Transportation Law Case Digests

TRANSPORTATION LAW CASE DIGESTS
I. CONTRACT OF TRANSPORTATION
A. CONCEPT, PARTIES AND PERFECTION
LIGHT RAIL TRANSIT AUTHORITY & RODOLFO
DANGWA TRANSPORTATION vs. COURT OF APPEALS ROMAN, versus
MARJORIE NAVIDAD, Heirs of the Late NICANOR
FACTS: NAVIDAD & PRUDENT SECURITY AGENCY
Private respondents filed a complaint for damages against petitioners FACTS:

for the death of Pedrito Cudiamat as a result of a vehicular accident
which occurred on March 25, 1985 at Marivic, Sapid, Mankayan, Nicanor Navidad, then drunk, entered the EDSA LRT station after
Benguet. Petitioner Theodore M. Lardizabal was driving a passenger purchasing a "token" (representing payment of the fare). While
bus belonging to petitioner corporation in a reckless and imprudent Navidad was standing on the platform near the LRT tracks, Junelito
manner and without due regard to traffic rules and regulations and Escartin, the security guard assigned to the area approached him. A
safety to persons and property, it ran over its passenger, Pedrito misunderstanding or an altercation between the two apparently
Cudiamat. Petitioners alleged that they had observed and continued ensued that led to a fist fight. No evidence, however, was adduced to
to observe the extraordinary diligence and that it was the victim's indicate how the fight started or who, between the two, delivered the
own carelessness and negligence which gave rise to the subject first blow or how Navidad later fell on the LRT tracks. At the exact
incident. moment that Navidad fell, an LRT train, operated by petitioner
Rodolfo Roman, was coming in. Navidad was struck by the moving
RTC pronounced that Pedrito Cudiamat was negligent, which train, and he was killed instantaneously. The widow of Nicanor,
negligence was the proximate cause of his death. However, Court of Marjorie Navidad, along with her children, filed a complaint for
Appeals set aside the decision of the lower court, and ordered damages against Junelito Escartin, Rodolfo Roman, the LRTA, the
petitioners to pay private respondents damages due to negligence. Metro Transit Organization, Inc. (Metro Transit), and Prudent for the
death of her husband. Trial court ruled in favor Navidad’s wife and
ISSUE: against the defendants Prudent Security and Junelito Escartin . LRTA
and Rodolfo Roman were dismissed for lack of merit. CA held LRTA
WON the CA erred in reversing the decision of the trial court and in and Roman liable, hence the petition.
finding petitioners negligent and liable for the damages claimed.
ISSUE:
HELD: CA Decision AFFIRMED
Whether or not there was a perfected contract of carriage between
The testimonies of the witnesses show that that the bus was at full Navidad and LRTA
stop when the victim boarded the same. They further confirm the
conclusion that the victim fell from the platform of the bus when it HELD:
suddenly accelerated forward and was run over by the rear right tires
of the vehicle. Under such circumstances, it cannot be said that the AFFIRMED with MODIFICATION but only in that (a) the award of
deceased was guilty of negligence. nominal damages is DELETED and (b) petitioner Rodolfo Roman is
absolved from liability
It is not negligence per se, or as a matter of law, for one attempt to
board a train or streetcar which is moving slowly. An ordinarily Contract of carriage was deemed created from the moment Navidad
prudent person would have made the attempt board the moving paid the fare at the LRT station and entered the premises of the latter,
conveyance under the same or similar circumstances. The fact that entitling Navidad to all the rights and protection under a contractual
passengers board and alight from slowly moving vehicle is a matter relation. The appellate court had correctly held LRTA and Roman
of common experience both the driver and conductor in this case liable for the death of Navidad in failing to exercise extraordinary
could not have been unaware of such an ordinary practice. diligence imposed upon a common carrier. While the deceased might
not have then as yet boarded the train, a contract of carriage
Common carriers, from the nature of their business and reasons of theretofore had already existed when the victim entered the place
public policy, are bound to observe extraordinary diligence for the where passengers were supposed to be after paying the fare and
safety of the passengers transported by the according to all the getting the corresponding token therefor.
circumstances of each case. A common carrier is bound to carry the
passengers safely as far as human care and foresight can provide, The law requires common carriers to carry passengers safely using
using the utmost diligence very cautious persons, with a due regard the utmost diligence of very cautious persons with due regard for all
for all the circumstances. circumstances. Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip but
It has also been repeatedly held that in an action based on a contract for so long as the passengers are within its premises and where they
of carriage, the court need not make an express finding of fault or ought to be in pursuance to the contract of carriage. The statutory
negligence on the part of the carrier in order to hold it responsible to provisions render a common carrier liable for death of or injury to
pay the damages sought by the passenger. By contract of carriage, the passengers (a) through the negligence or willful acts of its employees
carrier assumes the express obligation to transport the passenger to or b) on account of willful acts or negligence of other passengers or
his destination safely and observe extraordinary diligence with a due of strangers if the common carrier’s employees through the exercise
regard for all the circumstances, and any injury that might be suffered of due diligence could have prevented or stopped the act or omission.
by the passenger is right away attributable to the fault or negligence
of the carrier. This is an exception to the general rule that negligence In case of such death or injury, a carrier is presumed to have been at
must be proved, and it is therefore incumbent upon the carrier to fault or been negligent, and by simple proof of injury, the passenger
prove that it has exercised extraordinary diligence as prescribed in is relieved of the duty to still establish the fault or negligence of the
Articles 1733 and 1755 of the Civil Code. carrier or of its employees and the burden shifts upon the carrier to
prove that the injury is due to an unforeseen event or to force
majeure. The liability of the common carrier and that of the
KOREAN AIRLINES CO. v. CA independent contractor is solidary.
EH 405 Page 1
carriers are responsible for the loss, destruction or deterioration of the
goods which they carry, "unless the same is due to any of the
B. COMMON CARRIERS (Arts. 1731 to 1766 NCC) following causes only:
1. Definitions of “domestic shipping” under R.A. No. 9295 (1) Flood, storm, earthquake, lightning or other natural disaster or
and of “public service” under Commonwealth Act No. calamity;
146 (2) Act of the public enemy in war, whether international or civil;
2. Common Carriage (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
PEDRO DE GUZMAN vs.COURT OF APPEALS and containers; and
ERNESTO CENDANA (5) Order or act of competent public authority.
FACTS: The above list of causes of loss, destruction or deterioration which

exempt the common carrier for responsibility therefor, is a closed list.
Ernesto Cendana, a junk dealer, was engaged in buying up used Causes falling outside the foregoing list, even if they appear to
bottles and scrap metal in Pangasinan, and bring such material to constitute a species of force majeure fall within the scope of Article
Manila for resale. He utilized two (2) six-wheeler trucks which he 1735, which provides as follows:
owned for hauling the material to Manila. He charged freight rates In all cases other than those mentioned in numbers 1, 2, 3, 4 and 5 of
which were commonly lower than regular commercial rates for the the preceding article, if the goods are lost, destroyed or deteriorated,
cargo loaded in his vehicle. common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
Pedro de Guzman a merchant and authorized dealer of General Milk diligence as required in Article 1733. (Emphasis supplied)
Company contracted with Cendana for the hauling of 750 cartons of
Liberty filled milk from a warehouse of General Milk in Makati, The limits of the duty of extraordinary diligence in the vigilance over
Rizal. 150 cartons were loaded on a truck driven by Cendana the goods carried are reached where the goods are lost as a result of a
himself, while 600 cartons were placed on board the other truck robbery which is attended by "grave or irresistible threat, violence or
which was driven by Manuel Estrada, Cendana’s driver and force." In the instant case, armed men held up the second truck
employee. The other 600 boxes never reached de Guzman, since the owned by private respondent which carried petitioner's cargo.
truck which carried these boxes was hijacked somewhere along the
MacArthur Highway in Paniqui, Tarlac, by armed men who took with The occurrence of the loss must reasonably be regarded as quite
them the truck, its driver, his helper and the cargo. Having failed to beyond the control of the common carrier and properly regarded as a
exercise the extraordinary diligence required of him by the law, he is fortuitous event. It is necessary to recall that even common carriers
held liable for the value of the undelivered goods. Cendana denied are not made absolute insurers against all risks of travel and of
that he was a common carrier and argued that he could not be held transport of goods, and are not held liable for acts or events which
responsible for the value of the lost goods, such loss having been due cannot be foreseen or are inevitable, provided that they shall have
to force majeure. complied with the rigorous standard of extraordinary diligence.
ISSUE: Cendana is not liable for the value of the undelivered merchandise
which was lost because of an event entirely beyond private
Whether or not Ernesto Cendana may, under the facts earlier set respondent's control. Petition for Review on certiorari is hereby
forth, be properly characterized as a common carrier? DENIED and the Decision of the Court of Appeals dated 3 August
1977 is AFFIRMED. No pronouncement as to costs.
Whether or not high jacking with robbery can be properly regarded as
a fortuitous event that can exempt the carrier?
PLANTERS PRODUCTS, INC. VS. COURT OF APPEALS,
HELD: SORIAMONT STEAMSHIP AGENCIES AND KYOSEI KISEN
KABUSHIKI KAISHA
The trial court rendered a Decision finding private respondent to be a G.R. No. 101503 September 15, 1993
common carrier and holding him liable for the value of the
undelivered goods as damages and as attorney's fees. The Court of FACTS:
Appeals reversed the judgment of the trial court and held that
respondent had been engaged in transporting return loads of freight Planters Products, Inc. (PPI), purchased from Mitsubishi International
"as a casual occupation — a sideline to his scrap iron business" and Corporation (MITSUBISHI) of New York, U.S.A., 9,329.7069
not as a common carrier. metric tons (M/T) of Urea 46% fertilizer which the latter shipped in
bulk on 16 June 1974 aboard the cargo vessel M/V "Sun Plum"
Liability arises the moment a person or firm acts as a common owned by private respondent Kyosei Kisen Kabushiki Kaisha
carrier, without regard to whether or not such carrier has also (KKKK) from Kenai, Alaska, U.S.A., to Poro Point, San Fernando,
complied with the requirements of the applicable regulatory statute La Union, Philippines, as evidenced by Bill of Lading No. KP-1
and implementing regulations and has been granted a certificate of signed by the master of the vessel and issued on the date of departure.
public convenience or other franchise. To exempt private respondent
from the liabilities of a common carrier because he has not secured Prior to its voyage, a time charter-party on the vessel M/V "Sun
the necessary certificate of public convenience, would be offensive to Plum" pursuant to the Uniform General Charter was entered into
sound public policy; that would be to reward private respondent between Mitsubishi as shipper/charterer and KKKK as shipowner, in
precisely for failing to comply with applicable statutory Tokyo, Japan.
requirements.
Before loading the fertilizer aboard the vessel, four (4) of her
Common carriers, "by the nature of their business and for reasons of holds were all presumably inspected by the charterer's representative
public policy" 2 are held to a very high degree of care and diligence and found fit to take a load of urea in bulk pursuant to par. 16 of the
("extraordinary diligence") in the carriage of goods as well as of charter-party . After the Urea fertilizer was loaded in bulk by
passengers. Article 1734 establishes the general rule that common stevedores hired by and under the supervision of the shipper, the steel
EH 405 Page 2
hatches were closed with heavy iron lids, covered with three (3) crew, who are his servants. Contract of affreightment may either be
layers of tarpaulin, then tied with steel bonds. The hatches remained time charter, wherein the vessel is leased to the charterer for a fixed
closed and tightly sealed throughout the entire voyage. period of time, or voyage charter, wherein the ship is leased for a
single voyage. In both cases, the charter-party provides for the hire of
Petitioner unloaded the cargo from the holds into its steelbodied vessel only, either for a determinate period of time or for a single or
dump trucks which were parked alongside the berth, using metal consecutive voyage, the shipowner to supply the ship's stores, pay for
scoops attached to the ship, pursuant to the terms and conditions of the wages of the master and the crew, and defray the expenses for the
the charter-partly (which provided for an F.I.O.S. clause). However, maintenance of the ship.
the hatches remained open throughout the duration of the discharge. Upon the other hand, the term "common or public carrier" is
Each time a dump truck was filled up, its load of Urea was covered defined in Art. 1732 of the Civil Code. The definition extends to
with tarpaulin. The port area was windy, certain portions of the route carriers either by land, air or water which hold themselves out as
to the warehouse were sandy and the weather was variable, raining ready to engage in carrying goods or transporting passengers or both
occasionally while the discharge was in progress. for compensation as a public employment and not as a casual

