COMPAÑIA MARITIMA, petitioner,

vs.
INSURANCE COMPANY OF NORTH AMERICA, respondent.

Rafael Dinglasan for petitioner.

Ozaeta Gibbs & Ozaeta for respondent.

BAUTISTA ANGELO, J.:

 October 1952, Macleod and Company of the Philippines contracted by telephone the
services of the Compañia Maritima, a shipping corporation, for the shipment of 2,645
bales of hemp from the former's Sasa private pier at Davao City to Manila and for their
subsequent transhipment to Boston, Massachusetts, U.S.A. on board the S.S. Steel
Navigator.
 This oral contract was later on confirmed by a formal and written booking issued by
Macleod's branch office in Sasa and handcarried to Compañia Maritima's branch office
in Davao in compliance with which the latter sent to Macleod's private wharf LCT Nos.
1023 and 1025 on which the loading of the hemp was completed on October 29, 1952.
 These two lighters were manned each by a patron and an assistant patron.
 Thereafter, the two loaded barges left Macleod's wharf and proceeded to and moored
at the government's marginal wharf in the same place to await the arrival of the S.S.
Bowline Knot belonging to Compañia Maritima on which the hemp was to be loaded.
 During the night of October 29, 1952, or at the early hours of October 30, LCT No. 1025
sank, resulting in the damage or loss of 1,162 bales of hemp loaded therein.
 On October 30, 1952, Macleod promptly notified the carrier's main office in Manila and
its branch in Davao advising it of its liability
 . The damaged hemp was brought to Odell Plantation in Madaum, Davao, for cleaning,
washing, reconditioning, and redrying.
 All abaca shipments of Macleod, including the 1,162 bales loaded on the carrier's LCT
No. 1025, were insured with the Insurance Company of North America against all losses
and damages
 Macleod filed a claim for the loss it suffered as above stated with said insurance
company, and after the same had been processed, the sum of P64,018.55 was paid,
which was noted down in a document which aside from being a receipt of the amount
paid, was a subrogation agreement between Macleod and the insurance company
wherein the former assigned to the latter its rights over the insured and damaged cargo
 Having failed to recover from the carrier the sum of P60,421.02, which is the only
amount supported by receipts, the insurance company instituted the present action on
October 28, 1953. After trial, the court a quo rendered judgment ordering the carrier to
pay the insurance company the sum of P60,421.02, with legal interest thereon from the
 date of the filing of the complaint until fully paid, and the costs. This judgment was
affirmed by the Court of Appeals on December 14, 1960. Hence, this petition for review.
Issue:
(1) Was there a contract of carriage between the carrier (CM) and the shipper (M) even if the loss
occurred when the hemp was loaded on a barge owned by the carrier which was loaded free of charge
and was not actually loaded on the S.S. Bowline Knot which would carry the hemp to Manila and no
bill of lading was issued therefore?; YES

(2) Was the damage caused to the cargo or the sinking of the barge where it was loaded due to a
fortuitous event, storm or natural disaster that would exempt the carrier from liability?; NO

(3) Can respondent insurance company sue the carrier under its insurance contract as assignee of
Macleod in spite of the fact that the liability of the carrier as insurer is not recognized in this
jurisdiction?; YES

(4) Has the Court of Appeals erred in regarding Exhibit NNN-1 as an implied admission by the carrier of
the correctness and sufficiency of the shipper's statement of accounts contrary to the burden of proof
rule?; and

(5) Can the insurance company maintain this suit without proof of its personality to do so? YES

Decision:
1. YES, As found by the Court of Appeals, Macleod and Company contracted by telephone the
services of petitioner to ship the hemp in question from the former's private pier at Sasa, Davao
City, to Manila, to be subsequently transhipped to Boston, Massachusetts, U.S.A., which oral
contract was later confirmed by a formal and written booking issued by the shipper's branch
office, Davao City, in virtue of which the carrier sent two of its lighters to undertake the service.
It also appears that the patrons of said lighters were employees of the carrier with due authority
to undertake the transportation and to sign the documents that may be necessary therefor so
much so that the patron of LCT No. 1025 signed the receipt covering the cargo of hemp loaded
The fact that the carrier sent its lighters free of charge to take the hemp from Macleod's
wharf at Sasa preparatory to its loading onto the ship Bowline Knot does not in any way
impair the contract of carriage already entered into between the carrier and the
shipper, for that preparatory step is but part and parcel of said contract of carriage.
Here we have a complete contract of carriage the consummation of which has already
begun: the shipper delivering the cargo to the carrier, and the latter taking possession
thereof by placing it on a lighter manned by its authorized employees, under which
Macleod became entitled to the privilege secured to him by law for its safe
transportation and delivery, and the carrier to the full payment of its freight upon
completion of the voyage.
 Whenever the control and possession of goods passes to the carrier and nothing
remains to be done by the shipper, then it can be said with certainty that the relation
of shipper and carrier has been established.

