CHAPTER 1

EVERETT STEAMSHIP vs. CA

FACTS
Hernandez trading company imported three crates of bus spare parts marked as Marco 12, Marco 13,
Marco 14 from its supplier Maruman trading company.

Said crates were shipped from Japan to Manila on noard the vessel owned by Everette Orient Lines. Upon
arrival in Manila, it was discovered that Marco 14 was missing.

Hernandez makes a formal claim to Everette in an amount of 1 mill ++ Yen, which is the amount of the
cargo lost.
However, Everett offers an amount of 100k because it is the amount that was stipulated in its Bill of Lading.

Hernandez files a case at the RTC of Caloocan, RTC rules 1 in favor of Hernandez holding Everett liable for
the amount of !mill ++ Yen.
THE CA affirmed the RTCs ruling and made an additional observation that since Hernandez is not a privy
to the contract in the bill of lading ( the contract was entered by Everett and Maruman trading [shipper]),
and so the 100k limit stipulated will not bind Hernandez making Everett liable for the full amount of 1mill ++
Yen.

ISSUE

1. Is Everett liable for the full amount or the amount that was stipulated in the contract?- what was
stipulated in the contract
2. Is Hernandez a privy to the contract which says that Petitioner is liable only for 100k? Yes

RULING

1. Controlling provisions for this issue would be 1749 and 1750 of the Civil Code. 2

In Sea Land Service, Inc. vs Intermediate Appellate Court

That said stipulation is just and reasonable is arguable from the fact that it echoes Art. 1750 itself in
providing a limit to liability only if a greater value is not declared for the shipment in the bill of lading. To
hold otherwise would amount to questioning the justness and fairness of the law itself, and this the private

1 Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss,

destruction or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and
has been fairly and freely agreed upon.
It is required, however, that the contract must be reasonable and just under the circumstances and has been fairly and freely
agreed upon.XXX
the Court is of the view that the requirements of said article have not been met. The fact that those conditions are printed at
the back of the bill of lading in letters so small that they are hard to read would not warrant the presumption that the plaintiff
or its supplier was aware of these conditions such that he had fairly and freely agreed to these conditions. It can not be said
that the plaintiff had actually entered into a contract with the defendant, embodying the conditions as printed at the back of
the bill of lading that was issued by the defendant to plaintiff.
2 ART. 1749. A stipulation that the common carriers liability is limited to the value of the goods appearing in

the bill of lading, unless the shipper or owner declares a greater value, is binding.
ART. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction,
or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been freely and fairly
agreed upon.
respondent does not pretend to do. But over and above that consideration, the just and reasonable
character of such stipulation is implicit in it giving the shipper or owner the option of avoiding accrual of
liability limitation by the simple and surely far from onerous expedient of declaring the nature and value of
the shipment in the bill of lading

The clause of the contract goes:

The carrier shall not be liable for any loss of or any damage to or in any connection with,
goods in an amount exceeding One Hundred Thousand Yen in Japanese Currency (Y100,000.00)
or its equivalent in any other currency per package or customary freight unit (whichever is least)
unless the value of the goods higher than this amount is declared in writing by the shipper before
receipt of the goods by the carrier and inserted in the Bill of Lading and extra freight is paid as
required. (Emphasis supplied)

The shipper, Maruman Trading, had the option to declare a higher valuation if the value of its cargo
was higher than the limited liability of the carrier. Considering that the shipper did not declare a
higher valuation, it had itself to blame for not complying with the stipulations.

The trial courts ratiocination that private respondent could not have fairly and freely agreed to the
limited liability clause in the bill of lading because the said conditions were printed in small letters does not
make the bill of lading invalid.
In Ong Yiu VS. CA the court said that

contracts of adhesion wherein one party imposes a ready-made form of

contract on the other, as the plane ticket in the case at bar, are contracts
not entirely prohibited

A contract limiting liability upon an agreed valuation does not offend

against the policy of the law forbidding one from contracting against his
own negligence

The shipper, Maruman Trading, we assume, has been extensively engaged in the trading business. It can
not be said to be ignorant of the business transactions it entered into involving the shipment of its goods to
its customers. The shipper could not have known, or should know the stipulations in the bill of lading and
there it should have declared a higher valuation of the goods shipped. Moreover, Maruman Trading has
not been heard to complain that it has been deceived or rushed into agreeing to ship the cargo in petitioners
vessel.

