TRANSPORTATION LAW

DE GUZMAN VS CA
FACTS:
Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used
bottles and scrap metal in Pangasinan. Upon gathering sufficient quantities of
such scrap material, respondent would bring such material to Manila for resale. He
utilized two (2) six-wheeler trucks which he owned for hauling the material to
Manila. On the return trip to Pangasinan, respondent would load his vehicles with
cargo which various merchants wanted delivered to differing establishments in
Pangasinan. For that service, respondent charged freight rates which were
commonly lower than regular commercial rates.
Sometime in November 1970, petitioner Pedro de Guzman a merchant and
authorized dealer of General Milk Company (Philippines), Inc. in Urdaneta,
Pangasinan, contracted with respondent for the hauling of 750 cartons of Liberty
filled milk from a warehouse of General Milk in Makati, Rizal, to petitioner's
establishment in Urdaneta on or before 4 December 1970. Accordingly, on 1
December 1970, respondent loaded in Makati the merchandise on to his trucks:
150 cartons were loaded on a truck driven by respondent himself, while 600
cartons were placed on board the other truck which was driven by Manuel
Estrada, respondent's driver and employee.
Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600
boxes never reached petitioner, since the truck which carried these boxes was
hijacked somewhere along the MacArthur Highway in Paniqui, Tarlac, by armed
men who took with them the truck, its driver, his helper and the cargo. Petitioner
commenced an action claiming the value of the lost merchandise. Petitioner
argues that respondent, being a common carrier, is bound to exercise
extraordinary diligence, which it failed to do. Private respondent denied that he
was a common carrier, and so he could not be held liable for force majeure. The
trial court ruled against the respondent, but such was reversed by the Court of
Appeals.
ISSUE:
WON P.R IS A COMMON CARRIER AND LIABLE FOR THE LOSS OF GOODS
HELD:
(1) Article 1732 makes no distinction between one whose principal business
activity is the carrying of persons or goods or both, and one who does such
carrying only as an ancillary activity. Article 1732 also carefully avoids making any
distinction between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on an occasional,
episodic or unscheduled basis. Neither does Article 1732 distinguish between a
carrier offering its services to the "general public," i.e., the general community or
population, and one who offers services or solicits business only from a narrow
segment of the general population. It appears to the Court that private
respondent is properly characterized as a common carrier even though he merely
"back-hauled" goods for other merchants from Manila to Pangasinan, although
such backhauling was done on a periodic or occasional rather than regular or
scheduled manner, and even though private respondent's principal occupation
was not the carriage of goods for others. There is no dispute that private
respondent charged his customers a fee for hauling their goods; that fee
frequently fell below commercial freight rates is not relevant here. A certificate of

public convenience is not a requisite for the incurring of liability under the Civil
Code provisions governing common carriers.
(2) Article 1734 establishes the general rule that common carriers are responsible
for the loss, destruction or deterioration of the goods which they carry, "unless the
same is due to any of the following causes only:
a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;
b. Act of the public enemy in war, whether international or civil;
c. Act or omission of the shipper or owner of the goods;
d. The character of the goods or defects in the packing or in the containers; and
e. Order or act of competent public authority."
The hijacking of the carrier's truck - does not fall within any of the five (5)
categories of exempting causes listed in Article 1734. Private respondent as
common carrier is presumed to have been at fault or to have acted negligently.
This presumption, however, may be overthrown by proof of extraordinary
diligence on the part of private respondent. We believe and so hold that the limits
of the duty of extraordinary diligence in the vigilance over the goods carried are
reached where the goods are lost as a result of a robbery which is attended by
"grave or irresistible threat, violence or force." we hold that the occurrence of the
loss must reasonably be regarded as quite beyond the control of the common
carrier and properly regarded as a fortuitous event. It is necessary to recall that
even common carriers are not made absolute insurers against all risks of travel
and of transport of goods, and are not held liable for acts or events which cannot
be foreseen or are inevitable, provided that they shall have complied with the
rigorous standard of extraordinary diligence.
FIRST PHILLIPPINE INDUSTRIAL CORP VS. CA
FACTS:
Petitioner is a grantee of a pipeline concession under Republic Act No. 387.
Sometime in January 1995, petitioner applied for mayors permit in Batangas.
However, the Treasurer required petitioner to pay a local tax based on gross
receipts amounting to P956,076.04.
In order not to hamper its operations, petitioner paid the tax under protest in the
amount of P239,019.01 for the first quarter of 1993.
On January 20, 1994, petitioner filed a letter-protest addressed to the respondent
City Treasurer, the pertinent portion of which reads:
"Please note that our Company (FPIC) is a pipeline operator with a government
concession granted under the Petroleum Act. It is engaged in the business of
transporting petroleum products from the Batangas refineries, via pipeline, to
Sucat and JTF Pandacan Terminals. As such, our Company is exempt from paying
tax on gross receipts under Section 133 of the Local Government Code of 1991 x x
xx
"Moreover, Transportation contractors are not included in the enumeration of
contractors under Section 131, Paragraph (h) of the Local Government Code.
Therefore, the authority to impose tax 'on contractors and other independent
contractors' under Section 143, Paragraph (e) of the Local Government Code does
not include the power to levy on transportation contractors.

