TRANSPORTATION LAW CASE DIGESTS (BATCH 1)

CANGCO vs. MANILA RAILROAD CO. the case of Rakes v. Atlantic Gulf. It is not accurate to say that
G.R. No. L-12191, October 14, 1918 proof of diligence and care in the selection and control of the
servant relieves the master from liability fro the latter’s act.
FACTS:
The fundamental distinction between obligation of this
character and those which arise from contract, rest upon the
Jose Cangco was in the employment of Manila Railroad
fact that in cases of non-contractual obligations it is the
Company. He lived in the pueblo of San Mateo, in the province
wrongful or negligent act or omission itself which creates the
of Rizal, which is located upon the line of the defendant
vinculum juris, whereas in contractual relations the vinculum
railroad company; and in coming daily by train to the
exists independently of the breach of the voluntary duty
company’s office in the city of Manila where he worked, he
assumed by the parties when entering into the contractual
used a pass, supplied by the company, which entitled him to
relation. When the source of obligation upon which plaintiff’s
ride upon the company’s trains free of charge.
cause of action depends is a negligent act or omission, the
burden of proof rest upon the plaintiff to prove negligence. On
During his ride in the train he arose from his seat and makes
the other hand, in contractual undertaking, proof of the
his way to the exit while the train is still on travel. When the
contract and of its nonperformance is sufficient prima facie to
train has proceeded a little farther Jose Cangco step down into
the cement platform but unfortunately step in to a sack of warrant recovery.
watermelon, fell down and rolled under the platform and was
The negligence of employee cannot be invoked to relieve the
drawn under the moving car which resulting to his arm to be
employer from liability as it will make juridical persons
crashed and lacerated. He was rushed to the hospital where
his arm was amputated, and subsequently sued the company completely immune from damages arising from breach of
and the employee who put the sack of watermelon in the their contracts. Defendant was therefore liable for the injury
suffered by plaintiff, whether the breach of the duty were to
platform.
be regarded as constituting culpa aquiliana or contractual. As
Manresa discussed, whether negligence occurs as an incident
The accident occurred between 7 and 8 o’ clock on the dark
in the course of the performance of a contractual undertaking
night. It is that time of the year that may we considered as
or is itself the source of an extra-contractual obligation, its
season to harvest watermelon explaining why there are sacks
essential characteristics are identical. There is always an act or
of watermelon in the platform.
omission productive of damage due to carelessness or
inattention on the part of the defendant.
The trial court after having found negligence on the part of
defendant, adjudged saying that plaintiff failed to use due
The contract of defendant to transport plaintiff carried with
caution in alighting from the coach and was therefore
it, by implication, the duty to carry him in safety and to provide
precluded from recovering, hence this appeal.
safe means of entering and leaving its trains. Contributory
negligence on the part of petitioner as invoked by defendant
ISSUE:
is untenable. In determining the question of contributory
negligence in performing such act- that is to say, whether the
Whether or not respondent’s employees were guilty of
passenger acted prudently or recklessly- age, sex, and physical
negligence.
condition of the passenger are circumstances necessarily
affecting the safety of the passenger, and should be
RULING:
considered. It is to be noted that the place was perfectly
familiar to plaintiff as it was his daily routine.
YES. It cannot be doubted that the employees of defendant
were guilty of negligence in piling these sacks on the platform
in the manner stated. It necessarily follows that the defendant SILVERIO V. MENDOZA
company is liable for the damage thereby occasioned unless G.R. NO. L-24471 AUGUST 30, 1968
recovery is barred by the plaintiff’s own contributory
negligence. FACTS:

It is to note that the foundation of the legal liability is the In the evening of February 22, 1954 (9PM to 9:30PM), a
contract of carriage. However Art. 1903 relates only to culpa passenger bus of Philippine Rabbit Bus Lines was then driven
aquiliana and not to culpa contractual, as the Court cleared on by Silverio Marchan fell into a ditch in barrio Malanday, Polo,

