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COMMON CARRIERS PT 1 (2) a private carrier is not carry all who offer such

goods as
A. In General bound to carry for any reason, it is accustomed to
1. Definitions; essential elements; Art. 1732 carry
and unless it enters into a special tender
Art. 1732. Common carriers are persons, reasonable
corporations, firms or associations engaged compensation agreement to do so for carrying
in the business of carrying or transporting them
passengers or goods or both, by land, water (3) a common carrier is a public service
or air, for compensation, offering their (3) a private carrier does not and is therefore
services to the public. subject to regulation hold itself out as engaged in the
business for the public, and is therefore not subject to
Transportation defined.-- a contract of transportation is regulation as a common carrier
one whereby a certain person or association of persons
obligate themselves to transport persons, things, or news
from one place to another for a fixed price Test for a common carrier:
(1) He must be engaged in the business of
Classification : carrying goods for others as a public employment, and
1. As to object: (1) things; (2) persons; (3) news must hold himself out as ready to engage in the
2. As to place of travel: (1) land; (2) water; (3) air transportation of goods for persons generally as a business,
and not a casual occupation.
Parties to contract of transportation: (2) He must undertake to carry goods of the kind
(1) shipper or consignor.-- person to be transported; one to which his business is confined.
who gives rise to the contract of transportation by agreeing (3) He must undertake to carry by the methods by
to deliver the things or news to be transported, or to which his business is conducted, and over his established
present his own person or those of other or others in the roads.
case of transportation of passengers (4) The transportation must be for hire.
(2) carrier or conductor.-- one who binds himself to The true test is whether the given undertaking is a part of
transport persons, things, or news as the case may be; one the business engaged in by the carrier which he has held
employed in or engaged in the business of carrying goods out to the general public as his occupation rather than the
for other for hire quantity or extent of the business actually transacted, or
(3) consignee.-- the party to whom the carrier is to deliver the no. and character of the conveyances used in the
the things being transported; one to whom the carrier may employment (the test is therefore the character of the
lawfully make delivery in accordance with its contract of business actually carried on by the carrier.)
carriage (but the shipper and the consignee may be one
person) Case : an airplane owner is a common carrier where he
undertakes for hire to carry all persons who apply for
Freight defined.-- The terms has been defined as: passage indiscriminately as long as there is room and no
(1) the price or compensation paid for the transportation of legal excuse for refusing; airlines engaged in the passenger
goods by a carrier, at sea, from port to port. But the term is service on regular schedules on definite
also used to denote (2) the hire paid for the carriage of routes, who solicit patronage of the traveling public,
goods on land from place to place, or on inland streams or advertise schedules for routes, times of leaving and rates
lakes. The name is also applied to (3) the goods or of fare, and make the usual stipulation as to baggage are
merchandise transported at sea, on land, or inland streams common carriers
or lakes. Thus, the term is used in 2 senses: to designate
the price for the carriage, also called freightage, or to Characteristics of common carriers:
designate the goods carried. (1) The common carrier undertakes to carry for all
people indifferently; he holds himself out as ready to
Contracts through transportation agents.A contract engage in the transportation of goods for hire as a public
of transportation is not changed, altered or affected by the employment and not as a casual occupation, and he
mere fact that the obligor avails of other parties to effect undertakes to carry for all persons indifferently, within the
the transportation agreed upon, as in the case of limits of his capacity and the sphere of the
transportation agents. business required of him, so that he is bound to serve all
who apply and is liable for refusal, without sufficient
Carriers defined.-- Persons or corporations who reason, to do so
undertake to transport or convey goods, property or (2) The common carrier cannot lawfully decline to
persons, from one place to another, gratuitously or for hire, accept a particular class of goods for carriage to the
and are classified as private or special carriers, and prejudice of the traffic in those goods Exception : for some
common or public carriers sufficient reason, where the discrimination in such goods is
reasonable and necessary (substantial grounds)
Private carriers defined.-- Those who transport or (3) No monopoly is favored - the Commission has
undertake to transport in a particular instance for hire or the power to say what is a reasonable compensation to the
reward utility and to make reasonable rules and regulations for the
convenience of the traveling public and to enforce them
Common carriers vs Private carriers: (4) Public convenience - for the best interests of
(1) the common carrier holds the public
(1) the private carrier agrees himself out in
common, that is, in some special case with some Meaning of Public use.-- It is not confined to privileged
to all persons who choose to emprivate individual individuals, but is open to the indefinite public; there must
to carry ploy him, as ready to carry for for hire be a right which the law compels the owner to give to the
hire; no one can be a common carrier unless he general public. Public use is
has held himself out to the public as a carrier in not synonymous with public interest. The true criterion is
such a manner as to render him liable to an action whether the public may enjoy it by right or only by
if he should refuse to carry for anyone who wished permission
to employ him
(2) a common carrier is bound to

