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PEDRO DE GUZMAN V.

COURT OF APPEALS
G.R. No. L-47822, December 22, 1988 1. Herein respondent is considered as a common carrier.

Article 1732 of the New Civil Code avoids any distinction between one
PARTIES: whose principal business activity is the carrying of persons or goods or both
Pedro de Guzman, petitioner and one who does such carrying only as an ancillary activity.
Court of Appeals and Ernesto Cendana, respondents
It also avoids a distinction between a person or enterprise offering
BRIEF STATEMENT OF THE CASE: transportation services on a regular or scheduled basis and one offering such
Breach of the contract to carry services on an occasional, episodic, and unscheduled basis.
Extraordinary diligence needed over common carriers
2. Respondent is not liable for the value of the undelivered merchandise .
FACTS:
Article 1734 of the Civil Code- The general rule is established by the article
Ernesto Cendana was engaged in buying up used bottles and scrap metal that common carriers are responsible for the loss, destruction or deterioration
in Pangasinan. Upon gathering sufficient quantities of such scrap material, of the goods which they carry, unless the same is due to any of the following
respondent would bring such material to Manila for resale. causes only:
He utilized (2) two six-wheeler trucks which he owned for the purpose.
Upon returning to Pangasinan, he would load his vehicle with cargo a. Flood, storm, earthquake, lightning or other natural disasters;
belonging to different merchants to different establishments in b. Act of the public enemy, whether international or civil;
Pangasisnan which respondents charged a freight fee for. c. Act or omission of the shipper or owner of the goods;
d. Character of the goods or defects in the packing;
Sometime in November 1970, herein petitioner Pedro de Guzman, a
e. Order or act of competent public authority.
merchant and dealer of General Milk Company Inc. in Pangasinan
contracted with respondent for hauling 750 cartons of milk. Unfortunately,
only 150 cartons made it, as the other 600 cartons were intercepted by Applying the above article, we note firstly that the specific cause alleged in
hijackers along Marcos Highway. the instant case the hijacking of the carrier's truck does not fall
within any of the five (5) categories of exempting causes listed in Article
Hence, petitioners commenced an action against private respondent. In
1734.
his defense, respondent argued that he cannot be held liable due to force
majuere, and that he is not a common carrier and hence is not required to
exercise extraordinary diligence. It would follow; therefore, that the hijacking of the carrier's vehicle must be
Court of Appeals, Cendana urged that the trial court had erred in dealt with under the provisions of Article 1735, in other words, the private
considering him a common carrier; in finding that he had habitually offered respondent as common carrier is presumed to have been at fault or to
trucking services to the public; in not exempting him from liability on the have acted negligently. This presumption, however, may be overthrown by
ground of force majeure; and in ordering him to pay damages and proof of extraordinary diligence on the part of private respondent.
attorneys fees. The Court of Appeals reversed the judgment of the trial
court and held that Cendana had been engaged in transporting return Article 1745: Any of the following or similar stipulations shall be considered
loads of freight as a casual occupation a sideline to his scrap iron unreasonable, unjust and contrary to public policy:
business and not as a common carrier.
De Guzman came to the Supreme Court by way of a Petition for Review. xxx xxx xxx

ISSUES: (5) that the common carrier shall not be responsible for the acts or omissions of his
1. WON respondent a common carrier? or its employees;
2. WON respondent liable for the loss of the cartons of milk due to force
majeure?
ARGUMENTS:
(6) that the common carrier's liability for acts committed by thieves, or of G.R. No. 186312 June 29, 2010
robbers who do not act with grave or irresistible threat, violence or force, is SPOUSES DANTE CRUZ and LEONORA CRUZ, Petitioners, vs. SUN
dispensed with or diminished; and
HOLIDAYS, INC., Respondent
(7) that the common carrier shall not responsible for the loss, destruction or
deterioration of goods on account of the defective condition of the car vehicle, FACTS
ship, airplane or other equipment used in the contract of carriage. (Emphasis
supplied)
Spouses Dante and Leonora Cruz (petitioners) lodged a Complaint on
January 25, 2001 against Sun Holidays, Inc. (respondent) with the
Under Article 1745 (6) above, a common carrier is held responsible and Regional Trial Court (RTC) of Pasig City for damages arising from the
will not be allowed to divest or to diminish such responsibility even for acts death of their son Ruelito C. Cruz (Ruelito) who perished with his wife on
of strangers like thieves or robbers, except where such thieves or robbers in September 11, 2000 on board the boat M/B Coco Beach III that capsized
fact acted "with grave or irresistible threat, violence or force." We believe and en route to Batangas from Puerto Galera, Oriental Mindoro where the
so hold that the limits of the duty of extraordinary diligence in the vigilance couple had stayed at Coco Beach Island Resort (Resort) owned and
over the goods carried are reached where the goods are lost as a result of a operated by respondent.
robbery which is attended by "grave or irresistible threat, violence or force." On September 11, 2000, as it was still windy, Matute and 25 other Resort
guests including petitioners son and his wife trekked to the other side of
The decision of the trial court shows that the armed men who held up the the Coco Beach mountain that was sheltered from the wind where they
second truck owned by private respondent acted with grave, if not irresistible,
boarded M/B Coco Beach III, which was to ferry them to Batangas.
threat, violence or force, which is an exception of the general rule of Article
1745 (6). Shortly after the boat sailed, it started to rain.
As it moved farther away from Puerto Galera and into the open seas, the
RULING: rain and wind got stronger, causing the boat to tilt from side to side and
the captain to step forward to the front, leaving the wheel to one of the
The Petition for Review on certiorari is hereby DENIED and the Decision of crew members.
the Court of Appeals dated 3 August 1977 is AFFIRMED. The waves got more unwieldy. After getting hit by two big waves which
came one after the other, M/B Coco Beach III capsized putting all
The occurrence of the loss must reasonably be regarded as quite beyond the passengers underwater.
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 The passengers, who had put on their life jackets, struggled to get out of
against all risks of travel and of transport of goods, and are not held liable for the boat.
acts or events which cannot be foreseen or are inevitable, provided that they Upon seeing the captain, Matute and the other passengers who reached
shall have complied with the rigorous standard of extraordinary diligence. the surface asked him what they could do to save the people who were
still trapped under the boat.
We, therefore, agree with the result reached by the Court of Appeals that The captain replied "Iligtas niyo na lang ang sarili niyo" (Just save
private respondent Cendana is not liable for the value of the undelivered yourselves). Help came after about 45 minutes when two boats owned by
merchandise which was lost because of an event entirely beyond private
Asia Divers in Sabang, Puerto Galera passed by the capsized M/B Coco
respondent's control.
Beach III.
Boarded on those two boats were 22 persons, consisting of 18
passengers and four crew members, who were brought to Pisa Island.
Eight passengers, including petitioners son and his wife, died during the
incident.
ISSUE
Whether or not respondent is a common carrier? FIRST PHILIPPINE INDUSTRIAL CORP. V. CA, PATERNO TAC-AN,
BANTANGAS CITY, AND ADORACION ARELLANO G.R. No. 125948
RULING December 29, 1998

The Civil Code defines "common carriers" in the following terms: FACTS
Article 1732. Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting FPIC grantee of a pipeline concession under Republic Act No. 387, as
passengers or goods or both, by land, water, or air for compensation, amended, to contract, install and operate oil pipelines
offering their services to the public. It applied for a mayors permit with the Office of the Mayor of Batangas City.
The above article makes no distinction between one whose principal Before the permit could be issued, it was required by the City Treasurer to
business activity is the carrying of persons or goods or both, and one who pay a local tax based on its gross receipts for the fiscal year 1993 pursuant
does such carrying only as an ancillary activity (in local idiom, as "a to the Local Government Code. It paid the tax under protest.
sideline"). It filed a complaint for tax refund alleging that 1) the imposition and
Article 1732 also carefully avoids making any distinction between a collection of the business tax on its gross receipts violates Section 133 of
person or enterprise offering transportation service on a regular or the Local Government Code which grants tax exemption to common
scheduled basis and one offering such service on an occasional, episodic carriers; 2) the authority of cities to impose and collect a tax on the gross
or unscheduled basis. receipts of contractors and independent contractors under Sec. 141 (e)
Neither does Article 1732 distinguish between a carrier offering its and 151 does not include the authority to collect such taxes on
services to the "general public," i.e., the general community or population, transportation contractors for, as defined under Sec. 131 (h), the term
and one who offers services or solicits business only from a narrow contractors excludes transportation contractors; and, 3) the City Treasurer
segment of the general population. illegally and erroneously imposed and collected the said tax, thus meriting
We think that Article 1733 deliberately refrained from making such the immediate refund of the tax paid.
distinctions. Indeed, respondent is a common carrier. Its ferry services are
so intertwined with its main business as to be properly considered ISSUES
ancillary thereto.
The constancy of respondents ferry services in its resort operations is 1. WON FPIC is a common carrier;
underscored by its having its own Coco Beach boats. And the tour 2. WON it is exempted from paying the taxes required by the City Treasurer
packages it offers, which include the ferry services, may be availed of by
anyone who can afford to pay the same. RULING
These services are thus available to the public. That respondent does not
1. YES. FPIC is engaged in the business of transporting or carrying goods, i.e.
charge a separate fee or fare for its ferry services is of no moment. It
petroleum products, for hire as a public employment. It undertakes to carry for
would be imprudent to suppose that it provides said services at a loss.
all persons indifferently, that is, to all persons who choose to employ its
The Court is aware of the practice of beach resort operators offering tour
services, and transports the goods by land and for compensation.
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
common carrier - holds himself out to the public as engaged in the business
the same amount is likewise inconsequential. These guests may only be
of transporting persons or property from place to place, for compensation,
deemed to have overpaid.
offering his services to the public generally (see also Art. 1732)
test for determining whether a party is a common carrier of goods:
a. 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;
b. undertakes to carry goods of the kind to which his business is confined
c. undertakes to carry by the method by which his business is conducted
and over his established roads
d. transportation is for hire PLANTERS PRODUCTS, INC. V. CA, SORIAMONT STEAMSHIP
AGENCIES AND KYOSEI KISEN KABUSHIKI KAISHA
common service coincides with public service G.R. No. 101503 September 15, 1993

public service includes every person that now or hereafter may own, FACTS:
operate. manage, or control in the Philippines, for hire or compensation,
with general or limited clientele, whether permanent, occasional or Planters Products - purchased from Mitsubishi Interl Corp. 9.3K metric tons
accidental, and done for general business purposes, any common carrier, of Urea (fertilizer), 46% of which the latter shipped in bulk aboard the cargo
railroad, street railway, traction railway, subway motor vehicle, either for vessel M/V Sun Plum owned by Kyosei Kisen Kabushiki Kaisha (KKKK)
freight or passenger, or both, with or without fixed route and whatever may time charter-party on the vessel M/V Sun Plum pursuant to the Uniform
be its classification, freight or carrier service of any class, express service, General Charter was entered into between Mitsubishi as shipper/charterer
steamboat, or steamship line, pontines, ferries and water craft, engaged in and KKKK as shipowner
the transportation of passengers or freight or both, shipyard, marine repair before loading the fertilizer aboard the vessel they were inspected by the
shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system charterers representative and found fit
gas, electric light heat and power, water supply and power petroleum, After the Urea fertilizer was loaded in bulk by stevedores (somebody whose
sewerage system, wire or wireless communications systems, wire or job is to load and unload ships) hired by and under the supervision of the
wireless broadcasting stations and other similar public services (CA No. shipper, the steel hatches were closed with heavy iron lids, covered with 3
1416, as amended, otherwise known as the Public Service Act) layers of tarpaulin, then tied with steel bonds. The hatches remained closed
and tightly sealed throughout the entire voyage.
FPIC - considered a common carrier under Art. 86 of the Petroleum Act of port area was windy, certain portions of the route to the warehouse were
the Philippines (RA 387), which provides that: Art. 86. Pipe line sandy and the weather was variable, raining occasionally while the
concessionaire as common carrier. A pipe line shall have the preferential discharge was in progress
right to utilize installations for the transportation of petroleum owned by him, survey report revealed a shortage in the cargo of 106.726 M/T and that a
but is obligated to utilize the remaining transportation capacity pro rata for portion of the Urea fertilizer approximating 18 M/T was contaminated with
the transportation of such other petroleum as may be offered by others for sand, rust and dirt
transport, and to charge without discrimination such rates as may have Planters Products sent a claim letter to Soriamont Steamship Agencies, the
been approved by the Secretary of Agriculture and Natural Resources. resident agent of the carrier, for damages

FPIC is also a public utility pursuant to Art. 7 of RA 387 which states that ISSUES:
everything relating to the exploration for and exploitation of petroleum . . .
and everything relating to the manufacture, refining, storage, or 1. WON a common carrier becomes a private carrier by reason of a charter-
transportation by special methods of petroleum, is hereby declared to be a party;
public utility 2. in the negative, WON the shipowner was able to prove that he had
exercised that degree of diligence required of him under the law
2. YES. Legal basis is Section 133 (j), of the Local Government Code which
provides that Unless otherwise provided herein, the exercise of the taxing RULING:
powers of provinces, cities, municipalities, and barangays shall not extend to
the levy of the following: Taxes on the gross receipts of transportation 1. YES.
contractors and persons engaged in the transportation of passengers or charter-party contract by which an entire ship, or some principal part
freight by hire and common carriers by air, land or water, except as provided thereof, is let by the owner to another person for a specified time or use;
in this Code. contract of affreightment by which the owner of a ship or other vessel lets
Reason for the exception: to avoid duplication of tax the whole or a part of her to a merchant or other person for the conveyance
of goods, on a particular voyage, in consideration of the payment of freight

2 types of charter-party:
a. Contract Of Affreightment involves the use of shipping space on ships holds, the steel pontoon hatches were closed and sealed with iron
vessels leased by the owner in part or as a whole, to carry goods for others; lids, then covered with 3 layers of serviceable tarpaulins which were tied
may either be: i) time charter - vessel is leased to the charterer for a fixed with steel bonds. The hatches remained close and tightly sealed while the
period of time; or ii) voyage charter - ship is leased for a single voyage ship was in transit as the weight of the steel covers made it impossible for a
person to open without the use of the ships boom.
b. Charter By Demise Or Bareboat Charter whole vessel is let to the
charterer with a transfer to him of its entire command and possession and the hull of the vessel was in good condition, foreclosing the possibility of
consequent control over its navigation, including the master and the crew, spillage of the cargo into the sea or seepage of water inside the hull of the
who are his servants vessel

In both types, the charter-party provides for the hire of vessel only, either for stevedores unloaded the cargo under the watchful eyes of the shipmates
a determinate period of time or for a single or consecutive voyage, the who were overseeing the whole operation on rotation basis
shipowner to supply the ships stores, pay for the wages of the master and
the crew, and defray the expenses for the maintenance of the ship. Urea also contains 46% nitrogen and is highly soluble in water. However,
during storage, nitrogen and ammonia do not normally evaporate even on a
Common Or Public Carrier see Art. 1732; extends to carriers either by long voyage, provided that the temperature inside the hull does not exceed
land, air or water which hold themselves out as ready to engage in carrying 80 degrees centigrade.
goods or transporting passengers or both for compensation as a public
employment and not as a casual occupation distinction between a common dissipation of quantities of fertilizer, or its deterioration in value, is caused
or public carrier and a private or special carrier lies in the character of the either by an extremely high temperature in its place of storage, or when it
business, such that if the undertaking is a single transaction, not a part of comes in contact with water
the general business or occupation, although involving the carriage of goods
for a fee, the person or corporation offering such service is a private carrier probability of the cargo being damaged or getting mixed or contaminated
with foreign particles was made greater by the fact that the fertilizer was
Common Carrier - should observe extraordinary diligence in the vigilance transported in bulk, thereby exposing it to the inimical effects of the
over the goods they carry; in case of loss, destruction or deterioration of the elements and the grimy condition of the various pieces of equipment used in
goods, it is presumed to be at fault or to have acted negligently, and the transporting and hauling it risk the shipper or the owner of the goods has
burden of proving otherwise rests on it to face

Private Carrier - exercise of ordinary diligence in the carriage of goods will


suffice; no such presumption applies to private carriers only when the
charter includes both the vessel and its crew, as in a bareboat or demise
that a common carrier becomes private, at least insofar as the particular
voyage covering the charter-party is concerned when Planters Products
chartered the vessel M/V Sun Plum, the ship captain, its officers and
compliment were under the employ of the shipowner and therefore
continued to be under its direct supervision and control.

As stranger to the crew and to the ship, Planters Products did not have the
duty of caring for its cargo as it did not have control of the means in doing
so.

