1
UNSWORTH TRANSPORT INTERNATIONAL V.
CA
Facts: On August 31, 1992, the shipper Sylvex
Purchasing Corporation delivered to UTI a
shipment of 27 drums of various raw materials for
pharmaceutical manufacturing, consisting of: 1) 3
drums (of) extracts, flavoring liquid, flammable
liquid x x x banana flavoring; 2) 2 drums (of)
flammable liquids x x x turpentine oil; 2 pallets.
STC: 40 bags dried yeast; and 3) 20 drums (of)
Vitabs: Vitamin B Complex Extract.[4] UTI issued
Bill of Lading No. C320/C15991-2,[5] covering the
aforesaid shipment. The subject shipment was
insured with private respondent Pioneer Insurance
and Surety Corporation in favor of Unilab against all
risks in the amount of P1,779,664.77 under and by
virtue of Marine Risk Note Number MC RM UL
0627 92[6] and Open Cargo Policy No. HO-022-
RIU.[7]
On the same day that the bill of lading was issued,
the shipment was loaded in a sealed 1x40
container van, with no. APLU-982012, boarded on
APLs vessel M/V Pres. Jackson, Voyage 42, and
transshipped to APLs M/V Pres. Taft[8] for delivery
to petitioner in favor of the consignee United
Laboratories, Inc. (Unilab).
On September 30, 1992, the shipment arrived at
the port of Manila. On October 6, 1992, petitioner
received the said shipment in its warehouse after it
stamped the Permit to Deliver Imported
Goods[9] procured by the Champs Customs
Brokerage.[10] Three days thereafter, or on
October 9, 1992, Oceanica Cargo Marine
Surveyors Corporation (OCMSC) conducted a
stripping survey of the shipment located in
petitioners warehouse.
On October 15, 1992, the arrastre Jardine Davies
Transport Services, Inc. (Jardine) issued Gate Pass
No. 7614[12] which stated that 22 drums[13] Raw
Materials for Pharmaceutical Mfg. were loaded on a
truck with Plate No. PCK-434 facilitated by Champs
for delivery to Unilabs warehouse. The materials
were noted to be complete and in good order in the
gate pass.[14] On the same day, the shipment
arrived in Unilabs warehouse and was immediately
surveyed by an independent surveyor.
On October 23 and 28, 1992, the same
independent surveyor conducted final inspection
surveys which yielded the same results.
Consequently, Unilabs quality control
representative rejected one paper bag containing
dried yeast and one steel drum containing Vitamin
B Complex as unfit for the intended purpose.[16]
On November 7, 1992, Unilab filed a formal
claim[17] for the damage against private
respondent and UTI. On November 20, 1992, UTI
denied liability on the basis of the gate pass issued
by Jardine that the goods were in complete and
good condition; while private respondent paid the
claimed amount on March 23, 1993. By virtue of the
Loss and Subrogation Receipt[18] issued by Unilab
in favor of private respondent, the latter filed a
complaint for Damages against APL, UTI and
petitioner with the RTC of Makati.[19]The case was
docketed as Civil Case No. 93-3473 and was
raffled to Branch 134.
The RTC decided in favor of private respondent
and against APL, UTI and petitioner. On appeal, the
CA affirmed the RTC decision on April 29, 2004.
The CA rejected UTIs defense that it was merely a
forwarder, declaring instead that it was a common
carrier.
Issues: WON petitioner is a common carrier.
Ruling: Admittedly, petitioner is a freight forwarder.
The term freight forwarder" refers to a firm holding
itself out to the general public (other than as a
pipeline, rail, motor, or water carrier) to provide
transportation of property for compensation and, in
the ordinary course of its business, (1) to
assemble and consolidate, or to provide for
assembling and consolidating, shipments, and to
perform or provide for break-bulk and distribution
operations of the shipments; (2) to assume
responsibility for the transportation of goods from
the place of receipt to the place of destination; and
(3) to use for any part of the transportation a carrier
subject to the federal law pertaining to common
carriers.[23]
A freight forwarders liability is limited to damages
arising from its own negligence, including
negligence in choosing the carrier; however, where
the forwarder contracts to deliver goods to their
destination instead of merely arranging for their
transportation, it becomes liable as a common
carrier for loss or damage to goods. A freight
forwarder assumes the responsibility of a carrier,
which actually executes the transport, even though
the forwarder does not carry the merchandise itself.
[24]
It is undisputed that UTI issued a bill of lading in
favor of Unilab. Pursuant thereto, petitioner
undertook to transport, ship, and deliver the 27
drums of raw materials for pharmaceutical
manufacturing to the consignee.
A bill of lading is a written acknowledgement of the
receipt of goods and an agreement to transport and