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The law prohibits unreasonable discrimination by HOME INSURANCE CO. VS. AMERICAN STEAMSHIP
common carriers.-- The law requires common carriers to F: A Peruvian firm shipped fishmeal through the SS
carry for all persons, either passengers or property, for Crowborough consigned to the SMB and insured by the
exactly the same charge for a like or contemporaneous Home Insurance Co. The cargo arrived with shortages. SMB
service in the transportation of like kind of traffic under demanded and Home Insurance Co. paid P14,000 in
substantially similar circumstances or conditions. The law settlement of SMB's claim. Home Insurance filed for
prohibits common carriers (CC) from subjecting any person, recovery from Luzon Stevedoring and American Steamship
etc. or locality, or any kind of traffic, to any undue or Agencies. Luzon Stevedoring claimed that it merely
unreasonable prejudice or discrimination whatsoever. delivered what it received from the carrier in the same
condition it received it. American Steamship contended
Exception: When the actual cost of handling and that it was not liable because of a stipulation in the charter
transporting is different, then different rates may be party that the charterer and not the ship owner was to be
charged liable for any loss or damage to the cargo. The CFI absolved
Luzon Stevedoring but ordered American Steamship to
Cases : (1) merchandise of like quantity may not be reimburse the P14,000 to Home Insurance, declaring that
considered alike - the quantity, kind and quality may be Art. 587 of the Code of Commerce makes the ship agent
exactly the same, and yet not be alike, so far as the cost of civilly liable for damages in favor of third persons due to
transportation is concerned the conduct of carrier's captain and that the stipulation in
(2) shipments may be alike although composed of different the charter party exempting owner from liability is against
classes of merchandise - difference in the charge for public policy under Art. 1744 of NCC.
handling and transporting may only be made when the
difference is based upon I: Is the stipulation valid? YES.
actual cost H: The provisions of our Civil Code on common carriers
were taken from Anglo-American law. Under American
Determination of justifiable refusal: jurisprudence, a common carrier undertaking to carry a
This involves a consideration of the following-- (1) special cargo or chartered to a special person only,
suitability of the vessels of the company for the becomes a private carrier. As a private carrier, a stipulation
transportation of such products; exempting the owner from liability for the negligence of its
(2) reasonable possibility of danger or disaster, resulting agents is not against public policy and is deemed valid. The
from their transportation in the form and under the Civil Code provisions on common carriers should not be
conditions in which they are offered for carriage; applied where the carrier is not acting as such but as a
(3) the general nature of the business done by the carrier; private carrier. The stipulation in the charter party
(4) all the attendant circumstances which might affect the absolving the owner from liability for loss due to the
question of the reasonable necessity for the refusal by the negligence of the agent would be void only if the strict
carrier to undertake the transportation of this class of public policy governing CC is applied. Such policy has no
merchandise force where the public at large is not involved, as in the
case of a ship totally chartered (as in this case) for the use
Case: The mere fact that the carriage of dynamites may of a single party. Based on the stipulation, recovery cannot
lead to destructive explosions is not sufficient to justify be had, for loss or damage to the cargo against ship
refusal if it can be proven that in the condition in which it is owners, unless the same is due to personal acts or
offered for carriage there is no real danger to the carrier negligence of said owner or its managers, as distinguished
nor reasonable ground to fear that the vessel and those on from agents or employees. No personal act or negligence
board will be exposed to unnecessary or unreasonable risks has been proved. In a charter of the entire vessel, the bill of
lading issued by the master to the charterer, as shipper, is
in fact and legal contemplation merely a receipt and a
U.S. V. TAN PIACO document of title and not a contract, for the contract is the
F: Tan Piaco rented two automobile trucks and was using charter party.
them upon the highways of Leyte for the purpose of
carrying some passengers and freight. He carried
passengers and freight under a special contract in each DE GUZMAN V. CA
case and had not held himself out to carry all passengers F: Cendana was a junk dealer and was engaged in buying
and freight for all persons who might offer passengers and used bottles and scrap materials in Pangasinan and brought
freight. He was convicted for violation of the Public Utility these to Manila for resale. He used two 6-wheeler trucks.
Law for operating a public utility without permission from On the return trip to Pangasinan, he would load his vehicles
the Public Utility Commission. with cargo which various merchants wanted delivered to
Pangasinan. For that service, he charged freight lower than
I: WON defendant operated a public utility. NO. regular rates. General Milk Co. contracted with him for the
hauling of 750 cartons of mild. On the way to Pangasinan,
H: There is no public use. The trucks were used under one of the trucks was hijacked by armed men who took
special agreements to carry particular persons and with them the truck and its cargo and kidnapped the driver
property. Under the Public Service Law, two things are and his helper. Only 150 cartons of milk were delivered.
necessary: The Milk Co. sued to claim the value of the lost
(1) the individual, co-partnership, etc. must be a public merchandise based on an
utility; and (2) the business in which such individual, co- alleged contract of carriage. Cendana denied that he was a
partnership, etc. is engaged must be for public use. common carrier and contended that he could not be liable
"Public use" means the same as "use by the public." The for the loss since it was due to force majeure. The TC ruled
essential feature of public use is that it is not confined to that he was a common carrier. The CA reversed.
privileged individuals, but is open to the indefinite public. In
determining whether a use is public, we must look not only I: WON Cendana is a common carrier. YES.
to the character of the business to be done, but also to the H: Cendana is properly characterized as a common carrier
proposed mode of doing it. If the use is merely optional even though he merely backhauled goods for other
with the owners, or the public benefit is merely incidental, merchants, and even if it was done on a periodic basis
it is not a public use, authorizing the exercise of the rather than on a regular basis, and even if his principal
jurisdiction of the public utility commission. There must be, occupation was not the carriage of goods. Art. 1732 makes
in general, a right which the law compels the no distinction between one whose principal business
activity is the carrying of persons or goods or both, and one

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who does such carrying only as an ancillary activity. It also business transacted." In this case, petitioner herself has
avoids making a distinction between a person or enterprise made the admission that she was in the trucking business,
offering transportation services on a regular or scheduled offering her trucks to those with cargo to move. Judicial
basis and one offering service on an occasional, episodic or admissions are conclusive and no evidence is required to
unscheduled basis. Neither does it make a distinction prove the same.
between a carrier offering its services to the general public
and one who offers services or solicits business only from a (2) Common carriers are obliged to observe extraordinary
narrow segment of the population. The fact that Cendana diligence in the vigilance over the goods transported by
does not hold a CPC is no excuse to exempt him from them. Accordingly, they are presumed to have been at fault
incurring liabilities as a or to have acted negligently if the goods are lost, destroyed
CC. Otherwise, it would be to reward persons who fail to or deteriorated. There are very few instances when the
comply with applicable statutory reqts. and would be presumption of negligence does not attach and these
offensive to public policy. The liability arises the moment a instances are enumerated in Article 1734. In those cases
person or firm acts as a common carrier, without regard to where the presumption is applied, the common carrier
whether or not such carrier has also complied with the must prove that it exercised extraordinary diligence in
requirements of the applicable regulatory statute and order to overcome the presumption. The presumption of
implementing regulations. negligence was raised against petitioner. It was petitioner's
burden to overcome it. Thus, contrary to her assertion,
I: WON Cendana may be held liable for the loss of the milk. private respondent need not introduce any evidence to
NO. prove her negligence. Her own failure to adduce sufficient
H: Common carriers by the very nature of their business proof of extraordinary diligence made the presumption
and for reasons of public policy are held to a very high conclusive against her.
degree of care and diligence (extra-ordinary diligence) in
the carriage of goods as well as passengers. Article 1734 PLANTERS PRODUCTS INC. V. COURT OF APPEALS
establishes the general rule that CC are responsible for the F: Planters purchased urea fertilizer from Mitsubishi, New
loss, destruction, or deterioration of the goods which they York. The fertilizer was shipped on MV Sun Plum, which is
carry unless the same is due to the causes enumerated owned by KKKK, from Alaska to San Fernando, La Union. A
therein. Such enumeration is a closed list. Causes falling time charter party was entered into between Mitsubishi as
outside the list, even if they are force majeure, fall within shipper/charterer and KKKK
the scope of Art. 1735 which provides that CC are as shipowner. Upon arrival in the port, PPI unloaded the
presumed to have been at fault or to have acted cargo. It took PPI 11 days to unload the cargo. PPI hired a
negligently, unless they prove that they observed marine and cargo surveyor to determine if there was any
extraordinary diligence required under Art. 1733. shortage. A shortage and
However, Art. 1745 provides that a CC cannot be contamination of the fertilizer was discovered. PPI sent a
allowed to divest or diminish his responsibility even for acts claim letter to SSA, the resident agent of KKKK for the
of strangers like thieves or robbers, except where such amount of the loss. An action for damages was filed. SSA
thieves or robbers acted with grave or irresistible threat, contended that the provisions on CC do not apply to them
violence or force. The limits of extraordinary diligence are because they have become private
reached where there is grave or irresistible threat, violence carriers by reason of the charter-party. The TC awarded
or force. In this case, the loss was quite beyond the control damages. The CA reversed.
of the CC. Even CC are not made absolute insurers against
all risks of travel and of transport of goods, and are not I: Does a charter party between a shipowner and a
liable for acts or events which cannot be foreseen or are charterer transform a CC into a private one as to negate
inevitable, provided that they shall have complied with the the civil law presumption of negligence in case of loss or
rigorous standard of extraordinary diligence. damage to its cargo? NO.

