11. NATIONAL STEEL CORPORATION v.

COURT OF APPEALS
G.R. No. 112287 December 12, 1997

Facts:

On July 17, 1974, plaintiff National Steel Corporation (NSC) as Charterer and defendant Vlasons
Shipping, Inc. (VSI) as Owner, entered into a Contract of Voyage Charter Hire whereby NSC hired
VSI’s vessel, the MV Vlasons I to make one voyage to load steel products at Iligan City and
discharge them at North Harbor, Manila. The handling, loading and unloading of the cargoes
were the responsibility of the Charterer.

In accordance with said Contract, the MV "VLASONS I" loaded at plaintiffs pier at Iligan City, the
NSC's shipment of 1,677 skids of tinplates and 92 packages of hot rolled sheets or a total of 1,769
packages with a total weight of about 2,481.19 metric tons for carriage to Manila.

The vessel arrived with the cargo at Pier 12, North Harbor, Manila, on August 12, 1974. The following
day, August 13, 1974, when the vessel's three (3) hatches containing the shipment were opened
by plaintiff's agents, nearly all the skids of tinplates and hot rolled sheets were allegedly found to
be wet and rusty. The cargo was discharged and unloaded by stevedores hired by the Charterer.

NSC called for a survey of the shipment by the Manila Adjusters and Surveyors Company (MASCO)
which was of opinion that "rusting of the tinplates was caused by contact with SEA WATER sustained
while still on board the vessel as a consequence of the heavy weather and rough seas
encountered while en route to destination

Plaintiff filed with the defendant its claim for damages suffered due to the downgrading of the
damaged tinplates in the amount of P941,145.18 but defendant VSI refused and failed to pay.

Plaintiff claimed that it sustained losses amounting to P941,145.18 as a result of the act, neglect
and default of the master and crew in the management of the vessel as well as the want of due
diligence on the part of the defendant to make the vessel seaworthy and to make the holds and
all other parts of the vessel in which the cargo was carried, fit and safe for its reception, carriage
and preservation — all in violation of defendant's undertaking under their Contract of Voyage
Charter Hire.

Defendant denied liability for the alleged damage claiming that the MV "VLASONS I" was
seaworthy in all respects for the carriage of plaintiff's cargo; that said vessel was not a "common
carrier" inasmuch as she was under voyage charter contract with the plaintiff as charterer under
the charter party; that in the course of the voyage from Iligan City to Manila, the MV "VLASONS I"
encountered very rough seas, strong winds and adverse weather condition, causing strong winds
and big waves to continuously pound against the vessel and seawater to overflow on its deck
and hatch covers, that under the Contract of Voyage Charter Hire, defendant shall not be
responsible for losses/damages except on proven willful negligence of the officers of the vessel,
that the officers of said MV "VLASONS I" exercised due diligence and proper seamanship and were
not willfully negligent.

Issues:
1. WON VSI is a common carrier; and
2. Which law shall govern over the carrier’s liability and obligation?
3. Is VSI liable for damages?
Whether or not the provisions of the Civil Code on common carriers pursuant to which there exists
a presumption of negligence against the common carrier in case of loss or damage to the cargo
are applicable to a private carrier.

Held:

1. VSI is a private carrier.

Article 1732 of the Civil Code defines a common carrier as "persons, corporations, firms or
associations engaged in the business of carrying or transporting passengers or goods or both, by
land, water, or air, for compensation, offering their services to the public." It has been held that
the true test of a common carrier is the carriage of passengers or goods, provided it has space,
for all who opt to avail themselves of its transportation service for a fee. 11 11 A carrier which does
not qualify under the above test is deemed a private carrier. "Generally, private carriage is
undertaken by special agreement and the carrier does not hold himself out to carry goods for the
general public. The most typical, although not the only form of private carriage, is the charter
party, a maritime contract by which the charterer, a party other than the shipowner, obtains the
use and service of all or some part of a ship for a period of time or a voyage or voyages." 12

In the instant case, it is undisputed that VSI did not offer its services to the general public. As found
by the Regional Trial Court, it carried passengers or goods only for those it chose under a "special
contract of charter party." 13 As correctly concluded by the Court of Appeals, the MV Vlasons
I "was not a common but a private carrier."14Consequently, the contract is the between the
parties.