to deliver them at a specified place to a person
named or on his or her order.[25] It operates both
as a receipt and as a contract. It is a receipt for the
goods shipped and a contract to transport and
deliver the same as therein stipulated. As a receipt,
it recites the date and place of shipment, describes
the goods as to quantity, weight, dimensions,
identification marks, condition, quality, and value.
As a contract, it names the contracting parties,
which include the consignee; fixes the route,
destination, and freight rate or charges; and
stipulates the rights and obligations assumed by
the parties.[26]
Undoubtedly, UTI is liable as a common carrier.
Common carriers, as a general rule, are presumed
to have been at fault or negligent if the goods they
transported deteriorated or got lost or destroyed.
That is, unless they prove that they exercised
extraordinary diligence in transporting the goods. In
order to avoid responsibility for any loss or damage,
therefore, they have the burden of proving that they
observed such diligence.[27] 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 facie case of fault or negligence
against the carrier. If no adequate explanation is
given as to how the deterioration, loss, or
destruction of the goods happened, the transporter
shall be held responsible.
SPS. PERENA V. SPS. ZARATE
Facts: The Pereñas were engaged in the business
of transporting students from their respective
residences in Parañaque City to Don Bosco in
Pasong Tamo, Makati City, and back. In their
business, the Pereñas used a KIA Ceres Van (van)
with Plate No. PYA 896, which had the capacity to
transport 14 students at a time, two of whom would
be seated in the front beside the driver, and the
others in the rear, with six students on either side.
They employed Clemente Alfaro (Alfaro) as driver
of the van.
In June 1996, the Zarates contracted the Pereñas
to transport Aaron to and from Don Bosco. On
August 22, 1996, as on previous school days, the
van picked Aaron up around 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
air-conditioning unit turned on and the stereo
playing loudly, ultimately carried all the 14 student
riders on their way to Don Bosco. Considering that
the students were due at Don Bosco by 7:15 a.m.,
and that they were already running late because of
the heavy vehicular traffic on the South
Superhighway, Alfaro took the van to an alternate
2
route at about 6:45 a.m. by traversing the narrow
path underneath the Magallanes Interchange that
was then commonly used by Makati-bound vehicles
as a short cut into Makati. At the time, the narrow
path was marked by piles of construction materials
and parked passenger jeepneys, and the railroad
crossing in the narrow path had no railroad warning
signs, or watchmen, or other responsible persons
manning the crossing. 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 in the
vicinity of the Magallanes Interchange travelling
northbound. As the train neared the railroad
crossing, Alfaro drove the van eastward across the
railroad tracks, closely tailing a large passenger
bus. His view of the oncoming train was blocked
because he overtook the passenger bus on its left
side. The train blew its horn to warn motorists of its
approach. When the train was about 50 meters
away from the passenger bus and the van, Alano
applied the ordinary brakes of the train. He applied
the emergency brakes only when he saw that a
collision was imminent. The passenger bus
successfully crossed the railroad tracks, but the van
driven by Alfaro did not. The train hit the rear end of
the van, and the impact threw nine of the 12
students in the rear, including Aaron, out of the van.
Aaron landed in the path of the train, which
dragged his body and severed his head,
instantaneously killing him. Alano fled the scene on
board the train, and did not wait for the police
investigator to arrive.
Devastated by the early and unexpected death of
Aaron, the Zarates commenced this action for
damages against Alfaro, the Pereñas, PNR and
Alano. The Pereñas and PNR filed their respective
answers, with cross-claims against each other, but
Alfaro could not be served with summons.
WHEREFORE, premises considered, judgment is
hereby rendered in favor of the plaintiff and against
the defendants.
Issues: WON the petitioners are common carrier.
Ruling: We find no adequate cause to differ from
the conclusions of the lower courts that the
Pereñas operated as a common carrier; and that
their standard of care was extraordinary diligence,
not the ordinary diligence of a good father of a
family.
Although in this jurisdiction the operator of a school
bus service has been usually regarded as a private

carrier,9primarily because he only caters to some
specific or privileged individuals, and his operation
is neither open to the indefinite public nor for public
use, the exact nature of the operation of a school
bus service has not been finally settled. This is the
occasion to lay the matter to rest.
A carrier is a person or corporation who undertakes
to transport or convey goods or persons from one
place to another, gratuitously or for hire. The carrier
is classified either as a private/special carrier or as
a common/public carrier.10 A private carrier is one
who, without making the activity a vocation, or
without 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, to transport goods or
persons from one place to another either
gratuitously or for hire.11The provisions on ordinary
contracts of the Civil Code govern the contract of
private carriage.The diligence required of a private
carrier is only ordinary, that is, the diligence of a
good father of the family. In contrast, a common
carrier is a person, corporation, firm or association
engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air,
for compensation, offering such services to the
public.12Contracts of common carriage are
governed by the provisions on common carriers of
the Civil Code, the Public Service Act,13 and other
special laws relating to transportation. A common
carrier is required to observe extraordinary
diligence, and is presumed to be at fault or to have
acted negligently in case of the loss of the effects of
passengers, or the death or injuries to
passengers.14
In relation to common carriers, the Court defined
public use in the following terms in United States v.
Tan Piaco,15viz:
"Public use" is the same as "use by the public". The
essential feature of the public use is not confined to
privileged individuals, but is open to the indefinite
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 the business to be done, but also to
the proposed mode of doing it. If the use is merely
optional with the owners, or the public benefit is
merely incidental, it is not a public use, authorizing
the exercise of the jurisdiction of the public utility
commission. There must be, in general, a right
which the law compels the owner to give to the
general public. It is not enough that the general
prosperity of the public is promoted. Public use is
not synonymous with public interest. The true
criterion by which to judge the character of the use
3
is whether the public may enjoy it by right or only by
permission.
In De Guzman v. Court of Appeals,16 the Court
noted that Article 1732 of the Civil Code avoided
any distinction between a person or an enterprise
offering transportation on a regular or an isolated
basis; and has not distinguished a carrier offering
his services to the general public, that is, the
general community or population, from one offering
his services only to a narrow segment of the
general population.
Nonetheless, the concept of a common carrier
embodied in Article 1732 of the Civil Code
coincides neatly with the notion of public service
under the Public Service Act, which supplements
the law on common carriers found in the Civil Code.
Public service, according to Section 13, paragraph
(b) of the Public Service Act, includes:
x x x every person that now or hereafter may own,
operate, manage, or control in the Philippines, for
hire or compensation, with general or limited
clientèle, whether permanent or occasional, and
done for the general business purposes, any
common carrier, railroad, street railway, traction
railway, subway motor vehicle, either for freight or
passenger, or both, with or without fixed route and
whatever may be its classification, freight or carrier
service of any class, express service, steamboat, or
steamship line, pontines, ferries and water craft,
engaged in the transportation of passengers or
freight or both, shipyard, marine repair shop, ice-
refrigeration plant, canal, irrigation system, gas,
electric light, heat and power, water supply and
power petroleum, sewerage system, wire or
wireless communications systems, wire or wireless
broadcasting stations and other similar public
services. x x x.17
Given the breadth of the aforequoted
characterization of a common carrier, the Court has
considered as common carriers pipeline
operators,18 custom brokers and
warehousemen,19 and barge operators20 even if
they had limited clientèle.
As all the foregoing indicate, the true test for a
common carrier is not the quantity or extent of the
business actually transacted, or the number and
character of the conveyances used in the activity,
but whether the undertaking is a part of the activity
engaged in by the carrier that he has held out to the
general public as his business or occupation. If the
undertaking is a single transaction, not a part of the
general business or occupation engaged in, as
advertised and held out to the general public, the
individual or the entity rendering such service is a

