie fault or negligence on the part
of the carrier. If no adequate explanation is given as to how the loss, the destruction or the
deterioration of the goods happened, the carrier shall be held liable therefor.
FACTS:
Shipper: CMC Trading A.G.
Carrier: BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V.
Subject: coils of various Prime Cold Rolled Steel sheets
Consignee: Philippine Steel Trading Corporation
Insurer: PHILIPPINE FIRST INSURANCE CO., INC.

Goods found to be in bad order. Belgian refused to pay. Thus, Phil First did. Impugning the
propriety of the suit against them, defendants-appellees imputed that the damage and/or loss
was due to pre-shipment damage, to the inherent nature, vice or defect of the goods, or to
perils, danger and accidents of the sea, or to insufficiency of packing thereof, or to the act or
omission of the shipper of the goods or their representatives.

RTC dismissed. CA ruled that Belgian liable. Failed to overcome presumption of negligence.
Belgian inadequately proven petitioners' claim that the loss or the deterioration of the goods
was due to pre-shipment damage.

ISSUES: Whether petitioners have overcome the presumption of negligence of a common

carrier
RULING:
No. A review of the records and more so by the evidence shows
First, as stated in the Bill of Lading, petitioners received the subject shipment in good order
and condition in Hamburg, Germany.
Second, prior to the unloading of the cargo, an Inspection Report prepared and signed by
representatives of both parties showed the steel bands broken, the metal envelopes rust-
stained and heavily buckled, and the contents thereof exposed and rusty.
Third, Bad Order Tally Sheet No. 154979 issued by Jardine Davies Transport Services, Inc.,
stated that the four coils were in bad order and condition. Normally, a request for a bad order
survey is made in case there is an apparent or a presumed loss or damage.
Fourth, the Certificate of Analysis stated that, based on the sample submitted and tested, the
steel sheets found in bad order were wet with fresh water.
Fifth, petitioners -- in a letter addressed to the Philippine Steel Coating Corporation and dated
October 12, 1990 -- admitted that they were aware of the condition of the four coils found in
bad order and condition.
Further, petitioners failed to prove that they observed the extraordinary diligence and
precaution which the law requires a common carrier to know and to follow to avoid damage to
or destruction of the goods entrusted to it for safe carriage and delivery.
True, the words "metal envelopes rust stained and slightly dented" were noted on the Bill of
Lading; however, there is no showing that petitioners exercised due diligence to forestall or
lessen the loss. The master of the vessel should have known at the outset that metal
envelopes in the said state would eventually deteriorate when not properly stored while in
transit.The master of the vessel and his crew should have undertaken precautionary
measures to avoid possible deterioration of the cargo. But none of these measures was
taken.
In their attempt to escape liability, petitioners further contend that they are exempted from
liability under Article 1734(4) of the Civil Code. They cite the notation "metal envelopes rust
stained and slightly dented" printed on the Bill of Lading as evidence that the character of the
goods or defect in the packing or the containers was the proximate cause of the damage
From the evidence on record, it cannot be reasonably concluded that the damage to the four
coils was due to the condition noted on the Bill of Lading.Theaforecitedexception refers to
cases when goods are lost or damaged while in transit as a result of the natural decay of
perishable goods or the fermentation or evaporation of substances liable therefor, the
necessary and natural wear of goods in transport, defects in packages in which they are
shipped, or the natural propensities of animals. None of these is present in the instant case.
Further, even if the fact of improper packing was known to the carrier or its crew or was
apparent upon ordinary observation, it is not relieved of liability for loss or injury resulting
therefrom, once it accepts the goods notwithstanding such condition.
May 2nd at 3rd issue pa pero di konasinama. Notice of loss. Dapat within 3 days
dawsiyanagfile, 1 yr prescription if there was an inspection. Limited liability. No stipulation in
the bill of lading, Letter of credit attached to the bill of lading does not count.

Asia Lighterage vs CA (CP)

Eastern Shipping Lines v. CA and First Nationwide Assurance Co.

FACTS:
- On September 4, 1978, 13 coils of uncoated 7-wire stress relieved wire strand for
prestressed concrete were shipped on board the vessel "Japri Venture," owned
and operated by the defendant Eastern Shipping Lines, Inc., at Kobe, Japan, for
delivery to Stresstek Post-Tensioning Phils., Inc. in Manila, and 6-Razon which
were insured by the plaintiff First Nationwide Assurance Corporation for
P171,923.
- The carrying vessel arrived in Manila and discharged the cargo to the custody of the
defendant E. Razon, Inc. from whom the consignee's customs broker received it for
delivery to the consignee's warehouse.