occupation. The distinction between a "common or public carrier"
It took eleven (11) days for PPI to unload the cargo. A private marine and a "private or special carrier" lies in the character of the business,
and cargo surveyor, Cargo Superintendents Company Inc. (CSCI), such that if the undertaking is a single transaction, not a part of the
was hired by PPI to determine the "outturn" of the cargo shipped, by general business or occupation, although involving the carriage of
taking draft readings of the vessel prior to and after discharge. The goods for a fee, the person or corporation offering such service is a
survey report submitted by CSCI to the consignee (PPI) revealed a private carrier.
shortage in the cargo of 106.726 M/T and that a portion of the Urea
fertilizer approximating 18 M/T was contaminated with dirt, sand and It is not disputed that respondent carrier, in the ordinary course of
rust and rendered unfit for commerce. business, operates as a common carrier, transporting goods
indiscriminately for all persons. When petitioner chartered the vessel
Consequently, PPI sent a claim letter to Soriamont Steamship M/V "Sun Plum", the ship captain, its officers and compliment were
Agencies (SSA), the resident agent of the carrier, KKKK, under the employ of the shipowner and therefore continued to be
representing the cost of the alleged shortage in the goods shipped and under its direct supervision and control. Hardly then can we charge
the diminution in value of that portion said to have been the charterer, a stranger to the crew and to the ship, with the duty of
contaminated with dirt. Respondent SSA was not able to respond to caring for his cargo when the charterer did not have any control of
this consignee’s claim for payment because according to them, they the means in doing so. This is evident in the present case considering
only received a request for shortlanded certificate and not a formal that the steering of the ship, the manning of the decks, the
claim. determination of the course of the voyage and other technical
incidents of maritime navigation were all consigned to the officers
Hence, PPI filed an action for damages with the Court of First and crew who were screened, chosen and hired by the shipowner.
Instance of Manila. The defendant carrier argued that the strict public
policy governing common carriers does not apply to them because It is therefore imperative that a public carrier shall remain as such,
they have become private carriers by reason of the provisions of the notwithstanding the charter of the whole or portion of a vessel by one
charter-party. The court a quo however sustained the claim of the or more persons, provided the charter is limited to the ship only, as in
plaintiff against the defendant carrier for the value of the goods lost the case of a time-charter or voyage-charter. It is only when the
or damaged. charter includes both the vessel and its crew, as in a bareboat or
demise that a common carrier becomes private, at least insofar as the
On appeal, respondent Court of Appeals reversed the lower court and particular voyage covering the charter-party is concerned.
absolved the carrier from liability for the value of the cargo that was Indubitably, a shipowner in a time or voyage charter retains
lost or damaged. Relying on the 1968 case of Home Insurance possession and control of the ship, although her holds may, for the
Co.v. American Steamship Agencies, Inc., the appellate court ruled moment, be the property of the charterer.
that the cargo vessel M/V "Sun Plum" owned by private respondent
KKKK was a private carrier and not a common carrier by reason of Respondent carrier's heavy reliance on the case of Home Insurance
the time charterer-party. Accordingly, the Civil Code provisions on Co. v. American Steamship Agencies, supra, is misplaced for the
common carriers which set forth a presumption of negligence do not reason that the meat of the controversy therein was the validity of a
find application in the case at bar. stipulation in the charter-party exempting the shipowners from
liability for loss due to the negligence of its agent, and not the effects
ISSUE: Whether a common carrier becomes a private carrier by of a special charter on common carriers. At any rate, the rule in the
reason of a charter-party. United States that a ship chartered by a single shipper to carry special
cargo is not a common carrier, does not find application in our
HELD: The assailed decision of the Court of Appeals, which jurisdiction, for we have observed that the growing concern for safety
reversed the trial court, is affirmed. in the transportation of passengers and /or carriage of goods by sea
requires a more exacting interpretation of admiralty laws, more
A "charter-party" is defined as a contract by which an entire ship, or particularly, the rules governing common carriers.
some principal part thereof, is let by the owner to another person for a
specified time or use; a contract of affreightment by which the owner In an action for recovery of damages against a common carrier on the
of a ship or other vessel lets the whole or a part of her to a merchant goods shipped, the shipper or consignee should first prove the fact of
or other person for the conveyance of goods, on a particular voyage, shipment and its consequent loss or damage while the same was in
in consideration of the payment of freight; Charter parties are of two the possession, actual or constructive, of the carrier. Thereafter, the
types: (a) contract of affreightment which involves the use of burden of proof shifts to respondent to prove that he has exercised
shipping space on vessels leased by the owner in part or as a whole, extraordinary diligence required by law or that the loss, damage or
to carry goods for others; and, (b) charter by demise or bareboat deterioration of the cargo was due to fortuitous event, or some other
charter, by the terms of which the whole vessel is let to the charterer circumstances inconsistent with its liability. To our mind, respondent
with a transfer to him of its entire command and possession and carrier has sufficiently overcome, by clear and convincing proof,
consequent control over its navigation, including the master and the the prima facie presumption of negligence. Verily, the presumption
EH 405 Page 3
of negligence on the part of the respondent carrier has been
efficaciously overcome by the showing of extraordinary zeal and The Supreme Court dismissed the petition and affirmed the decision
assiduity exercised by the carrier in the care of the cargo. The period of the Court of Appeals.
during which private respondent was to observe the degree of
diligence required of it as a public carrier began from the time the Petitioner is a common carrier. Article 1732 of the Civil Code defines
cargo was unconditionally placed in its charge after the vessel's holds a common carrier as "(a) person, corporation or firm, or association
were duly inspected and passed scrutiny by the shipper, up to and engaged in the business of carrying or transporting passengers or
until the vessel reached its destination and its hull was reexamined by goods or both, by land, water or air, for compensation, offering their
the consignee, but prior to unloading. services to the public." The test to determine a common carrier is
"whether the given undertaking is a part of the business engaged in
Article 1734 of the New Civil Code provides that common carriers by the carrier which he has held out to the general public as his
are not responsible for the loss, destruction or deterioration of the occupation rather than the quantity or extent of the business
goods if caused by the charterer of the goods or defects in the transacted." In this case, petitioner herself has made the admission
packaging or in the containers. The Code of Commerce also provides that she was in the trucking business, offering her trucks to those with
that all losses and deterioration which the goods may suffer during cargo to move. Judicial admissions are conclusive and no evidence is
the transportation by reason of fortuitous event, force majeure, or the required to prove the same.
inherent defect of the goods, shall be for the account and risk of the
shipper, and that proof of these accidents is incumbent upon the Moreover, in referring to Article 1732 of the Civil Code, it held in De
carrier. The carrier, nonetheless, shall be liable for the loss and Guzman vs. Court of Appeals that “The above article makes no
damage resulting from the preceding causes if it is proved, as against distinction between one whose principal business activity is the
him, that they arose through his negligence or by reason of his having carrying of persons or goods or both, and one who does such carrying
failed to take the precautions which usage has established among only as an ancillary activity (in local idiom, as a “sideline”). Article
careful persons. 1732 also carefully avoids making any distinction between a person
or enterprise offering transportation service on a regular or scheduled
Thus, the petition is dismissed. basis and one offering such service on an occasional, episodic or
unscheduled basis. Neither does Article 1732 distinguish between a
ESTRELLITA M. BASCOS vs. COURT OF APPEALS and carrier offering its services to the “general public,” i.e., the general
RODOLFO A. CIPRIANO G.R. No. 101089. April 7, 1993. community or population, and one who offers services or solicits
business only from a narrow segment of the general population.
FACTS:
Common carriers are obliged to observe extraordinary diligence in
Rodolfo A. Cipriano representing Cipriano Trading Enterprise the vigilance over the goods transported by them. Accordingly, they
(CIPTRADE) entered into a hauling contract with Jibfair Shipping are presumed to have been at fault or to have acted negligently if the
Agency Corp. whereby the former bound itself to haul the latter’s goods are lost, destroyed or deteriorated. There are very few
2,000 m/tons of soya bean meal from Magallanes Drive, Del Pan, instances when the presumption of negligence does not attach and
Manila to the warehouse of Purefoods Corporation in Calamba, these instances are enumerated in Article 1734. In those cases where
Laguna. To carry out its obligation, CIPTRADE, through Rodolfo the presumption is applied, the common carrier must prove that it
Cipriano, subcontracted with Estrellita Bascos to transport and to exercised extraordinary diligence in order to overcome the
deliver 400 sacks of soya bean meal from the Manila Port Area to presumption.
Calamba, Laguna at the rate. But, Bascos failed to deliver the said
cargo. As a consequence, Cipriano paid Jibfair Shipping Agency the As to the second issue, the Court held that hijacking, not being
amount of the lost goods in accordance with the contract. Cipriano included in the provisions of Article 1734, must be dealt with under
demanded reimbursement from Bascos but the latter refused to pay. the provisions of Article 1735 and thus, the common carrier is
presumed to have been at fault or negligent. UArticle 1745 of the
Eventually, Cipriano filed a complaint for a sum of money and Civil Code provides that a common carrier is held responsible; and
damages with writ of preliminary attachment for breach of a contract will not be allowed to divest or to diminish such responsibility even
of carriage. The trial court granted the writ of preliminary attachment for acts of strangers like thieves or robbers except where such thieves
and rendered a decision, ordering Bascos to pay for actual damages or robbers in fact acted with grave or irresistible threat, violence or
with legal interest, attorney’s fees and the costs of the suit. The court force. Affidavits were not enough to overcome the presumption. (1)
further denied the “Urgent Motion To Dissolve/Lift preliminary Bascos’s affidavit about the hijacking was based on what had been
Attachment” filed by Bascos for being moot and academic. told her by Juanito Morden. It was not a first-hand account. While it
had been admitted in court for lack of objection on the part of
Bascos appealed to the CA but the appellate court affirmed the trial Cipriano, the lower court had discretion in assigning weight to such
court’s judgment. Hence, the petition for review on certiorari. evidence. (2) The affidavit of Jesus Bascos did not dwell on how the
Petitioner, Bascos interposed the following defenses: that there was hijacking took place. (3) While the affidavit of Juanito Morden, the
no contract of carriage since CIPTRADE leased her cargo truck to truck helper in the hijacked truck, was presented as evidence in court,
load the cargo from Manila Port Area to Laguna; that CIPTRADE he himself was a witness as could be gleaned from the contents of the
was liable to petitioner for loading the cargo; that the truck carrying petition.
the cargo was hijacked along Paco, Manila; that the hijacking was
immediately reported to CIPTRADE and that petitioner and the
police exerted all efforts to locate the hijacked properties; and that Mr. & Mrs. Engracio Fabre, Jr. vs. CA, et al.
hijacking, being a force majeure, exculpated petitioner from any 259 SCRA 426
liability to CIPTRADE
Facts:
ISSUE:
WON petitioner was a common carrier. Petitioners Fabre and his wife were owners of a minibus which they
WON the hijacking referred to a force majeure. used principally in connection with a bus service for school children
which they operated. The couple had a driver, Porfirio Cabil, whom
HELD:
EH 405 Page 4
they hired after trying him out for two weeks. His job was to take Fabres, were themselves negligent in the selection and
school children to and from the St. Scholastica’s College. supervision of their employee. Due diligence in selection of
employees is not satisfied by finding that the applicant
On November 2, 1984, private respondent Word for the World possessed a professional driver’s license. The employer should
Christian Fellowship Inc. arranged with petitioners for the also examine the applicant for his qualifications, experience and
transportation of 33 members from Manila to La Union and back in record of service. In the case at bar, the Fabres, in allowing
consideration of which they paid P3,000 to petitioners. Cabil to drive the bus to La Union, apparently did not consider
the fact that Cabil had been driving for school children only,
The group left at 8:00 in the evening, petitioner Cabil drove the from their homes to the St. Scholastica’s College in Metro
minibus. The usual route to Caba, La Union was through Carmen, Manila. They had hired him only after a two-week
Pangasinan. However, the bridge at Carmen was under repair, so that apprenticeship.
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 Ba- 2. This case involves a contract of carriage. Petitioners, the Fabres,
ay in Lingayen, Pangasinan. At 11:30 that night, petitioner Cabil did not have to be engaged in the business of public
came upon a sharp curve on the highway, running on a south to east transportation for the provisions of the Civil Code on common
direction. The road was slippery because it was raining, causing the carriers to apply to them.
bus, which was running at the speed of 50 kilometers per hour, to Art. 1732. Common carriers are persons, corporations, firms or
skid to the left road shoulder. The bus hit the left traffic steel brace associations engaged in the business of carrying or transporting
and sign along the road and rammed the fence of one Jesus Escano, passengers or goods or both, by land, water, or air for
then turned over and landed on its left side, coming to a full stop only compensation, offering their services to the public.
after a series of impacts. The bus came to rest off the road. A
coconut tree which it had hit fell on it and smashed its front portion. The above article makes no distinction between one whose
principal business activity is the carrying of persons or goods or
Several passengers were injured. Private respondent Amyline both, and one who does such carrying only as an ancillary
Antonio was thrown on the floor of the bus and pinned down by a activity. Neither does Article 1732 distinguish between a carrier
wooden seat which came off after being unscrewed. It took three offering its services to the “general public,” i.e., the general
persons to safely remove her from this position. She was in great community or population, and one who offers services or solicits
pain and could not move. business only from a narrow segment of the general population.
A case was filed by the respondents against Fabre and Cabil. As common carriers, the Fabres were bound to exercise
Amyline Antonio was found to be suffering from paraplegia and is “extraordinary diligence” for the safe transportation of the
permanently paralyzed from the waist down. The RTC ruled in favor passengers to their destination. This duty of care is not excused
of respondents. Mr. & Mrs. Fabre and Cabil were ordered to pay by proof that they exercised the diligence of a good father of the
jointly and severally actual, moral and exemplary damages, and as family in the selection and supervision of their employee.
well as amount of loss of earning capacity of Antonio and attorney’s As Art. 1759 of the Code provides:
fees. The Court of Appeals affirmed the decision of the trial court Common carriers are liable for the death of or injuries to
with modification on the award of damages. passengers through the negligence or wilful acts of the former’s
employees, although such employees may have acted beyond
Issues: the scope of their authority or in violation of the orders of the
1. Whether or not petitioners were negligent. common carriers.
2. Whether or not petitioners were liable for the injuries
suffered by private respondents.
3. Whether or not damages can be awarded and in the First Philippine Industrial Corporation vs. Court of Appeals
positive, up to what extent. G.R. No. 125948 December 29, 1998
Held: Facts:
SC affirmed the decision of the CA but reverted the amount
of the award of damages to that ordered by the RTC. Petitioner, First Phil. Industrial Corporation (FirstPhil for brevity) is a
grantee of a pipeline concession under Republic Act No. 387, as
1. The finding that Cabil drove his bus negligently, while his amended, to contract, install and operate oil pipelines. FirstPhil
employer, the Fabres, who owned the bus, failed to exercise the applied for a mayor's permit, but before the mayor's permit could be
diligence of a good father of the family in the selection and issued, the respondent City Treasurer required petitioner to pay a
supervision of their employee is fully supported by the evidence local tax pursuant to the Local Government Code. Petitioner filed a
on record. Indeed, it was admitted by Cabil that on the night in letter-protest addressed to the respondent City Treasurer, but the
question, it was raining, and, as a consequence, the road was latter denied the same contending that petitioner cannot be considered
slippery, and it was dark. However, it is undisputed that Cabil engaged in transportation business, thus it cannot claim exemption
drove his bus at the speed of 50 kilometers per hour and only under Section 133 (j) of the Local Government Code.
slowed down when he noticed the curve some 15 to 30 meters
ahead. Given the conditions of the road and considering that the FirstPhil filed with the RTC Batangas a complaint for tax refund with
trip was Cabil’s first one outside of Manila, Cabil should have prayer for writ of preliminary injunction against respondents,
driven his vehicle at a moderate speed. There is testimony that contending that the imposition of tax upon them violates Sec 133 of
the vehicles passing on that portion of the road should only be the Local Government Code. On the other hand, respondents assert
running 20 kilometers per hour, so that at 50 kilometers per that pipelines are not included in the term "common carrier" which
hour, Cabil was running at a very high speed. Cabil was grossly refers solely to ordinary carriers such as trucks, trains, ships and the
negligent and should be held liable for the injuries suffered by like. Respondents further posit that the term "common carrier" under
private respondent Amyline Antonio. the said code pertains to the mode or manner by which a product is
delivered to its destination.
Pursuant to Arts. 2176 and 2180 of the Civil Code his RTC dismissed the complaint, ruling that exemption granted under
negligence gave rise to the presumption that his employers, the Sec. 133 (j) encompasses only "common carriers" so as not to
EH 405 Page 5
overburden the riding public or commuters with taxes. And that (j) Taxes on the gross receipts of transportation contractors and
petitioner is not a common carrier, but a special carrier extending its persons engaged in the transportation of passengers or freight by hire
services and facilities to a single specific or "special customer" under and common carriers by air, land or water, except as provided in this
a "special contract." Code.
The case was elevated by the petitioner to the CA, but CA affirmed SC held that the legislative intent in excluding from the taxing power
the decision of the RTC. Hence this petition. of the local government unit the imposition of business tax against
common carriers is to prevent a duplication of the so-called "common
Issue: carrier's tax."
WON the petitioner is a "common carrier" and, therefore, exempt