private, not a common, carrier. The question must
be determined by the character of the business
actually carried on by the carrier, not by any secret
intention or mental reservation it may entertain or
assert when charged with the duties and
obligations that the law imposes.21
Applying these considerations to the case before
us, there is no question that the Pereñas as the
operators of a school bus service were: (a)
engaged in transporting passengers generally as a
business, not just as a casual occupation; (b)
undertaking to carry passengers over established
roads by the method by which the business was
conducted; and (c) transporting students for a fee.
Despite catering to a limited clientèle, the Pereñas
operated as a common carrier because they held
themselves out as a ready transportation
indiscriminately to the students of a particular
school living within or near where they operated the
service and for a fee.
MARINA PORT SERVICES INC. V. AMERICAN
HOME ASSURANCE CORP.
FACTS:
On September 21, 1989, Countercorp Trading
PTE., Ltd. shipped from Singapore to the
Philippines 10 container vans of soft wheat flour
with seals intact on board the vessel M/V Uni
Fortune. The shipment was insured against all risks
by AHAC and consigned to MSC Distributor (MSC).
Upon arrival at the Manila South Harbor on
September 25, 1989, the shipment was discharged
in good and complete order condition and with
safety seals in place to the custody of the arrastre
operator, MPSI. After unloading and prior to
hauling, agents of the Bureau of Customs officially
broke the seals, opened the container vans, and
examined the shipment for tax evaluation in the
presence of MSC's broker and checker. Thereafter,
the customs inspector closed the container vans
and refastened them with safety wire seals while
MSC's broker padlocked the same. MPSI then
placed the said container vans in a back-to-back
arrangement at the delivery area of the harbor's
container yard where they were watched over by
the security guards of MPSI and of the Philippine
Ports Authority.
On October 10, 1989, MSC's representative, AD's
Customs Services (ACS), took out five container
vans for delivery to MSC. At the compound's exit,
MPSI issued to ACS the corresponding gate
passes for the vans indicating its turnover of the
subject shipment to MSC. However, upon receipt of
the container vans at its warehouse, MSC
discovered substantial shortages in the number of
bags of flour delivered. Hence, it filed a formal
claim for loss with MPSI.
4
From October 12 to 14, 1989 and pursuant to the
gate passes issued by MPSI, ACS took out the
remaining five container vans from the container
yard and delivered them to MSC. Upon receipt,
MSC once more discovered substantial shortages.
Thus, MSC filed another claim with MPSI.
Per MSC, the total number of the missing bags of
flour was 1,650 with a value of £257,083.00.
MPSI denied both claims of MSC. As a result, MSC
sought insurance indemnity for the lost cargoes
from AHAC. AHAC paid MSC the value of the
missing bags of flour after finding the tetter's claim
in order. In turn, MSC issued a subrogation receipt
in favor of AHAC.
Thereafter, AHAC filed a Complaint for damages
against MPSI before the RTC.
RTC ruled in favor of MPSI saying that AHAC's
evidence failed to clearly show that the loss
happened while the subject shipment was still
under MPSI's responsibility.
Aggrieved, AHAC appealed to the CA. CA reversed
the ruling in RTC saying that in a claim for loss filed
by a consignee, the burden of proof to show due
compliance with the obligation to deliver the goods
to the appropriate party devolves upon the arrastre
operator. In this case, the CA found that MPSI
failed to discharge such burden and to rebut the
aforementioned presumption.
MPSI moved for reconsideration but the CA denied
the same. Hence, the present recourse.
ISSUE:
The core issue to be resolved in this case is
whether MPSI is liable for the loss of the bags of
flour.
HELD:
NO! MPSI is not liable for the loss.
The relationship between an arrastre operator and
a consignee is similar to that between a
warehouseman and a depositor, or to that between
a common carrier and the consignee and/or the
owner of the shipped goods. Thus, an arrastre
operator should adhere to the same degree of
diligence as that legally expected of a
warehouseman or a common carrieras set forth in
Section 3[b] of the Warehouse Receipts [Act] and
Article 1733 of the Civil Code. As custodian of the
shipment discharged from the vessel, the arrastre
operator must take good care of the same and turn
it over to the party entitled to its possession.
In case of claim for loss filed by a consignee or the
insurer as subrogee, it is the arrastre operator that
carries the burden of proving compliance with the
obligation to deliver the goods to the appropriate
party. It must show that the losses were not due to