2. The Code of Commerce governs.

Because the MV Vlasons I was a private carrier, the shipowner's obligations are governed by the
foregoing provisions of the Code of Commerce and not by the Civil Code

In an action against a private carrier for loss of, or injury to, cargo, the burden is on the plaintiff to
prove that the carrier was negligent or unseaworthy, and the fact that the goods were lost or
damaged while in the carrier's custody does not put the burden of proof on the carrier.

Since . . . a private carrier is not an insurer but undertakes only to exercise due care in the
protection of the goods committed to its care, the burden of proving negligence or a breach of
that duty rests on plaintiff and proof of loss of, or damage to, cargo while in the carrier's possession
does not cast on it the burden of proving proper care and diligence on its part or that the loss
occurred from an excepted cause in the contract or bill of lading.

3. VSI cannot be held liable for damages.

The records reveal that VSI exercised due diligence to make the ship seaworthy and fit for the
carriage of NSC's cargo of steel and tinplates. This is shown by the fact that it was drylocked and
inspected by the Philippine Coast Guard before it proceeded to Iligan City for its voyage to Manila
under the contract of voyage charter hire.24The vessel's voyage from Iligan to Manila was the
vessel's first voyage after drydocking. The Philippine Coast Guard Station in Cebu cleared it
as seaworthy, fitted and equipped; it met all requirements for trading as cargo vessel.25 The Court
of Appeals itself sustained the conclusion of the trial court that MV Vlasons I was seaworthy.
That due diligence was exercised by the officers and the crew of the MV Vlasons I was further
demonstrated by the fact that, despite encountering rough weather twice, the new tarpaulin did
not give way and the ship's hatches and cargo holds remained waterproof.

NSC had the burden of proving that the damage to the cargo was caused by the negligence of
the officers and the crew of MV Vlasons I in making their vessel seaworthy and fit for the carriage
of tinplates. On the contrary, the records reveal that it was the stevedores of NSC who were
negligent in unloading the cargo from the ship.

The stevedores employed only a tent-like material to cover the hatches when strong rains
occasioned by a passing typhoon disrupted the unloading of the cargo.

12. FIRST PHILIPPINE INDUSTRIAL CORP. VS. CA, Batangas City

GR 124948 December 29, 1998

Facts:

Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in January
1995, petitioner applied for mayor’s permit in Batangas City. However, the Treasurer required
petitioner to pay a local tax based on gross receipts amounting to P956,076.04. In order not to
hamper its operations, petitioner paid the taxes for the first quarter of 1993 amounting to
P239,019.01 under protest. On January 20, 1994, petitioner filed a letter-protest to the City
Treasurer, claiming that it is exempt from local tax since it is engaged in transportation business as
the authority of cities to impose and collect a tax on the gross receipts of "contractors
and independent contractors" under Sec. 141 (e) and 151 does not include the authority
to collect such taxes on transportation contractors.

The respondent City Treasurer denied the protest contending that petitioner cannot be
considered engaged in transportation business, thus it cannot claim exemption under
Section 133 (j) of the Local Government Code. Respondents argued that petitioner
cannot be exempt from taxes under Section 133 (j) of the Local Government Code as
said exemption applies only to "transportation contractors and persons engaged in the
transportation by hire and common carriers by air, land and water." Respondents assert
that pipelines are not included in the term "common carrier" which refers solely to
ordinary carriers such as trucks, trains, ships and the like. Respondents further posit that
the term "common carrier" under the said code pertains to the mode or manner by which
a product is delivered to its destination.8

The trial court dismissed the complaint, and such was affirmed by the Court of Appeals. Hence
this petition.

Issue:

Is the petitioner a common/transportation carrier and therefore exempt from business tax?

Decision:

Yes, the petitioner is a common/transportation carrier and thus exempt from business tax.
A "common carrier" may be defined, broadly, as one who holds himself out to the public as
engaged in the business of transporting persons or property from place to place, for
compensation, offering his services to the public generally.

Art. 1732 of the Civil Code defines a "common carrier" as "any 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 their services to the public."

The test for determining whether a party is a common carrier of goods is:

1. He must be engaged in the business of carrying goods for others as a public

employment, and must hold himself out as ready to engage in the transportation of
goods for person generally as a business and not as a casual occupation;
2. He must undertake to carry goods of the kind to which his business is confined;
3. He must undertake to carry by the method by which his business is conducted and
over his established roads; and
4. The transportation must be for hire.