DIGESTED BY ERUM, FUENTES, OLACO, PANIZA, PARAO, RIVERA, TAN, VILLAHERMOSA & VILLARIN 1

Bulacan, while travelling on its way to Manila. As a result,
Arsenio Mendoza, his wife and child, were thrown off the bus
resulting to multiple injuries.
The bus was travelling on a high speed while purposely trying
to overtake a parked truck. However, there was an incoming
vehicle on the opposite road which he tried to avoid. He
applied the brakes but due to his high speed, one of the back
wheel fell into a ditch.
Consequently, Marchan, was prosecuted and convicted for
serious, less serious and slight physical injuries through
reckless imprudence. Now, Mendoza sought to recover
damages against Marchan and Philippine Rabbit Bus Lines for
their breach of contract of carriage for its failure to safely
convey them to their destination as well as for the criminal
negligence on the part of its driver.
Now, Philippine Rabbit Bus Lines contended that there was no
implied contract of carriage between them and Mendozas.
ISSUE:
Whether there was a contract of carriage between the Bus
Line and Mendozas thus holding them liable for such breach.
HELD:
Yes. It is undisputed by the evidence on record that appellant
Silverio Marchan was then at the steering wheel of the vehicle
of the defendant transportation company at that moment, the
riding public is not expected to inquire from time to time
before they board the passenger bus whether or not the
driver who is at the steering wheel of said bus was authorized
to drive said vehicle or that said driver is acting within the
scope of his authority and observing the existing rules and
regulations required of him by the management.
To hold otherwise would in effect render Article 1759
ineffective. It is clear from the above Civil Code provision that
common carriers cannot escape liability "for the death of or
injuries to passengers through the negligence and 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”. "Direct and immediate" liability of the carrier
under the above legal provision, "not merely subsidiary or
secondary.” According to the facts as above disclosed, which
this Court cannot disturb, the applicability of Article 1759 is
indisputable.
DIGESTED BY ERUM, FUENTES, OLACO, PANIZA, PARAO, RIVERA, TAN, VILLAHERMOSA & VILLARIN
TRANSPORTATION LAW CASE DIGESTS (BATCH 1)
MARANAN VS. PEREZ
G.R. NO. L-22272; JUNE 26, 1967
FACTS:
Rogelio Corachea, a passenger in a taxicab owned and
operated by Pascual Perez, was stabbed and killed by the
driver, Simeon Valenzuela. Valenzuela was found guilty for
homicide by the Court of First Instance and was sentenced to
suffer Imprisonment and to indemnify the heirs of the
deceased in the sum of P6000. While pending appeal, mother
of deceased filed an action in the Court of First Instance of
Batangas to recover damages from Perez and Valenzuela.
Defendant Perez claimed that the death was a caso fortuito
for which the carrier was not liable. The court a quo, after trial,
found for the plaintiff and awarded her P3,000 as damages
against defendant Perez. The claim against defendant
Valenzuela was dismissed. From this ruling, both plaintiff and
defendant Perez appealed to this Court, the former asking for
more damages and the latter insisting on non-liability.
Defendant-appellant relied solely on the ruling enunciated in
Gillaco vs. Manila Railroad Co. that the carrier is under no
absolute liability for assaults of its employees upon the
passengers.
ISSUE:
Whether or not Perez should be held liable for the death of
the passenger.
HELD:
Yes. The basis of the carrier's liability for assaults on
passengers committed by its drivers rests on the principle that
it is the carrier's implied duty to transport the passenger
safely. As between the carrier and the passenger, the former
must bear the risk of wrongful acts or negligence of the
carrier's employees against passengers, since it, and not the
passengers, has power to select and remove them. 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. The liability of the common carriers does
not cease upon proof that they exercised all the diligence of a
good father of a family in the selection and supervision of their
employees. (Art. 1759)
As can be gleaned from Art. 1759, the Civil Code of the
Philippines evidently follows the rule based on the second
view. At least three very cogent reasons underlie this rule.
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(1) the special undertaking of the carrier requires that it
furnish its passenger that full measure of protection afforded
by the exercise of the high degree of care prescribed by the
law, inter alia from violence and insults at the hands of
strangers and other passengers, but above all, from the acts
of the carrier's own servants charged with the passenger's
safety;
(2) said liability of the carrier for the servant's violation of duty
to passengers, is the result of the formers confiding in the
servant's hands the performance of his contract to safely
transport the passenger, delegating therewith the duty of
protecting the passenger with the utmost care prescribed by
law; and
(3) as between the carrier and the passenger, the former must
bear the risk of wrongful acts or negligence of the carrier's
employees against passengers, since it, and not the
passengers, has power to select and remove them.
Accordingly, it is the carrier's strict obligation to select its
drivers and similar employees with due regard not only to
their technical competence and physical ability, but also, no
less important, to their total personality, including their
patterns of behavior, moral fibers, and social attitude.
Applying this stringent norm to the facts in this case,
therefore, the lower court rightly adjudged the defendant
carrier liable pursuant to Art. 1759 of the Civil Code. The
dismissal of the claim against the defendant driver was also
correct. Plaintiff's action was predicated on breach of contract
of carriage and the cab driver was not a party thereto.
YU CON vs GLICERIO IPIL, NARCISO LAURON, and JUSTO
SOLAMO
G.R. No. L-10195 December 29, 1916
FACTS:
Lauron and Yu Con executed a contract wherein money and
merchandise belonging to Yu Con were to be transported by
a banca named Maria belonging to Lauron, which Ipil was
master and Solamo, supercargo, from the port of Cebu to the
town of Catmon of the Province of Cebu.
Lauron delivered to Ipil, and Solamo the sum of P450 for the
purpose of its delivery to the latter's shop in Catmon.
However, the money disappeared from the craft while it was
anchored in the port of Cebu and ready to sail for its
destination.
DIGESTED BY ERUM, FUENTES, OLACO, PANIZA, PARAO, RIVERA, TAN, VILLAHERMOSA & VILLARIN
TRANSPORTATION LAW CASE DIGESTS (BATCH 1)
Thus, Yu Con filed an action to recover from the defendants
jointly and severally the sum of P450. Yu Con based his action
on the charge that the disappearance of said sum was due to
the abandonment, negligence, or voluntary breach, on the
part of the defendants, of the duty they had in respect to the
safe-keeping of the aforementioned sum.
The trial court held that the sole cause of the disappearance
of the money from the said banca was the negligence of the
master and the supercargo, the defendants Ipil and Solamo,
respectively, and that the defendant Lauron was responsible
for that negligence, as owner of the banca, pursuant to
articles 589, 587, and 618 of the Code of Commerce, Yu Con
therefore being entitled to recover the amount lost.
ISSUE:
W/N the defendants were liable for the amount lost.
HELD:
YES. In order that a thing may be transported, it must be
delivered to the carrier from the time it is delivered to the
carrier or shipper until it is received by the consignee, the
carrier has it in his possession, as a necessary condition for its
transportation, and is obliged to preserve and guard it;
wherefore it is but natural and logical that he should be
responsible for it.
The said two defendants being the depositaries of the sum in
question, and they having failed to exercise for its safe-
keeping the diligence required by the nature of the obligation
assumed by them and by the circumstances of the time and
the place, it is evident that, in pursuance of the provisions of
articles 1601 and 1602, in their relation to articles 1783 and
1784, and as prescribed in articles 1770, of the Civil Code, they
are liable for its loss or misplacement and must restore it to
Yu Con, together with the corresponding interest thereon as
an indemnity for the losses and damages caused him through
the loss of the said sum.
With respect to Lauron, as the shipowner. He should be held
liable. As in maritime commerce, the shippers and passengers
in making contracts with the captain do so through the
confidence they have in the shipowner who appointed him;
they presume that the owner made a most careful
investigation before appointing him, and, above all, they
themselves are unable to make such an investigation, and
even though they should do so, they could not obtain
complete security, inasmuch as the shipowner can, whenever
he sees fit, appoint another captain instead.
3

The shipowner is in the same case with respect to the
members of the crew, for, though he does not appoint
directly, yet, expressly or tacitly, he contributes to their
appointment.
On the other hand, if the shipowner derives profits from the
results of the choice of the captain and the crew, when the
choice turns out successful, it is also just that he should suffer
the consequences of an unsuccessful appointment.
Moreover, the Penal Code contains a general principle that
resolves the question under consideration, for it declares that
such persons as undertake and carry on any industry shall be
civilly liable, in default of those who may be criminally liable,
for the misdemeanors and crimes committed by their
subordinates in the discharge of their duties.
The Code of Commerce makes the shipowner liable civilly for
the loss suffered by those who contracted with the captain, in
consequence of the misdemeanors and crimes committed by
the latter or by the members of the crew.
MRR VS BALLESTEROS
G.R. NO. L-19161 APRIL 29, 1966
FACTS:
Private respondents here, plaintiffs below, were passengers
on petitioner's bus, the driver of which was Jose Anastacio. In
Bayombong, Nueva Vizcaya, Anastacio stopped the bus and
got off to replace a defective spark plug. While he was thus
engaged, one Dionisio Abello, an auditor assigned to
defendant company by the General Auditing Office, took the
wheel and told the driver to sit somewhere else. With Abello
driving, the bus proceeded on its way, from time to time
stopping to pick up passengers. Anastacio tried twice to take
the wheel back but Abello would not relinquish it. Then, in the
language of the trial court, "while the bus was negotiating
between Km. posts 328 and 329 (in Isabela) a freight truck ...
driven by Marcial Nocum ... bound for Manila, was also
negotiating the same place; when these two vehicles were
about to meet at the bend of the road Marcial Nocum, in
trying to evade several holes on the right lane, where his truck
was running, swerved his truck towards the middle part of the
road and in so doing, the left front fender and left side of the
freight truck smashed the left side of the bus resulting in
extensive damages to the body of the bus and injuries to
seventeen of its passengers, ... including the plaintiffs herein."
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TRANSPORTATION LAW CASE DIGESTS (BATCH 1)
In rejecting petitioner's contention that the negligence of
Marcial Nocum could not be imputed to it and relieved it from
liability, the trial court found that Dionisio Abello "was
likewise reckless when he was driving the bus at the rate of
from 40 to 50 kilometers per hour on a bumpy road at the
moment of the collision."
Another defense put up by petitioner is that since Abello was
not its employee it should not be held responsible for his acts
ISSUE:
WON petitioner is liable for the injuries suffered by the
private respondents.
HELD:
Yes, Art. 1763. A common carrier is responsible for injuries
suffered by a passenger on account of the willful acts or
negligence of other passengers or of strangers, if the common
carrier's employees through the exercise of the diligence of a
good father of a family could have prevented or stopped the
act or omission.
Sec. 48(b). No professional chauffeur shall permit any
unlicensed person to drive the motor vehicle under his
control, or permit a person, sitting beside him or in any other
part of the car, to interfere with him in the operation of the
motor vehicle, by allowing said person to take hold of the
steering wheel, or in any other manner take part in the
manipulation or control of the car.
It appears further, and so the trial court found, that there
were negotiations between the parties to compromise the
case, as a result of which respondents herein, plaintiffs below,
considerably reduced their claims to the amounts
subsequently awarded in the judgment; that petitioner had in
fact settled the claims of the other passengers who were also
injured in the same accident and even the claim for damages
filed in another action by the owner of the freight truck; and
that the Government Corporate Counsel himself, who
represents herein petitioner, rendered two separate opinions
wherein, after analyzing the facts and the law applicable, he
reached the conclusion that the acts of the bus personnel,
particularly "in allowing Mr. Abello to drive despite two
occasions when the bus stopped and the regular driver could
have taken over, constitute reckless imprudence and wanton
injurious conduct on the part of the MRR employees." On the
basis of those opinions the Government Corporate Counsel
advised petitioner that the offer of the claimants was
reasonable and should be accepted. His advice, however, was
4