its negligence or that of its employees. It must
establish that it observed the required diligence in
handling the shipment. Otherwise, it shall be
presumed that the loss was due to its fault. In the
same manner, an arrastre operator shall be liable
for damages if the seal and lock of the goods
deposited and delivered to it as closed and sealed,
be broken through its fault. Such fault on the part of
the arrastre operator is likewise presumed unless
there is proof to the contrary.
MPSI was able to prove delivery of the shipment to
MSC in good and complete condition and with locks
and seals intact. It is significant to note that MPSI,
in order to prove that it properly delivered the
subject shipment consigned to MSC, presented 10
gate passes. Each of these gate passes bore the
duly identified signature of MSC's representative
which serves, among others, as an
acknowledgement that:
Issuance of [the] Gate Pass constitutes delivery to
and receipt by consignee of the goods as described
above in good order and condition, unless an
accompanying B.O. certificate duly issued and
noted on the face of [the] Gate Pass appears.
The signature of the consignee's representative on
the gate pass is evidence of receipt of the shipment
in good order and condition. Also, that MPSI
delivered the subject shipment to MSC's
representative in good and complete condition and
with lock and seals intact is established by the
testimonies of MPSFs employees who were directly
involved in the processing of the subject shipment.
The testimonies of the aforementioned employees
of MPSI confirm that the container vans, together
with their padlocks and wirings, were in order at the
time the gate passes were issued up to the time the
said container vans were turned over to ACS.
Even in the light of Article 1981, no presumption of
fault on the part of MPSI arises since it was not
sufficiently shown that the container vans were re-
opened or that their locks and seals were broken
for the second time. Indeed, Article 1981 of the Civil
Code also mandates a presumption of fault on the
part of the arrastre operator as follows:
Article 1981. When the thing deposited is delivered
closed and sealed, the depositary must return it in
the same condition, and he shall be liable for
damages should the seal or lock be broken through
his fault.
Fault on the part of the depositary is presumed,
unless there is proof to the contrary.
As regards the value of the thing deposited, the
statement of the depositor shall be accepted, when
the forcible opening is imputable to the depositary,
should there be no proof to the contrary. However,
the courts may pass upon the credibility of the
depositor with respect to the value claimed by him.
5
When the seal or lock is broken, with or without the
depositary's fault, he shall keep the secret of the
deposit. However, no such presumption arises in
this case considering that it was not sufficiently
shown that the container vans were re-opened or
that their locks and seals were broken for the
second time. As may be recalled, the container
vans were opened by a customs official for
examination of the subject shipment and were
thereafter resealed with safety wires. While this fact
is not disputed by both parties, AHAC alleges that
the container vans were re-opened and this gave
way to the alleged pilferage. There being no other
competent evidence that the container vans were
reopened or that their locks and seals were broken
for the second time, MPSI cannot be held liable for
damages due to the alleged loss of the bags of
flour pursuant to Article 1981 of the Civil Code.
At any rate, the goods were shipped under
"Shipper's Load and Count" arrangement. Thus,
protection against pilferage of the subject shipment
was the consignees lookout.
At any rate, MPSI cannot just the same be held
liable for the missing bags of flour since the
consigned goods were shipped under "Shipper's
Load and Count" arrangement. "This means that
the shipper was solely responsible for the loading
of the container, while the carrier was oblivious to
the contents of the shipment. Protection against
pilferage of the shipment was the consignee's
lookout. The arrastre operator was, like any
ordinary depositary, duty-bound to take good care
of the goods received from the vessel and to turn
the same over to the party entitled to their
possession, subject to such qualifications as may
have validly been imposed in the contract between
the parties. The arrastre operator was not required
to verify the contents of the container received and
to compare them with those declared by the
shipper because, as earlier stated, the cargo was at
the shipper's load and count. The arrastre operator
was expected to deliver to the consignee only the
container received from the carrier.
Transportation Case Digest: Planters Products Inc
V. CA (1993)
G.R. No. 101503 September 15, 1993
Lessons Applicable: Charter Party (Transportation)
FACTS:
 June 16 1974: Mitsubishi International
Corporation (Mitsubishi) of New York, U.S.A.,
9,329.7069 M/T of Urea 46% fertilizer bought
by Planters Products, Inc. (PPI) on aboard the
cargo vessel M/V "Sun Plum" owned by private
Kyosei Kisen Kabushiki Kaisha (KKKK) from

Kenai, Alaska, U.S.A., to Poro Point, San
Fernando, La Union, Philippines, as evidenced
by Bill of Lading
 May 17 1974: a time charter-party on the
vessel M/V "Sun Plum" pursuant to the Uniform
General Charter was entered into between
Mitsubishi as shipper/charterer and KKKK as
shipowner, in Tokyo, Japan
 Before loading the fertilizer aboard the
vessel, 4 of her holds were all presumably
inspected by the charterer's representative and
found fit
 The hatches remained closed and tightly
sealed throughout the entire voyage
 July 3, 1974: PPI unloaded the cargo from
the holds into its steelbodied dump trucks which
were parked alongside the berth, using metal
scoops attached to the ship, pursuant to the
terms and conditions of the charter-partly
 hatches remained open throughout
the duration of the discharge
 Each time a dump truck was filled
up, its load of Urea was covered with tarpaulin
before it was transported to the consignee's
warehouse located some 50 meters from the
wharf
 Midway to the warehouse, the trucks
were made to pass through a weighing scale
where they were individually weighed for the
purpose of ascertaining the net weight of the
cargo.
 The port area was windy, certain
portions of the route to the warehouse were
sandy and the weather was variable, raining
occasionally while the discharge was in
progress.
 Tarpaulins and GI sheets were
placed in-between and alongside the trucks to
contain spillages of the ferilizer
 It took 11 days for PPI to unload the
cargo
 Cargo Superintendents Company Inc.
(CSCI), private marine and cargo surveyor, was
hired by PPI to determine the "outturn" of the
cargo shipped, by taking draft readings of the
vessel prior to and after discharge
 shortage in the cargo of 106.726
M/T and that a portion of the Urea fertilizer
approximating 18 M/T was contaminated with
dirt
6
 Certificate of Shortage/Damaged
Cargo prepared by PPI
 short of 94.839 M/T and about 23
M/T were rendered unfit for commerce, having
been polluted with sand, rust and dirt
 PPI sent a claim letter 1974 to Soriamont
Steamship Agencies (SSA), the resident agent
of the carrier, KKKK, for P245,969.31
representing the cost of the alleged shortage in
the goods shipped and the diminution in value
of that portion said to have been contaminated
with dirt
 SSA: what they received was just a
request for shortlanded certificate and not a
formal claim, and that they "had nothing to do
with the discharge of the shipment
 RTC: failure to destroy the presumption of
negligence against them, SSA are liable
 CA: REVERSED - failed to prove the basis
of its cause of action
ISSUE: W/N a time charter between a shipowner
and a charterer transforms a common carrier into a
private one as to negate the civil law presumption
of negligence in case of loss or damage to its cargo
HELD: NO. petition is DISMISSED
 When PPI 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. Hardly then
can we charge the charterer, a stranger to the
crew and to the ship, with the duty of caring for
his cargo when the charterer did not have any
control of the means in doing so
 carrier has sufficiently overcome, by clear
and convincing proof, the prima
facie presumption of negligence. The hatches
remained close and tightly sealed while the ship
was in transit as the weight of the steel covers
made it impossible for a person to open without
the use of the ship's boom.
 bulk shipment of highly soluble goods like
fertilizer carries with it the risk of loss or
damage. More so, with a variable weather
condition prevalent during its unloading
 This is a risk the shipper or the
owner of the goods has to face. Clearly, KKKK
has sufficiently proved the inherent character of
 7