Based on the above definitions and requirements, there is no doubt that petitioner is a common
carrier. It is engaged in the business of transporting or carrying goods, i.e. petroleum products, for
hire as a public employment. It undertakes to carry for all persons indifferently, that is, to all persons
who choose to employ its services, and transports the goods by land and for compensation. The
fact that petitioner has a limited clientele does not exclude it from the definition of a common
carrier.

Also, respondent's argument that the term "common carrier" as used in Section 133 (j) of the Local
Government Code refers only to common carriers transporting goods and passengers through
moving vehicles or vessels either by land, sea or water, is erroneous.

As correctly pointed out by petitioner, the definition of "common carriers" in the Civil Code makes
no distinction as to the means of transporting, as long as it is by land, water or air. It does not
provide that the transportation of the passengers or goods should be by motor vehicle. In fact, in
the United States, oil pipe line operators are considered common carriers. 17

Under the Petroleum Act of the Philippines (Republic Act 387), petitioner is considered a "common
carrier."

From the foregoing disquisition, there is no doubt that petitioner is a "common carrier" and,
therefore, exempt from the business tax as provided for in Section 133 (j), of the Local Government
Code.
13. Calvo v. UCPB General Insurance
G.R. No. 148496 March 19, 2002

Facts:

Petitioner Virgines Calvo, owner of Transorient Container Terminal Services, Inc. (TCTSI), and a
custom broker, entered into a contract with San Miguel Corporation (SMC) for the transfer of 114
reels of semi-chemical fluting paper and 124 reels of kraft liner board from the port area to the
Tabacalera Compound, Ermita, Manila. The cargo was insured by respondent UCPB General
Insurance Co., Inc.

On July 14, 1990, contained in 30 metal vans, said cargoes arrived in Manila on board “M/V
Hayakawa Maru”. After 24 hours, they were unloaded from vessel to the custody of the arrastre
operator, Manila Port Services, Inc. From July 23 to 25, 1990, petitioner, pursuant to her contract
with SMC, withdrew the cargo from the arrastre operator and delivered it to SMC’s warehouse in
Manila. On July 25, the goods were inspected by Marine Cargo Surveyors, reported that 15 reels
of the semi-chemical fluting paper were “wet/stained/torn” and 3 reels of kraft liner board were
also torn. The damages cost P93,112.00.

SMC collected the said amount from respondent UCPB under its insurance contract. Respondent
on the other hand, as a subrogee of SMC, brought a suit against petitioner in RTC, Makati City.
On December 20, 1995, the RTC rendered judgment finding petitioner liable for the damage to
the shipment. The decision was affirmed by the CA.

Private respondent contends that petitioner is liable as damages sustained by shipment is

attributable to improper handling in transit presumably whilst in the custody of the broker.
Petitioner claims that the spoilage or wettage took place while the goods were in the custody of
either the carrying vessel M/V Hayakawa Maru, which transported the cargo to Manila, or the
arrastre operator, to whom the goods were unloaded and who allegedly kept them in open air for
nine days. She further contends that contrary to the findings of the trial court and the Court of
Appeals, she is not a common carrier but a private carrier because, as a customs broker and
warehouseman, she does not indiscriminately hold her services out to the public but only offers
the same to select parties with whom she may contract in the conduct of her business. Thus, she
cannot be held liable for damages.

Issues:

1. Whether or not Calvo is a common carrier?

2. Whether or not Calvo is liable for damages?

Decision:

1. Calvo is a common carrier. The contention of the petitioner, that she is not a common
carrier but a private carrier, has no merit.

Article 1732 provides “Common carriers are persons, corporations, firms or associations
engaged in the business of carrying or transporting passengers or goods or both, by land,
water, or air for compensation, offering their services to the public.”

It makes no distinction between one whose principal business activity is the carrying of
persons or goods or both, and one who does such carrying only as ancillary activity. 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. (De Guzman v. CA, 68 SCRA 612)

The concept of “common carrier” under Article 1732 coincides with the notion of “public
service”, under the Public Service Act which partially supplements the law on common
carrier. Under Section 13, paragraph (b) of the Public Service Act, it 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 clientele, whether
permanent, occasional or accidental, and done for 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, wharf or dock, ice plant, 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”

Thus, petitioner is a common carrier because the transportation of goods is an integral part
of her business.