"The imposition and assessment cannot be categorized as a mere fee authorized

under Section 147 of the Local Government Code. The said section limits the
imposition of fees and charges on business to such amounts as may be
commensurate to the cost of regulation, inspection, and licensing. Hence,
assuming arguendo that FPIC is liable for the license fee, the imposition thereof
based on gross receipts is violative of the aforecited provision. The amount of
P956,076.04 (P239,019.01 per quarter) is not commensurate to the cost of
regulation, inspection and licensing. The fee is already a revenue raising measure,
and not a mere regulatory imposition." The respondent City Treasurer denied the
protest, thus, petitioner filed a complaint before the Regional Trial Court of
Batangas for tax refund. Respondents assert that pipelines are not included in the
term common carrier which refers solely to ordinary carriers or motor vehicles.
The trial court dismissed the complaint, and such was affirmed by the Court of
Appeals.
ISSUE:
Whether a pipeline business is included in the term common carrier so as to
entitle the petitioner to the exemption
HELD:
Article 1732 of the Civil Code defines a "common carrier" as "any person,
corporation, firm or association engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public."
The test for determining whether a party is a common carrier of goods is:
(1) He must be engaged in the business of carrying goods for others as a public
employment, and must hold himself out as ready to engage in the transportation
of goods for person generally as a business and not as a casual occupation;
(2) He must undertake to carry goods of the kind to which his business is
confined;
(3) He must undertake to carry by the method by which his business is conducted
and over his established roads; and
(4) The transportation must be for hire.
Based on the above definitions and requirements, there is no doubt that petitioner
is a common carrier. It is engaged in the business of transporting or carrying
goods, i.e. petroleum products, for hire as a public employment. It undertakes to
carry for all persons indifferently, that is, to all persons who choose to employ its
services, and transports the goods by land and for compensation. The fact that
petitioner has a limited clientele does not exclude it from the definition of a
common carrier.
NATIONAL STEEL CORP VS CA
FACTS:
Plaintiff National Steel Corporation (NSC) as Charterer and defendant Vlasons
Shipping, Inc. (VSI) as Owner, entered into a Contract of Voyage Charter Hire
whereby NSC hired VSIs vessel, the MV Vlasons I to make one voyage to load
steel products at Iligan City and discharge them at North Harbor, Manila. The