from the business taxc
Held: Petition was granted. CA decision was REVERSED and SET LOADSTAR SHIPPING CO., INC., vs.
ASIDE. COURT OF APPEALS
SC ruled in this case that petitioner is a common carrier and thus, Facts:
exempt from business tax.
On 19 November 1984, LOADSTAR received on board a) 705 bales
A "common carrier" may be defined, broadly, as one who holds of lawanit hardwood; b) 27 boxes and crates of tilewood assemblies
himself out to the public as engaged in the business of transporting and the others ;and c) 49 bundles of mouldings R & W (3) Apitong
persons or property from place to place, for compensation, offering Bolidenized. On its way to Manila from the port of Nasipit, Agusan
his services to the public generally. Art. 1732 of the Civil Code del Norte, the vessel, along with its cargo, sank off Limasawa Island.
defines a "common carrier" as "any person, corporation, firm or As a result of the total loss of its shipment, the consignee made a
association engaged in the business of carrying or transporting claim with LOADSTAR which, however, ignored the same. MIC
passengers or goods or both, by land, water, or air, for compensation, filed a complaint against LOADSTAR and PGAI, alleging that the
offering their services to the public." The test for determining sinking of the vessel was due to the fault and negligence of
whether a party is a common carrier of goods is: LOADSTAR and its employees. LOADSTAR denied any liability for
1. He must be engaged in the business of carrying goods for others as the loss of the shipper's goods and claimed that sinking of its vessel
a public employment, and must hold himself out as ready to engage was due to force majeure. LOADSTAR submits that the vessel was a
in the transportation of goods for person generally as a business and private carrier because it was not issued certificate of public
not as a casual occupation; convenience, it did not have a regular trip or schedule nor a fixed
2. He must undertake to carry goods of the kind to which his business route, and there was only "one shipper, one consignee for a special
is confined; cargo.
3. He must undertake to carry by the method by which his business is
conducted and over his established roads; and Issues:
4. The transportation must be for hire.
(1) Is the M/V "Cherokee" a private or a common carrier?
Based on the above definitions and requirements, there is no doubt (2) Did LOADSTAR observe due and/or ordinary diligence in these
that petitioner is a common carrier. It is engaged in the business of premises.
transporting or carrying goods, i.e. petroleum products, for hire as a
public employment. It undertakes to carry for all persons Held: Petition is dismissed:
indifferently, that is, to all persons who choose to employ its services,
and transports the goods by land and for compensation. The fact that SC hold that LOADSTAR is a common carrier. It is not necessary
petitioner has a limited clientele does not exclude it from the that the carrier be issued a certificate of public convenience, and this
definition of a common carrier. public character is not altered by the fact that the carriage of the
goods in question was periodic, occasional, episodic or unscheduled.
The definition of "common carriers" in the Civil Code makes no The bills of lading failed to show any special arrangement, but only a
distinction as to the means of transporting, as long as it is by land, general provision to the effect that the M/V"Cherokee" was a
water or air. It does not provide that the transportation of the "general cargo carrier." 14 Further, the bare fact that the vessel was
passengers or goods should be by motor vehicle. In fact, in the United carrying a particular type of cargo for one shipper, which appears to
States, oil pipe line operators are considered common carriers. be purely coincidental, is not reason enough to convert the vessel
from a common to a private carrier, especially where, as in this case,
Under the Petroleum Act of the Philippines (Republic Act 387), it was shown that the vessel was also carrying passengers. Under
petitioner is considered a "common carrier.", and at the same time, Article 1732 of the Civil Code the Civil Code defines "common
said act also regards petroleum operation as a public utility. BIR carriers" in the following terms:
likewise considers the petitioner a "common carrier." In so ruling, it Art. 1732. Common carriers are persons, corporations,
held that, since petitioner is a pipeline concessionaire that is engaged firms or associations engaged in the business of carrying or
only in transporting petroleum products, it is considered a common transporting passengers or goods or both, by land, water, or air for
carrier under Republic Act No. 387. Such being the case, it is not compensation, offering their services to the public.
subject to withholding tax prescribed by Revenue Regulations No.
13-78, as amended. On to the second assigned error, we find that the M/V "Cherokee"
was not seaworthy when it embarked on its voyage on 19 November
Section 133 (j), of the Local Government Code, provides: 1984. The vessel was not even sufficiently manned at the time. "For a
Sec. 133. Common Limitations on the Taxing Powers of Local vessel to be seaworthy, it must be adequately equipped for the voyage
Government Units. — Unless otherwise provided herein, the exercise and manned with a sufficient number of competent officers and crew.
of the taxing powers of provinces, cities, municipalities, and The failure of a common carrier to maintain in seaworthy condition
barangays shall not extend to the levy of the following:
EH 405 Page 6
its vessel involved in a contract of carriage is a clear breach of its resulting in the loss of the cargo. Petitioner failed to prove that the
duty. typhoon was the proximate and only cause of the loss and that it has
exercised due diligence before, during and after the occurrence.
CALVO VS. UCPB GENERAL INSURANCE TERMINAL HCISED
SERVICE, INC.
ISSUE:
Facts:
Whether or Not the petitioner is a common carrier.
A contract was entered into between Calvo and San Miguel RULING: YES.
Corporation (SMC) for the transfer of certain cargoes from the port
area in Manila to the warehouse of SMC. The cargo was insured by Petitioner is a common carrier whether its carrying of goods is done
UCPB General Insurance Co., Inc. When the shipment arrived and on an irregular rather than scheduled manner, and with an only
unloaded from the vessel, Calvo withdrew the cargo from the arrastre limited clientele. A common carrier need not have fixed and publicly
operator and delivered the same to SMC’s warehouse. When it was known routes. Neither does it have to maintain terminals or issue
inspected, it was found out that some of the goods were torn. UCPB, tickets. To be sure, petitioner fits the test of a common carrier as laid
being the insurer, paid for the amount of the damages and as down in Bascos vs. Court of Appeals. The test to determine a
subrogee thereafter, filed a suit against Calvo. common carrier is "whether the given undertaking is a part of the
Petitioner, on the other hand, contends that it is a private carrier not business engaged in by the carrier which he has held out to the
required to observe such extraordinary diligence in the vigilance over general public as his occupation rather than the quantity or extent of
the goods. the business transacted." In the case at bar, the petitioner admitted
As customs broker, she does not indiscriminately hold her services that it is engaged in the business of shipping and lighterage, offering
out to the public but only to selected parties. its barges to the public, despite its limited clientele for carrying or
transporting goods by water for compensation.
Issue:
Article 1732 of the Civil Code defines common carriers as persons,
Whether or not Calvo is a common carrier liable for the damages for corporations, firms or associations engaged in the business of
failure to observe extraordinary diligence in the vigilance over the carrying or transporting passengers or goods or both, by land, water,
goods. or air, for compensation..offering their services to the public.
Petitioner contends that it is not a common carrier but a private
Held: carrier. Allegedly, it has no fixed and publicly known route, maintains
no terminals, and issues no tickets. It points out that it is not obliged
The contention has no merit. In De Guzman v. Court of Appeals, the to carry indiscriminately for any person. It is not bound to carry
Court dismissed a similar contention and held the party to be a goods unless it consents. In short, it does not hold out its services to
common carrier, thus - the general public. In De Guzman vs. Court of Appeals, we held that
The Civil Code defines "common carriers" in the following terms: the definition of common carriers in Article 1732 of the Civil Code
"Article 1732. Common carriers are persons, corporations, firms or makes no distinction between one whose principal business activity is
associations engaged in the business of carrying or transporting the carrying of persons or goods or both, and one who does such
passengers or goods or both, by land, water, or air for compensation, carrying only as an ancillary activity. We also did not distinguish
offering their services to the public." between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on an
The law makes no distinction between a carrier offering its services occasional, episodic or unscheduled basis. Further, we ruled that
to the general community or solicits business only from a narrow Article 1732 does not distinguish between a carrier offering its
segment of the general population. Note that the transportation of services to the general public, and one who offers services or solicits
goods holds an integral part of Calvo’s business, it cannot indeed be business only from a narrow segment of the general population.
doubted that it is a common carrier. Common carriers are bound to observe extraordinary diligence in the
vigilance over the goods transported by them. They are presumed to
have been at fault or to have acted negligently if the goods are lost,
Asia Lighterage and Shipping Inc. v. CA destroyed or deteriorated. To overcome the presumption of
Gr, No. 147246, August 19, 2003 negligence in the case of loss, destruction or deterioration of the
goods, deterioration of the goods, the common carrier must prove that
FACTS: it exercised extraordinary diligence. There are, however, exceptions
to this rule. Article 1734 of the Civil Code enumerates the instances
Petitioner was contracted as carrier by a corporation from Portland, when the presumption of negligence does not attach: Art. 1734.
Oregon to deliver a cargo to the consignee's warehouse at Pasig City. Common carriers are responsible for the loss, destruction, or
The cargo, however, never reached the consignee as the barge that deterioration of the goods, unless the same is due to any of the
carried the cargo sank completely, resulting in damage to the cargo. following causes only: (1) Flood, storm, earthquake, lightning, or
Private respondent, as insurer, indemnified the consignee for the lost other natural disaster or calamity; (2) Act of the public enemy in war,
cargo and thus, as subrogee, sought recovery from petitioner. Both whether international or civil; (3) Act or omission of the shipper or
the trial court and the appellate court ruled in favor of private owner of the goods; (4) The character of the goods or defects in the
respondent. packing or in the containers; (5) Order or act of competent public
The Court ruled in favor of private respondent. Whether or not authority.
petitioner is a common carrier, the Court ruled in the affirmative. The
principal business of petitioner is that of lighterage and drayage, In the case at bar, the barge completely sank after its towing bits
offering its barges to the public, although for limited clientele, for broke, resulting in the total loss of its cargo. Petitioner claims that
carrying or transporting goods by water for compensation. Whether this was caused by a typhoon, hence, it should not be held liable for
or not petitioner failed to exercise extraordinary diligence in its care the loss of the cargo. However, petitioner failed to prove that the
and custody of the consignee's goods, the Court also ruled in the typhoon is the proximate and only cause of the loss of the goods, and
affirmative. The barge completely sank after its towing bits broke, that it has exercised due diligence before, during and after the
EH 405 Page 7
occurrence of the typhoon to prevent or minimize the loss. The Schmitz Transport, whose services the consignee engaged to secure
evidence show that, even before the towing bits of the barge broke, it the requisite clearances, to receive the cargoes from the shipside, and
had already previously sustained damage when it hit a sunken object to deliver them to its (the consignee’s) warehouse at Cainta, Rizal, in
while docked at the Engineering Island. It even suffered a hole. turn engaged the services of TVI to send a barge and tugboat at
Clearly, this could not be solely attributed to the typhoon. The partly- shipside. TVI’s tugboat “Lailani” towed the barge “Erika V” to
submerged vessel was refloated but its hole was patched with only shipside. The tugboat, after positioning the barge alongside the
clay and cement. The patch work was merely a provisional remedy, vessel, left and returned to the port terminal. Arrastre operator
not enough for the barge to sail safely. Thus, when petitioner Ocean Terminal Services Inc. commenced to unload 37 of the 545
persisted to proceed with the voyage, it recklessly exposed the cargo coils from the vessel unto the barge. By 12:30 a.m. of October 27,
to further damage. 1991 during which the weather condition had become inclement due
to an approaching storm, the unloading unto the barge of the 37 coils
was accomplished. No tugboat pulled the barge back to the pier,
AF Sanchez Brokerage vs CA however. At around 5:30 a.m. of October 27, 1991, due to strong
(Dec 21, 2004) waves, the crew of the barge abandoned it and transferred to the
vessel. The barge pitched and rolled with the waves and eventually
Facts: capsized, washing the 37 coils into the sea.
AF Sanchez is engaged in a broker business wherein its main job is to Little Giant thus filed a formal claim against Industrial Insurance
calculate customs duty, fees and charges as well as storage fees for which paid it the amount of P5,246,113.11. Little Giant thereupon
the cargoes. Part also of the services being given by AF Sanchez is executed a subrogation receipt in favor of Industrial Insurance.
the delivery of the shipment to the consignee upon the instruction of Industrial Insurance later filed a complaint against Schmitz
the shipper. Transport, TVI, and Black Sea through its representative
Inchcape (the defendants) before the RTC of Manila, they faulted
Wyett engaged the services of AF Sanchez where the latter delivered the defendants for undertaking the unloading of the cargoes
the shipment to Hizon Laboratories upon instruction of Wyett. Upon while typhoon signal No. 1 was raised. The RTC held all the
inspection, it was found out that at least 44 cartons containing defendants negligent. Defendants Schmitz Transport and TVI filed
contraceptives were in bad condition. Wyett claimed insurance from a joint motion for reconsideration assailing the finding that they
FGU. FGU exercising its right of subrogation claims damages against are common carriers. RTC denied the motion for reconsideration.
AF Sanchez who delivered the damaged goods. AF Sanchez CA affirmed the RTC decision in toto, finding that all the defendants
contended that it is not a common carrier but a brokerage firm. were common carriers — Black Sea and TVI for engaging in the
transport of goods and cargoes over the seas as a regular business and
Issue: Is AF Sanchez a common carrier? not as an isolated transaction, and Schmitz Transport for entering into
Held: a contract with Little Giant to transport the cargoes from ship to port
for a fee.
SC held that Art 1732 of the Civil Code in defining common carrier Issue:
does not distinguish whether the activity is undertaken as a principal
activity or merely as an ancillary activity. In this case, while it is true Whether or not Black Sea and TVI are common carriers
that AF Sanchez is principally engaged as a broker, it cannot be
denied from the evidence presented that part of the services it offers Held :
to its customers is the delivery of the goods to their respective
consignees. Contrary to petitioner’s insistence, this Court, as did the appellate
court, finds that petitioner is a common carrier. For it undertook to
Note: transport the cargoes from the shipside of “M/V Alexander Saveliev”
AF Sanchez claimed that the proximate cause of the damage is to the consignee’s warehouse at Cainta, Rizal. As the appellate court
improper packing. Under the CC, improper packing of the goods is put it, “as long as a person or corporation holds [itself] to the
an exonerating circumstance. But in this case, the SC held that public for the purpose of transporting goods as [a] business, [it] is
though the goods were improperly packed, since AF Sanchez knew already considered a common carrier regardless if [it] owns the
of the condition and yet it accepted the shipment without protest or vehicle to be used or has to hire one.” That petitioner is a common
reservation, the defense is deemed waived. carrier, the testimony of its own Vice-President and General Manager
Noel Aro that part of the services it offers to its clients as a brokerage
firm includes the transportation of cargoes reflects so.
Schmitz Transport and Brokerage Corp v Transort Venture Inc.,
GR 150255 April 22,2005 It is settled that under a given set of facts, a customs broker may be
regarded as a common carrier. Thus, this Court, in A.F. Sanchez
Facts: Brokerage, Inc. v. The Honorable Court of Appeals,[44] held:
The appellate court did not err in finding petitioner, a
On September 25, 1991, SYTCO Pte Ltd. Singapore shipped from customs broker, to be also a common carrier, as defined
the port of Ilyichevsk, Russia on board M/V “Alexander Saveliev” under Article 1732 of the Civil Code, to wit,
545 hot rolled steel sheets in coil weighing 6,992,450 metric tons. Art. 1732. Common carriers are persons, corporations,
The cargoes, which were to be discharged at the port of Manila in firms or associations engaged in the business of carrying
favor of the consignee, Little Giant Steel Pipe Corporation (Little or transporting passengers or goods or both, by land,
Giant), were insured against all risks with Industrial Insurance water, or air, for compensation, offering their services
Company Ltd. (Industrial Insurance) under Marine Policy No. M-91- to the public.
3747-TIS. The vessel arrived at the port of Manila and the xxx
Philippine Ports Authority (PPA) assigned it a place of berth at the Article 1732 does not distinguish between one whose principal
outside breakwater at the Manila South Harbor. business activity is the carrying of goods and one who does such
carrying only as an ancillary activity. The contention, therefore, of
petitioner that it is not a common carrier but a customs broker whose
EH 405 Page 8
principal function is to prepare the correct customs declaration and
proper shipping documents as required by law is bereft of merit. It HELD: THE RULING OF THE RTC AND CA WAS UPHELD.
suffices that petitioner undertakes to deliver the goods for
pecuniary consideration. The petitioner posits that the loss/damage was caused by the
mishandling of the shipment by therein respondent ICTSI, the
And in Calvo v. UCPB General Insurance Co. Inc.,[46] this Court arrastre operator, and not by its negligence. The petition has no merit.
held that as the transportation of goods is an integral part of a
customs broker, the customs broker is also a common carrier. For We agree with the contention of the petitioner that common carriers,
to declare otherwise “would be to deprive those with whom [it] from the nature of their business and for reasons of public policy, are
contracts the protection which the law affords them notwithstanding mandated to observe extraordinary diligence in the vigilance over the
the fact that the obligation to carry goods for [its] customers, is part goods according to all the circumstances of each case. The
and parcel of petitioner’s business.” extraordinary diligence in the vigilance over the goods requires
common carriers to render service with the greatest skill and foresight
and "to use all reasonable means to ascertain the nature and
PHIL CHARTER vs. M/V "NATIONAL HONOR," characteristic of goods tendered for shipment, and to exercise due
[G.R. No. 161833. July 8, 2005.] care in the handling and stowage, including such methods as their
nature requires." When the goods shipped are either lost or arrive in
FACTS: damaged condition, a presumption arises against the carrier of its
failure to observe that diligence, and there need not be an express
On November 5, 1995, J. Trading Co. Ltd. of Seoul, Korea, loaded a finding of negligence to hold it liable. However, under Article 1734
shipment of four units of parts and accessories on board the vessel of the New Civil Code, the presumption of negligence does not
M/V "National Honor," represented in the Philippines by its agent, apply to any of the following causes:
National Shipping Corporation of the Philippines (NSCP). The 1. Flood, storm, earthquake, lightning or other natural
shipment was contained in two wooden crates, namely, Crate No. 1 disaster or calamity;
and Crate No. 2, complete and in good order condition. Crate No. 1 2. Act of the public enemy in war, whether international
contained the following articles: one (1) unit Lathe Machine or civil;
complete with parts and accessories; one (1) unit Surface Grinder 3. Act or omission of the shipper or owner of the goods;
complete with parts and accessories; and one (1) unit Milling 4. The character of the goods or defects in the packing or
Machine complete with parts and accessories. On the flooring of the in the containers;
wooden crates were three wooden battens placed side by side to 5. Order or act of competent public authority.
support the weight of the cargo. It was insured for P2,547,270.00
with the Philippine Charter Insurance Corporation (PCIC). It bears stressing that the enumeration in Article 1734 of the New
Civil Code which exempts the common carrier for the loss or damage
The M/V "National Honor" arrived at the Manila International to the cargo is a closed list. Crate No. 1 was provided by the shipper
Container Terminal (MICT). The International Container Terminal of the machineries in Seoul, Korea. There is nothing in the record
Services, Incorporated (ICTSI) was the exclusive arrastre operator of which would indicate that defendant ICTSI had any role in the choice
MICT and was charged with discharging the cargoes from the vessel. of the materials used in fabricating this crate. Said defendant,
Claudio Cansino, the stevedore of the ICTSI, placed two sling cables therefore, cannot be held as blame worthy for the loss of the
on each end of Crate No. 1. No sling cable was fastened on the mid- machineries contained in Crate No. 1.
portion of the crate. As the crate was being hoisted from the vessel's The CA affirmed the ruling of the RTC, thus:
hatch, the mid-portion of the wooden flooring suddenly snapped in “The case at bar falls under one of the exceptions mentioned in
the air, about five feet high from the vessel's twin deck, sending all its Article 1734 of the Civil Code, particularly number (4) thereof, i.e.,
contents crashing down hard, resulting in extensive damage to the the character of the goods or defects in the packing or in the
shipment. containers. The trial court found that the breakage of the crate was
not due to the fault or negligence of ICTSI, but to the inherent defect
Blue Mono International Company, Incorporated (BMICI) and weakness of the materials used in the fabrication of the said
subsequently filed separate claims against the NSCP, the ICTSI, and crate.”
its insurer, the PCIC, for US$61,500.00. When the other companies
denied liability, PCIC paid the claim and was issued a Subrogation Upon examination of the records, We find no compelling reason to
Receipt for P1,740,634.50. On March 22, 1995, PCIC, as subrogee, depart from the factual findings of the trial court. It appears that the
filed with the RTC of Manila a Complaint for Damages against the wooden batten used as support for the flooring was not made of good
"Unknown owner of the vessel M/V National Honor," NSCP and materials, which caused the middle portion thereof to give way when
ICTSI, as defendants. ICTSI, for its part, filed its Answer with it was lifted. The shipper also failed to indicate signs to notify the
Counterclaim and Cross-claim against its co-defendant NSCP, stevedores that extra care should be employed in handling the
claiming that the loss/damage of the shipment was caused exclusively shipment. Appellant's allegation that since the cargo arrived safely
by the defective material of the wooden battens of the shipment, from the port of [P]usan, Korea without defect, the fault should be
insufficient packing or acts of the shipper. attributed to the arrastre operator who mishandled the cargo; is
without merit. The cargo fell while it was being carried only at about
The trial court rendered judgment for PCIC and ordered the five (5) feet high above the ground. It would not have so easily
complaint dismissed. According to the trial court, the loss of the collapsed had the cargo been properly packed. The shipper should
shipment contained in Crate No. 1 was due to the internal defect and have used materials of stronger quality to support the heavy
weakness of the materials used in the fabrication of the crates. The machines. Not only did the shipper fail to properly pack the cargo, it
CA affirmed in TOTO the decision of the RTC. also failed to indicate an arrow in the middle portion of the cargo
where additional slings should be attached.
ISSUE:
While it is true that the crate contained machineries and spare parts, it
WHETHER OR NOT THE COMMON CARRIER IS LIABLE FOR cannot thereby be concluded that the respondents knew or should
THE DAMAGE SUSTAINED BY THE SHIPMENT IN THE have known that the middle wooden batten had a hole, or that it was
HANDS OF THE ARRASTRE OPERATOR. not strong enough to bear the weight of the shipment. The statement
EH 405 Page 9
in the Bill of Lading, that the shipment was in apparent good their vigilance over the goods and the safety of the passengers they
condition, is sufficient to sustain a finding of absence of defects in transport, as required by the nature of their business and for reasons
the merchandise. Case law has it that such statement will create a of public policy. Extraordinary diligence requires rendering service
prima facie presumption only as to the external condition and not to with the greatest skill and foresight to avoid damage and destruction
that not open to inspection. to the goods entrusted for carriage and delivery.
Common carriers are presumed to have been at fault or to have acted