2. YES

Before the fertilizer was loaded, the 4 hatches of the vessel were cleaned,
dried and fumigated. After completing the loading of the cargo in bulk in the
HOME INSURANCE CO. V. AMERICAN STEAMSHIP AGENCIES, INC. AND
LUZON STEVEDORING CORP. ABELARDO LIM V. COURT OF APPEALS
G.R. No. L-25599 April 4, 1968 GR No. 125817 Jan 16, 2002

FACTS:
FACTS
On November 28, 1956, Gelacio Tumambing contracted the services of
Consorcio Pesquero del Peru of South America shipped freight pre-paid Mauro B. Ganzon to haul 305 tons of scrap iron from Mariveles, Bataan,
jute bags of Peruvian fish meal through SS Crowborough; cargo, consigned to the port of Manila on board the lighter LCT "Batman.
to San Miguel Brewery, Inc. and insured by Home Insurance Co. arrived in
Manila and was discharged into the lighters of Luzon Stevedoring Co.; when Pursuant to that agreement, Mauro B. Ganzon sent his lighter "Batman" to
the cargo was delivered to consignee San Miguel, there were shortages Mariveles where it docked in three feet of water.
amounting to P12K, causing the latter to lay claims against Luzon
Stevedoring, Home Insurance and the American Steamship Agencies, Gelacio Tumambing delivered the scrap iron to defendant Filomeno Niza,
owner and operator of SS Crowborough. captain of the lighter, for loading which was actually begun on the same
date by the crew of the lighter under the captain's supervision.
Home Insurance paid the consignee; it filed against American Steamship
Agencies, Inc. and Luzon Stevedoring Corp a complaint for recovery of a When about half of the scrap iron was already loaded, Mayor Jose
sum of money with legal interest Advincula of Mariveles, Bataan, arrived and demanded P5,000.00 from
Gelacio Tumambing.
Section 2, paragraph 2 of the charter party, provides that the owner is liable
for loss or damage to the goods caused by personal want of due diligence The latter resisted the shakedown and after a heated argument between
on its part or its manager to make the vessel in all respects seaworthy and them, Mayor Jose Advincula drew his gun and fired at Gelacio
to secure that she be properly manned, equipped and supplied or by the Tumambing who sustained injuries.
personal act or default of the owner or its manager. Said paragraph,
however, exempts the owner of the vessel from any loss or damage or delay After sometime, the loading of the scrap iron was resumed. But on
arising from any other source, even from the neglect or fault of the captain December 4, 1956, Acting Mayor Basilio Rub, accompanied by three
or crew or some other person employed by the owner on board, for whose policemen, ordered captain Filomeno Niza and his crew to dump the
acts the owner would ordinarily be liable except for said paragraph. scrap iron where the lighter was docked.
ISSUE: The rest was brought to the compound of NASSCO. Later on Acting
Mayor Rub issued a receipt stating that the Municipality of Mariveles had
WON the stipulation in the charter party of the owners non-liability is valid so taken custody of the scrap iron.
as to absolve the American Steamship Agencies from liability for loss
Tumabing sued Ganzon; the latter alleged that the goods have not been
HELD:
unconditionally placed under his custody and control to make him liable.
Yes. A common carrier undertaking to carry a special cargo or chartered to a
The trial court dismissed the case but on appeal, respondent Court
special person only, becomes a private carrier. As a private carrier, a
rendered a decision reversing the decision of the trial court and ordering
stipulation exempting the owner from liability for the negligence of its agent is
Ganzon to pay damages.
not against public policy, and is deemed valid.
ISSUE:

Whether or not a contract of carriage has been perfected.


HELD: LITA ENTERPRISES, INC., vs.INTERMEDIATE APPELLATE COURT,
NICASIO M. OCAMPO and FRANCISCA P. GARCIA.
Yes. [G.R. No. L-64693 April 27, 1984]
By the said act of delivery, the scraps were unconditionally placed in the
possession and control of the common carrier, and upon their receipt by FACTS:
the carrier for transportation, the contract of carriage was deemed Sometime in 1966, the spouses Nicasio M. Ocampo and Francisca
perfected.
Garcia, herein private respondents, purchased in installment from the
Delta Motor Sales Corporation five (5) Toyota Corona Standard cars to be
Consequently, the petitioner-carrier's extraordinary responsibility for the
loss, destruction or deterioration of the goods commenced. used as taxicabs.
Pursuant to Art. 1736, such extraordinary responsibility would cease only
upon the delivery, actual or constructive, by the carrier to the consignee, Since they had no franchise to operate the said taxicabs, they contracted
or to the person who has a right to receive them. with petitioner Lita Enterprises Inc. (Lita) for the use of the latters
Certificate of Public Convenience in consideration of an initial payment of
The fact that part of the shipment had not been loaded on board the P1,000 and a monthly rental of P200 per taxi cab unit.
lighter did not impair the said contract of transportation as the goods
remained in the custody and control of the carrier, albeit still unloaded. To effectuate their agreement, the taxicabs were registered under the
name of Lita but the possession remained with the spouses who operated
Before Ganzon could be absolved from responsibility on the ground that them under the name Acme taxi.
he was ordered by competent public authority to unload the scrap iron, it
must be shown that Acting Mayor Basilio Rub had the power to issue the
About a year later, one of said taxicabs driven by their employee,
disputed order, or that it was lawful, or that it was issued under legal
process of authority. The appellee failed to establish this. Emeterio Martin, collided with a motorcycle whose driver, Florante Galvez,
died from the head injuries sustained.
Indeed, no authority or power of the acting mayor to issue such an order
was given in evidence. Neither has it been shown that the cargo of scrap A criminal case was filed against the driver while a civil case was filed
iron belonged to the Municipality of Mariveles. against Lita enterprises seeking for damages. In the CFI of Manila,
petitioner Lita Enterprises was adjudged liable for damages as the
What we have in the record is the stipulation of the parties that the cargo registered owner of the taxicab.
of scrap iron was accumulated by the appellant through separate
purchases here and there from private individuals. Thus, a writ of execution was issued and one of the vehicles of
respondent spouses was levied upon and sold at public auction.
The fact remains that the order given by the acting mayor to dump the
scrap iron into the sea was part of the pressure applied by Mayor Jose Thereafter, respondent Nicasio Ocampo decided to register his taxicab in
Advincula to shakedown Tumambing for P5,000.00. The order of the
his name, but Lita Enterprises allegedly refused to turn over the
acting mayor did not constitute valid authority for Ganzon and his
representatives to carry out. registration papers to him.

The spouses then filed an action for reconveyance with the CFI of Manila.
The CFI ordered Lita to transfer the registration certificate of the three
Toyota cars not levied upon by executing a deed of conveyance in favor of
the plaintiff.
Plaintiff is, however, ordered to pay Lita Enterprises, Inc., the rentals in delivered, or damages for its violation. The parties in this case are in pari
arrears for the certificate of convenience from March 1973 up to May 1973 delicto, therefore no affirmative relief can be granted to them.
at the rate of P200 a month per unit for the three cars.

On appeal, the CA modified the decision by ordering Lita to pay the ISSUE:
plaintiffs their fair market value as of July 22, 1975 In the event the
condition of the three Toyota rears will no longer serve the purpose of the WON Lita Enterprises is liable to the heir of the victim who died as a result of
deed of conveyance because of their deterioration, or because they are the gross negligence of Ocampo and Garcias driver while driving one private
no longer serviceable, or because they are no longer available. respondents taxicabs

ISSUE: RULING

Yes.
Whether or not petitioner can recover from private respondent, knowing they kabit system system whereby a person who has been granted a
are in an arrangement known as kabit system. certificate of convenience allows another person who owns motors vehicles
to operate under such franchise for a fee; contrary to public policy and,
RULING therefore, void and inexistent under Article 1409 of the Civil Code; as a
result, the court will not aid either party to enforce an illegal contract, but will
NO leave them both where it finds them (pari delicto rule)
Kabit system is defined as, when a person who has been granted a Art. 1412: If the act in which the unlawful or forbidden cause consists does
certificate of convenience allows another person who owns a motor vehicle to not constitute a criminal offense, the following rules shall be observed; (1)
operate under such franchise for a fee. This system is not penalized as a when the fault, is on the part of both contracting parties, neither may recover
criminal offense but is recognized as one that is against public policy; what he has given by virtue of the contract, or demand the performance of
therefore it is void and inexistent. the others undertaking.
the defect of inexistence of a contract is permanent and incurable, and
It is fundamental that the court will not aid either of the party to enforce an cannot be cured by ratification or by prescription
illegal contract, but will leave them both where it finds them. Upon this
premise, it was flagrant error on the part of both trial and appellate courts to
have accorded the parties relief from their predicament. Specifically Article
1412 states that:

If the act in which the unlawful or forbidden cause consists does not
constitute a criminal offense, the following rules shall be observed: when the
fault, is on the part of both contracting parties, neither may recover what he
has given by virtue of the contract, or demand the performance of the others
undertaking.

The principle of in pari delicto is evident in this case. the proposition is


universal that no action arises, in equity or at law, from an illegal contract; no
suit can be maintained for its specific performance, or to recover the property
agreed to sold or delivered, or damages for its property agreed to be sold or F.C. FISHER vs.YANGCO STEAMSHIP COMPANY
G.R. No. L-8095 March 31, 1915
FACTS:
Plaintiff alleges that he is the owner and consignee of two cases of books, shipped
FACTS: in good order and condition at New York, U.S.A., on board the defendant's
steamship President Garfield, for transport and delivery to the plaintiff in the City
The board of Yangco Steamship Co. adopted a resolution which was ratified by the of Manila, all freight charges paid.
stockholders declaring classes of merchandise which are not to be carried by the That the two cases arrived in Manila on September 1, 1927, in bad order and
vessels of the company and prohibiting the employees to carry dynamite, powder or damaged condition, resulting in the total loss of one case and a partial loss of the
other explosives. other.
Defendant has refused and neglected to pay, giving as its reason that the damage
in question "was caused by sea water."
The Collector of Customs suspended the issuance of clearances for the vessels unless
Plaintiff never entered into any contract with the defendant limiting defendant's
they carry the explosives. Fisher, a stockholder of YSC, filed a petition for prohibition.
liability as a common carrier, and when he wrote the letter of September 3, 1927,
he had not then ascertained the contents of the damaged case, and could not
ISSUE:
determine their value. That he never intended to ratify or confirm any agreement
to limit the liability of the defendant.
Whether or not the refusal of the board of YFC to accept for carriage "dynamite,
DEFENDANTs CONTENTIONS:
powder or other explosives" from any and all shippers who may offer such explosives o the steamship President Garfield at all the times alleged was in all respects
for carriage can be held to be a lawful act.
seaworthy and properly manned, equipped and supplied, and fit for the
voyage.
RULING: o That the damage to plaintiff's merchandise, if any, was not caused through
the negligence of the vessel, its master, agent, officers, crew, tackle or
NO. In construing Act 98 for the alleged violation, the test is whether the refusal of YSC appurtenances, nor by reason of the vessel being unseaworthy or improperly
to carry the explosives without qualification or conditions may have the effect of manned, "but that such damage, if any, resulted from faults or errors in
subjecting any person or locality or the traffic is such explosives to an unduly navigation or in the management of said vessel."
unreasonable or unnecessary prejudice or discrimination. o The bill of lading issued by the defendant to plaintiff, it was agreed in writing
that defendant should not be "held liable for any loss of, or damage to,
Common carriers in this jurisdiction cannot lawfully decline to accept a particular class any of said merchandise resulting from any of the following causes, to
of goods unless it appears that for some sufficient reason the discrimination for such is wit: Acts of God, perils of the sea or other waters,"
reasonable and necessary. YSC has not met those conditions. o The damage, if any, was caused by "sea water," and that the bill of lading
exempts defendant from liability for that cause. That damage by "sea water" is
The nature of the business of a common carrier as a public employment is such that it a shipper's risk, and that defendant is not liable.
is within the power of the State to impose such just regulations in the interest of the
public as the legislator may deem proper. Trial court favored the plaintiff.

ISSUE(S): WON defendant liable?

RULING: YES.

Dispositive: The judgment of the lower court will be modified, so as to give the plaintiff
legal interest on the amount of his judgment from the date of its rendition in the lower
court, and in all respects affirmed, with costs. So ordered.

RATIO:
AMANDO MIRASOL vs THE ROBERT DOLLAR CO.
The defendant having received the two boxes in good condition, its legal duty was
to deliver them to the plaintiff in the same condition in which it received them. FACTS:
From the time of their delivery to the defendant in New York until they are
delivered to the plaintiff in Manila, the boxes were under the control and Benito Macam, doing business under name Ben-Mac Enterprises, shipped on board
supervision of the defendant and beyond the control of the plaintiff. vessel Nen-Jiang, owned and operated by respondent China Ocean Shipping Co.
The defendant having admitted that the boxes were damaged while in transit and through local agent Wallem Philippines Shipping Inc., 3,500 boxes of watermelon
in its possession, the burden of proof then shifted, and it devolved upon the covered by Bill of Lading No. HKG 99012, and 1,611 boxes of fresh mangoes covered
defendant to both allege and prove that the damage was caused by reason of by Bill of Lading No. HKG 99013.
some fact which exempted it from liability.
The shipment was bound for Hongkong with PAKISTAN BANK as consignee and Great
As to how the boxes were damaged, when or where, was a matter peculiarly and
Prospect Company of Rowloon (GPC) as notify party.
exclusively within the knowledge of the defendant and in the very nature of things
could not be in the knowledge of the plaintiff. Upon arrival in Hongkong, shipment was delivered by respondent WALLEM directly to
Shippers who are forced to ship goods on an ocean liner or any other ship have
GPC, not to PAKISTAN BANK and without the required bill of lading having been
some legal rights, and when goods are delivered on board ship in good order and
surrendered. Subsequently, GPC failed to pay PAKISTAN BANK, such that the latter,
condition, and the shipowner delivers them to the shipper in bad order and
still in possession of original bill of lading, refused to pay petitioner thru SOLIDBANK.
condition, it then devolves upon the shipowner to both allege and prove that the
goods were damaged by the reason of some fact which legally exempts him from Since SOLIDBANK already pre-paid the value of shipment, it demanded payment from
liability; otherwise, the shipper would be left without any redress, no matter what respondent WALLEM but was refused. MACAM constrained to return the amount paid
may have caused the damage. by SOLIDBANK and demanded payment from WALLEM but to no avail.
The cases were received by the defendant in New York in good order and
condition, and when they arrived in Manila, they were in bad condition, and one WALLEM submitted in evidence a telex dated 5 April 1989 as basis for delivering the
was a total loss. cargoes to GPC without the bills of lading and bank guarantee.
The fact that the cases were damaged by "sea water," standing alone and
within itself, is not evidence that they were damaged by force majeure or for The telex instructed delivery of various shipments to the respective consignees without
a cause beyond the defendant's control. The words "perils of the sea," as need of presenting the bill of lading and bank guarantee per the respective shippers
stated in defendant's brief apply to "all kinds of marine casualties, such as request since for prepaid shipt ofrtcharges already fully paid. MACAM, however,
shipwreck, foundering, stranding," and among other things, it is said: "Tempest, argued that, assuming there was such an instruction, the consignee referred to was
rocks, shoals, icebergs and other obstacles are within the expression," and "where PAKISTAN BANK and not GPC.
the peril is the proximate cause of the loss, the shipowner is excused."
"Something fortuitous and out of the ordinary course is involved in both words The RTC ruled for MACAM and ordered value of shipment. CA reversed RTCs
'peril' or 'accident'." decision.
Defendant also cites and relies on the case of Government of the Philippine
Islands vs. Ynchausti & Company (40 Phil., 219), but it appears from a reading of ISSUE:
that case that the facts are very different and, hence, it is not in point. In the
instant case, there is no claim or pretense that the two cases were not in good Are the respondents liable to the petitioner for releasing thegoods to GPC without
order when received on board the ship, and it is admitted that they were in bad the bills of lading or bank guarantee?
order on their arrival at Manila. Hence, they must have been damaged in transit. In
RULING:
the very nature of things, if they were damaged by reason of a tempest, rocks,
icebergs, foundering, stranding or the perils of the sea, that would be a matter It is a standard maritime practice when immediate delivery is of the essence, for
exclusively within the knowledge of the officers of defendant's ship, and in the very shipper to request or instruct the carrier to deliver thegoods to the buyer upon arrival at
nature of things would not be within plaintiff's knowledge, and upon all of such the port of destination without requiring presentation of bill of lading as that usually
questions, there is a failure of proof. takes time.

Thus, taking into account that subject shipment consisted of perishable goods and
MACAM vs. COURT OF APPEALS GR No. 125524; August 25, 1999 SOLIDBANK pre-paid the full amount of value thereof, it is not hard to believe the
claim of respondent WALLEM that petitioner indeed requested the release of
the goods to GPC without presentation of the bills of lading and bank guarantee. Lessons Applicable: Actionable Document (Transportation)
Laws Applicable: Art. 1733, Art. 1755
To implement the said telex instruction, the delivery of the shipment must be to GPC,
the notify party or real importer/buyer of the goods and not the PAKISTANI BANK since FACTS:
the latter can very well present the original Bills of Lading in its possession. May 13, 1985: Theodore M. Lardizabal was driving a passenger bus
belonging to Dangwa Transportation Co. Inc. (Dangwa)
Likewise, if it were the PAKISTANI BANK to whom the cargoes were to be strictly The bus was at full stop bet. Bunkhouses 53 and 54 when Pedro alighted
delivered, it will no longer be proper to require a bank guarantee as a substitute for
Pedro Cudiamat fell from the platform of the bus when it suddenly accelerated
the Bill of Lading. To construe otherwise will render meaningless the telex instruction.
forward
After all, the cargoes consist of perishable fresh fruits and immediate delivery thereof
Pedro was ran over by the rear right tires of the vehicle
the buyer/importer is essentially a factor to reckon with.
Theodore first brought his other passengers and cargo to their respective
We emphasize that the extraordinary responsibility of the common carrierslasts until destinations before bringing Pedro to Lepanto Hospital where he expired
actual or constructive delivery of the cargoes to the consignee or to the person who Private respondents filed a complaint for damages against Dangwa for the
has a right to receive them. death of Pedro Cudiamat
Dangwa: observed and continued to observe the extraordinary diligence
PAKISTAN BANK was indicated in the bills of lading as consignee whereas GPC was required in the operation of the co. and the supervision of the employees even as
the notify party. However, in the export invoices GPC was clearly named as they are not absolute insurers of the public at large
buyer/importer. Petitioner also referred to GPC as such in his demand letter to RTC: in favour of Dangwa holding Pedrito as negligent and his negligence
respondent WALLEM and in his complaint before the trial court. was the cause of his death but still ordered to pay in equity P 10,000 to the heirs
of Pedrito
This premise draws us to conclude that the delivery of the cargoes to GPC as
CA: reversed and ordered to pay Pedrito indemnity, moral damages, actual
buyer/importer which, conformably with Art. 1736 had, other than the consignee, the
and compensatory damages and cost of the suit
right to receive them was proper.