the goods which makes it highly vulnerable to  a. contract of affreightment – involves the use of
shipping space on vessels leased by the owner in
deterioration; as well as the inadequacy of its part or as a whole, to carry goods for others; may
packaging which further contributed to the loss. either be: i) time charter - vessel is leased to the
 On the other hand, no proof was charterer for a fixed period of time; or ii) voyage
charter - ship is leased for a single voyage
adduced by the petitioner showing that the
 b. charter by demise or bareboat charter –
carrier was remise in the exercise of due whole vessel is let to the charterer with a transfer
diligence in order to minimize the loss or to him of its entire command and possession and
consequent control over its navigation, including
damage to the goods it carried.
the master and the crew, who are his servants
Planters Products, Inc. v. CA, Soriamont
 In both types, the charter-party provides for the
Steamship Agencies and Kyosei Kisen
hire of vessel only, either for a determinate period
Kabushiki Kaisha
of time or for a single or consecutive voyage, the
G.R. No. 101503 September 15, 1993
shipowner to supply the ship’s stores, pay for the
Bellossillo, J.
wages of the master and the crew, and defray the
expenses for the maintenance of the ship.
FACTS:
 common or public carrier – see Art. 1732;
 Planters Products - purchased from Mitsubishi
extends to carriers either by land, air or water
Inter’l Corp. 9.3K metric tons of Urea (fertilizer),
which hold themselves out as ready to engage in
46% of which the latter shipped in bulk aboard
carrying goods or transporting passengers or
the cargo vessel M/V “Sun Plum” owned by
both for compensation as a public employment
Kyosei Kisen Kabushiki Kaisha (KKKK)
and not as a casual occupation
 time charter-party on the vessel M/V “Sun Plum”
 distinction between a “common or public carrier”
pursuant to the Uniform General Charter was
and a “private or special carrier” lies in the
entered into between Mitsubishi as
character of the business, such that if the
shipper/charterer and KKKK as shipowner
undertaking is a single transaction, not a part of
 before loading the fertilizer aboard the vessel
the general business or occupation, although
they were inspected by the charterer’s
involving the carriage of goods for a fee, the
representative and found fit
person or corporation offering such service is a
 After the Urea fertilizer was loaded in bulk by
private carrier
stevedores (somebody whose job is to load and
 common carrier - should observe extraordinary
unload ships) hired by and under the supervision
diligence in the vigilance over the goods they
of the shipper, the steel hatches were closed with
carry; in case of loss, destruction or deterioration
heavy iron lids, covered with 3 layers of tarpaulin,
of the goods, it is presumed to be at fault or to
then tied with steel bonds. The hatches remained
have acted negligently, and the burden of proving
closed and tightly sealed throughout the entire
otherwise rests on it
voyage.
 private carrier - exercise of ordinary diligence in
 port area was windy, certain portions of the route
the carriage of goods will suffice; no such
to the warehouse were sandy and the weather
presumption applies to private carriers
was variable, raining occasionally while the
 only when the charter includes both the vessel
discharge was in progress
and its crew, as in a bareboat or demise that a
 survey report revealed a shortage in the cargo of
common carrier becomes private, at least insofar
106.726 M/T and that a portion of the Urea
as the particular voyage covering the charter-
fertilizer approximating 18 M/T was contaminated
party is concerned
with sand, rust and dirt
 when Planters Products chartered the vessel M/V
 Planters Products sent a claim letter to Soriamont
“Sun Plum”, the ship captain, its officers and
Steamship Agencies, the resident agent of the
compliment were under the employ of the
carrier, for damages
shipowner and therefore continued to be under its
direct supervision and control. As stranger to the
ISSUES: 1. WON a common carrier becomes a
crew and to the ship, Planters Products did not
private carrier by reason of a charter-party; 2. in the
have the duty of caring for its cargo as it did not
negative, WON the shipowner was able to prove
have control of the means in doing so.
that he had exercised that degree of diligence
required of him under the law
HELD: 2. Yes.
 Before the fertilizer was loaded, the 4 hatches of
HELD: 1. Yes.
the vessel were cleaned, dried and fumigated.
 charter-party – contract by which an entire ship,
After completing the loading of the cargo in bulk
or some principal part thereof, is let by the owner
in the ship’s holds, the steel pontoon hatches
to another person for a specified time or use;
were closed and sealed with iron lids, then
contract of affreightment by which the owner of a
covered with 3 layers of serviceable tarpaulins
ship or other vessel lets the whole or a part of her
which were tied with steel bonds. The hatches
to a merchant or other person for the conveyance
remained close and tightly sealed while the ship
of goods, on a particular voyage, in consideration
was in transit as the weight of the steel covers
of the payment of freight
made it impossible for a person to open without
 2 types of charter-party:
the use of the ship’s boom.

