Baliwag Transit, Inc. v. CA and Sps.
Sotero Cailipan, Jr and Zenaida Fortune Insurance and Baliwag filed Motions to Dismiss the
Lopez andGeorge Cailipan
G.R. No. 80447 January 31, 1989
Melencio-Herrera, J.
FACTS:
George – was a paying passenger on a Baliwag bus who suffered
multiple serious physical injuries when he was thrown off said bus
driven in a careless and negligent manner by Leonardo Cruz, the bus
driver, along Brgy. Patubig, Marilao, Bulacan; as a result, he was
confined in the hospital for treatment, incurring medical expenses,
which were borne by his
parents in the sum of about P200,000.00 plus other incidental expens
es of aboutP10,000.00
George’s parents, Spouses Cailipan filed a complaint for damages
arising from breach of contract of carriage
Baliwag Transit alleged that the cause of the injuries sustained by
George was solely attributable to his own voluntary act in that,
without warning and provocation, he suddenly stood up from his seat
and headed for the door of the bus as if in a daze, opened it
and jumped off while said bus was in motion, in spite of the
protestations by the driver and without the knowledge of the
conductor a third-Party Complaint against Fortune Insurance & Surety
Company, Inc., on its third-party liability insurance in the amount of
P50,000.00; Fortune Insurance claimed limited liability, the
coverage being subject to a Schedule
of Indemnities forming part of the insurance policy
complaint filed against them on the
ground that George, in consideration of the sum of P8,020.50
had executed a “Release of Claims”
Sotero opposed the motion to dismiss; he testified that be is the
father of George, who at the time of the incident was a student, living
with his parents and totally dependent on them for their support;
that the expenses for his hospitalization were shouldered by his
parents; and that they had not signed the “Release of Claims”
RTC dismissed the complaint (dismissal was predicated on George’s
execution of Release of Claims)
ISSUE:
what is the legal effect of the Release of Claims executed by George
HELD:
Since the suit is one for breach of contract of carriage, the Release of
Claims executed by him, as the injured party, discharging Fortune
Insurance and Baliwag from any and all liability is valid. He was
then of legal age, a graduating student of Agricultural Engineering,
and had the capacity to do acts with legal effect (Article 37 in relation
to Article 402, Civil Code). Thus, he could sue and be sued even
without the assistance of his parents.
The contract of carriage was actually between George, as the
paying passenger, and Baliwag, as the common carrier; since a
contract may be violated only by the parties thereto, as against each
Transpo Digested Cases (P. 1-2 of the Syllabus) 1
other, in an action upon that contract, the real parties in interest,
either as plaintiff or as defendant, must be parties to said contract (
real party-in-interest-plaintiff – one who has a legal right;
real party-in-interest-defendant – one who has a correlative legal
obligation whose act or omission violates the legal right of the
former); in the absence of any contract of carriage between Baliwag
and George’s parents, the latter are not real parties-in-interest in an
action for breach of that contract
Release of Claims – have the effect of a compromise agreement since
it was entered into for the purpose of making a full and final
compromise adjustment and settlement of the cause of action
involved
Compromise – contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already
commenced.
British Airways, Inc. v. Court of Appeals
G.R. No. 92288 February 9, 1993
FACTS:
First International Trading and General Services Co. – duly licensed
domestic recruitment and placement agency; it received a telex
message from its principal ROLACO Engineering and Contracting
Services in Jeddah, Saudi Arabia to recruit Filipino contract workers in
behalf of said principal
ROLACO paid to the Jeddah branch of petitioner British Airways, Inc.
airfare tickets for 93contract workers with specific instruction to
transport said workers to Jeddah on or before March 30, 1981
March 1981: First International was informed by British Airways that
ROLACO hadforwarded 93 prepaid tickets; First International
instructed its travel agent, ADB Travel and Tours. Inc., to book the 93
workers with petitioner but the latter failed to fly said workers,
thereby compelling private respondent to borrow money in the
amount of P304,416.00 in order to purchase airline tickets from the
other airlines for the 93 workers it had recruited who must leave
immediately since the visas of said workers are valid only for 45 days
and the Bureau of Employment Services mandates that contract
workers must be sent to the job site within a period of 30 days
June 1981: First International was again informed by British Airways
that it had received a prepaid ticket advice from its Jeddah branch for
the transportation of 27 contract workers; First International
instructed its travel agent to book the 27 contract workers with the
petitioner but the latter was only able to book and confirm 16 seats
on its June 9, 1981flight; on the date of the scheduled flight only 9
workers were able to board said flight while the remaining 7 workers
were rebooked to June 30, 1981 which bookings were again cancelled
by the petitioner without any prior notice to either private
respondent or the workers; thereafter, the 7 workers were rebooked
to the July 4,1981 flight of petitioner with 6 more workers booked for
said flight; but the confirmed bookings of the 13 workers were again
cancelled and rebooked to July 7, 1981
Transpo Digested Cases (P. 1-2 of the Syllabus) 2
First International paid the travel tax of the said workers as required
by British Airways
butwhen the receipt of the tax payments was submitted, the latter inf
ormed FirstInternational that it can only confirm the seats of the 12
workers on its July 7, 1981 flight; but the confirmed seats of said
workers were again cancelled without any prior notice either to First
International or said workers; the 12 workers were finally able to
leave for Jeddah after First International had bought tickets from the
other airlines
July 1981: First International sent a letter to petitioner demanding
compensation for the damages in the amount of P350,000.00 it had
incurred by the latter’s repeated failure
totransport its contract workers despite confirmed bookings and pay
ment of thecorresponding travel taxes
British Airways’ narration:
it received a telex message from Jeddah advising that ROLACO
had prepaid the airfares of 100 persons to transport First
International’s contract workers from Manila to Jeddah on or before
March 30, 1981; however, due to the unavailability of space and
limited time, it had to return to its sponsor in Jeddah the prepaid
ticket advice consequently not even one of the alleged 93 contract
workers were booked in any of its flights
June 1981: British Airways received another prepaid ticket advice to
transport 16 contract workers of First International to Jeddah but the
travel agent of First International booked only 10 contract workers for
British Airways’ June 9, 1981 flight; however, only 9 contract workers
boarded the scheduled flight with 1 passenger not showing up as
evidenced by the Philippine Airlines’ passenger manifest
First International’s travel agent booked seats for 5 contract workers
on British Airways’ July 4, 1981 flight but said travel agent cancelled
the booking of 2 passengers while the other 3 passengers did not
show up on said flight
July 1981: the travel agent of First International booked 7 more contr
act workers inaddition to the previous 5 contract workers who were
not able to board the July 4, 1981flight with British Airways’ July
7, 1981 flight which was accepted by British Airways subject to
reconfirmation
July 1981: British Airways’ computer system broke down which
resulted to its failure to get
a reconfirmation from Saudi Arabia Airlines causing
the automatic cancellation of thebookings of First International’s 12 c
ontract workers; the computer system of thepetitioner was
reinstalled the next day and immediately British Airways tried to
reinstate the bookings of the 12 workers with either Gulf Air or Saudi
Arabia Airlines but both airlines replied that no seat was available on
that date and had to place the 12 workers on the wait list; said
information was duly relayed to the First International and the 12
workers before the scheduled flight
ISSUE:
WON British Airways is liable
Transpo Digested Cases (P. 1-2 of the Syllabus) 3
HELD:
Yes. Its repeated failures to transport First International’s workers
in its flight despite confirmed booking of said workers clearly
constitutes breach of contract and bad faith on its part.
two aspects of contract of common carriage of passengers:
a. contract to carry at some future time –consensual and is
necessarily perfected by mere consent
b. contract of carriage or of common carriage itself –real contract
for not until the carrier is actually used can the carrier be said to have
already assumed the obligation of a carrier contract to carry was
involved in the case; its elements are consent, consideration and
object certain
CONSENT: British Airways consent to the contract was manifested by
its acceptance of
thePTA or prepaid ticket advice that ROLACO has prepaid the airfares
of the FirstInternational’s contract workers advising the appellant
that it must transport the contract workers on or before the end of
March, 1981 and the other batch in June, 1981
CONSIDERATION: the fare paid for the passengers by the principal of
First International
OBJECT CERTAIN: the transport of the passengers from the place of
departure to the place of destination
First International has fully complied with the obligation, namely, the
payment of the fare and its willingness for its contract workers to
leave for their place of destination.