2. Even if the consignee was not a signatory to the contract of carriage between the shipper and the
carrier.

The consignee can still be bound by the contract. private respondent (Hernandez) formally claimed
reimbursement for the missing goods from petitioner and subsequently filed a case against the latter
based on the very same bill of lading, it (private respondent) accepted the provisions of the contract
and thereby made itself a party thereto, or at least has come to court to enforce it. Thus, private
respondent cannot now reject or disregard the carriers limited liability stipulation in the bill of lading. In
other words, private respondent is bound by the whole stipulations in the bill of lading and must respect
the same.

Dangwa Transportation Co. Inc vs. CA

FACTS:
Private respondents filed a complaint for damages against petitioners for the death of Pedrito Cudiamat
as a result of a vehicular accident which occurred on March 25, 1985 at Marivic, Sapid, Mankayan,
Benguet. Petitioner Theodore M. Lardizabal was driving a passenger bus belonging to petitioner
corporation in a reckless and imprudent manner and without due regard to traffic rules and regulations
and safety to persons and property, it ran over its passenger, Pedrito Cudiamat. Petitioners alleged that
they had observed and continued to observe the extraordinary diligence and that it was the victims own
carelessness and negligence which gave rise to the subject incident.
RTC pronounced that Pedrito Cudiamat was negligent, which negligence was the proximate cause of his
death. However, Court of Appeals set aside the decision of the lower court, and ordered petitioners to pay
private respondents damages due to negligence.
ISSUE: WON the CA erred in reversing the decision of the trial court and in finding petitioners negligent
and liable for the damages claimed.
HELD: CA Decision AFFIRMED
The testimonies of the witnesses show that that the bus was at full stop when the victim boarded the
same. They further confirm the conclusion that the victim fell from the platform of the bus when it
suddenly accelerated forward and was run over by the rear right tires of the vehicle. Under such
circumstances, it cannot be said that the deceased was guilty of negligence.
It is not negligence per se, or as a matter of law, for one attempt to board a train or streetcar which is
moving slowly. An ordinarily prudent person would have made the attempt board the moving conveyance
under the same or similar circumstances. The fact that passengers board and alight from slowly moving
vehicle is a matter of common experience both the driver and conductor in this case could not have been
unaware of such an ordinary practice.
Common carriers, from the nature of their business and reasons of public policy, are bound to observe
extraordinary diligence for the safety of the passengers transported by the according to all the
circumstances of each case. A common carrier is bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence very cautious persons, with a due regard for all
the circumstances.
It has also been repeatedly held that in an action based on a contract of carriage, the court need not
make an express finding of fault or negligence on the part of the carrier in order to hold it responsible to
pay the damages sought by the passenger. 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 suffered by the passenger is right away
attributable to the fault or negligence of the carrier. This is an exception to the general rule that
negligence must be proved, and it is therefore incumbent upon the carrier to prove that it has exercised
extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code.

Fabre Jr. v CA

Fabre v. CA

Engracio Fabre, Jr. and his wife owns of a 1982 model Mazda minibus which they used as a school service
which transported students to and from St. Scholasticas College Manila. The service was being driven by
Porfirio Cabil. Word for the World Christian Fellowship, Inc. (WWCF) arranged for the transportation of 33
members of its Young Adults Ministry from Manila to La Union and back in consideration of the amount of
P3,000. The minibus being driven by Cabil left at 8:00 pm and it would be his first trip to La Union. Due to
the closure of a bridge in Carmen, Pangasinan, Cabil took a detour and at around 11:30 that night, tragedy
ensued as the bus slipped on a sharp curve causing it to turn several times. Amyline Antonio, who became
paralyzed from the waist down due to the accident, filed a case with the RTC of Makati. A criminal complaint
was also filed against Cabil, who claimed that he did not see the curve until it was too late and that he was
unfamiliar with the area and could not have seen the curve even with the exercise of due care. The RTC,
in ruling the civil case, found the Fabres and Cabil liable while the CA affirmed the judgment. One of the
Fabres arguments is that the WWCF was directly responsible for the conduct of the trip. The Supreme
Court upheld the finding of the RTC and the CA and took note that the Fabres did not have to be engaged
in the business of public transportation for the provisions of the Civil Code on common carriers to
apply to them. The Court has consistently held that Article 1732 of the Civil Code makes no
distinction between one whose principal business is the carrying of persons or goods or both, and
on who does such carrying only as an ancillary activity (in local idiom, as a sideline). Article 1732
also carefully avoids making any distinction between a person or enterprise offering transportation
service on a regular or scheduled basis and one offering such service on an occasional, episodic
or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services
to the general public, i.e., the general community or population, and one who offers services or
solicits business only from a narrow segment of the general population. Karl Vincent B. Raso

