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PETITION for review on certiorari of a decision and

resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

     Soo, Gutierrez, Leogardo & Lee for petitioner.

_______________
340 SUPREME COURT REPORTS ANNOTATED
Asia Lighterage and Shipping, Inc. vs. Court of Appeals * THIRD DIVISION.

* 341
G.R. No. 147246. August 19, 2003.

ASIA LIGHTERAGE AND SHIPPING, INC., petitioner, vs. VOL. 409, AUGUST 19, 2003 341
COURT OF APPEALS and PRUDENTIAL GUARANTEE Asia Lighterage and Shipping, Inc. vs. Court of Appeals
AND ASSURANCE, INC., respondents.
          Linsangan, Linsangan & Linsangan Law Offices for
Civil Law; Contracts; Common Carriers; Definition.—The private respondent.
definition of common carriers in Article 1732 of the Civil Code
PUNO, J.:
makes no distinction between one whose principal business
activity is the carrying of persons or goods or both, and one who On appeal is the Court of Appeals’ May 11, 2000 Decision
1

does such carrying only as an ancillary activity. We also did not in CA-G.R. CV No. 49195 and February 21, 2001
distinguish between a person or enterprise offering transportation Resolution
2
affirming with modification the April 6, 1994
service on a regular or scheduled basis and one offering such 3
Decision of the Regional Trial Court of Manila which found
service on an occasional, episodic or unscheduled basis. Further, petitioner liable to pay private respondent the amount of
we ruled that Article 1732 does not distinguish between a carrier indemnity and attorney’s fees.
offering its services to the general public, and one who offers First, the facts.
services or solicits business only from a narrow segment of the On June 13, 1990, 3,150 metric tons of Better Western
general population. White Wheat in bulk, valued at US$423,192,35 was
4

Same; Same; Same; Determination of a common carrier.—The shipped by Marubeni American Corporation of Portland,
test to determine a common carrier is “whether the given Oregon on board the vessel M/V NEO CYMBIDIUM V-26
undertaking is a part of the business engaged in by the carrier for delivery to the consignee, General Milling Corporation5
which he has held out to the general public as his occupation in Manila, evidenced by Bill of Lading No. PTD/Man-4.
rather than the quantity or extent of the business transacted.” The shipment was insured by the private respondent
Same; Same; Same; Presumption of Negligence; Common
Prudential Guarantee and Assurance, Inc. against loss or
carriers are presumed to have been at fault or to have acted
damage for P14,621,771.75
6
under Marine Cargo Risk Note
negligently if the goods are lost, destroyed or deteriorated.—
RN 11859/90.
Common carriers are bound to observe extraordinary diligence in
On July 25, 1990, the carrying vessel arrived in Manila
the vigilance over the goods transported by them. They are
and the cargo was transferred to the custody of the
presumed to have been at fault or to have acted negligently if the
petitioner Asia Lighterage and Shipping, Inc. The
goods are lost, destroyed or deteriorated. To overcome the
petitioner was contracted by the consignee as carrier to
presumption of negligence in the case of loss, destruction or
deliver the cargo to consignee’s warehouse at Bo. Ugong,
deterioration of the goods, the common carrier must prove that it
Pasig City.
exercised extraordinary diligence. There are, however, exceptions
On August 15, 1990, 900 metric tons of the shipment
to this rule. Article 1734 of the Civil Code enumerates the
was loaded on barge7
PSTSI III, evidenced by Lighterage
instances when the presumption of negligence does not attach.
Receipt No. 0364 for delivery to consignee. The cargo did
not reach its destination.