handling, loading and unloading of the cargoes were the responsibility of the
Charterer.
The skids of tinplates and hot rolled sheets shipped were allegedly found to be
wet and rusty. Plaintiff, alleging negligence, filed a claim for damages against the
defendant who denied liability claiming that the MV Vlasons I was seaworthy in all
respects for the carriage of plaintiffs cargo; that said vessel was not a common
carrier inasmuch as she was under voyage charter contract with the plaintiff as
charterer under the charter party; that in the course its voyage, the vessel
encountered very rough seas.
ISSUE:
Whether or not the provisions of the Civil Code on common carriers pursuant to
which there exists a presumption of negligence against the common carrier in
case of loss or damage to the cargo are applicable to a private carrier.
HELD:
No. In a contract of private carriage, the parties may freely stipulate their duties
and obligations which perforce would be binding on them. Unlike in a contract
involving a common carrier, private carriage does not involve the general public.
Hence, the stringent provisions of the Civil Code on common carriers protecting
the general public cannot justifiably be applied to a ship transporting commercial
goods as a private carrier.
It has been held that the true test of a common carrier is the carriage of
passengers or goods, provided it has space, for all who opt to avail themselves of
its transportation service for a fee [Mendoza vs. Philippine Airlines, Inc., 90 Phil.
836, 842-843 (1952)]. A carrier which does not qualify under the above test is
deemed a private carrier. Generally, private carriage is undertaken by special
agreement and the carrier does not hold himself out to carry goods for the
general public.
Because the MV Vlasons I was a private carrier, the ship owners obligations are
governed by the foregoing provisions of the Code of Commerce and not by the
Civil Code which, as a general rule, places the prima facie presumption of
negligence on a common carrier.
BASCOS VS CA
FACTS:
Rodolfo Cipriano, representing CIPTRADE, entered into a hauling contract with
Jibfair Shipping Agency Corporation whereby the former bound itself to haul the
latters 2000m/tons of soya bean meal from Manila to Calamba. CIPTRADE
subcontracted with petitioner Estrellita Bascos to transport and deliver the 400
sacks of soya beans. Petitioner failed to deliver the cargo, and as a consequence,
Cipriano paid Jibfair the amount of goods lost in accordance with their contract.
Cipriano demanded reimbursement from petitioner but the latter refused to pay.
Cipriano filed a complaint for breach of contract of carriage. Petitioner denied that
there was no contract of carriage since CIPTRADE leased her cargo truck, and that
the hijacking was a force majeure. The trial court ruled against petitioner.
ISSUE:
(1) Was petitioner a common carrier?
(2) Was the hijacking referred to a force majeure?

HELD:
(1) Article 1732 of the Civil Code defines a common carrier as "(a) person,
corporation or firm, or association engaged in the business of carrying or
transporting passengers or goods or both, by land, water or air, for compensation,
offering their services to the public." The test to determine a common carrier is
"whether the given undertaking is a part of the business engaged in by the carrier
which he has held out to the general public as his occupation rather than the
quantity or extent of the business transacted." In this case, petitioner herself has
made the admission that she was in the trucking business, offering her trucks to
those with cargo to move. Judicial admissions are conclusive and no evidence is
required to prove the same.
(2) 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 goods
are lost, destroyed or deteriorated. There are very few instances when the
presumption of negligence does not attach and these instances are
enumerated in Article 1734. In those cases where the presumption is
applied, the common carrier must prove that it exercised extraordinary
diligence in order to overcome the presumption. The presumption of
negligence was raised against petitioner. It was petitioner's burden to
overcome it. Thus, contrary to her assertion, private respondent need not
introduce any evidence to prove her negligence. Her own failure to adduce
sufficient proof of extraordinary diligence made the presumption
conclusive against her.
VLASON SHIPPING VS CA
FACTS:
National Steel Corporation (NSC) as Charterer and defendant Vlasons Shipping,
Inc. (VSI) as Owner, entered into a Contract of Voyage Charter Hire
(Affreightment) whereby NSC hired VSIs vessel, the MV VLASONS I to make one
(1) voyage to load steel products at Iligan City and discharge them at North
Harbor, Manila. VSI carried passengers or goods only for those it chose under a
special contract of charter party.
The vessel arrived with the cargo in Manila, but when the vessels three (3)
hatches containing the shipment were opened, nearly all the skids of tin plates
and hot rolled sheets were allegedly found to be wet and rusty.
NSC filed its complaint against defendant before the CFI wherein it claimed that it
sustained losses as a result of the act, neglect and default of the master and
crew in the management of the vessel as well as the want of due diligence on the
part of the defendant to make the vessel seaworthy -- all in violation of
defendants undertaking under their Contract of Voyage Charter Hire.
In its answer, defendant denied liability for the alleged damage claiming that the
MV VLASONS I was seaworthy in all respects for the carriage of plaintiffs cargo;
that said vessel was not a common carrier inasmuch as she was under voyage
charter contract with the plaintiff as charterer under the charter party.
The trial court ruled in favor of VSI; it was affirmed by the CA on appeal.
ISSUE:
Whether or not Vlazons is a private carrier.