H: A charter-party is a contract by which an entire ship, or


BASCOS V. CA, 221 SCRA 318 some principal part thereof, is let by the owner to another
F: Rodolfo Cipriano, representing CIPTRADE, entered into a person for a specified time or use. There are 2 kinds:
hauling contract with Jibfair Shipping Agency Corporation (1) contract of affreightment which involves the use of
whereby the former bound itself to haul the latters shipping space or vessels leased by the owner in part or as
2000m/tons of soya bean meal from Manila to Calamba. a whole, to carry goods for others; and
CIPTRADE subcontracted with petitioner Estrellita Bascos to (2) charter by demise or bareboat charter where the whole
transport and deliver the 400 sacks of soya beans. vessel is let to the charterer with a transfer to him of its
Petitioner failed to deliver the cargo, and as a entire command and possession and consequent control
consequence, Cipriano paid Jibfair the amount of goods lost over its navigation, including
in accordance with their contract. Cipriano demanded the master and the crew, who are his servants.
reimbursement from petitioner but the latter refused to
pay. Cipriano filed a complaint for breach of contract of It is not disputed that the carrier operates as a CC in the
carriage. Petitioner denied that there was no contract of ordinary course of business. When PPI chartered the vessel,
carriage since CIPTRADE leased her cargo truck, and that the ship captain, its officers and crew were under the
the hijacking was a force majeure. The trial court ruled employ of the shipowner and therefore continued to be
against petitioner. under its direct supervision and control. Thus, it continued
to be a public carrier. It is therefore imperative that a public
I: (1) Was petitioner a common carrier? carrier shall remain as such, notwithstanding the charter of
(2) Was the hijacking referred to a force majeure? the whole or portion of a vessel, provided the charter is
limited to the ship only, as in the case of a timecharter or a
H: (1) Article 1732 of the Civil Code defines a common voyage-charter. It is only when the charter includes both
carrier as "(a) person, corporation or firm, or association the vessel and the crew, as in a bareboat or demise that a
engaged in the business of carrying or transporting CC becomes private, insofar as such particular voyage is
passengers or goods or both, by land, water or air, for concerned.
compensation, offering their services to the public." The
test to determine a common carrier is "whether the given I: WON the carrier is liable for damages. NO.
undertaking is a part of the business engaged in by the H: The presumption of negligence on the part of
carrier which he has held out to the general public as his respondent carrier has been overcome by the showing of
occupation rather than the quantity or extent of the extraordinary zeal and assiduity exercised by the carrier in

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the care of the cargo. On the other hand, no proof was F: Asia Lighterage and Shipping, Inc was contracted as
adduced by the petitioner showing that the carrier was carrier to deliver 3,150 metric tons of Better Western White
remiss in the exercise of due diligence in order to minimize Wheat in bulk, (US$423,192.35) to the consignees
the loss or damage to the goods it carried. (General Milling Corporation) warehouse at Bo.
Ugong, Pasig City. The cargo was transferred to its custody
on July 25, 1990. The shipment was insured by Prudential
FABRE V. COURT OF APPEALS Guarantee and Assurance, Inc. against loss/damage for
Facts: Petitioners Engracio Fabre, Jr. and his wife were P14,621,771.75.
owners of a Mazda minibus. They used the bus principally On August 15, 1990, 900 metric tons of the
in connection with a bus service for school children which shipment was loaded on barge PSTSI III for delivery to
they operated in Manila. It was driven by Porfirio Cabil. consignee. However, the cargo did not reach its
destination.
On November 2, 1984, private respondent Word for the It appears that on August 17, 1990, the transport
World Christian Fellowship Inc. (WWCF) arranged with the of said cargo was suspended due to a warning of an
petitioners for the transportation of 33 members of its incoming typhoon. 5 days later, the petitioner proceeded to
Young Adults Ministry from Manila to La Union and back in pull the barge to Engineering Island off Baseco to seek
consideration of which private respondent paid petitioners shelter from the approaching typhoon. PSTSI III was tied
the amount of P3,000.00. down to other barges which arrived ahead of it while
weathering out the storm that night. A few days after, the
The usual route to Caba, La Union was through Carmen, barge developed a list because of a hole it sustained after
Pangasinan. However, the bridge at Carmen was under hitting an unseen protuberance underneath the water. It
repair, so that petitioner Cabil, who was unfamiliar with the filed a Marine Protest on August 28, 1990 and also secured
area (it being his first trip to La Union), was forced to take a the services of Gaspar Salvaging Corporation to refloat the
detour through the town of Ba-ay in Lingayen, Pangasinan. barge. The hole was then patched with clay and cement.
At 11:30 that night, petitioner Cabil came upon a sharp The barge was then towed to ISLOFF terminal
curve on the highway. The road was slippery because it was before it finally headed towards the consignees wharf on
raining, causing the bus, which was running at the speed of September 5, 1990. Upon reaching the Sta. Mesa spillways,
50 kilometers per hour, to skid to the left road shoulder. the barge again ran aground due to strong current. To avoid
The bus hit the left traffic steel brace and sign along the the complete sinking of the barge, a portion of the goods
road and rammed the fence of one Jesus Escano, then was transferred to 3 other barges.
turned over and landed on its left side, coming to a full stop The next day, the towing bits of the barge broke. It
only after a series of impacts. The bus came to rest off the sank completely, resulting in the total loss of the remaining
road. A coconut tree which it had hit fell on it and smashed cargo. A 2nd Marine Protest was filed on September 7,
its front portion. Because of the mishap, several 1990.
passengers were injured particularly Amyline Antonio. 7 days later, a bidding was conducted to dispose
of the damaged wheat retrieved & loaded on the 3 other
Criminal complaint was filed against the driver and the barges. The total proceeds from the sale of the salvaged
spouses were also made jointly liable. Spouses Fabre on the cargo was P201,379.75.
other hand contended that they are not liable since they On the same date, consignee sent a claim letter to the
are not a common carrier. The RTC of Makati ruled in favor petitioner, and another letter dated September 18, 1990 to
of the plaintiff and the defendants were ordered to pay the private respondent for the value of the lost cargo. On
jointly and severally to the plaintiffs. The Court of Appeals January 30, 1991, the private respondent indemnified the
affirmed the decision of the trial court. consignee in the amount of P4,104,654.22. Thereafter, as
subrogee, it sought recovery of said amount from the
I: Whether the spouses Fabre are common carriers? petitioner, but to no avail.
H: Petition was denied. Spouses Fabre are common
carriers. I: 1. Whether petitioner is a common carrier.
The Supreme Court held that this case actually involves a 2. Assuming petitioner is a common carrier, whether it
contract of carriage. Petitioners, the Fabres, did not have to exercised extraordinary care and diligence in its care and
be engaged in the business of public transportation for the custody of the consignees cargo.
provisions of the Civil Code on common carriers to apply to
them. As this Court has held: 10 Art. 1732, Common H: 1. Petitioner is a common carrier. Article
carriers are persons, corporations, firms or associations 1732 defines common carriers as persons, corporations,
engaged in the business of carrying or transporting firms or associations engaged in the business of carrying or
passengers or goods or both, by land, water, or air for transporting passengers or goods or both, by land, water,
compensation, offering their services to the public. or air, for compensation, offering their services to the
public.
The above article makes no distinction between one whose In De Guzman vs. CA (G.R. No. L-47822, 22 December
principal business activity is the carrying of persons or 1988) it was held that the definition of common carriers in
goods or both, and one who does such carrying only as an Article 1732 of the Civil Code makes no distinction between
ancillary activity (in local idiom, as "a sideline"). Article one whose principal business activity is the carrying of
1732 also carefully avoids making any distinction between persons or goods or both, and one who does such carrying
a person or enterprise offering transportation service on a only as an ancillary activity. There is also no distinction
regular or scheduled basis and one offering such service on between a person or enterprise offering transportation
an occasional, episodic or unscheduled basis. Neither does service on a regular/scheduled basis and one offering such
Article 1732 distinguish between a carrier offering its service on an occasional, episodic or unscheduled
services to the "general public," i.e., the general basis. Further, Article 1732 does not distinguish between a
community or population, and one who offers services or carrier offering its services to the general public, and one
solicits business only from a narrow segment of the general who offers services or solicits business only from a narrow
population. We think that Article 1732 deliberately segment of the general population .Private respondent
refrained from making such distinctions. Ernesto Cendaa was considered to be a common carrier
even if his principal occupation was not the carriage of
goods for others, but that of buying used bottles and scrap
ASIA LIGHTERAGE AND SHIPPING V. COURT OF metal in Pangasinan and selling these items in Manila.
APPEALS