On the other hand, British Airways was remiss in its obligation to
transport the contract workers on their flight despite confirmation
and bookings made by First International’s travelling agent. British
Airways should have refused acceptance of the PTA from by
FirstInternational’s principal or to at least inform by First International
that it could notaccommodate the contract workers.
KOREAN AIRLINES vs CA
The case is for 1980 vintage. It originated from the Regional Trial
Court, appealed to the Court of Appeals, then finally elevated to this
Court. From the Court’s disposition of the case stemmed incidents
which are now the subjects for resolution. To elaborate:chanrob1es
virtual 1aw library
In an action for breach of contract of carriage, Korean Airlines, Co.,
Ltd., (KAL) was ordered by the trial court to pay actual/compensatory
damages, with legal interest, attorney’s fees and costs of suit in favor
of plaintiff Juanito C. Lapuz. 1 Both parties appealed to the Court of
Appeals, but the trial court’s judgment was merely modified: the
award of compensatory damages reduced, an award for moral and
exemplary damages added, with 6% interest per annum from the
date of filing of the complaint and the attorney’s fees and cost
deleted.
Transpo Digested Cases (P. 1-2 of the Syllabus) 4
The parties subsequently elevated the case to this Court, docketed as
G.R. No. 114061 and G.R. No. 113842. On August 3, 1994, the Court in
a consolidated decision affirmed the decision of the Court of Appeals,
modified only as to the commencement date of the award of legal
interest, i.e., from the date of the decision of the trial court and not
from the date of filing of the complaint. 2 The parties filed their
respective motions for reconsideration with KAL, for the first time,
assailing the Court’s lack of jurisdiction to impose legal interest as the
complaint allegedly failed to pray for its award. In a resolution dated
September 21, 1994, the Court resolved to deny both motions for
reconsideration with finality. Notwithstanding, KAL filed subsequent
pleadings asking for reconsideration of the Court’s consolidated
decision and again impugning the award of legal interest. Lapuz,
meanwhile, filed a motion for early resolution of the case followed by
a motion for execution dated March 14, 1995, praying for the
issuance of a writ of execution. KAL, in response, filed its Opposition
and Supplemental Argument in Support of the Opposition dated
March 28, 1995, and March 30, 1995, respectively. Additionally, on
May 3, 1995, Lapuz filed another Urgent Motion for Early Resolution
stating that the case has been pending for fifteen years which KAL
admitted in its Comment filed two days later, albeit stressing that its
pleadings were not intended for delay.
KAL’s asseveration that the Court lacks jurisdiction to award legal
interest is devoid of merit. Both the complaint and amended
complaint against KAL dated November 27, 1980, and January 5,
1981, respectively, prayed for reliefs and remedies to which Lapuz
may be entitled in law and equity. The award of legal interest is one
such relief, as it is based on equitable grounds duly sanctioned by
Article 2210 of the Civil Code which provides that:" [i]nterest may, in
the discretion of the Court, be allowed upon damages awarded for
breach of contract." 4
Furthermore, in its petition for review before the Court of Appeals,
KAL did not question the trial court’s imposition of legal interest.
Likewise, in its appeal before the Court, KAL never bewailed the
award of legal interest. In fact, KAL took exception only with respect
to the date when legal interest should commence to run. 5 Indeed, it
was only in its motion for reconsideration when suddenly its
imposition was assailed for having been rendered without
jurisdiction. To strengthen its languid position, KAL’s subsequent
pleadings clothed its attack with constitutional import for alleged
violation of its right to due process. There is no cogent reason and
none appears on record that could sustain KAL’s scheme as KAL was
amply given, in the courts below and in this Court, occasion to
ventilate its case. What is repugnant to due process is the denial of
opportunity to be heard 6 which opportunity KAL was extensively
afforded. While it is a rule that jurisdictional question may be raised
at any time, this, however, admits of an exception where, as in this
case, estoppel has supervened. 7 This Court has time and again
3 frowned upon the undesirable practice of a party submitting his case
for decision and then accepting the judgment, only if favorable, and
attacking it for lack of jurisdiction when adverse. 8 The Court shall not
countenance KAL’s undesirable move. What attenuates KAL’s
unmeritorious importuning is that assailed decision has long acquired
finality. It is a settled rule that a judgment which has acquired finality
becomes immutable and unalterable, hence may no longer be
modified in any respect except only to correct clerical errors or
Transpo Digested Cases (P. 1-2 of the Syllabus) 5
mistake. 9 Once a judgment becomes final, all the issues between the
parties are deemed resolved and laid to rest.
KAL’s filing of numerous pleadings delayed the disposition of the case
which for fifteen years remained pending. This practice may
constitute abuse of the Court’s processes for it tends to impede,
obstruct and degrade the administration of justice. In Li Kim Tho v. Go
Siu Ko, Et Al., 10 the Court gave this reminder to litigants and lawyers’
alike:jgc:chanrobles.com.ph
"Litigation must end and terminate sometime and somewhere, and it
is essential to an effective and efficient administration of justice that,
once a judgment has become final, the winning party be not, through
a mere subterfuge, deprived of the fruits of the verdict. Courts must
therefore guard against any scheme calculated to bring about that
result. Constituted as they are to put an end to controversies, courts
should frown upon any attempt to prolong them." 11
Likewise, in Banogan v. Zerna 12 the Court reminded lawyers of their
responsibility as officer of the court in this
manner:jgc:chanrobles.com.ph
"As officers of the court, lawyers have a responsibility to assist in the
proper administration of justice. They do not discharge this duty by
filing pointless petitions that only add to the workload of the
judiciary, especially this Court, which is burdened enough as it is. A
judicious study of the facts and the law should advise them when a
case, such as this, should not be permitted to be filed to merely
clutter the already congested judicial dockets. They do not advance
the cause of law or their clients by commencing litigations that for
sheer lack of merit do not deserve the attention of the courts." 13
A lawyer owes fidelity to the cause of his client, but not at the
expense of truth and the administration of justice. 14 Counsel for KAL
is reminded that it is his duty not to unduly delay a case, impede the
execution of a judgment or misuse Court processes. 15
With respect to Lapuz’ motion for execution, suffice to state that the
application for a writ of execution should be addressed to the court of
origin and not to this Court. As the judgment has become final and
executory then all that is left of the trial court is the ministerial act of
ordering the execution thereof.
ACCORDINGLY, KAL’s motion for reconsideration is DENIED. Counsel
for KAL is hereby warned that repetition of his undesirable practice
shall be dealt with severely.
____________________________________________________
Mr. and Mrs. Engracio Fabre, Jr. and Porfirio Cabil v. CA, The Word
for the WorldChristian Fellowship, Inc., Amyline Antonio, etc.