not favorably acted upon, petitioner obviously preferring to
litigate.
The issues proposed to be taken up on appeal, as set forth in
the petition, are whether or not Dionisio Abello acted with
reckless negligence while driving petitioner's bus at the time
of the accident, and whether or not petitioner may be held
liable on account of such negligence, considering that he was
not its employee. These are no longer justiciable questions
which would justify our issuing the peremptory writ prayed
for. The first is a question of fact on which the affirmative
finding of respondent court is not reviewable by us; and the
second is one as to which there can be no possible doubt in
view of the provisions of the Civil Code and of the Motor
Vehicle Law hereinbefore cited. There would be no point in
giving the appeal due course.
ROSITO Z. BACARRO, WILLIAM SEVILLA, and FELARIO
MONTEFALCON vs. GERUNDIO B. CASTAÑO, and the COURT
OF APPEALS
G.R. No. L-34597, November 5, 1982
FACTS:
A jeepney was running quite fast and while approaching a
bridge, there was a cargo truck which blew its horn for a right
of way. The jeep gave way but did not change speed. When
the jeep gave way it turned to the right and continued running
with the same speed. In doing so, the driver was not able to
return the jeep to the proper place. Instead, it ran obliquely
towards the canal. Petitioners contend that the proximate
cause of the accident was the negligence of the driver of the
truck.
ISSUE:
Whether the jeepney driver is liable for the accident
RULING:
Yes.
There was a contract of carriage between the parties in which
case the application of Articles 1733, 1755 and 1766 of the
Civil Code which require the exercise of extraordinary
diligence on the part of the jeepney driver should be followed.
The provisions provide:
Art. 1733. Common carriers, from the nature of their business
and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for
DIGESTED BY ERUM, FUENTES, OLACO, PANIZA, PARAO, RIVERA, TAN, VILLAHERMOSA & VILLARIN
TRANSPORTATION LAW CASE DIGESTS (BATCH 1)
the safety of the passengers transported by them, according
to all the circumstances of each case.
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. 1766. In all matters not regulated by this Code, the rights
and obligations of common carriers shall be governed by the
Code of Commerce and by special laws.
Indeed, the hazards of modern transportation demand
extraordinary diligence. A common carrier is vested with
public interest. Under the new Civil Code, instead of being
required to exercise mere ordinary diligence a common
carrier is exhorted to carry the passengers safely as far as
human care and foresight can provide "using the utmost
diligence of very cautious persons." (Article 1755). Once a
passenger in the course of travel is injured, or does not reach
his destination safely, the carrier and driver are presumed to
be at fault.
OLEGARIO BRITO SY vs. MALATE TAXI CAB & GARAGE, INC
G.R. No. L-8937 November 29, 1957
FACTS:
On June 26, 1952, Olegario Brito Sy engaged a taxicab bearing
plate No. Taxi-1130, owned and operated by Malate Taxicab
and Garage, Inc. and driven by Catalino Ermino, to take him to
his place of business at Dencia's Restaurant on the Escolta
where he was the general manager. Upon reaching the Rizal
Monument he told the driver to turn to the right, but the latter
did not heed him and instead countered that they better pass
along Katigbak Drive. At the intersection of Dewey Bolevard
and Katigbak Drive, the taxi collided with an army wagon with
plate No. TPI-695 driven by Sgt. Jesus De quito, as a result of
which Olegario Brito Sy was jarred, jammed and jolted. He was
taken to the Santa Isabel Hospital suffering from bruises and
contusions as well as fractured right leg.
On September 30, 1952, Sy filed action against the Malate
Taxicab & Garage, Inc., based upon a contract of carriage, to
recover damages and attorney’s fees.
On October 2, 1952, the defendant alleged that the collision
subject of the complaint was not due to the negligence of its
driver but to that of Sgt. Jesus Dequito, the driver of the army
wagon; and, by way of counterclaim, sought to recover the
5