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To be sure, petitioner fits the test of a common carrier as bits of the vessel broke that caused its sinking and the total
laid down in Bascos vs. CA (G.R. No. 101089, 07 April 1993, loss of the cargo upon reaching the Pasig River, it was no
221 SCRA 318). The test to determine a common carrier longer affected by the typhoon. The typhoon then is not
is whether the given undertaking is a part of the business the proximate cause of the loss of the cargo; a human
engaged in by the carrier which he has held out to the factor, i.e., negligence had intervened.
general public as his occupation rather than the quantity or
extent of the business transacted. In the case at bar, the
petitioner admitted that it is engaged in the business of CRISOSTOMO V. COURT OF APPEALS
shipping, lighterage and drayage, offering its barges to the F: Estela L. Crisostomo contracted the services of Caravan
public, despite its limited clientele for carrying/transporting Travel and Tours International, Inc. to arrange and facilitate
goods by water for compensation. Petitioner is clearly a her booking, ticketing and accommodation in a tour dubbed
common carrier. "Jewels of Europe". The package tour cost her P74, 322.70.
She was given a 5% discount on the amount, which
Therefore, petitioner is a common carrier whether its included airfare, and the booking fee was also waived
carrying of goods is done on an irregular rather than because petitioners niece, Meriam Menor, was formers
scheduled manner, and with an only limited clientele. companys ticketing manager.
A common carrier need not have fixed and publicly known
routes. Neither does it have to maintain terminals or issue Menor went to her aunts residence on a Wednesday to
tickets. deliver petitioners travel documents and plane tickets.
2. The findings of the lower courts should be Estela, in turn, gave Menor the full payment for the
upheld. Petitioner failed to exercise extraordinary diligence package tour. Menor then told her to be at the Ninoy
in its care and custody of the consignees goods. Aquino International Airport (NAIA) on Saturday, two hours
Common carriers are bound to observe extraordinary before her flight on board British Airways.
diligence in the vigilance over the goods transported by
them. They are presumed to have been at fault or to Without checking her travel documents, Estela went to
have acted negligently if the goods NAIA on Saturday, to take the flight for the first leg of her
are lost, destroyed or deteriorated. To overcome the journey from Manila to Hongkong. She discovered that the
presumption of negligence in the case of loss, destruction flight she was supposed to take had already departed the
or deterioration of the goods, the common carrier must previous day. She learned that her plane ticket was for the
prove that it exercised extraordinary diligence. There are, flight scheduled on June 14, 1991. She thus called up
however, exceptions to this rule. Article 1734 of the Civil Menor to complain. Subsequently, Menor prevailed upon
Code enumerates the instances when the presumption of Estela to take another tour the "British Pageant, which
negligence does not attach: cost P20, 881.00. She gave caravan travel and tours P7,
Art. 1734. Common carriers are responsible for the loss, 980.00 as partial payment and commenced the trip in July
destruction, or deterioration of the goods, unless the same 1991.
is due to any of the following causes only:
(1) Flood, storm, earthquake, lightning, or other natural Upon petitioners return from Europe, she demanded from
disaster or calamity; respondent the reimbursement of P61, 421.70,
(2) Act of the public enemy in war, whether international or representing the difference between the sum she paid for
civil; "Jewels of Europe" and the amount she owed respondent
(3) Act/omission of the shipper/owner of the goods; for the "British Pageant" tour. Despite several demands,
(4) The character of the goods or defects in the packing respondent company refused to reimburse the amount,
or in the containers; contending that the same was non-refundable. Estela filed
(5) Order/act of competent public authority. a complaint against Caravan travel and Tours for breach of
contract of carriage and damages.
In the case at bar, the barge completely sank after its
towing bits broke, resulting in the total loss of its cargo. A) Will the action
Petitioner claims that this was caused by a typhoon, hence, prosper?
it should not be held liable for the loss of the cargo. B) Will she be entitled to damages?
However, petitioner failed to prove that the typhoon is the
proximate and only cause of the loss of the goods, and that R: No, for there was no contract of carriage.
it has exercised due diligence before, during and after the By definition, a contract of carriage or transportation is one
occurrence of the typhoon to prevent/minimize the loss. whereby a certain person or association of persons obligate
The evidence show that, even before the towing bits of the themselves to transport persons, things, or news from one
barge broke, it had already previously sustained damage place to another for a fixed price.
when it hit a sunken object while docked at the Engineering From the above definition, Caravan Travel and Tours is not
Island. It even suffered a hole. Clearly, this could not be an entity engaged in the business of transporting either
solely attributed to the typhoon. The partly-submerged passengers or goods and is therefore, neither a private nor
vessel was refloated but its hole was patched with only clay a common carrier. Caravan Travel and Tours did not
and cement. The patch work was merely a provisional undertake to transport Estela from one place to another
remedy, not enough for the barge to sail safely. Thus, when since its covenant with its customers is simply to make
petitioner persisted to proceed with the voyage, it travel arrangements in their behalf. Caravan travel and
recklessly exposed the cargo to further damage. tours services as a travel agency include procuring tickets
and facilitating travel permits or visas as well as booking
Moreover, petitioner still headed to the consignees wharf customers for tours.
despite knowledge of an incoming typhoon. During the time While Estela concededly bought her plane ticket through
that the barge was heading towards the consignees wharf the efforts of respondent company, this does not mean that
on September 5, 1990, typhoon Loleng has already the latter ipso facto is a common carrier. At most, Caravan
entered the Philippine area of responsibility. Travel and Tours acted merely as an agent of the airline,
with whom the former ultimately contracted for her
Accordingly, the petitioner cannot invoke the occurrence of carriage to Europe.
the typhoon as force majeure to escape liability for the loss
sustained by the private respondent. Surely, meeting a B) No. The negligence of the obligor in the performance of
typhoon head-on falls short of due diligence required from the obligation renders him liable for damages for the
a common carrier. More importantly, the officers/employees resulting loss suffered by the obligee. Fault or negligence of
themselves of petitioner admitted that when the towing