HELD:
Yes.
At the outset, it is essential to establish whether VSI contracted with NSC as a
common carrier or as a private carrier. The resolution of this preliminary question
determines the law, standard of diligence and burden of proof applicable to the
present case.
Article 1732 of the Civil Code defines a common carrier 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 services to the public. It has been held that the true test of a common
carrier is the carriage of passengers or goods, provided it has space, for all who
opt to avail themselves of its transportation service for a fee. A carrier which does
not qualify under the above test is deemed a private carrier. Generally, private
carriage is undertaken by special agreement and the carrier does not hold himself
out to carry goods for the general public. The most typical, although not the only
form of private carriage, is the charter party, a maritime contract by which the
charterer, a party other than the shipowner, obtains the use and service of all or
some part of a ship for a period of time or a voyage or voyages.
In the instant case, it is undisputed that VSI did not offer its services to the
general public. As found by the Regional Trial Court, it carried passengers or
goods only for those it chose under a special contract of charter party. As
correctly concluded by the Court of Appeals, the MV Vlasons I was not a common
but a private carrier. Consequently, the rights and obligations of VSI and NSC,
including their respective liability for damage to the cargo, are determined
primarily by stipulations in their contract of private carriage or charter party.
Recently, in Valenzuela Hardwood and Industrial Supply, Inc., vs. Court of Appeals
and Seven Brothers Shipping Corporation, the Court ruled:
x x x [I]n a contract of private carriage, the parties may freely stipulate their
duties and obligations which perforce would be binding on them. Unlike in a
contract involving a common carrier, private carriage does not involve the general
public. Hence, the stringent provisions of the Civil Code on common carriers
protecting the general public cannot justifiably be applied to a ship transporting
commercial goods as a private carrier. Consequently, the public policy embodied
therein is not contravened by stipulations in a charter party that lessen or remove
the protection given by law in contracts involving common carriers.
VALENZUELA HARDWOOD VS CA
FACTS:
On January 16, 1984 plaintiff Valenzuela Hardwood and Industrial Supply Inc.
entered into an agreement with the defendant Seven Brothers whereby the latter
undertook to load on board its vessel the formers lavan round logs. On January 20,
1984 plaintiff insured the loss and/or damages with defendant South Sea Surety
and insured company for 2 million pesos on January 24, 1984, plaintiff gave the
check in payment of the premium on the insurance policy. In the meantime, the
said vessel sank on January 25, 1984 resulting in the loss of the plaintiffs insured
logs. Plaintiff demanded payment of the proceeds and lost claim for the value of
the lost logs to insurance company and Seven Brothers Shipping Corporation
respectively to which both of them denied liability.
After due hearing, the RTC rendered judgment in favor of plaintiff. Both
defendants appealed. The CA affirmed in part the RTC judgment by sustaining

liability of South Sea Surety but modified it by holding that the Seven Brothers
was not liable for the lost of the cargo. The CA held that the stipulation in the
character party that the ship owner would be exempted from liability in case of
loss or even for negligence of its agent is valid.
ISSUE:
whether or not respondent Court (of Appeals) committed a reversible error in
upholding the validity of the stipulation in the charter party executed between the
petitioner and the private respondent exempting the latter from liability for the
loss of petitioners logs arising from the negligence of its (Seven Brothers)
captain
HELD:
The trial court deemed the charter party stipulation void for being contrary to
public policy, 13 citing Article 1745 of the Civil Code which provides:
Art. 1745. Any of the following or similar stipulations shall be considered
unreasonable, unjust and contrary to public policy:
(1) That the goods are transported at the risk of the owner or shipper;
(2) That the common carrier will not be liable for any loss, destruction, or
deterioration of the goods;
(3) That the common carrier need not observe any diligence in the custody of the
goods;
(4) That the common carrier shall exercise a degree of diligence less than that of
a good father of a family, or of a man of ordinary prudence in the vigilance over
the movables transported;
(5) That the common carrier shall not be responsible for the acts or omissions of
his or its employees;
(6) That the common carriers liability for acts committed by thieves, or of robbers
who do not act with grave or irresistible threat, violence or force, is dispensed
with or diminished;
(7) That the common carrier is not responsible for the loss, destruction, or
deterioration of goods on account of the defective condition of the car, vehicle,
ship, airplane or other equipment used in the contract of carriage.
Petitioner Valenzuela adds that the stipulation is void for being contrary to Articles
586 and 587 of the Code of Commerce 14 and Articles 1170 and 1173 of the Civil
Code. Citing Article 1306 and paragraph 1, Article 1409 of the Civil Code, 15
petitioner further contends that said stipulation gives no duty or obligation to the
private respondent to observe the diligence of a good father of a family in the
custody and transportation of the cargo.
The Court is not persuaded. As adverted to earlier, it is undisputed that private
respondent had acted as a private carrier in transporting petitioners lauan logs.
Thus, Article 1745 and other Civil Code provisions on common carriers which were
cited by petitioner may not be applied unless expressly stipulated by the parties
in their charter party.
In a contract of private carriage, the parties may validly stipulate that
responsibility for the cargo rests solely on the charterer, exempting the shipowner