- Plaintiff indemnified the consignee in the amount of P171,923.00 for damage and loss
to the insured cargo, whereupon the former was subrogated for the latter.

- The plaintiff now seeks to recover from the defendants what it has indemnified the
consignee, less P48,293.70, the salvage value of the cargo, or the total amount of
P123,629.30.

- It appears that while enroute from Kobe to Manila, the carrying vessel
"encountered very rough seas and stormy weather" for three days, more or less,
which caused it to roll and pound heavily, moving its master to execute a marine
 note of protest upon arrival at the port of Manila; that the coils wrapped in burlap
cloth and cardboard paper were stored in the lower hold of the hatch of the
vessel which was flooded with water about one foot deep; that the water entered the
hatch when the vessel encountered heavy weather enroute to Manila; that upon
request, a survey of bad order cargo was conducted at the pier in the presence of the
representatives of the consignee and the defendant E. Razon, Inc. and it was found
that seven coils were rusty on one side each; that upon survey conducted at the
consignee's warehouse it was found that the "wetting (of the cargo) was caused by
fresh water" that entered the hatch when the vessel encountered heavy weather
enroute to Manila; and that all thirteen coils were extremely rusty and totally unsuitable
for the intended purpose.

- The complaint that was filed by the First Nationwide Assurance Corporation (insurer)
against Eastern Shipping Lines, Inc. and E. Razon, Inc., in the RTC was dismissed in a
decision.

- An appeal therefrom was interposed by the insurer to the CA which ordered Eastern
Shipping and E. Razon to pay the insurer as subrogee of the Stresstek.
ISSUE: W/N defendants are liable to plaintiff insurer-subrogee? YES

RULING:
The heavy seas and rains referred to in the master's report were not caso fortuito, but normal
occurrences that an ocean-going vessel, particularly in the month of September which, in our
area, is a month of rains and heavy seas would encounter as a matter of routine. They are
neither unforeseen nor unforeseeable. These are conditions that ocean-going vessels would
encounter and provide for, in the ordinary course of a voyage. That rain water (not sea water)
found its way into the holds of the Jupri Venture is a clear indication that care and foresight
did not attend the closing of the ship's hatches so that rain water would not find its way into
the cargo holds of the ship.

Moreover, under Article 1733 of the Civil Code, common carriers are bound to observe "extra-
ordinary vigilance over goods according to all circumstances of each case”.

Since the carrier has failed to establish any caso fortuito, the presumption by law of fault or
negligence on the part of the carrier applies; and the carrier must present evidence that it has
observed the extraordinary diligence required by Article 1733 of the Civil Code in order to
escape liability for damage or destruction to the goods that it had admittedly carried in this
case. No such evidence exists of record. Thus, the carrier cannot escape liability.
The Court agrees with and is bound by the foregoing findings of fact made by the appellate
court. The presumption, therefore, that the cargo was in apparent good condition when it was
delivered by the vessel to the arrastre operator by the clean tally sheets has been overturned
and traversed. The evidence is clear to the effect that the damage to the cargo was suffered
while aboard petitioner's vessel.

Bascos v. CA
FACTS:
- Rodolfo Cipriano representing CIPTRADE entered into a hauling contract with Jibfair
 Shipping Agency Corporation whereby CIPTRADE 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 from the Manila Port Area to Calamba, Laguna at the rate of
P50/metric ton.
- Petitioner Bascos 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: “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”
- Cipriano demanded reimbursement from Bascos but the latter refused to pay.
Eventually, Cipriano filed a complaint for a sum of money and damages with writ of
preliminary attachment for breach of a contract of carriage.
- RTC rendered a decision in favor of CIPTRADE. CA affirmed.

ISSUE/S:
- Was petitioner a common carrier? YES
- Was the hijacking referred to a force majeure? NO

RULING:
1) Article 1732 of the Civil Code defines a common carrier as "(a) person, corporation or firm,
or association engaged in the business of carrying or transporting passengers or goods or
both, by land, water or air, for compensation, offering their services to the public." The test to
determine a common carrier is "whether the given undertaking is a part of the business
engaged in by the carrier which he has held out to the general public as his occupation
rather than the quantity or extent of the business transacted." In this case, petitioner
herself has made the admission that she was in the trucking business, offering her trucks to
those with cargo to move. Judicial admissions are conclusive and no evidence is required to
prove the same.

