De Guzman v.

CA
Facts:

Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings those
that he gathered to Manila for resale using 2 six-wheeler trucks. On the return trip to
Pangasinan, respondent would load his vehicle with cargo which various merchants
wanted delivered, charging fee lower than the commercial rates. Sometime in November
1970, petitioner Pedro de Guzman contracted with respondent for the delivery of 750
cartons of Liberty Milk. On December 1, 1970, respondent loaded the cargo. Only 150
boxes were delivered to petitioner because the truck carrying the boxes was hijacked along
the way. Petitioner commenced an action claiming the value of the lost merchandise.
Petitioner argues that respondent, being a common carrier, is bound to exercise
extraordinary diligence, which it failed to do. Private respondent denied that he was a
common carrier, and so he could not be held liable for force majeure. The trial court ruled
against the respondent, but such was reversed by the Court of Appeals.

Issues:

(1) Whether or not private respondent is a common carrier

(2) Whether private respondent is liable for the loss of the goods

Held:

(1) Article 1732 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 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. It appears to the Court that private respondent
is properly characterized as a common carrier even though he merely "back-hauled"
goods for other merchants from Manila to Pangasinan, although such backhauling 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. A
certificate of public convenience is not a requisite for the incurring of liability under the
Civil Code provisions governing common carriers.

(2) 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:
a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;

b. Act of the public enemy in war, whether international or civil;

c. Act or omission of the shipper or owner of the goods;

d. The character of the goods or defects in the packing or in the containers; and

e. Order or act of competent public authority."

The hijacking of the carrier's truck - does not fall within any of the five (5) categories of
exempting causes listed in Article 1734. Private respondent as common carrier is
presumed to have been at fault or to have acted negligently. This presumption, however,
may be overthrown by proof of extraordinary diligence on the part of private respondent.
We believe and so hold that 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." we hold that
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. It is necessary to recall that
even common carriers are not made absolute insurers against all risks of travel and of
transport of goods, and are not held liable for acts or events which cannot be foreseen or
are inevitable, provided that they shall have complied with the rigorous standard of
extraordinary diligence.

Fabre vs. Court of Appeals

259 SCRA 426
G.R. No. 111127
July 26, 1996

Facts: Petitioners Engracio Fabre, Jr. and his wife were owners of a Mazda minibus. They used the
bus principally in connection with a bus service for school children which they operated in Manila. It
was driven by Porfirio Cabil.

On November 2, 1984 private respondent Word for the World Christian Fellowship Inc. (WWCF)
arranged with the petitioners for the transportation of 33 members of its Young Adults Ministry from
Manila to La Union and back in consideration of which private respondent paid petitioners the amount
of P3,000.00.

The usual route to Caba, La Union was through Carmen, Pangasinan. However, the bridge at Carmen
was under repair, so that petitioner Cabil, who was unfamiliar with the area (it being his first trip to La
Union), was forced to take a detour through the town of Ba-ay in Lingayen, Pangasinan. At 11:30 that
night, petitioner Cabil came upon a sharp curve on the highway. The road was slippery because it was
raining, causing the bus, which was running at the speed of 50 kilometers per hour, to skid to the left
road shoulder. The bus hit the left traffic steel brace and sign along the road and rammed the fence of
one Jesus Escano, then turned over and landed on its left side, coming to a full stop only after a series
of impacts. The bus came to rest off the road. A coconut tree which it had hit fell on it and smashed
its front portion. Because of the mishap, several passengers were injured particularly Amyline Antonio.

Criminal complaint was filed against the driver and the spouses were also made jointly liable. Spouses
Fabre on the other hand contended that they are not liable since they are not a common carrier. The
RTC of Makati ruled in favor of the plaintiff and the defendants were ordered to pay jointly and severally
to the plaintiffs. The Court of Appeals affirmed the decision of the trial court.

Issue: Whether the spouses Fabre are common carriers?

Held: Petition was denied. Spouses Fabre are common carriers.

The Supreme Court held that this case actually involves a contract of carriage. Petitioners, the Fabres,
did not have to be engaged in the business of public transportation for the provisions of the Civil Code
on common carriers to apply to them. As this Court has held: 10 Art. 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.

The above article 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 (in local
idiom, as "a sideline"). Article 1732 also carefully avoids making any distinction between a person or
enterprise offering transportation service on a regular or scheduled basis and one offering such service
on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a
carrier offering its services to the "general public," i.e., the general community or population, and one
who offers services or solicits business only from a narrow segment of the general population. We
think that Article 1732 deliberately refrained from making such distinctions.