 The claim that there can be no contract of affreightment because the hemp was
not actually loaded on the ship that was to take it from Davao City to Manila is of
no moment, for, as already stated, the delivery of the hemp to the carrier's lighter
is in line with the contract. In fact, the receipt signed by the patron of the lighter
that carried the hemp stated that he was receiving the cargo "in behalf of S.S.
Bowline Knot in good order and condition." On the other hand, the authorities are
to the effect that a bill of lading is not indispensable for the creation of a contract
of carriage.
MAURO GANZON, petitioner,
vs.
COURT OF APPEALS and GELACIO E. TUMAMBING, respondents.

FACTS:

 On November 28, 1956, Gelacio Tumambing contracted the services of Mauro B.

Ganzon to haul 305 tons of scrap iron from Mariveles, Bataan, to the port of
Manila on board the lighter LCT "Batman" Pursuant to that agreement, Mauro B.
Ganzon sent his lighter "Batman" to Mariveles where it docked in three feet of
water.
 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. But on December 4,
1956, Acting Mayor Basilio Rub, accompanied by three policemen, ordered
captain Filomeno Niza and his crew to dump the scrap iron where the lighter was
docked. The rest was brought to the compound of NASSCO. Later on Acting
Mayor Rub issued a receipt stating that the Municipality of Mariveles had taken
custody of the scrap iron.

ISSUES:

a) Whether or not there is a breach of contract of transportation? YES

b) Whether or not the employees of Ganzon are liable in dumping the cargo? YES
c) Whether or not the loss of the scrap was due to fortuitous event? that the loss of
the scraps was due to an "order or act of competent public authority? NO

HELD:

a) YES, there is a breach of contract of carriage.

 Soon after the scraps were delivered to, and received by the petitioner-common
carrier, loading was commenced.
 By the said act of delivery, the scraps were unconditionally placed in the
possession and control of the common carrier, and upon their receipt by the
carrier for transportation, the contract of carriage was deemed perfected.
Consequently, the petitioner-carrier's extraordinary responsibility for the loss,
destruction or deterioration of the goods commenced.
  The fact that part of the shipment had not been loaded on board the lighter did
not impair the said contract of transportation as the goods remained in the
custody and control of the carrier, albeit still unloaded.
 The petitioner has failed to show that the loss of the scraps was due to any of the
following causes enumerated in Article 1734 of the Civil Code, namely:

The petitioner could have been exempted from any liability

1. had he been able to prove that he observed extraordinary diligence in the

vigilance over the goods in his custody, according to all the circumstances of the
case, or
2. that the loss was due to an unforeseen event or to force majeure. As it was,
there was hardly any attempt on the part of the petitioner to prove that he
exercised such extraordinary diligence.

b);c) NO, There is no fortuitous event.

 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 fulfillment 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 fullfilment of the obligation is not considered force
majeure.

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

It is my view that 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.When loading was resumed, this time it was Acting Mayor Basilio
Rub, accompanied by three policemen, who ordered the dumping of the scrap iron into the sea right where the lighter was docked in
three feet of water. Again, could the captain of the lighter and his crew have defied said order?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.

Art. 1743. If through order of public authority the goods are seized or destroyed, the common carrier is not responsible, provided said
public authority had power to issue the order.
LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN
vs.
MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD & PRUDENT
SECURITY AGENCY

VITUG, J.:

FACTS:

 On 14 October 1993, about half an hour past seven o’clock in the evening,
Nicanor Navidad, then drunk, entered the EDSA LRT station after purchasing a
"token" (representing payment of the fare).
 While Navidad was standing on the platform near the LRT tracks, Junelito
Escartin, the security guard assigned to the area approached Navidad. A
misunderstanding or an altercation between the two apparently ensued that led
to a fist fight. (No evidence, however, was adduced to indicate how the fight
started or who, between the two, delivered the first blow or how Navidad later fell
on the LRT tracks)
 At the exact moment that Navidad fell, an LRT train, operated by petitioner
Rodolfo Roman, was coming in. Navidad was struck by the moving train, and he
was killed instantaneously.
 the widow of Nicanor, Marjorie Navidad, along with her children, filed a complaint
for damages against Junelito Escartin, Rodolfo Roman, the LRTA, the Metro
Transit Organization, Inc. (Metro Transit), and Prudent for the death of her
husband.
 LRTA and Roman filed a counterclaim against Navidad and a cross-claim against
Escartin and Prudent. Prudent, in its answer, denied liability and averred that it
had exercised due diligence in the selection and supervision of its security
guards.