sum of P1,000 as damages caused by the alleged malicious
and frivolous action filed against it.
Thereafter, on October 30, 1952, plaintiff presented his
evidence, and on November 20, 1952 judgment was rendered
awarding plaintiff the sum of P14.000 as actual,
compensatory, moral, nominal and exemplary damages
including attorney's fees and costs, with interest at the legal
rate from the filing of the action.
ISSUES:
1. Whether or not the third-party complaint involves a
prejudicial question, and therefore, the main complaint
cannot be decided until the third-party complaint is decided. -
NO
2. Whether or not the trial court erred in not deciding or
making an express finding as to whether the defendant
appellant Malate Taxicab & Garage, Inc. was responsible for
the collision, and hence, civilly responsible to the plaintiff-
appellee. - NO
RULING:
1.
We find no merit in the first assignment of error that the third-
party complaint is a pre-judicial question. "Pre-judicial
question in understood in law to be that which precedes the
criminal action, or that which requires a decision before final
judgment is rendered in the principal action with which said
question is closely connected. Not all previous questions are
pre-judicial questions are necessarily previous", although all
pre-judicial questions are necessarily previous."
In the present case, the third-party complaint is not a pre-
judicial question, as the issue in the main action is not entirely
dependent upon those in the third-party complaint; on the
contrary, it is the third-party complaint that is dependent
upon the main case at least in the amount of damages which
defendant appellant seeks to be reimbursed in its third-party
complaint. Furthermore, the complaint is based on a
contractual obligation of transportation of passenger which
defendant-appellant failed to carry out, and the action is
entirely different and independent from that in the third-party
complaint which is based an alleged tortious act committed by
the third-party defendant Sgt. Dequito.
The main case, therefore, is entirely severable and may be
litigated independently. Moreover, whatever the outcome of
the third-party complaint might be would not in any way
affect or alter the contractual liability of the appellant to
plaintiff. If the collision was due to the negligence of the third-
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TRANSPORTATION LAW CASE DIGESTS (BATCH 1)
party defendant, as alleged, then defendant appellant may file
a separate civil action for damages based on tort ex-delicto or
upon quasi-delict, as the case may be.
2.
Coming to the second assignment of error that the lower court
erred in not making an express finding as to whether
defendant appellant was responsible for the collision, we find
the same to be unjustified. The pertinent, provisions of the
new Civil Code under the heading Common Carriers, are the
following:
ART. 1733. Common carriers, from the nature of their business
and for reason of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for
the safety of the passengers transported by them, according
to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is
further expressed in articles 1734, 1735, and 1745, Nos. 5, 6,
and 7, while the extraordinary diligence for the safety of the
passengers is further set forth in articles 1755 and 1756.
ART. 1755. A common carrier is bound to carry the passengers
to safety 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 of 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. (Emphasis supplied.)
Evidently, under these provisions of law, the court need not
make an express finding of fault or negligence on the part of
the defendant appellant in order to hold it responsible to pay
the damages sought for by the plaintiff, for the action initiated
therefor is based on a contract of carriage and not on tort.
When plaintiff rode on defendant-appellant's taxicab, the
latter assumed the express obligation to transport him to his
destination safely, and to observe extraordinary diligence with
a due regard for all the circumstances, and any injury that
might be suffered by the passenger is right away attributable
to the fault or negligence of the carrier (Article 1756, supra).
This is an exception to the general rule that negligence must
be proved, and it was therefore incumbent upon the carrier to
prove that it has exercised extraordinary diligence as
prescribed in Articles 1733 and 1755 of the new Civil Code.
6

It is noteworthy, however, that at the hearing in the lower
court defendant-appellant failed to appear and has not
presented any evidence at all to overcome and overwhelm the
presumption of negligence imposed upon it by law; hence,
there was no need for the lower court to make an express
finding thereon in view of the provisions of the aforequoted
Article 1756 of the new Civil Code.
Wherefore, the decision of the lower court is hereby affirmed
with cost against the appellant.
NICHOLAS Y. CERVANTES VS. CA
G.R. NO. 125138 / MARCH 2, 1999
FACTS:
On March 27, 1989, the private respondent, Philippines Air
Lines, Inc. (PAL), issued to the herein petitioner, Nicholas
Cervantes (Cervantes), a round trip plane ticket for Manila-
Honolulu-Los Angeles-Honolulu-Manila, which ticket
expressly provided an expiry of date of one year from
issuance, i.e., until March 27, 1990. The issuance of the said
plane ticket was in compliance with a Compromise Agreement
entered into between the contending parties in two previous
suits, docketed as Civil Case Nos. 3392 and 3451 before the
Regional Trial Court in Surigao City. 2
On March 23, 1990, four days before the expiry date of subject
ticket, the petitioner used it. Upon his arrival in Los Angeles on
the same day, he immediately booked his Los Angeles-Manila
return ticket with the PAL office, and it was confirmed for the
April 2, 1990 flight.
Upon learning that the same PAL plane would make a stop-
over in San Francisco, and considering that he would be there
on April 2, 1990, petitioner made arrangements with PAL for
him to board the flight In San Francisco instead of boarding in
Las Angeles.
On April 2, 1990, when the petitioner checked in at the PAL
counter in San Francisco, he was not allowed to board. The
PAL personnel concerned marked the following notation on
his ticket: "TICKET NOT ACCEPTED DUE EXPIRATION OF
VALIDITY."
Aggrieved, petitioner Cervantes filed a Complaint for
Damages, for breach of contract of carriage.
ISSUE:
DIGESTED BY ERUM, FUENTES, OLACO, PANIZA, PARAO, RIVERA, TAN, VILLAHERMOSA & VILLARIN
TRANSPORTATION LAW CASE DIGESTS (BATCH 1)
Whether or not the Award of Damages to Petitioner is proper
HELD:
An award of damages is improper because petitioner failed to
show that PAL acted in bad faith in refusing to allow him to
board its plane in San Francisco.
In awarding moral damages for breach of contract of carriage,
the breach must be wanton and deliberately injurious or the
one responsible acted fraudulently or with malice or bad faith.
14 Petitioner knew there was a strong possibility that he could
not use the subject ticket, so much so that he bought a back-
up ticket to ensure his departure. Should there be a finding of
bad faith, we are of the opinion that it should be on the
petitioner. What the employees of PAL did was one of simple
negligence. No injury resulted on the part of petitioner
because he had a back-up ticket should PAL refuse to
accommodate him with the use of subject ticket.
Neither can the claim for exemplary damages be upheld. Such
kind of damages is imposed by way of example or correction
for the public good, and the existence of bad faith is
established. The wrongful act must be accompanied by bad
faith, and an award of damages would be allowed only if the
guilty party acted in a wanton, fraudulent, reckless or
malevolent manner. 15 Here, there is no showing that PAL
acted in such a manner. An award for attorney's fees is also
improper.
EMMA BUSTAMANTE et al. vs COURT OF APPEALS
G.R. no. 89880, February 6 , 1991
FACTS:
A collision occurred between a truck, a sand and gravel truck
driven by defendant Edilberto Montesiano and owned by
Federico Del Pilar and a Passenger bus along the national road
at about 6:30 am of April 20, 1983 along the national road at
Calibuyo, Tanza, Cavite. The front left side portion (barandilla)
of the body of the truck sideswiped the left side wall of the
passenger bus, ripping off the said wall from the driver’s seat
up to the last rear seat. Due to the impact several passengers
of the bus were thrown out and died as a result of the injuries
they sustained by the collision.
After a careful perusal of the circumstances of the case, the
trial court reached the conclusion "that the negligent acts of
both drivers contributed to or combined with each other in
directly causing the accident which led to the death of the
7