Saltis vs. ABB

Sorry guys wala nito sa net kahit full text :(

Standard Vacuum Oil Comp. v. Luzon Stevedoring COmp

Facts: Standard Vacuum Oil Co. entered into a contract with Luzon Stevedoring Co. Inc. to transport
between the ports of Manila and Nin Bay, Sagay, Iloilo, 2,916.44 barrels of bulk gasoline belonging to the
former. The gasoline was delivered in accordance with the contract but Luzon Stevedoring failed to
transport it to its place of destination. It appeared that the tugboat towing barge L-522 which was laden
with gasoline, among others, stalled due to a broken idler during the morning of 4 February 1947. The
barges that tied to it broke off due to the rough condition of the sea during the afternoon. The tugboat and
the barges were dashed against rocks, the tugboat sunk, and barge L-522 was so badly damaged that
the gasoline leaked out.
Standard Vacuum Oil brought an action in the CFI of Manila to recover the sum of P75,578.60 as
damages. Luzon Stevedoring, in its answer, pleaded that its failure to deliver the gasoline was due to
fortuitous event or caused by circumstances beyond its control and not to its fault or negligence or that of
any of its employees. The court, after receiving the evidence, rendered decision finding that the disaster
that had befallen the tugboat was the result of an unavoidable accident and the loss of the gasoline was
due to a fortuitous event which was beyond the control of Luzon Stevedoring and, consequently,
dismissed the case with costs against Standard Vacuum Oil.
The Supreme Court reversed the decision appealed from; and ordered Luzon Stevedoring to pay to
Standard Vacuum Oil Co. the sum of P75,578.50, with legal interest from the date of the filing of the
complaint, with costs.
1. Luzon Stevedoring Co. not a common carrier but has earned level of a public utility; Contract
covered by Code of Commerce
Luzon Stevedoring is a private stevedoring company engaged in transporting local products, including
gasoline in bulk and has a fleet of about 140 tugboats and about 90 per cent of its business is devoted to
transportation. Though it is engaged in a limited contract of carriage in the sense that it chooses its
customers and is not opened to the public, nevertheless, the continuity of its operations in this kind of
business have earned for it the level of a public utility. Herein, the contract between Standard Vacuum Oil
and Luzon Stevedoring comes therefore under the provisions of the Code of Commerce.
2. Luzon Stevedoring negligent, did not use reasonable diligence The fact that the tugboat was a
surplus property, has not been dry-docked, and was not provided with the requisite equipment to make it
seaworthy, shows that Luzon Stevedoring did not use reasonable diligence in putting the tugboat in such
a condition as would make its use safe for operation. Where owner buys old tug, licensed coastwise, and
equips it for ocean going, it is negligence to send tug out without knowing something of her stability and
especially without stability test, where history and performance with respect to crankiness and tenderness
are matters of official record.
3. Lack of spare parts show lack of precaution and diligence Another circumstance which shows the
lack of precaution and diligence taken by Luzon Stevedoring to make the travel of the tugboat safe, is the
failure to carry on board the necessary spare parts. When the idler was broken, the engineer of the
tugboat examined it for the first time and it was only then that he found that there were no spare parts to
use except a worn out spare driving chain. Vessels motored by diesel engines it is necessary always to
carry spare chains, ball bearings and chain drives. This was not done.
4. Tug liable for damage to barges cargo by faulty equipment. A tug engaged to tow a barge is liable
for damage to the cargo of the barge caused by faulty equipment of the tug.
5. Cause of disaster attributed to negligence or lack of precaution. While the breaking of the idler
may be due to an accident, or to something unexpected, the cause of the disaster which resulted in the
loss of the gasoline can only be attributed to the negligence or lack of precaution to avert it on the part of
Luzon Stevedoring. It had enough time to effectuate the rescue if it had only a competent tug for the
purpose because the weather was good from 3:00 a.m. to 12:00 p.m. of 4 February 1947 and it was only
in the afternoon that the wind began to blow with some intensity, but failed to do so because of that
shortcoming. The loss of the gasoline certainly cannot be said to be due to force majeure or unforeseen
event but to the failure of Luzon Stevedoring to extend adequate and proper help.