LEA MER INDUSTRIES INC VS MALAYAN INSURANCE negligently for loss or damage to the goods that they have
CO, INC. transported. This presumption can be rebutted only by proof that they
GR No. 161745, SEPTEMBER 30, 2005 observed extraordinary diligence, or that the loss or damage was
occasioned by any of the following causes:
FACTS: "(1) Flood, storm, earthquake, lightning, or other natural
disaster or calamity;
Ilian Silica Mining entered into a contract of carriage with the "(2) Act of the public enemy in war, whether international or
petitioner, Lea Mer Industries Inc. for the shipment of 900 metric civil;
tons of silica sand worth P565,000. The cargo was consigned to "(3) Act or omission of the shipper or owner of the goods;
Vulcan Industrial and Mining Corporation and was to be shipped "(4) The character of the goods or defects in the packing or in
from Palawan to Manila. The silica sand was boarded to Judy VII, the the containers;
vessel leased by Lea Mer. However, during the course of its voyage, "(5) Order or act of competent public authority."
the vessel sank which led to the loss of the cargo.
Jurisprudence defines the elements of a "fortuitous event" as follows:
Consequently, the respondent, as the insurer, paid Vulcan the value (a) the cause of the unforeseen and unexpected occurrence, or the
of the lost cargo. Malayan Insurance Co., Inc. then collected from the failure of the debtors to comply with their obligations, must have
petitioner the amount it paid to Vulcan as reimbursement and as its been independent of human will; (b) the event that constituted the
exercise on the right of subrogation. Lea Mer refused to pay which caso fortuito must have been impossible to foresee or, if foreseeable,
led Malayan to institute a complaint with the RTC. The RTC impossible to avoid; (c) the occurrence must have been such as to
dismissed the complaint stating that the loss was due to a fortuitous render it impossible for the debtors to fulfill their obligation in a
event, Typhoon Trining. Petitioner did not know that a typhoon was normal manner; and (d) the obligor must have been free from any
coming and that it has been cleared by the Philippine Coast Guard to participation in the aggravation of the resulting injury to the creditor.
travel from Palawan to Manila. The CA reversed the ruling of the To excuse the common carrier fully of any liability, the fortuitous
trial court for the reason that said vessel was not seaworthy when it event must have been the proximate and only cause of the loss.
sailed to Manila. Moreover, it should have exercised due diligence to prevent or
minimize the loss before, during and after the occurrence of the
ISSUE: fortuitous event. As required by the pertinent law, it was not enough
Whether or not the petitioner is liable for the loss of the cargo. for the common carrier to show that there was an unforeseen or
unexpected occurrence. It had to show that it was free from any fault
HELD: — a fact it miserably failed to prove.
CA reversed. Common carriers are persons, corporations, firms or