G.R. No. 111127 July 26, 1996
FACTS:
Engracio Fabre, Jr. and his wife – 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; they had a
driver, Porfirio Cabil, whom they hired in 1981, after trying him out
Transpo Digested Cases (P. 1-2 of the Syllabus) 6
for two weeks; his job was to take school children to and from the St.
Scholastica’s College in Malate, Manila
Word for the World Christian Fellowship Inc. arranged with Fabres for
the transportation of 33 members of its Young Adults Ministry from
Manila to La Union and back
usual route to Caba, La Union was through Carmen, Pangasinan;
however, the bridge at Carmen was under repair, so that petitioner
Cabil, who was unfamiliar with the area (it being his first trip to La
Union), was forced to take a detour through the town of Baay
inLingayen, Pangasinan; 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 kph, 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 Jesus Escano, then turned over and
landed on its left side, coming to a full stop only after a series of
impacts
several passengers were injured; 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; she is
now suffering from paraplegia (total inability to move both legs and
usually the lower part of the trunk, often as a result of disease or
injury of the spine)and is permanently paralyzed from the waist down
Cabil’s answer: he did not see the curve until it was too late; 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 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
ISSUES:
1. WON petitioners (a. Cabil; b. employers Fabres) were negligent; 2.
WONpetitioners were liable for the injuries suffered by private
respondents
HELD:
1. On Cabil’s negligence: On the night of the accident, it was raining,
and as a consequence, the road was slippery, and it was dark. Cabil
drove his bus at the speed of 50kilometers per hour and only slowed
down when he noticed the curve some 15 to 30 meters ahead. 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
De Guzman v CA G.R. No. L-47822 December 22, 1988
FACTS:
Respondent Ernesto Cendaña, 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
Transpo Digested Cases (P. 1-2 of the Syllabus) 7
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 P22,150.00, the claimed value of the lost merchandise,
plus damages and attorney’s fees. On December 10, 1975, the trial
court rendered a Decision finding private respondent to be a common
carrier and holding him liable for the value of the undelivered goods
(P22,150.00) as well as for P4,000.00 as damages and P2,000.00 as
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.
ISSUE:
1. Whether or not the private respondent is considered a common
carrier.
2. Whether or not the hijacking of respondent’s truck was force
majeure.
HELD:
1. 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.
The concept of “common carrier” under Art. 1732 may be seen to
coincide neatly with the notion of “public service” under the Public
Service Act which states in section 13, par b, public service includes:
xxx 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
Transpo Digested Cases (P. 1-2 of the Syllabus) 8
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. Xxx
Further, 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.
2. The hijacking of the carrier’s truck does not fall within any of the
five (5) categories of exempting causes in Art. 1734. Hence, 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.
However, 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. The court believes and so holds
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 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). 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.
________________________________________________
First Philippine Industrial Corp. v. CA, Paterno Tac-an, Bantangas
City, andAdoracion Arellano (treasurer of Batangas)
G.R. No. 125948 December 29, 1998
Martinez, J.
FACTS:
FPIC – grantee of a pipeline concession under Republic Act No. 387, as
amended, tocontract, install and operate oil pipelines
It applied for a mayor’s permit with the Office of the Mayor of
Batangas City. Before the permit could be issued, it was required by
the City Treasurer to pay a local tax based on its gross receipts for the
fiscal year 1993 pursuant to the Local Government Code. It paid the
tax under protest.
It filed a complaint for tax refund alleging that 1) the imposition and
collection of the business tax on its gross receipts violates Section
Transpo Digested Cases (P. 1-2 of the Syllabus) 9
133 of the Local Government Code which grants tax exemption to
common carriers; 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
transportationcontractors for, as defined under Sec. 131 (h), the term
“contractors” excludestransportation contractors; and, 3) the City
Treasurer illegally and erroneously imposed and collected the said
tax, thus meriting the immediate refund of the tax paid.
ISSUES:
1. WON FPIC is a common carrier; 2. WON it is exempted from paying
the taxes required by the City Treasurer
HELD:
1. Yes. FPIC 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.
common carrier -
holds himself out to the public as engaged in the business of transpor
ting persons or property from place to place, for compensation, offeri
ng hisservices to the public generally (see also Art. 1732)
test for determining whether a party is a common carrier of goods:
a. 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 asa business and not as
a casual occupation;
b. undertakes to carry goods of the kind to which his business is
confined
c. undertakes to carry by the method by which his business is
conducted and over his established roads
d. transportation is for hire
common service coincides with public service
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
forfreight or passenger, or both, with or without fixed route and what
ever may be itsclassification, freight or carrier service of any class, exp
ress service, steamboat, orsteamship 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 (CA No. 1416, as amended,
otherwise known as the Public Service Act)
Transpo Digested Cases (P. 1-2 of the Syllabus) 10
FPIC - considered a common carrier under Art. 86 of the Petroleum
Act of the Philippines(RA 387), which 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.
FPIC is also a public utility pursuant to Art. 7 of RA 387 which states
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”
2. Yes. Legal basis is Section 133 (j), of the Local Government Code
which provides that “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: 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”.
Reason for the exception: to avoid duplication of
Asia Lighterage and Shipping Inc. v. CAGr, No. 147246, August 19,
2003
FACTS:
Petitioner was contracted as carrier by a corporation from Portland,
Oregon to deliver a cargo to the consignee's warehouse at Pasig City.
The cargo, however, never reached the consignee as the barge that
carried the cargo sank completely, resulting in damage to the cargo.
Privater espondent, as insurer, indemnified the consignee for the lost
cargo and thus, as subrogee, sought recovery from petitioner. Both
the trial court and the appellate court ruled in favor of private
respondent. The Court ruled in favor of private respondent. Whether
or not petitioner is a common carrier, the Court ruled in the
affirmative. The principal business of petitioner is that of lighterage
and drayage, offering its barges to the public, although for limited
clientele, for carrying or transporting goods by water for
compensation. Whether or not petitioner failed to exercise
extraordinary diligence in its care and custody of the consignee's
goods, the Court also ruled in the affirmative. The barge completely
sank after its towing bits broke, resulting in the loss of the cargo.
Petitioner failed to prove that thetyphoon was the proximate and
only cause of the loss and that it has exercised due diligence before,
during and after the occurrence.
tax
ISSUE: Whether or Not the petitioner is a common carrier.
Transpo Digested Cases (P. 1-2 of the Syllabus) 11
RULING: 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
YES. Petitioner is a common carrier whether its carrying of goods is
between a person or enterprise offering transportation service on a
done on an irregular rather than scheduled manner, and with an only
regular or scheduled basis and one offering such service on
limited clientele. A common carrier need not have fixed and publicly
an occasional, episodic or unscheduled basis. Further, we ruled that
known routes. Neither does it have to maintain terminals or issue
Article 1732 does not distinguish between a carrier offering its
tickets. To be sure, petitioner fits the test of a common carrier as laid
services to the general public, and one who offers services or solicits
down in Bascos vs. Court of Appeals. The test to determine a common
business only from an arrow segment of the general population.