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It appears that on August 17, 1990, the transport of said On January 30, 1991, the private respondent 15
cargo was suspended due to a warning of an incoming indemnified the consignee in the amount of P4,104,654.22.
typhoon. On August 22, 1990, the petitioner proceeded to Thereafter, as subrogee, it sought recovery of said amount
pull the barge to Engineering Island off Baseco to seek from the petitioner, but to no avail.
shelter from the approaching typhoon. PSTSI III was tied On July 3, 1991, the private respondent filed a
down to other barges which arrived complaint against the petitioner for recovery of the amount
of indemnity,
_______________
_______________
1 Rollo, pp. 49-59.
2 Id., at p. 61. 8 Exhibit “4,” id., p. 144.
3 Id., at pp. 71-73. 9 Exhibits “G-1” and “1-A,” id., p. 100.
4 Exhibit “B,” Records, p. 91. 10 Exhibits “G-2” and “1-B,” id., p. 101.
5 Exhibit “A,” id., p. 90. 11 Ibid.
6 Exhibits “I” and “I-1,” id., pp. 107-108. 12 Exhibit “5,” Records, p. 145.
7 Exhibit “C,” id., at p. 92. 13 Supra note 10.
14 Exhibits “G-3” and “1-C,” Records, p. 102.
342 15 Exhibit “L,” id., p. 110.

343
342 SUPREME COURT REPORTS ANNOTATED
Asia Lighterage and Shipping, Inc. vs. Court of Appeals
VOL. 409, AUGUST 19, 2003 343
ahead of it while weathering out the storm that night. A Asia Lighterage and Shipping, Inc. vs. Court of Appeals
few days after, the barge developed a list because of a hole
16
it sustained after hitting an unseen protuberance attorney’s fees and17cost of suit. Petitioner filed its answer
underneath the water. The 8petitioner filed a Marine with counterclaim.
Protest on August 28, 1990. It likewise secured the The Regional Trial Court ruled in favor of the private
services of 9 Gaspar Salvaging Corporation which refloated respondent. The dispositive portion of its Decision states:
the barge. The hole was then patched with clay and
cement. “WHEREFORE, premises considered, judgment is hereby
The barge was then towed to ISLOFF terminal before it rendered ordering defendant Asia Lighterage & Shipping, Inc.
finally headed towards the consignee’s wharf on September liable to pay plaintiff Prudential Guarantee & Assurance Co., Inc.
5, 1990. Upon reaching the Sta. Mesa spillways, the barge the sum of P4,104,654.22 with interest from the date complaint
again ran aground due to strong current. To avoid the was filed on July 3, 1991 until fully satisfied plus 10% of the
complete sinking of the barge, a 10portion of the goods was amount awarded as and for attorney’s fees. Defendant’s
transferred to three other barges. counterclaim18
is hereby DISMISSED. With costs against
The next day, September 6, 1990, the towing bits of the defendant.”
barge broke. It sank completely, resulting in the total loss
11 Petitioner appealed to the Court of Appeals insisting that it
of the remaining cargo. A second Marine Protest was filed
12 is not a common carrier. The appellate court affirmed the
on September 7, 1990.
decision of the trial court with modification. The dispositive
On September 14, 1990, a bidding was conducted to
portion of its decision reads:
dispose of the damaged
13
wheat retrieved and loaded on the
three other barges. The total proceeds
14
from the sale of the “WHEREFORE, the decision appealed from is hereby AFFIRMED
salvaged cargo was P201,379.75. with modification in the sense that the salvage value of
On the same date, September 14, 1990, consignee sent a P201,379.75 shall be deducted from the amount of P4,104,654.22.
claim letter to the petitioner, and another letter dated Costs against appellant.
September 18, 1990 to the private respondent for the value SO ORDERED.”
of the lost cargo.
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Petitioner’s Motion for Reconsideration dated June 3, 2000 (1) Whether the petitioner is a common carrier; and,
was likewise denied by the appellate court in a Resolution (2) Assuming the petitioner is a common carrier,
promulgated on February 21, 2001. whether it exercised extraordinary diligence in its
Hence, this petition. Petitioner submits the following
19 care and custody of the consignee’s cargo.
errors allegedly committed by the appellate court, viz:
On the first issue, we rule that petitioner is a common
(1) THE COURT OF APPEALS DECIDED THE CASE
carrier.
A QUO IN A WAY NOT IN ACCORD WITH LAW
Article 1732 of the Civil Code defines common carriers
AND/OR WITH THE APPLICABLE DECISIONS
as persons, corporations, firms or associations engaged in
OF THE SUPREME COURT WHEN IT HELD
the business of carrying or transporting passengers or
THAT PETITIONER IS A COMMON CARRIER.
goods or both, by land, water, or air, for compensation,
(2) THE COURT OF APPEALS DECIDED THE CASE offering their services to the public.
A QUO IN A WAY NOT IN ACCORD WITH LAW Petitioner contends that it is not a common carrier but a
AND/OR WITH THE APPLICABLE DECISIONS private carrier. Allegedly, it has no fixed and publicly
OF TFIE SUPREME COURT WHEN IT known route, maintains no terminals, and issues no
AFFIRMED THE FINDING OF THE LOWER tickets. It points out that it is not obliged to carry
COURT A QUO THAT ON THE BASIS OF THE indiscriminately for any person. It is not bound to carry
PROVISIONS OF THE CIVIL CODE goods unless it consents. In short, it does not hold out its
20
APPLICABLE TO COM services to the general public.
We disagree. 21