aforementioned persons. It could not be determined from the
evidence that it was only the negligent act of one of them
which was the proximate cause of the collision. In view of this,
the liability of the two drivers for their negligence must be
solidary.
The CA ruled on the contrary, the court held that the bus
driver had the last clear chance to avoid the collision and his
reckless negligence in proceeding to overtake the hand tractor
was the proximate cause of the collision.
ISSUE:
W/N the Doctrine of Last clear chance applies in the case.
RULING:
NO. The doctrine, stated broadly, is that the negligence of the
plaintiff does not preclude a recovery for the negligence of the
defendant where it appears that the defendant, by exercising
reasonable care and prudence, might have avoided injurious
consequences to the plaintiff notwithstanding the plaintiff's
negligence. In other words, the doctrine of last clear chance
means that even though a person's own acts may have placed
him in a position of peril, and an injury results, the injured
person is entitled to recovery. As the doctrine is usually stated,
a person who has the last clear chance or opportunity of
avoiding an accident, notwithstanding the negligent acts of his
opponent or that of a third person imputed to the opponent
is considered in law solely responsible for the consequences
of the accident.
The doctrine cannot be extended into the field of joint
tortfeasors as a test of whether only one of them should be
held liable to the injured person by reason of his discovery of
the latter's peril, and it cannot be invoked as between
defendants concurrently negligent. As against third persons, a
negligent actor cannot defend by pleading that another had
negligently failed to take action which could have avoided the
injury.
The Supreme Court is convinced that the respondent Court
committed an error of law in applying the doctrine of last clear
chance as between the defendants, since the case at bar is not
a suit between the owners and drivers of the colliding vehicles
but a suit brought by the heirs of the deceased passengers
against both owners and drivers of the colliding vehicles.
PHILIPPINE RABBIT BUS LINES, INC. vs. IAC
G.R. Nos. 66102-04, August 30, 1990
DIGESTED BY ERUM, FUENTES, OLACO, PANIZA, PARAO, RIVERA, TAN, VILLAHERMOSA & VILLARIN
TRANSPORTATION LAW CASE DIGESTS (BATCH 1)
FACTS:
About 11:00 o'clock in the morning on December 24, 1966,
private respondents boarded the jeepney owned by spouses
Isidro Mangune and Guillerma Carreon and driven by
Tranquilino Manalo at Dau, Mabalacat, Pampanga bound for
Carmen, Rosales, Pangasinan to spend Christmas at their
respective homes. Although they usually ride in buses, they
had to ride in a jeepney that day because the buses were full.
Their contract with Manalo was for them to pay P24.00 for the
trip. The private respondents' testimonial evidence on this
contractual relationship was not controverted by Mangune,
Carreon and Manalo, nor by Filriters Guaranty Assurance
Corporation, Inc., the insurer of the jeepney, with contrary
evidence.
Upon reaching barrio Sinayoan, San Manuel, Tarlac, the right
rear wheel of the jeepney was detached, so it was running in
an unbalanced position. Manalo stepped on the brake, as a
result of which, the jeepney which was then running on the
eastern lane, made a U-turn, invading and eventually stopping
on the western lane of the road in such a manner that the
jeepney's front faced the south (from where it came) and its
rear faced the north (towards where it was going). The
jeepney practically occupied and blocked the greater portion
of the western lane, which is the right of way of vehicles
coming from the north, among which was Bus No. 753 of
petitioner Philippine Rabbit Bus Lines, Inc. driven by Tomas
delos Reyes. Almost at the time when the jeepney made a
sudden U-turn and encroached on the western lane of the
highway as claimed by Rabbit and delos Reyes, or after
stopping for a couple of minutes as claimed by Mangune,
Carreon and Manalo, the bus bumped from behind the right
rear portion of the jeepney. As a result of the collision, three
passengers of the jeepney (Catalina Pascua, Erlinda Meriales
and Adelaida Estomo) died while the other jeepney
passengers sustained physical injuries.
After conducting the investigation, the police filed with the
Municipal Court of San Manuel, Tarlac, a criminal complaint
against the two drivers for Multiple Homicide. At the
preliminary investigation, a probable cause was found with
respect to the case of Manalo, tyhus, his case was elevated to
the Court of First Instance where Manalo was convicted and
sentenced to suffer imprison
ISSUE:
Whether or not the CFI erred in convicting Manalo.
8

RULING:
NO. The principle about "the last clear" chance, would call for
application in a suit between the owners and drivers of the
two colliding vehicles. It does not arise where a passenger
demands responsibility from the carrier to enforce its
contractual obligations. For it would be inequitable to exempt
the negligent driver of the jeepney and its owners on the
ground that the other driver was likewise guilty of negligence.
The jeepney, which was then traveling on the eastern
shoulder, making a straight, skid mark of approximately 35
meters, crossed the eastern lane at a sharp angle, making a
skid mark of approximately 15 meters from the eastern
shoulder to the point of impact. Hence, delos Reyes could not
have anticipated the sudden U-turn executed by Manalo. The
respondent court did not realize that the presumption was
rebutted by this piece of evidence.
After a minute scrutiny of the factual matters and duly proven
evidence, the Supreme Court found that the proximate cause
of the accident was the negligence of Manalo and spouses
Mangune and Carreon. They all failed to exercise the
precautions that are needed precisely pro hac vice.
In culpa contractual, the moment a passenger dies or is
injured, the carrier is presumed to have been at fault or to
have acted negligently, and this disputable presumption may
only be overcome by evidence that he had observed extra-
ordinary diligence as prescribed in Articles 1733, 1755 and
1756 of the New Civil Code or that the death or injury of the
passenger was due to a fortuitous event.
The negligence of Manalo was proven during the trial by the
unrebutted testimonies of Caridad Pascua, Police Investigator
Tacpal, Police Corporal Cacalda, Manalo’s conviction for the
crime of Multiple Homicide and Multiple Serious Injuries with
Damage to Property thru Reckless Imprudence, and the
application of the doctrine of res ipsa loquitur supra.
JAPAN AIRLINES VS CA
G.R. NO. 118664 AUGUST 7, 1998
FACTS:
Jose Miranda boarded JAL flight No. JL 001 in San Francisco,
California bound for Manila. Also, other passengers left Los
Angeles, California for Manila via JAL flight No. JL 061. Both
flights were to make an overnight stopover at Narita, Japan,
DIGESTED BY ERUM, FUENTES, OLACO, PANIZA, PARAO, RIVERA, TAN, VILLAHERMOSA & VILLARIN
TRANSPORTATION LAW CASE DIGESTS (BATCH 1)
at the airlines' expense, thereafter proceeding to Manila the
following day.
Upon arrival at Narita, Japan on June 14, 1991, they rested in
Hotel Nikko Narita for the night. The next day however, due
to the Mt. Pinatubo eruption, unrelenting ashfall blanketed
NAIA, rendering it inaccessible. Hence, private respondents'
trip to Manila was cancelled indefinitely.
JAL rebooked all the Manila-bound passengers to depart on
June 16, 1991 and also paid for the hotel expenses for their
unexpected overnight stay. On the said date, their long
anticipated flight to Manila was again cancelled due to NAIA's
indefinite closure. At this point, JAL informed the private
respondents that it would no longer defray their hotel and
accommodation expense during their stay in Narita.
NAIA was only reopened to airline traffic on June 22, 1991,
respondents were forced to pay for their accommodations
and meal expenses from their personal funds from June 16 to
June 21, 1991. On June 22, 1991, they arrived Manila.
Respondents filed an action for damages against JAL. They
contended that JAL failed to live up to its duty to provide care
and comfort to its stranded passengers when it refused to pay
for their hotel and accommodation expenses from June 16 to
21, 1991 at Narita, Japan.
On the other hand, JAL denied this allegation and averred that
airline passengers have no vested right to these amenities in
case a flight is cancelled due to "force majeure."
ISSUE:
Whether JAL, as a common carrier has the obligation to
shoulder the hotel and meal expenses of its stranded
passengers until they have reached their final destination,
even if the delay were caused by "force majeure."
HELD:
No. Failure on the part of the common carrier to live up to the
exacting standards of care and diligence renders it liable for
any damages that may be sustained by its passengers.
However, this is not to say that common carriers are
absolutely responsible for all injuries or damages even if the
same were caused by a fortuitous event. To rule otherwise
would render the defense of "force majeure," as an exception
from any liability, illusory and ineffective.
9

