Transpo Case Digests C D

Philippine American General Insurance Company vs.
PKS Shipping Company

[G.R. No. 149038. April 9, 2003.]
Ponente: Vitug
SHIPPER: Davao Union Marketing Corp.

CARRIER: PKS Shipping thru Limar I and MT Iron Eagle
COSIGNEE: Davao Union Marketing Corp. (?!?)
INSURER: Philamgen
Facts:
Davao Union Marketing Corporation (DUMC) contracted the services of respondent PKS Shipping
Company (PKS Shipping) for the shipment to Tacloban City of seventy-five thousand (75,000)
bags of cement worth Three Million Three Hundred Seventy-Five Thousand Pesos
(P3,375,000.00). DUMC insured the goods for its full value with petitioner Philippine American
General Insurance Company (Philamgen).
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.
The appellate court 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.
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. Petitioner 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.
RTC: The RTC dismissed the 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,"
CA: Affirmed in toto the decision of the trial court. It then 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.
The appellate court 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.
Issue:
1. W/n PSK is a common carrier, 2. W/n Exercised proper diligence.
Ruling:
1. Yes. 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, 3 the person or
corporation providing such service could very well be just a private carrier.
Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

2. 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.
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.
HEIRS OF AMPARO DE LOS SANTOS et. Al Vs. CA and Compania Maritima

[G.R. No. 51165. June 21, 1990.]
Ponente: Medialdea
Carrier: M/V Mindoro.

Passenger: Petitioners.
Facts:
There is no dispute in the record that the M/V 'Mindoro' sailed from pier 8 North Harbor, Manila,
on November 2, 1967 at about 2:00 (should have been 6:00 p.m.) in the afternoon bound for
New Washington, Aklan, with many passengers aboard. It appears that said vessel met typhoon
'Welming' on the Sibuyan Sea, Aklan, at about 5:00 in the morning of November 4, 1967. Due to

the strong waves M/V Mindoro sank causing the drowning of many passengers among whom
were Amparo delos Santos, although about 136 survived.
Eliadora Crisostomo de Justo, one of the survivors, corroborated the testimony of Mauricio delos
Santos that he accompanied Amparo delos Santos and her children to the port to board the M/V
Mindoro. She is a cousin of Amparo delos Santos' husband. According to her, when she boarded
the second deck of the vessel, she saw about 200 persons therein. She tried to see whether she
could be accommodated in the third deck or first deck because the second deck was very
crowded. She admitted that she was not included in the manifest because she boarded the boat
without a ticket, but she purchased one in the vessel.
The plaintiffs further submitted in evidence a copy of a Radiogram stating among other things
that the M/V Mindoro was loaded also with 3,000 cases of beer, one dump truck and 292 various
goods.
It appears that in a decision of the Board of Marine Inquiry, it was found that the captain and some
officers of the crew were negligent in operating the vessel and imposed upon them a suspension
and/or revocation of their license certificates.
The defendant alleges that no negligence was ever established, and, in fact, the ship owners
and their officers took all the necessary precautions in operating the vessel. Furthermore, the loss
of lives as a result of the drowning of some passengers, including the relatives of the herein
plaintiffs, was due to force majeure because of the strong typhoon 'Welming.'
A certification of the shipyard named El Varadero de Manila stated among other things that the
M/V 'Mindoro' was dry-docked from August 25 to September 6, 1967 and was found to be in a
seaworthy condition, and that the said M/V 'Mindoro' was duly inspected by the Bureau of
Customs. Another certification was introduced stating among other things that the Bureau of
Customs gave a clearance to the M/V 'Mindoro' after inspection.
RTC: sustained the position of private respondent Compania Maritima. "WHEREFORE, the Court
finds that in view of lack of sufficient evidence, the case be, as it is hereby DISMISSED.
CA: Affirmed RTC decision. While it found that there was concurring negligence on the part of
the captain which must be imputable to Maritima, the Court of Appeals ruled that Maritima cannot
be held liable in damages based on the principle of limited liability of the shipowner or ship agent
under Article 587 of the Code of Commerce.
Issue: 1. Is the limited liability doctrine (because of right of abandonement) applicable to Maritima.
2. Is Maritima liable.
Ruling:
1. No. Under Art. 587 of Code of Commerce, a shipowner or agent has the right of
abandonment; and by necessary implication, his liability is confined to that which he is
entitled as of right to abandon — "the vessel with all her equipment's and the freight it may
have earned during the voyage"
The reason lies in the peculiar nature of maritime law is which is "exclusively real and
hypothecary that operates to limit such liability to the value of the vessel, or to the
insurance thereon, As correctly stated by the appellate court, "(t)his rule is found
necessary to offset against the innumerable hazards and perils of a sea voyage and to
encourage shipbuilding and marine commerce.

The limited liability doctrine applies not only to the goods but also in all cases like death
or injury to passengers wherein the shipowner or agent may properly be held liable for the
negligent or illicit acts of the captain.
It must be stressed at this point that Article 587 speaks only of situations where the
fault or negligence is committed solely by the captain. In cases where the
shipowner is likewise to be blamed, Article 587 does not apply.
Such a situation will be covered by the provisions of the New Civil Code on Common
Carriers. Owing to the nature of their business and for reasons of public policy, common
carriers are tasked to observe extraordinary diligence in the vigilance over the goods and
for the safety of its passengers (Article 1733, New Civil Code). evidence on record showing
the late departure of the ship at 6:00 p.m. (instead of the scheduled 2:00 p.m. departure)
on November 2, 1967. We find it highly improbable that the Weather Bureau had not yet
issued any typhoon bulletin at any time during the day to the shipping companies. Maritima
submitted no convincing evidence to show this omission.
While We agree with the appellate court that the captain was negligent for overloading the
ship, We, however, rule that Maritima shares equally in his negligence. We find that while
M/V Mindoro was already cleared by the Bureau of Customs and the Coast Guard for
departure at 2:00 p.m. the ship's departure was, however, delayed for four hours. Maritima
could not account for the delay because it neither checked from the captain the reasons
behind the delay nor sent its representative to inquire into the cause of such delay. another
ship, M/V Mangaren, an inter island vessel, sailed for New Washington, Aklan on
November 2, 1967, ahead of M/V Mindoro and took the same route as the latter but it
arrived safely

American Home Assurance Company vs. CA and National Marine Corporation
[G.R. No. 94149. May 5, 1992.]
Ponente: Paras
SHIPPER: Cheng Hwa Pulp Corporation