Cebu Arrastre Service v. CIR

In 1952, the Cebu Arrastre, an association of person engaged in the handling of cargoes carried by
coastwise vessels stopping at the Port of Cebu, thru its Counsel, Atty. Jose Muana (who became a
lawyer on July 18, 1927) petitioned the Collector of Internal Revenue for the exemption and refund of its
taxes.

The Cebu Arrastre Service asked for the refund of the amount of P2,867.02. Such was a big amount then
in the 1950s. The grounds for exemption were based on the following:

1. That they were a group of laborers who had recently organized themselves into an arrastre
service association merely for the purpose of centralizing the collection of handling charges and
making direct payment to the men in order to insure the compliance of the Minimum Wage Law
requirement.
2. The work of the men of the said arrastre group was under the direct supervision and control of the
officers of the ship.
3. Cebu Arrastre Service was engaged solely in the loading and unloading of cargoes to and from
the boats and is not engaged in the transportation business.

When the Collector of Internal Revenue who was based in Manila received the petition, he referred the
matter to his agent in Cebu for investigation. Mr. Ignacio Quijano (of Mambaling, Cebu City became a
lawyer on January 18, 1954), the Assistant Agent, conducted the investigation and filed his report, the
result of which said among others:

That the loading and unloading of cargoes to and from the ship's holds was done by the laborers under
the Cebu Arrastre Service Co. Inc. and the supervision of the ship's officers in the work was confined only
to the proper handling of the cargoes to their nature and to the proper placing of the cargoes inside the
ship's holds.

Mr. Ignacio Quijano also reported that as to the laborers actuations outside the handling and placing of
cargoes inside the ship's holds the officers of the ship had no supervision.
It was also reported that the Cebu Arrastre Service was not engaged in the transportation of the cargoes
from the wharf to the bodegas of the shippers. The shippers had their own trucks or provide for the
transportation of their cargoes from the wharf to their bodegas.

That the laborers of the Cebu Arrastre Service helped only in the loading of the cargoes from the wharf to
the shipper's trucks, for the shippers trucks are provided with their own personnel.

On the basis of the report the Collector of Internal Revenue denied the petition, holding that inasmuch as
the Cebu Arrastre was engaged in the loading and unloading of vessels in port, it may be considered a
stevedore within the meaning of Section of the Tax Code. In this connection, it may be stated that Section
191 of the Tax Code imposes a tax equivalent to three percent of the gross receipts on certain
businesses and business entities, among them stevedores.

Atty. Jose Muana questioned the report of Mr. Quijano and the ruling of the Collector of Internal Revenue
for denying their petition for exemption. It was established that the men working under the Cebu Arrastre
Service were the same men of Katubusan sa Mamumuo who had been handling the loading of the boats
of the Aboitiz and Co. and of the Philippine Navigation Co. since 1947.

PH Charter Insurance Corp. v. Neptune Orient Lines/ Overseas Agency Services Ic

PHIL CHARTER vs. NEPTUNE ORIENT

FACTS
L.T. Garments Manufacturing Corp. Ltd. shipped from Hong Kong 3 sets of warp yarn on returnable beams
aboard respondent Neptune Orient Lines' vessel, M/V Baltimar Orion, for transport and delivery to
Fukuyama Manufacturing Corporation (Fukuyama) in Manila.

