DUMLAO, CHEYENNE HOPE TRANSPO
COMPILED DIGESTS
Chapter 1 General Considerations
UNSWORTH TRANSPORTATION INTERNATIONAL
PHILIPPINES VS. 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." UTI issued Bill of
Lading No. C320/C15991-2, 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 and Open Cargo Policy No.
HO-022-RIU. 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 APL’s
vessel M/V "Pres. Jackson," Voyage 42, and
transshipped to APL’s M/V "Pres. Taft" 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
procured by the Champs Customs Brokerage. Three days
thereafter, or on October 9, 1992, Oceanica Cargo Marine
Surveyors Corporation (OCMSC) conducted a stripping
survey of the shipment located in petitioner’s warehouse.
Consequently, Unilab’s quality control representative
rejected one paper bag containing dried yeast and one
steel drum containing Vitamin B Complex as unfit for the
intended purpose. On November 7, 1992, Unilab filed a
formal claim 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 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.
ISSUE: Whether or not 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
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transportation a carrier subject to the federal law
pertaining to common carriers. A freight forwarder’s
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. 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. 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.
PHIL. AMERICAN GENERAL INSURANCE COMPANY
VS. PKS SHIPPING COMPANY
DOCTRINE: The provisions of Article 1733,
notwithstanding, common carriers are exempt from
liability for loss, destruction, or deterioration of the goods
due to any of the following causes:
(1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity;
(2) Act of the public enemy in war, whether
international or civil;
(3) Act or omission of the shipper or owner of the
goods;
(4) The character of the goods or defects in the
packing or in the containers; and
(5) Order or act of competent public authority.
PARTIES:
♠ Davao Union Marketing Corporation – Shipper
♠ PKS Shipping Company – Carrier
♠ Philippine American General Insurance
Company - Insurer
FACTS: Davao Union Marketing Corporation (DUMC)
contracted the services of respondent PKS Shipping
Company (PKS Shipping) for the shipment to Tacloban
City of 75,000 bags of cement. DUMC insured the goods
for its full value with petitioner Philippine American
General Insurance Company (Philamgen). The goods
were loaded aboard the dumb barge Limar I belonging to
PKS Shipping. On 22 December 1993, about 9 o’clock,
while Limar I was being towed by respondent’s tugboat,
MT Iron Eagle, the barge sank a couple of miles off the
coast of Dumagasa Point, in Zamboanga del Sur, bringing
down with it the entire cargo of 75,000 bags of cement.
DUMLAO, CHEYENNE HOPE
Philamgen made payment to DUMC upon filing a formal
claim; it then sought reimbursement from PKS Shipping
of the sum paid to DUMC but the shipping company
refused to pay. This prompted Philamgen to file suit
against PKS Shipping with the Makati RTC. RTC –
dismissed complaint after finding that the total loss of the
cargo could have been caused either by a fortuitous
event, in which case the ship owner was not liable, or
through the negligence of the captain and crew of the
vessel and that, under Article 587 of the Code of
Commerce adopting the “Limited Liability Rule,” the ship
owner could free itself of liability by abandoning, as it
apparently so did, the vessel with all her equipment and
earned freightage.
CA – affirmed in tot
- ruled that evidence to establish that PKS Shipping was
a common carrier at the time it undertook to transport the
bags of cement was wanting because the peculiar method
of the shipping company’s carrying goods for others was
not generally held out as a business but as a casual
occupation.
- concluded that PKS Shipping, not being a common
carrier, was not expected to observe the stringent
extraordinary diligence required of common carriers in the
care of goods.
- found that the loss of the goods was sufficiently
established as having been due to fortuitous event,
negating any liability on the part of PKS Shipping to the
shipper.
PETITIONER’S ARGUMENTS:
- The fact that respondent has a limited clientele does not
militate against respondent’s being a common carrier and
that the only way by which such carrier can be held
exempt for the loss of the cargo would be if the loss were
caused by natural disaster or calamity.
- Avers that typhoon “APIANG” has not entered the
Philippine area of responsibility and that, even if it did,
respondent would not be exempt from liability because its
employees, particularly the tugmaster, have failed to
exercise due diligence to prevent or minimize the loss.
RESPONDENT’S ARGUMENTS:
- Respondent urges that the petition should be denied
because what Philamgen seeks is not a review on points
or errors of law but a review of the undisputed factual
findings of the RTC and the appellate court. In any event,
the findings and conclusions of both courts find support
from the evidence and applicable jurisprudence.
ISSUES:
1. Whether PKS Shipping is a private carrier or a common
carrier.
2. Whether PKS Shipping has observed the proper
diligence (ordinary, if a private carrier, or extraordinary, if
a common carrier) required of it given the circumstances.
RULING:
1. PKS Shipping is a common carrier. The factual findings
indicate that PKS Shipping has engaged itself in the
business of carrying goods for others, although for a
TRANSPO SAN BEDA UNIVERSITY LAW
limited clientele, undertaking to carry such goods for a
fee. The regularity of its activities in this area indicates
more than just a casual activity on its part. Neither can the
concept of a common carrier change merely because
individual contracts are executed or entered into with
patrons of the carrier. Such restrictive interpretation would
make it easy for a common carrier to escape liability by
the simple expedient of entering into those distinct
agreements with clients.
2. Yes. Article 1733 of the Civil Code requires common
carriers to observe extraordinary diligence in the vigilance
over the goods they carry. In case of loss, destruction or
deterioration of goods, common carriers are presumed to
have been at fault or to have acted negligently, and the
burden of proving otherwise rests on them. The provisions
of Article 1733, notwithstanding, common carriers are
exempt from liability for loss, destruction, or deterioration
of the goods due to any of the following causes:
(1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity;
(2) Act of the public enemy in war, whether
international or civil;
(3) Act or omission of the shipper or owner of the
goods;
(4) The character of the goods or defects in the
packing or in the containers; and
(5) Order or act of competent public authority.
The appellate court ruled, gathered from the testimonies
and sworn marine protests of the respective vessel
masters of Limar I and MT Iron Eagle, that there was no
way by which the barge’s or the tugboat’s crew could have
prevented the sinking of Limar I. The vessel was suddenly
tossed by waves of extraordinary height of six (6) to eight
(8) feet and buffeted by strong winds of 1.5 knots resulting
in the entry of water into the barge’s hatches. The official
Certificate of Inspection of the barge issued by the
Philippine Coastguard and the Coastwise Load Line
Certificate would attest to the seaworthiness of Limar I
and should strengthen the factual findings of the appellate
court. The appellate court did not err in its judgment
absolving PKS Shipping from liability for the loss of the
DUMC cargo.
TRAVEL & TOURS ADVISERS, INC. V. ALBERTO
CRUZ, SR.
FACTS: Respondent Edgar Hernandez was driving an
Isuzu Passenger Jitney (jeepney) that he owns along
Angeles-Magalang Road, Barangay San Francisco,
Magalang, Pampanga, on January 9, 1998, around 7:50
p.m. Meanwhile, a Daewoo passenger bus (RCJ Bus
Lines) owned by petitioner Travel and Tours Advisers,
Inc. and driven by Edgar Calaycay travelled in the same
direction as that of respondent Edgar Hernandez vehicle.
Thereafter, the bus bumped the rear portion of the
jeepney causing it to ram into an acacia tree which
resulted in the death of Alberto Cruz, Jr. and the serious
physical injuries of Virginia Muñoz.
DUMLAO, CHEYENNE HOPE TRANSPO SAN BEDA UNIVERSITY LAW
Thus, respondents Edgar Hernandez, Virginia Muñoz and
Alberto Cruz, Sr., father of the deceased Alberto Cruz, Jr.,
filed a complaint for damages, docketed as Civil Case No.
9006 before the RTC claiming that the collision was due
to the reckless, negligent and imprudent manner by which
Edgar Calaycay was driving the bus, in complete
disregard to existing traffic laws, rules and regulations,
and praying that judgment be rendered ordering Edgar
Calaycay and petitioner Travel & Tours Advisers, Inc. to
pay them.