5 katrinab. transpo
the obligor consists in his failure to exercise due care and constitutionality of Art. 15, CA 146 as an undue delegation
prudence in the performance of the obligation as the of legislative powers.
nature of the obligation so demands.
I: WON the PSC may prescribe the 2 conditions as a
In the case at bar, Caravan Travel and Tours exercised due prerequisite to the issuance of the CPCN.
diligence in performing its obligations under the contract
and followed standard procedure in rendering its services H: Yes. CA 146 provides a sufficient standard, which is
to Estela. The plane ticket issued to petitioner clearly public interest, by which the PSC is guided in imposing such
reflected the departure date and time, contrary to Estelas conditions. The business of a common carrier holds such a
contention. The travel documents, consisting of the tour peculiar relation to the public interest that there is
itinerary, vouchers and instructions, were likewise delivered superinduced upon it the right of public regulation.
to her two days prior to the trip. The Caravan Travel and When private property is affected with a public
Tours also properly booked Estela for the tour, prepared the interest, it ceases to be juris privati only. When, therefore,
necessary documents and procured the plane tickets. It one devotes his property to a use in which the public has
arranged Estelas hotel accommodation as well as food, an interest, he, in effect, grants to the public an interest in
land transfers and sightseeing excursions, in accordance that use, and must submit to be controlled by the public for
with its avowed undertaking. the common good, to the extent of the interest he had thus
From the foregoing, it is clear that the Caravan Travel and created. He may withdraw his grant by discontinuing the
Tours performed its prestation under the contract as well as use, but so long as he maintains the use, he must submit to
everything else that was essential to book Estela for the control. Indeed this right is so far beyond question that it is
tour. settled that the power of the state to exercise legislative
Hence, Estela cannot recover and must bear her own control over public utilities may be exercised through the
damage. board of commissioners. This right of the state to regulate
public utilities is founded upon the police power, and
statutes for the control and regulation of utilities are a
2. Nature of Business; power of State to regulate; legitimate exercise thereof, for the protection of the public
Art. 1765 as well as the utilities themselves. Such statutes are not
unconstitutional, either as impairing the obligation of
Art. 1765. The [Public Service Commission] contracts, taking property without due process, or denying
Board of Transportation may, on its own the equal protection of the laws, especially inasmuch as the
motion or on petition of any interested question WON private property shall be devoted to a public
party, after due hearing, cancel the use and the consequent burdens assumed is ordinarily for
certificate of public convenience granted to the owner to decide; and if he voluntarily places his
any common carrier that repeatedly fails to property in public service he cannot complain that it
comply with his or its duty to observe becomes subject to the regulatory powers of the state. This
extraordinary diligence as prescribed in this is more so in the light of authorities which hold that a CPC
Section. constitutes neither a franchise nor a contract, confers no
property rights and is a mere license or privilege.
Common carriers are subject to legislative
regulation.-- The business of a common carrier holds such FORES V. MIRANDA
a peculiar relation to the public interest that there is F: Respondent, a professor of Fine Arts, was a passenger of
superinduced upon it the right of public regulation. The a jeep registered in the name of Fores but actually
business of a common carrier is affected with public operated by Carmen Sackerman. While the jeep was
interest. When, therefore, one devotes his property to a use descending at Sta. Mesa bridge at
in which the public has an interest, he, in effect, grants to excessive speed, the driver lost control of it causing it to
the public an interest in that use, and must submit to be swerve and hit the bridge wall resulting to injuries to its
controlled by the public for the common good, to the extent passengers including respondent who suffered a fracture of
of the interest he had thus created. the upper right humerus. In an action for damages, the CFI
awarded actual damages. The CA
Limitation on power to regulate.Such regulations reduced the actual damages and added moral damages
must not have the effect of depriving an owner of his and attorney's fees.
property without due process of law, nor of confiscating, or
appropriating private property without just compensation, I: WON the approval of the PSC is necessary for the sale of
nor of limiting or prescribing irrevocably vested rights or a public service vehicle even without conveying therewith
privileges lawfully acquired under a charter or franchise the authority to operate the same. YES.
[just compensation, due process of law] H: A transfer made without the requisite approval of the
PSC is not effective and binding in so far as the
When judiciary may interfere with legislative responsibility of the grantee under the franchise in relation
regulation of common carriers.-- The judiciary ought to the public is concerned. The law was designed primarily
not to interfere with legislative regulations unless they are for the protection of the public interest.
so plainly and palpably unreasonable as to make their
enforcement equivalent to the taking of property for public I: WON moral damages may be awarded.
use without such compensation as under all circumstances H: In case of breach of contract (including one of
is just both to the owner and to the public. transportation), proof of bad faith or fraud, i.e., wanton or
deliberately injurious conduct, is essential to justify an
award of moral damages. The exception to this is when a
PANTRANCO V. PSC mishap results in the death of a passenger, in which a CC is
F: Pantranco has been engaged for the past 20 years in the liable to pay moral damages for the
business of transporting passengers by means of motor mental anguish by reason of the death of the passenger.
vehicles in accordance with the CPCN issued to it. It filed So, where the injured passenger does not die, moral
with the PSC an application for authorization to operate 10 damages are not recoverable unless it is proved that the
addtl. new trucks. The application was granted with two carrier was guilty of malice or bad faith.
conditions: (1) that the CPCN would be valid for only 25 Under the law, the presumption is that common
years and (2) that the service can be acquired by the govt. carriers acted negligently but not maliciously. The
upon payment of cost price of its useful eqpt. less distinction between fraud, bad faith or malice in the sense
reasonable depreciation. Pantranco challenged the of deliberate or wanton wrong doing and negligence (as