The said cargoes were loaded in a container under a bill of lading. Fukuyama insured the shipment against
all risks with petitioner Philippine Charter Insurance Corporation (PCIC) under Marine Cargo Policy. During
the course of the voyage, the container with the cargoes fell overboard and was lost.

Thus, Fukuyama wrote a letter to respondent Overseas Agency Services, Inc, the agent of Neptune Orient,
and claimed for the value of the lost cargoes. However, Overseas Agency ignored the claim. Hence,
Fukuyama sought payment from its insurer, PCIC, for the insured value which claim was fully satisfied by
PCIC. PCIC then demanded from respondents reimbursement of the entire amount it paid to Fukuyama,
but respondents refused payment. Hence, PCIC filed a complaint for damages against respondents.

Respondents denied liability and alleged that during the voyage, the vessel encountered strong winds and
heavy seas making the vessel pitch and roll, which caused the subject container with the cargoes to fall
overboard. They claim that the occurrence was a fortuitous event which exempted them from any liability,
and that their liability, if any, should not exceed US$500 or the limit of liability in the bill of lading, whichever
is lower.

The RTC held that respondents, as common carrier, failed to prove that they observed the required
extraordinary diligence to prevent loss of the subject cargoes and ordered them to pay the plaintiff the
amount claimed. The CA on the other hand found respondents liability to be only US$1,500 or US$500 per
package under the limited liability provision of the Carriage of Goods by Sea Act (COGSA). Hence, the
instant appeal.

Petitioners Contention: The vessel committed a "quasi deviation" which is a breach of the contract of
carriage when it intentionally threw overboard the container for its own benefit. Such breach of contract
resulted in the abrogation of respondents' rights under the contract and COGSA including the US$500 per
package limitation.

ISSUE
W/N the liability of the respondents is only US$1,500 or US$500 per package as provided in the COGSA -
Yes

RULING
The facts as found by the RTC do not support the new allegation regarding the intentional throwing
overboard of the subject cargoes and quasi deviation. The Court notes that the petitioner's Complaint and
the survey report provide that the shipment were lost/fell overboard. The records show that the subject
cargoes fell overboard the ship and petitioner should not vary the facts of the case on appeal.

Since the subject cargoes were lost while being transported by respondent common carrier from Hong
Kong to the RP - Philippine law applies pursuant to the Civil Code. The rights and obligations of respondent
common carrier are thus governed by the provisions of the Civil Code, and the COGSA, which is a special
law applying suppletorily.

The pertinent provisions of the Civil Code applicable to this case are as follows:

Art. 1749. A stipulation that the common carrier's liability is limited to the value of the goods appearing in
the bill of lading, unless the shipper or owner declares a greater value, is binding.
Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction,
or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been
fairly and freely agreed upon.

In addition, Sec. 4, paragraph (5) of the COGSA, which is applicable to all contracts for the carriage of
goods by sea to and from Philippine ports in foreign trade, provides: Neither the carrier nor the ship shall in
any event be or become liable for any loss or damage to or in connection with the transportation of goods
in an amount exceeding $500 per package lawful money of the United States, or in case of goods not
shipped in packages, per customary freight unit, or the equivalent of that sum in other currency, unless the
nature and value of such goods have been declared by the shipper before shipment and inserted in the bill
of lading. This declaration, if embodied in the bill of lading shall be prima facie evidence, but shall be
conclusive on the carrier.

In this case, Bill of Lading stipulates: Neither the Carrier nor the vessel shall in any event become liable for
any loss of or damage to or in connection with the transportation of Goods in an amount exceeding US$500
(which is the package or shipping unit limitation under U.S. COGSA) unless the nature and value of such
Goods have been declared by the Shipper before shipment and inserted in this Bill of Lading and
the Shipper has paid additional charges on such declared value. . . .

The bill of lading submitted in evidence by petitioner did not show that the shipper in Hong Kong declared
the actual value of the goods as insured by Fukuyama before shipment and that the said value was inserted
in the Bill of Lading, and so no additional charges were paid. Hence, the stipulation in the bill of lading that
the carrier's liability shall not exceed US$500 per package applies.