carrier is "whether the given undertaking is a part of the business
Common carriers are bound to observe extraordinary diligence in the
engaged in by the carrier which he has held out to the general public
vigilance over the goods transported by them. They are presumed to
as his occupation rather than the quantity or extent of the business
have been at fault or to have acted negligently if the goods are lost,
transacted." In the case at bar, the petitioner admitted that it is
destroyed or deteriorated. To overcome the presumption of
engaged in the business of shipping and lighterage, offering its barges
negligence in the case of loss, destruction or deterioration of the
to the public, despite its limited clientele for carrying or transporting
goods, deterioration of the goods, the common carrier must prove
goods by water for compensation. Article 1732 of the Civil
that it exercised extraordinary diligence. There are, however,
Code defines common carriers as persons, corporations, firms or
exceptions to this rule. Article1734 of the Civil Code enumerates the
associations engaged in the business of carrying or transporting
instances when the presumption of negligence does not attach: Art.
passengers or goods or both, by land, water, or air ,for
1734. Common carriers are responsible for the loss, destruction, or
compensation.. offering their services to the public. Petitioner
deterioration of the goods, unless the same is due to any of
contends that it is not a common carrier but a private carrier.
the following causes only: (1) Flood, storm, earthquake, lightning, or
Allegedly, it has no fixed and publicly known route, maintains no
other natural disaster or calamity; (2) Act of the public enemy in war,
terminals, and issues no tickets. It points out that it is not
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
obliged to carry indiscriminately for any person. It is not bound to authority
carry goods unless it consents. In short, it does not hold out its
services to the general public. In De Guzman vs. Court of Appeals, we
held that the definition of common carriers in Article1732 of the Civil
Code makes no distinction between one whose principal business

Transpo Digested Cases (P. 1-2 of the Syllabus) 12

 LRTA V. Navidad (2003)
G.R. No. 145804 February 6, 2003
Lessons Applicable: Actionable Document (transportation)
Laws Cited: Art. 1755,Art. 1756,Art. 1759,Art. 1763
FACTS:
October 14, 1993, 7:30 p.m. : Drunk Nicanor Navidad (Nicanor)
entered the EDSA LRT station after purchasing a “token”. While
Nicanor was standing at the platform near the LRT tracks, the guard
Junelito Escartin approached him.
Due to misunderstanding, they had a fist fight
Nicanor fell on the tracks and killed instantaneously upon being hit by
a moving train operated by Rodolfo Roman
December 8, 1994: The widow of Nicanor, along with her children,
filed a complaint for damages against Escartin, Roman, LRTA, Metro
Transit Org. Inc. and Prudent (agency of security guards) for the death
of her husband.
LRTA and Roman filed a counter-claim against Nicanor and a cross-
claim against Escartin and Prudent
Prudent: denied liability – averred that it had exercised due diligence
in the selection and surpervision of its security guards
LRTA and Roman: presented evidence
Prudent and Escartin: demurrer contending that Navidad had failed to
prove that Escartin was negligent in his assigned task
RTC: In favour of widow and against Prudent and Escartin, complaint
against LRT and Roman were dismissed for lack of merit
CA: reversed by exonerating Prudent and held LRTA and Roman liable
ISSUE: W/N LRTA and Roman should be liable according to the
contract of carriage
HELD: NO. Affirmed with Modification: (a) nominal damages is
DELETED (CANNOT co-exist w/ compensatory damages) (b) Roman is
absolved.
Law and jurisprudence dictate that a common carrier, both from the
nature of its business and for reasons of public policy, is burdened
with the duty off exercising utmost diligence in ensuring the safety of
passengers
Civil Code:
Art. 1755. A common carrier is bound to carry the passengers safely
as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with a due regard for all the
circumstances
Art. 1756. In case of death or injuries to passengers, common carriers
are presumed to have been at fault or to have acted negligently,
unless they prove that they observed extraordinary diligence as
prescribed in articles 1733 and 1755
Transpo Digested Cases (P. 1-2 of the Syllabus) 13
Art. 1759. 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
EX: if employer’s liability is negligence or fault on the part of the
employee, employer can be made liable on the basis of the
presumption juris tantum that the employer failed to exercise
diligentissimi patris families in the selection and supervision of its
employees.

This liability of the common carriers does NOT cease upon proof that EX to the EX: Upon showing due diligence in the selection and
they Exercised all the diligence of a good father of a family in the supervision of the employee
selection and supervision of their employees
Factual finding of the CA: NO link bet. Prudent and the death of
Art. 1763. A common carrier is responsible for injuries suffered by a Nicanor for the reason that the negligence of Escartin was NOT
passenger on account of the wilful acts or negligence of other proven
passengers or of strangers, if the common carrier’s employees
NO showing that Roman himself is guilty of any culpable act or
through the exercise of the diligence of a good father of a family
omission, he must also be absolved from liability
could have prevented or stopped the act or omission.
Contractual tie bet. LRT and Nicanor is NOT itself a juridical relation
Carriers presumed to be at fault or been negligent and by simple
bet. Nicanor and Roman
proof of injury, the passenger is relieaved of the duty to still establish
the fault or negligence of the carrier or of its employees and the Roman can be liable only for his own fault or negligence
burden shifts upon the carrier to prove that the injury is due to an
unforeseen event or to force majeure

Where it hires its own employees or avail itself of the services of an

outsider or an independent firm to undertake the task, the common
carrier is NOT relieved of its responsibilities under the contract of
carriage

GR: Prudent can be liable only for tort under Art. 2176 and related
provisions in conjunction with Art. 2180 of the Civil Code. (Tort may
arise even under a contract, where tort [quasi-delict liability] is that
which breaches the contract)
Transpo Digested Cases (P. 1-2 of the Syllabus) 14
 PERENA VS. ZARATE
G.R. NO. 157917
August 29, 2012
FACTS:
Perenas were engaged in the business of transporting students to
Don Bosco. The Zarates engaged Perenas services to transport their
son, Aaron, to school.
While on the way to school, the van’s air-conditioned unit was turned
on and the stereo playing loudly. The driver took a detour because
they were running late due to the traffic in SLEX. The detour was
through a narrow path underneath the Magallanes Interchange used
as short cut into Makati. When the van was to traverse the PNR
railroad crossing, the van was tailing a large passenger bus so the
driver’s view of the oncoming train was blocked. The train hit the van
at the rear end and the impact threw 9 students including Aaron out
of the van. Aaron landed in the path of the train which dragged his
body and severed his head, instantaneously killing him.
The Zarates filed for damages against Alfaro, Perenas, PNR, and the
train driver. The cause of action against Perena was for contract of
carriage while for PNR, quasi delict. Perena posited the defense of
diligence of a good father in the selection and supervision of their
driver
ISSUE/S: Were Perenas and PNR jointly and severally liable for
damages? Is the petitioner a common carrier?
RULING:
YES. A school bus operator is a common carrier.
Perena’s defense of diligence of a good father in the selection and
supervision of their driver is unavailable for breach of contract of
carriage. Perenas operated as a common carrier; and their standard
of care was extraordinary diligence, not only diligence of a good
father.
A carrier is a person or corporation who undertakes to transport or
convey goods from one place to another, gratuitously or for hire.
They may be private or common
Private carrier is one who, without holding himself or itself out to the
public as ready to act for all who may desire his or its services,
undertakes, by special agreement in a particular instance only, to
transport goods or persons from one place to another either
gratutitously or for hire. The diligence required of a private carrier is
only ordinary
Common Carrier is a 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 such services
to the public. Diligence required is to observe extraordinary diligence,
and is presumed to be at fault or to have acted negligently in case of
the loss of effects of passengers, or death or injuries to passengers
The true test for a common carrier is not the quantity or extent of
business actually transacted, or the number of conveyances, BUT
Transpo Digested Cases (P. 1-2 of the Syllabus) 15
WHETHER the undertaking is a part of the activity that he has held
out to the general public as his business or occupation.