2) Common carriers are obliged to observe extraordinary diligence in the vigilance over the
goods transported by them. Accordingly, they are presumed to have been at fault or to have
acted negligently if the goods are lost, destroyed or deteriorated. There are very few
instances when the presumption of negligence does not attach and these instances are
enumerated in Article 1734. In those cases where the presumption is applied, the common
carrier must prove that it exercised extraordinary diligence in order to overcome the
presumption.
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 by virtue of Art. 1745 (6).
Both the trial court and the Court of Appeals have concluded that the affidavits presented by
petitioner 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. The affidavit of Jesus Bascos did not dwell on how the hijacking took place.
Moreover, 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. 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.

Japan Airlines vs Court of Appeals (G.R. No. 118664)

Facts: Private respondents boarded a JAL flight in San Francisco, California bound for Manila.
It included an overnight stopover at Narita, Japan at JAL’s expense. Due to the Mt. Pinatubo
eruption, private respondents’ trip to Manila was cancelled. JAL rebooked all the Manila-
bound passengers and paid for the hotel expenses of their unexpected overnight stay. The
flight of private respondents was again cancelled due to NAIA’s indefinite closure. JAL
informed the respondents that it would no longer defray their hotel and accommodation
expense during their stay in Narita. The respondents were forced to pay for their
accommodations and meal expenses for 5 days.
Issues:
1.Whether or not JAL has the obligation to shoulder the hotel and meal expenses even if the
delay was caused by force majeure
2.Whether or not the award of damages was proper
Held:
1.When a party is unable to fulfill his obligation because of force majeure, the general rule is
that he cannot be held liable for damages for non-performance. When JAL was prevented
from resuming its flight to Manila due to the effects of the eruption, whatever losses or
damages in the form of hotel and meal expenses the stranded passengers incurred cannot be
charged to JAL. The predicament of the private respondents was not due to the fault or
negligence of JAL. JAL had the duty to arrange the respondents’ flight back to Manila.
However, it failed to look after the comfort and convenience of its passengers when it made
the passengers arrange their flight back to Manila on their own and after waiting in the airport
for a whole day.
2.Yes, the award of nominal damages is proper. Nominal damages are adjudicated in order
that a right of a plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized and not for the purpose of indemnifying any loss suffered by him.

Calalas v CA (Torts)

Calalas v CA. G.R. No. 122039 May 31, 2000 VICENTE CALALAS, petitioner, vs. COURT
OF APPEALS, ELIZA JUJEURCHE SUNGA and FRANCISCO SALVA, respondents.

FACTS:
At 10 o'clock in the morning of August 23, 1989, private respondent Eliza Jujeurche G.
Sunga, then a college freshman majoring in Physical Education at the Siliman University, took
a passenger jeepney owned and operated by petitioner Vicente Calalas. As the jeepney was
filled to capacity of about 24 passengers, Sunga was given by the conductor an "extension
seat," a wooden stool at the back of the door at the rear end of the vehicle.
On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger
off. As she was seated at the rear of the vehicle, Sunga gave way to the outgoing passenger.
Just as she was doing so, an Isuzu truck driven by Iglecerio Verena and owned by Francisco
Salva bumped the left rear portion of the jeepney. As a result, Sunga was injured.
On October 9, 1989, Sunga filed a complaint for damages against Calalas, alleging violation
of the contract of carriage by the former in failing to exercise the diligence required of him as
a common carrier. Calalas, on the other hand, filed a third-party complaint against Francisco
Salva, the owner of the Isuzu truck.

DECISION OF LOWER COURTS:

1. RTC – Dumaguete – rendered judgment against Salva holding that the driver of the Isuzu
truck was responsible
It took cognizance of another case (Civil Case No. 3490), filed by Calalas against Salva and
Verena, for quasi-delict, in which Branch 37 of the same court held Salva and his driver
Verena jointly liable to Calalas for the damage to his jeepney.
2. CA – reversed the RTC, awarding damages instead to Sunga as plaintiff in an action for
breach of contract of carriage since the cause of action was based on such and not quasi
delict.
Hence, current petition for review on certiorari.