The LRTA and Roman (operator) presented their evidence while Prudent (Security
Agency) and Escartin (guard), instead of presenting evidence, filed a demurrer
contending that Navidad had failed to prove that Escartin was negligent in his assigned
task. On 11 August 1998,

RTC Decision: Rendered in favor of the plaintiffs and against the defendants Prudent
Security and Junelito Escartin ordering the latter to pay jointly and severally the plaintiffs

 "The complaint against defendants LRTA and Rodolfo Roman are dismissed for
lack of merit.
 "The compulsory counterclaim of LRTA and Roman are likewise dismissed."1

CA Decision: Exonerated Prudent from any liability for the death of Nicanor Navidad
and, instead, holding the LRTA and Roman jointly and severally liable thusly:
  The appellate court ratiocinated that while the deceased might not have then as
yet boarded the train, a contract of carriage theretofore had already existed when
the victim entered the place where passengers were supposed to be after paying
the fare and getting the corresponding token therefor.
 In exempting Prudent from liability, the court stressed that there was nothing to
link the security agency to the death of Navidad. It said that Navidad failed to
show that Escartin inflicted fist blows upon the victim and the evidence merely
established the fact of death of Navidad by reason of his having been hit by the
train owned and managed by the LRTA and operated at the time by Roman. The
appellate court faulted petitioners for their failure to present expert evidence to
establish the fact that the application of emergency brakes could not have
stopped the train.

ISSUES: Whether or not LRTA is liable? Whether or not Roman is liable?

Contention of LRTA and Roman:

Petitioners would contend that the appellate court ignored the evidence and the factual
findings of the trial court by holding them liable on the basis of a sweeping conclusion
that the presumption of negligence on the part of a common carrier was not overcome.

Petitioners would insist that Escartin’s assault upon Navidad, which caused the latter to
fall on the tracks, was an act of a stranger that could not have been foreseen or
prevented.

The LRTA would add that the appellate court’s conclusion on the existence of an
employer-employee relationship between Roman and LRTA lacked basis because
Roman himself had testified being an employee of Metro Transit and not of the LRTA.

Contention of CA; Prudent and Escartin:

Respondents, supporting the decision of the appellate court, contended that a contract
of carriage was deemed created from the moment Navidad paid the fare at the LRT
station and entered the premises of the latter, entitling Navidad to all the rights and
protection under a contractual relation, and that the appellate court had correctly held
LRTA and Roman liable for the death of Navidad in failing to exercise extraordinary
diligence imposed upon a common carrier.

DECISION:

Yes, LRTA is liable. The foundation of LRTA’s liability is the contract of carriage and its
obligation to indemnify the victim arises from the breach of that contract by reason of its
failure to exercise the high diligence required of the common carrier. In the discharge of
its commitment to ensure the safety of passengers, a carrier may choose to hire its own
employees or avail itself of the services of an outsider or an independent firm to
undertake the task. In either case, the common carrier is not relieved of its
responsibilities under the contract of carriage.

Should Prudent be made likewise liable?

No, Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the late
Nicanor Navidad, this Court is concluded by the factual finding of the Court of Appeals
that "there is nothing to link (Prudent) to the death of Nicanor (Navidad), for the reason
that the negligence of its employee, Escartin, has not been duly proven x x x."

Rodolfo Roman himself is not guilty of any culpable act or omission, he must also be
absolved from liability. Needless to say, the contractual tie between the LRT and
Navidad is not itself a juridical relation between the latter and Roman; thus, Roman can
be made liable only for his own fault or negligence.

The award of nominal damages in addition to actual damages is untenable. It is an

established rule that nominal damages cannot co-exist with compensatory damages.19
PEDRO DE GUZMAN, petitioner,
vs.
COURT OF APPEALS and ERNESTO CENDANA, respondents.

FELICIANO, J.:

FACTS:

 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.

Contention of the 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.

RTC Decision:

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.
CA Decision:

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.

ISSUES: Whether or not Cendana is a common carrier? Whether or not the hijacking is
a force majeure and Cendana exercised extraordinary diligence?

Decision:

a) Yes, Cendana is a common carrier because

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.

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.

A certificate of public convenience is not a requisite for the incurring of liability under the
Civil Code provisions governing common carriers.

b) Cendana is not liable because of the existence of fortuitous event.

GR: 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.
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)

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.

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. (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 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.