CARRIER: National Marine Corporation thru “SS Kanluran”
COSIGNEE: Mayleen Paper, INC.
INSURER: American Home Assurance Co.
Facts:
Cheng Hwa Pulp Corporation shipped 5,000 bales (1,000 ADMT) of bleached kraft pulp from
Haulien, Taiwan on board "SS Kaunlaran", which is owned and operated by herein respondent
National Marine Corporation. The said shipment was consigned to Mayleen Paper, Inc. of Manila,
which insured the shipment with herein petitioner American Home Assurance Co. as evidenced
by Bill of Lading.
Shipment arrived in Manila and was discharged into the custody of the Marina Port Services, Inc.,
for eventual delivery to the consignee assured. However, upon delivery of the shipment to
Mayleen Paper, Inc., it was found that 122 bales had either been damaged or lost. Mayleen Paper,
Inc. sought recovery from the former. Upon demand and submission of proper documentation,
American Home Assurance paid Mayleen Paper, Inc. the adjusted amount of P31,506.75 for the
damages/losses suffered by the shipment, hence, the former was subrogated to the rights and
interests of Mayleen Paper, Inc. National Marine Corporation, filed a motion to dismiss dated
August 7, 1989 stating that American Home Assurance Company had no cause of action based
on Article 848 of the Code of Commerce which provides "that claims for averages shall not be
admitted if they do not exceed 5% of the interest which the claimant may have in the vessel or in
the cargo if it be gross average and 1% of the goods damaged if particular average, deducting in
both cases the expenses of appraisal, unless there is an agreement to the contrary." On the other
hand, petitioner countered that Article 848 does not apply as it refers to averages and that a
particular average presupposes that the loss or damage is due to an inherent defect of the goods,
an accident of the sea, or a force majeure or the negligence of the crew of the carrier, while claims
for damages due to the negligence of the common carrier are governed by the Civil Code
provisions on Common Carriers.
RTC: dismissed for lack of cause of action.

It is not disputed by the defendant that the loss suffered by the shipment is only .18% or less than
1% of the interest of the consignee on the cargo. Invoking the provision of Article 848 of the Code
of Commerce which reads:
'Claims for average shall not be admitted if they do not exceed five percent of the interest which
the claimant may have in the vessel or cargo if it is gross average, and one percent of the goods
damaged if particular average, deducting in both cases the expenses of appraisal, unless there
is an agreement to the contrary.'
"From the foregoing definition, it is clear that the damage on the cargo in question, is in the nature
of the 'particular average.' Since the loss is less than 1% to the value of the cargo and there
appears to be no allegations as to any agreement defendants and the consignee of the goods to
the contrary, by express provision of the law, plaintiff is barred from suing for recovery.
CA: dismissed the petition as constituting plain errors of law and not grave abuse of discretion
correctible by certiorari.

Issue: Is National Marine Corporation liable under Civil Code?
Ruling:
Yes. The Court ruled that common carriers cannot limit their liability for injury or loss of
goods where such injury or loss was caused by its own negligence. Otherwise stated, the
law on averages under the Code of Commerce cannot be applied in determining liability
where there is negligence.
Petitioner avers that respondent court failed to consider that respondent National Marine
Corporation being a common carrier, in conducting its business is regulated by the Civil Code
primarily and suppletorily by the Code of Commerce; and that respondent court refused to
consider the Bill of Lading as the law governing the parties.
Private respondent countered that in all matters not covered by the Civil Code, the rights and
obligations of the parties shall be governed by the Code of Commerce and by special laws as
provided for in Article 1766 of the Civil Code; that Articles 806, 809 and 848 of the Code of
Commerce should be applied suppletorily as they provide for the extent of the common carriers'
liability.
For cargoes transported to the Philippines as in the case at bar, the liability of the carrier is
governed primarily by the Civil Code and in all matters not regulated by said Code, the rights
and obligations of common carrier shall be governed by the Code of Commerce and by special
laws
Instead of presenting proof of the exercise of extraordinary diligence as required by law, National
Marine Corporation (NMC) filed its Motion to Dismiss As ruled by this Court, the filing of a motion
to dismiss on the ground of lack of cause of action carries with it the admission of the material
facts pleaded in the complaint

Philippine Airlines, INC. vs CA and Pedro Zapatos
[G.R. No. 82619. September 15, 1993.]
Ponente: Bellosillo
CARRIER: PAL
Passenger: PEDRO ZAPATOS
Facts:
On 2 August 1976, respondent was among the twenty-one (21) passengers of PAL Flight 477
that took off from Cebu bound for Ozamiz City. The routing of this flight was Cebu-Ozamiz-
Cotabato. While on flight and just about fifteen (15) minutes before landing at Ozamiz City, the
pilot received a radio message that the airport was closed due to heavy rains and inclement
weather and that he should proceed to Cotabato City instead.
Upon arrival at Cotabato City, the PAL Station Agent informed the passengers of their options to
return to Cebu on Flight 560 of the same day and thence to Ozamiz City on 4 August 1975, or
take the next flight to Cebu the following day, or remain at Cotabato and take the next available
flight to Ozamiz City on 5 August 1975. The Station Agent likewise informed them that Flight 560
bound for Manila would make a stop-over at Cebu to bring some of the diverted passengers; that
there were only six (6) seats available as there were already confirmed passengers for Manila;
and, that the basis for priority would be the check-in sequence at Cebu.
Private respondent chose to return to Cebu but was not accommodated because he checked-in
as passenger No. 9 on Flight 477. He insisted on being given priority over the confirmed
passengers in the accommodation, but the Station Agent refused private respondent's demand
explaining that the latter's predicament was not due to PAL's own doing but to a force majeure.
Private respondent was left at the airport and could not even hitch a ride in the Ford Fiera loaded
with PAL personnel. PAL neither provided private respondent with transportation from the airport
to the city proper nor food and accommodation for his stay in Cotabato City. The following day,
private respondent purchased a PAL ticket to Iligan City. He informed PAL personnel that
he would not use the free ticket because he was filing a case against PAL.
PAL filed its answer denying that it unjustifiably refused to accommodate private respondent. It
alleged that there was simply no more seat for private respondent on Flight 560 that its Station
Agent explained in a courteous and polite manner to all passengers the reason for PAL's inability
to transport all of them back to Cebu; that the stranded passengers agreed to avail of the options
and had their respective tickets exchanged for their onward trips; that it was only the private
respondent who insisted on being given priority in the accommodation; that pieces of checked-in
baggage and hand- carried items of the Ozamiz City passengers were removed from the aircraft;
RTC: Judgment is hereby rendered in favor of the plaintiff and against the defendant Philippine
Air Lines, Inc. ordering the latter to pay: Actual Damage, Moral Damage, Exemplary Damage,
Attorney’s Fees, Cost of Suit.
CA: Finds no reversible error, affirmed the judgment of the court a quo.
Issue: W/n PAL observe extra ordinary diligence.
Ruling:
No. PAL did not seem to mind the introduction of evidence which focused on its alleged
negligence in caring for its stranded passengers:

PAL asserts that it should not be charged with the task of looking after the
passengers' comfort and convenience because the diversion of the flight was due
to a fortuitous event, and that if made liable, an added burden is given to PAL which is
over and beyond its duties under the contract of carriage. PAL cannot be liable in
damages in the absence of fraud or bad faith; that private respondent failed to apprise
PAL of the nature of his trip and possible business losses; and, that private respondent
himself is to be blamed for unreasonably refusing to use the free ticket which PAL
issued.
The contract of air carriage is a peculiar one. Being imbued with public interest, the law requires
common carriers to carry the passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with due regard for all the circumstances.
PAL's diversion of its flight due to inclement weather was a fortuitous event. Nonetheless, such
occurrence did not terminate PAL's contract with its passengers. Being in the business of
air carriage and the sole one to operate in the country, PAL is deemed equipped to deal with
situations as in the case at bar. the relation of carrier and passenger continues until the
latter has been landed at the port of destination and has left the carrier's premises. PAL
necessarily would still have to exercise extraordinary diligence in safeguarding the comfort,
convenience and safety of its stranded passengers until they have reached their final destination.
While we find PAL remiss in its duty of extending utmost care to private respondent while being
stranded in Cotabato City, there is no sufficient basis to conclude that PAL failed to inform him
about his non-accommodation on Flight 560, or that it was inattentive to his queries relative
thereto. With regard to the award of actual damages in the amount of P5,000.00 representing
private respondent's alleged business losses occasioned by his stay at Cotabato City, we find the
same unwarranted. Actual or compensatory damages cannot be presumed but must be duly
proved with reasonable degree of certainty. A court cannot rely on speculation, conjecture or
guesswork as to the fact and amount of damages, but must depend upon competent.
WHEREFORE the decision appealed from is AFFIRMED with modification…
Ben-Mac Enterprises (Macam) vs CA and China Ocean Shipping Co. and Wallem Phil.
Shipping INC.
[G.R. No. 125524. August 25, 1999.]
Ponente: Bellosillo
SHIPPER: Ben-Mac Enterprise

CARRIER: China Ocean Shipping thru Nen Jiang and thru Wallem Phil. (local agent)
COSIGNEE: Pakistan Bank (as per petitioner) / GPC (as per Supreme Court) (“notify party” as
per petitioner
INSURER(not insurer but subrogee to Ben-Mac) SOLIDBANK.
Facts:

RTC: Judgement was rendered in favor of petitioner. The trial court opined that respondents
breached the provision in the bill of lading requiring that "one of the Bills of Lading must be
surrendered duly endorsed in exchange for the goods or delivery order,"
The trial court observed that the only role of GPC in the transaction as notify party was precisely
to be notified of the arrival of the cargoes in Hongkong so it could in turn duly advise the
consignee.
CA: Respondent Court of Appeals appreciated the evidence in a different manner. as established
by previous similar transactions between the parties, shipped cargoes were sometimes actually
delivered not to the consignee but to notify party GPC without need of the bills of lading or bank
guarantee. bills of lading have been properly superseded by the telex instruction and to
implement the instruction, the delivery of the shipment must be to GPC, the real importer/buyer
of the goods as shown by the export invoices, if it were the PAKISTAN BANK to which the cargoes
were to be strictly delivered it would no longer be proper to require a bank guarantee. It observed
further that the demand letter of petitioner to respondents never complained of misdelivery of
goods.
Issue: W/n respondents are liable to petitioner for releasing the goods to GPC without the bills of
lading or bank guarantee.
Ruling:
No. The submission of petitioner that "the fact that the shipment was not delivered to the
consignee as stated in the Bill of Lading or to a party designated or named by the consignee
constitutes a misdelivery thereof" is a deviation from his cause of action before the trial court.
It is clear from the allegation in his complaint that it does not deal with misdelivery of the
cargoes but of delivery to GPC without the required bills of lading and bank guarantee.
We emphasize that the extraordinary responsibility of the common carriers lasts until actual or
constructive delivery of the cargoes to the consignee or to the person who has a right to receive
them. PAKISTAN BANK was indicated in the bills of lading as consignee whereas GPC was the
notify party. However, in the export invoices GPC was clearly named as buyer/importer. Petitioner
also referred to GPC as such in his demand letter to respondent WALLEM and in his complaint
before the trial court. This premise draws us to conclude that the delivery of the cargoes to GPC
as buyer/importer which, conformably with Art. 1736 had, other than the consignee, the right to
receive them was proper.
Apart from the foregoing obstacles to the success of petitioner's cause, petitioner failed to
substantiate his claim that he returned to SOLIDBANK the full amount of the value of the
cargoes. It is not far-fetched to entertain the notion, as did respondent court, that he merely
accommodated SOLIDBANK in order to recover the cost of the shipped cargoes from
respondents.
WHEREFORE, the petition is DENIED.

VIRGENES CALVO v. UCPB GENERAL INSURANCE CO., INC.
G.R. No. 148496
J. Mendoza
SHIPPER: Virgines Calvo, owner of Transorient Container Terminal Services, Inc. (TCTSI)
(customs broker)
CARRIER: M/V Hayakawa Maru (carrying vessel) or Manila Port Services, Inc. (arrastre operator)
CONSIGNEE: San Miguel Corporation (SMC)
INSURER: UCPB General Insurance Co. Inc.
FACTS:
The petitioner in this case who owns TCTSI which is a customs broker, entered into a contract
with San Miguel Corporation to transfer 114 reels of semi-chemical fluting paper and 124 reels of
kraft liner board. This will be transported from the Port Area in Manila to SMC’s warehouse at the
Tabacalera Compound, Romualdez St., Ermita, Manila. The cargo was insured by UCPB General
Insurance Co. Inc. The shipment contained 30 metal vans. It arrived in Manila on board M/V
Hayakawa Maru. It was later unloaded to the custody of Manila Port Services Inc. after 24 hours.
Thereafter, the petitioner withdrew the cargo from Manila Port Services and delivered it to SMC’s
warehouse in Ermita. On July 25, 1990, the goods were inspected by Marine Cargo Surveyors,
and found that 15 reels of the semi-chemical fluting paper were “wet/stained/torn” and 3 reels of
kraft liner board were also torn. The damage amounted to a total of P93, 112.00.
Because of this, SMC collected payment from the insurer UCPB. Subsequently, UCPB filed a suit
against the petitioner in this case. However, petitioner contends that 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. She
further argues that the spoilage and wattage happened while the goods were in the custody of
either the carrying vessel “M/V Hayakawa Maru” or the arrastre operator, to whom the goods were
unloaded and who allegedly kept them in open air for 9 days, notwithstanding the fact that some
of the containers were deformed, cracked, or damaged, as noted in the Marine Survey Report.
RTC: Calvo is liable to respondent for the damage to the shipment.

CA: Affirmed the decision of the lower court.
ISSUES:
WON the petitioner should be held liable for the damage to the shipment even though she claims
to be a private or special carrier, and not a common carrier.
RULING:
YES. As defined in Art. 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. There is 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. The said article also does not 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 must view the concept of “common carrier” as related to the idea of “public
service” under the Public Service Act which states that “public service” includes every person who
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 xxx. And since, transportation of goods is an integral part of her
business, this gives us a reason to say that the petitioner as a common carrier.
With regard to Calvo’s liability, Art. 1733 of the Code provides that 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 Court, in the case of Compania
Maritima v. CA, defined extraordinary diligence as 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 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. The petitioner cannot argue that either
the carrying vessel “M/V Hayakawa Maru” or the arrastre operator should be held liable for the
damages because as per the survey report, the petitioner’s employees withdrew the cargo from
the arrastre operator without exceptions and dis not raise any issue as to the condition of the
container vans or their contents. Thus, we can assume that the petitioner in this case received
the shipment in good order and condition and delivered the same to the consignee damaged.