6 katrinab. transpo
mere carelessness) is too fundamental in our law to be said responsibility and transfer the same to an indefinite
ignored. A carrier's bad faith is not to be lightly inferred person or to one who possesses no property with which to
from a mere finding that the contract was breached respond financially for the damage or injury done; in case
through negligence of the carrier's employees. of an accident, the registered owner should not be allowed
to disprove his ownership to the prejudice of the person
3. Nature and Basis of liability Art. 1733 injured or to be relieved from responsibility

Art. 1733. Common carriers, from the nature of


their business and for reasons of public policy, CANGCO V. MRR
are bound to observe extraordinary diligence in F: Jose Cangco, an employee of MRR, was riding on its
the vigilance over the goods and for the safety train. As it drew up to the station, the plaintiff made his
of the passengers transported by them, exit. As he alighted, his foot stepped on a sack of
according to the circumstances of each case. watermelons causing him to slip and his right arm was
crushed. This happened between 7 and 8 p.m. and as the
Such extraordinary diligence in the vigilance railroad station was lighted dimly by a single light, objects
over the goods is further expressed in Articles on the platform were difficult to see.
1734, 1735, and 1745, Nos. 5,6, and 7, while
the extraordinary diligence for the safety of the I: WON MRR is liable to pay damages for the acts of its EEs.
passengers is further set forth in Articles 1755 H: YES. It cannot be doubted that the EEs of the railroad co.
and 1756. were guilty of negligence in piling sacks on the platform;
their presence constituted an effective legal cause of the
Extraordinary diligence required of common injuries sustained by Cangco.
carriers.-- The law requires CC to exercise extraordinary It is impt. to note that the foundation of the legal
diligence which means that they must render service with liability of the defendant is the contract of carriage, and
the greatest skill and utmost foresight. that the obligation to respond for the damage which
The extra-ordinary diligence required of carriers in the plaintiff has suffered arises, if at all,
handling of the goods of the shippers and consignees last from the breach of that contract by reason of the failure of
from the time the cargoes are loaded in the vessels until defendant to exercise due care in its performance. Its
they are discharged and delivered to the consignees. liability is direct and immediate (culpa contractual),
differing essentially, from that presumptive responsibility
Reasons for requiring extra-ordinary diligence.-- The for the negligence of its servants, which can be rebutted by
nature of the business of common carriers and the proof of the exercise of due care in the selection and
exigencies of public policy demand that they observe supervision of EEs (culpa aquiliana).
extra-ordinary diligence; the business of CC is impressed The liability of masters and employers for the negligent
with a special public duty and therefore subject to control acts or omissions of their servants or agents, when such
and regulation by the state. The public must of necessity act or omissions cause damage which amount to the
rely on the care and skill of CC in the vigilance over the breach of a contract, is not based upon a mere presumption
goods and safety of the passengers of the master's negligence in their selection or control, and
proof of exercise of the utmost diligence and care in this
Rigorous law on common carriers not applicable to regard does not relieve the master of his liability for the
special employment as carrier.-- The laws applicable to breach of his contract. When the facts averred show a
CC are rigorous and should not be extended to a person contractual
who has neither expressly undertaking by defendant for the benefit of plaintiff, and it
assumed that character, nor by his conduct and from the is alleged that plaintiff has failed or refused to perform the
nature of his business justified the belief on the part of the contract, it is not necessary for plaintiff to specify in his
public that he intended to assume it. pleadings whether the breach of the contract is due to
willful fault or to negligence on the part of the defendant,
Registered owner primarily and solidarily liable with or of his servants or agents. Proof of the contract and of its
driver, under the "kabit system."-- Registered owner is nonperformance is sufficient prima facie to warrant
primarily and solidarily liable for the damage caused by the recovery.
vehicle registered in his name, even if the said vehicle had The contract of defendant to transport plaintiff carried with
already been sold, leased or transferred to another person it, by implication, the duty to carry him in safety and to
who was, at the time of the accident, actually operating the provide safe means of entering and leaving its trains. That
vehicle. The operator of record continues to be the operator duty, being contractual, was direct and immediate, and its
of the vehicle in contemplation of law, as regards the public nonperformance could not be excused by proof that the
and third persons, and as such is responsible for the fault was morally imputable to defendant's servants.
consequences incident to its operation; such
owner/operator of record is held in contemplation of law as
the employer of the driver. ISAAC V. A.L. AMMEN
F: Plaintiff boarded defendant's bus as a paying passenger
Kabit system.-- One whereby a person who has been from Albay. The bus collided with a pick-up truck which was
granted a certificate of public convenience allows other coming from the opposite direction trying to swerve from a
persons who own vehicles to operate them under such pile of gravel. As a result, his left arm was completely
license, for a fee or percentage of the earnings. This is severed. Plaintiff chose to hold defendant liable on its
contrary to public policy, and therefore, void and inexistent; contractual obligation. Plaintiff brought this action for
"this is a pernicious system that cannot be too severely damages which the lower court dismissed holding the
condemned; it constitutes an imposition upon the good driver of the pick-up negligent and not that of the bus.
faith of the govt."
I: WON defendant observed extra-ordinary diligence or the
Reason for holding registered owner liable.The law utmost diligence of a very cautious person in avoiding the
does not relieve the registered owner directly of the collision. YES.
responsibility that the law fixes and places upon him as an
incident or consequence of registration -- where a H: The facts of the case show that the bus and the pick-up
registered owner allowed to evade responsibility by proving were approaching each other head-on. The bus swerved to
who the supposed transferee or owner is, it would be easy the right and went over a pile of stones and gravel. Despite
for him by collusion with others or otherwise, to escape