ISSUE:
WON Dangwa should be held liable for the negligence of its driver Theodore

RULING:
YES. CA affirmed.
A public utility once it stops, is in effect making a continuous offer to bus riders
(EVEN when moving as long as it is still slow in motion)
Duty of the driver: do NOT make acts that would have the effect of increasing peril
to a passenger while he is attempting to board the same
Premature acceleration of the bus in this case = breach of duty
Stepping and standing on the platform of the bus is already considered a
passenger and is entitled all the rights and protection pertaining to such a
contractual relation
Duty extends to boarding and alighting
GR: By contract of carriage, the carrier assumes the express obligation to
transport the passenger to his destination safely and observe extraordinary
diligence with a due regard for all the circumstances, and any injury that might be
DANGWA TRANSPORTATION INC. V. CA, 1991 suffered by the passenger is right away attributable to the fault or negligence of
G.R. No. 95582 October 7, 1991 the carrier
EX: carrier to prove that it has exercised extraordinary diligence as prescribed in PARTIES: Mariano Beltran and wife- plaintiffs (passengers); Raquel Beltran-
Art. 1733 and 1755 of the Civil Code passenger, victim;
Failure to immediately bring Pedrito to the hospital despite his serious condition =
patent and incontrovertible proof of their negligence FACTS:
Hospital was in Bunk 56 On December 20, 1953, plaintiffs husband and wife together with their minor
1st proceeded to Bunk 70 to allow a passenger (who later called the family of daughters namely, Milagros, 13 years old, Raquel 4 years old, and Fe over 2
Pedrito on his own will) to alight and deliver a refrigerator years old, boarded the Pambusco Bus no. 352, owned and operated by
In tort, actual damages is based on net earnings defendant, at San Fernando, Pampanga bound for Anao, Mexico, Pampanga.
At the same time, they were carrying four pieces of baggages containing their
personal things. The conductor of the bus, who happened to be a half-brother of
Plaintiff Mariano Beltran, issued three tickets. It covered the full fares of plaintiff
and their eldest child, Milagros. No fare was charged on Raquel and Fe.
After an hour, the plaintiffs and their children was about to get off. Mariano
Beltran, then carrying some of their baggages, was the first to get down the bus,
followed by his wife and his children.
He returned to the bus to get his other bayong which he had left behind, but in
so doing, his daughter Racquel followed him, unnoticed by her father. While
Mariano is waiting for the conductor to hand him his bayong, the bus suddenly
started moving forward.
Mariano Beltran saw people beginning to gather around the body of a child lying
prostrate on the ground, her skull crushed, and without life. The child was none
other than his daughter Raquel, who was run over by the bus in which she rode
earlier together with her parents.
For the death of the said child, the plaintiffs commenced the present suit against
the defendant seeking to recover an aggregate amount of P16,000 to cover
moral damages and actual damages and attorney's fees.

LOWER COURT RULING:


The trial court found defendant liable for breach of contract of carriage and
sentenced to pay P3,000 for the death of the child and P400.00 as compensatory
damages representing burial and expenses and costs.

ISSUE:
WON as to the child, who was already led by the father to a place about 5 meters
away from the bus the liability of the carrier for her safety under the contract of
carriage also persisted.
LA MALLORCA V. COURT OF APPEALS RULING:
The petitioner is liable for damages for the death of the child, Raquel Beltran.
There can be no controversy that as far as the father is concerned, when he
returned to the bus for his bayong which was not unloaded, the relation of
passenger and carrier between him and the petitioner remained subsisting.
It has been recognized as a rule that the relation of carrier and passenger does
not cease at the moment the passenger alights form the carrier's vehicle at a
place selected by the carrier at the point of destination, but continues until the
passenger has had a reasonable time or opportunity to leave the carrier's
premises.
Thus, a person who, after alighting from a train, walks along the station platform
is considered still a passenger. It cannot be claimed that the carrier's agent had
exercised the "utmost diligence" of a "very cautious person" required by Article
1755 of the Civil Code. In the first place, the driver, nevertheless did not put off
the engine.
Secondly, he started to run the bus even before the bus conductor gave him the
signal to do so and while the latter was still unloading part of the baggages of the
passengers Mariano Beltran.
The decision of the Court of Appeals is hereby modified by sentencing, the
petitioner to pay to the respondents Mariano Beltran, et.al the sum of P3,000 for
the death of the child, Raquel Beltran, and the amount of P400.00 as actual
damages.

JOSE CANGCO vs. MANILA RAILROAD CO


G.R. No. L12191 October 14, 1918 The testimony shows that this row of sacks was so placed of melons and the
edge of platform and it is clear that the fall of the plaintiff was due to the fact
FACTS: that his foot alighted upon one of these melons at the moment he stepped upon
the platform.
Jose Cangco, was in the employment of Manila Railroad Company in the capacity
His statement that he failed to see these objects in the darkness is readily to be
of clerk, with a monthly wage of P25.
credited.
He lived in the pueblo of San Mateo, Rizal, located upon the line of the
Cangco was drawn from under the car in an unconscious condition, and it
defendant railroad company and in coming daily by train to the company's office
appeared that the injuries which he had received were very serious. He was
in the city of Manila where he worked, he used a pass, supplied by the company,
therefore brought at once to a certain hospital in the city of Manila wherean
which entitled him to ride upon the company's trains free of charge.
examination was made and his arm was amputated.
Upon the occasion in question, Cangco arose from his seat in the second
The result of this operation was unsatisfactory, and Cangco was then carried to
classcar where he was riding and, making, his exit through the door, took his
another hospital where a second operation was performed and the member was
position upon the steps of the coach, seizing the upright guardrail with his right
again amputated higher up near the shoulder.
hand for support.
Cangco instituted this proceeding in the Court to recover damages of the
On the side of the train where passengers alight at the San Mateo station there
defendant company, founding his action upon the negligence of the servants and
is a cement platform which begins to rise with a moderate gradient some
employees of the defendant in placing the sacks of melons upon the platform
distance away from the company's office and extends along in front of said office
and leaving them so placed as to be a menace to the security of passenger
for a distance sufficient to cover the length of several coaches.
alighting from the company's trains.
As the train slowed down another passenger, named Emilio Zuiga, also an
employee of the railroad company, got off the same car, alighting safely at the
TRIAL COURT: Judgment was accordingly entered in favor of Manila Rail Road Co.
point where the platform begins to rise from the level of the ground. When the
Cangco himself had failed to use due caution in alighting from the coach and was
train had proceeded a little farther, Jose Cangco stepped off also, but one or therefore precluded form recovering.
both of his feet came in contact with a sack of watermelons with the result that
his feet slipped from under him and he fell violently on the platform.
His body at once rolled from the platform and was drawn under the moving car, ISSUE:
where his right arm was badly crushed and lacerated.
1. Whether or not Manila Railroad Co is liable for the damages suffered by Cangco?
It appears that after the plaintiff alighted from the train the car moved forward
possibly six meters before it came to a full stop. YES.
The accident occurred between 7 and 8 o'clock on a dark night, and as the Alighting from a moving train while it is slowing down is a common practice and a lot
railroad station was lighted dimly by a single light located some distance away, of people are doing so every day without suffering injury. Cangco has the vigor and
objects on the platform where the accident occurred were difficult to discern agility of young manhood, and it was by no means so risky for him to get off while
especially to a person emerging from a lighted car. the train was yet moving as the same act would have been in an aged or feeble
The explanation of the presence of a sack of melons on the platform where the person. He was also ignorant of the fact that sacks of watermelons were there as
Cangco alighted is found in the fact that it was the customary season for there were no appropriate warnings and the place was dimly lit.
harvesting these melons and a large lot had been brought to the station for the The Court also elucidated on the distinction between the liability of employers under
shipment to the market. Article 2180 and their liability for breach of contract [of carriage]:
They were contained in numerous sacks which has been piled on the platform in
a row one upon another.
Whether negligence occurs an incident in the course of the performance of a
contractual undertaking or in itself the source of an extra-contractual undertaking
obligation, its essential characteristics are identical.

Vinculum Juris:
(def) It means an obligation of law, or the right of the obligee to enforce a civil
matter in a court of law

2. Whether or not there was a contributing negligence on the part of the


plaintiff?

In determining the question of contributory negligence in performing such act that


is to say, whether the passenger acted prudently or recklessly the age, sex, and
physical condition of the passenger are circumstances necessarily affecting the safety
of the passenger, and should be considered.

The place was perfectly familiar to the plaintiff as it was his daily custom to get on
and off the train at the station. There could, therefore, be no uncertainty in his mind
with regard either to the length of the step which he was required to take or the
character of the platform where he was alighting. The Supreme Courts conclusion
NOTES: was that the conduct of the plaintiff in undertaking to alight while the train was yet
But, if the master has not been guilty of any negligence whatever in the selection slightly under way was not characterized by imprudence and that therefore he was
and direction of the servant, he is not liable for the acts of the latter, whatever not guilty of contributory negligence.
done within the scope of his employment or not, if the damage done by the
servant does not amount to a breach of the contract between the master and
the person injured.
The liability arising from extra-contractual culpa is always based upon a
voluntary act or omission which, without willful intent, but by mere negligence
or inattention, has caused damage to another.
These two fields, figuratively speaking, concentric; that is to say, the mere fact
that a person is bound to another by contract does not relieve him from extra-
contractual liability to such person. When such a contractual relation exists the
obligor may break the contract under such conditions that the same act which
constitutes the source of an extra-contractual obligation had no contract existed
between the parties. CESAR L. ISAAC vs. A. L. AMMEN TRANSPORTATION CO., INC
Manresa: G.R. No. L9671 August 23, 1957
FACTS WON AL. Ammen observed extraordinary diligence or the utmost diligence of every
AL. Ammen Transportation Co., Inc. is a corporation engaged in thebusiness of cautious person, having due regard for all circumstances, in avoiding the collision
transporting passengers by land for compensation in the Bicol provinces and one which resulted in the injury caused to the plaintiff?
of the lines it operates is the one connecting Legaspi City, Albay with Naga City,
Camarines Sur. RULING
One of the buses which L. Ammen was operating is Bus No. 31.
Isaac boarded said bus as a passenger paying the required fare from Ligao, Albay YES
bound for Pili, Camarines Sur, but before reaching his destination, the bus Thus, it appears that Bus No. 31, immediately prior to the collision, was running at a
collided with a motor vehicle of the pickup type coming from the opposite moderate speed because it had just stopped at the school zone of Matacong,
direction, as a result of which plaintiff's left arm was completely severed and the Polangui, Albay.
severed portion fell inside the bus.
He was rushed to a hospital in Iriga, Camarines Sur where he was given blood The pickup car was at full speed and was running outside of its proper lane. The
transfusion to save his life. After four days, he was transferred to another driver of the bus, upon seeing the manner in which the pickup was then running,
hospital in Tabaco, Albay, where he under went treatment for three months and swerved the bus to the very extreme right of the road until its front and rear wheels
was moved later to the Orthopedic Hospital where he was operated on and have gone over the pile of stones or gravel situated on the rampart of the road.
stayed there for another two months.
Isaac brought this action against defendants for damages alleging that the Said driver could not move the bus farther right and run over a greater portion of the
collision which resulted in the loss of his left arm was mainly due to the gross pile, the peak of which was about 3 feet high, without endangering the safety of his
incompetence and recklessness of the driver of the bus operated by L. Ammen passengers. And notwithstanding all these efforts, the rear left side of the bus was hit
and that L. Ammen incurred in culpa contractual arising from its noncompliance by the pickup car.
with its obligation to transport plaintiff safely to his, destination.
L. Ammen set up as special defense that the injury suffered by plaintiff was due Considering all the circumstances, we are persuaded to conclude that the driver of
entirely to the fault or negligence of the driver of the pickup car which collided the bus has done what a prudent man could have done to avoid the collision and in
with the bus driven by its driver and to the contributory negligence of plaintiff our opinion this relieves appellee from legibility under our law.
himself.
Defendant further claims that the accident which resulted in the injury of ART. 1733.
plaintiff is one which defendant could not foresee or, though foreseen, was Common carriers, from the nature of their business and for reasons of public policy,
inevitable. are bound to observe extra ordinary diligence in the vigilance over the goods and for
the safety of the passengers transported by them according to all the circumstances
TRIAL COURT: of each case.
Found that the collision occurred due to the negligence of the driver of the pickup
car and not to that of the driver of the bus it appearing that the latter did everything Such extraordinary diligence in the vigilance over the goods is further expressed in
he could to avoid the same but that notwithstanding his efforts, he was not able to articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for
avoid it. Dismissed the complaint. the safety of the passengers is further set forth in articles 1755 and 1756.
ISSUE
ART. 1755.
A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due It is the prevailing rule that it is negligence per se for a passenger on a railroad
regard for all the circumstances. voluntarily or inadvertently to protrude his arm, hand, elbow, or any other part
of his body through the window of a moving car beyond the outer edge of the
ART. 1756. window or outer surface of the car, so as to come in contact with objects or
In case of death of or injuries to passengers, common carriers are presumed to have obstacles near the track, and that no recovery can be had for an injury which but
been at fault or to have acted negligently, unless they prove that they observed for such negligence would not have been sustained.
extraordinary diligence as prescribed in articles 1733 and 1755.

PRINCIPLES GOVERNING THE LIABILITY OF A COMMON CARRIER:


1. The liability of a carrier is contractual and arises upon breach of its
obligation. There is breach if it fails to exert extraordinary diligence according to
all circumstances of each case
2. A carrier is obliged to carry its passenger with the utmost diligence of a very
cautious person, having due regard for all the circumstances
3. A carrier is presumed to be at fault or to have acted negligently in case of
death of, or injury to, passengers, it being its duty to prove that it exercised
extraordinary diligence
4. The carrier is not an insurer against all risks of travel