associations engaged in the business of carrying or transporting LOADSTAR SHIPPING CO., INC., v. CA
passengers or goods, or both — by land, water, or air — when this
service is offered to the public for compensation. Petitioner is clearly Facts:
a common carrier, because it offers to the public its business of
transporting goods through its vessels. Thus, the Court corrects the On 19 November 1984, LOADSTAR received on board a) 705 bales
trial court's finding that petitioner became a private carrier when of lawanit hardwood; b) 27 boxes and crates of tilewood assemblies
Vulcan chartered it. Charter parties are classified as contracts of and the others ;and c) 49 bundles of mouldings R & W (3) Apitong
demise (or bareboat) and affreightment, which are distinguished as Bolidenized. On its way to Manila from the port of Nasipit, Agusan
follows: 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
"Under the demise or bareboat charter of the vessel, the charterer will claim with LOADSTAR which, however, ignored the same. MIC
generally be considered as owner for the voyage or service stipulated. filed a complaint against LOADSTAR and PGAI, alleging that the
The charterer mans the vessel with his own people and becomes, in sinking of the vessel was due to the fault and negligence of
effect, the owner pro hac vice, subject to liability to others for LOADSTAR and its employees. LOADSTAR denied any liability for
damages caused by negligence. To create a demise, the owner of a the loss of the shipper's goods and claimed that sinking of its vessel
vessel must completely and exclusively relinquish possession, was due to force majeure. LOADSTAR submits that the vessel was a
command and navigation thereof to the charterer; anything short of private carrier because it was not issued certificate of public
such a complete transfer is a contract of affreightment (time or convenience, it did not have a regular trip or schedule nor a fixed
voyage charter party) or not a charter party at all." route, and there was only "one shipper, one consignee for a special
cargo.
The distinction is significant, because a demise or bareboat charter
indicates a business undertaking that is private in character. Issues:
Consequently, the rights and obligations of the parties to a contract of
private carriage are governed principally by their stipulations, not by (1) Is the M/V "Cherokee" a private or a common carrier?
the law on common carriers. The Contract in the present case was one (2) Did LOADSTAR observe due and/or ordinary diligence in these
of affreightment, as shown by the fact that it was petitioner's crew premises.
that manned the tugboat M/V Ayalit and controlled the barge Judy
VII. Held: Petition is dismissed:
Common carriers are bound to observe extraordinary diligence in
EH 405 Page 10
SC hold that LOADSTAR is a common carrier. It is not necessary The Court of First Instance absolved the Luzon Stevedoring
that the carrier be issued a certificate of public convenience, and this Corporation from any liability and ordered the American Steamship
public character is not altered by the fact that the carriage of the Agencies to pay the sum. Hence, this petition.
goods in question was periodic, occasional, episodic or unscheduled.
The bills of lading failed to show any special arrangement, but only a ISSUE:
general provision to the effect that the M/V"Cherokee" was a
"general cargo carrier." 14 Further, the bare fact that the vessel was Is the stipulation in the charter party of the owner's non-liability valid
carrying a particular type of cargo for one shipper, which appears to so as to absolve the American Steamship Agencies from liability for
be purely coincidental, is not reason enough to convert the vessel loss?
from a common to a private carrier, especially where, as in this case,
it was shown that the vessel was also carrying passengers. Under RULING:
Article 1732 of the Civil Code the Civil Code defines "common
carriers" in the following terms: Judgment was reversed and American Steamship Agencies was
Art. 1732. Common carriers are persons, corporations, absolved liability.
firms or associations engaged in the business of carrying or  The bills of lading provided at the back thereof that the bills of
transporting passengers or goods or both, by land, water, or air for lading shall be governed by and subject to the terms and
compensation, offering their services to the public. conditions of the charter party, if any, otherwise, the bills of
lading prevail over all the agreements.
On to the second assigned error, we find that the M/V "Cherokee"
was not seaworthy when it embarked on its voyage on 19 November o Section 2, paragraph 2 of the charter party, provides that
1984. The vessel was not even sufficiently manned at the time. "For a the owner is liable for loss or damage to the goods caused
vessel to be seaworthy, it must be adequately equipped for the voyage by personal want of due diligence on its part or its manager
and manned with a sufficient number of competent officers and crew. to make the vessel in all respects seaworthy and to secure
The failure of a common carrier to maintain in seaworthy condition that she be properly manned, equipped and supplied or by
its vessel involved in a contract of carriage is a clear breach of its the personal act or default of the owner or its manager. Said
duty. paragraph, however, exempts the owner of the vessel from
any loss or damage or delay arising from any other source,
even from the neglect or fault of the captain or crew or
CEBU SALVAGE CORP. v. PHIL HOME ASSURANCE some other person employed by the owner on board, for
whose acts the owner would ordinarily be liable except for
3. Private Carriage said paragraph..
Home Insurance Co. v. American Steamship Agencies  The Court of First Instance declared the contract as contrary to
23 SCRA 24 Article 587 of the Code of Commerce making the ship agent
civilly liable for indemnities suffered by third persons arising
FACTS: from acts or omissions of the captain in the care of the goods
and Article 1744 of the Civil Code under which a stipulation
"Consorcio Pesquero del Peru of South America" shipped freight pre- between the common carrier and the shipper or owner limiting
paid at Chimbate, Peru, 21,740 jute bags of Peruvian fish meal the liability of the former for loss or destruction of the goods to
through SS Crowborough. The cargo, consigned to San Miguel a degree less than extraordinary diligence is valid provided it be
Brewery, Inc., now San Miguel Corporation, and insured by Home reasonable, just and not contrary to public policy. The release
Insurance Company for $202,505, arrived in Manila and was from liability in this case was held unreasonable and contrary to
discharged into the lighters of Luzon Stevedoring Company. When the public policy on common carriers.
the cargo was delivered to consignee San Miguel Brewery Inc., there
were shortages amounting to P12,033.85, causing the latter to lay o Under American jurisprudence, a common carrier
claims against Luzon Stevedoring Corporation, Home Insurance undertaking to carry a special cargo or chartered to a
Company and the American Steamship Agencies, owner and operator special person only, becomes a private carrier.8 As a
of SS Crowborough. private carrier, a stipulation exempting the owner from
liability for the negligence of its agent is not against public
Because the others denied liability, Home Insurance Company paid policy, and is deemed valid
the consignee P14,870.71. Having been refused reimbursement by o he Civil Code provisions on common carriers should not be
both the Luzon Stevedoring Corporation and American Steamship applied where the carrier is not acting as such but as a
Agencies, Home Insurance Company, as subrogee to the consignee, private carrier. The stipulation in the charter party
filed against them before the Court of First Instance a complaint for absolving the owner from liability for loss due to the
recovery of P14,870.71 with legal interest, plus attorney's fees. negligence of its agent would be void only if the strict
public policy governing common carriers is applied. Such
In answer, Luzon Stevedoring Corporation alleged that it delivered policy has no force where the public at large is not
with due diligence the goods in the same quantity and quality that it involved, as in the case of a ship totally chartered for the
had received the same from the carrier. It also claimed that plaintiff's use of a single party.
claim had prescribed under Article 366 of the Code of Commerce
stating that the claim must be made within 24 hours from receipt of  And furthermore, in a charter of the entire vessel, the bill of
the cargo. lading issued by the master to the charterer, as shipper, is in fact
American Steamship Agencies denied liability by alleging that under and legal contemplation merely a receipt and a document of title
the provisions of the Charter party referred to in the bills of lading, not a contract, for the contract is the charter party. The
the charterer, not the shipowner, was responsible for any loss or consignee may not claim ignorance of said charter party because
damage of the cargo. Furthermore, it claimed to have exercised due the bills of lading expressly referred to the same. Accordingly,
diligence in stowing the goods and that as a mere forwarding agent, it the consignees under the bills of lading must likewise abide by
was not responsible for losses or damages to the cargo. the terms of the charter party. And as stated, recovery cannot be
EH 405 Page 11
had thereunder, for loss or damage to the cargo, against the
shipowners, unless the same is due to personal acts or
negligence of said owner or its manager, as distinguished from VALENZUELA HARDWOOD AND INDUSTRIAL SUPPLY v.
its other agents or employees. In this case, no such personal act CA
or negligence has been proved.
FACTS:
NATIONAL STEEL CORPORATION vs. COURT OF Plaintiff shipped at Maconcon Port, Isabela 940 round logs on board
APPEALS (1997) M/V Seven Ambassador, a vessel owned by defendant Seven
Brothers Shipping Corporation. Plaintiff insured the logs against loss
Facts: and/or damage with defendant South Sea Surety and Insurance Co.,
Inc. for P2M and the latter issued its Marine Cargo Insurance Policy
NSC hired MV Vlasons I, a private vessel owned by VSI. They on said date. In the meantime, the M/V Seven Ambassador sank
entered into a contract of voyage charter hire wherein the contract resulting in the loss of the plaintiff’s insured logs.
states that NSC hired VSI's vessel to make one voyage to load steel
products at Iligan City and discharge them at North Harbor, Manila. Plaintiff demanded from defendant South Sea Surety and Insurance
On arrival and upon opening the three hatches containing the Co., Inc. the payment of the proceeds of the policy but the latter
shipment, nearly all the skids of tinplates and hot rolled sheets were denied liability under the policy. Plaintiff likewise filed a formal
allegedly found to be wet and rusty. NSC filed a complaint for claim with defendant Seven Brothers Shipping Corporation for the
damages but RTC dismissed the complaint value of the lost logs but the latter denied the claim.
Issues: Court of Appeals affirmed in part the RTC judgment by sustaining