The Perenas held themselves out as a ready transportation
indiscriminately to the students of a particular school living within or
near where they operated the service and for a fee. Perena, being a
common carrier, was already presumed to be negligent at the time of
the accident because death occurred to their passenger. The
omissions of care on the part of the driver constituted negligence.
Cruz vs. Sun Holidays 622 SCRA 389
Facts:
In 2000 newly weds Ruelito and his wife brought a package tour
contract from Sun Holidays. The tour was scheduled from September
9- 11, 2016 inclusive of transportation to and from the resort. On the
last day, due to heavy rains the day before and heavy winds, the
couple along with other guests trekked to the other side of the beach
where they boarded M/B Coco Beach III. Shortly after the boat sailed,
it started to rain and when the reached the open seas the wind got
stronger causing the boat to tilt from side to side and eventually
capsized putting all passengers underwater. Ruelito and his wife
perished from the accident which, prompted his parents to filed a
complaint for damages against Sun Holidays alleging that the latter
failed to observed extraordinary diligence as common carrier in
allowing the boat to sail despite a storm warning. Sun Holidays
denied responsibility claiming that they are not a common carrier
hence they are only required to observe ordinary diligence and the
accident was due to a fortuitous event.
Issue:
W/N Sun Holidays is a common carrier within the ambit of the law
hence liable for damages.
Ruling:
YES. Article 1732 of the Civil Code defining “common carriers” has
deliberately refrained from making distinctions on whether the
carrying of persons or goods is the carrier’s principal business,
whether it is offered on a regular basis, or whether it is offered to the
general public. The intent of the law is thus to not consider such
distinctions. Otherwise, there is no telling how many other
distinctions may be concocted by unscrupulous businessmen engaged
in the carrying of persons or goods in order to avoid the legal
obligations and liabilities of common carriers. The evidence shows
that PAGASA issued 24-hour public weather forecasts and tropical
cyclone warnings for shipping on September 10 and 11, 2000 advising
of tropical depressions in Northern Luzon, which would also affect the
province of Mindoro. By the testimony of Dr. Frisco Nilo, supervising
weather specialist of PAGASA, squalls are to be expected under such
weather condition. A very cautious person exercising the utmost
diligence would thus not brave such stormy weather and put other
people’s lives at risk. The extraordinary diligence required of common
carriers demands that they take care of the goods or lives entrusted
to their hands as if they were their own. This respondent failed to do.
Transpo Digested Cases (P. 1-2 of the Syllabus) 16

NATIONAL STEEL CORPORATION v. COURT OF APPEALS
G.R. No. 112287 December 12, 1997
Panganiban, J.
Doctrine:
The stringent provisions of the Civil Code on common carriers
protecting the general public cannot justifiably be applied to a private
carrier.
Facts:
Plaintiff National Steel Corporation (NSC) as Charterer and defendant
Vlasons Shipping, Inc. (VSI) as Owner, entered into a Contract of
Voyage Charter Hire whereby NSC hired VSI’s vessel, the MV Vlasons I
to make one voyage to load steel products at Iligan City and discharge
them at North Harbor, Manila. The handling, loading and unloading of
the cargoes were the responsibility of the Charterer.
The skids of tinplates and hot rolled sheets shipped were allegedly
found to be wet and rusty. Plaintiff, alleging negligence, filed a claim
for damages against the defendant who denied liability claiming that
the MV Vlasons I was seaworthy in all respects for the carriage of
plaintiff’s cargo; that said vessel was not a “common carrier”
inasmuch as she was under voyage charter contract with the plaintiff
as charterer under the charter party; that in the course its voyage, the
vessel encountered very rough seas.
Issue:
Whether or not the provisions of the Civil Code on common carriers
pursuant to which there exists a presumption of negligence against
the common carrier in case of loss or damage to the cargo are
applicable to a private carrier.
Held:
No. In a contract of private carriage, the parties may freely stipulate
their duties and obligations which perforce would be binding on
them. Unlike in a contract involving a common carrier, private
carriage does not involve the general public. Hence, the stringent
provisions of the Civil Code on common carriers protecting the
general public cannot justifiably be applied to a ship transporting
commercial goods as a private carrier.
It has been held that the true test of a common carrier is the carriage
of passengers or goods, provided it has space, for all who opt to avail
themselves of its transportation service for a fee [Mendoza vs.
Philippine Airlines, Inc., 90 Phil. 836, 842-843 (1952)]. A carrier which
does not qualify under the above test is deemed a private carrier.
“Generally, private carriage is undertaken by special agreement and
the carrier does not hold himself out to carry goods for the general
public.
Because the MV Vlasons I was a private carrier, the ship owner’s
obligations are governed by the foregoing provisions of the Code of
Commerce and not by the Civil Code which, as a general rule, places
the prima facie presumption of negligence on a common carrier.
Transpo Digested Cases (P. 1-2 of the Syllabus) 17

Filcar Transport v Espinas
G.R. No. 174156
June 20, 2012
FACTS:
Respondent Jose A. Espinas was driving his car along Leon Guinto
Street in Manila when he was suddenly hit by another car. Upon
verifying with the LTO, Espinas learned that the owner of the other
car is Filcar. This car was assigned to Filcar's Corporate Secretary Atty.
Candido Flor and, at the time of the incident, was driven by Atty.
Flor's personal driver, Timoteo Floresca.
Espinas sued Filcar for damages. Filcar denied liability, claiming that
the incident was not due to its fault or negligence since Floresca was
not its employee but that of Atty. Flor.
ISSUE: Whether or not Filcar, as registered owner of the motor
vehicle which figured in an accident, may be held liable for the
damages caused to the Espinas
HELD:
Filcar, as registered owner, is deemed the employer of the driver,
Floresca, and is thus vicariously liable under Article 2176 in relation
with Article 2180 of the Civil Code
It is undisputed that Filcar is the registered owner of the motor
vehicle which hit and caused damage to Espinas' car. It is on this basis
that Filcar is primarily and directly liable to Espinas for damages.
As a general rule, one is only responsible for his own act or omission.
Thus, a person will generally be held liable only for the torts
committed by himself and not by another. This general rule is laid
down in Article 2176 of the Civil Code, which provides to wit:
Article 2176. Whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the damage
done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed
by the provisions of this Chapter.
Based on the above-cited article, the obligation to indemnify another
for damage caused by one's act or omission is imposed upon the
tortfeasor himself, i.e., the person who committed the negligent act
or omission. The law, however, provides for exceptions when it
makes certain persons liable for the act or omission of another.
One exception is an employer who is made vicariously liable for the
tort committed by his employee. Article 2180 of the Civil Code states:
Article 2180. The obligation imposed by Article 2176 is demandable
not only for one's own acts or omissions, but also for those of persons
for whom one is responsible.
xxxx
Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks,
even though the former are not engaged in any business or industry.
xxxx
Transpo Digested Cases (P. 1-2 of the Syllabus) 18
The responsibility treated of in this article shall cease when the
persons herein mentioned prove that they observed all the diligence
of a good father of a family to prevent damage.
Under Article 2176, in relation with Article 2180, of the Civil Code, an
action predicated on an employee's act or omission may be instituted
against the employer who is held liable for the negligent act or
omission committed by his employee.
Although the employer is not the actual tortfeasor, the law makes
him vicariously liable on the basis of the civil law principle of pater
familias for failure to exercise due care and vigilance over the acts of
one's subordinates to prevent damage to another. In the last
paragraph of Article 2180 of the Civil Code, the employer may invoke
the defense that he observed all the diligence of a good father of a
family to prevent damage.