Where a carrier's employee is confronted with a sudden emergency, the fact that
he is obliged to act quickly and without a chance for deliberation must be taken
into account, and he is held to the some degree of care that he would otherwise
be required to exercise in the absence of such emergency but must exercise only
such care as any ordinary prudent person would exercise under like
circumstances and conditions, and the failure on his part to exercise the best
judgment the case renders possible does not establish lack of care and skill on
his part
It is therefore apparent that appellant is guilty of contributory negligence. Had
he not placed his left arm on the window sill with a portion thereof protruding
outside, perhaps the injury would have been avoided as is the case with the
other passenger. It is to be noted that appellant was the only victim of the
collision.
It is true that such contributory negligence cannot relieve appellee of its liability
but will only entitle it to a reduction of the amount of damage caused (Article
1762, new Civil Code), but this is a circumstance which further militates against
the position taken by appellant in this case. SPS TEODORO AND NANETTE PERENA VS.
SPS NICOLAS AND TERESITA L. ZARATE, PHILIPPINE NATIONAL RAILWAYS AND CA
G.R. No. 157917, August 29, 2012 Alano fled the scene on board the train, and did not wait for the police
investigator to arrive.
FACTS Devastated by the early and unexpected death of Aaron, the Zarates commenced
this action for damages against Alfaro, the Pereas, PNR and Alano. Their cause
The Pereas were engaged in the business of transporting students from their of action against PNR was based on quasi-delict. Their cause of action against the
respective residences in Paraaque City to Don Bosco in Pasong Tamo, Makati Pereas was based on breach of contract of common carriage.
City, and back. In their defense, the Pereas invoked that as private carriers they were not
In their business, the Pereas used a KIA Ceres Van (van) with Plate No. PYA 896, negligent in selecting Alfaro as their driver as they made sure that he had a
which had the capacity to transport 14 students at a time, two of whom would drivers license and that he was not involved in any accident prior to his being
be seated in the front beside the driver, and the others in the rear, with six
hired. In short, they observed the diligence of a good father in selecting their
students on either side. They employed Clemente Alfaro (Alfaro) as driver of the
van. employee.
Zarates contracted the Pereas to transport Aaron to and from Don Bosco. PNR also disclaimed liability as they insist that the railroad crossing they placed
On August 22, 1996, as on previous school days, the van picked Aaron up around there was not meant for railroad crossing (really, thats their defense!).
6:00 a.m. from the Zarates residence. Aaron took his place on the left side of the
van near the rear door. The van, with its airconditioning unit turned on and the RTC ruled in favor of the Zarates.
stereo playing loudly, ultimately carried all the 14 student riders on their way to Court of Appeals affirmed the RTC.
Don Bosco.
In the decision of the RTC and the CA, they awarded damages in favor of the Zarates
Considering that the students were due at Don Bosco by 7:15 a.m., and that they
for the loss of earning capacity of their dead son.
were already running late because of the heavy vehicular traffic on the South
Superhighway, Alfaro took the van to an alternate route at about 6:45 a.m. by
traversing the narrow path underneath the Magallanes Interchange that was The Pereas appealed. They argued that the award was improper as Aaron was
then commonly used by Makatibound vehicles as a short cut into Makati. At the merely a high school student, hence, the award of such damages was merely
time, the narrow path was marked by piles of construction materials and parked speculative. They cited the case of People vs Teehankee where the Supreme
passenger jeepneys, and the railroad crossing in the narrow path had no railroad Court did not award damages for the loss of earning capacity despite the fact
warning signs, or watchmen, or other responsible persons manning the crossing.
that the victim there was enrolled in a pilot school.
In fact, the bamboo barandilla was up, leaving the railroad crossing open to
traversing motorists. At about the time the van was to traverse the railroad
crossing, PNR Commuter No. 302 (train), operated by Jhonny Alano (Alano), was ISSUE
in the vicinity of the Magallanes Interchange travelling northbound. As the train
neared the railroad crossing, Alfaro drove the van eastward across the railroad 1. WON Perenas and PNR are jointly and severally liable for damagaes?
tracks, closely tailing a large passenger bus. His view of the oncoming train was The Pereas were liable for the death of Aaron despite the fact that their driver
blocked because he overtook the passenger bus on its left side. might have acted beyond the scope of his authority or even in violation of the
The train blew its horn to warn motorists of its approach. When the train was orders of the common carrier.
about 50 meters away from the passenger bus and the van, Alano applied the Although that point had been used by motorists as a shortcut into the Makati
ordinary brakes of the train. area, that fact alone did not excuse their driver into taking that route. On the
He applied the emergency brakes only when he saw that a collision was
other hand, with his familiarity with that shortcut, their driver was fully aware of
imminent. The passenger bus successfully crossed the railroad tracks, but the
van driven by Alfaro did not. the risks to his passengers but he still disregarded the risks.
The train hit the rear end of the van, and the impact threw nine of the 12 Compounding his lack of care was that loud music was playing inside the
students in the rear, including Aaron, out of the van. Aaron landed in the path of airconditioned van at the time of the accident. The loudness most probably
the train, which dragged his body and severed his head, instantaneously killing reduced his ability to hear the warning horns of the oncoming train to allow him
him. to correctly appreciate the lurking dangers on the railroad tracks.
Also, he sought to overtake a passenger bus on the left side as both vehicles merely optional with the owners, or the public benefit is merely incidental, it is
traversed the railroad tracks. In so doing, he lost his view of the train that was not a public use, authorizing the exercise of the jurisdiction of the public utility
then coming from the opposite side of the passenger bus, leading him to commission. There must be, in general, a right which the law compels the owner
miscalculate his chances of beating the bus in their race, and of getting clear of to give to the general public. It is not enough that the general prosperity of the
the train. As a result, the bus avoided a collision with the train but the van got public is promoted. Public use is not synonymous with public interest. The true
slammed at its rear, causing the fatality. criterion by which to judge the character of the use is whether the public may
Lastly, he did not slow down or go to a full stop before traversing the railroad enjoy it by right or only by permission.
tracks despite knowing that his slackening of speed and going to a full stop were Private transport for schools are common carriers.
in observance of the right of way at railroad tracks as defined by the traffic laws
The true test for a common carrier is not the quantity or extent of the business
and regulations. He thereby violated a specific traffic regulation on right of way,
actually transacted, or the number and character of the conveyances used in the
by virtue of which he was immediately presumed to be negligent.
activity, but whether the undertaking is a part of the activity engaged in by the
The lower courts correctly held both the Pereas and the PNR jointly and carrier that he has held out to the general public as his business or occupation. If
severally liable for damages arising from the death of Aaron. the undertaking is a single transaction, not a part of the general business or
As to the PNR, the RTC rightly found the PNR also guilty of negligence despite the occupation engaged in, as advertised and held out to the general public, the
school van of the Pereas traversing the railroad tracks at a point not dedicated individual or the entity rendering such service is a private, not a common, carrier.
by the PNR as a railroad crossing for pedestrians and motorists, because the PNR The question must be determined by the character of the business actually
did not ensure the safety of others through the placing of crossbars, signal lights, carried on by the carrier, not by any secret intention or mental reservation it may
warning signs, and other permanent safety barriers to prevent vehicles or entertain or assert when charged with the duties and obligations that the law
pedestrians from crossing there. imposes.
The Pereas, as the operators of a school bus service were:
2. WON the defense of due diligence of a good father by the Pereas is untenable? (a) engaged in transporting passengers generally as a business, not just as a
Yes. Defense of Due Diligence of a Good Father casual occupation;
This defense is not tenable in this case. The Pereas are common carriers. (b) undertaking to carry passengers over established roads by the method by
They are not merely private carriers. (Prior to this case, the status of private which the business was conducted; and
transport for school services or school buses is not well settled as to whether or (c) transporting students for a fee. Despite catering to a limited clientle, the
not they are private or common carriers but they were generally regarded as Pereas operated as a common carrier because they held themselves out as a
private carriers). ready transportation indiscriminately to the students of a particular school living
A private carrier is one who, without making the activity a vocation, or without within or near where they operated the service and for a fee.
holding himself or itself out to the public as ready to act for all who may desire
his or its services, undertakes, by special agreement in a particular instance only, Being a common carrier, what is required of the Pereas is not mere diligence of
to transport goods or persons from one place to another either gratuitously or a good father. What is specifically required from them by law is extraordinary
for hire. diligence a fact which they failed to prove in court.
Public use is the same as use by the public. The essential feature of the
Verily, their obligation as common carriers did not cease upon their exercise of
public use is not confined to privileged individuals, but is open to the indefinite
diligently choosing Alfaro as their employee
public. It is this indefinite or unrestricted quality that gives it its public character.
In determining whether a use is public, we must look not only to the character of 3. WON the award of damages for loss of income is proper?
the business to be done, but also to the proposed mode of doing it. If the use is
YES. Award of Damages for Aarons loss of earning capacity despite he being a
high school student at the time of his death FACTS
The award is proper. Aaron was enrolled in a reputable school (Don Bosco). He The facts show that OOA 9:00 o'clock in the evening, Winifredo Tupang, husband
was of normal health and was an able-bodied person. of plaintiff Rosario Tupang, boarded 'Train No. 516 of PNR at Libmanan,
Camarines Sur, as a paying passenger bound for Manila.
Further, the basis of the computation of his earning capacity was not on what he Due to some mechanical defect, the train stopped at Sipocot, Camarines Sur, for
would have become. It was based on the current minimum wage. The minimum repairs, taking some two hours before the train could resume its trip to Manila.
wage was validly used because with his circumstances at the time of his death, it Unfortunately, upon passing Iyam Bridge at Lucena, Quezon, Winifredo Tupang
is most certain that had he lived, he would at least be a minimum wage earner fell off the train resulting in his death.
The train did not stop despite the alarm raised by the other passengers that
by the time he starts working. This is not being speculative at all.
somebody fell from the train. Instead, the train conductor Perfecto Abrazado,
The Teehankee case was different because in that case, the reason why no called the station agent at Candelaria, Quezon, and requested for verification of
damages were awarded for loss of earning capacity was that the defendants the information.
Police authorities of Lucena City were dispatched to the Iyam Bridge where they
there were already assuming that the victim would indeed become a pilot
found the lifeless body of Winifredo Tupang. As shown by the autopsy report,
hence, that made the assumption speculative. Winifredo Tupang died of cardiorespiratory failure due to massive cerebral
But in the case of Aaron, there was no speculation as to what he might be but hemorrhage due to traumatic injury
Upon complaint filed by the deceased's widow, Rosario Tupang, the TRIAL
whatever hell become, it is certain that he will at the least be earning minimum
COURT held the petitioner PNR liable for damages for breach of contract of
wage. carriage.
APPELLATE COURT sustained the holding of the trial court that the PNR did not
exercise the utmost diligence required by law of a common carrier.
PNR raised for the first time, as a defense, the doctrine of state immunity from
suit. It alleged that it is a mere agency of the Philippine government without
distinct or separate personality of its own, and that its funds are governmental in
character and, therefore, not subject to garnishment or execution.
The motion was denied the respondent court ruled that the ground advanced
could not be raised for the first time on appeal.

1. PNR created under RA 4196; PNR may sue and be sued like any other
corporation
The PNR was created under A 4156, as amended. Section 4 of the said Act
provides that the Philippine National Railways shall have the following powers:
(a) To do all such other things and to transact all such business directly or
indirectly necessary, incidental or conducive to the attainment of the purpose of
the corporation; and
(b) Generally, to exercise all powers of a corporation under the Corporation Law.
Under the foregoing section, the PNR has all the powers, the characteristics and
attributes of a corporation under the Corporation Law. PNR may sue and be sued
and may be subjected to court processes just like any other corporation.

PHILIPPINE NATIONAL RAILWAYS vs. CA and ROSARIO TUPANG 2. PNR funds subject to garnishment or execution
G.R. No. L55347 October 4, 1985
In Philippine National Railways v. Union de Maquinistas, et al., then Justice Fernando, its obligation under the contract of carriage. PNR failed to overthrow such
later Chief Justice, said that the main issue posed in said proceeding, i.e. whether or presumption of negligence with clear and convincing evidence, inasmuch as PNR
not the funds of the Philippine National Railways could be garnished or levied upon does not deny,
on execution, was resolved in two recent decisions, the Philippine National Bank v. (1) that the train boarded by the deceased Winifredo Tupang was so overcrowded
Court of Industrial Relations [81 SCRA 314] and Philippine National Bank v. Hon. that he and many other passengers had no choice but to sit on the open platforms
Judge Pabalan [83 SCRA 595], where the Court ruled that there was no legal bar to between the coaches of the train,
garnishment or execution. The argument based on non-suability of a state allegedly (2) that the train did not even slow down when it approached the Iyam Bridge which
because the funds are governmental in character was unavailing. was under repair at the time, and
(3) that neither did the train stop, despite the alarm raised by other passengers that a
3. Other cases as to garnishment of GOCC funds person had fallen off the train at Iyam Bridge.
a. Philippine National Bank v. Court of Industrial Relations:
The premise that the funds could be spoken of as public in character may be 6. Contributory negligence of Tupang warrants deletion of moral damages
accepted in the sense that the Peoples Homesite and Housing Corporation was a
government-owned entity. It does not follow though that they were exempt from While PNR failed to exercise extraordinary diligence as required by law, it appears
garnishment. that the deceased was chargeable with contributory negligence. Since he opted to sit
on the open platform between the coaches of the train, he should have held tightly
b. National Shipyard and Steel Corporation v. Court of Industrial Relations: and tenaciously on the upright metal bar found at the side of said platform to avoid
A government-owned and controlled corporation has a personality of its own, distinct falling off from the speeding train. Such contributory negligence, while not exempting
and separate from that of the Government. the PNR from liability, nevertheless justified the deletion of the amount adjudicated
as moral damages.
4. By engaging in a particular business as a corporation, government divests itself
pro hac vice of its sovereign character; Doctrine of non-suability cannot be legally 7. Award of exemplary damages in the absence of fraud, malice or bad faith
set up
The award of exemplary damages must be set aside. Exemplary damages may be
As held in Manila Hotel Employees Association v. Manila Hotel Co., when the allowed only in cases where the defendant acted in a wanton, fraudulent, reckless,
government enters into commercial business, it abandons its sovereign capacity and oppressive or malevolent manner. There being no evidence of fraud, malice or bad
is to be treated like any other corporation. faith on the part of PNR, the grant of exemplary damages should be discarded.

By engaging in a particular business through the instrumentality of a corporation, the


government divests itself pro hac vice of its sovereign character, so as to render the
corporation subject to the rules of law governing private corporations.

In Prisco v. CIR, it was held that when the government engages in business, it
abdicates part of its sovereign prerogatives and descends to the level of a citizen In
the case at bar, PNR cannot legally set up the doctrine of non-suability as a bar to the
Tupangs suit for damages.

5. PNR has obligation to observe extraordinary diligence in transporting passengers KAPALARAN BUS LINE vs. ANGEL CORONADO, LOPE GRAJERA,DIONISIO SHINYO, CA
to their destinations G.R. No. 85331 August 25, 1989

PNR has the obligation to transport its passengers to their destinations and to FACTS
observe extraordinary diligence in doing so. Death or any injury suffered by any of its On 2 August 1982, the jeepney driven by Lope Grajera was then coming from
passengers gives rise to the presumption that it was negligent in the performance of Pila, Laguna on its way towards the direction of Sta. Cruz, traversing the old
highwayAs the jeepney reached the intersection where there is a traffic sign A motion for reconsideration by Kapalaran having been denied by the appellate
yield, it stopped and cautiously treated the intersection as a Thru Stop court on 13 October 1988. Hence, the petition for Review.
street, which it is not. The KBL bus, on the other hand, was on its way from Sta.
Cruz, Laguna, driven by its regular driver Virgilio Llamoso, on its way towards
Manila. 1. General rules as to right-of-way
The general rule is that the vehicle on the national highway has the right-of-way as
The regular itinerary of the KBL bus is through the town proper of Pila, Laguna,
against a feeder road. Another general rule is that the vehicle coming from the right
but at times it avoids this if a bus is already fully loaded with passengers and can has the right-of-way over the vehicle coming from the left. The general rules on right-
no longer accommodate additional passengers. of-way may be invoked only if both vehicles approach the intersection at almost the
As the KBL bus neared the intersection, Virgilio Llamoso inquired from his same time.
conductor if they could still accommodate passengers and learning that they
were already full, he decided to bypass Pila and instead, to proceed along the 2. Supreme Court not a trier of facts
national highway. It is not the function of the Supreme Court to analyze and weigh evidence
presented by the parties all over again and that its jurisdiction is in principle
Virgilio Llamoso admitted that there was another motor vehicle ahead of him.
limited to reviewing errors of law that might have been committed by the Court
Atty. Conrado L. Manicad, who was driving a Mustang car coming from the of Appeals.
direction of Sta. Cruz and proceeding towards the direction of Manila, stopped at Herein, Kapalaran has made no compelling showing of any misapprehension of
the intersection to give way to the jeepney driven by Grajera. Behind Manicad facts on the part of the Court of Appeals that would require us to review and
were two vehicles, a car of his client and another car. overturn the factual findings of that court.
A Laguna Transit bus had just entered the town of Pila ahead of Atty. Manicad. On the contrary, examination of the record shows that not only are the
The KBL bus ignored the stopped vehicles of Atty. Manicad and the other conclusions of fact of the Court of Appeals and the trial court on who had acted
negligently and was at fault in the collision of their vehicles, amply supported by
vehicles behind Atty. Manicad and overtook both vehicles at the intersection,
the evidence of record, but also that Kapalarans bus driver was grossly negligent
therefore, causing the accident. and had acted wantonly and in obvious disregard of the applicable rules on
The KBL bus appeared to have been travelling at a fast rate of speed because, safety on the highway.
after the collision, it did not stop; it travelled for another 50 meters and stopped
only when it hit an electric post. 3. Bus driver actually violating traffic rules and regulations, presumed negligent
Kapalaran, apparently believing that the best defense was offense, filed a Kapalarans driver had become aware that some vehicles ahead of the bus and
complaint for damage to property and physical injuries through reckless travelling in the same direction had already stopped at the intersection obviously
to give way either to pedestrians or to another vehicle about to enter the
imprudence against Angel Coronado and Lope Grajera
intersection.
Coronado and Grajera answered with their own claims (counter-claims) for
The bus driver, who was driving at a speed too high to be safe and proper at or
damages. near an intersection on the highway, and in any case too high to be able to slow
A third-party complaint and/or a complaint for intervention was also filed in the down and stop behind the cars which had preceded it and which had stopped at
same case against Kapalaran by jeepney passenger Dionisio Shinyo. the intersection, chose to swerve to the left lane and overtake such preceding
TRIAL COURT rendered a judgment in favor of Coronado, Grajera and Shinyo vehicles, entered the intersection and directly smashed into the jeepney within
Kapalaran appealed to the Court Of Appeals assailing the trial courts findings on the intersection. Immediately before the collision, the bus driver was actually
violating the following traffic rules and regulations, among others, in the Land
the issue of fault and the award of damages.
Transportation and Traffic Code, RA 4136, as amended. Thus, a legal
COURT OF APPEALS affirmed the decision of the trial court but modified the award presumption arose that the bus driver was negligent, a presumption Kapalaran
of damages by setting aside the grant of exemplary damages as well as the award of was unable to overthrow.
attorneys fee and litigation expenses made to Dionisio Shinyo.
4. Section 35(a) of RA 4136, Restriction as to speed The point of impact was on the left side of the intersection (the right lane so far
Section 35 (a) provides that any person driving a motor vehicle on a highway shall as concerns the jeepney coming from the opposite side), which was precisely the
drive the same at a careful and prudent speed, not greater nor less than is lane or side on which the jeepney had a right to be.
reasonable and proper, having due regard for the traffic, the width of the highway,
and or any other condition then and there existing; and no person shall drive any 9. Drivers gross negligence raises presumption that Kapalaran guilty of negligence
motor vehicle upon a highway at such a speed as to endanger the life, limb and in selection and supervision of employees; Right of recourse
property of any person, nor at a speed greater than will permit him to bring the
vehicle to a stop within the assured clear distance ahead. The patent and gross negligence on the part of Kapalarans driver raised the legal
presumption that Kapalaran as employer was guilty of negligence either in the
5. Section 41 (a) of RA 4136, Restrictions on overtaking and passing selection or in the supervision of its bus drivers.
Section 41 (a) provides that the driver of a vehicle shall not drive to the left side of Where the employer is held liable for damages, it has of course a right of
the center line of a highway in overtaking or passing another vehicle, proceeding in recourse against its own negligent employee.
the same direction, unless such left side is clearly visible, and is free of oncoming If Kapalaran was interested in maintaining its right of recourse against or
traffic for a sufficient distance ahead to permit such overtaking or passing to be made reimbursement from its own driver, it should have appealed from that portion of
in safety. the trial courts decision which had failed to hold the bus driver responsible for
any damage.
6. Section 41 (c) of RA 4136, Restrictions on overtaking and passing Contrary to Kapalarans pretense, its liability for the acts and negligence of its
Section 41 (c) provides that the driver of a vehicle shall not overtake or pass any bus driver is not merely subsidiary, and is not limited to cases where the
other vehicle proceeding in the same direction, at any railway grade crossing, or at employee cannot pay his liability, nor are Coronado, et. al. compelled first to
any intersection of highways, unless such intersection or crossing is controlled by proceed against the bus driver.
traffic signal, or unless permitted to do so by a watchman or a peace officer, except The liability of the employer under Article 2180 of the Civil Code is direct and
on a highway having two or more lanes for movement of traffic in one direction immediate; it is not conditioned upon prior recourse against the negligent
where the driver of a vehicle may overtake or pass another vehicle on the right. employee and a prior showing of the insolvency of such employee.