Accordingly, there is no question that when a party is unable
to fulfill his obligation because of "force majeure," the general
rule is that he cannot be held liable for damages for non-
performance. Corollarily, when JAL was prevented from
resuming its flight to Manila due to the effects of Mt. Pinatubo
eruption, whatever losses or damages in the form of hotel and
meal expenses the stranded passengers incurred, cannot be
charged to JAL. Yet it is undeniable that JAL assumed the hotel
expenses of respondents for their unexpected overnight stay
on June 15, 1991.
Admittedly, to be stranded for almost a week in a foreign land
was an exasperating experience for the private respondents.
To be sure, they underwent distress and anxiety during their
unanticipated stay in Narita, but their predicament was not
due to the fault or negligence of JAL but the closure of NAIA
to international flights. Indeed, to hold JAL, in the absence of
bad faith or negligence, liable for the amenities of its stranded
passengers by reason of a fortuitous event is too much of a
burden to assume.
Furthermore, it has been held that airline passengers must
take such risks incident to the mode of travel. In this regard,
adverse weather conditions or extreme climatic changes are
some of the perils involved in air travel, the consequences of
which the passenger must assume or expect. After all,
common carriers are not the insurer of all risks.
REPUBLIC V. MANILA ELECTRIC COMPANY (MERALCO)
G.R. NO. 141314; NOV. 15, 2002
FACTS:
MERALCO filed with petitioner, Energy Regulatory
Commission (ERC), an application for the revision of its rate
schedules to reflect an average increase in its distribution
charge. ERC granted a provisional increase subject to the
condition that should the Commission on Audit (COA) thru its
audit report find MERALCO is entitled to a lesser increase, all
excess amounts collected from the latter’s customers shall
either be refunded to them or correspondingly credited in
their favor. The COA report found that MERALCO is entitled to
a lesser increase, thus ERC ordered the refund or crediting of
the excess amounts. On appeal, the CA set aside the ERC
decision. MRs were denied.
ISSUE:
Whether or not the regulation of ERC as to the adjustment of
rates of MERALCO is valid.
DIGESTED BY ERUM, FUENTES, OLACO, PANIZA, PARAO, RIVERA, TAN, VILLAHERMOSA & VILLARIN
TRANSPORTATION LAW CASE DIGESTS (BATCH 1)
RULING:
YES. The regulation of rates to be charged by public utilities is
founded upon the police powers of the State and statutes
prescribing rules for the control and regulation of public
utilities are a valid exercise thereof. When private property is
used for a public purpose and is affected with public interest,
it ceases to be juris privati only and becomes subject to
regulation. The regulation is to promote the common good.
Submission to regulation may be withdrawn by the owner by
discontinuing use; but as long as use of the property is
continued, the same is subject to public regulation.
In regulating rates charged by public utilities, the State
protects the public against arbitrary and excessive rates while
maintaining the efficiency and quality of services rendered.
However, the power to regulate rates does not give the State
the right to prescribe rates which are so low as to deprive the
public utility of a reasonable return on investment. Thus, the
rates prescribed by the State must be one that yields a fair
return on the public utility upon the value of the property
performing the service and one that is reasonable to the
public for the services rendered. The fixing of just and
reasonable rates involves a balancing of the investor and the
consumer interests.
KAPALARAN BUS LINE vs. ANGEL CORONADO, LOPE
GRAJERA, DIONISIO SHINYO, and THE COURT OF APPEALS
G.R. No. 85331 August 25, 1989
FACTS:
The jeepney driven by Lope Grajera coming from Pila, Laguna
was on its way to Sta. Cruz. As it reached the intersection, it
stopped and seeing that the road was clear, the jeepney began
to move forward, then another car driven by Atty. Manicad
stopped his car at the intersection to give way to the jeepney.
At about this time, the KBL bus was approaching the
intersection and its driver, Llamoso, was engaged in
determining from his conductor if they would still pass
through the town proper of Pila. Upon learning that they were
already full, he turned his attention to the road and found the
stopped vehicles at the intersection with the jeepney trying to
cross the intersection.
The KBL bus had no more room within which to stop without
slamming into the rear of the vehicle behind the car of Atty.
Manicad. Llamoso chose to gamble on proceeding on its way,
unfortunately, the jeepney driven by Grajera, which had the
10