A stipulation in the bill of lading limiting the common carrier's liability for loss or destruction of a cargo to a
certain sum, unless the shipper or owner declares a greater value, is sanctioned and allowed by law. It
seems clear that even if said section 4 (5) of the Carriage of Goods by Sea Act did not exist, the validity
and binding effect of the liability limitation clause in the bill of lading here are nevertheless fully sustainable
on the basis alone of the cited Civil Code Provisions.

Alitalia v. IAC

Facts: Dr. Felipa Pablo, a professor from UP was invited to attend a meeting by the United Nations in Ispra,
Italy. She was to read apaper regarding foreign substances in food and the agriculture environment which
she had specialized knowledge of. She booked a flight to Italy with Alitalia airlines, petitioner herein. She
had arrived in Milan the day before the meeting however her luggage did not arrive with her. The airline
informed her that her luggage was delayed because it was placed in one of the succeeding flights to Italy.
She never got her luggage.

When she got back to Manila she demanded that Alitaliacompensate her for the damages that she suffered.
Petitioner herein offered free airline tickets in order to compensate for the alleged damages, however she
rejected this offer and instead filed a case. Subsequently it was found out that the luggages of Dr. Pablo
were not placed in the succeeding flights. She received her luggage 11 months after and after she had
already instituted a case againstAlitalia.

The lower court rendered a decision in favor of Dr. Pablo and ordered plaintiff to pay damages. On appeal,
the Court of Appeals affirmed the decision and even increased the amount of damages to be awarded to
Dr. Pablo. Hence this petition for certiorari.

Issue: Whether or not Alitalia is liable for damages incurred by Dr. Pablo.

Held: The Court held that Alitalia is liable to pay Dr. Pablo for nominal damages. The Warsaw Convention
provides that an air carrier is made liable for damages when: (1) the death, wounding or other bodily injury of
a passenger if the accident causing it took place on board the aircraft or in the course of its operations of
embarking or disembarking; (2) the destruction or loss of, or damage to, any registered luggage or goods,
if the occurrence causing it took place during the carriage by air"; and (3) delay in the transportation by air
of passengers, luggage or goods. However, the claim for damages may be brought subject to limitations
provided in the said convention.

In this case, Dr. Pablo did not suffer any other injury other than not being able to read her paper in Italy.
This was due to the fact thatAlitalia misplaced her luggage. There was no bad faith or malice on the part
of Alitalia in the said delay in the arrival of her luggage. Dr. Pablo received all her things which were returned
to her in good condition although 11 months late. Therefore she shall receive nominal damages for the
special injury caused.

Duquillo v. Bayot

Florencia Duquillo appeals to this court from a judgment rendered by the CFI:
1. In declaring that James McGurk, and not Leopoldo Fernandez, employee and chauffeur of the
appellee, was driving the truck TPU-1400, when it overturned, throwing away Pio Duquillo, who suffered
injuries which later caused his death.

2. In holding that the appellants action is based on articles 1902 and 1903 of the Civil Code and not on
articles 1101 et seq. of said Code in relation of the two first mentioned articles; and

It is clear, upon a reading of the record of the case, that the facts proven beyond doubt, because
conclusively established by the evidence adduced at the trial, briefly the following: Pio Duquillo, father of
the appellant, and provincial treasurer of Masbate had to go to the municipality of Milagros with a big
cargo. On April 17, 1937, he went to the house of Leopoldo Fernandez, chauhuer of one of the two trucks
of Paz Bayot engaged in the transportation business, to ask to drive in one of said trucks to the
municipality above-mentioned. Leopoldo Fernandez refused to do so, firstly, because it was Easter
Sunday, a holy day, and Father Ayson, in charge of the appellees trucks, did not permit him, and,
secondly, because it was not he but Eusebio Quiro who had charge of the truck chosen by Pio Duquillo
for its greater size and capacity. Pio Duquillo insisted on being driven to the municipality of Milagros in the
truck under the charge of Euseblo Quiro, and, as an inducement, offered Leopoldo Fernandez P1 and
promised to talk to Father Ayson so that he would not be scolded. While Father Ayson, then, was saying
mass, the no of them, Pio Duquillo and Leopoldo Fernandez, left for Milagros in Eusebio Quiros truck,
driven by Fernandez. On the way, and at a short distance from the starting place, Fernandez saw his
friend James McGurk, who was a complete stranger to the appellees business, and invited him to have a
pleasure ride with them to the municipality of Milagros. McGurk accepted the invitation and, on reaching
Milagros, they found that there was a party going on. At the invitation of many friends Leopoldo
Fernandez drank tuba an intoxicating beverage. In the afternoon of said day, Fernandez had a terrible
headache, so he told Pio Duquillo that he would not be able to drive the truck as he was not feeling well.
Fio Duquillo asked him to try his best al d Fernandez did so, but after driving two kilometers, he again
said that he was not feeling well and could not continue driving because his headache was getting worse.
Then, Pio Duquillo told him to hand the steering wheel over to James McGurk, who was also in the truck,
as McBurk knew how to drive, having driven other cars before. Shortly after McGurk started driving, the
truck overturned with the result already mentioned.