Nothing in this section shall be construed to prohibit a driver overtaking or passing, 10. Award of moral damages in order; Shinyos death
upon the right, another vehicle which is making or about to make a left turn. The award of moral damages against Kapalaran is not only entirely in order; it is
also quite modest considering Dionisio Shinyos death during the pendency of
7. Jeepney driver has right to assume further vehicles would stop this petition, a death hastened by, if not directly due to, the grievous injuries
The jeepney driver, seeing the cars closest to the intersection on the opposite side of sustained by him in the violent collision.
the highway come to a stop to give way to him, had the right to assume that other
vehicles further away and behind the stopped cars would similarly come to a stop 11. Court entitled to take judicial notice of negligence
and not seek illegally to overtake the stopped vehicles and come careening into the Kapalarans bus driver was grossly and very probably criminally negligent in his
intersection at an unsafe speed. reckless disregard of the rights of other vehicles and their passengers and of
pedestrians as well.
Kapalarans bus was still relatively far away from the intersection when the jeepney
The Court is entitled to take judicial notice of the gross negligence and the
entered the same; the bus collided head-on into the jeepney because the bus had
appalling disregard of the physical safety and property of others so commonly
been going at an excessively high velocity immediately before and at the time of
exhibited today by the drivers of passenger buses and similar vehicles on our
overtaking the stopped cars, and so caught the jeepney within the intersection.
highways.
8. Responsibility of driver to see to it that left lane of road was clear
It was the responsibility of the bus driver to see to it, when it overtook the 2 cars
12. Diligence required of a common carrier
ahead which had stopped at the intersection, that the left lane of the road within
the intersection and beyond was clear.
The law requires a common carrier to exercise extraordinary diligence in carrying
and transporting their 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. In requiring the highest possible degree of diligence from FACTS
common carriers and creating a presumption of negligence against them, the law
compels them to curb the recklessness of their drivers. The deceased was an inspector of the Bureau of Forestry stationed in Davao with
an annual salary of P1,800.
13. Beneficiaries of standard of extraordinary diligence The defendant is engaged in the business of exporting logs from his lumber
concession in Cotabato. Lara went to said concession upon instructions of his
While the immediate beneficiaries of the standard of extraordinary diligence are,
chief to classify the logs of defendant which were about to be loaded on a ship
of course, the passengers and owners of cargo carried by a common carrier, they
are not the only persons that the law seeks to benefit. anchored in the port of Parang. The work Lara of lasted for six days during which
For if common carriers carefully observed the statutory standard of he contracted malaria fever.
extraordinary diligence in respect of their own passengers, they cannot help but In the morning of January 9, 1954, Lara who then in a hurry to return to Davao
simultaneously benefit pedestrians and the owners and passengers of other asked defendant if he could take him in his pickup as there was then no other
vehicles who are equally entitled to the safe and convenient use of our roads means of transportation, to which defendant agreed, and in that same morning
and highways. the pickup left Parang bound for Davao taking along six passengers, including
The law seeks to stop and prevent the slaughter and maiming of people Lara.
(whether passengers or not) and the destruction of property (whether freight or
The pickup has a front seat where the driver and two passengers can be
not) on our highways by buses, the very size and power of which seem often to
inflame the minds of their drivers. accommodated and the back has a steel flooring enclosed with a steel walling of
16 to 17 inches tall on the sides and with a 19 inches tall walling at the back.
14. Exemplary damages; Article 2231 NCC Before leaving Parang, the sitting arrangement was as follows: defendant was at
the wheel and seated with him in the front seat were Mrs. Valencia and Nicanor
Article 2231 of the Civil Code explicitly authorizes the imposition of exemplary Quinain on the back of the pickup were two improvised benches placed on each
damages in cases of quasi-delicts if the defendant acted with gross negligence. side, and seated on the right bench were Ricardo Alojipan and Antonio Lagahit,
Herein, the award of exemplary damages by the trial court was quite proper,
and on the left one Bernardo and Pastor Geronimo.
although granted for the wrong reason, and should not only be restored but
augmented. A person by the name of Leoning was seated on a box located on the left side
while in the middle Lara sat on a bag. Before leaving Parang, defendant invited
15. Issues not raised may be considered by Court if substantial justice and/or public Lara to sit with him on the front seat but Lara declined.
policy require it It was their understanding that upon reaching barrio Samoay, Cotabato, the
passengers were to alight and take a bus bound for Davao, but when they arrived
Issues which must be resolved if substantial justice is to be rendered to the at that place, only Bernardo alighted and the other passengers requested
parties, may and should be considered and decided by the Supreme Court even
defendant to allow them to ride with him up to Davao because there was then
if those issues had not been explicitly raised by the party affected.
no available bus that they could take in going to that place.
Herein, it is not only the demands of substantial justice but also the compelling
considerations of public policy noted above, which impel us to the conclusion Defendant again accommodated the passengers. When they continued their trip,
that the trial courts award of exemplary damages was erroneously deleted and the sitting arrangement of the passengers remained the same, Lara being seated
must be restored and brought more nearly to the level which public policy and on a bag in the middle with his arms on a suitcase and his head cove red by a
substantial justice require. jacket.
Upon reaching Km. 96, barrio Catidtuan, Lara accidentally fell from the pickup
LOURDES J. LARA, ET AL vs. BRIGIDO R. VALENCIA
and as a result he suffered serious injuries. Valencia stopped the pickup to see
G.R. No. L9907 June 30, 1958
what happened to Lara. He sought the help of the residents of that place and
applied water to Lara but to no avail. They brought Lara to the nearest place regularly makes trips for the public, and if Valencia agreed to take the deceased
where they could find a doctor and not having found any they took him to St. in his own car, it was only to accommodate him considering his feverish
Joseph's Clinic of Kidapawan. But when Lara arrived he was already dead. condition and his request that he be so accommodated. The passengers who
rode in the pick-up of Valencia took their respective seats therein at their own
From there they proceeded to Davao City and immediately notified the local
choice and not upon indication of Valencia with the particularity that Valencia
authorities. An investigation was made regarding the circumstances surrounding invited the deceased to sit with him in the front seat but which invitation the
the death of Lara but no criminal action was taken against defendant. deceased declined.
An action for damages was brought by Lourdes J. Lara, et. al. against Valencia for The reason for this can only be attributed to his desire to be at the back so that
the death of one Demetrio Lara, Sr. allegedly caused by the negligent act of he could sit on a bag and travel in a reclining position because such was more
Valencia. Valencia denied the charge of negligence and set up certain affirmative convenient for him due to his feverish condition.
defenses and a counterclaim. All the circumstances thereof clearly indicate that Valencia had done what a
reasonable prudent man would have done under the circumstances.
TRIAL COURT after hearing rendered judgment ordering Valencia to pay Lara, et.
al. 3. Finding as to speed not supported by evidence; else, speed not unreasonable
Both parties appealed to the Supreme Court because the damages claimed in The finding of the trial court that the pick-up was running at more than 40
the complaint exceed the sum of P50,000. kilometers per hour is not supported by evidence. This is a mere surmise made
by the trial court considering the time the pick- up left barrio Samoay and the
1. Lara, et. al. merely accommodation passaengers who paid nothing for service; time the accident occurred in relation to the distance covered by the pick-up.
Degree of diligence required of owner of vehicle And even if this is correct, still we say that such speed is not unreasonable
considering that they were travelling on a national road and the traffic then was
The deceased, as well as his companions who rode in the pick-up of Valencia, not heavy.
were merely accommodation passengers who paid nothing for the service and
so they can be considered as invited guests within the meaning of the law. 4. Injury to passenger has been proximately caused by own negligence
As accommodation passengers or invited guests, Valencia as owner and driver of The incident may be attributed to lack of care on the part of the deceased
the pick-up owes to them merely the duty to exercise reasonable care so that considering that the pick-upwas open and he was then in crouching position.
they may be transported safely to their destination. Indeed the law provides that A passenger must observe the diligence of a good
Thus, The rule is established by the weight of authority that the owner or father of a family to avoid injury to himself (Article 1761, new Civil Code), which
operator of an automobile owes the duty to an invited guest to exercise means that if the injury to the passenger has been proximately caused by his
reasonable care in its operation, and not unreasonably to expose him to danger own negligence, the carrier cannot be held liable.
and injury by increasing the hazard of travel.
This rule, as frequently stated by the courts, is that an owner of an automobile 5. Unfortunate happening due to unforeseen accident
owes a guest the duty to exercise ordinary or reasonable care to avoid injuring There is every reason to believe that the unfortunate happening was only due to
him. an unforeseen accident caused by the fact at the time the deceased was half
asleep and must have fallen from the pick-up when it ran into some stones
Since one riding in an automobile is no less a guest because he asked for the
causing it to jerk considering that the road was then bumpy, rough and full of
privilege of doing so, the same obligation of care is imposed upon the driver as in
stones. All things considered, the accident occurred not due to the negligence of
the case of one expressly invited to ride Valencia, therefore, is only required to
Valencia but to circumstances beyond his control and so he should be exempt
observe ordinary care, and is not in duty bound to exercise extraordinary
from liability.
diligence as required of a common carrier by Philippine law.

2. Valencia had done what a reasonable prudent man would have done
CALTEX (PHILIPPINES), INC.VS. SULPICIO LINES, ET AL.
Valencia was not in duty bound to take the deceased in his own pick-up to Davao
(GR 131166, 30 SEPTEMBER 1999)
because from Parang to Cotabato there was a line of transportation that
FACTS The respective rights and duties of a shipper and the carrier depends not on
MT Vector is a tramping motor tanker owned and operated by Vector Shipping whether the carrier is public or private, but on whether the contract of carriage
Corporation, which is engaged in the business of transporting fuel products such is a bill of lading or equivalent shipping documents on the one hand, or a charter
as gasoline, kerosene, diesel and crude oil. party or similar contract on the other. In the case at bar, Caltex and Vector
On the other hand, the MV Doa Paz is a passenger and cargo vessel owned and entered into a contract of affreightment, also known as a voyage charter.
operated by Sulpicio Lines, Inc. plying the route of Manila/ Tacloban/
Catbalogan/ Manila/ Catbalogan/ Tacloban/ Manila, making trips twice a week. 2. Charter party and contract of affreightment defined
On 19 December 1987, motor tanker MT Vector left Limay, Bataan, enroute to A charter party is a contract by which an entire ship, or some principal part thereof, is
Masbate, loaded with 8,800 barrels of petroleum products shipped by Caltex, by let by the owner to another person for a specified time or use; a contract of
virtue of a charter contract between Vector Shipping and Caltex. affreightment is one by which the owner of a ship or other vessel lets the whole or
The next day, the passenger ship MV Doa Paz left the port of Tacloban headed part of her to a merchant or other person for the conveyance of goods, on a
for Manila with a complement of 59 crew members including the master and his particular voyage, in consideration of the payment of freight.
officers, and passengers totaling 1,493 as indicated in the Coast Guard Clearance,
but possibly carrying an estimated 4,000 passengers. 3. Kinds of contract of affreightment
At about 10:30 p.m. of 20 December 1987, the two vessels collided in the open A contract of affreightment may be either time charter, wherein the leased vessel is
sea within the vicinity of Dumali Point between Marinduque and Oriental leased to the charterer for a fixed period of time, or voyage charter, wherein the ship
Mindoro. All the crewmembers of MV Doa Paz died, while the two survivors is leased for a single voyage.
from MT Vector claimed that they were sleeping at the time of the incident. In both cases, the charter-party provides for the hire of the vessel only, either for a
Only 24 survived the tragedy after having been rescued from the burning waters determinate period of time or for a single or consecutive voyage, the ship owner to
by vessels that responded to distress calls. Among those who perished were supply the ships store, pay for the wages of the master of the crew, and defray the
public school teacher Sebastian Caezal (47 years old) and his daughter Corazon expenses for the maintenance of the ship.
Caezal (11 years old), both unmanifested passengers but proved to be on board
the vessel. 4. Charterers liability: Bareboat charter vs. Contract of affreightment
On 22 March 1988, the board of marine inquiry after investigation found that the Under a demise or bareboat charter, the charterer mans the vessel with his own
MT Vector, its registered operator Francisco Soriano, and its owner and actual people and becomes, in effect, the owner for the voyage or service stipulated,
operator Vector Shipping Corporation, were at fault and responsible for its subject to liability for damages caused by negligence. If the charter is a contract of
collision with MV Doa Paz. affreightment, which leaves the general owner in possession of the ship as owner for
Teresita and Sotera Caezal, filed with the RTC Manila, a complaint for Damages the voyage, the rights and the responsibilities of ownership rest on the owner. The
Arising from Breach of Contract of Carriage against Sulpicio Lines, Inc. Sulpicio, charterer is free from liability to third persons in respect of the ship.
in turn, filed a third party complaint against Francisco Soriano, Vector Shipping
Corporation and Caltex (Philippines), Inc. 5. Categories of charter parties
TRIAL COURT rendered decision dismissing the third party complaint against Caltex. Charter parties fall into three main categories:
COURT OF APPEALS modified the trial courts ruling and included petitioner Caltex as (1) Demise or bareboat,
one of the those liable for damages. Hence the petition. (2) time charter,
(3) voyage charter.
1. The respective rights and duties of a carrier depends on the nature of the 6. Bareboat, but not voyage charter, transforms common carrier into private carrier
contract of carriage
Although a charter party may transform a common carrier into a private one, the Under Section 3 of the Carriage of Goods by Sea Act, (1) The carrier shall be bound
same however is not true in a contract of affreightment (Coastwise Lighterage before and at the beginning of the voyage to exercise due diligence to
Corp. vs. CA) A public carrier shall remain as such, notwithstanding the charter of (a) Make the ship seaworthy;
the whole or portion of a vessel by one or more persons, provided the charter is (b) Properly man, equip, and supply the ship; among others. Carriers are
limited to the ship only, as in the case of a time-charter or voyage charter. deemed to warrant impliedly the seaworthiness of the ship.
It is only when the charter includes both the vessel and its crew, as in a bareboat For a vessel to be seaworthy, it must be adequately equipped for the voyage and
or demise that a common carrier becomes private, at least insofar as the manned with a sufficient number of competent officers and crew. The failure of a
particular voyage covering the charter-party is concerned. Indubitably, a ship- common carrier to maintain in seaworthy condition the vessel involved in its contract
owner in a time or voyage charter retains possession and control of the ship, of carriage is a clear breach of its duty prescribed in Article 1755 of the Civil Code.
although her holds may, for the moment, be the property of the charterer.
(Planters Products vs. CA). 10. Article 1173 of the New Civil Code
In the case at bar, the charter party agreement did not convert the common Article 1173 of the Civil Code provides that the fault or negligence of the obligor
carrier into a private carrier. The parties entered into a voyage charter, which consists in the omission of that diligence which is required by the nature of the
retains the character of the vessel as a common carrier. obligation and corresponds with the circumstances of the persons, of the time and of
the place. When negligence shows bad faith, the provisions of Article 1171 and 2201
7. Common carrier defined paragraph 2, shall apply. If the law does not state the diligence which is to be
A common carrier is a person or corporation whose regular business is to carry observed in the performance, that which is expected of a good father of a family shall
passengers or property for all persons who may choose to employ and to remunerate be required.
him. In the case at bar, MT Vector fits the definition of a common carrier under
Article 1732 of the Civil Code (Common carriers are persons, corporations, firms or 11. Negligence defined
associations engaged in the business of carrying or transporting passengers for Negligence, as commonly understood, is conduct which naturally or reasonably
passengers or goods or both, by land, water, or air for compensation, offering their creates undue risk or harm to others. It may be the failure to observe that degree of
services to the public). care, precaution, and vigilance, which the circumstances justly demand, or the
omission to do something which ordinarily regulate the conduct of
8. Article 1732, Common carrier, construed human affairs, would do (Southeastern College vs. CA).
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 12. Reason for the applicability of Section 3 COGSA, and Article 1755 NCC to
ancillary activity (in local idiom, as a sideline). Article 1732 also carefully avoids carriers, not shipper and passengers; Ordinary diligence required of shippers
making any distinction between a person or enterprise offering transportation The provisions owed their conception to the nature of the business of common
service on a regular or scheduled basis and one offering such services on a an carriers. This business is impressed with a special public duty.
occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish The public must of necessity rely on the care and skill of common carriers in the
between a carrier offering its services to the general public, i.e., the general vigilance over the goods and safety of the passengers, especially because with
community or population, and one who offers services or solicits business only from the modern development of science and invention, transportation has become
a narrow segment of the general population. Article 1733 deliberately refrained from more rapid, more complicated and somehow more hazardous.
making such distinctions. For these reasons, a passenger or a shipper of goods is under no obligation to
conduct an inspection of the ship and its crew, the carrier being obliged by law to
9. Responsibility of carrier before voyage; Seaworthiness impliedly warrant its seaworthiness.
The charterer of a vessel has no obligation before transporting its cargo to Spouses Cornelio (Cornelio) and Anacleta Macasa (Anacleta), together with their
ensure that the vessel it chartered complied with all legal requirements. The eightyearold grandson, Ritchie Macasa, (Ritchie) boarded the MV Doa Paz,
duty rests upon the common carrier simply for being engaged in public service. owned and operated by respondent Sulpicio Lines, Inc. (Sulpicio Lines), at
Tacloban, Leyte bound for Manila.
The Civil Code demands diligence which is required by the nature of the
On the fateful evening of December 20, 1987, MV Doa Paz collided with the
obligation and that which corresponds with the circumstances of the persons, MT Vector, an oil tanker owned and operated by petitioners Vector Shipping
the time and the place. Corporation (Vector Shipping) and Francisco Soriano (Soriano), which at the time
Because of the implied warranty of seaworthiness, shippers of goods, when was loaded with 860,000 gallons of gasoline and other petroleum products, in
transacting with common carriers, are not expected to inquire into the vessels the vicinity of Dumali Point, Tablas Strait, between Marinduque and Oriental
seaworthiness, genuineness of its licenses and compliance with all maritime Mindoro.
Only twentysix persons survived: 24 passengers of MV Doa Paz and 2 crew
laws.
members of MT Vector. Both vessels were never retrieved. Worse, only a few of
To demand more from shippers and hold them liable in case of failure exhibits the victims' bodies, who either drowned or were burned alive, were recovered.
nothing but the futility of our maritime laws insofar as the protection of the Cornelio, Anacleta and Ritchie were among the victims whose bodies have yet to
public in general is concerned. be recovered up to this day.
By the same token, passengers cannot be expected to inquire every time they Respondents Adelfo, Emilia, Timoteo, and Cornelio, Jr., all surnamed Macasa, are
board a common carrier, whether the carrier possesses the necessary papers or the children of Cornelio and Anacleta. On the other hand, Timoteo and his wife,
respondent Rosario Macasa, are the parents of Ritchie (the Macasas).
that all the carriers employees are qualified. Such a practice would be an
Some of the Macasas went to the North Harbor in Manila to await the arrival of
absurdity in a business where time is always of the essence. Cornelio, Anacleta and Ritchie.
Considering the nature of transportation business, passengers and shippers alike When they heard the news that MV Doa Paz was rammed at sea by another
customarily presume that common carriers possess all the legal requisites in its vessel, bewildered, the Macasas went to the office of Sulpicio Lines to check on
operation. In the case at bar, the nature of the obligation of Caltex demands the veracity of the news, but the latter denied that such an incident occurred.
ordinary diligence like any other shipper in shipping his cargoes. According to the Macasas, Sulpicio Lines was uncooperative and was reluctant to
entertain their inquiries. Later, they were forced to rely on their own efforts to
search for the bodies of their loved ones, but to no avail.
13. Caltex not liable for damages
Macasas filed a Complaint for Damages arising out of breach of contract of
Caltex and Vector Shipping Corporation had been doing business since 1985, or for carriage against Sulpicio Lines before the RTC.
about two years before the tragic incident occurred in 1987. Past services rendered
showed no reason for Caltex to observe a higher degree of diligence. RTC:
Accordingly, as a result of this decision, Sulpicio Lines, Caltex, Vector Shipping and
Clearly, as a mere voyage charterer, Caltex had the right to presume that the ship was Soriano are liable.
seaworthy as even the Philippine Coast Guard itself was convinced of its
CA:
seaworthiness. All things considered, we find no legal basis to hold petitioner liable The assailed decision is hereby modified in that thirdparty defendantappellant Caltex
for damages. Phils., Inc. Is hereby exonerated from liability. All other aspects of the appealed
judgment are perforce affirmed.
VECTOR SHIPPING CORPORATION & FRANCISCO SORIANO VS. ADELFO B. MACASA
G.R. No. 160219, July 21, 2008 ISSUE