2. Calvo is liable for damages.

Art. 1733 of the Civil Code provides: Common carriers, from the nature of their business and
for reasons of public policy, are bound to observe extraordinary diligence in the vigilance
over the goods and for the safety of the passengers transported by them, according to all the
circumstances of each case. . .

The extraordinary diligence in the vigilance over the goods tendered for shipment requires
the common carrier to know and to follow the required precaution for avoiding damage to, or
destruction of the goods entrusted to it for sale, carriage and delivery. It requires common
carriers to render service with the greatest skill and foresight and to use all reasonable means
to ascertain the nature and characteristic of goods tendered for shipment, and to exercise due
care in the handling and stowage, including such methods as their nature requires.

From the [Survey Report], it [is] clear that the shipment was discharged from the vessel to the
arrastre, Marina Port Services Inc., in good order and condition as evidenced by clean
Equipment Interchange Reports (EIRs). Had there been any damage to the shipment, there
would have been a report to that effect made by the arrastre operator.

Anent petitioner’s insistence that the cargo could not have been damaged while in her custody
as she immediately delivered the containers to SMCs compound, suffice it to say that to prove
the exercise of extraordinary diligence, petitioner must do more than merely show the
possibility that some other party could be responsible for the damage. It must prove
that it used all reasonable means to ascertain the nature and characteristic of goods
tendered for [transport] and that [it] exercise[d] due care in the handling [thereof].

Art. 1734(4), which provides “Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the following causes only: … (4)
The character of the goods or defects in the packing or in the containers…

For the provision to apply, the Rule is that if the improper packing or, in this case, the defect/s
in the container, is/are known to the carrier or his employees or apparent upon ordinary
observation, but he nevertheless accepts the same without protest or exception
notwithstanding such condition, he is not relieved of liability for damage
resulting therefrom.[14] In this case, petitioner accepted the cargo without exception despite
the apparent defects in some of the container vans. Hence, for failure of petitioner to prove
that she exercised extraordinary diligence in the carriage of goods in this case or that she is
exempt from liability, the presumption of negligence as provided under Art. 1735[15] holds.
14. SCHMITZ TRANSPORT & BROKERAGE CORPORATION, petitioner, vs. TRANSPORT VENTURE, INC.,
INDUSTRIAL INSURANCE COMPANY, LTD., and BLACK SEA SHIPPING AND DODWELL now INCHCAPE
SHIPPING SERVICES, respondents.
GR 150255 April 22, 2005

FACTS:

On September 25, 1991, SYTCO Pte Ltd. Singapore shipped from the port of Ilyichevsk, Russia on
board M/V Alexander Saveliev 545 hot rolled steel sheets in favor of the consignee, Little Giant
Steel Pipe Corporation (Little Giant). Said cargoes were insured against all risks with Industrial
Insurance Company Ltd. (Industrial Insurance).

The vessel arrived at the port of Manila on October 24, 1991 and was assigned to a place of berth
at the outside breakwater at the Manila South Harbor.[6]

Schmitz Transport, whose services, Little Giant engaged to secure the requisite clearances, to
receive the cargoes from the shipside, and to deliver them to its (the consignees) warehouse at
Cainta, Rizal, engaged the services of TVI to send a barge and tugboat at shipside.

TVI’s tugboat Lailani towed the barge Erika V to shipside and left after positioning the barge
alongside the vessel carrying the cargo. The arrastre operator Ocean Terminal Services Inc.
commenced to unload 37 of the 545 coils from the vessel unto the barge.

By 12:30 a.m. of October 27, 1991 during which the weather condition had become inclement
due to an approaching storm, the unloading unto the barge of the 37 coils was accomplished.
No tugboat pulled the barge back to the pier, however. At around 5:30 a.m. of October 27, 1991,
due to strong waves. The crew of the barge abandoned it and transferred to the vessel. The barge
pitched and rolled with the waves and eventually capsized, washing the 37 coils into the sea. [12]

Industrial Insurance paid the amount of P5,246,113.11 to the consignee and thereafter filed a
complaint against Schmitz Transport, TVI, and Black Sea through its representative Inchcape (the
defendants) before the RTC of Manila, for the recovery of the amount it paid plus adjustment fees,
attorneys fees, and litigation expenses. Industrial Insurance faulted the defendants for undertaking
the unloading of the cargoes while typhoon signal No. 1 was raised in Metro Manila.[17]

By Decision, RTC held all the defendants negligent for unloading the cargoes outside of the
breakwater notwithstanding the storm signal. All the defendants appealed to the Court of Appeals
which, which affirmed in toto the decision of the trial court, finding that all the defendants were
common carriers, Black Sea and TVI for engaging in the transport of goods and cargoes over the
seas as a regular business and not as an isolated transaction, and Schmitz Transport for entering
into a contract with Little Giant to transport the cargoes from ship to port for a fee.