BASCOS vs. COURT OF APPEALS and RODOLFO A. CIPRIANO

G.R. No. 101089
April 7, 1993
FACTS: Rodolfo A. Cipriano representing Cipriano Trading Enterprise
(CIPTRADE for short) entered into a hauling contract with Jibfair Shipping
Agency Corp whereby the former bound itself to haul the latter’s 2,000
m/tons of soya bean meal to the warehouse in Calamba, Laguna. To carry out
its obligation, CIPTRADE, through Cipriano, subcontracted with Bascos to
transport and to deliver 400 sacks of soya bean meal from the Manila Port
Area to Calamba, Laguna. Petitioner failed to deliver the said cargo. As a
consequence of that failure, Cipriano paid Jibfair Shipping Agency the amount
of the lost goods in accordance with their contract.
Cipriano demanded reimbursement from petitioner but the latter refused to
pay. Eventually, Cipriano filed a complaint for a sum of money and damages
with writ of preliminary attachment for breach of a contract of carriage. The
trial court granted the writ of preliminary attachment.

In her answer, petitioner interposed the defense that there was no contract of
carriage since CIPTRADE leased her cargo truck to load the cargo from Manila
Port Area to Laguna and that the truck carrying the cargo was hijacked and
being a force majeure, exculpated petitioner from any liability
After trial, the trial court rendered a decision in favor of Cipriano and against
Bascos ordering the latter to pay the former for actual damages for attorney’s
fees and cost of suit.

The “Urgent Motion To Dissolve/Lift preliminary Attachment” Bascos is

DENIED for being moot and academic.

Petitioner appealed to the Court of Appeals but respondent Court affirmed the
trial court’s judgment.

Hence this petition for review on certiorari

ISSUE:
(1) WON petitioner a common carrier
(2) WON the hijacking referred to a force majeure

HELD: The petition is DISMISSED and the decision of the Court of Appeals is
hereby AFFIRMED.
1. YES

In disputing the conclusion of the trial and appellate courts that petitioner was
a common carrier, she alleged in this petition that the contract between her
and Cipriano was lease of the truck. She also stated that: she was not catering
to the general public. Thus, in her answer to the amended complaint, she said
that she does business under the same style of A.M. Bascos Trucking, offering
her trucks for lease to those who have cargo to move, not to the general public
but to a few customers only in view of the fact that it is only a small business.

We agree with the respondent Court in its finding that petitioner is a common
carrier.

Article 1732 of the Civil Code defines a common carrier as “(a) person,
corporation or 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 to determine a
common carrier is “whether the given undertaking is a part of the business
engaged in by the carrier which he has held out to the general public as his
occupation rather than the quantity or extent of the business transacted.” 12
In this case, petitioner herself has made the admission that she was in the
trucking business, offering her trucks to those with cargo to move. Judicial
admissions are conclusive and no evidence is required to prove the same. 13

But petitioner argues that there was only a contract of lease because they offer
their services only to a select group of people. Regarding the first contention,
the holding of the Court in De Guzman vs. Court of Appeals 14 is instructive.
In referring to Article 1732 of the Civil Code, it held thus:

“The above article 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 (in local idiom, as a “sideline”). Article
1732 also carefully avoids making any distinction between a person or
enterprise offering transportation service on a regular or scheduled basis and
one offering such service on an occasional, episodic or unscheduled basis.
Neither does Article 1732 distinguish between a carrier offering its services to
the “general public,” i.e., the general community or population, and one who
offers services or solicits business only from a narrow segment of the general
population. We think that Article 1732 deliberately refrained from making
such distinctions.”

2. NO

Likewise, We affirm the holding of the respondent court that the loss of the
goods was not due to force majeure.

Common carriers are obliged to observe extraordinary diligence in the

vigilance over the goods transported by them. Accordingly, they are presumed
to have been at fault or to have acted negligently if the goods are lost,
destroyed or deteriorated. There are very few instances when the presumption
of negligence does not attach and these instances are enumerated in Article
1734. 19 In those cases where the presumption is applied, the common carrier
must prove that it exercised extraordinary diligence in order to overcome the
presumption.