_______________ In De Guzman vs. Court of Appeals, we held that the

definition of common carriers in Article 1732 of the Civil
16 Id., at pp. 1-4. Code makes no distinction between one whose principal
17 Id., at pp. 21-22. business activity is the carrying of persons or goods or both,
18 Id., at p. 172. and one who does such carrying only as an ancillary
19 Rollo, p. 22. activity. We also did not distinguish between a person or
enterprise offering transportation service on a regular or
344
scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis. Further, we
344 SUPREME COURT REPORTS ANNOTATED ruled that Article 1732 does not distinguish between a
carrier offering its services to the
Asia Lighterage and Shipping, Inc. vs. Court of Appeals

_______________
MON CARRIERS, “THE LOSS OF THE CARGO
IS, THEREFORE, BORNE BY THE CARRIER IN 20 Id., at pp. 147-150.
ALL CASES EXCEPT IN THE FIVE (5) CASES 21 G.R. No. L-47822, 22 December 1988, 168 SCRA 612.
ENUMERATED.”
345
(3) THE COURT OF APPEALS DECIDED THE CASE
A QUO IN A WAY NOT IN ACCORD WITH LAW
AND/OR WITH THE APPLICABLE DECISIONS VOL. 409, AUGUST 19, 2003 345
OF THE SUPREME COURT WHEN IT
Asia Lighterage and Shipping, Inc. vs. Court of Appeals
EFFECTIVELY CONCLUDED THAT
PETITIONER FAILED TO EXERCISE DUE
DILIGENCE AND/OR WAS NEGLIGENT IN ITS general public, and one who offers services or solicits
CARE AND CUSTODY OF THE CONSIGNEE’S business only from a narrow segment of the general
CARGO. population.
In the case at bar, the principal business22
of the
The issues to be resolved are: petitioner is that of lighterage and drayage and it offers
its barges to the public for carrying or transporting goods
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by water for compensation. Petitioner23

is clearly a common presumed to have been at fault or to have acted negligently
29
carrier. In De Guzman, supra, we considered private if the goods are lost, destroyed or deteriorated. To
respondent Ernesto Cendaña to be a common carrier even overcome the presumption of negligence in the case of loss,
if his principal occupation was not the carriage of goods for destruction or deterioration of the goods, the common
others, but that of buying used bottles and scrap metal in carrier must prove that it exercised extraordinary
Pangasinan and selling these items in Manila. diligence. There are, however, exceptions to this rule.
We therefore hold that petitioner is a common carrier Article 1734 of the Civil Code enumerates the instances
whether its carrying of goods is done on an irregular rather when the presumption of negligence does not attach:
than scheduled manner, and with an only limited clientele.
A common carrier need not have fixed and publicly known Art. 1734. Common carriers are responsible for the loss,
routes. Neither does it have to maintain terminals or issue destruction, or deterioration of the goods, unless the same is due
tickets. to any of the following causes only:
To be sure, petitioner fits the test of a common carrier as
24 (1) Flood, storm, earthquake, lightning, or other natural
laid down in Bascos vs. Court of Appeals. The test to disaster or calamity;
determine a common carrier is “whether the given
(2) Act of the public enemy in war, whether international or
undertaking is a part of the business engaged in by the
civil;
carrier which he has held out to the general public as his
occupation rather than the quantity or extent of the (3) Act or omission of the shipper or owner of the goods;
25
business transacted.” In the case at bar, the petitioner (4) The character of the goods or defects in the packing or in
admitted that
26
it is engaged in the business of shipping and the containers;
lighterage, offering its barges to the public, despite its (5) Order or act of competent public authority.
limited clientele for carrying
27
or transporting goods by
water for compensation. In the case at bar, the barge completely sank after its
On the second issue, we uphold the findings of the lower towing bits broke, resulting in the total loss of its cargo.
courts that petitioner failed to exercise extraordinary Petitioner claims that this was caused by a typhoon; hence,
diligence in its care and custody of the consignee’s goods. it should not be held liable for the loss of the cargo.
Common carriers are bound to observe extraordinary However, petitioner failed to prove that the typhoon is the
diligence
28
in the vigilance over the goods transported by proximate and only cause of the loss of the goods, and that
them. They are it has exercised due diligence before, during and after the30
occurrence of the typhoon to prevent or minimize the loss.
_______________ The evidence show that, even before the towing bits of the