1. whether VSI contracted with NSC as a common carrier or the liability of South Sea Surety and Insurance Company ("South
as a private carrier Sea"), but modified it by holding that Seven Brothers Shipping
2. Whether or not the provisions of the Civil Code of the Corporation ("Seven Brothers") was not liable for the lost cargo.
Philippines on common carriers pursuant to which there
exist[s] a presumption of negligence against the common ISSUE:
carrier in case of loss or damage to the cargo are applicable
to a private carrier. Whether defendants shipping corporation and the surety company are
liable to the plaintiff for the latter's lost logs.
Held: HELD:
1. VSI was not a common carrier but a private carrier. It is The charter party between the petitioner and private respondent
undisputed that VSI did not offer its services to the general stipulated that the "(o)wners shall not be responsible for loss, split,
public. The extent of VSI's responsibility and liability over short-landing, breakages and any kind of damages to the cargo" –
NSC's cargo are determined primarily by the stipulations in VALID
the contract of carriage or charter party and the Code of
Commerce. The burden of proof lies on the part of NSC There is no dispute between the parties that the proximate cause of
and not the VSI. the sinking of M/V Seven Ambassadors resulting in the loss of its
cargo was the "snapping of the iron chains and the subsequent rolling
Article 1732 of the Civil Code defines a common carrier as of the logs to the portside due to the negligence of the captain in
"persons, corporations, firms or associations engaged in the stowing and securing the logs on board the vessel and not due to
business of carrying or transporting passengers or goods or fortuitous event." Likewise undisputed is the status of Private
both, by land, water or air, for compensation, offering their Respondent Seven Brothers as a private carrier when it contracted to
services to the public." It has been held that the true test of transport the cargo of Petitioner Valenzuela. Even the latter admits
a common carrier is the carriage of passengers or goods, this in its petition.
provided it has space, for all who opt to avail themselves of
its transportation service for a fee. A carrier which does not Private respondent had acted as a private carrier in transporting
qualify under the above test is deemed a private carrier. petitioner's lauan logs. Thus, Article 1745 and other Civil Code
"Generally, private carriage is undertaken by special provisions on common carriers which were cited by petitioner may
agreement and the carrier does not hold himself out to carry not be applied unless expressly stipulated by the parties in their
goods for the general public. . . ." charter party.
2. Because the MV Vlason I was a private carrier, the In a contract of private carriage, the parties may validly stipulate that
shipowner's obligations are governed by the provisions of responsibility for the cargo rests solely on the charterer, exempting
the Code of Commerce and not by the Civil Code which, as the shipowner from liability for loss of or damage to the cargo caused
a general rule places the prima facie presumption of even by the negligence of the ship captain. Pursuant to Article 1306
negligence on a common carrier. of the Civil Code, such stipulation is valid because it is freely entered
into by the parties and the same is not contrary to law, morals, good
IN A CONTRACT OF PRIVATE CARRIAGE, THE customs, public order, or public policy. Indeed, their contract of
BURDEN OF PROOF IN CASE OF ACCIDENT IS ON private carriage is not even a contract of adhesion. We stress that in a
THE CARRIER but the court exempts VSI due to force contract of private carriage, the parties may freely stipulate their
majeure. duties and obligations which perforce would be binding on them.
Unlike in contract involving a common carrier, private carriage does
NSC must prove that the damage to its shipment was not involve the general public. Hence, the stringent provisions of the
caused by VSI's willful negligence or failure to exercise Civil Code on common carriers protecting the general public cannot
due diligence in making MV Vlason I seaworthy and fit for justifiably be applied to a ship transporting commercial goods as a
holding, carrying and safekeeping the cargo. The burden of private carrier. Consequently, the public policy embodied therein is
proof was placed on NSC by the parties' agreement. not contravened by stipulations in a charter party that lessen or
EH 405 Page 12
remove the protection given by law in contracts involving common No. 92-133 and raffled to Branch 59 of the Regional Trial Court of
carriers. Makati City.
The provisions of our Civil Code on common carriers were taken After due proceedings, the trial court rendered a decision in favor of
from Anglo-American law. Under American jurisprudence, a Estela Crisostomo.
common carrier undertaking to carry a special cargo or chartered to a But it was reversed by the Court of Appeals. Hence, this petition.
special person only, becomes a private carrier. As a private carrier a
stipulation exempting the owner from liability for the negligence of ISSUE:
its agent is not against public policy and is deemed valid. Such
doctrine We find reasonable. The Civil Code provisions on common Is the Caravan Travel and Tours liable for reimbursement and
carriers should not be applied where the carrier is not acting as such damages?
but as a private carrier. The stipulation in the charter party absolving
the owner from liability for loss due to the negligence of its agent HELD: Petition DENIED.
would be void only if the strict public policy governing common
carriers is applied. Such policy has no force where the public at large By definition, a contract of carriage or transportation is one whereby
is not involved as in this case of a ship totally chartered for the use of a certain person or association of persons obligate themselves to
a single party. (Home Insurance Co. vs. American Steamship transport persons, things, or news from one place to another for a
Agencies Inc., 23 SCRA 24, April 4, 1968) fixed price.Such person or association of persons are regarded as
carriers and are classified as private or special carriers and common
or public carriers.A common carrier is defined under Article 1732 of
FGU INSURANCE v. G.P. SARMIENTO the Civil Code as persons, corporations, firms or associations
engaged in the business of carrying or transporting passengers or
goods or both, by land, water or air, for compensation, offering their
Crisostomo vs. CA services to the public.
G.R. No. 138334 August 25, 2003
It is obvious from the above definition that respondent is not an entity
FACTS: engaged in the business of transporting either passengers or goods
and is therefore, neither a private nor a common carrier. Respondent
In May 1991, petitioner Estela L. Crisostomo contracted the services did not undertake to transport petitioner from one place to another
of respondent Caravan Travel and Tours International, Inc. to arrange since its covenant with its customers is simply to make travel
and facilitate her booking, ticketing and accommodation in a tour arrangements in their behalf. Respondent’s services as a travel agency
dubbed “Jewels of Europe”. The package tour included the countries include procuring tickets and facilitating travel permits or visas as
of England, Holland, Germany, Austria, Liechstenstein, Switzerland well as booking customers for tours.
and France at a total cost of P74,322.70.Petitioner was given a 5%
discount on the amount, which included airfare, and the booking fee While petitioner concededly bought her plane ticket through the
was also waived because petitioner’s niece, Meriam Menor, was efforts of respondent company, this does not mean that the latter ipso
respondent company’s ticketing manager. facto is a common carrier. At most, respondent acted merely as an
agent of the airline, with whom petitioner ultimately contracted for
Pursuant to said contract, Menor went to her aunt’s residence on June her carriage to Europe. Respondent’s obligation to petitioner in this
12, 1991 – a Wednesday – to deliver petitioner’s travel documents regard was simply to see to it that petitioner was properly booked
and plane tickets.Petitioner, in turn, gave Menor the full payment for with the airline for the appointed date and time. Her transport to the
the package tour.Menor then told her to be at the Ninoy Aquino place of destination, meanwhile, pertained directly to the airline.
International Airport (NAIA) on Saturday,two hours before her
flight on board British Airways. The object of petitioner’s contractual relation with respondent is the
latter’s service of arranging and facilitating petitioner’s booking,
Without checking her travel documents, petitioner went to NAIA on ticketing and accommodation in the package tour. In contrast, the
Saturday, June 15, 1991, to take the flight for the first leg of her object of a contract of carriage is the transportation of passengers or
journey from Manila to Hongkong. To petitioner’s dismay, she goods. It is in this sense that the contract between the parties in this
discovered that the flight she was supposed to take had already case was an ordinary one for services and not one of carriage.
departed the previous day.She learned that her plane ticket was for Petitioner’s submission is premised on a wrong assumption.It is thus
the flight scheduled on June 14, 1991. She thus called up Menor to not bound under the law to observe extraordinary diligence in the
complain. performance of its obligation, as petitioner claims.
Subsequently, Menor prevailed upon petitioner to take another tour – Since the contract between the parties is an ordinary one for services,
the “British Pageant” – which included England, Scotland and Wales the standard of care required of respondent is that of a good father of
in its itinerary. For this tour package, petitioner was asked anew to a family under Article 1173 of the Civil Code.This connotes
pay US$785.00 or P20,881.00 (at the then prevailing exchange rate reasonable care consistent with that which an ordinarily prudent
of P26.60). She gave respondent US$300 or P7,980.00 as partial person would have observed when confronted with a similar
payment and commenced the trip in July 1991. situation. The test to determine whether negligence attended the
performance of an obligation is: did the defendant in doing the
Upon petitioner’s return from Europe, she demanded from respondent alleged negligent act use that reasonable care and caution which an
the reimbursement of P61,421.70, representing the difference ordinarily prudent person would have used in the same situation?If
between the sum she paid for “Jewels of Europe” and the amount she not, then he is guilty of negligence.
owed respondent for the “British Pageant” tour. Despite several
demands, respondent company refused to reimburse the amount,
contending that the same was non-refundable.Petitioner was thus we do not agree with the finding of the lower court that Menor’s
constrained to file a complaint against respondent for breach of negligence concurred with the negligence of petitioner and resultantly
contract of carriage and damages, which was docketed as Civil Case caused damage to the latter. Contrary to petitioner’s claim, the
evidence on record shows that respondent exercised due diligence in
EH 405 Page 13
performing its obligations under the contract and followed standard shipper's branch office, Davao City, in virtue of which the carrier sent
procedure in rendering its services to petitioner. As correctly two of its lighters to undertake the service. It also appears that the
observed by the lower court, the plane ticket. issued to petitioner patrons of said lighters were employees of the carrier with due
clearly reflected the departure date and time, contrary to petitioner’s authority to undertake the transportation and to sign the documents
contention. The travel documents, consisting of the tour itinerary, that may be necessary therefor.
vouchers and instructions, were likewise delivered to petitioner two The fact that the carrier sent its lighters free of charge to take the
days prior to the trip. Respondent also properly booked petitioner for hemp from Macleod's wharf at Sasa preparatory to its loading onto
the tour, prepared the necessary documents and procured the plane the ship Bowline Knot does not in any way impair the contract of
tickets. It arranged petitioner’s hotel accommodation as well as food, carriage already entered into between the carrier and the shipper, for
land transfers and sightseeing excursions, in accordance with its that preparatory step is but part and parcel of said contract of
avowed undertaking. Therefore, it is clear that respondent performed carriage. In other words, here we have a complete contract of carriage
its prestation under the contract as well as everything else that was the consummation of which has already begun: the shipper delivering
essential to book petitioner for the tour. the cargo to the carrier, and the latter taking possession thereof by
placing it on a lighter manned by its authorized employees, under
Hence, petitioner cannot recover and must bear her own damage. which Macleod became entitled to the privilege secured to him by
law for its safe transportation and delivery, and the carrier to the full
payment of its freight upon completion of the voyage.
4. Distinction from towage, arrester and stevedoring
5. Governing Laws The receipt of goods by the carrier has been said to lie at the
6. Registered Owner Rule and Kabit System foundation of the contract to carry and deliver, and if actually no
goods are received there can be no such contract. The liability and
C. OBLIGATIONS OF PARTIES AND DEFENSES responsibility of the carrier under a contract for the carriage of goods
1. Duties of Common Carrier commence on their actual delivery to, or receipt by, the carrier or an
authorized agent. ... and delivery to a lighter in charge of a vessel for
COMPAÑIA MARITIMA v. INSURANCE COMPANY OF shipment on the vessel, where it is the custom to deliver in that way,
NORTH AMERICA is a good delivery and binds the vessel receiving the freight, the
G.R. No. L-18965 October 30, 1964 liability commencing at the time of delivery to the lighter. ... and,
similarly, where there is a contract to carry goods from one port to
FACTS: another, and they cannot be loaded directly on the vessel and lighters
are sent by the vessel to bring the goods to it, the lighters are for the
Macleod and Company of the Philippines contracted the services of time its substitutes, so that the bill of landing is applicable to the
the Compañia Maritima, a shipping corporation, for the shipment of goods as soon as they are placed on the lighters. (80 C.J.S., p. 901,
2,645 bales of hemp from the former's Sasa private pier at Davao emphasis supplied)
City to Manila and for their subsequent transhipment to Boston,
Massachusetts, U.S.A. on board the S.S. Steel Navigator. This oral The liability of the carrier as common carrier begins with the actual
contract was later on confirmed by a formal and written booking delivery of the goods for transportation, and not merely with the
issued by Macleod's branch office in Sasa and handcarried to formal execution of a receipt or bill of lading; the issuance of a bill of
Compañia Maritima's branch office in Davao in compliance with lading is not necessary to complete delivery and acceptance. Even
which the latter sent to Macleod's private wharf on which the loading where it is provided by statute that liability commences with the
of the hemp was completed on October 29, 1952. These two lighters issuance of the bill of lading, actual delivery and acceptance are
were manned each by a patron and an assistant patron. The patrons of sufficient to bind the carrier.
both barges issued the corresponding carrier's receipts.
During the night of October 29, 1952, or at the early hours of October SERVANDO vs. PHILIPPINE STEAM NAVIGATION CO.
30, LCT No. 1025 sank, resulting in the damage or loss of 1,162
bales of hemp loaded therein. The total damages totaled to FACTS:
P60,421.02. Since Macleod’s products were insured by Insurance
Company of North America, it executed a subrogation contract where On November 6, 1963, appellees Clara Uy Bico and Amparo
Macleod assigned all rights to the Insurance Company of North Servando loaded on board the appellant's vessel, FS-176, for carriage
America to the damaged and insured cargo. Unable to collect from from Manila to Pulupandan, Negros Occidental. In the bills of lading
Compania Maritima, Company of North America filed this case in issued for the cargoes in question, the parties agreed to limit the
court. The trial court ordered Compania Maritima to pay Macleod responsibility of the carrier for the loss or damage that may be caused
the damages it incurred due to its sinking. The CA affirmed the to the shipment by inserting therein the following stipulation:
decision of the lower court prompting the petitioner to elevate the Clause 14. Carrier shall not be responsible for loss or damage to
case to the Supreme Court. shipments billed 'owner's risk' unless such loss or damage is due to
negligence of carrier. Nor shall carrier be responsible for loss or
ISSUE: damage caused by force majeure, dangers or accidents of the sea or
other waters; war; public enemies; . . . fire . ...
(1) Was there a contract of carriage between the carrier and the
shipper even if the loss occurred when the hemp was loaded on a Upon arrival of the vessel at Pulupandan, in the morning of
barge owned by the carrier which was loaded free of charge and was November 18, 1963, the cargoes were discharged, complete and in
not actually loaded on the S.S. Bowline Knot which would carry the good order, unto the warehouse of the Bureau of Customs. At about
hemp to Manila and no bill of lading was issued therefore? 2:00 in the afternoon of the same day, said warehouse was razed by a
fire of unknown origin, destroying appellees' cargoes. Before the fire,
HELD: however, appellee Uy Bico was able to take delivery of 907 cavans of
rice 2 Appellees' claims for the value of said goods were rejected by
1. This issue should be answered in the affirmative. The oral contract the appellant
was later confirmed by a formal and written booking issued by the
SC RULING
EH 405 Page 14
Compania General de Tabacos de Filipinas while private respondent
We sustain the validity of the above stipulation; there is nothing Efren Castillo, on the other hand, is the proprietor of Ethegal
therein that is contrary to law, morals or public policy. Laboratories, a firm engaged in the manutacture of pharmaceutical
products.
Besides, the agreement contained in the above quoted Clause 14 is a
mere iteration of the basic principle of law written in Article 1 1 7 4 Private respondent ordered from Eli Lilly. Inc. (ELI) of Puerto Rico
of the Civil Code: through its agent in the Philippines, Elanco Products, 600,000 empty
Article 1174. Except in cases expressly specified by the law, or when gelatin capsules for the manufacture of his pharmaceutical products.
it is otherwise declared by stipulation, or when the nature of the The shipper ELI advised Castillo as consignee that the gelatin
obligation requires the assumption of risk, no person shall be capsules contained in 6 drums were already shipped on board MV
responsible for those events which could not be foreseen, or which, "Anders Maerskline for shipment to the Philippines via Oakland,
though foreseen, were inevitable. California, which according to the memo sent, was to arrive on April
3, 1977.
Thus, where fortuitous event or force majeure is the immediate and
proximate cause of the loss, the obligor is exempt from liability for For reasons unknown, the cargo of capsules were mishipped and
non-performance. The Partidas, 4 the antecedent of Article 1174 of diverted to Richmond, Virginia, USA and then transported back
the Civil Code, defines 'caso fortuito' as 'an event that takes place by Oakland, Califorilia causing it to arrive 2 months after it was
accident and could not have been foreseen. Examples of this are specified in the memo. Castillo refused to receive the delivery of the
destruction of houses, unexpected fire, shipwreck, violence of goods due to the delay. Castillo filed before the rescission of the
robbers.' contract and damages against ELI.
In its dissertation of the phrase 'caso fortuito' the Enciclopedia ELI’s argument was that it the subject shipment was transported in
Juridicada Espanola 5 says: "In a legal sense and, consequently, also accordance with the provisions of the covering bill of lading and that
in relation to contracts, a 'caso fortuito' presents the following its liability under the law on transportation of good attaches only in
essential characteristics: (1) the cause of the unforeseen and case of loss, destruction or deterioration of the goods as provided for
unexpected occurrence, or of the failure of the debtor to comply with in Article 1734 of Civil Code and ELI filed a croos-claim against
his obligation, must be independent of the human will; (2) it must be Maerskline. issues having been joined, private respondent moved for
impossible to foresee the event which constitutes the 'caso fortuito', the dismissal of the complaint against Eli Lilly, Inc.on the ground
or if it can be foreseen, it must be impossible to avoid; (3) the that the evidence on record shows that the delay in the delivery of the
occurrence must be such as to render it impossible for the debtor to shipment was attributable solely to petitioner.
fulfill his obligation in a normal manner; and (4) the obligor must be
free from any participation in the aggravation of the injury resulting RTC: ruled in favor of Castillo on the ground that breach in the
to the creditor." In the case at bar, the burning of the customs performance of their obligation consisting of their negligence to
warehouse was an extraordinary event which happened deliver the goods on time.
independently of the will of the appellant. The latter could not have CA: Affirmed the Decision of the RTC.
foreseen the event.
ISSUE:
There is nothing in the record to show that appellant carrier ,incurred
in delay in the performance of its obligation. It appears that appellant W/N maerskline may be held liable for the delay
had not only notified appellees of the arrival of their shipment, but
had demanded that the same be withdrawn. In fact, pursuant to such Ruling:
demand, appellee Uy Bico had taken delivery of 907 cavans of rice
before the burning of the warehouse. The SC, in their ruling made reference to the stipulations in the bill of
lading. A provision in said bill of lading states that “The Carrier does
Nor can the appellant or its employees be charged with negligence. not undertake that the goods shall arive at the port of discharge or the
The storage of the goods in the Customs warehouse pending place of delivery at any particular time or to meet any particular
withdrawal thereof by the appellees was undoubtedly made with their market or use and save as is provided in clause 4 the Carrier shall in
knowledge and consent. Since the warehouse belonged to and was no circumstances be liable for any direct, indirect or consequential
maintained by the government, it would be unfair to impute loss or damage caused by delay”. According to the SC, the
negligence to the appellant, the latter having no control whatsoever aforequoted provision at the back of the bill of lading, in fine print, is
over the same. a contract of adhesion. Generally, contracts of adhesion are
considered void since almost all the provisions of these types of
The lower court in its decision relied on the ruling laid down in Yu contracts are prepared and drafted only by one party, usually the
Biao Sontua vs. Ossorio 6, where this Court held the defendant liable carrier. Nonetheless, settled is the rule that bills of lading are
for damages arising from a fire caused by the negligence of the contracts not entirely prohibited. The questioned provision in the
defendant's employees while loading cases of gasoline and petroleon subject bill of lading has the effect of practically leaving the date of
products. But unlike in the said case, there is not a shred of proof in arrival of the subject shipment on the sole determination and will of
the present case that the cause of the fire that broke out in the the carrier.
Custom's warehouse was in any way attributable to the negligence of
the appellant or its employees. Under the circumstances, the appellant While it is true that common carriers are not obligated by law to carry
is plainly not responsible and to deliver merchandise, and persons are not vested with the right
to prompt delivery, unless such common carriers previously assume
the obligation to deliver at a given date or time (Mendoza v.
MAERSK LINE vs. CA Philippine Air Lines, Inc., 90 Phil. 836 [1952]), delivery of shipment
or cargo should at least be made within a reasonable time.
FACTS: In the case before us, we find that a delay in the delivery of the goods
spanning a period of two (2) months and seven (7) days falls was
Petitioner Maersk Line is engaged in the transportation of goods by beyond the realm of reasonableness. It was due to petitioner’s
sea, doing business in the Philippines through its general agent negligence that the goods were mishipped to Richmond, Virginia.
EH 405 Page 15
PAKISTAN BANK was indicated in the bills of lading as consignee
whereas GPC was the notify party. However, in the export invoices
MACAM vs. CA GPC was clearly named as buyer/importer. Petitioner also referred to
[G.R. No. 125524. August 25, 1999] GPC as such in his demand letter to respondent WALLEM and in his
complaint before the trial court.
FACTS: This premise draws us to conclude that the delivery of the
cargoes to GPC as buyer/importer which, conformably with Art.
On 4 April 1989 petitioner Macam shipped on board the vessel Nen 1736 had, other than the consignee, the right to receive them was
Jiang, owned and operated by respondent China Ocean Shipping Co., proper.
through local agent respondent WALLEM, 3,500 boxes of
watermelons and 1,611 boxes of fresh mangoes; the two sets of fruits 2.) NO.
were covered by two bills of lading and were exported through their Contrary to petitioner’s claims, the Court agrees with
respective Letters of Credit both issued by Pakistan Bank. The respondents that it was his (Macam’s) practice to ask the shipping
shipment was bound for Hongkong with PAKISTAN BANK as lines to immediately release shipment of perishable goods through
consignee and Great Prospect Company of Kowloon, Hongkong telephone calls by himself or his “people.” He no longer required
(GPC) as notify party. On 6 April 1989, per letter of credit presentation of a bill of lading nor of a bank guarantee as a condition
requirement, copies of the bills of lading and commercial invoices to releasing the goods in case he was already fully paid. Thus, taking
were submitted to petitioner's depository bank, Consolidated Banking into account that subject shipment consisted of perishable goods and
Corporation (SOLIDBANK), which paid petitioner in advance the SOLIDBANK pre-paid the full amount of the value thereof, it is not
total value of the shipment of US$20,223.46. hard to believe the claim of respondent WALLEM that petitioner
indeed requested the release of the goods to GPC without
Upon arrival in Hongkong, the shipment was (1) delivered by presentation of the bills of lading and bank guarantee.
respondent WALLEM directly to GPC (the buyer-importer), not to
PAKISTAN BANK, (2) and without the required bill of lading Respondents submitted in evidence a telex dated 5 April 1989 as
having been surrendered. Subsequently, GPC failed to pay basis for delivering the cargoes to GPC without the bills of lading and
PAKISTAN BANK such that the latter, still in possession of the bank guarantee. The telex instructed delivery of various shipments to
original bills of lading, refused to pay petitioner through the respective consignees without need of presenting the bill of lading
SOLIDBANK. Since SOLIDBANK already pre-paid petitioner the and bank guarantee per the respective shipper’s request since “for
value of the shipment, it demanded payment from respondent prepaid shipt ofrt charges already fully paid” (sic).
WALLEM through five (5) letters but was refused. Petitioner was
thus allegedly constrained to return the amount involved to It has been the practice of petitioner to request the shipping lines to
SOLIDBANK; petitioner then demanded payment from respondent immediately release perishable cargoes such as watermelons and
WALLEM in writing but to no avail. fresh mangoes through telephone calls by himself or his “people.” In
transactions covered by a letter of credit, bank guarantee is normally
On 25 September 1991 petitioner sought collection of the value of the required by the shipping lines prior to releasing the goods. But for
shipment of US$20,223.46 or its equivalent of P546,033.42 from buyers using telegraphic transfers, petitioner dispenses with the bank
respondents before the Regional Trial Court of Manila, based on guarantee because the goods are already fully paid. In his several
delivery of the shipment to GPC without presentation of the bills of years of business relationship with GPC and respondents, there was
lading and bank guarantee. not a single instance when the bill of lading was first presented before
the release of the cargoes.
On 14 May 1993, the trial court favored Pet, ordering China Ocean
Shipping and Wallem to pay, jointly and severally. The Court of In view of petitioner’s utter failure to establish the liability of
Appeals appreciated the evidence in a different manner; it set aside respondents over the cargoes, no reversible error was committed by
the decision of the trial court and dismissed the complaint together respondent court in ruling against him.
with the counterclaims. Hence, the petition for review.
WHEREFORE, the petition is DENIED.
ISSUES:
(1) Duration and extent of a common carrier’s extraordinary DELSAN TRANSPORT LINES, INC vs. AMERICAN HOME
responsibility. WON delivery to GPC was proper. ASSURANCE CORPORATION
(2) WON respondents are liable to petitioner for releasing the G.R. No. 149019, August 15, 2006
goods to GPC without the bills of lading or bank
guarantee.
FACTS:
RULING:
Delsan is a domestic corporation which owns and operates the vessel
1.) YES. MT Larusan. On the other hand, respondent American Home
Art. 1736 of the NCC. The extraordinary responsibility of Assurance Corporation (AHAC for brevity) is a foreign insurance
the common carriers lasts from the time the goods are company duly. It is engaged, among others, in insuring cargoes for
unconditionally placed in the possession of, and received by the transportation within the Philippines.
carrier for transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the person who Unloading operations commenced, discharging of the diesel oil. The
has a right to receive them, without prejudice to the provisions of discharging had to be stopped on account of the discovery that the
article 1738. port bow mooring of the vessel was intentionally cut or stolen by
unknown persons. Because there was nothing holding it, the vessel
We emphasize that the extraordinary responsibility of the common drifted westward, ultimately caused the diesel oil to spill into the sea.
carriers lasts until actual or constructive delivery of the cargoes to the
consignee or to the person who has a right to receive them.
EH 405 Page 16
As a result of spillage and backflow of diesel oil, Caltex sought feeder vessel, bound for Port Dammam, Saudi Arabia. However,
recovery of the loss from Delsan, but the latter refused to pay. As while in transit, the vessel and all its cargo caught fire.
insurer, AHAC paid Caltex. AHAC, as Caltex’s subrogee, instituted
Civil Case against Delsan. caused by the spillage. It likewise prayed Consequently, Federal Phoenix Assurance paid Berde Plants
that it be indemnified for damages suffered P941,429.61 corresponding to the amount of insurance for the cargo.
In turn Berde Plants executed in its favor a "Subrogation Receipt"
Delsan insists that the rule on contributory negligence against Caltex, Thus, Federal Phoenix Assurance filed a complaint for damages
the shipper-owner of the cargo, and the diesel oil was already against DSR-Senator Lines and C.F. Sharp
completely delivered to Caltex.
RTC rendered a Decision in favor of Federal Phoenix Assurance
ISSUE:
On appeal, the Court of Appeals rendered a Decision affirming the
W.O.N. Delsan is liable based on Article 1734 of the NCC and RTC Decision
W.O.N. the rule on contributory negligence should be applied against
Caltex. Issue:
HELD: WON the liability was extinguished when the vessel carrying the
cargo was gutted by fire
Petition is DENIED. CA is affirmed.
Ruling:
Art. 1734. Common carriers are responsible for the loss, destruction,
or deterioration of the goods, unless the same is due to any of the Article 1734 of the Civil Code provides:
following causes only: "Art. 1734. Common carriers are responsible for the loss,
destruction, or deterioration of the goods, unless the same is due to
1) Flood storm, earthquake, lightning, or other natural disaster or any of the following causes only:
calamity; (1) Flood, storm, earthquake, lightning, or other natural
2) Act of the public enemy in war, whether international or civil; disaster or calamity;
3) Act or omission of the shipper or owner of the goods; (2) Act of the public enemy in war, whether international or
4) The character of the goods or defects in the packing or in the civil;
containers; (3) Act or omission of the shipper or owner of the goods;
5) Order or act of competent public authority. (4) The character of the goods or defects in the packing or in
the containers;
Delsan failed to prove its claim that there was a contributory (5) Order or act of competent public authority."
negligence on the part of the owner of the goods – Caltex. Dlesan, as
the owner of the vessel, was obliged to prove that the loss was caused Fire is not one of those enumerated under the above provision which
by one of the excepted causes if it were to seek exemption from exempts a carrier from liability for loss or destruction of the cargo.
responsibility. 7 Unfortunately, it miserably failed to discharge this
burden by the required quantum of proof. Even if fire were to be considered a natural disaster within the
purview of Article 1734, it is required under Article 1739 of the
Delsan’s argument that it should not be held liable for the loss of same Code that the natural disaster must have been the proximate
diesel oil due to backflow because the same had already been actually and only cause of the loss, and that the carrier has exercised due
and legally delivered to Caltex at the time it entered the shore tank diligence to prevent or minimize the loss before, during or after the
holds no water. It had been settled that the subject cargo was still in occurrence of the disaster.
the custody of Delsan because the discharging thereof has not yet
been finished. Common carriers are obliged to observe extraordinary diligence in
the vigilance over the goods transported by them. Accordingly, they
are presumed to have been at fault or to have acted negligently if the
2. Defenses of Common Carrier goods are lost, destroyed or deteriorated. There are very few
 Fire as Cause instances when the presumption of negligence does not attach and
these instances are enumerated in Article 1739. In those cases where
DSR-SENATOR LINES AND C.F. SHARP AND COMPANY, the presumption is applied, the common carrier must prove that it
INC. vs. FEDERAL PHOENIX ASSURANCE CO., INC. exercised extraordinary diligence in order to overcome the
G.R. No. 135377. October 7, 2003 presumption.
Facts: Respondent Federal Phoenix Assurance raised the presumption of