right-of-way, was about to cross the center of the highway and
was directly on the path of the KBL bus. The gamble made by
Llamoso did not pay off. The impact indicates that the KBL bus
was travelling at a fast rate of speed because, after the
collision, it did not stop; it travelled for another 50 meters and
stopped only when it hit an electric post.
Kapalaran Bus, apparently believing that the best defense was
offense, filed a complaint for damage to property and physical
injuries through reckless imprudence with the RTC against
Coronado, the owner of the jeepney and Grajera, the driver.
CA affirmed the decision of the RTC in favor of Coronado and
Grajera and ordering Kapalaran Bus to pay for the damages
incurred since its driver was grossly negligent and had acted
wantonly and in obvious disregard of the applicable rules on
safety on the highway.
ISSUE:
W/N Kapalaran Bus should be held liable for the gross
negligence of its driver.
HELD:
YES. The law requires Kapalaran Bus as common carrier to
exercise extraordinary diligence in carrying and transporting
their passenger safely "as far as human care and foresight can
proved, using the utmost diligence of very cautious persons,
with due regard for all circumstances." In requiring the highest
possible degree of diligence from common carriers and
creating a presumption of negligence against them, the law
compels them to curb the recklessness of their drivers. While
the immediate beneficiaries of the standard of extraordinary
diligence are, of course, the passengers and owners of cargo
carried by a common carrier, they are not only persons that
the law seeks to benefit. For if common carriers carefully
observed the statutory standard of extraordinary diligence in
respect of their own passengers, they cannot help but
simultaneously benefit pedestrians and the owners and
passengers of other vehicles who are equally entitled to the
safe and convenient use of our roads and highways. The law
seeks to stop and prevent the slaughter and maiming of
people (whether passengers or not) and the destruction of
property (whether freight or not) on our highways by buses,
the very size and power of which seem often to inflame the
minds of their drivers. Article 2231 of the Civil Code explicitly
authorizes the imposition of exemplary damages in cases of
quasi-delicts "if the defendant acted with gross negligence."
JUNTILLA V FONTANAR
DIGESTED BY ERUM, FUENTES, OLACO, PANIZA, PARAO, RIVERA, TAN, VILLAHERMOSA & VILLARIN
TRANSPORTATION LAW CASE DIGESTS (BATCH 1)
GR.NO. L-L456 37 MAY 31 1985
Doctrine: (It is sufficient to reiterate that the source of a
common carrier’s legal liability is the contract of carriage, and
by entering into said contract, it binds itself to carry the
passengers safely as far as human care and foresight can
provide, using the utmost diligence of a very cautious person,
with due regard to all circumstances.)
FACTS:
The facts established after trial show that the plaintiff was a
passenger of the public utility jeepney bearing plate No. PUJ-
71-7 on the course of the trip from Danao City to Cebu City.
The jeepney was driven by defendant Berfol Camoro. It was
registered under the franchise of defendant Clemente
Fontanar but was actually owned by defendant Fernando
Banzon. When the jeepney reached Mandaue City, the right
rear tire exploded causing the vehicle to turn turtle. In the
process, the plaintiff who was sitting at the front seat was
thrown out of the vehicle. Upon landing on the ground, the
plaintiff momentarily lost consciousness. When he came to his
senses, he found that he had a lacerated wound on his right
palm. Aside from this, he suffered injuries on his left arm, right
thigh and on his back.
Petitioner Roberto Juntilla filed Civil Case No. R-17378 for
breach of contract with damages.
The respondents filed their answer, alleging inter alia that the
accident that caused losses to the petitioner was beyond the
control of the respondents taking into account that the tire
that exploded was newly bought and was only slightly used at
the time it blew up.
ISSUE:
WON the defendants and/or their employee failed to exercise
"utmost and/or extraordinary diligence" required of common
carriers contemplated under Art. 1755 of the Civil Code of the
Philippines.
HELD:
Yes, The City Court and the Court of First Instance of Cebu
found that the right rear tire of the passenger jeepney in
which the petitioner was riding blew up causing the vehicle to
fall on its side. The petitioner questions the conclusion of the
respondent court drawn from this finding of fact.
11

In the case at bar, there are specific acts of negligence on the
part of the respondents. The records show that the passenger
jeepney turned turtle and jumped into a ditch immediately
after its right rear tire exploded. The evidence shows that the
passenger jeepney was running at a very fast speed before the
accident. We agree with the observation of the petitioner that
a public utility jeep running at a regular and safe speed will not
jump into a ditch when its right rear tire blows up. There is
also evidence to show that the passenger jeepney was
overloaded at the time of the accident. The petitioner stated
that there were three (3) passengers in the front seat and
fourteen (14) passengers in the rear.
While it may be true that the tire that blew-up was still good
because the grooves of the tire were still visible, this fact alone
does not make the explosion of the tire a fortuitous event. No
evidence was presented to show that the accident was due to
adverse road conditions or that precautions were taken by the
jeepney driver to compensate for any conditions liable to
cause accidents. The sudden blowing-up, therefore, could
have been caused by too much air pressure injected into the
tire coupled by the fact that the jeepney was overloaded and
speeding at the time of the accident.
It is sufficient to reiterate that the source of a common
carrier's legal liability is the contract of carriage, and by
entering into the said contract, it binds itself to carry the
passengers safely as far as human care and foresight can
provide, using the utmost diligence of a very cautious person,
with a due regard for all the circumstances. The records show
that this obligation was not met by the respondents.
PHILIPPINE AIR LINES, INC., vs. THE COURT OF APPEALS and
JESUS V. SAMSON
G.R. No. L-46558, July 31, 1981
FACTS:
Jesus V. Samson averred that he flew as co-pilot on a regular
flight with Captain Delfin Bustamante as commanding pilot of
a C-47 plane belonging to defendant Philippine Air Lines, Inc.
On attempting to land the plane at Daet airport, Captain Delfin
Bustamante due to his very slow reaction and poor judgment
overshot the airfield and as a result, notwithstanding the
diligent efforts of the co-pilot to avert an accident, the
airplane crashlanded beyond the runway. The jolt caused the
head of the plaintiff to hit and break through the thick front
windshield of the airplane causing him severe brain
concussion, wounds and abrasions on the forehead with
intense pain and suffering. Instead of giving Samson expert
DIGESTED BY ERUM, FUENTES, OLACO, PANIZA, PARAO, RIVERA, TAN, VILLAHERMOSA & VILLARIN
TRANSPORTATION LAW CASE DIGESTS (BATCH 1)
and proper medical treatment, the airlines simply referred
him to a company physician without examining the severe
brain concussion. The airline company discharged the Samson
from its employment on grounds of physical disability, thereby
causing him not only to lose his job but to become physically
unfit to continue as aviator. Samson thereafter prayed for
damages.
ISSUE:
Is the exercise of extraordinary diligence applicable only to the
passengers and the goods that are being transported?
RULING:
No.
Philippine Airlines is a common carrier 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, as defined in Art. 1732, New Civil Code.
The law is clear in requiring a common carrier to exercise the
highest degree of care in the discharge of its duty and business
of carriage and transportation under Arts. 1733, 1755 and
1756 of the New Civil Code.
The duty to exercise the utmost diligence on the part of
common carriers is for the safety of passengers as well as for
the members of the crew or the complement operating the
carrier, the airplane in the case at bar. And this must be so
for any omission, lapse or neglect thereof will certainly result
to the damage, prejudice, nay injuries and even death to all
aboard the plane, passengers and crew members alike.
STANDARD VACUUM OIL COMPANY V. LUZON
STEVEDORING CO., INC.
G.R. NO. L-5203 APRIL 18, 1956
FACTS:
Defendant's barge No. L-522 was laden with gasoline
belonging to the plaintiff to be transported from Manila to the
Port of Iloilo. Defendant's tugboat "Snapper" picked up the
barge outside the breakwater. The barge was placed behind
the tugboat, it being connected to the latter by a tow rope.
Behind the barge, three other barges were likewise placed.
The weather was good when on that day the tugboat with its
tow started on its voyage. The weather remained good on
February 3, 1947.
12