 the hull of the vessel was in good condition,
foreclosing the possibility of spillage of the cargo
into the sea or seepage of water inside the hull of
the vessel
 stevedores unloaded the cargo under the
watchful eyes of the shipmates who were
overseeing the whole operation on rotation basis
 Urea also contains 46% nitrogen and is highly
soluble in water. However, during storage,
nitrogen and ammonia do not normally evaporate
even on a long voyage, provided that the
temperature inside the hull does not exceed 80
degrees centigrade.
 dissipation of quantities of fertilizer, or its
deterioration in value, is caused either by an
extremely high temperature in its place of
storage, or when it comes in contact with water
 probability of the cargo being damaged or getting
mixed or contaminated with foreign particles was
made greater by the fact that the fertilizer was
transported in “bulk,” thereby exposing it to the
inimical effects of the elements and the grimy
condition of the various pieces of equipment used
in transporting and hauling it  risk the shipper or
the owner of the goods has to face
 DEFINITIONS; ESSENTIAL ELEMENTS;
ART. 1732
 public." The essential feature of the public
 1. THE UNITED STATES, plaintiff-
appellee, vs. TAN PIACO, VENTURA
ESTUYA, PEDRO HOMERES, MAXIMINO
GALSA and EMILIO
LEOPANDO, defendants. TAN
PIACO, appellant.
 G.R. No. L-15122 March 10, 1920
 proposed mode of doing it. If the use is
 Facts:
 Piaco rented two automobile trucks and was
using them upon the highways of the
Province of Leyte for the purpose of
carrying some passengers and freight. He
carried passengers and freight under a
special contract in each case. He had not
held himself out to carry all passengers and
all freight for all persons who might offer
passengers and freight. Said defendants
were charged with a violation of the Public
Utility Law (Act No. 2307 as amended by
Acts Nos. 2362 and 2694), in that they were
operating a public utility without permission
from the Public Utility Commissioner.
 appellant was not operating a public utility,
 Issue:
 Whether the appellant was a public utility
under the foregoing definitions, and was
therefore subject to the control and
regulation of the Public Utility Commission.
 
 Held:
No. In support of the conclusion of the
Attorney-General, he cites the case of
Terminal Taxicab Co. vs. Kutz (241 U. S..
252).
 Urea 46% fertilizer which the latter shipped
 Section 14 of Act No. 2307, as amended by
section 9 of Act No. 2694, provides that:
8
"The Public Utility Commission or
Commissioners shall have general
supervision and regulation of, jurisdiction
and control over, all public utilities. . . . The
term 'public utility' is hereby defined to
include every individual, copartnership,
association, corporation or joint stock
company, etc., etc., that now or hereafter
may own, operate, managed, or control any
common carrier, railroad, street railway, etc.,
etc., engaged in the transportation of
passengers, cargo, etc., etc., for public
use."

 Under the provisions of said section, two
things are necessary: (a) The individual,
copartnership, etc., etc., must be a public
utility; and (b) the business in which such
individual, copartnership, etc. etc., is
engaged must be for public use. So long as
the individual or copartnership, etc., etc., is
engaged in a purely private enterprise,
without attempting to render service to all
who may apply, he can in no sense be
considered a public utility, for public use.

 "Public use" means the same as "use by the
use is that it is not confined to privilege
individuals, but is open to the indefinite
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 the character of the
business to be done, but also to the
merely optional with the owners, or the
public benefit is merely incidental, it is not a
public use, authorizing the exercise of the
jurisdiction of the public utility commission.
There must be, in general, a right which the
law compels the power to give to the
general public. It is not enough that the
general prosperity of the public is promoted.
Public use is not synonymous with public
interest. The true criterion by which to judge
of the character of the use is whether the
public may enjoy it by right or only by
permission.

 For all of the foregoing reasons, the
for public use, and was not, therefore,
subject to the jurisdiction of the Public Utility
Commission.


5. Planters Products Inc. vs CA

 Facts:
 Planters Products, Inc. (PPI) purchased
from Mitsubishi International Corporation
(Mitsubishi) 9, 329. 7069 metric tons of
in bulk aboard the cargo vessel M/V “Sun
Plum” owned by Kyosei Kisen Kabushiki

Kaisha (KKK) from Alaska, USA to San
Fernando, La Union, Philippines.
 shipped and the diminution in value of that
 Prior to its voyage, a time charter-party on
the vessel pursuant to the Uniform General
Charter was entered into between
Mitsubishi as shipper/charter and KKKK as
shipowner.
 Before landing the fertilizer aboard the
vessel, four of her holds were presumably
inspected by the charterer’s representative
and found fit to take a load of urea in bulk
pursuant to par. 16 of the charter-party.
 prove that the shortage of contamination
 After the Urea fertilizer was loaded in bulk
by the stevedores hired by and under the
supervision of the shipper, the steel hatches
were closed with heavy in lids, covered with
three layers of tarpaulin, then tied with steel
bonds. The hatches remained closed and
tightly sealed through the entire voyage.
 
 Upon the arrival of the vessel at her port of
call, the steel pontoon were opened with the
use of the vessel’s boom.
 Petitioner unloaded the cargo from the
holds into its steelbodied dump trucks which
were parked alongside the berth, using
metal scoops attached to the ship, pursuant
to the terms and conditions of the charter-
partly (which provided for an F.I.O.S.
clause). The hatches remained open
throughout the duration of the discharge.
Each time a dump truck was filled up, its
load of Urea was covered with tarpaulin
before it was transported to the consignee's
warehouse located some fifty (50) meters
from the wharf. Midway to the warehouse,
the trucks were made to pass through a
weighing scale where they were individually
weighed for the purpose of ascertaining the
net weight of the cargo. The port area was
windy, certain portions of the route to the
warehouse were sandy and the weather
was variable, raining occasionally while the
discharge was in progress. The petitioner's
warehouse was made of corrugated
galvanized iron (GI) sheets, with an opening
at the front where the dump trucks entered
and unloaded the fertilizer on the
warehouse floor. Tarpaulins and GI sheets
were placed in-between and alongside the
trucks to contain spillages of the fertilizer. It
actually took 11 days for PPI to unload the
cargo.
 of the ship, the manning of the decks, the
 According to the report of the private marine
and cargo surveyor (Cargo Superintendents
Company Inc. (CSCI) hired by PPI, there is
shortage in the cargo of 106. 726 M/T and
that a portion of the Urea fertilizer
approximating 18 M/T were rendered unfit
for commerce, having been polluted with
sand, rust and dirt. PPI then sent a claim
letter to Soriamont Steamship Agencies
(SSA), the resident agent of the carrier KKK
9
for 245, 969. 31 php representing the cost
of the alleged shortage in the goods
portion said to have been contaminated with
dirt. SSA did not respond to the claim for
payment because according to them, what
they received was just a request for
shortlanded certificate and not a formal
claim which was denied because “they had
nothing to do with the discharge of the
shipment”

 RTC: It was incumbent upon the SSA to
sustained by the cargo is attributable to the
fault or negligence on the part of the shipper
(PPI) in the loading, stowing, trimming and
discharge of the cargo. SSA failed to
destroy the presumption of negligence
against them, thus, they are liable.