from liability for loss of or damage to the cargo caused even by the negligence of
the ship captain. Pursuant to Article 1306 17 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 customs, public order, or public policy. Indeed, their contract
of private carriage is not even a contract of adhesion. We stress that in a contract
of private carriage, the parties may freely stipulate their duties and obligations
which perforce would be binding on them. Unlike in a contract involving a
common carrier, private carriage does not involve the general public. Hence, the
stringent provisions of the Civil Code on common carriers protecting the general
public cannot justifiably be applied to a ship transporting commercial goods as a
private carrier. Consequently, the public policy embodied therein is not
contravened by stipulations in a charter party that lessen or remove the
protection given by law in contracts involving common carriers.
Mr. Justice Jose P. Bengzon, the following well-settled observation and doctrine:
The provisions of our Civil Code on common carriers were taken from AngloAmerican law. Under American jurisprudence, a common carrier undertaking to
carry a special cargo or chartered to a special person only, becomes a private
carrier. As a private carrier, a stipulation exempting the owner from liability for the
negligence of its agent is not against public policy, and is deemed valid.
Such doctrine We find reasonable. The Civil Code provisions on common carriers
should not be applied where the carrier is not acting as such 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 would be void if the strict public policy
governing common carriers is applied. Such policy has no force where the public
at large is not involved, as in this case of a ship totally chartered for the use of a
single party. 19 (Emphasis supplied.)
Indeed, where the reason for the rule ceases, the rule itself does not apply. The
general public enters into a contract of transportation with common carriers
without a hand or a voice in the preparation thereof. The riding public merely
adheres to the contract; even if the public wants to, it cannot submit its own
stipulations for the approval of the common carrier. Thus, the law on common
carriers extends its protective mantle against one-sided stipulations inserted in
tickets, invoices or other documents over which the riding public has no
understanding or, worse, no choice. Compared to the general public, a charterer
in a contract of private carriage is not similarly situated. It can and in fact it
usually does enter into a free and voluntary agreement. In practice, the parties
in a contract of private carriage can stipulate the carriers obligations and
liabilities over the shipment which, in turn, determine the price or consideration of
the charter. Thus, a charterer, in exchange for convenience and economy, may
opt to set aside the protection of the law on common carriers. When the charterer
decides to exercise this option, he takes a normal business risk.
Spouses Cruz vs. Sun Holidays
FACTS:
ISSUE:
WON RESPONDENT IS A COMMON CARRIER AND WON THEY EXERCISED
EXTRAORDINARY DILIGENCE
HELD:
The Civil Code defines "common carriers" in the following terms:

Article 1732. Common carriers are persons, corporations, firms or associations

engaged in the business of carrying or transporting passengers or goods or both,
by land, water, or air for compensation, offering their services to the public.
The above article makes no distinction between one whose principal business
activity is the carrying of persons or goods or both, and one who does such
carrying only as an ancillary activity (in local idiom, as "a sideline"). Article 1732
also carefully avoids making any distinction between a person or enterprise
offering transportation service on a regular or scheduled basis and one offering
such service on an occasional, episodic or unscheduled basis. Neither does Article
1732 distinguish between a carrier offering its services to the "general public,"
i.e., the general community or population, and one who offers services or solicits
business only from a narrow segment of the general population. We think that
Article 1733 deliberately refrained from making such distinctions.
So understood, the concept of "common carrier" under Article 1732 may be seen
to coincide neatly with the notion of "public service," under the Public Service Act
(Commonwealth Act No. 1416, as amended) which at least partially supplements
the law on common carriers set forth in the Civil Code. Under Section 13,
paragraph (b) of the Public Service Act, "public service" includes:
. . . every person that now or hereafter may own, operate, manage, or control in
the Philippines, for hire or compensation, with general or limited clientele,
whether permanent, occasional or accidental, and done for general business
purposes, any common carrier, railroad, street railway, traction railway, subway
motor vehicle, either for freight or passenger, or both, with or without fixed route
and whatever may be its classification, freight or carrier service of any class,
express service, steamboat, or steamship line, pontines, ferries and water craft,
engaged in the transportation of passengers or freight or both, shipyard, marine
repair shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation
system, gas, electric light, heat and power, water supply and power petroleum,
sewerage system, wire or wireless communications systems, wire or wireless
broadcasting stations and other similar public services . . .18 (emphasis and
underscoring supplied.)
Indeed, respondent is a common carrier. Its ferry services are so intertwined with
its main business as to be properly considered ancillary thereto. The constancy of
respondents ferry services in its resort operations is underscored by its having its
own Coco Beach boats. And the tour packages it offers, which include the ferry
services, may be availed of by anyone who can afford to pay the same. These
services are thus available to the public.
That respondent does not charge a separate fee or fare for its ferry services is of
no moment. It would be imprudent to suppose that it provides said services at a
loss. The Court is aware of the practice of beach resort operators offering tour
packages to factor the transportation fee in arriving at the tour package price.
That guests who opt not to avail of respondents ferry services pay the same
amount is likewise inconsequential. These guests may only be deemed to have
overpaid.
As De Guzman instructs, Article 1732 of the Civil Code defining "common carriers"
has deliberately refrained from making distinctions on whether the carrying of
persons or goods is the carriers principal business, whether it is offered on a
regular basis, or whether it is offered to the general public. The intent of the law is
thus to not consider such distinctions. Otherwise, there is no telling how many
other distinctions may be concocted by unscrupulous businessmen engaged in
the carrying of persons or goods in order to avoid the legal obligations and
liabilities of common carriers.