negligence against petitioners. However, they failed to overcome it
Berde Plants, Inc. (Berde Plants) delivered 632 units of artificial by sufficient proof of extraordinary diligence.
trees to C.F. Sharp and Company, Inc. (C.F. Sharp, for
transportation and delivery to the consignee. The cargo was loaded Petition is DENIED
in M/S "Arabian Senator."
Federal Phoenix Assurance Company, Inc. (Federal Phoenix  Shore Pass Requirement
Assurance) insured the cargo against all risks in the amount of
P941,429.61. JAPAN AIRLINES vs. ASUNCION
M/S "Arabian Senator" left the Manila South Harbor for Saudi FACTS:
Arabia with the cargo on board. When the vessel arrived in Khor
Fakkan Port, the cargo was reloaded on board DSR-Senator Lines' Respondents Michael and Jeanette Asuncion left Manila on board
Japan Airlines (JAL) bound for LA. Their itinerary included a stop-
EH 405 Page 17
over in Narita and an overnight stay at Hotel Nikko Narita. Upon metric tons (M/T) of Urea 46% fertilizer which the latter shipped in
arrival at Narita, JAL endorsed their applications for shore pass and bulk on 16 June 1974 aboard the cargo vessel M/V "Sun Plum"
directed them to the Japanese immigration official. A shore pass is owned by private respondent Kyosei Kisen Kabushiki Kaisha
required of a foreigner aboard a vessel or aircraft who desires to stay (KKKK) from Kenai, Alaska, U.S.A., to Poro Point, San Fernando,
in the neighborhood of the port of call for not more than 72 hours. La Union, Philippines, as evidenced by Bill of Lading No. KP-1
signed by the master of the vessel and issued on the date of departure.
During their interview, the Japanese immigration official noted that
Michael appeared shorter than his height as indicated in his passport. Prior to its voyage, a time charter-party on the vessel M/V "Sun
Because of this inconsistency, respondents were denied shore pass Plum" pursuant to the Uniform General Charter was entered into
entries and were brought instead to the Narita Airport Rest House between Mitsubishi as shipper/charterer and KKKK as shipowner, in
where they were billeted overnight. Tokyo, Japan.
Respondents were charged US$400.00 each for their accommodation, Before loading the fertilizer aboard the vessel, four (4) of her
security service and meals. holds were all presumably inspected by the charterer's representative
and found fit to take a load of urea in bulk pursuant to par. 16 of the
Respondents filed a complaint for damages claiming that JAL did not charter-party . After the Urea fertilizer was loaded in bulk by
fully apprise them of their travel requirements and that they were stevedores hired by and under the supervision of the shipper, the steel
rudely and forcibly detained at Narita Airport. hatches were closed with heavy iron lids, covered with three (3)
layers of tarpaulin, then tied with steel bonds. The hatches remained
JAL denied the allegations of respondents. It maintained that the closed and tightly sealed throughout the entire voyage.
refusal of the Japanese immigration authorities to issue shore passes
to respondents is an act of state which JAL cannot interfere with or Petitioner unloaded the cargo from the holds into its steelbodied
prevail upon. Consequently, it cannot impose upon the immigration dump trucks which were parked alongside the berth, using metal
authorities that respondents be billeted at Hotel Nikko instead of the scoops attached to the ship, pursuant to the terms and conditions of
airport resthouse. the charter-partly (which provided for an F.I.O.S. clause). However,
the hatches remained open throughout the duration of the discharge.
ISSUE: Each time a dump truck was filled up, its load of Urea was covered
with tarpaulin. The port area was windy, certain portions of the route
WON JAL is guilty of breach of contract. to the warehouse were sandy and the weather was variable, raining
occasionally while the discharge was in progress.