CA: Reversed the ruling of the lower court.
It is an old and well settled rule that if the
plaintiff (PPI), upon whom rests the burden
of proving his cause of action, fails to show
in satisfactory manner the facts upon which
he bases his claim, the defendant (SSA) is
under no obligation to prove his defense.
PPI failed to prove the basis of its cause of
action

 ISSUE:
 Whether or not a time charter between a
shipowner and a charterer transforms a
common carrier into a private one as to
negate the civil law presumption of
negligence in case of loss or damage to its
cargo


 HELD:
 No, petition is dismissed.

 Points:
 • When the petitioner 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. Hardly then we can charge the
charterer, a stranger to the crew and to the
ship with the duty of caring his cargo wen
the charterer did not have any control of the
means in doing so. This is evident in the
present case considering that the steering
determination of the course of the voyage
and other technical incidents of maritime
navigation were all consigned to the officers
and crew who were screened, chosen and
hired by the shipowner. It is therefore
imperative that a public carrier remain as
such notwithstanding the charter of the
whole or portion of a vessel by one or more
persons, provided the charter is limited to

the ship only, as in the case of time charter
or voyage charter.
 • It has been proven that the
respondent carrier has sufficiently
overcome, by clear and convincing proof,
the prima facie presumption of negligence.
The hatches remained close and tightly
sealed while the ship was in transit as the
weight of the steel covers made it
impossible for a person to open without the
use of the ship’s boom.
 • The Supreme Court agreed with
respondent carrier that bulk shipment of
highly soluble goods like fertilizer carries
with it the risk of loss or damage. More so,
with a variable weather condition prevalent
during its unloading, as was the case at bar.
This is a risk the shipper or the owner of the
goods has to face. Clearly, respondent
carrier has sufficiently proved the inherent
character of the goods which makes it
highly vulnerable to deterioration; as well as
the inadequacy of its packaging which
further contributed to the loss. On the other
hand, no proof was adduced by the
petitioner showing that the carrier was
remise in the exercise of due diligence in
order to minimize the loss or damage to the
goods it carried.
 NATURE AND BASIS OF LIABILITY; ART.
1733
 
 11. Cangco v. MRR, 38 Phil. 767
 defendant is the contract of carriage, and
 Facts:
 Jose Cangco, was in the employment of
Manila Railroad Company in the capacity of
clerk
 entitled him to ride upon the company's
trains free of charge.
 plaintiff arose from his seat in the second
class-car where he was riding and, making,
his exit through the door, took his position
upon the steps of the coach, seizing the
upright guardrail with his right hand for
support.
 Emilio Zuñiga, also an employee of the
railroad company, got off the same car,
alighting safely at the point where the
platform begins to rise from the level of the
ground. When the train had proceeded a
little farther the plaintiff Jose Cangco
stepped off also, but one or 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, where his right arm was badly crushed
and lacerated. It appears that after the
plaintiff alighted from the train the car
moved forward possibly six meters before it
came to a full stop.
 control, and proof of exercise of the utmost
10
 The accident occurred between 7 and 8
o'clock on a dark night, and as the railroad
station was lighted dimly by a single light
located some distance away, objects on the
platform where the accident occurred were
difficult to discern especially to a person
emerging from a lighted car.

 He was therefore brought at once to a
certain hospital in the city of Manila where
an examination was made and his arm was
amputated. The result of this operation was
unsatisfactory, and the plaintiff was then
carried to another hospital where a second
operation was performed and the member
was again amputated higher up near the
shoulder. It appears in evidence that the
plaintiff expended the sum of P790.25 in the
form of medical and surgical fees and for
other expenses in connection with the
process of his curation.

 He instituted this proceeding in the Court of
First Instance of the city of Manila to recover
damages of the defendant company,
founding his action upon the negligence of
the servants and employees of the
defendant in placing the sacks of melons
upon the platform and leaving them so
placed as to be a menace to the security of
passenger alighting from the company's
trains
 The foundation of the legal liability of the
that the obligation to respond for the
damage which plaintiff has suffered arises,
if at all, from the breach of that contract by
reason of the failure of defendant to
exercise due care in its performance.

 To the effect that in case of extra-
contractual culpa based upon negligence, it
is necessary that there shall have been
some fault attributable to the defendant
personally, and that the last paragraph of
article 1903 merely establishes a rebuttable
presumption

 That the liability created by article 1903 is
imposed by reason of the breach of the
duties inherent in the special relations of
authority or superiority existing between the
person called upon to repair the damage
and the one who, by his act or omission,
was the cause of it.