About 3:00 AM on February 4, the engine of the tugboat came
to a dead stop. The engineer found out that the trouble was
due to a broken idler. A message was then sent to the
defendant's radio station in Manila informing its official of the
engine trouble. The master of the Snapper attempted to cast
anchor but the water areas around Elefante Island were so
deep. In the afternoon, the weather become worse and due
to the rough condition of the sea the anchor chains of the
Snapper' and the four barges broke. They were drifted and
were dashed against the rocks. A hole was opened in the hull
of the Snapper', which ultimately caused it to sink, while the
barge No. L-522 was so badly damaged that the gasoline it had
on board leaked out.
Defendant failed to transport the gasoline so plaintiff brought
an action with CFI Manila to recover damages.
Defendant pleaded that its failure to deliver was due to
fortuitous event or caused by circumstances beyond its
control and not to its fault or negligence or that of any of its
employees.
The court found that the disaster was the result of an
unavoidable accident and the loss of the gasoline was due to
a fortuitous event hence it dismissed the case.
ISSUE:
WON defendant exercised extraordinary diligence and that
the accident was due to force majeure.
HELD:
NO. While the breaking of the idler may be due to an accident,
or to something unexpected, the cause of the disaster which
resulted in the loss of the gasoline can only be attributed to
the negligence or lack of precaution to avert it on the part of
defendant.
Defendant had enough time to effectuate the rescue if it had
only a competent tug for the purpose because the weather
was good from 3:00 o'clock a.m. to 12:00 o'clock noon of
February 4, 1947 and it was only in the afternoon that the
wind began to blow with some intensity, but failed to do so
because of that shortcoming. The loss of the gasoline certainly
cannot be said to be due to force majeure or unforeseen event
but to the failure of defendant to extend adequate and proper
help.
Considering these circumstances, the Court persuaded to
conclude that defendant has failed to establish that it is
DIGESTED BY ERUM, FUENTES, OLACO, PANIZA, PARAO, RIVERA, TAN, VILLAHERMOSA & VILLARIN
TRANSPORTATION LAW CASE DIGESTS (BATCH 1)
exempt from liability under the law. Defendant is hereby
ordered to pay to plaintiff the sum of P75,578.50, with legal
interest from the date of the filing of the complaint, with
costs.
DELSAN TRANSPORT LINES VS CA
GR NO. 127897, NOVEMBER 15, 2001
FACTS:
The facts show that Caltex Philippines (Caltex for brevity)
entered into a contract of affreightment with the petitioner,
Delsan Transport Lines, Inc., for a period of one year whereby
the said common carrier agreed to transport Caltex’s
industrial fuel oil from the Batangas-Bataan Refinery to
different parts of the country. Under the contract, petitioner
took on board its vessel, MT Maysun 2,277.314 kiloliters of
industrial fuel oil of Caltex to be delivered to the Caltex Oil
Terminal in Zamboanga City. The shipment was insured with
the private respondent, American Home Assurance
Corporation. During the voyage, the vessel sank. The insurer
paid Caltex and now seeks recovery under the right of
subrogation. The trial court found the vessel seaworthy and
the incident was caused by force majeure hence, exempt from
liability. CA reversed the trial court’s decision, explaining that
petitioner was liable as a common carrier due to lack of
manpower and absent any explanation why the vessel sank.
ISSUE:
Whether or not there was an implied admission of
seaworthiness thus precluding the right of recovery by private
respondent as insurer
HELD:
No. The payment made by the private respondent for the
insured’s value of the lost cargo operates as waiver of its
(private respondent) right to enforce the term of the implied
warranty against Caltex under the marine insurance policy.
However, the same cannot be validly interpreted as an
automatic admission of the vessel’s seaworthiness by the
private respondent as to foreclose recourse against the
petitioner for any liability under its contractual obligation as a
common carrier. The fact of payment grants the private
respondent subrogatory right which enables it to exercise
legal remedies that would otherwise be available to Caltex as
owner of the lost cargo against the petitioner common carrier.
From the nature of their business and for reasons of public
policy, common carriers are bound to observe extraordinary
13

diligence in the vigilance over the goods and for the safety of
passengers transported by them, according to all the
circumstance of each case.
In the event of loss, destruction or deterioration of the insured
goods, common carriers shall be responsible unless the same
is brought about, among others, by flood, storm, earthquake,
lightning or other natural disaster or calamity. In all other
cases, 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. The said presumption was not
overturned by petitioner in this case. Hence, private
respondent as insurer can exercise its right of subrogation
against petitioner.
Thus, as the appellate court correctly ruled, petitioner’s
vessel, MT Maysun, sank with its entire cargo for the reason
that it was not seaworthy. There was no squall or bad weather
or extremely poor sea condition in the vicinity when the said
vessel sank.
LOADSTAR SHIPPING CO. vs COURT OF APPEALS
G.R. 131621, September 28, 1999
FACTS:
On 19 November 1984, Loadstar received on board its M/V
Cherokee 705 bales of lawanit hardwood; 27 boxes and crates
of tilewood assemblies and others; and 49 bunles of moulding
r & w Apitong Bolidenized for shipment. he goods, amounting
to P6,067, 178. Were insured for the same amount with the
Manila Insurance Company against various risks including
“Total Loss by Total Loss of the Vessel”. On November 20,
1984, on its way to Manila from the port of Nasipit, Agusan
Del Norte, the vessel, along with its cargo, sank off Limasawa
Island. As a result of the total loss of its shipment, the
consignee made a claim with loadstar which, however,
ignored the same. As the insurer, MIC paid to the insured in
full settlement of its claim, and the latter executed a
subrogation receipt therefor. MIC thereafter filed a complaint
against loadstar alleging that the sinking of the vessel was due
to fault and negligence of loadstar and its employees.
In its answer, Loadstar denied any liability for the loss of the
shipper’s goods and claimed that the sinking of its vessel was
due to force majeure. The court a quo rendered judgment in
favor of MIC., prompting loadstar to elevate the matter to the
Court of Appeals, which however, agreed with the trial court
and affirmed its decision in toto. On appeal, loadstar
maintained that the vessel was a private carrier because it was
DIGESTED BY ERUM, FUENTES, OLACO, PANIZA, PARAO, RIVERA, TAN, VILLAHERMOSA & VILLARIN
TRANSPORTATION LAW CASE DIGESTS (BATCH 1)
not issued a Certificate of Public Convenience, it did not have
a regular trip or schedule nor a fixed route, and there was only
“one shipper, one consignee for a special cargo.
ISSUES:
1. W/N Loadstar is a common carrier.
2. W/N MV Cherokee is sea worthy.
RULING:
1. YES.
LOADSTAR is a common carrier. It is not necessary that the
carrier be issued a certificate of public convenience, and this
public character is not altered by the fact that the carriage of
the goods in question was periodic, occasional, episodic or
unscheduled. Further, the bare fact that the vessel was
carrying a particular type of cargo for one shipper, which
appears to be purely co-incidental; it is no reason enough to
convert the vessel from a common to a private carrier,
especially where, as in this case, it was shown that the vessel
was also carrying passengers.
2. NO
The Supreme Court found that the M/V Cherokee was not
seaworthy when it embarked on its voyage on 19 November
1984. The vessel was not even sufficiently manned at the
time. For a vessel to be seaworthy, it must be adequately
equipped for the voyage and manned with a sufficient number
of competent officers and crew. The failure of a common
carrier to maintain in seaworthy condition its vessel involved
in a contract of carriage is a clear breach of its duty prescribed
in Article 1755 of the Civil Code.
The Unseaworthiness of a vessel may be established by the
fact that it was not able to withstand the natural and
inevitable action of the sea. A ship, normally, will not sink if
the sea is moderate, if it is seaworthy or if the carrier and its
employees were not negligent
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