1. May VECTOR and SORIANO be held liable to indemnify/reimburse SULPICIO the


FACTS
amounts it is ordered to pay the MACASA's because SULPICIO's liability arises
from breach of contract of carriage, inasmuch as in "culpa contractual" it is
sufficient to prove the existence of the contract, because carrier is presumed to
be at fault or to have acted negligently it being its duty to exercise extraordinary Unless the trial court overlooked substantial matters that would alter the
diligence, and cannot make the [safety] of its passengers dependent upon the outcome of the case, this Court will not disturb such findings. In any event, we
diligence of VECTOR and SORIANO? have meticulously reviewed the records of the case and found no reason to
depart from the rule.

2. Will it be in accord with existing law and/or jurisprudence that both vessels (MV It is a wellestablished doctrine that in petitions for review on certiorari under Rule 45
DOA PAZ and MT VECTOR) be declared mutually at fault and, therefore, each of the Rules of Civil Procedure, only questions of law may be raised by the parties
must [bear] its own loss? In the absence of CLEAR and CONVINCING proof[,] who and passed upon by this Court. This Court defined a question of law, as distinguished
is solely at fault? from a question of fact, to wit:

This Court sustained the CA ruling that Vector Shipping and Soriano are liable to A question of law arises when there is doubt as to what the law is on a certain state
reimburse and indemnify Sulpicio Lines for whatever damages, attorney's fees of facts, while there is a question of fact when the doubt arises as to the truth or
and costs the latter is adjudged to pay the victims therein. falsity of the alleged facts. For a question to be one of law, the same must not involve
That Sulpicio Lines has a right to reimbursement and indemnification from the an examination of the probative value of the evidence presented by the litigants or
thirdparty defendants Soriano and Vector Shipping, who are the same any of them. The resolution of the issue must rest solely on what the law provides on
petitioners in this case, was sustained by this Court. Considering that in the cases the given set of circumstances. Once it is clear that the issue invites a review of the
which have reached this Court, we have consistently upheld the thirdparty evidence presented, the question posed is one of fact. Thus, the test of whether a
liability of petitioners, we see no cogent reason to deviate from this ruling. question is one of law or of fact is not the appellation given to such question by the
party raising the same rather, it is whether the appellate court can determine the
Thus, we are disposed to agree with the findings of the CA when it aptly held: issue raised without reviewing or evaluating the evidence, in which case, it is a
We are not swayed by the lengthy disquisition of MT Vector and Francisco Soriano question of law otherwise it is a question of fact.
urging this Court to absolve them from liability. All evidence points to the fact that it
was MT Vector's negligent officers and crew which caused it to ram into MV Doa
Paz. More so, MT Vector was found to be carrying expired coastwise license and
permits and was not properly manned. As the records would also disclose, there is a
defect in the ignition system of the vessel, and it was not convincingly shown
whether the necessitated repairs were in fact undertaken before the said ship had set
to sea. In short, MT Vector was unseaworthy at the time of the mishap. That the said
vessel was allowed to set sail when it was, to everyone in the group's knowledge, not
fit to do so translates into rashness and imprudence.

We reiterate, anew, the rule that findings of fact of the CA are generally binding NEGROS NAVIGATION CO., INC. VS CA, RAMON MIRANDA, SPS. RICARDO AND
and conclusive on this Court. While this Court has recognized several exceptions VIRGINIA DE LA VICTORIA
G.R. No. 110398, November 07, 1997
to this rule, none of these exceptions finds application in this case. It bears
emphasis also that this Court accords respect to the factual findings of the trial FACTS
court, especially if affirmed by the CA on appeal.
Ramon Miranda purchased from the Negros Navigation Co., Inc. four special COURT OF APPEALS affirmed the decision of the Regional Trial Court with
cabin tickets (#74411, 74412, 74413 and 74414) for his wife, daughter, son and modification
niece who were going to Bacolod City to attend a family reunion.
The tickets were for Voyage No. 457A of the M/V Don Juan, leaving Manila at ISSUE
1:00 p.m. on April 22, 1980. The ship sailed from the port of Manila on schedule. (1) Whether the members of private respondents families were actually
At about 10:30 in the evening of April 22, 1980, the Don Juan collided off the passengers of the Don Juan?
Tablas Strait in Mindoro, with the M/T Tacloban City, an oil tanker owned by the
Philippine National Oil Company (PNOC) and the PNOC Shipping and Transport The trial court held that the fact that the victims were passengers of the M/V
Corporation (PNOC/STC). Don Juan was sufficiently proven by private respondent Ramon Miranda, who
As a result, the M/V Don Juan sank. Several of her passengers perished in the sea testified that he purchased tickets numbered 74411, 74412, 74413, and 74414 at
tragedy. The bodies of some of the victims were found and brought to shore, but P131.30 each from the Makati office of petitioner for Voyage No. 47A of the M/V
the four members of private respondents families were never found. Don Juan, which was leaving Manila on April 22, 1980. This was corroborated by
Private respondents filed a complaint against the Negros Navigation, the the passenger on which the numbers of the tickets and the names of Ardita
Philippine National Oil Company (PNOC), and the PNOC Shipping and Transport Miranda and her children and Elfreda de la Victoria appear.
Corporation (PNOC/STC), seeking damages for the death of his family members. Given the facts of this case, it is improper for petitioner to even suggest that
In its answer, petitioner admitted that private respondents purchased ticket private respondents relatives did not board the illfated vessel and perish in the
numbers which were listed in the passenger manifest and that the Don Juan left accident simply because their bodies were not recovered.
Pier 2, North Harbor, Manila on April 22, 1980 and sank that night after being
rammed by the oil tanker M/T Tacloban City. (2) Whether the ruling in Mecenas v. Court of Appeals finding the crew members of
Petitioner, however, denied that the four relatives of private respondents petitioner to be grossly negligent in the performance of their duties, is binding in
actually boarded the vessel as shown by the fact that their bodies were never this case?
recovered. In finding petitioner guilty of negligence and in failing to exercise the
Petitioner further averredthat the Don Juan was seaworthy and manned by a full extraordinary diligence required of it in the carriage of passengers, both the trial
and competent crew, and that the collision was entirely due to the fault of the court and the appellate court relied on the findings of this Court in Mecenas v.
crew of the M/T Tacloban City. Intermediate Appellate Court, which case was brought for the death of other
On January 20, 1986, the PNOC and petitioner Negros Navigation Co., Inc. passengers.
entered into a compromise agreement whereby petitioner assumed full In that case it was found that although the proximate cause of the mishap was
responsibility for the payment and satisfaction of all claims arising out of or in the negligence of the crew of the M/T Tacloban City, the crew of the Don Juan
connection with the collision and releasing the PNOC and the PNOC/STC from was equally negligent as it found that the latters master, Capt. Rogelio
any liability to it. The agreement was subsequently held by the trial court to be Santisteban, was playing mahjong at the time of collision, and the officer on
binding upon petitioner, PNOC and PNOC/STC. watch, Senior Third Mate Rogelio De Vera, admitted that he failed to call the
Private respondents did not join in the agreement. attention of Santisteban to the imminent danger facing them.
This Court found that Capt. Santisteban and the crew of the M/V Don Juan failed
TRIAL COURT to take steps to prevent the collision or at least delay the sinking of the ship and
Rendered judgment in favor of the plaintiffs, ordering all the defendants to pay supervise the abandoning of the ship.
jointly and severally to the plaintiffs damages Petitioner Negros Navigation was found equally negligent in tolerating the
playing of mahjong by the ship captain and other crew members while on board
the ship and failing to keep the M/V Don Juan seaworthy so much so that the The accepted formula for determining life expectancy is 2/3 multiplied by (80 minus
ship sank within 10 to 15 minutes of its impact with the M/T Tacloban City. the age of the deceased). It may be that in the Philippines the age of retirement
In addition, the Court found that the Don Juan was overloaded. The Certificate of generally is 65 but, in calculating the life expectancy of individuals for the purpose of
Inspection, issued by the Philippine Coast Guard Commander at Iloilo City stated determining loss of earning capacity under Art. 2206(1) of the Civil Code, it is
that the total number of persons allowed on the ship was 864, of whom 810 are assumed that the deceased would have earned income even after retirement from a
passengers, but there were actually 1,004 on board the vessel when it sank, 140 particular job. In this case, the trial court took into account the fact that Mrs.
persons more than the maximum number that could be safely carried by it. Miranda had a masters degree and a good prospect of becoming principal of the
Taking these circumstances together, and the fact that the M/V Don Juan, as the school in which she was teaching.
faster and betterequipped vessel, could have avoided a collision with the PNOC
tanker, this Court held that even if the Tacloban City had been at fault for failing
to observe an internationally recognized rule of navigation, the Don Juan was
guilty of contributory negligence.
We conclude that Capt. Santisteban and Negros Navigation are properly held
liable for gross negligence in connection with the collision of the Don Juan and
Tacloban City and the sinking of the Don Juan leading to the death of
hundreds of passengers
The trial court made its own independent findings on the basis of the
testimonies of witnesses, such as Senior Third Mate Rogelio de Vera, who
incidentally gave substantially the same testimony on petitioners behalf before
the Board of Marine Inquiry. The trial court agreed with the conclusions of the
then Minister of National Defense finding both vessels to be negligent.

(3) Whether the total loss of the M/V Don Juan extinguished petitioners liability?