 On the other hand, the liability of masters
and employers for the negligent acts or
omissions of their servants or agents, when
such acts or omissions cause damages
which amount to the breach of a contact, is
not based upon a mere presumption of the
master's negligence in their selection or
diligence and care in this regard does not

relieve the master of his liability for the
breach of his contract.
 The contract of defendant to transport
plaintiff carried with it, by implication, the
duty to carry him in safety and to provide
safe means of entering and leaving its trains
(civil code, article 1258). That duty, being
contractual, was direct and immediate, and
its non-performance could not be excused
by proof that the fault was morally imputable
to defendant's servants.
 The railroad company's defense involves
the assumption that even granting that the
negligent conduct of its servants in placing
an obstruction upon the platform was a
breach of its contractual obligation to
maintain safe means of approaching and
leaving its trains, the direct and proximate
cause of the injury suffered by plaintiff was
his own contributory negligence in failing to
wait until the train had come to a complete
stop before alighting.
 him to the contrary, that the platform was
 Under the doctrine of comparative
negligence announced in the Rakes case
(supra), if the accident was caused by
plaintiff's own negligence, no liability is
imposed upon defendant's negligence and
plaintiff's negligence merely contributed to
his injury, the damages should be
apportioned. It is, therefore, important to
ascertain if defendant was in fact guilty of
negligence.
 presence would be revealed.
 Issue:
 W/N the railroad company was negligent
and can be liable for damages
 the step which he was required to take or
 Held:
 Court: that the train was barely moving
when plaintiff alighted is shown conclusively
by the fact that it came to stop within six
meters from the place where he stepped
from it. Thousands of person alight from
trains under these conditions every day of
the year, and sustain no injury where the
company has kept its platform free from
dangerous obstructions. There is no reason
to believe that plaintiff would have suffered
any injury whatever in alighting as he did
had it not been for defendant's negligent
failure to perform its duty to provide a safe
alighting place.
 services, and other incidental expenditures
 The test by which to determine whether the
passenger has been guilty of negligence in
attempting to alight from a moving railway
train, is that of ordinary or reasonable care.
It is to be considered whether an ordinarily
prudent person, of the age, sex and
condition of the passenger, would have
acted as the passenger acted under the
circumstances disclosed by the evidence.
This care has been defined to be, not the
care which may or should be used by the
prudent man generally, but the care which a
11
man of ordinary prudence would use under
similar circumstances, to avoid injury.

 Was there anything in the circumstances
surrounding the plaintiff at the time he
alighted from the train which would have
admonished a person of average prudence
that to get off the train under the conditions
then existing was dangerous? If so, the
plaintiff should have desisted from alighting;
and his failure so to desist was contributory
negligence.1awph!l.net

 it should not be overlooked that the plaintiff
was, as we find, ignorant of the fact that the
obstruction which was caused by the sacks
of melons piled on the platform existed; and
as the defendant was bound by reason of its
duty as a public carrier to afford to its
passengers facilities for safe egress from its
trains, the plaintiff had a right to assume, in
the absence of some circumstance to warn
clear.

 The place, as we have already stated, was
dark, or dimly lighted, and this also is proof
of a failure upon the part of the defendant in
the performance of a duty owing by it to the
plaintiff; for if it were by any possibility
concede that it had right to pile these sacks
in the path of alighting passengers, the
placing of them adequately so that their

 There could, therefore, be no uncertainty in
his mind with regard either to the length of
the character of the platform where he was
alighting.

 Our conclusion is that the conduct of the
plaintiff in undertaking to alight while the
train was yet slightly under way was not
characterized by imprudence and that
therefore he was not guilty of contributory
negligence.

 a fair compensation for the damage suffered
by him for his permanent disability is the
sum of P2,500, and that he is also entitled
to recover of defendant the additional sum
of P790.25 for medical attention, hospital
connected with the treatment of his injuries.
EXTRAORDINARY DILIGENCE; PRESUMPTION
OF FAULT OR NEGLIGENCE REBUTTABLE
REPUBLIC OF THE PHIL., represented by the
DEPARTMENT OF HEALTH, NATIONAL
TRUCKING AND FORWARDING CORPORATION
(NTFC) and COOPERATIVE FOR AMERICAN
RELIEF EVERYWHERE, INC. (CARE) VS.
LORENZO SHIPPING CORPORATION (LSC)
 12

G.R. No. 153563. February 7, 2005 designated subordinates to sign the delivery
receipts upon completion of each delivery.
Facts: The Philippine government entered into a
contract of carriage of goods with petitioner NTFC
whereby the latter shipped bags of non-fat dried
milk through respondent LSC. The consignee
named in the bills of lading issued by the
respondent was Abdurahma Jama, petitioner’s
branch supervisor in Zamboanga City.
On reaching the port of Zamboanga City, the
respondent’s agent unloaded the goods and
delivered the same to petitioner’s warehouse.
Before each delivery, the delivery checkers of
respondent’s agent requested Jama to surrender
the original bills of lading, but the latter merely
presented certified true copies thereof. Upon
completion of each delivery, the delivery checkers
asked Jama to sign the delivery receipts. However,
at times when Jama had to attend to other business
before a delivery was completed, he instructed his
subordinates to sign the delivery receipts for him.
Notwithstanding the precautions taken, petitioner
NTFC allegedly did not receive the good and filed a
formal claim for non-delivery of the goods shipped
through respondent. Respondent explained that the
cargo had already been delivered to Jama. The
government through the DOH, CARE and NTFC as
plaintiffs filed an action for breach of contract of
carriage against respondent as defendant.
Issue: Whether or not respondent is presumed at
fault or negligent as common carrier for the loss or
deterioration of the goods.
Held: Article 1733 of the Civil Code demands that a
common carrier observe extraordinary diligence
over the goods transported by it. Extraordinary
diligence is that extreme measure of care and
caution which persons of unusual prudence and
circumspection use for securing and preserving
their own property or rights. This exacting standard
imposed on common carriers in a contract of
carriage of goods is intended to tilt the scales in
favor of the shipper who is at the mercy of the
common carrier once the goods have been lodged
for shipment. Hence, in case of loss of goods in
transit, the common carrier is presumed under the
law to have been at fault or negligent. However, the
presumption of fault or negligence may be
overturned by competent evidence showing that the
common carrier has observed extraordinary
diligence over the goods.
The respondent has observed such extraordinary
diligence in the delivery of the goods. Prior to
releasing the goods to Jama, the delivery checkers
required the surrender of the original bills of lading,
and in their absence, the certified true copies
showing that Jama was indeed the consignee of
the goods. In addition, they required Jama or his