(2) Under the Civil Code, common carriers, from the nature of their business and
for reasons of public policy, are bound to observe extraordinary diligence for the
safety of the passengers transported by them, according to all the circumstances
of each case.19 They are bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious
persons, with due regard for all the circumstances.20
When a passenger dies or is injured in the discharge of a contract of carriage, it is
presumed that the common carrier is at fault or negligent. In fact, there is even no
need for the court to make an express finding of fault or negligence on the part of
the common carrier. This statutory presumption may only be overcome by
evidence that the carrier exercised extraordinary diligence.21
Respondent nevertheless harps on its strict compliance with the earlier mentioned
conditions of voyage before it allowed M/B Coco Beach III to sail on September 11,
2000. Respondents position does not impress.
The evidence shows that PAGASA issued 24-hour public weather forecasts and
tropical cyclone warnings for shipping on September 10 and 11, 2000 advising of
tropical depressions in Northern Luzon which would also affect the province of
Mindoro.22 By the testimony of Dr. Frisco Nilo, supervising weather specialist of
PAGASA, squalls are to be expected under such weather condition.23
A very cautious person exercising the utmost diligence would thus not brave such
stormy weather and put other peoples lives at risk. The extraordinary diligence
required of common carriers demands that they take care of the goods or lives
entrusted to their hands as if they were their own. This respondent failed to do.
Respondents insistence that the incident was caused by a fortuitous event does
not impress either.
The elements of a "fortuitous event" are: (a) the cause of the unforeseen and
unexpected occurrence, or the failure of the debtors to comply with their
obligations, must have been independent of human will; (b) the event that
constituted the caso fortuito must have been impossible to foresee or, if
foreseeable, impossible to avoid; (c) the occurrence must have been such as to
render it impossible for the debtors to fulfill their obligation in a normal manner;
and (d) the obligor must have been free from any participation in the aggravation
of the resulting injury to the creditor.24
To fully free a common carrier from any liability, the fortuitous event must have
been the proximate and only cause of the loss. And it should have exercised due
diligence to prevent or minimize the loss before, during and after the occurrence
of the fortuitous event.25
Respondent cites the squall that occurred during the voyage as the fortuitous
event that overturned M/B Coco Beach III. As reflected above, however, the
occurrence of squalls was expected under the weather condition of September 11,
2000. Moreover, evidence shows that M/B Coco Beach III suffered engine trouble
before it capsized and sank.26 The incident was, therefore, not completely free
from human intervention.
The Court need not belabor how respondents evidence likewise fails to
demonstrate that it exercised due diligence to prevent or minimize the loss
before, during and after the occurrence of the squall.
Article 176427 vis--vis Article 220628 of the Civil Code holds the common carrier
in breach of its contract of carriage that results in the death of a passenger liable

to pay the following: (1) indemnity for death, (2) indemnity for loss of earning
capacity and (3) moral damages.
Petitioners are entitled to indemnity for the death of Ruelito which is fixed at
P50,000.