Under the facts established the defendant cannot be held liable for anything. At the time of the accident,
James McGurk was driving the truck, and he was not an employee of the defendant, nor did he have
anything to do with the latters business; neither the defendant nor Father Ayson, who was in charge of
her business, consented to have any of her trucks driven on the day of the accident, as it was a holy day,
and much less by a chauffeur who was not in charge of driving it; the use of the defendants truck in the
circumstances indicated was done without her consent or knowledge; it may, therefore, be said, that there
was not the remotest contractual relation between the deceased Pio Duquillo and the defendant. It
necessarily follows from all this that articles 1101 and following of the Civil Code, cited by the appellant,
have no application in this case, and, therefore, the errors attributed to the inferior court are without
basis.

Abelardo Lim v. CA

FACTS: On November 28, 1956, Gelacio Tumambing contracted the services of Mauro B. Ganzon to
haul 305 tons of scrap iron from Mariveles, Bataan, to the port of Manila on board the lighter LCT
"Batman. Pursuant to that agreement, Mauro B. Ganzon sent his lighter "Batman" to Mariveles where it
docked in three feet of water. Gelacio Tumambing delivered the scrap iron to defendant Filomeno Niza,
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. When about half of the scrap iron was already loaded, Mayor Jose
Advincula of Mariveles, Bataan, arrived and demanded P5,000.00 from Gelacio Tumambing. The latter
resisted the shakedown and after a heated argument between them, Mayor Jose Advincula drew his gun
and fired at Gelacio Tumambing who sustained injuries.
After sometime, the loading of the scrap iron was resumed. But on December 4, 1956, Acting Mayor
Basilio Rub, accompanied by three policemen, ordered captain Filomeno Niza and his crew to dump the
scrap iron where the lighter was docked. The rest was brought to the compound of NASSCO. Later on
Acting Mayor Rub issued a receipt stating that the Municipality of Mariveles had taken custody of the
scrap iron.
Tumabing sued Ganzon; the latter alleged that the goods have not been unconditionally placed under his
custody and control to make him liable. The trial court dismissed the case but on appeal, respondent
Court rendered a decision reversing the decision of the trial court and ordering Ganzon to pay damages.
ISSUE: Whether or not a contract of carriage has been perfected.
HELD: Yes.
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 the carrier for transportation, the contract of carriage was
deemed perfected. Consequently, the petitionercarrier's extraordinary responsibility for the loss,
destruction or deterioration of the goods commenced. Pursuant to Art. 1736, such extraordinary
responsibility would cease only upon the delivery, actual or constructive, by the carrier to the consignee,
or to the person who has a right to receive them. The fact that part of the shipment had not been loaded
on board the lighter did not impair the said contract of transportation as the goods remained in the
custody and control of the carrier, albeit still unloaded.
Before Ganzon could be absolved from responsibility on the ground that 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 disputed order, or that it was lawful, or that it was issued under legal process of authority. The
appellee failed to establish this. 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 iron belonged to the Municipality
of Mariveles. What we have in the record is the stipulation of the parties that the cargo of scrap iron was
accumulated by the appellant through separate purchases here and there from private individuals. 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 Advincula to shakedown Tumambing for P5,000.00. The order of the
acting mayor did not constitute valid authority for Ganzon and his representatives to carry out.