It is well settled that in case of motor vehicle mishaps, the registered
owner of the motor vehicle is considered as the employer of the
tortfeasor-driver, and is made primarily liable for the tort committed
by the latter under Article 2176, in relation with Article 2180, of the
Civil Code.
In so far as third persons are concerned, the registered owner of the
motor vehicle is the employer of the negligent driver, and the actual
employer is considered merely as an agent of such owner.
Thus, it is clear that for the purpose of holding the registered owner
of the motor vehicle primarily and directly liable for damages under
Article 2176, in relation with Article 2180, of the Civil Code, the
existence of an employer-employee relationship, as it is understood
in labor relations law, is not required. It is sufficient to establish that
Filcar is the registered owner of the motor vehicle causing damage in
order that it may be held vicariously liable under Article 2180 of the
Civil Code.
Rationale for holding the registered owner vicariously liable
The rationale for the rule that a registered owner is vicariously liable
for damages caused by the operation of his motor vehicle is explained
by the principle behind motor vehicle registration, viz:
The main aim of motor vehicle registration is to identify the owner
so that if any accident happens, or that any damage or injury is
caused by the vehicle on the public highways, responsibility therefor
can be fixed on a definite individual, the registered owner. Instances
are numerous where vehicles running on public highways caused
accidents or injuries to pedestrians or other vehicles without positive
identification of the owner or drivers, or with very scant means of
identification. It is to forestall these circumstances, so inconvenient or
prejudicial to the public, that the motor vehicle registration is
primarily ordained, in the interest of the determination of persons
responsible for damages or injuries caused on public highways.
Employer-employee relationship between registered owner and driver
is irrelevant
Thus, whether there is an employer-employee relationship between
the registered owner and the driver is irrelevant in determining the
liability of the registered owner who the law holds primarily and
directly responsible for any accident, injury or death caused by the
operation of the vehicle in the streets and highways.
The general public policy involved in motor vehicle registration is the
protection of innocent third persons who may have no means of
identifying public road malefactors and, therefore, would find it
Transpo Digested Cases (P. 1-2 of the Syllabus) 19
difficult if not impossible to seek redress for damages they may
sustain in accidents resulting in deaths, injuries and other damages;
by fixing the person held primarily and directly liable for the damages
sustained by victims of road mishaps, the law ensures that relief will
always be available to them.
To identify the person primarily and directly responsible for the
damages would also prevent a situation where a registered owner of
a motor vehicle can easily escape liability by passing on the blame to
anther who may have no means to answer for the damages caused,
thereby defeating the claims of victims of road accidents. We take
note that some motor vehicles running on our roads are driven not by
their registered owners, but by employed drivers who, in most
instances, do not have the financial means to pay for the damages
caused in case of accidents.
Filcar cannot pass on the liability to another party
The agreement between Filcar and Atty. Flor to assign the motor
vehicle to the latter does not bind Espinas who was not a party to and
has no knowledge of the agreement, and whose only recourse is to
the motor vehicle registration.
Filcar cannot use the defense that the employee acted beyond the
scope of his assigned task or that it exercised the due diligence of a
good father of a family to prevent damage
Neither can Filcar use the defenses available under Article 2180 of the
Civil Code – that the employee acts beyond the scope of his assigned
task or that it exercised the due diligence of a good father of a family
to prevent damage – because the motor vehicle registration law, to a
certain extent, modified Article 2180 of the Civil Code by making
these defenses unavailable to the registered owner of the motor
vehicle. Thus, for as long as Filcar is the registered owner of the car
involved in the vehicular accident, it could not escape primary liability
for the damages caused to Espinas.
Filcar's recourse is against the actual employer of the driver and the
driver himself
This does not mean, however, that Filcar is left without any recourse
against the actual employer of the driver and the driver himself.
Under the civil law principle of unjust enrichment, the registered
owner of the motor vehicle has a right to be indemnified by the actual
employer of the driver of the amount that he may be required to pay
as damages for the injury caused to another.
o Registered owner is deemed employer of the driver and is thus
vicariously liable under Article 2176 in relation with Article 2180 of
the Civil Code
o The main aim of motor vehicle registration is to identify the owner so
that if any accident happens, or that any damage or injury is caused
by the vehicle on public highways, responsibility therefor can be fixed
on a definite individual, the registered owner.
o The motor vehicle registration law modified Article 2180 to a certain
extent so that the defense available thereunder cannot be used by
the registered owner
o The registered owner can recover from the actual owner and the
driver under the doctrine of unjust enrichment
Transpo Digested Cases (P. 1-2 of the Syllabus) 20
 Duavit vs. CA, Sarmiento & Catuar G.R. No. 82318 May 18, 1989
Facts:
Private respondents were on board a jeep when they met an accident
with another jeep driven by Sabiniano. This accident caused injuries
to private respondents, thus they filed a case for damages against
driver Salbiniano and owner of the jeep Duavit. Duavit admits
ownership of the jeep but contends that he should not be held liable
since Salbiniano is not his employee and that the jeep was taken by
Salbiniano without his (Duavit) consent.
Issue:
Whether or not the owner of a private vehicle which figured in an
accident can be held liable as an employer when the said vehicle was
neither driven by an employee of the owner nor taken with his
consent.
Held:
No, an owner of a vehicle cannot be held liable for an accident
involving the said vehicle if the same was driven without his consent
or knowledge and by a person not employed by him.
To hold the petitioner liable for the accident caused by the negligence
of Sabiniano who was neither his driver nor employee would be
absurd as it would be like holding liable the owner of a stolen vehicle
for an accident caused by the person who stole such vehicle.
PCI LEASING AND FINANCE, INC.,
- versus -
UCPB GENERAL INSURANCE CO., INC.
G.R. No. 162267
(July 4, 2008)
FACTS:
A Mitsubishi Lancer car owned by UCPB, insured with UCPB General
Insurance Co., was traversing the Laurel
Highway, Barangay Balintawak, LipaCity. It was driven by Flaviano Isaac
with Conrado Geronimo (Asst. Manager of said bank), was hit and bumped
by an 18-wheeler Fuso Tanker Truck, owned by defendants-appellants PCI
Leasing & Finance, Inc. allegedly leased to and operated by defendant-
appellant Superior Gas & Equitable Co., Inc. (SUGECO) and driven by its
employee, defendant appellant Renato Gonzaga. The impact caused heavy
damage to the Mitsubishi Lancer car resulting in an explosion of the rear part
of the car. The driver and passenger suffered physical injuries. However, the
driver defendant-appellant Gonzaga continued on its way to its destination
and did not bother to bring his victims to the hospital.
As the 18-wheeler truck is registered under the name of PCI Leasing,
repeated demands were made by plaintiff-appellee for the payment of the
aforesaid amounts. However, no payment was made. PCI Leasing and
Finance, Inc., (petitioner) interposed the defense that it could not be held
liable for the collision, since the driver, Gonzaga, was not its employee, but
that of its co-defendant SUGECO. In fact, it was SUGECO, that was the actual
operator of the truck, pursuant to a Contract of Lease signed by petitioner
and SUGECO. Petitioner, however, admitted that it was the owner of the
truck in question. RTC rendered judgment in favour of UCPB General
Transpo Digested Cases (P. 1-2 of the Syllabus) 21
Insurance and ordered PCI Leasing and Gonzaga, to pay jointly and severally
the former. CA affirmed with the lower court’s decision.