7 katrinab. transpo
the efforts of the bus driver, the pick up car still hit the rear contract of carriage is between the carrier and the
left side of the bus. The passenger, and in the event of
sense of caution one should observe cannot always be contractual liability, the carrier is exclusively responsible
expected from one who is placed suddenly in a therefore to the passenger, even if such breach be due to
predicament where he is not given enough time to take the the negligence of the driver. To make the driver jointly
proper course of action under ordinary circumstances. liable would make the carrier's
Furthermore, plaintiff is guilty of contributory negligence liability personal instead of merely vicarious and
since he placed his left elbow outside the window. consequently, the victim is entitled to recover only the
share which corresponds to the driver.
Ratio: A CC is bound to carry the passengers safely as far
as human care and foresight can provide, using the utmost LRTA V. NAVIDAD
diligence of very cautious persons, with due regard for all F: Navidad was drunk when he entered the boarding
circumstances. This extra-ordinary diligence required of platform of the LRT. He got into an altercation with the SG
common carriers is calculated to Escartin. They had a fistfight and Navidad fell onto the
protect the passengers from the tragic mishaps that tracks and was killed when a train came and ran over him.
frequently occur in connection with rapid modern
transportation. This high standard of care is imperatively The Heirs of Navidad filed a complaint for damages against
demanded by the preciousness of human life and by the Escartin, the train driver, (Roman) the LRTA, the Metro
consideration that every person must in every way be Transit Organization and Prudent Security Agency
safeguarded against all injury. (Prudent). The trial court found Prudent and Escartin jointly
Principles as to liability of CC: and severally liable for damages to the heirs. The CA
(1) the liability of a carrier is contractual and exonerated Prudent and instead held the LRTA and the train
arises upon breach of its obligation; there is breach if it fails driver Romero jointly and severally liable as well as
to exert extra-ordinary diligence accdg. to all the removing the award for compensatory damages and
circumstances of each case replacing it with nominal damages.
(2) a carrier is obliged to carry its passenger with
the utmost diligence of a very cautious person, having due The reasoning of the CA was that a contract of carriage
regard for all the circumstances already existed between Navidad and LRTA (by virtue of his
(3) a carrier is presumed to have been at fault or havA ing purchased train tickets and the liability was
to have caused by the mere fact of Navidad's death after being hit
acted negligently in case of death of, or injury to, by the train being managed by the LRTA and operated by
passengers, it being it duty to prove that it exercised extra- Roman. The CA also blamed LRTA for not having presented
ordinary diligence expert evidence showing that the emergency brakes could
(4) the carrier is not an insurer against all risks of not have stopped the train on time.
travel.
I: (1) Whether or not LRTA and/or Roman is liable for the
death.
PHIL. RABBIT V. IAC (2) Whether or not Escartin and/or Prudent are liable.
F: Several passengers boarded the jeepney owned by (3) Whether or not nominal damages may coexist with
spouses Mangune and driven by Manalo at Dau, Pampanga compensatory damages.
bound for Carmen, Rosales, Pangasinan. Their contract with
Manalo was P24 for the trip. Upon reaching Tarlac, the right H: (1) Yes. The foundation of LRTA's liability is the contract
wheel of the jeepney was detached, so it was running in an of carriage and its obligation to indemnify the victim arising
unbalanced position. Manalo stepped on the brake, making from the breach of that contract by reason of its failure to
a sudden U-turn and encroaching on the right of way of the exercise the high diligence required of a common carrier.
other vehicles. The Phil. Rabbit bus bumped from behind (2) Fault was not established. Liability will be based on Tort
the jeepney. As a result of the collision, 3 persons died under Art. 2176 of the New Civil Code.
while the others sustained injuries. Cases were filed against (3) No. It is an established rule that nominal damages
the spouses Mangune, Manalo, Phil. Rabbit and De los cannot co-exist with compensatory damages.
Reyes (driver).
RATIO: Liability of LRTA Read Arts. 1755,1756, 1759
I: Who should be held liable? the Mangunes and Filriters and 1763 of the New Civil Code
Guaranty Assurance Corp. (Insurance co.)
A common carrier is required by these above statutory
Ratio: The principle of last clear chance would call for provisions to use utmost diligence in carrying passengers
application in a suit between the owners and drivers of two with due regard for all circumstances. This obligation exists
colliding vehicles. It does not arise where a passenger not only during the course of the trip but for so long as the
demands responsibility from the carrier to enforce its passengers are within its premises where they ought to be
contractual obligations. in pursuance to then contract of carriage.
For it would be inequitable to exempt the negligent driver
of the jeepney and its owners on the ground that the other Art. 1763 renders a common carrier liable for death of or
driver was likewise guilty of negligence. On the injury to passengers (a) through the negligence or willful
presumption that the drivers who bump the rear of another acts of its employees or (b) on account of willful acts or
vehicle are guilty and the cause of the accident, unless negligence of other passengers or of strangers if the
contradicted by other evidence, the SC held that the jeep common carriers employees through the exercise of due
made a sudden U-turn which was so abrupt that the other diligence could have prevented or stopped the act or
driver de los Reyes did not anticipate the sudden U-turn. omission. In case of such death or injury, a carrier is
The proximate cause of the accident was the negligence of presumed to have been at fault or been negligent, and by
Manalo and the spouses Mangune. In culpa contractual, the simple proof of injury, the passenger is relieved of the duty
carrier is presumed to have been at fault or to have acted to still establish the fault or negligence of the carrier or of
negligently, and this disputable presumption may only be its employees and the burden shifts upon the carrier to
overcome by evidence that he had observed extra-ordinary prove that the injury is due to an unforeseen event or to
diligence or that the death or injury of the passenger was force majeure.
due to a fortuitous event.
The driver cannot be held jointly liable with the owners of Liability of Security Agency If Prudent is to be held
the jeep in case of breach of the contract of carriage. The liable, it would be for a tort under Art. 2176 in conjunction