Vector Shipping Corp. v. Macasa
G.R. No. 160219; July 21, 2008
Nachura, J.
Petitioner: Vector Shipping Corp

Respondent: The Macasas
Shipper:
Carrier: Vector Shipping Corp and Sulpicio Lines Inc.
Consignee:
Insurer:
Facts:
• On December 19, 1987, spouses Cornelio and Anacleta Macasa, together with their
eight-year-old grandson, Ritchie Macasa, boarded the MV Doña Paz that is owned and
operated by Sulpicio Lines, Inc. at Tacloban, Leyte bound for Manila.
• On December 20, 1987, MV Doña Paz collided with the MT Vector, an oil tanker owned
and operated by petitioners Vector Shipping Corporation and Francisco Soriano. The
collision happened in the vicinity of Dumali Point, Tablas Strait, between Marinduque
and Oriental Mindoro. MT Vector was loaded with 860,000 gallons of gasoline and other
petroleum products that time.
• Only twenty-six persons survived: 24 passengers of MV Doña Paz and 2 crew members
of MT Vector. Only a few of victims’ bodies have been recovered. Cornelio, Anacleta,
and Ritchie were among the victims whose bodies have yet to be recovered up to this
day.
• At the day of the incident, some of Cornelio and Anacleta’s children went to the North
Harbor in Manila to await the arrival of Cornelio, Anacleta and Ritchie. They heard the
news that MV Doña Paz was rammed at sea by another vessel. They went to the office
of Sulpicio lines to learn more about the incident but it was uncooperative and
unresponsive to their queries.
• The Macasas filed a case in court. Sulpicio Lines offered the amount of P250,000 as
settlement for the death of Cornelio, Anacleta, and Ritchie. The Macasas rejected the
offer.
RTC
• On October 2, 1991, the Macasas filed a Complaint for Damages arising out of breach of
contract of carriage against Sulpicio Lines before the RTC.
o The complaint imputed negligence to Sulpicio Lines for failure to practice
extraordinary diligence as a common carrier.
• In its reply, Sulpicio Lines averred that:
o (1) MV Doña Paz was seaworthy in all aspects;
o (2) it exercised extraordinary diligence in transporting their passengers and
goods;
o (3) it acted in good faith as it gave immediate assistance to the survivors and kin
of the victims;
o (4) the sinking of MV Doña Paz was without contributory negligence on its part;
and

o (5) the collision was MT Vector's fault since it was allowed to sail with an expired
coastwise license, expired certificate of inspection and it was manned by
unqualified and incompetent crew members per findings of the Board of Marine
Inquiry (BMI) in BMI Case No. 653-87 which had exonerated Sulpicio Lines from
liability.
• Thus, Sulpicio Lines filed a Third- Party Complaint against Vector Shipping, Soriano and
Caltex Philippines, Inc. (Caltex), the charterer of MT Vector.
• RTC ruled that MT Vector Shipping Lines and/or Francisco Soriano, and Caltex, are
jointly and severally, liable to pay Sulpicio lines for the amounts ordered in favor of the
Macasas.
o P200,000.00 as civil indemnity for the death of Cornelio, Anacleta and Ritchie;
P100,000.00 as actual damages; P500,000.00 as moral damages; P100,000.00
as exemplary damages; and P50,000.00 as attorney's fees
CA
• Exonerated Caltex Philippines, Inc. (charterer of MT Vector) and held MT Vector and
Francisco Soriano liable to pay Sulpicio lines.
ISSUE/S:
• W/N the factual findings of the Board of Marine Inquiry (BMI) cannot be binding to the
courts
• W/N MT Vector is a common carrier
• W/N MT Vector and Soriano should reimburse Sulpicio Lines
HELD:
Issue #1
• No. To accept petitioners' submission that the Supreme Court, along with the RTC and
the CA, should await the review by the Department of National Defense of the BMI
findings, would limit the courts' jurisdiction to expeditiously try, hear and decide cases
filed before them. It would not only prolong the Macasas' agony but would result in yet
another tragedy at the expense of speedy justice.
• Findings of fact by the CA are generally binding to the Supreme Court. It is a well-
established doctrine that in petitions for review on certiorari under Rule 45 of the Rules
of Civil Procedure, only questions of law may be raised by the parties and passed upon
by this Court.
Issue #2
• Yes. The SC held in Caltex Inc. v. Sulpicio Lines, Inc. that MT Vector fits the definition of
a common carrier under Article 1732 of the New Civil Code.
o The carriers are deemed to warrant impliedly the seaworthiness of the ship. For a
vessel to be seaworthy, it must be adequately equipped for the voyage and
manned with a sufficient number of competent officers and crew. The failure of a
common carrier to maintain in seaworthy condition the vessel involved in its
contract of carriage is a clear breach of its duty prescribed in Article 1755 of the
Civil Code.
Issue #3
• Yes. The Supreme Court agrees with the findings of the CA that MT Vector was
unseaworthy at the time of the mishap.

• Allowing the vessel to set sail when it was not fit to do so translates into rashness and
imprudence.

R TRANSPORT CORPORATION vs. PANTE
[G.R. No. 162104. September 15, 2009.]
Peralta, J.:
COMMON CARRIER: R Transport Corporation (Bus Line)
Facts:
Petitioner R Transport Corporation, represented by its owner and president, Rizalina
Lamzon, is a common carrier engaged in operating a bus line transporting passengers to Nueva
Ecija from Quezon City and back.
Respondent Eduardo Pante rode petitioner's R.L. Bus Liner in Quezon City bound for
Nueva Ecija.
While traveling along the Doña Remedios Trinidad Highway in Baliuag, Bulacan, the bus
hit a tree and a house due to the fast and reckless driving of the bus driver. Respondent sustained
physical injuries as a result of the vehicular accident and was diagnosed to have sustained a
fractured bone on his right arm. Respondent underwent an operation for the fracture.
Respondent spent for his own operation, confinement, and medication costs. He was
informed that he had to undergo a second operation after two years of rest. He was unemployed
for almost a year after his first operation because Goldilocks, where he worked as a production
crew, refused to accept him with his disability as he could not perform his usual job.
By way of initial assistance, petitioner gave respondent's wife the sum of P7,000.00, which
was spent for the stainless-steel instrument used in his fractured arm.
After the first operation, respondent demanded from petitioner the full payment or
reimbursement of his medical and hospitalization expenses, but petitioner refused payment.
Four years later, respondent underwent a second operation. He spent P15,170.00 for
medical and hospitalization expenses.
Subsequently, respondent filed a Complaint for damages against petitioner with the RTC
for the injuries he sustained as a result of the vehicular accident. Petitioner put up the defense that
it had always exercised the diligence of a good father of a family in the selection and supervision
of its employees, and that the accident was a force majeure for which it should not be held liable.
The trial court rendered a Decision finding the plaintiffs to be entitled to damages.
The trial court held that the provisions of the Civil Code on common carriers govern this
case. Article 1756 of the Civil Code states that "[i]n case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to have acted negligently, unless they
prove that they observed extraordinary diligence as prescribed by Articles 1733 and 1755".
The trial court ruled that since petitioner failed to dispute said presumption despite the many
opportunities given to it, such presumption of negligence stands.
Petitioner appealed the decision of the trial court to the CA. The CA affirmed the Decision
of the trial court.
Petitioner elevated the case before the SC.
Issue:
WON petitioner R Transport corporation is liable to respondent Pante for damages.
Ruling:
YES. The SC affirms the decision of the CA that petitioner is liable for damages.