Schmitz Transport filed the present petition against TVI, Industrial Insurance and Black Sea.
Petitioner asserts that in chartering the barge and tugboat of TVI, it was acting for its principal,
consignee Little Giant, hence, the transportation contract was by and between Little Giant and
TVI and being an agent of the Consignee, any negligence it committed was deemed the
negligence of its principal.

Black Sea argued that the cargoes were received by the consignee through petitioner in good
order, hence, it cannot be faulted, it having had no control and supervision thereover.
TVI maintained that it acted as a passive party as it merely received the cargoes and transferred
them unto the barge upon the instruction of petitioner.

ISSUES:
(1) WON the petitioner is a common carrier;
(2) Whether the loss of the cargoes was due to a fortuitous event, independent of any act of
negligence on the part of petitioner Black Sea and TVI? And
(3) If there was negligence, whether liability for the loss may attach to Black Sea, petitioner
and TVI.
HELD:

(1) The petitioner is a common carrier. For it undertook to transport the cargoes from the
shipside of M/V Alexander Saveliev to the consignees warehouse at Cainta, Rizal. As the
appellate court put it, as long as a person or corporation holds [itself] to the public for the
purpose of transporting goods as [a] business, [it] is already considered a common carrier
regardless if [it] owns the vehicle to be used or has to hire one. It is settled that under a
given set of facts, a customs broker may be regarded as a common carrier.

(2) The loss of the cargoes was NOT CONSIDERED an act of God.

When a fortuitous event occurs, Article 1174 of the Civil Code absolves any party from any
and all liability arising therefrom:

ART. 1174. Except in cases expressly specified by the law, or when it is otherwise declared
by stipulation, or when the nature of the obligation requires the assumption of risk, no
person shall be responsible for those events which could not be foreseen, or which though
foreseen, were inevitable.

To be considered a fortuitous event, however, (1) the cause of the unforeseen and unexpected
occurrence, or the failure of the debtor to comply with his obligation, must be independent of
human will; (2) it must be impossible to foresee the event which constitute the caso fortuito, or if it
can be foreseen it must be impossible to avoid; (3) the occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in any manner; and (4) the obligor must be free
from any participation in the aggravation of the injury resulting to the creditor.

The principle embodied in the act of God doctrine strictly requires that the act must be
occasioned solely by the violence of nature. Human intervention is to be excluded from creating
or entering into the cause of the mischief. When the effect is found to be in part the result of the
participation of man, whether due to his active intervention or neglect or failure to act, the whole
occurrence is then humanized and removed from the rules applicable to the acts of God.

That no tugboat towed back the barge to the pier after the cargoes were completely loaded by
12:30 in the morning[39] is, however, the proximate cause of the loss of the cargoes. Had the barge
been towed back promptly to the pier, the deteriorating sea conditions notwithstanding, the loss
could have been avoided. But the barge was left floating in open sea until big waves set in at
5:30 a.m., causing it to sink along with the cargoes. The loss thus falls outside the act of God
doctrine.

2. The petitioner and TVI are solidarily liable while no liability attaches to Black Sea.

The petitioner being a common carrier, for it to be relieved of liability, it should, following Article
1739 of the Civil Code, prove that it exercised due diligence to prevent or minimize the loss, before,
during and after the occurrence of the storm in order that it may be exempted from liability for
the loss of the goods. While petitioner sent checkers and a supervisor on board the vessel to
counter-check the operations of TVI, it failed to take all available and reasonable precautions to
avoid the loss. After noting that TVI failed to arrange for the prompt towage of the barge despite
the deteriorating sea conditions, it should have summoned the same or another tugboat to extend
help, but it did not.