In this case, petitioner alleged that hijacking constituted force majeure which
exculpated her from liability for the loss of the cargo. In De Guzman vs. Court
of Appeals, the Court held that hijacking, not being included in the provisions
of Article 1734, must be dealt with under the provisions of Article 1735 and
thus, the common carrier is presumed to have been at fault or negligent. To
exculpate the carrier from liability arising from hijacking, he must prove that
the robbers or the hijackers acted with grave or irresistible threat, violence, or
force. This is in accordance with Article 1745 of the Civil Code which provides:

“Art. 1745. Any of the following or similar stipulations shall be considered

unreasonable, unjust and contrary to public policy; xx

(6) That the common carrier’s liability for acts committed by thieves, or of
robbers who do not act with grave or irresistible threat, violences or force, is
dispensed with or diminished;” xx

NOTES:
1. She cited as evidence certain affidavits which referred to the contract as
“lease”. These affidavits were made by Jesus Bascos and by petitioner herself
and Cipriano and CIPTRADE did not object to the presentation of affidavits by
petitioner where the transaction was referred to as a lease contract. Both the
trial and appellate courts have dismissed them as self-serving and petitioner
contests the conclusion. We are bound by the appellate court’s factual
conclusions. Yet, granting that the said evidence were not self-serving, the
same were not sufficient to prove that the contract was one of lease. It must be
understood that a contract is what the law defines it to be and not what it is
called by the contracting parties. Furthermore, petitioner presented no other
proof of the existence of the contract of lease. He who alleges a fact has the
burden of proving it.

2. Having affirmed the findings of the respondent Court on the substantial

issues involved, We find no reason to disturb the conclusion that the motion to
lift/dissolve the writ of preliminary attachment has been rendered moot and
academic by the decision on the merits.

Case of FGU INSURANCE CORPORATION vs. G.P.S TRUCKING CORPORATION and LAMBERT M. EROLES
G.R.No. 141910 06August2002

FACTS OF THE CASE:

G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994 thirty (30) units of
Condura S.D. white refrigerators aboard one of its Isuzu truck, driven by Lambert Eroles. While the
truck was traversing the north diversion road along McArthur highway in Barangay Anupol, Bamban,
Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage
to the cargoes.
FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the
value of the covered cargoes: P204, 450.00. FGU, in turn, being the subrogee of the rights and
interests of the insured sought reimbursement of the amount, from GPS. Since GPS failed to heed the
claim, FGU filed a complaint for damages and breach of contract of carriage against GPS and its driver
with the Regional Trial Court, Branch 66, of Makati City. In its answer, respondents asserted that GPS
was the exclusive hauler only of Concepcion Industries, Inc., since 1988, and it was not so engaged in
business as a common carrier. Respondents further claimed that the cause of damage was purely
accidental. GPS, instead of submitting its evidence, filed with leave of court a motion to dismiss the
complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it was
a common carrier. The RTC and CA both ruled in favor of the Respondent.

ISSUES OF THE CASE:

WHETHER RESPONDENT GPS, EITHER AS A COMMON CARRIER OR A PRIVATE CARRIER, MAY BE PRESUMED
TO HAVE BEEN NEGLIGENT WHEN THE GOODS IT UNDERTOOK TO TRANSPORT SAFELY WERE
SUBSEQUENTLY DAMAGED WHILE IN ITS PROTECTIVE CUSTODY AND POSSESSION.

- In culpa contractual, upon which the action of petitioner rests as being the subrogee of Concepcion
Industries, Inc., the mere proof of the existence of the contract and the failure of its compliance
justify, prima facie, a corresponding right of relief. Thus, FGU has a claim for the amount paid out.
- The law, recognizing the obligatory force of contracts, will not permit a party to be set free from
liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor
thereof
- GPS recognizes the existence of a contract of carriage between it and petitioner’s assured, and
admits that the cargoes it has assumed to deliver have been lost or damaged while in its custody. In
such a situation, a default on, or failure of compliance with, the obligation in this case, the delivery of
the goods in its custody to the place of destination - gives rise to a presumption of lack of care and
corresponding liability on the part of the contractual obligor the burden being on him to establish
otherwise. GPS has failed to do so.

HELD:
The decision of the lower courts insofar as Lambert M. Eroles is concerned is affirmed but assailed
decision with regard to GPS trucking is reversed. It, is hereby ordered to pay FGU Insurance
Corporation the value of the damaged and lost cargoes in the amount of P204, 450.00

Obligations and Contracts Terms:

• expectation interest- the interest in having the benefit of his bargain by being put in as good a
position as he would have been in had the contract been performed
• reliance interest- the interest in being reimbursed for loss caused by reliance on the contract by
being put in as good a position as he would have been in had the contract not been made
• Restitution interest- which is his interest in having restored to him any benefit that he has conferred
on the other party.
• Subrogee- the person or entity that assumes the legal right to attempt to collect a claim of another
(subrogor) in return for paying the other's expenses or debts which the other claims against a third
party. A subrogee is usually the insurance company which has insured the party whose expenses were
paid.