For its defense, the petitioner claimed that it exercised the

diligence of a good father of a family in the selection and
supervision of its employee Edgar Calaycay and further
argued that it was Edgar Hernandez who was driving his
passenger jeepney in a reckless and imprudent manner
by suddenly entering the lane of the petitioner's bus
without seeing to it that the road was clear for him to enter
said lane. In addition, petitioner alleged that at the time of
the incident, Edgar Hernandez violated his franchise by
travelling along an unauthorized line/route and that the
jeepney was overloaded with passengers, and the
deceased Alberto Cruz, Jr. was clinging at the back
thereof.

ISSUE: Whether the contributory negligence of the

jeepney driver will still make him entitled to damages?

RULING: Yes. But petitioner’s liability is mitigated.

At the time of the vehicular accident, the jeepney was in

violation of its allowed route as found by the RTC and the
CA, hence, the owner and driver of the jeepney likewise,
are guilty of negligence as defined under Article 2179 of
the Civil Code, which reads as follows: When the plaintiffs
negligence was the immediate and proximate cause of his
injury, he cannot recover damages. But if his negligence
was only contributory, the immediate and proximate
cause of the injury being the defendant's lack of due care,
the plaintiff may recover damages, but the courts shall
mitigate the damages to be awarded.

The petitioner and its driver, therefore, are not solely liable
for the damages caused to the victims. The petitioner
must thus be held liable only for the damages actually
caused by his negligence. It is, therefore, proper to
mitigate the liability of the petitioner and its driver. The
determination of the mitigation of the defendant's liability
varies depending on the circumstances of each case.

In the present case, it has been established that the

proximate cause of the death of Alberto Cruz, Jr. is the
negligence of petitioner's bus driver, with the contributory
negligence of respondent Edgar Hernandez, the driver
and owner of the jeepney, hence, the heirs of Alberto
Cruz, Jr. shall recover damages of only 50% of the award
from petitioner and its driver. Necessarily, 50% shall be
bourne by respondent Edgar Hernandez.