8 katrinab. transpo
with Art. 2180. Once the fault of the employee Escartin is Art. 1753, NCC. The law of the country to
established, the employer, Prudent, would be held liable on which the goods are to be transported shall
the presumption that it did not exercise the diligence of a govern the liability of the common carrier for
good father of the family in the selection and supervision of their loss, destruction or deterioration.
its employees.
The provisions of the NCC primarily govern contracts of
Relationship between contractual and non- carriage of goods from foreign ports to Philippine ports
contractual breach How then must the liability of the
common carrier, on the one hand, and an independent
contractor, on the other hand, be described? It would be EASTERN SHIPPING V. IAC
solidary. A contractual obligation can be breached by tort F: These two cases, both for the recovery of value of cargo
and when the same act or omission causes the injury, one insurance, arose from the same incident, the sinking of the
resulting in culpa contractual and the other in culpa M/S ASIATICA when it caught fire, resulting in the total loss
aquiliana, Article 2194 of the Civil Code can well apply. In of ship and cargo. In the first case, the M/S ASIATICA, a
fine, a liability for tort may arise even under a contract, vessel operated by petitioner Eastern Shipping Lines,
where tort is that which breaches the contract. Stated loaded at Kobe, Japan for transportation to Manila 5,000
differently, when an act which constitutes a breach of pieces of colorized lance pipes in 28 packages valued at
contract would have itself constituted the source of a quasi- P256,039 consigned to Phil. Blooming Mills and 7 cases of
delictual liability had no contract existed between the spare parts valued at P92,361.75 consigned to Central
parties, the contract can be said to have been breached by Textile Mills. Both sets of goods were insured against
tort, thereby allowing the rules on tort to apply. marine risk for their stated value with respondent Devt.
Insurance and Surety Corporation.
Nominal Damages - The award of nominal damages in
addition to actual damages is untenable. Nominal damages In the second case, the same vessel took on board 128
are adjudicated in order that a right of the plaintiff, which cartons of garment fabrics and accessories, in 2 containers,
has been violated or invaded by the defendant, may be consigned to Mariveles Apparel Corporation, and 2 cases of
vindicated or recognized, and not for the purpose of surveying instruments consigned to Aman Enterprises and
indemnifying the plaintiff for any loss suffered by him. It is General Merchandise. The 128 cartons were insured by
an established rule that nominal damages cannot co-exist respondent Nisshin Fire and Marine Insurance Co. and Dowa
with compensatory damages. The award was deleted. Fire & Marine Insurance Co. En route for Manila, the ship
caught fire and sank. The insurers paid the corresponding
4. Classes of common carriers Art. 1732, 1733, 1755 marine insurance values and were subrogated to the rights
of the latter as the insured. They filed suits against the
Art. 1732. Common carriers are persons, petitioner Carrier and won (affirmed by the CA).
corporations, firms or associations engaged
in the business of carrying or transporting Petitioner carrier denies liability on the ff. grounds:
passengers or goods or both, by land, water, (a) that the loss was due to an extraordinary fortuitous
or air, for compensation, offering their even which is an exempting circumstance under Sec. 4(2)
services to the public. (b) of the Carriage of Goods by Sea Act (COGSA);
(b) that when fire is established, the burden of proving
Art. 1733. Common carriers, from the nature negligence is shifted to the cargo shipper.
of their business and for reasons of public
policy, are bound to observe extraordinary I: (1) Which law should govern: the Civil Code or the
diligence in the vigilance over the goods and Carriage of Goods by Sea Act.
for the safety of the passengers transported (2) Who has the burden of proof to show negligence of the
by them, according to the circumstances of carrier.
each case.
Ratio: (1) The law of the country to which the goods are to
Such extraordinary diligence in the vigilance be transported governs the liability of the common carrier
over the goods is further expressed in in case of their loss, destruction or deterioration. As the
Articles 1734, 1735, and 1745, Nos. 5,6, and cargoes in question were transported from Japan to the
7, while the extraordinary diligence for the Philippines, the liability of Petitioner Carrier is governed
safety of the passengers is further set forth primarily by the Civil Code. However, in all matters not
in Articles 1755 and 1756. regulated by said Code, the rights and obligations of
common carriers shall be governed by the Code of
Art. 1755. A common carrier is bound to Commerce and
carry the passengers safely as far as human special laws. Thus, the COGSA, a special law, is suppletory
care and foresight can provide, using the to the provisions of the Civil Code.
utmost diligence of very cautious persons,
with a due regard for all circumstances. (2) Under the Civil Code, common carriers, from the nature
of their business and for reasons of public policy, are bound
5. Laws applicable Art. 1766, 1753 to observe extra-ordinary diligence in the vigilance over
goods, accdg. to all the
Art. 1766. In all matters not regulated by circumstances of each case. Common carriers are
this Code, the rights and obligations of responsible for the loss, destruction, or deterioration of the
common carriers shall be governed by the goods unless the same is due to any of the ff. causes only
Code of Commerce and by special laws. (Art. 1734, NCC):
"(1) Flood, storm, earthquake, lightning or other natural
New Civil Code primarily governs common carriers.-- disaster or calamity; xxx"
The Provisions of the Civil Code [1732- 1766] primarily The Carrier claims that the loss of the vessel by fire
govern common carriers and the provisions of the Code of exempts it from liability under the phrase "natural disaster
Commerce [Overland or calamity." However, we are of the opinion that fire may
Transportation and Maritime Commerce] and special laws not be considered a natural
[Carriage of Goods by Sea Act; Salvage Act] have only disaster or calamity. This must be so as it arises almost
subsidiary application to common carriers. invariably from some act of man or by human means. It
does not fall within the category of an act of God unless

9 katrinab. transpo
caused by lightning or by other natural disaster or calamity. loss before, during or after the occurrence of the disaster.
It may even be caused by the actual fault or privity of the This petitioner carrier has also failed to establish
carrier. satisfactorily.
Nor may Petitioner Carrier seek refuge from liability under
As the peril of fire is not comprehended within the the COGSA. It is provided therein that:
exceptions in Article 1734, then Article 1735 provides that "Sec.4 (2). Neither the carrier nor the ship shall be
in all cases other than those mentioned in Art. 1734, the CC responsible for loss or damage arising or resulting from: (b)
shall be presumed to have been at fault or to have acted Fire, unless caused by the actual fault or privity of the
negligently, unless it proves that carrier."
it has observed the extra-ordinary diligence required by
law. In this case, both the TC and the CA, in effect, found, as a
fact, that there was "actual fault" of the carrier shown by
In this case, the respective Insurers, as subrogees of the lack of diligence in that when the smoke was noticed, the
cargo shippers, have proven that the transported goods fire was already big; that the
have been lost. Petitioner carrier has also proven that the fire must have started 24 hrs before the same was noticed;
loss was caused by fire. The burden then is upon Petitioner and that after the cargoes were stored in the hatches, no
carrier to prove that it has exercised the extra-ordinary regular inspection was made as to their condition during
diligence required by law. Having failed to discharge the the voyage.
burden of proving that it had exercised the extra-ordinary The foregoing suffices to show that the circumstances
diligence required by law, Petitioner Carrier can not under which the fire originated and spread are such as to
escape liability for the loss of the cargo. And even if fire show that Petitioner carrier or its servants were negligent in
were to be considered a natural disaster within the connection therewith.
meaning of Art. 1734, it is Consequently, the complete defense afforded by the
required under Art. 1739 of the same Code that the natural COGSA when the loss results from fire is unavailing to
disaster must have been the proximate and only cause of petitioner carrier.
the loss, and that the carrier has exercised due diligence to
prevent or minimize the

10 katrinab. transpo

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