A.Y.

2018-2019
CASE TITLE: Philippine American General Insurance Co. v PKS Shipping

G.R. NO/DATE: GR No. 149038 April 9, 2003

Common carriers; Art. 1732 of NCC-- 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; Article 1732 also carefully avoids making
any distinction between a person or enterprise offering transportation service on a regular or
DOCTRINE: 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. We think that Article
1732 deliberately refrained from making such distinctions.

FACTS:

Davao Union Marketing Corporation (DUMC) contracted the services of PKS Shipping Company (PKS
Shipping) for the shipment to Tacloban City of 75,000 bags of cement worth P3,375,000. DUMC insured
the goods for its full value with Philippine American General Insurance Company (Philamgen).

The goods were loaded aboard the dumb barge Limar I belonging to PKS Shipping. On December 22,
1988 9 pm: While Limar I was being towed by PKS’ 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.

DUMC filed a formal claim with Philamgen for the full amount of the insurance. Philamgen promptly
made payment; it then sought reimbursement from PKS Shipping of the sum paid to DUMC but the
shipping company refused to pay so Philamgen to file suit against PKS Shipping

RTC: dismissed the complaint - fortuitous event

CA:Affirmed - not a common carrier but a casual occupation

ISSUE:

W/N PKS Shipping is NOT liable since it was NOT a common carrier

HELD:

NO. Petition is DENIED

Article 1732. 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. Complementary is Section 13, paragraph (b), of the Public Service Act

public service" to be –
"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, 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, or steamship line, pontines,
ferries and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine

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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 communication
systems, wire or wireless broadcasting stations and other similar public services

So understood, the concept of `common carrier’ under Article 1732 may be seen to coincide neatly with
the notion of `public service,’ under the Public Service Act
distinction between:
common or public carrier
private or special carrier - character of the business, such that if the undertaking is an isolated
transaction , not a part of the business or occupation, and the carrier does not hold itself out to
carry the goods for the general public or to a limited clientele, although involving the carriage of
goods for a fee
EX: charter party which includes both the vessel and its crew, such as in a bareboat or
demise, where the charterer obtains the use and service of all or some part of a ship for a
period of time or a voyage or voyages and gets the control of the vessel and its crew.

The regularity of its activities in this area indicates more than just a casual activity on its part. The
appellate court ruled, gathered from the testimonies and sworn marine protests of the respective vessel
masters ofLimar 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 6 to 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 findings of fact of the Court of Appeals generally conclude this Court; none of the recognized
exceptions from the rule - (1) when the factual findings of the Court of Appeals and the trial court are
contradictory; (2) when the conclusion is a finding grounded entirely on speculation, surmises, or
conjectures; (3) when the inference made by the Court of Appeals from its findings of fact is manifestly
mistaken, absurd, or impossible; (4) when there is a grave abuse of discretion in the appreciation of facts;
(5) when the appellate court, in making its findings, went beyond the issues of the case and such findings
are contrary to the admissions of both appellant and appellee; (6) when the judgment of the Court of
Appeals is premised on a misapprehension of facts; (7) when the Court of Appeals failed to notice certain
relevant facts which, if properly considered, would justify a different conclusion; (8) when the findings of
fact are themselves conflicting; (9) when the findings of fact are conclusions without citation of the
specific evidence on which they are based; and (10) when the findings of fact of the Court of Appeals are
premised on the absence of evidence but such findings are contradicted by the evidence on record –
would appear to be clearly extant in this instance.