In the case of TVI, while it acted as a private carrier for which it was under no duty to observe
extraordinary diligence, it was still required to observe ordinary diligence to ensure the proper and
careful handling, care and discharge of the carried goods. If the law or contract does not state
the diligence which is to be observed in the performance, that which is expected of a good father
of a family shall be required.

TVIs failure to promptly provide a tugboat did not only increase the risk that might have been
reasonably anticipated during the shipside operation, but was the proximate cause of the loss. A
man of ordinary prudence would not leave a heavily loaded barge floating for a considerable
number of hours, at such a precarious time, and in the open sea, knowing that the barge does
not have any power of its own and is totally defenceless from the ravages of the sea. That it was
night time and, therefore, the members of the crew of a tugboat would be charging overtime
pay did not excuse TVI from calling for one such tugboat.

Thus, the Court holds that petitioner and TVI are solidarily liable for the loss of the cargoes.

As for Black Sea, its duty as a common carrier extended only from the time the goods were
surrendered or unconditionally placed in its possession and received for transportation until they
were delivered actually or constructively to consignee Little Giant. In the case at bar, Bill of Lading
No. 2 covering the shipment provides that delivery be made to the port of discharge or so near
thereto as she may safely get, always afloat. The delivery of the goods to the consignee was not
from pier to pier but from the shipside of M/V Alexander Saveliev and into barges. Since Black Sea
had constructively delivered the cargoes to Little Giant, through petitioner, it had discharged its
duty. In fine, no liability may thus attach to Black Sea.
15. PEDRO DE GUZMAN vs. COURT OF APPEALS and ERNESTO CENDANA
GR L-47822 December 12, 1988

FACTS:

On November 1970, Pedro de Guzman a merchant and authorized dealer of General Milk
Company Inc. in Urdaneta, Pangasinan, contracted with Ernesto Cendana for the hauling of 750
cartons of Liberty filled milk from a warehouse in Makati, Rizal, to Pedro’s establishment in Urdaneta
on or before 4 December 1970. On 1 December 1970, Ernesto loaded in Makati the merchandise
on to his trucks: 150 cartons were loaded on a truck driven by himself, 600 cartons were placed
on another truck driven by Manuel Estrada, his driver and employee.

Only 150 boxes of Liberty filled milk were delivered to Pedro, because the other truck where the
other 600 were placed was hijacked along the MacArthur Highway in Paniqui, Tarlac. Petitioner
demanded payment of P22,150 before the CFI of Pangasinan for the lost merchandise, plus
damages and attorney's fees against respondent. Petitioner argued that private respondent,
being a common carrier, and having failed to exercise the extraordinary diligence required of
him by the law, should be held liable for the value of the undelivered goods.

Private respondent denied that he was a common carrier and argued that he could not be held
responsible for the value of the lost goods, such loss having been due to force majeure.

The trial court rendered a Decision 1 finding private respondent to be a common carrier and
holding him liable for the value of the undelivered goods Arguing that respondent, being a
common carrier who failed to exercise extraordinary diligence should be held liable for the value
of the undelivered goods.

The Court of Appeals reversed the judgment of the trial court and held that respondent had been
engaged in transporting return loads of freight "as a casual occupation — a sideline to his scrap
iron business" and not as a common carrier and that the hijacking was force majeure. Hence, this
petition.

ISSUE:

(1) WON the respondent is a common carrier; and

(2) WON the respondent is liable for damages.

HELD:

(1) Yes, respondent is a common carrier.

Under Article 1732 of the Civil Code, Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting passengers or goods or both, by
land, water, or air for compensation, offering their services to the public.

It makes no distinction between one whose principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as an ancillary activity, 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, nor does it distinguish between a carrier
offering its services to the "general public," and one who offers services or solicits business only from
a narrow segment of the general population.

The private respondent is properly characterized as a common carrier even though he merely
"back-hauled" goods for other merchants from Manila to Pangasinan and such back-hauling was
done on a periodic or occasional rather than regular or scheduled manner, and even though
private respondent's principal occupation was not the carriage of goods for others. There is no
dispute that private respondent charged his customers a fee for hauling their goods; that fee
frequently fell below commercial freight rates is not relevant here.