ISSUE:
Whether (per ruling in Civil Case) negligence of Verena was the proximate cause of the
accident negates his liability and that to rule otherwise would be to make the common carrier
an insurer of the safety of its passengers
In relation thereto, does the principle of res judicata apply?

RULING:
No.
The issue in Civil Case No. 3490 was whether Salva and his driver Verena were liable for
quasi-delict for the damage caused to petitioner's jeepney. On the other hand, the issue in this
case is whether petitioner is liable on his contract of carriage.

Quasi-delict / culpa aquiliana / culpa extra contractual

1. Has as its source the negligence of the tortfeasor
2. negligence or fault should be clearly established because it is the basis of the action
3. doctrine of proximate cause is applicable
(device for imputing liability to a person where there is no relation between him and another
party, obligation is created by law itself)

Breach of contract / culpa contractual

1. premised upon the negligence in the performance of a contractual obligation
2. action can be prosecuted merely by proving the existence of the contract and the fact that
the obligor (here, the common carrier) failed to transport his passenger safely to his
destination
3. not available; it is the parties themselves who create the obligation and the function of the
law is merely to regulate the relation thus created
In case of death or injuries to passengers, Art. 1756 of the Civil Code provides that common
carriers are presumed to have been at fault or to have acted negligently unless they prove
that they observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code.
This provision necessarily shifts to the common carrier the burden of proof.

Hence, Vicente Calalas (operator) is liable since he did not exercise utmost diligence.
1. Jeepney was not properly parked;
2. Overloading of passengers.

PRECILLANO NECESITO, ETC. vs. NATIVIDAD PARAS, ET AL.

G.R. No. L-10605, June 30, 1958)

FACTS:

A mother and her son boarded a passenger auto-truck of the Philippine Rabbit Bus Lines.
While entering a wooden bridge, its front wheels swerved to the right, the driver lost control
and the truck fell into a breast-deep creek. The mother drowned and the son sustained
injuries. These cases involve actions ex contractu against the owners of PRBL filed by the
son and the heirs of the mother. Lower Court dismissed the actions, holding that the accident
was a fortuitous event.

ISSUE:

Whether or not the carrier is liable for the manufacturing defect of the steering knuckle, and
whether the evidence discloses that in regard thereto the carrier exercised the diligence
required by law (Art. 1755, new Civil Code)

HELD:

Yes.

While the carrier is not an insurer of the safety of the passengers, the manufacturer of the
defective appliance is considered in law the agent of the carrier, and the good repute of the
manufacturer will not relieve the carrier from liability. The rationale of the carrier’s liability is
the fact that the passengers has no privity with the manufacturer of the defective equipment;
hence, he has no remedy against him, while the carrier has. We find that the defect could be
detected. The periodical, usual inspection of the steering knuckle did not measure up to the
“utmost diligence of a very cautious person” as “far as human care and foresight can provide”
and therefore the knuckle’s failure cannot be considered a fortuitous event that exempts the
carrier from responsibility.
Juntilla vs Fontanar Case Digest
Juntilla vs Fontanar
(136 SCRA 624)

Facts: Herein plaintiff was a passenger of the public utility jeepney on course from Danao
City to Cebu City. The jeepney was driven by driven by defendant Berfol Camoro and
registered under the franchise of Clemente Fontanar. When the jeepney reached Mandaue
City, the right rear tire exploded causing the vehicle to turn turtle. In the process, the plaintiff
who was sitting at the front seat was thrown out of the vehicle. Plaintiff suffered a lacerated
wound on his right palm aside from the injuries he suffered on his left arm, right thigh, and on
his back.

Plaintiff filed a case for breach of contract with damages before the City Court of Cebu City.
Defendants, in their answer, alleged that the tire blow out was beyond their control, taking into
account that the tire that exploded was newly bought and was only slightly used at the time it
blew up.

Issue: Whether or not the tire blow-out is a fortuitous event?

Held: No. In the case at bar, the cause of the unforeseen and unexpected occurrence was
not independent of the human will. The accident was caused either through the negligence of
the driver or because of mechanical defects in the tire. Common carriers should teach drivers
not to overload their vehicles, not to exceed safe and legal speed limits, and to know the
correct measures to take when a tire blows up thus insuring the safety of passengers at all
tines.