Under the Civil Code, common carriers, like petitioner bus company, from the nature of
their business and for reasons of public policy, are bound to observe extraordinary diligence
for the safety of the passengers transported by them, according to all the circumstances of
each case. They are bound to carry the passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances.
Article 1756 of the Civil Code states that "[i]n case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to have acted negligently, unless they prove
that they observed extraordinary diligence as prescribed by Articles 1733 and 1755.
Further, Article 1759 of the Civil Code provides that "common carriers are liable for the
death or injury to passengers through the negligence or willful acts of the former's
employees, although such employees may have acted beyond the scope of their authority or in
violation of the orders of the common carriers. This liability of the common carriers DOES
NOT CEASE upon proof that they exercised all the diligence of a good father of a family in
the selection and supervision of their employees".
In this case, petitioner, through its bus driver, failed to observe extraordinary diligence, and
was, therefore, negligent in transporting the passengers of the bus safely to Gapan, Nueva Ecija
since the bus bumped a tree and a house, and caused physical injuries to respondent. Article 1759
of the Civil Code explicitly states that the common carrier is liable for the death or injury to
passengers through the negligence or willful acts of its employees, and that such liability does not
cease upon proof that the common carrier exercised all the diligence of a good father of a family
in the selection and supervision of its employees. Hence, even if petitioner was able to prove
that it exercised the diligence of a good father of the family in the selection and supervision
of its bus driver, it is still liable to respondent for the physical injuries he sustained due to
the vehicular accident.
OTHER NOTES:
(1) Award of moral damages

SC: The CA correctly sustained the award for moral damages. In Spouses Ong vs. CA, the
SC awarded moral damages to paying passengers, who suffered physical injuries on board a bus
that figured in an accident. Spouses Ong held that a person is entitled to the integrity of his body
and if that integrity is violated, damages are due and assessable. Thus, the usual practice is to award
moral damages for physical injuries sustained.
In this case, respondent sustained a fracture due to the vehicular accident. He underwent
an operation for the fracture of the bone. After a few years of rest, he had to undergo a second
operation. Respondent, therefore, suffered physical pain, mental anguish and anxiety as a result of
the vehicular accident. Hence, the award of moral damages is proper.
(2) Award of exemplary damages

SC: Article 2232 of the Civil Code states that "in contracts and quasi contracts, the court
may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner. In this case, respondent's testimonial evidence showed that
the bus driver was driving the bus very fast in a reckless, negligent and imprudent manner; hence,

the bus hit a tree and a house along the highway in Baliuag, Bulacan. The award of exemplary
damages is proper. The award of exemplary damages is justified to serve as an example or as
a correction for the public good.

NEDLLYOD LIJEN B.B. ROTTERDAM & EAST ASIATIC CO. vs.
GLOW LAKS ENTERPRISES, LTD.
G.R. NO. 156330 & NOVEMBER 19, 2014
PEREZ, J.:
SHIPPER: Glow Laks Enterprises, Ltd.

CARRIER: Nedlloyd Lijnen B.V. Rotterdam
SHIP AGENT: East Asiatic Co., Ltd. (East Asiatic).
COSIGNEE: Pierre Kasem, International, S.A.
FACTS:
Petitioner Nedlloyd Lijnen B.V. Rotterdam (Nedlloyd) is a foreign corporation engaged in
the business of carrying goods by sea, whose vessels regularly call at the port of Manila.
It is doing business in the Philippines thru its local ship agent, co-petitioner East Asiatic
Co., Ltd. (East Asiatic). Respondent Glow Laks Enterprises,Ltd., is likewise a foreign
corporation organized and existing under the laws of Hong Kong. It is not licensed to do,
and it is not doing business in, the Philippines.
Respondent loaded on board M/S Scandutch at the Port of Manila a total 343 cartons of
garments, complete and in good order for pre-carriage to the Port of Hong Kong. The
goods covered by 2 Bills of Lading which arrived in good condition in Hongkong and were
transferred to M/S Amethyst for final carriage to Colon, Panama. Both vessels, M/S
Scandutch and M/S Amethyst, are owned by Nedlloyd represented in the Phlippines by
its agent, East Asiatic.
The goods was agreed to be released to the consignee, Pierre Kasem, International, S.A.,
upon presentation of the original copies of the covering bills of lading. Upon arrival of the
vessel at the Port of Colon, petitioners purportedly notified the consignee of the arrival of
the shipments, and its custody was turned over to the National Ports Authority in
accordance with the laws, customs regulations, and practice of trade in Panama. By an
unfortunate turn of events, however, unauthorized persons managed to forge the
covering bills of lading and on the basis of the falsified documents, the ports
authority released the goods.
Claiming that petitioners are liable for the mis delivery of the goods, respondent initiated
a Civil case before the RTC against Nedlloyd. In disclaiming liability for the misdelivery of
the shipments, petitioners asserted that they were never remiss in their obligation as a
common carrier and the goods were discharged in good order and condition into the
custody of the National Ports Authority of Panama in accordance with the Panamanian
law. They averred that they cannot be faulted for the release of the goods to unauthorized
persons, their extraordinary responsibility as a common carrier having ceased at the time
the possession of the goods were turned over to the possession of the port authorities.
RTC: Dismissed the case and held that it had released the common carrier from liability
for the misdelivery of the goods, the RTC ruled that Panama law was duly proven during
the trial and pursuant to the said statute, carriers of goods destined to any Panama port
of entry have to discharge their loads into the custody of Panama Ports Authority to make
effective government collection of port dues, customs duties and taxes. The subsequent
withdrawal effected by unauthorized persons on the strength of falsified bills of lading does
not constitute misdelivery arising from the fault of the common carrier.
CA: Reversed the findings of RTC and held that foreign laws were not proven. For failure
to prove the foreign law and custom, it is presumed that foreign laws are the same as our
local or domestic or internal law under the doctrine of processual presumption. Under the
New Civil Code, the discharge of the goods into the custody of the ports authority therefore

does not relieve the common carrier from liability because the extraordinary responsibility
of the common carriers lasts until actual or constructive delivery of the cargoes to the
consignee or to the person who has the right to receive them. Absent any proof that the
notify party or the consignee was informed of the arrival of the goods, the appellate court
held that the extraordinary responsibility of common carriers remains.
ISSUES: Whether or not petitioner are liable for misdelivery of goods under Philippine
Laws.
RULING: YES. Article 1736 and Article 1738 are the provisions in the New Civil Code
which define the period when the common carrier is required to exercise diligence lasts:
Article 1736. The extraordinary responsibility of the common carrier lasts

from the time the goods are unconditionally placed in the possession of
and received by the carrier for transportation until the same are delivered,
actually or constructively, by the carrier to the consignee, or to the person
who has a right to receive them, without prejudice to the provisions of
article 1738.
Article 1738. The extraordinary liability of the common carrier continues