Note: The CA held that the respondent is not a common carrier because it has no CPC but the
court ruled that a certificate of public convenience is not a requisite for the incurring of liability
under the Civil Code provisions governing common carriers. That liability arises the moment a
person or firm acts as a common carrier, without regard to whether or not such carrier has also
complied with the requirements of the applicable regulatory statute and implementing
regulations and has been granted a certificate of public convenience or other franchise. To
exempt private respondent from the liabilities of a common carrier because he has not secured
the necessary certificate of public convenience, would be offensive to sound public policy;

(2) The respondent is NOT LIABLE for damages.

Article 1734 establishes the general rule that common carriers are responsible for the loss,
destruction or deterioration of the goods which they carry, "unless the same is due to any of the
following causes only:

(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.

While hijacking does not fall within any of the 5 categories of exempting causes in Article 1734,
Article 1745 (6) provides that, a common carrier is held responsible, and will not be allowed to
divest or to diminish such responsibility, even for acts of strangers like thieves or robbers, EXCEPT
where such thieves or robbers in fact acted "with grave or irresistible threat, violence or force."

The limits of the duty of extraordinary diligence in the vigilance over the goods carried are
reached where the goods are lost as a result of a robbery which is attended by "grave or irresistible
threat, violence or force." In the instant case, the accused acted with grave, if not irresistible,
threat, violence or force. 3 of the 5 hold-uppers were armed with firearms. They not only took the
truck and its cargo but also kidnapped the driver and his helper, detaining them for several days.
The occurrence of the loss must reasonably be regarded as quite beyond the control of the
common carrier and properly regarded as a fortuitous event. Thus, respondent herein is not liable.
#44. FILCAR TRANSPORT SERVICES VS JOSE A. ESPINAS,
G.R. No. 174156 June 20, 2012

FACTS:

On November 22, 1998, at around 6:30 p.m., respondent Jose A. Espinas was driving his car along
Leon Guinto Street in Manila when he was suddenly hit by another car. After verifying with the
Land Transportation Office, Espinas learned that the owner of the other car with plate number
UCF-545 is Filcar. The car was assigned to its Corporate Secretary Atty. Candido Flor. At the time
of the incident happened, the car was driven by Timoteo Floresca, Atty. Flor’s personal driver.

On May 31, 2001, Espinas filed a complaint for damages against Filcar and Carmen Flor, President
& Gen Manager before the Metropolitan Trial Court, Makati City. Filcar argued that while it is
the registered owner of the car that hit and bumped Espinas car, the car was assigned to
its Corporate Secretary Atty. Candido Flor, the husband of Carmen Flor. Filcar further
stated that when the incident happened, the car was being driven by Atty. Flors personal
driver, Timoteo Floresca.

Atty. Flor. Filcar and Carmen Flor both said that they always exercised the due diligence
required of a good father of a family in leasing or assigning their vehicles to third parties.

The MeTC, in its decision dated January 20, 2004,[4] ruled in favor of Espinas, and ordered
Filcar and Carmen Flor, jointly and severally,
The Regional Trial Court (RTC) of Manila, Branch 20, in the exercise of its appellate
jurisdiction, affirmed the MeTC decision.
CA partly granted the petition in CA-G.R. SP No. 86603; it modified the RTC decision by
ruling that Carmen Flor, President and General Manager of Filcar, is not personally liable
to Espinas. The CA, however, affirmed the liability of Filcar to pay Espinas damages.
Hence, the petition.

ISSUE:

WON Filcar, as registered owner of the motor vehicle which figured in an accident, may be held
liable for the damages caused to Espinas.

HELD:

Filcar, as registered owner, is deemed the employer of the driver, Floresca, and is thus vicariously
liable under Article 2176 in relation with Article 2180 of the Civil Code

It is well settled that in case of motor vehicle mishaps, the registered owner of the motor
vehicle is considered as the employer of the tortfeasor-driver, and is made primarily liable
for the tort committed by the latter under Article 2176, in relation with Article 2180, of the
Civil Code.
In Equitable Leasing Corporation v. Suyom,[11] we ruled that in so far as third persons are
concerned, the registered owner of the motor vehicle is the employer of the negligent
driver, and the actual employer is considered merely as an agent of such owner.

The rationale for the rule that a registered owner is vicariously liable for damages caused
by the operation of his motor vehicle is explained by the principle behind motor vehicle
registration, which has been discussed by this Court in Erezo, and cited by the CA in its
decision:

The main aim of motor vehicle registration is to identify the owner so that if any accident
happens, or that any damage or injury is caused by the vehicle on the public highways,
responsibility therefor can be fixed on a definite individual, the registered owner.