ISSUES:
1) Whether petitioner, as registered owner of a motor vehicle that figured in
a quasi-delict may be held liable, jointly and severally, with the driver thereof,
for the damages caused to third parties.
2) Whether petitioner, as a financing company, is absolved from liability by
the enactment of Republic Act (R.A.) No. 8556, or the Financing Company Act
of 1998.
RULING:
1) YES. The principle of holding the registered owner of a vehicle liable
for quasi-delicts resulting from its use is well-established in jurisprudence. As
explained in the case of Erezo v. Jepte, thus:
Registration is required not to make said registration the
operative act by which ownership in vehicles is transferred,
as in land registration cases, because the administrative
proceeding of registration does not bear any essential
relation to the contract of sale between the parties
(Chinchilla vs. Rafael and Verdaguer, 39 Phil. 888), but to
permit the use and operation of the vehicle upon any public
highway (section 5 [a], Act No. 3992, as amended.) The main
aim of motor vehicle registration is to identify the owner so
that if any accident happens, or that any damage or injury is
caused by the vehicle on the public highways,
responsibility therefor can be fixed on a definite individual,
the registered owner. Instances are numerous where
vehicles running on public highways caused accidents or
injuries to pedestrians or other vehicles without positive
identification of the owner or drivers, or with very scant
means of identification. It is to forestall these circumstances,
so inconvenient or prejudicial to the public, that
the motor vehicle registration is primarily ordained, in the
interest of the determination of persons responsible for
damages or injuries caused on public highways.
2) NO. The new law, R.A. No. 8556, notwithstanding developments in foreign
jurisdictions, do not supersede or repeal the law on compulsory motor
vehicle registration. No part of the law expressly repeals Section 5(a) and (e)
of R.A. No. 4136, as amended, otherwise known as the Land Transportation
and Traffic Code. Thus, the rule remains the same: a sale, lease, or financial
lease, for that matter, that is not registered with the Land Transportation
Office, still does not bind third persons who are aggrieved
in tortious incidents, for the latter need only to rely on the public registration
of a motor vehicle as conclusive evidence of ownership. A lease such as the
one involved in the instant case is an encumbrance in contemplation of law,
which needs to be registered in order for it to bind third parties. Under this
policy, the evil sought to be avoided is the exacerbation of the suffering of
victims of tragic vehicular accidents in not being able to identify a guilty
party. A contrary ruling will not serve the ends of justice. The failure to
register a lease, sale, transfer or encumbrance, should not benefit the parties
responsible, to the prejudice of innocent victims.
Transpo Digested Cases (P. 1-2 of the Syllabus) 22

Teja Marketing and/or Angel Jaucian v. IAC and Pedro Nale
G.R. No. L-65510 March 9, 1987
Paras, J.
FACTS:
Jaucian bought from the Nale a motorcycle with complete
accessories and a sidecar; out of the total purchase price the Jaucian
gave a downpayment of 1,700.00 with a promise thathe would pay
Nale the balance within sixty days. The Jaucian, however, failed to
complywith his promise and so upon his own request, the period of
paying the balance wasextended to one year in monthly installments
until January 1976 when he stopped paying any more a chattel
mortgage was constituted as a security for the payment of the
balance of thepurchase price
It has been the practice of financing firms that whenever
there is a balance of thepurchase price the registration papers of the
motor vehicle subject of the sale are notgiven to the buyer
The motorcycle sold to the defendant was first mortgaged to the Teja
Marketing by Jaucianbecause the latter had no franchise of his own
(CPC) so he attached the unit to Nale’s MCHLine
The agreement of the parties was for Nale to undertake the yearly
registration of themotorcycle with the Land Transportation
Commission; pursuant to this agreement
Jauciangave Nale P90.00, the P8.00 would be for the mortgage fee
and the P82.00 for theregistration fee of the motorcycle; Nale failed
to register the motorcycle on the groundthat the Jaucian failed to
comply with some requirements such as the payment of theinsurance
premiums and the bringing of the motorcycle to the LTC for
stenciling, Nalesaying that the defendant was hiding the motorcycle
from him; Nale explained that thoughthe ownership of the
motorcycle was already transferred to Jaucian, the vehicle was
stillmortgaged with the consent of the Jaucian to the Rural Bank of
Camaligan for the reasonthat all motorcycle purchased from Nale on
credit was rediscounted with the bank
Because of the failure of Nale to register the motorcycle Jaucian
suffered damages
whenhe failed to claim any insurance indemnity for the more than tw
o times that themotorcycle figured in accidents
Nale filed an action for collection of sum of money with damages
against Nale
ISSUE:
WON not respondent court erred in applying the doctrine of pari
delicto
HELD:
No.
kabit system is contrary to public policy and, therefore, void and in
existent under Article1409 of the Civil Code; the court will not aid
either party to enforce an illegal contract, butwill leave both where it
finds then
Transpo Digested Cases (P. 1-2 of the Syllabus) 23
Art. 1412: “If the act in which the unlawful or forbidden cause
consists does not constitutea criminal offense, the following rules
shall be observed: 1. When the fault is on the part of both contracting
parties, neither may recover that he has given by virtue of the
contract,or demand, the performance of the other’s undertaking.”
Lita Enterprises, Inc. v. Second Civil Cases Division, IAC, Nicasio
Ocampo andFrancisca Garcia
G.R. No. L-64693 April 27, 1984
Escolin, J.
FACTS:
Ocampo and Garcia – purchased in installment from the Delta Motor
Sales Corporation 5 Toyota Corona Standard cars to be used as
taxicabs; they had no franchise to operatetaxicabs, so they contracted
with Lita Enterprises for the use of the latter’s certificate of public
convenience in consideration of an initial payment of 1,000.00 and a
monthly rentalof 200.00 per taxicab unit; the aforesaid cars were
then registered in the name of LitaEnterprises
One of the taxicabs driven by Ocampo and Garcia’s employee,
Emeterio Martin, collidedwith a motorcycle whose driver, Florante
Galvez, died from the head injuries sustainedtherefrom
A criminal case was filed against the driver Martin, while a civil case
for damages wasinstituted by heir of the victim against Lita
Enterprises
ISSUE:
WON Lita Enterprises is liable to the heir of the victim who died as a
result of
thegross negligence of Ocampo and Garcia’s driver while driving one
private respondents’taxicabs
HELD:
Yes.
kabit system
–
system whereby a person who has been granted a certificate of conv
enience allows another person who owns motors vehicles to operate
under suchfranchise for a fee; contrary to public policy and,
therefore, void and inexistent underArticle 1409 of the Civil Code; as
a result, the court will not aid either party to enforce anillegal
contract, but will leave them both where it finds them (pari delicto
rule)
Art. 1412: “If the act in which the unlawful or forbidden cause
consists does not constitutea criminal offense, the following rules
shall be observed; (1) when the fault, is on the
partof both contracting parties, neither may recover what he has
Transpo Digested Cases (P. 1-2 of the Syllabus) 24
given by virtue of thecontract, or demand the performance of the
other’s undertaking.”
the defect of inexistence of a contract is permanent and incurable,
and cannot be cured byratification or by prescription.
LIM v. CA
G.R. No. 125817, January 16, 2002
FACTS:
Sometime in 1982 private respondent Donato Gonzales purchased an Isuzu
passenger jeepney, plying the MonumentoBulacan route, from
Gomercino Vallarta. While Gonzalescontinued offering the
jeepney for public transport services he did not have the registration
of t h e vehicle transferred in his name nor did
h e s e c u r e f o r h i m s e l f a c e r t i f i c a t e o f p u b l i c convenience
for its operation. Thus, Vallarta remained on record as its registered
owner and operator. On 22 July 1990, while the jeepney was running
northbound along the North Diversion Road, Meycauayan, Bulacan, it
collided with a ten-wheeler-truck owned by petitioner Abelardo Lim
andd r i v e n b y h i s c o -
petition er Esmadito Gunnab an. Gunn aban owned resp
o n s i b i l i t y f o r t h e accident, explaining that while he was
traveling towards Manila the truck suddenly lost its brakes.