to be operative even during the time the goods are stored in a warehouse
of the carrier at the place of destination, until the consignee has been
advised of the arrival of the goods and has had reasonable opportunity
thereafter to remove them or otherwise dispose of them.
Explicit is the rule under Civil Code that the extraordinary responsibility of the common
carrier begins from the time the goods are delivered to the carrier. This responsibility
remains in full force and effect even when they are temporarily unloaded or stored in
transit, unless the shipper or owner exercises the right of stop page in transit and
terminates only after the lapse of a reasonable time for the acceptance, of the goods by
the consignee or such other person entitled to receive them. It was further provided in the
same statute that the carrier may be relieved from the responsibility for loss or damage to
the goods upon actual or constructive delivery of the same by the carrier to the consignee
or to the person who has the right to receive them.
In this case, there is no dispute that the custody of the goods was never turned over to
the consignee or his agents but was lost into the hands of unauthorized persons who
secured possession thereof on the strength of falsified documents. The loss or the
misdelivery of the goods in the instant case gave rise to the presumption that the common
carrier is at fault or negligent.
A common carrier is presumed to have been negligent if it fails to prove that it exercised
extraordinary vigilance over the goods it transported. When the goods shipped are either
lost or arrived in damaged condition, a presumption arises against the carrier of its failure
to observe that diligence, and there need not be an express finding of negligence to hold
it liable. To overcome the presumption of negligence, the common carrier must establish
by adequate proof that it exercised extraordinary diligence over the goods. It must do
more than merely show that some other party could be responsible for the damage.
In the present case, petitioners failed to prove that they did exercise the degree of
diligence required by law over the goods they transported. Indeed, aside from their

persistent disavowal of liability by conveniently posing an excuse that their extraordinary
responsibility is terminated upon release of the goods to the Panamanian Ports Authority,
petitioners failed to adduce sufficient evidence they exercised extraordinary care to
prevent unauthorized withdrawal of the shipments. However, nothing in the New Civil
Code suggests that the common carriers’ responsibility over the goods ceased
upon delivery thereof to the custom authorities. To the mind of this Court, the contract
of carriage remains in full force and effect even after the delivery of the goods to the port
authorities; the only delivery that releases it from their obligation to observe extraordinary
care is the delivery to the consignee or his agents. Even more telling of petitioners’
continuing liability for the goods transported to the fact that the original bills of lading up to
this time, remains in the possession of the notify party or consignee.
Petitioners could have offered evidence before the trial court to show that they exercised
the highest degree of care and caution even after the goods was turned over to the custom
authorities, by promptly notifying the consignee of its arrival at the Port in order to afford
them ample opportunity to remove the cargoes from the port of discharge. We have
scoured the records and found that neither the consignee nor the notify party was informed
by the petitioners of the arrival of the goods, a crucial fact indicative of petitioners' failure
to observe extraordinary diligence in handling the goods entrusted to their custody for
transport.

EASTERN SHIPPING LINES, INC, petitioner vs. BPI/MS INSURANCE CORP., & MITSUI
SUMITOMO INSURANCE CO., LTD., respondents
[ G.R. No. 182864, January 12, 2015]
PEREZ, J
Shipper: Yokohama Japan, Sumitomo Corporation

Carrier: Eastern Shipping Lines, Inc.
Consignee: Calamba Steel Center, Inc.
Insurer: BPI/MS
Facts
BPI/MS and Mitsui filed a Complaint before RTC Makati against ESLI and ATI to recover actual
damages amounting to US$17,560.48 with legal interest, attorney's fees and costs of suit. BPI/MS
and Mitsui alleged that Yokohama, Japan, Sumitomo Corporation shipped on board ESLI's vessel
M/V "Eastern Venus 22" 22 coils of various Steel Sheet weighing 159,534 kilograms in good order
and condition for transportation to and delivery at the port of Manila in favor of consignee Calamba
Steel. The declared value of the shipment was US$83,857.59. The shipment was insured with
the respondents BPI/MS and Mitsui against all risks. They also alleged that the shipment arrived
at the port of Manila in an unknown condition and was turned over to ATI for safekeeping. Upon
withdrawal of the shipment, it was found out that part of the shipment was damaged and was in
bad order condition such that there was a Request for Bad Order Survey. It was found out that
the damage amounted to US$4,598.85 prompting Calamba Steel to reject the damaged shipment
for being unfit for the intended purpose.
Thereafter, Sumitomo Corporation again shipped on board ESLI's vessel M/V "Eastern Venus 25"
50 coils at Kashima, Japan in various Steel Sheet weighing 383,532 kilograms in good order and
condition for transportation to and delivery at the port of Manila, Philippines in favor of the same
consignee Calamba Steel. The declared value of the shipment was US$221,455.58. ESLI's
vessel with the second shipment arrived at the port of Manila partly damaged and in bad order.
The coils sustained further damage during the discharge from vessel to shore until its turnover to
ATI's custody for safekeeping. Upon withdrawal from ATI and delivery to Calamba Steel, it was
found out that the damage amounted to US$12,961.63. As it did before, Calamba Steel rejected
the damaged shipment for being unfit for the intended purpose.
Calamba Steel attributed the damages on both shipments to ESLI as the carrier and ATI as the
arrastre operator in charge of the handling and discharge of the coils and filed a claim against
them. When ESLI and ATI refused to pay, Calamba Steel filed an insurance claim for the total
amount of the cargo against BPI/MS and Mitsui as cargo insurers. Thus, BPI/MS and Mitsui
became subrogated in place of and with all the rights and defenses accorded by law in favor of
Calamba Steel. ATI, in its Answer, denied the allegations and insisted that the coils in two
shipments were already damaged upon receipt from ESLI's vessels. It likewise insisted that it
exercised due diligence in the handling of the shipments and invoked that in case of adverse
decision, its liability should not exceed P5,000.00 pursuant to Section 7.01, Article VII of the
Contract for Cargo Handling Services between Philippine Ports Authority (PPA) and ATI. On its
part, ESLI denied the allegations of the complainants and averred that the damage to both
shipments was incurred while the same were in the possession and custody of ATI and/or of the
consignee or its representatives. It also filed a cross-claim against ATI for indemnification in case
of liability.

To expedite settlement, the case was referred to mediation but it was returned to the trial court
for further proceedings. Thereafter, the parties agreed that the procedural issue was whether
there was a valid subrogation in favor of BPI/MS and Mitsui; and that the substantive issues were,
whether the shipments suffered damages, the cause of damage, and the entity liable for
reparation of the damages caused. However, due to the limited factual matters of the case, the
parties were required to present their evidence through affidavits and documents. Upon
submission, the case was submitted for resolution.
RTC
RTC Makati City rendered a decision finding both the ESLI and ATI liable for the damages
sustained by the two shipments.
CA
The Court absolved ATI from liability thereby modifying the decision of the trial court.
Issue
Whether or not ESLI exercised extra-ordinary diligence [NO]
Ruling
ESLI bases of its non-liability on the survey reports prepared by BPI/MS and Mitsui's witness
Manuel which found that the cause of damage was the rough handling on the shipment by the
stevedores of ATI during the discharging operations. However, Manuel does not absolve ESLI of
liability. The witness in fact includes ESLI in the findings of negligence. ESLI cannot rely only on
parts it chooses. The entire body of evidence should determine the liability of the parties. From
the statements of Manuel, [ESLI] was negligent, whether solely or together with ATI. To further
press its cause, ESLI cites the affidavit of its witness Rodrigo who stated that the cause of the
damage was the rough mishandling by ATI's stevedores.
The affidavit of Rodrigo states that his functions as a cargo surveyor are, (1) getting hold of a
copy of the bill of lading and cargo manifest; (2) inspection and monitoring of the cargo on-board,
during discharging and after unloading from the vessel; and (3) making a necessary report of his
findings. Thus, upon arrival at the South Harbor of Manila of the two vessels of ESLI on 11
February 2004 and on 21 May 2004, Rodrigo immediately boarded the vessels to inspect and
monitor the unloading of the cargoes. In both instances, it was his finding that there was
mishandling on the part of ATI's stevedores which he reported as the cause of the damage. Easily
seen, however, is the absence of a crucial point in determining liability of either or both ESLI and
ATI — lack of determination whether the cargo was in a good order condition as described in the
bills of lading at the time of his boarding. As Rodrigo admits, it was also his duty to inspect and
monitor the cargo on-board upon arrival of the vessel. ESLI cannot invoke its non-liability solely
on the manner the cargo was discharged and unloaded. The actual condition of the cargoes upon
arrival prior to discharge is equally important and cannot be disregarded. Proof is needed that the
cargo arrived at the port of Manila in good order condition and remained as such prior to its
handling by ATI.
Common carriers, from the nature of their business and on public policy considerations, are bound
to observe extraordinary diligence in the vigilance over the goods transported by them. Subject
to certain exceptions enumerated under Article 1734 of the Civil Code, common carriers are