The next issue is whether petitioner is liable to pay damages notwithstanding


the total loss of its ship. The issue is not one of first impression. The rule is
wellentrenched in our jurisprudence that a shipowner may be held liable for
injuries to passengers notwithstanding the exclusively real and hypothecary
nature of maritime law if fault can be attributed to the shipowner
In Mecenas, this Court found petitioner guilty of negligence in
(1) allowing or tolerating the ship captain and crew members in playing mahjong
during the voyage, BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V./JARDINE DAVIES TRANSPORT
SERVICES, INC. VS PHILIPPINE FIRST INSURANCE CO., INC.
(2) in failing to maintain the vessel seaworthy and (3) in allowing the ship to carry
G.R. No. 143133, June 05, 2002
more passengers than it was allowed to carry. Petitioner is, therefore, clearly liable
for damages to the full extent.
FACTS
CMC Trading A.G. shipped on board the MN Anangel Sky at Hamburg, Germany
242 coils of various Prime Cold Rolled Steel sheets for transportation to Manila
consigned to the Philippine Steel Trading Corporation. On July 28, 1990, MN Petitioners contend that the presumption of fault imposed on common carriers
Anangel Sky arrived at the port of Manila and, within the subsequent days, should not be applied on the basis of the lone testimony offered by private
discharged the subject cargo. respondent. The contention is untenable.
Four (4) coils were found to be in bad order B.O. Tally sheet No. 154974. Well settled is the rule that common carriers, from the nature of their business
Finding the four (4) coils in their damaged state to be unfit for the intended and for reasons of public policy, are bound to observe extraordinary diligence
purpose, the consignee Philippine Steel Trading Corporation declared the same and vigilance with respect to the safety of the goods and the passengers they
as total loss. transport.
Despite receipt of a formal demand, defendantsappellees refused to submit to Thus, common carriers are required to render service with the greatest skill and
the consignees claim. Consequently, plaintiffappellant paid the consignee five foresight and to use all reason[a]ble means to ascertain the nature and
hundred six thousand eighty six & 50/100 pesos (P506,086.50), and was characteristics of the goods tendered for shipment, and to exercise due care in
subrogated to the latters rights and causes of action against the handling and stowage, including such methods as their nature requires.
defendantsappellees. The extraordinary responsibility lasts from the time the goods are
Subsequently, plaintiff appellant instituted this complaint for recovery of the unconditionally placed in the possession of and received for transportation by
amount paid by them, to the consignee as insured. Impugning the propriety of the carrier until they are delivered, actually or constructively, to the consignee or
the suit against them, defendantsappellees imputed that the damage and/or loss to the person who has a right to receive them.
was due to preshipment damage, to the inherent nature, vice or defect of the This strict requirement is justified by the fact that, without a hand or a voice in
goods, or to perils, danger and accidents of the sea, or to insufficiency of packing the preparation of such contract, the riding public enters into a contract of
thereof, or to the act or omission of the shipper of the goods or their transportation with common carriers. Even if it wants to, it cannot submit its
representatives. own stipulations for their approval.
In addition thereto, defendants appellees argued that their liability, if there be Hence, it merely adheres to the agreement prepared by them.
any, should not exceed the limitations of liability provided for in the bill of lading Owing to this high degree of diligence required of them, common carriers, as a
and other pertinent laws. general rule, are presumed to have been at fault or negligent if the goods they
Finally, defendants appellees averred that, in any event, they exercised due transported deteriorated or got lost or destroyed. That is, unless they prove that
diligence and foresight required by law to prevent any damage/loss to said they exercised extraordinary diligence in transporting the goods.
shipment. In order to avoid responsibility for any loss or damage, therefore, they have the
RTC dismissed the Complaint because respondent had failed to prove its claims with burden of proving that they observed such diligence.
the quantum of proof required by law However, the presumption of fault or negligence will not arise if the loss is due to
any of the following causes:
CA In reversing the trial court, ruled that petitioners were liable for the loss or the (1) flood, storm, earthquake, lightning, or other natural disaster or calamity
damage of the goods shipped, because they had failed to overcome the presumption (2) an act of the public enemy in war, whether international or civil
of negligence imposed on common carriers. (3) an act or omission of the shipper or owner of the goods
(4) the character of the goods or defects in the packing or the container or (5)
ISSUE an order or act of competent public authority.
1. Whether petitioners have overcome the presumption of negligence of a This is a closed list. If the cause of destruction, loss or deterioration is other than
common carrier? NO the enumerated circumstances, then the carrier is liable therefor. Corollary to
the foregoing, mere proof of delivery of the goods in good order to a common
carrier and of their arrival in bad order at their destination constitutes a prima or injury resulting therefrom, once it accepts the goods notwithstanding such
facie case of fault or negligence against the carrier. condition.
If no adequate explanation is given as to how the deterioration, the loss or the Thus, petitioners have not successfully proven the application of any of the
destruction of the goods happened, the transporter shall be held responsible. aforecited exceptions in the present case.
That petitioners failed to rebut the prima facie presumption of negligence is
revealed in the case at bar by a review of the records and more so by the 2. Whether the notice of loss was timely filed?
evidence adduced by respondent Petitioners claim that pursuant to Section 3, paragraph 6 of the Carriage of
All these conclusively prove the fact of shipment in good order and condition Goods by Sea Act (COGSA), respondent should have filed its Notice of Loss within
and the consequent damage to the four coils while in the possession of three days from delivery. They assert that the cargo was discharged on July 31,
petitioner, who notably failed to explain why. 1990, but that respondent filed its Notice of Claim only on September 18, 1990.
Further, petitioners failed to prove that they observed the extraordinary First, the abovecited provision of COGSA provides that the notice of claim need
diligence and precaution which the law requires a common carrier to know and not be given if the state of the goods, at the time of their receipt, has been the
to follow, to avoid damage to or destruction of the goods entrusted to it for safe subject of a joint inspection or survey. As stated earlier, prior to unloading the
carriage and delivery. cargo, an Inspection Report as to the condition of the goods was prepared and
True, the words metal envelopes rust stained and slightly dented were noted signed by representatives of both parties.
on the Bill of Lading however, there is no showing that petitioners exercised due Second, as stated in the same provision, a failure to file a notice of claim within
diligence to forestall or lessen the loss. Having been in the service for several three days will not bar recovery if it is nonetheless filed within one year. This one
years, the master of the vessel should have known at the outset that metal year prescriptive period also applies to the shipper, the consignee, the insurer of
envelopes in the said state would eventually deteriorate when not properly the goods or any legal holder of the bill of lading.
stored while in transit. In the present case, the cargo was discharged on July 31, 1990, while the
Equipped with the proper knowledge of the nature of steel sheets in coils and of Complaint was filed by respondent on July 25, 1991, within the oneyear
the proper way of transporting them, the master of the vessel and his crew prescriptive period.
should have undertaken precautionary measures to avoid possible deterioration
of the cargo. But none of these measures was taken. 3. Whether the package limitation of liability is applicable?
Having failed to discharge the burden of proving that they have exercised the Respondent argues that Section 4(5) of COGSA is inapplicable, because the value
extraordinary diligence required by law, petitioners cannot escape liability for the of the subject shipment was declared by petitioners beforehand, asevidenced by
damage to the four coils. the reference to and the insertion of the Letter of Credit or L/C No. 90/02447
From the evidence on record, it cannot be reasonably concluded that the in the said Bill of Lading
damage to the four coils was due to the condition noted on the Bill of Lading. A bill of lading serves two functions.
The aforecited exception refers to cases when goods are lost or damaged while First, it is a receipt for the goods shipped.
in transit as a result of the natural decay of perishable goods or the fermentation Second, it is a contract by which three parties namely, the shipper, the carrier,
or evaporation of substances liable therefor, the necessary and natural wear of and the consignee undertake specific responsibilities and assume stipulated
goods in transport, defects in packages in which they are shipped, or the natural obligations.
propensities of animals. None of these is present in the instant case. In a nutshell, the acceptance of the bill of lading by the shipper and the
Further, even if the fact of improper packing was known to the carrier or its crew consignee, with full knowledge of its contents, gives rise to the presumption that
or was apparent upon ordinary observation, it is not relieved of liability for loss it constituted a perfected and binding contract.
Further, a stipulation in the bill of lading limiting to a certain sum the common Alfredo Mallari Sr. collided with the delivery van of respondent Bulletin
carriers liability for loss or destruction of a cargo unless the shipper or owner Publishing Corp. (BULLETIN, for brevity) along the National Highway in Barangay
declares a greater value is sanctioned by law. San Pablo, Dinalupihan, Bataan.
There are, however, two conditions to be satisfied: Petitioner Mallari Jr. testified that he went to the left lane of the highway and
(1) the contract is reasonable and just under the circumstances, and overtook a Fiera which had stopped on the right lane.
(2) it has been fairly and freely agreed upon by the parties. Before he passed by the Fiera, he saw the van of respondent BULLETIN coming
The rationale for, this rule is to bind the shippers by their agreement to the value from the opposite direction. It was driven by one Felix Angeles.
(maximum valuation) of their goods. The sketch of the accident showed that the collision occurred after Mallari Jr.
It is to be noted, however, that the Civil Code does not limit the liability of the overtook the Fiera while negotiating a curve in the highway. The points of
common carrier to a fixed amount per package. In all matters not regulated by collision were the left rear portion of the passenger jeepney and the left front
the Civil Code, the right and the obligations of common carriers shall be side of the delivery van of BULLETIN.
governed by the Code of Commerce and special laws. The two (2) right wheels of the delivery van were on the right shoulder of the
road and pieces of debris from the accident were found scattered along the
Thus, the COGSA, which is suppletory to the provisions of the Civil Code,
shoulder of the road up to a certain portion of the lane travelled by the
supplements the latter by establishing a statutory provision limiting the carriers
passenger jeepney.
liability in the absence of a shippers declaration of a higher value in the bill of
The impact caused the jeepney to turn around and fall on its left side resulting in
lading. The provisions on limited liability are as much a part of the bill of lading
injuries to its passengers one of whom was Israel Reyes who eventually died due
as though physically in it and as though placed there by agreement of the
to the gravity of his injuries.
parties.
Claudia G. Reyes, the widow of Israel M. Reyes, filed a complaint for damages
In the case before us, there was no stipulation in the Bill of Lading limiting the
against Alfredo Mallari Sr. and Alfredo Mallari Jr., and also against BULLETIN, its
carriers liability. Neither did the shipper declare a higher valuation of the goods
driver Felix Angeles, and the N.V. Netherlands Insurance Company. The complaint
to be shipped. This fact notwithstanding, the insertion of the words L/C No.
alleged that the collision which resulted in the death of Israel Reyes was caused
90/02447 cannot be the basis for petitioners liability.
by the fault and negligence of both drivers of the passenger jeepney and the
A notation in the Bill of Lading which indicated the amount of the Letter of Credit
Bulletin Isuzu delivery van.
obtained by the shipper for the importation of steel sheets did not effect a
TRIAL COURT found that the proximate cause of the collision was the negligence of
declaration of the value of the goods as required by the bill. That notation was
Felix Angeles, driver of the Bulletin delivery van, considering the fact that the left
made only for the convenience of the shipper and the bank processing the Letter
front portion of the delivery truck driven by Felix Angeles hit and bumped the left
of Credit.
rear portion of the passenger jeepney driven by Alfredo Mallari Jr. Hence, the trial
court ordered BULLETIN and Felix Angeles to pay jointly and severally Claudia G.
Reyes, widow of the deceased victim,

COURT OF APPEALS modified the decision of the trial court and found no negligence
ALFREDO MALLARI SR. /ALFREDO MALLARI JR VS. CA/ BULLETIN PUBLISHING CORP.
on the part of Angeles and consequently of his employer, respondent BULLETIN.
G.R. No. 128607; January 31, 2000
Instead, the appellate court ruled that the collision was caused by the sole negligence
of petitioner Alfredo Mallari Jr. who admitted that immediately before the collision
FACTS
and after he rounded a curve on the highway, he overtook a Fiera which had stopped
On 14 October 1987, at about 5:00 o'clock in the morning, the passenger
jeepney driven by petitioner Alfredo Mallari Jr. and owned by his copetitioner
on his lane and that he had seen the van driven by Angeles before overtaking the
Fiera. The rule is settled that a driver abandoning his proper lane for the purpose of
overtaking another vehicle in an ordinary situation has the duty to see to it that
ISSUE the road is clear and not to proceed if he cannot do so in safety.

WON the proximate cause of the collision resulting in the death of Israel Reyes, a When a motor vehicle is approaching or rounding a curve, there is special
passenger of the jeepney, was the sole negligence of the driver(Alfredo Mallari Jr) of necessity for keeping to the right side of the road and the driver does not have
the passenger jeepney? the right to drive on the left hand side relying upon having time to turn to the
right if a car approaching from the opposite direction comes into view
RULING In the instant case, by his own admission, petitioner Mallari Jr. already saw that
the BULLETIN delivery van was coming from the opposite direction and failing to
The Court of Appeals correctly found, based on the sketch and spot report of the consider the speed thereof since it was still dark at 5:00 o'clock in the morning
police authorities which were not disputed by petitioners, that the collision mindlessly occupied the left lane and overtook two (2) vehicles in front of it at a
occurred immediately after petitioner Mallari Jr. overtook a vehicle in front of it curve in the highway.
while traversing a curve on the highway.
Clearly, the proximate cause of the collision resulting in the death of Israel Reyes,
This act of overtaking was in clear violation of Sec. 41, pars. (a) and (b), of RA a passenger of the jeepney, was the sole negligence of the driver of the
4136 as amended, otherwise known as The Land Transportation and Traffic passenger jeepney, petitioner Alfredo Mallari Jr., who recklessly operated and
Code which provides: drove his jeepney in a lane where overtaking was not allowed by traffic rules.

Sec. 41. Restrictions on overtaking and passing. Under Art. 2185 of the Civil Code, unless there is proof to the contrary, it is
presumed that a person driving a motor vehicle has been negligent if at the time
(a) The driver of a vehicle shall not drive to the left side of the center line of a of the mishap he was violating a traffic regulation. As found by the appellate
highway in overtaking or passing another vehicle proceeding in the same court, petitioners failed to present satisfactory evidence to overcome this legal
direction, unless such left side is clearly visible and is free of oncoming traffic for presumption.
a sufficient distance ahead to permit such overtaking or passing to be made in
safety. The negligence and recklessness of the driver of the passenger jeepney is
binding against petitioner Mallari Sr., who admittedly was the owner of the
(b) The driver of a vehicle shall not overtake or pass another vehicle proceeding passenger jeepney engaged as a common carrier, considering the fact that in an
in the same direction when approaching the crest of a grade, nor upon a curve in action based on contract of carriage, the court need not make an express finding
the highway, where the drivers view along the highway is obstructed within a of fault or negligence on the part of the carrier in order to hold it responsible for
distance of five hundred feet ahead except on a highway having two or more the payment of damages sought by the passenger.
lanes for movement of traffic in one direction where the driver of a vehicle may Under Art. 1755 of the Civil Code, a common carrier is bound to carry the
overtake or pass another vehicle: 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
Provided That on a highway, within a business or residential district, having two or circumstances.
more lanes for movement of traffic in one direction, the driver of a vehicle may
overtake or pass another vehicle on the right.
Moreover, under Art. 1756 of the Civil Code, in case of death or injuries to
passengers, a common carrier is presumed to have been at fault or to have acted
negligently, unless it proves that it observed extraordinary diligence.

Further, pursuant to Art. 1759 of the same Code, it is liable for the death of or
injuries to passengers through the negligence or willful acts of the formers
employees. This liability of the common carrier does not cease upon proof that it
exercised all the diligence of a good father of a family in the selection of its
employees.

Clearly, by the contract of carriage, the carrier jeepney owned by Mallari Sr.
assumed the express obligation to transport the passengers to their destination
safely and to observe extraordinary diligence with due regard for all the
circumstances, and any injury or death that might be suffered by its passengers
is right away attributable to the fault or negligence of the carrier.
In the morning of January 28, 1964, Severina Garces and her oneyear old son,
Precillano Necesito, carrying vegetables, boarded passenger auto truck or bus
No. 199 of the Philippine Rabbit Bus Lines at Agno, Pangasinan.
The passenger truck, driven by Francisco Bandonell, then proceeded on its
regular run from Agno to Manila.
After passing Mangatarem, Pangasinan truck No. 199 entered a wooden bridge,
but the front wheels swerved to the right; the driver lost control, and after wrecking
the bridge's wooden rails, the truck fell on its right side into a creek where water
was breast deep.
The mother, Severina Garces, was drowned; the son, Precillano Necesito, was
injured, suffering abrasions and fracture of the left femur. He was brought to the
Provincial Hospital at Dagupan, where the fracture was set but with fragments one
centimeter out of line.
The money, wrist watch and cargo of vegetables were lost.
Two actions for damages and attorney's fees (P85,000) filed in the Court against
the carrier, the latter pleaded that the accident was due to "engine or mechanical
trouble" independent or beyond the control of the defendants or of the driver
Bandonell.
TRIAL COURT: found that the bus was proceeding slowly due to the bad
condition of the road; that the accident was caused by the fracture of the right
steering knuckle, which was defective in that its center or core was not compact
but "bubbled and cellulous", a condition that could not be known or ascertained by
the carrier despite the fact that regular thirtyday inspections were made of the
steering knuckle, since the steel exterior was smooth and shiny to the depth of
3/16 of an inch all around; that the knuckles are designed and manufactured for
heavy duty and may last up to ten years; that the knuckle of bus No. 199 that
broke on January 28, 1954, was last inspected on January 5, 1954, and was due
to be inspected again on February 5th. Hence, the trial court, holding that the
accident was exclusively due to fortuitous event, dismissed both actions.
Plaintiffs appealed directly to this Court in view of the amount in controversy.

ISSUE

PRECILLANO NECESITO, ETC., vs. NATIVIDAD PARAS, ET AL


G.R. No. L10605 June 30, 1958 RULING
We are inclined to agree with the trial court that it is not likely that bus No. 199 of
the Philippine Rabbit Lines was driven over the deeply rutted road leading to the
FACTS
bridge at a speed of 50 miles per hour, as testified for the plaintiffs. Such conduct
These cases involve ex contractu against the owners and operators of the
on the part of the driver would have provoked instant and vehement protest on the
common carrier known as Philippine Rabbit Bus Lines, filed by one passenger,
part of the passengers because of the attendant discomfort, and there is no trace
and the heirs of another, who injured as a result of the fall into a river of the
of any such complaint in the records.
vehicle in which they were riding.
We are thus forced to assume that the proximate cause of the accident was the No argument is required to establish that a visual inspection could not directly
reduced strength of the steering knuckle of the vehicle caused by defects in determine whether the resistance of this critically important part was not impaired.
casting it. While appellants hint that the broken knuckle exhibited in court was not Nor has it been shown that the weakening of the knuckle was impossible to detect
the real fitting attached to the truck at the time of the accident, the records they by any known test; on the contrary, there is testimony that it could be detected. We
registered no objection on that ground at the trial below. are satisfied that the periodical visual inspection of the steering knuckle as
The issue is thus reduced to the question whether or not the carrier is liable for the practiced by the carrier's agents did not measure up to the required legal standard
manufacturing defect of the steering knuckle, and whether the evidence discloses of "utmost diligence of very cautious persons" "as far as human care and
that in regard thereto the carrier exercised the diligence required by law (Art. foresight can provide", and therefore that the knuckle's failure can not be
1755, new Civil Code). considered a fortuitous event that exempts the carrier from responsibility.
It may be impracticable, as appellee argues, to require of carriers to test the
ART. 1755. A common carrier is bound to carry the passengers safely as far as human strength of each and every part of its vehicles before each trip; but we are of the
care and foresight can provide, using the utmost diligence of very cautious persons, opinion that a due regard for the carrier's obligations toward the traveling public
with a due regard for the all the circumstances. demands adequate periodical tests to determine the condition and strength of
those vehicle portions the failure of which may endanger the safe of the
It is clear that the carrier is not an insurer of the passengers' safety. His liability passengers.
rests upon negligence, his failure to exercise the "utmost" degree of diligence that As to the damages suffered by the plaintiffs, we agree with appellee that no
the law requires, and by Art. 1756, in case of a passenger's death or injury the allowance may be made for moral damages, since under Article 2220 of the new
carrier bears the burden of satisfying the court that he has duly discharged the Civil Code, in case of suits for breach of contract, moral damages are recoverable
duty of prudence required. only where the defendant acted fraudulently or in bad faith, and there is none in
"The preponderance of authority is in favor of the doctrine that a passenger is the case before us.
entitled to recover damages from a carrier for an injury resulting from a defect in As to exemplary damages, the carrier has not acted in a "wanton, fraudulent,
an appliance purchased from a manufacturer, whenever it appears that the defect reckless, oppressive or malevolent manner" to warrant their award. Hence, we
would have been discovered by the carrier if it had exercised the degree of care believe that for the minor Precillano Necesito (G. R. No. L10605), an indemnity of
which under the circumstances was incumbent upon it, with regard to inspection P5,000 would be adequate for the abrasions and fracture of the femur, including
and application of the necessary tests. For the purposes of this doctrine, the medical and hospitalization expenses, there being no evidence that there would
manufacturer is considered as being in law the agent or servant of the carrier, as be any permanent impairment of his faculties or bodily functions, beyond the lack
far as regards the work of constructing the appliance. According to this theory, the of anatomical symmetry.
good repute of the manufacturer will not relieve the carrier from liability" As for the death of Severina Garces (G. R. No. L10606) who was 33 years old,
The rationale of the carrier's liability is the fact that the passenger has neither with seven minor children when she died, her heirs are obviously entitled to
choice nor control over the carrier in the selection and use of the equipment and indemnity not only for the incidental loses of property (cash, wrist watch and
appliances in use by the carrier. Having no privity whatever with the manufacturer merchandise) worth P394 that she carried at the time of the accident and for the
or vendor of the defective equipment, the passenger has no remedy against him, burial expenses of P490, but also for the loss of her earnings (shown to average
while the carrier usually has. It is but logical, therefore, that the carrier, while not in P120 a month) and for the deprivation of her protection, guidance and company.
insurer of the safety of his passengers, should nevertheless be held to answer for In ou
the flaws of his equipment if such flaws were at all discoverable.
In the case now before us, the record is to the effect that the only test applied to
the steering knuckle in question was a purely visual inspection every thirty days, to
see if any cracks developed. It nowhere appears that either the manufacturer or
the carrier at any time tested the steering knuckle to ascertain whether its strength HONORIO LASAM, ET AL vs. FRANK SMITH, JR.
was up to standard, or that it had no hidden flaws would impair that strength. And G.R. No. L19495 February 2, 1924
yet the carrier must have been aware of the critical importance of the knuckle's
FACTS
resistance; that its failure or breakage would result in loss of balance and steering
control of the bus, with disastrous effects upon the passengers. On February 27, 1918, the defendant was the owner of a public garage in the
town of San Fernando, La Union, and engaged in the business of carrying
passengers for hire from the one point to another in the Province of La Union and RULING
the surrounding provinces. On the date mentioned, he undertook to convey the
plaintiffs from San Fernando to Currimao, Ilocos Norte, in a Ford automobile. 1. Articles 1101 to 1107 NCC, not Article 1903, applicable
On leaving San Fernando, the automobile was operated by a licensed chauffeur, The cause of action rests on Smiths breach of the contract of carriage and that,
but after having reached the town of San Juan, the chauffeur allowed his consequently, articles 1101-1107 of the Civil Code, and not article 1903, are applicable.
assistant, Remigio Bueno, to drive the car. Herein, the source of Smiths legal liability is the contract of carriage; the by entering
Bueno held no driver's license, but had some experience in driving, and with the into that contract he bound himself to carry the spouses safely and securely to their
exception of some slight engine trouble while passing through the town of Luna, destination; and that having failed to do so he is liable in damages unless he shows
the car functioned well until after the crossing of the Abra River in Tagudin, when, that the failure to fulfill his obligation was due to causes mentioned in article 1105 of
according to the testimony of the witnesses for the plaintiffs, defects developed in the Civil Code
the steering gear so as to make accurate steering impossible, and after
zigzagging for a distance of about half a kilometer, the car left the road and went 2. Cases distinguishing extra-contractual and contractual liabilities
down a steep embankment. Upon the facts stated, the defendants liability, if any, is contractual, is well settled by
The defendant, in his testimony, maintains that there was no defect in the steering previous decisions of the court, beginning with the case of Rakes vs. Atlantic, Gulf &
gear, neither before nor after the accident, and expresses the opinion that the Pacific Co. and the distinction between extra-contractual liability and contractual
swaying or zigzagging of the car must have been due to its having been driven at liability has been so ably and exhaustively discussed in various other cases, that
an excessive rate of speed. nothing further need be said upon that subject
This may possibly be true, but it is, from our point of view, immaterial whether the
accident was caused by negligence on the part of the defendant's employees, or 3. Article 1105 NCC
whether it was due to defects in the automobile; the result would be practically the Article 1105 reads as no one shall be liable for events which could not be foreseen or
same in either event. which, even if foreseen, were inevitable, with the exception of the cases in which the
In going over the bank of the road, the automobile was overturned and the law expressly provides otherwise and those in which the obligation itself imposes such
plaintiffs pinned down under it. Mr. Lasam escaped with a few contusions and a liability.
"dislocated" rib , but his wife, Joaquina Sanchez, received serious injuries, among
which was a compound fracture of one of the bones in her left wrist. She also 4. Caso fortuito, events which cannot be foreseen and which having been
appears to have suffered a nervous breakdown from which she had not fully foreseen, are inevitable; Spanish construction
recovered at the time of the trial. The Spanish authorities regard the language employed as an effort to define the term
The complaint in the case was filed about a year and a half after the occurrence caso fortuito and hold that the two expressions are synonymous.
above related. It alleges, among other things, that the accident was due to defects
in the automobile as well as to the incompetence and negligence of the chauffeur, 5. Article 1105s antecedent: Law II, Title 33, Partida 7
and the case appears to have been tried largely upon the theory that it sounds in The antecedent to article 1105 is found in Law 11, Title 33, Partida 7, which defines
tort and that the liability of the defendant is governed by article 1903 of the Civil caso fortuito as ocasion que acaese por aventura deque non se puede ante ver. E
Code. son estos, derrivamientos de casas e fuego que se enciende so ora, e
quebrantamiento de navio, fuerca de ladrones. . . . ( An event that takes place by
TRIAL COURT: held, however, that the cause of action rests on the defendant's accident and could not have been foreseen, Examples of this are destruction of
breach of the contract of carriage and that, consequently, articles 1101 1107 houses, unexpected fire, shipwreck, violence of robbers. . . .)
of the Civil Code, and not article 1903, are applicable.
6. Caso fortuito defined; Escriche
The court further found that the breach of the contract was not due to
Escriche defines caso fortuito as an unexpected event such as floods, torrents,
fortuitous events and that, therefore, the defendant was liable in damages.
shipwrecks, conflagrations, lightning, compulsion, insurrections, destruction of
buildings by unforeseen accidents and other occurrences of a similar nature.
ISSUE