22 Rollo, p. 127.
_______________
23 See note 21.
24 G.R. No. 101089, 07 April 1993, 221 SCRA 318. Such extraordinary diligence in vigilance over the goods is further
25 Id., at pp. 323-324. expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the
26 Rollo, p. 14. extraordinary diligence for the safety of the passengers is further set forth
27 Id., at pp. 148-150. in articles 1755 and 1756.
28 Article 1733, Civil Code. Common carriers, from the nature of their 29 Article 1735, Civil Code. In all cases other than those mentioned in
business and for reasons of public policy, are bound to observe Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost,
extraordinary diligence in the vigilance over the goods and for the safety destroyed or deteriorated, common carriers are presumed to have been at
of the passengers transported by them, according to all the circumstances fault or to have acted negligently, unless they prove that they observed
of each case. extraordinary diligence as required in article 1733.
30 Article 1739, Civil Code. In order that the common carrier may be
346 exempted from responsibility, the natural disaster must have been the
proximate and only cause of the loss. However, the common carrier must
346 SUPREME COURT REPORTS ANNOTATED exercise due diligence to prevent or minimize the loss before, during and

Asia Lighterage and Shipping, Inc. vs. Court of Appeals 347

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VOL. 409, AUGUST 19, 2003 347 upon the common carrier in case of an act of the public enemy referred to
in article 1734, no. 2.
Asia Lighterage and Shipping, Inc. vs. Court of Appeals
31 TSN, 04 March 1993, pp. 12-13.