responsible for the loss, destruction, or deterioration of the goods. The extraordinary responsibility
of the common carrier lasts from the time the goods are unconditionally placed in the possession
of, and received by the carrier for transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the person who has a right to receive them.
In maritime transportation, a bill of lading is issued by a common carrier as a contract, receipt and
symbol of the goods covered by it. If it has no notation of any defect or damage in the goods, it is
considered as a "clean bill of lading." A clean bill of lading constitutes prima facie evidence of the
receipt by the carrier of the goods as therein described.
Based on the bills of lading issued, it is undisputed that ESLI received the two shipments of coils
from shipper Sumitomo Corporation in good condition at the ports of Yokohama and Kashima,
Japan. However, upon arrival at the port of Manila, some coils from the two shipments were partly
dented and crumpled as evidenced by the Turn Over Survey of Bad Order Cargoes No. 67982
dated 13 February 2004 and Turn Over Survey of Bad Order Cargoes Nos. 68363 and 68365
both dated 24 May 2004 signed by ESLI's representatives, a certain Tabanao and Rodrigo
together with ATI's representative Garcia. According to Turn Over Survey of Bad Order Cargoes
No. 67982, four coils and one skid were partly dented and crumpled prior to turnover by ESLI to
ATI's possession while a total of eleven coils were partly dented and crumpled prior to turnover
based on Turn Over Survey Bad Order Cargoes Nos. 68363 and 68365. Calamba Steel requested
for a re-examination of the damages sustained by the two shipments. Based on the Requests for
Bad Order Survey Nos. 58267 and 58254 covering the first shipment dated 13 and 17 February
2004, four coils were damaged prior to turnover. The second Request for Bad Order Survey No.
58658 dated 25 May 2004 also affirmed the earlier findings that eleven coils on the second
shipment were damaged prior to turnover.
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. From the foregoing, the fault is attributable
to ESLI. While no longer an issue, it may be nonetheless state that ATI was correctly absolved of
liability for the damage.

ASIAN TERMINALS v. SIMON ENTERPRISES, INC.
G.R. No. 177116. 27 FEBRUARY 2013
Villarama Jr., J.:
SHIPPER: Contiquincybunge Export Company

CARRIER: M/V Sea Dream and M/V Tern (unknown owner, local agent: Inter-Asia Marine
Transport, Inc.)
CONSIGNEE: Simon Enterprises, Inc.
INSURER:
FACTS:
Contiquincybunge Export Company loaded 6,843.700 metric tons of U.S. Soybean Meal
in bulk on board vessel M/V “Sea Dream” at Port of Darrow, Louisiana, USA for delivery
to Port of Manila to respondent Simon Enterprises, Inc. When the vessel arrived at the
South Harbor in Manila, the shipment was discharged to the receiving barges of petitioner
Asian Terminals Inc. (ATI), the arrastre operator. Respondent later received the shipment
but claimed having received only 6.825/144 metric tons of U.S. Soybean Meal, or short
by 18.556 metric tons, which is estimated to be worth $7,100.16 or P186,743.20.
On November 25, 1995, Contiquincybunge Export Company made another shipment to

respondent and allegedly loaded on board the vessel M/Tern 3,300.00 metric tons of U.S.
Soybean Meal in Bulk for delivery to respondent at the Port of Manila. On January
25,1996, the carrier docked at the inner Anchorage, South Harbor Manila. The subject
shipment was discharged to receiving barges of ATI and received by respondent which,
however, reported receiving only 3,100.137. Respondent filed against petitioner ATI and
carrier claim for shortage of 199.863 metric tons which was denied.
Respondent filed with RTC of Manila action for damages against unknown owner of
vessels M/V Sea Dream and M/V Tern, its local agent Inter-Asia Marine Transport, Inc.
and petitioner ATI.
RTC: The court held ATI and co-defendants (M/V “Tern” Inter-Asia Marine Transport, Inc.)
solidarily liable to respondent for damages arising from shortage.
CA: The court affirmed the decision of the RTC, except the award of attorney’s fees.
ISSUE: WON ATI is solidarily liable with its co-defendants for the shortage incurred in the
shipment of the goods to respondent.
RULING:
NO. Though it is true that common carriers are presumed to have been at fault or to have
acted negligently if the goods transported by them are lost destroyed, or deteriorated, and

that the common carrier must prove it had exercised extraordinary diligence in order to
overcome presumption, the plaintiff must still, before the burden is shifted to the
defendant, prove that the subject shipment suffered actual shortage. This can only be
done if the weight of the shipment at the port of origin and its subsequent weight at the
port of arrival have been proven by preponderance of evidence, and it can be seen that
the former weight is considerably greater than the latter weight, taking into consideration
the exceptions provided in Art. 1734 of the NCC.
In this case, respondent failed to prove that the subject shipment suffered shortage, for it
was not able to establish that the subject shipment was weighed at the port of origin in
Darrow, Louisana and that the actual weight of the said shipment was 3,300 metric tons.
The Berth Term Grain Bill of Lading, the Proforma Invoice, and Packing List, used by the
respondent, do not, in fact, help its cause.
The respondent having failed to present evidence to prove the actual weight of the subject
shipment when it was loaded onto the M/V Tern, its cause of action must then fail because
it cannot prove the shortage that it was alleging.
Respondent has not proven any negligence on the part of ATI. A reading of the Survey
Report of Del Pan Surveyors would not show any untoward incident or negligence on the
part of the petitioner ATI during discharging operations.
Also, the methods used in determining whether there was shortage are not accurate. The
conclusion that there was a shortage arose from an evaluation of the weight of the cargo
using the barge displacement method. This method does not entail the weighing of the
cargo itself, the weight of the shipment is being measured by mere estimation of the water
displaced by the barges before and after the cargo is unloaded from the said barges.
In addition, the fact that the measurements were done in prevailing slight to slightly rough
sea condition supports the conclusion that the resulting measurement may not be
accurate.
These discrepancies only lend credence to petitioner ATI’s assertion that the weighing
methods respondent used as bases are unreliable and should not be completely relied
upon.
Considering that respondent was not able to establish conclusively that the subject
shipment weighed 3,300 metric tons at the port of loading, and that it cannot therefore be
concluded that there was shortage for which petitioner should be responsible. Noting that
respondent was not able to show negligence on the part of the petitioner and that the
weighing methods which respondent relied upon to establish the shortage it alleges is
inaccurate, respondent cannot fairly claim damages against petitioner for the subject
shipment’s alleged shortage.