HELD:
It took eleven (11) days for PPI to unload the cargo. A private marine
Under Article 1755 of the Civil Code, a common carrier such as JAL and cargo surveyor, Cargo Superintendents Company Inc. (CSCI),
is bound to carry its passengers safely as far as human care and was hired by PPI to determine the "outturn" of the cargo shipped, by
foresight can provide, using the utmost diligence of very cautious taking draft readings of the vessel prior to and after discharge. The
persons, with due regard for all the circumstances. When an airline survey report submitted by CSCI to the consignee (PPI) revealed a
issues a ticket to a passenger, confirmed for a particular flight on a shortage in the cargo of 106.726 M/T and that a portion of the Urea
certain date, a contract of carriage arises. The passenger has every fertilizer approximating 18 M/T was contaminated with dirt, sand and
right to expect that he be transported on that flight and on that date rust and rendered unfit for commerce.
and it becomes the carrier’s obligation to carry him and his luggage
safely to the agreed destination. If the passenger is not so transported Consequently, PPI sent a claim letter to Soriamont Steamship
or if in the process of transporting he dies or is injured, the carrier Agencies (SSA), the resident agent of the carrier, KKKK,
may be held liable for a breach of contract of carriage. representing the cost of the alleged shortage in the goods shipped and
the diminution in value of that portion said to have been
We find that JAL did not breach its contract of carriage with contaminated with dirt. Respondent SSA was not able to respond to
respondents. It may be true that JAL has the duty to inspect whether this consignee’s claim for payment because according to them, they
its passengers have the necessary travel documents, however, such only received a request for shortlanded certificate and not a formal
duty does not extend to checking the veracity of every entry in these claim.
documents. JAL could not vouch for the authenticity of a passport
and the correctness of the entries therein. The power to admit or not Hence, PPI filed an action for damages with the Court of First
an alien into the country is a sovereign act which cannot be interfered Instance of Manila. The defendant carrier argued that the strict public
with even by JAL. This is not within the ambit of the contract of policy governing common carriers does not apply to them because
carriage entered into by JAL and herein respondents. As such, JAL they have become private carriers by reason of the provisions of the
should not be faulted for the denial of respondents’ shore pass charter-party. The court a quo however sustained the claim of the
applications. plaintiff against the defendant carrier for the value of the goods lost
or damaged.
 Exercise of Extraordinary Diligence, Inherent On appeal, respondent Court of Appeals reversed the lower court and
Character of Goods and Inadequacy of Packaging absolved the carrier from liability for the value of the cargo that was
lost or damaged. Relying on the 1968 case of Home Insurance
PLANTERS PRODUCTS, INC. VS. COURT OF APPEALS, Co.v. American Steamship Agencies, Inc., the appellate court ruled
SORIAMONT STEAMSHIP AGENCIES AND KYOSEI KISEN that the cargo vessel M/V "Sun Plum" owned by private respondent
KABUSHIKI KAISHA KKKK was a private carrier and not a common carrier by reason of
G.R. No. 101503 September 15, 1993 the time charterer-party. Accordingly, the Civil Code provisions on
common carriers which set forth a presumption of negligence do not
FACTS: find application in the case at bar.
Planters Products, Inc. (PPI), purchased from Mitsubishi International
Corporation (MITSUBISHI) of New York, U.S.A., 9,329.7069
EH 405 Page 18
ISSUE: Whether a common carrier becomes a private carrier by United States that a ship chartered by a single shipper to carry special
reason of a charter-party. cargo is not a common carrier, does not find application in our
jurisdiction, for we have observed that the growing concern for safety
HELD: The assailed decision of the Court of Appeals, which in the transportation of passengers and /or carriage of goods by sea
reversed the trial court, is affirmed. requires a more exacting interpretation of admiralty laws, more
particularly, the rules governing common carriers.
A "charter-party" is defined as a contract by which an entire ship, or
some principal part thereof, is let by the owner to another person for a In an action for recovery of damages against a common carrier on the
specified time or use; a contract of affreightment by which the owner goods shipped, the shipper or consignee should first prove the fact of
of a ship or other vessel lets the whole or a part of her to a merchant shipment and its consequent loss or damage while the same was in
or other person for the conveyance of goods, on a particular voyage, the possession, actual or constructive, of the carrier. Thereafter, the
in consideration of the payment of freight; Charter parties are of two burden of proof shifts to respondent to prove that he has exercised
types: (a) contract of affreightment which involves the use of extraordinary diligence required by law or that the loss, damage or
shipping space on vessels leased by the owner in part or as a whole, deterioration of the cargo was due to fortuitous event, or some other
to carry goods for others; and, (b) charter by demise or bareboat circumstances inconsistent with its liability. To our mind, respondent
charter, by the terms of which the whole vessel is let to the charterer carrier has sufficiently overcome, by clear and convincing proof,
with a transfer to him of its entire command and possession and the prima facie presumption of negligence. Verily, the presumption
consequent control over its navigation, including the master and the of negligence on the part of the respondent carrier has been
crew, who are his servants. Contract of affreightment may either be efficaciously overcome by the showing of extraordinary zeal and
time charter, wherein the vessel is leased to the charterer for a fixed assiduity exercised by the carrier in the care of the cargo. The period
period of time, or voyage charter, wherein the ship is leased for a during which private respondent was to observe the degree of
single voyage. In both cases, the charter-party provides for the hire of diligence required of it as a public carrier began from the time the
vessel only, either for a determinate period of time or for a single or cargo was unconditionally placed in its charge after the vessel's holds
consecutive voyage, the shipowner to supply the ship's stores, pay for were duly inspected and passed scrutiny by the shipper, up to and
the wages of the master and the crew, and defray the expenses for the until the vessel reached its destination and its hull was reexamined by
maintenance of the ship. the consignee, but prior to unloading.
Upon the other hand, the term "common or public carrier" is
defined in Art. 1732 of the Civil Code. The definition extends to Article 1734 of the New Civil Code provides that common carriers
carriers either by land, air or water which hold themselves out as are not responsible for the loss, destruction or deterioration of the
ready to engage in carrying goods or transporting passengers or both goods if caused by the charterer of the goods or defects in the
for compensation as a public employment and not as a casual packaging or in the containers. The Code of Commerce also provides
occupation. The distinction between a "common or public carrier" that all losses and deterioration which the goods may suffer during
and a "private or special carrier" lies in the character of the business, the transportation by reason of fortuitous event, force majeure, or the
such that if the undertaking is a single transaction, not a part of the inherent defect of the goods, shall be for the account and risk of the
general business or occupation, although involving the carriage of shipper, and that proof of these accidents is incumbent upon the
goods for a fee, the person or corporation offering such service is a carrier. The carrier, nonetheless, shall be liable for the loss and
private carrier. damage resulting from the preceding causes if it is proved, as against
him, that they arose through his negligence or by reason of his having
It is not disputed that respondent carrier, in the ordinary course of failed to take the precautions which usage has established among
business, operates as a common carrier, transporting goods careful persons.
indiscriminately for all persons. When petitioner chartered the vessel
M/V "Sun Plum", the ship captain, its officers and compliment were Thus, the petition is dismissed.
under the employ of the shipowner and therefore continued to be
under its direct supervision and control. Hardly then can we charge
the charterer, a stranger to the crew and to the ship, with the duty of  Exercise of Extraordinary Diligence and Doctrine of
caring for his cargo when the charterer did not have any control of Last Clear Chance
the means in doing so. This is evident in the present case considering  Fortuitous Event
that the steering of the ship, the manning of the decks, the
determination of the course of the voyage and other technical
incidents of maritime navigation were all consigned to the officers
and crew who were screened, chosen and hired by the shipowner.
It is therefore imperative that a public carrier shall remain as such,

notwithstanding the charter of the whole or portion of a vessel by one
or more persons, provided the charter is limited to the ship only, as in
the case of a time-charter or voyage-charter. It is only when the
charter includes both the vessel and its crew, as in a bareboat or
demise that a common carrier becomes private, at least insofar as the
particular voyage covering the charter-party is concerned.
Indubitably, a shipowner in a time or voyage charter retains
possession and control of the ship, although her holds may, for the
moment, be the property of the charterer.
Respondent carrier's heavy reliance on the case of Home Insurance

Co. v. American Steamship Agencies, supra, is misplaced for the
reason that the meat of the controversy therein was the validity of a
stipulation in the charter-party exempting the shipowners from
liability for loss due to the negligence of its agent, and not the effects
of a special charter on common carriers. At any rate, the rule in the
EH 405 Page 19

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TRANSPORTATION LAW CASE DIGESTS

Private respondents filed a complaint for damages against petitioners FACTS:

FACTS: The above list of causes of loss, destruction or deterioration which

WON the petitioner is a "common carrier" and, therefore, exempt

Common carriers are presumed to have been at fault or to have acted

CA reversed. Common carriers are persons, corporations, firms or

Common carriers are bound to observe extraordinary diligence in

Issues: Court of Appeals affirmed in part the RTC judgment by sustaining

Facts: Respondent Federal Phoenix Assurance raised the presumption of

It is therefore imperative that a public carrier shall remain as such,

Respondent carrier's heavy reliance on the case of Home Insurance

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