To avoid colliding with another vehicle, he swerved to the
left until he reached the center island. However, as the center island
eventually came to an end, he veered farther to the left until he smashed into
a Ferroza automobile, and later, into private respondent's
passenger jeepney driven Virgilio Gonzales. The impact caused
severe damage to both the Ferroza and the passenger jeepney and left
one (1) passenger dead and many others wounded. Lim shouldered the
costs for hospitalization of the wounded, compensated the
heirs of the deceased passenger, and had the Ferroza restored to
good condition. He also offered to have the passenger jeepney
repaired at his shop which Gonzales did not accept. Lim then offered
him P20,000.00 which was again rejected. Instead, Gonzales
demanded a brand-new jeep or the amount of P236,000.00. Lim
increased his bid to P
40,000.00 but Gonzales also rejected it. Hence, Gonzales filed a complaint
against the petitioners. Meanwhile, the damaged passenger jeepney was
left by the roadside to corrode and decay.
Gonzales explained that he had
no capability, financial or otherwise, to tow
the damagedvehicle.T h e t r i a l c o u r t u p h e l d G o n z a l e s ’ c l a i
m a n d a w a r d e d h i m P 2 3 6 , 0 0 0 . 0 0 a s c o m p e n s a t o r y dam
ages. The trial court held that as vendee and current owner
of the passenger jeepney, Gonzales stood as the real party
in interest. Gunnaban was found by the trial court to have
caused the accident since he panicked in the face of an emergency.
On the other hand, Lim was held liable for Gunnaban's negligence for
Gunnaban doubled as a mechanic of the truck although he was not
trained to do so. The petitioners appealed to the CA which
affirmed the decision of the trial court. The CA concluded
that while an operator under the kabit system could not sue
without joining the registered owner of the vehicle as his principal, equity
demanded that the present case be made an exception. Hence, this petition.
ISSUE:
Whether or not Donato Gonzales was the real party in interest in the
suit, despite thefact that he is not the registered owner under the certificate of
public convenience.
Transpo Digested Cases (P. 1-2 of the Syllabus) 25

HELD:
YES. The kabit system is an arrangement whereby a person who has
been granted a certificate of public convenience allows other persons
who own motor vehicles to operate them
under his license, sometimes for a fee or percentage of the earnings.
Although the parties to such an agreement are not outrightly
penalized by law, the kabit system is invariably recognized as being
contrary to public policy and therefore void and Inexistent under Art.
1409 of the CivilCode. I n t h e e a r l y c a s e o f Dizon v. Octavio
the Court explained that one of the primary factors
considered in the granting of a certificate of public
convenience for the business of public transportation is the
financial capacity of the holder of the license, so that liabilities arising
from accidents may be duly compensated. The kabit
system renders illusory such purpose and, worse, may still be
availed of by the grantee to escape civil liability caused by a negligent use of a
vehicle owned by another and operated under his license. If a
registered owner is allowed to escape liability by proving who the
supposed owner of the vehicle is, it would be easy for him to
transfer the subject vehicle to another who possesses no
property with which to respond financially for the damage done. In
the present case it is at once apparent that the evil sought to be
prevented in enjoining the
kabit system does not exist.
First , neither of the parties to the pernicious kabit system is being
held liable for damages.
Second , the case arose from the negligence of another vehicle in using the
public road to whom no representation, or misrepresentation, as
regards the ownership
ando p e r a t i o n o f t h e p a s s e n g e r j e e p n e y w a s m a d e a n d
t o w h o m n o s u c h r e p r e s e n t a t i o n , o r misrepresentation, was
necessary. Thus it cannot be said that private respondent Gonzales and the
registered owner of the jeepney were in estoppel for leading the
public to believe that
the jeepney belonged to the registered owner.
Third , t h e r i d i n g public was not bothered
n o r inconvenienced at the very least by the illegal
arrangement. On the contrary, it was private respondent
himself who had been wronged and was seeking compensation for
the damage done to him. Certainly, it would be the height of inequity to deny
him his right. In light of the foregoing, it is evident that private
respondent has the right to proceed against petitioners for the
damage caused on his passenger jeepney as well as on his business.
Any effort then to frustrate his claim of damages by the ingenuity
with which petitioners framed the issue should be discouraged, if not
repelled. The Court also upheld that it is but
just to award Gonzales 236,000.00 as compensatory damages
for indemnification for damages comprehends not only the value of
the loss suffered but also that of the profits which the obligee failed to obtain.
___________________________________________________
Spouses Hernandez
v
Spouses DolorG.R. No. 160286. July 30, 2004
FACTS:
Lorenzo Menard Boyet Dolor, Jr. was driving an owner-type jeepney
owned by hermother, Margarita, towards Anilao, Batangas. As he was
traversing the road, his vehiclecollided with a passenger jeepney
driven by petitioner Juan Gonzales and owned by his co-petitioner
Francisco Hernandez. Boyet and his passenger died. Passengers also
Transpo Digested Cases (P. 1-2 of the Syllabus) 26
on boardthe owner-type jeep, which was totally wrecked, suffered –
physical injuries. The collisionalso damaged the passenger jeepney of
one can be liablefor the acts or omission of another whom he is
Francisco Hernandez and caused physical injuriesto its passengers.
responsible for, meaning that an employer isaccountable for the
Respondents commenced an action for damages alleging that driver
actions of his employees. Article 2194 categorically states
JuanGonzales was guilty of negligence and lack of care and that the
thatresponsibility of two or more persons who are liablefor quasi-
Hernandez spouses wereguilty of negligence in the selection and
delict is solidary. TheHernandez spouses maintained that Julian
supervision of their employees. Petitionerscountered that the
Gonzales is not their employee because thelatter pays them daily for
proximate cause of the death and injuries sustained by the
the use of the jeepney. They argued that they are practicing a
passengers ofboth vehicles was the recklessness of Boyet who was
driving in a zigzagging manner underthe influence of alcohol. lease agreement using the “boundary system”. SC held that there
Petitioners also alleged that Gonzales was not the driver-employeeof exists an employer-employee relationship because by agreeing with
the Hernandez spouses as the former only leased the jeepney on a spouses Hernandez, there would be aviolation of the Public Service
daily basis. Hernandezspouses further claimed that even if an Law and the riding public is placed at the mercy of recklessand
employer-employee relationship is found to existbetween them, they irresponsible drivers because most drivers are in no position to pay
cannot be held liable because as employers they exercised due care for damages whenaccidents occur.
inthe selection and supervision of their employee. The trial court
rendered a decision in favorof respondents. CA affirmed with
modifications. Hence the present petition.
***** END ****
ISSUE:

W/N Hernandez spouses are solidarily liable with Juan Gonzales,

although it is ofrecord that they were not in the passenger jeepney
when the accident occurred.

HELD:YES.

They are still answerable under several provisions of the Civil Code
namelyArticle 2180 and Article 2176. While the above provisions do
not expressly provide for thesolidary liability, they should be read in
consonance with Article 2180
Transpo Digested Cases (P. 1-2 of the Syllabus) 27