7. Caso fortuito defined; Enciclopedia Juridica Espanola


In discussing and analyzing the term caso fortuito the Enciclopedia Juridica Espaola power to moderate the liability according to the circumstances especially in
says: In a legal sense and, consequently, also in relation to contracts, a caso fortuito determining the extent of the liability for losses or damages resulting from negligence
presents the following essential characteristics: in the fulfillment of a contractual obligation. The Court does not think that the evidence
(1) The cause of the unforeseen and unexpected occurrence, or of the failure of the is such as to justify in interfering with the discretion of the court below in this respect.
debtor to comply with his obligation, must be independent of the human will. Herein, by far the greater part of the damages claimed by the spouses resulted from
(2) It must be impossible to foresee the event which constitutes the caso fortuito, or if it the fracture of a bone in the left wrist of Joaquina Sanchez and from her objections to
can be foreseen, it must be impossible to avoid. having a decaying splinter of the bone refusal to submit to such an operation, a series
(3) The occurrence must be such as to render it impossible for the debtor to fulfill his of infections ensued and which required constant and expensive medical treatment for
obligation in a normal manner. And several years.
(4) the obligor (debtor) must be free from any participation in the aggravation of the
injury resulting to the creditor.

8. Extraordinary circumstance independent of obligors will an essential element


of caso fortuito
Authorities agree that some extraordinary circumstance independent of the will of the
obligor, or of his employees, is an essential element of a caso fortuito. Herein, it is at
once apparent that this elements is lacking. It is not suggested that the accident in
question was due to an act of God or to adverse road conditions which could not have
been foreseen. As far as the record shows, the accident was caused either by defects
in the automobile or else through the negligence of its driver. That is not a caso
fortuito.

9. Carrier of passenger not an absolute insurer against risks of travel; However,


Alba vs. Sociedad Anonima de Tranvias does not apply
Neither under the American nor Spanish law is a carrier of passengers an absolute
insurer against the risks of travel from which the passenger may protect himself by
exercising ordinary care and diligence. The case of Alba vs. Sociedad Anonima de
Tranvias, Jurisprudencia Civil, vol. 102, p. 928 affords a good illustration of the
application of this principle. In that case Alba, a passenger on a street car, was
standing on the platform of the car while it was in motion. The car rounded a curve
causing Alba to lose his balance and fall off the platform, sustaining sever injuries. In
an action brought by him to recover damages, the supreme court of Spain held that
inasmuch as the car at the time of the accident was travelling at a moderate rate of
speed and there was no infraction of the regulations, and the plaintiff was exposed to
no greater danger than that inherent in that particular mode of travel, the plaintiff could
not recover, especially so since he should have been on his guard against a
contingency as natural as that of losing his balance to a greater or less extent when
the car rounded the curve. Herein, however, the passengers had no means of avoiding
the danger or escaping the injury. ROBERTO JUNTILLA vs. CLEMENTE FONTANAR, FERNANDO BANZON and
BERFOL CAMORO
10. Discretion of the court to moderate liability according to circumstances G.R. No. L45637 May 31, 1985

FACTS
Although the expenses incurred by the spouses as a result of the accident greatly
The plaintiff was a passenger of the public utility jeepney bearing plate No.
exceeded the amount of the damages awarded, the courts have a discretionary
PUJ717 on the course of the trip from Danao City to Cebu City. The jeepney was
driven by defendant Berfol Camoro. It was registered under the franchise of There is also evidence to show that the passenger jeepney was overloaded at
defendant Clemente Fontanar but was actually owned by defendant Fernando the time of the accident. The petitioner stated that there were three (3)
Banzon. When the jeepney reached Mandaue City, the right rear tire exploded passengers in the front seat and fourteen (14) passengers in the rear.
causing the vehicle to turn turtle. In the process, the plaintiff who was sitting at the While it may be true that the tire that blewup was still good because the grooves
of the tire were still visible, this fact alone does not make the explosion of the tire
front seat was thrown out of the vehicle.
a fortuitous event.
Upon landing on the ground, the plaintiff momentarily lost consciousness. When No evidence was presented to show that the accident was due to adverse road
he came to his senses, he found that he had a lacerated wound on his right palm. conditions or that precautions were taken by the jeepney driver to compensate
Aside from this, he suffered injuries on his left arm, right thigh and on his back. for any conditions liable to cause accidents.
Because of his shock and injuries, he went back to Danao City but on the way, he The sudden blowingup, therefore, could have been caused by too much air
discovered that his "Omega" wrist watch was lost. Upon his arrival in Danao City, pressure injected into the tire coupled by the fact that the jeepney was
he immediately entered the Danao City Hospital to attend to his injuries, and also overloaded and speeding at the time of the accident.
requested his fatherinlaw to proceed immediately to the place of the accident and In the case at bar, the cause of the unforeseen and unexpected occurrence was
not independent of the human will. The accident was caused either through the
look for the watch. In spite of the efforts of his fatherinlaw, the wrist watch, which
negligence of the driver or because of mechanical defects in the tire.
he bought for P 852.70 could no longer be found. Common carriers should teach their drivers not to overload their vehicles, not to
Petitioner Roberto Juntilla filed Civil Case No. R17378 for breach of contract with exceed safe and legal speed limits, and to know the correct measures to take
damages before the City Court of Cebu City, Branch I against Clemente Fontanar, when a tire blows up thus insuring the safety of passengers at all times.
Fernando Banzon and Berfol Camoro. It is sufficient to reiterate that the source of a common carrier's legal liability is the
The respondents filed their answer, alleging inter alia that the accident that caused contract of carriage, and by entering into the said contract, it binds itself to carry
losses to the petitioner was beyond the control of the respondents taking into the passengers safely as far as human care and foresight can provide, using the
utmost diligence of a very cautious person, with a due regard for all the
account that the tire that exploded was newly bought and was only slightly used at circumstances.
the time it blew up. The records show that this obligation was not met by the respondents. The
respondents likewise argue that the petitioner cannot recover any amount for
TRIAL COURT: (Judge Romulo R. Senining) rendered judgment in favor of the failure to prove such damages during the trial. The respondents submit that if the
petitioner and against the respondents petitioner was really injured, why was he treated in Danao City and not in
Mandaue City where the accident took place. The respondents argue that the
doctor who issued the medical certificate was not presented during the trial, and
The respondents appealed to the Court of Cebu, Branch XIV. Judge Leonardo B.
hence not crossexamined.
Canares reversed the judgment of the City Court of Cebu upon a finding that the The respondents also claim that the petitioner was not wearing any wrist watch
accident in question was due to a fortuitous event. during the accident. It should be noted that the City Court of Cebu found that the
The City Court and the Court of First Instance of Cebu found that the right rear tire petitioner had a lacerated wound on his right palm aside from injuries on his left
of the passenger jeepney in which the petitioner was riding blew up causing the arm, right thigh and on his back, and that on his way back to Danao City, he
vehicle to fall on its side. The petitioner questions the conclusion of the discovered that his "Omega" wrist watch was lost. These are findings of facts of
respondent court drawn from this finding of fact. the City Court of Cebu which we find no reason to disturb. More so when we
consider the fact that the Court of First Instance of Cebu impliedly concurred in
these matters when it confined itself to the question of whether or not the tire
ISSUE blow out was a fortuitous event.

RULING JOSE PILAPIL vs. CA and ALATCO TRANSPORTATION COMPANY, INC.


G.R. No. 52159 December 22, 1989
In the case at bar, there are specific acts of negligence on the part of the
respondents. The records show that the passenger jeepney turned turtle and
FACTS
jumped into a ditch immediately after its right rear tire exploded. The evidence
shows that the passenger jeepney was running at a very fast speed before the Petitionerplaintiff Jose Pilapil, a paying passenger, boarded
accident. We agree with the observation of the petitioner that a public utility jeep respondentdefendant's bus bearing No. 409 at San Nicolas, Iriga City on 16
running at a regular and safe speed will not jump into a ditch when its right rear September 1971 at about 6:00 P.M. While said bus No. 409 was in due course
tire blows up. negotiating the distance between Iriga City and Naga City, upon reaching the
vicinity of the cemetery of the Municipality of Baao, Camarines Sur, on the way to Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and
Naga City, an unidentified man, a bystander along said national highway, hurled a precaution in the carriage of passengers by common carriers to only such as human
stone at the left side of the bus, which hit petitioner above his left eye. care and foresight can provide. What constitutes compliance with said duty is adjudged
Private respondent's personnel lost no time in bringing the petitioner to the with due regard to all the circumstances.
provincial hospital in Naga City where he was confined and treated.
Considering that the sight of his left eye was impaired, petitioner was taken to Dr. 3. Article 1756 NCC
Malabanan of Iriga City where he was treated for another week. Since there was Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the
no improvement in his left eye's vision, petitioner went to V. Luna Hospital, part of the common carrier when its passenger is injured, merely relieves the latter, for
Quezon City where he was treated by Dr. Capulong. Despite the treatment the time being, from introducing evidence to fasten the negligence on the former,
accorded to him by Dr. Capulong, petitioner lost partially his left eye's vision and because the presumption stands in the place of evidence. Being a mere presumption,
sustained a permanent scar above the left eye. however, the same is rebuttable by proof that the common carrier had exercised
Thereupon, petitioner instituted an action for recovery of damages sustained as a extraordinary diligence as required by law in the performance of its contractual
result of the stonethrowing incident. obligation, or that the injury suffered by the passenger was solely due to a fortuitous
event.
TRIAL COURT: Ordering defendant transportation company to pay plaintiff Jose Pilapil
the sum of P10,000.00, representing actual and material damages for causing a 4. Intention of the Code
permanent scar on the face and injuring the eyesight Inferring from the law, the intention of the Code Commission and Congress was to curb
of the plaintiff. the recklessness of drivers and operators of common carriers in the conduct of their
business.
CA: rendered judgment reversing and setting aside the judgment of the court a quo.
5. Common carrier not an insurer of all risks to passenger and goods
ISSUE In consideration of the right granted to it by the public to engage in the business of
transporting passengers and goods, a common carrier does not give its consent to
become an insurer of any and all risks to passengers and goods. It merely undertakes
to perform certain duties to the public as the law imposes, and holds itself liable for any
RULING breach thereof. While the law requires the highest degree of diligence from common
carriers in the safe transport of their passengers and creates a presumption of
The Supreme Court affirmed the judgment appealed from. negligence against them, it does not, however, make the carrier an insurer of the
absolute safety of its passengers. Neither the law nor the nature of the business of a
1. Diligence required of a common carrier, and presumption of negligence; transportation company makes it an insurer of the passengers safety, but that its
Articles 1733 and 1755 NCC liability for personal injuries sustained by its passenger rests upon its negligence, its
failure to exercise the degree of diligence that the law requires
Under Article 1733 of the Civil Code, common carriers are required to observe
extraordinary diligence for the safety of the passenger transported by them, according 6. Presumption of fault or negligence merely a disputable presumption
to all the circumstances of each case. The presumption of fault or negligence against the carrier is only a disputable
The requirement of extraordinary diligence imposed upon common carriers is restated presumption. It gives in where contrary facts are established proving either that the
in Article 1755: A common carrier is bound to carry the passengers safely as far as carrier had exercised the degree of diligence required by law or the injury suffered by
human care and foresight can provide, using the utmost diligence of very cautious the passenger was due to a fortuitous event. Herein, where the injury sustained by
persons, with due regard for all the circumstances. Further, in case of death of or Pilapil was in no way due to any defect in the means of transport or in the method of
injuries to passengers, the law presumes said common carriers to be at fault or to have transporting or to the negligent or willful acts of Alatcos employees, and therefore
acted negligently. involving no issue of negligence in its duty to provide safe and suitable cars as well as
competent employees, with the injury arising wholly from causes created by strangers
2. Article 1755 NCC over which the carrier had no control or even knowledge or could not have prevented,
the presumption is rebutted and the carrier is not and ought not to be held liable.
7. Standard of extraordinary diligence does not determine liability when acts of
strangers directly caused the injury
While as a general rule, common carriers are bound to exercise extraordinary diligence
in the safe transport of their passengers, it would seem that this is not the standard by
which its liability is to be determined when intervening acts of strangers directly cause
the injury, while the contract of carriage exists.

8. Article 1763 NCC


Article 1763 provides that a common carrier is responsible for injuries suffered by a
passenger on account of the wilful acts or negligence of other passengers or of
strangers, if the common carriers employees through the exercise of the diligence of a
good father of a family could have prevented or stopped the act or omission.

9. Article 1763 explained


A tort committed by a stranger which causes injury to a passenger does not accord the
latter a cause of action against the carrier. The negligence for which a common carrier
is held responsible is the negligent omission by the carriers employees to prevent the
tort from being committed when the same could have been foreseen and prevented by
them. Further, under the same provision, it is to be noted that when the violation of the
contract is due to the wilful acts of strangers the degree of care essential to be
exercised by the common carrier for the protection of its passenger is only that of a
good father of a family.

10. Rule of ordinary care and prudence is not exacting to require exercise of
doubtful or unreasonable precautions
Although the suggested precaution, i.e. mesh-work grills covering windows of the bus,
could have prevented the injury complained of, the rule of ordinary care and prudence
is not so exacting as to require one charged with its exercise to take doubtful or
unreasonable precautions to guard against unlawful acts of strangers. The carrier is
not charged with the duty of providing or maintaining vehicles as to absolutely prevent
any and all injuries to passengers. Where the carrier uses cars of the most approved
type, in general use by others engaged in the same occupation, and exercises a high
degree of care in maintaining them in suitable condition, the carrier cannot be charged
with negligence in this respect.

11. Congress role


Herein, Pilapil contends that it is to the greater interest of the State if a carrier were
made liable for such stone-throwing incidents rather than have the bus riding public
lose confidence in the transportation system. Sad to say, the court is not in a position
to so hold. Such a policy would be better left to the consideration of Congress which is
empowered to enact laws to protect the public from the increasing risks and dangers of
lawlessness in society.

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