barge broke, it had already previously sustained damage 348

when it hit a sunken object while docked at the
Engineering Island. It even suffered a hole. Clearly, this
348 SUPREME COURT REPORTS ANNOTATED
could not be solely attributed to the typhoon. The partly-
submerged vessel was refloated but its hole was patched Asia Lighterage and Shipping, Inc. vs. Court of Appeals
with only clay and cement. The patch work was merely a
32
provisional remedy, not enough for the barge to sail safely. area of responsibility. A part of the testimony of Robert
Thus, when petitioner persisted to proceed with the voyage, Boyd, Cargo Operations Supervisor of the petitioner,
it recklessly exposed the cargo to further damage. A portion reveals:
of the cross-examination of Alfredo Cunanan, cargo- 33
surveyor of Tan-Gatue Adjustment Co., Inc., states: DIRECT-EXAMINATION BY ATTY. LEE:
31   x x x      x x x      x x x
CROSS-EXAMINATION BY ATTY. DONN LEE:
Q Now, Mr. Witness, did it not occur to you it might be
  x x x      x x x      x x x
safer to just allow the Barge to lie where she was
Q Can you tell us what else transpired after that incident? instead of towing it?
A After the first accident, through the initiative of the A Since that time that the Barge was refloated, GMC
barge owners, they tried to pull out the barge from the (General Milling Corporation, the consignee) as I have
place of the accident, and bring it to the anchor terminal said was in a hurry for their goods to be delivered at
for safety, then after deciding if the vessel is stabilized, their Wharf since they needed badly the wheat that was
they tried to pull it to the consignee’s warehouse, now loaded in PSTSI-3. It was needed badly by the
while on route another accident occurred, now this time consignee.
the barge totally hitting something in the course.
Q And this is the reason why you towed the Barge as you
Q You said there was another accident; can you tell the did?
court the nature of the second accident?
A Yes, sir.
A The sinking, sir.
  x x x      x x x      x x x
Q Can you tell the nature . . . can you tell the court, if you 34
CROSS-EXAMINATION BY ATTY. IGNACIO:
know what caused the sinking?
  x x x      x x x      x x x
A Mostly it was related to the first accident because there
was already a hole (sic) on the bottom part of the barge. Q And then from ISLOFF Terminal you proceeded to the
premises of the GMC? Am I correct?
  x x x      x x x      x x x
A The next day, in the morning, we hired for additional
two (2) tugboats, as I have stated.
This is not all. Petitioner still headed to the consignee’s
wharf despite knowledge of an incoming typhoon. During Q Despite of the threats of an incoming typhoon as you
the time that the barge was heading towards the testified a while ago?
consignee’s wharf on September 5, 1990, typhoon “Loleng” A It is already in an inner portion of Pasig River. The
has already entered the Philippine typhoon would be coming and it would be dangerous if
we are in the vicinity of Manila Bay.
_______________ Q But the fact is, the typhoon was incoming? Yes or no?
after the occurrence of flood, storm or other natural disaster in order A Yes.
that the common carrier may be exempted from liability for the loss,
Q And yet as a standard operating procedure of your
destruction, or deterioration of the goods. The same duty is incumbent Company, you have to secure a sort of Certification to
determine the weather condition, am I correct?
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Note.—The general rule is that if the master is injured

A Yes, sir.
by the negligence of a third person and by the concurring
Q So, more or less, you had the knowledge of the incoming contributory negligence of his own servant or agent, the
typhoon, right? latter’s negligence is imputed to his superior and will
defeat the superior’s action against the third person,
_______________ assuming of course that the contributory negligence was
the proximate cause of the injury of which complaint is
32 Certification dated 02 August 1991 issued by the Philippine made (Philippine Commercial and International Bank vs.
Atmospheric Geophysical & Astronomical Services Administration Court of Appeals, 350 SCRA 446 [2001])
(PAGASA), Exhibit “7,” Records, p. 147.
33 TSN, 09 March 1993, pp. 70-71. ——o0o——
34 Id., at pp. 76-77.
350
349

VOL. 409, AUGUST 19, 2003 349

Asia Lighterage and Shipping, Inc. vs. Court of Appeals

A Yes, sir.
© Copyright 2021 Central Book Supply, Inc. All rights reserved.
Q And yet you proceeded to the premises of the GMC?
A ISLOFF Terminal is far from Manila Bay and anytime
even with the typhoon if you are already inside the
vicinity or inside Pasig entrance, it is a safe place to tow
upstream.

Accordingly, the petitioner cannot invoke the occurrence of

the typhoon as force majeure to escape liability for the loss
sustained by the private respondent. Surely, meeting a
typhoon head-on falls short of due diligence required from a
common carrier. More importantly, the officers/employees
themselves of petitioner admitted that when the towing
bits of the vessel broke that caused its sinking and the total
loss of the cargo upon reaching the Pasig River, it was no
longer affected by the typhoon. The typhoon then is not the
proximate cause of the loss of the cargo; a human factor,
i.e., negligence had intervened.
IN VIEW THEREOF, the petition is DENIED. The
Decision of the Court of Appeals in CA-G.R. CV No. 49195
dated May 11, 2000 and its Resolution dated February 21,
2001 arc hereby AFFIRMED. Costs against petitioner.
SO ORDERED.

     Panganiban and Sandoval-Gutierrez, JJ., concur.

     Corona and Carpio-Morales, JJ., On Official Leave.

Petition denied, judgment and resolution affirmed.

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