Thus, whether there is an employer-employee relationship between the registered owner

and the driver is irrelevant in determining the liability of the registered owner who the law
holds primarily and directly responsible for any accident, injury or death caused by the
operation of the vehicle in the streets and highways.

#45. EQUITABLE LEASING CORPORATION, petitioner, vs. LUCITA SUYOM, MARISSA ENANO,
MYRNA TAMAYO and FELIX OLEDAN, respondents.

FACTS:

Facts:
On July 17, 1994, a Fuso Road Tractor driven by Raul Tutor rammed into the house cum store of
Myrna Tamayo located at Pier 18, Vitas, Tondo, Manila. Two were pinned to death under the
engine of the tractor (namely, respondent Myrna Tamayos son, Reniel Tamayo, and Respondent
Felix Oledans daughter, Felmarie Oledan) while three (3) were injured (namely, respondent
Oledan himself, Respondent Marissa Enano, and two sons of Respondent Lucita Suyom)
Tutor was charged with and later convicted of reckless imprudence resulting in multiple homicide
and multiple physical injuries in Metropolitan Trial Court of Manila, Branch 12.
Upon verification with the Land Transportation Office, respondents were furnished a copy of
Official Receipt No. 62204139 and Certificate of Registration No. 08262797, showing that the
registered owner of the tractor was Equitable Leasing Corporation/leased to Edwin Lim. On April
15, 1995, respondents filed against Raul Tutor, Ecatine Corporation (Ecatine) and Equitable
Leasing Corporation (Equitable) a complaint for damages.
The trial court, upon motion of plaintiffs counsel, issued an Order dropping Raul Tutor, Ecatine and
Edwin Lim from the Complaint, because they could not be located and served with summonses.
It ruled that
After trial on the merits, the RTC rendered its Decision ordering petitioner to pay actual and moral
damages and the same was affirmed by the CA.
In its appeal, petitioner contends that it should not be held liable for the damages sustained by
respondents and that arose from the negligence of the driver of the Fuso Road Tractor, which it
had already sold to Ecatine at the time of the accident. Not having employed Raul Tutor, the
driver of the vehicle, it could not have controlled or supervised him.[18]

Issue:
WON the petitioner can be held liable.

Decision:
The petitioner can be held liable for damages based on quasi-delict.
The petitioner is liable for the deaths and the injuries complained of, because it was the registered
owner of the tractor at the time of the accident on July 17, 1994. [38] The Court has consistently
ruled that, regardless of sales made of a motor vehicle, the registered owner is the lawful operator
insofar as the public and third persons are concerned; consequently, it is directly and primarily
responsible for the consequences of its operation.[39] In contemplation of law, the owner/operator
of record is the employer of the driver, the actual operator and employer being considered as
merely its agent.[40] The same principle applies even if the registered owner of any vehicle does
not use it for public service. Since Equitable remained the registered owner of the tractor, it could
not escape primary liability for the deaths and the injuries arising from the negligence of the driver.
It was stressed that the failure of Equitable and/or Ecatine to register the sale with the LTO should
not prejudice respondents, who have the legal right to rely on the legal principle that the
registered vehicle owner is liable for the damages caused by the negligence of the
driver. Petitioner cannot hide behind its allegation that Tutor was the employee of Ecatine.

Additional Notes

In negligence cases, the aggrieved party may sue the negligent party under (1) Article 100 [19] of
the Revised Penal Code, for civil liability ex delicto; or (2) under Article 2176[20] of the Civil Code,
for civil liability ex quasi delicto.

Under Article 2176 in relation to Article 2180[24] of the Civil Code, an action predicated on quasi
delict may be instituted against the employer for an employees act or omission. The liability for the
negligent conduct of the subordinate is direct and primary, but is subject to the defense of due
diligence in the selection and supervision of the employee.[25] The enforcement of the judgment
against the employer for an action based on Article 2176 does not require the employee to be
insolvent, since the liability of the former is solidary -- the latter being statutorily considered a joint
tortfeasor.[26]

In the instant case, respondents -- having failed to recover anything in the criminal case -- elected
to file a separate civil action for damages, based on quasi delict under Article 2176 of the Civil
Code