Manay, Jr. v. Cebu Air, Inc,
G.R. No. 210621, 04 April 2016

GREENSTAR EXPRESS INC. and FRUTO SAYSON JR. v. UNIVERSAL ROBINA
CORPORATION and NISSIN UNIVERSAL ROBINA CORPORATION
G.R. No. 205090
J. Del Castillo
Common carrier: Greenstar Express Inc.
FACTS:
Fruto L. Sayson, one of the drivers of Greenstar Express, got involved in a vehicular
accident with one of Nissin Universal Robina’s (a corporation that is a subsidiary of
Universal Robina) employees named Renanto Bicomong.
On February, 25, 2003 (keep in mind that this was declared as a national holiday), at
about 6:50 AM, Greenstar’s bus which was driven by Sayson and headed to Manila,
collided head-on with URC’s van en route to Quezon province which was driven by
Renanto Bicomong. The incident occurred along Km. 76, Maharlika Highway, Brgy, San
Agustin, Alaminos, Laguna. Due to the severity of the accident, Bicomong died on the
spot.
On Sept. 23, 2003, the petitioners filed a complaint against NURC to recover damages
sustained during the collision, premised on NEGLIGENCE.
It was established during trial that on the day of the incident, Sayson was driving the
passenger bus from Lucena to Manila at a speed of more or less 60 kmph. Sayson
testified that he saw the URC van rapidly approaching as evidenced by the dust clouds
from the screeching of the tires. Said vehicle was already near his bus when it (UV)
managed to return to its proper lane, then hit and swerved his vehicle. He tried to prevent
the collision by swerving to the right but it was too late. The collision caused damage on
the left portion of the bus while the van got totally wrecked from, causing the death of
Bicomong. After getting out of the bus, Sayson looked for the driver of the L-300 UV but
he was informed by a bystander that he was thrown in a canal and already dead. For fear
of possible reprisals from bystanders as experienced by most drivers involved in an
accident, he boarded another bus owned by his employer. Before he left, he indorsed the
matter to his conductor and line inspector. The defendants in presented three witnesses:
its employees Alexander Caoleng and John Legaspi and deceased Renante Bicomong’s
widow, Gloria Bicomong. These witnesses were presented to prove that deceased
Bicomong was acting in his personal capacity when the mishap happened on
February 25, 2003 as that day had been declared an official holiday and the L-300
UV he was driving had not been issued to him, among others.
Alexander Caoleng, HR Manager of NURC, testified that the deceased worked as the
Operations Manager of NURC until his death. His last assignment was in First Cavite
Industrial Estate. He also testified that the deceased was issued his own service vehicle,
but it was not the L-300 UV that he was driving when the accident happened. The UV
was issued in the name of Florante Soro-Soro, the defendant’s Logistics Manager. The

said vehicle was used to transport items coming from their office at Pasig to Cavite and
vice versa.
Meanwhile, John Legaspi (Project Manager) testified that Bicomong was transferring his
things from his executive vehicle (Toyota Corolla) to the L-300 which was a company
vehicle. Bicomong shared that he would go home to Quezon Province the following day
(Feb 25) to give money to his daughter. He was aware that his trip was not work-related
as Feb 25, 2003 was declared a holiday. Also, there’s no plant owned by defendant NURC
in the provinces of Quezon, Laguna or Bicol.
Gloria Bicomong likewise narrated that aside from the Corolla of her husband, he would
use the L-300 UV whenever he had to bring bulky things home. She says he used the UV
about 5 times already.
RTC: Plaintiff has no cause of action and cannot recover from the defendants even
assuming that the direct and proximate cause of the accident was the negligence of the
defendant's employee Renato Bicomong.
CA: Affirmed the decision of the RTC.
ISSUES:
WON the lower court erred in finding that the respondents are not liable for the damages
they sustained given that the accident was attributed to the negligence of the deceased.
RULING:
NO. The SC denies the petition and affirms the lower court’s decision in toto.
Since the deceased was not in performance of his official duty during the accident, his
employer cannot be held liable for the damages caused by Bicomong.
Although in the case of Caravan Travel and Tours International Inc. v. Abejar, the Court
resolved the case based on two (2) rules. First, Article 2180's specification that
'[e]mployers shall be liable for the damages caused by their employees . . . acting within
the scope of their assigned tasks[.]’ Second, the operation of the registered-owner rule
that registered owners are liable for death or injuries caused by the operation of their
vehicles. But these rules appear to be in conflict when it comes to cases in which the
employer is also the registered owner of a vehicle. Article 2180 requires proof of two
things: first, an employment relationship between the driver and the owner; and second,
that the driver acted within the scope of his or her assigned tasks. On the other hand,
applying the registered-owner rule only requires the plaintiff to prove that the defendant-
employer is the registered owner of the vehicle. The purpose of the registered-owner rule
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, the appropriate approach is that in cases

where both the registered-owner rule and Article 2180 apply, the plaintiff must first
establish that the employer is the registered owner of the vehicle in question. Once the
plaintiff successfully proves ownership, there arises a disputable presumption that the
requirements of Article 2180 have been proven. Consequently, the burden of proof shifts
to the defendant to show that no liability under Article 2180 has arisen.
In this case, it must be said that when by evidence the ownership of the van and
Bicomong's employment were proved, the presumption of negligence on respondents'
part attached, as the registered owner of the van and as Bicomong's employer. The
burden of proof then shifted to respondents to show that no liability under Article 2180
arose. This may be done by proof of any of the following:
1. That they had no employment relationship with Bicomong; or

2. That Bicomong acted outside the scope of his assigned tasks; or
3. That they exercised the diligence of a good father of a family in the selection and
supervision of Bicomong.
Respondents succeeded in overcoming the presumption of negligence, having
shown that when the collision took place, Bicomong was not in the performance of his
work; that he was in possession of a service vehicle that did not belong to his employer
NURC, but to URC, and which vehicle was not officially assigned to him, but to another
employee; that his use of the URC van was unauthorized — even if he had used the same
vehicle in furtherance of a personal undertaking in the past, 31 this does not amount to
implied permission; that the accident occurred on a holiday and while Bicomong was on
his way home to his family in Quezon province; and that Bicomong had no official
business whatsoever in his hometown in Quezon, or in Laguna where the collision
occurred, his area of operations being limited to the Cavite area.
HOWEVER, the evidence suggests that the accident could have been avoided if Sayson
exercised care and prudence, given the circumstances and information that he had
immediately prior to the accident. Based from his testimony, Sayson already noticed that
Bicomong was coming at a high speed which could potentially lead to an accident. Sayson
did not take the necessary precautions, as by reducing speed and adopting a defensive
stance to avert any untoward incident that may occur from Bicomong's manner of driving.
Sayson did not take the necessary precautions, as by reducing speed and adopting a
defensive stance to avert any untoward incident that may occur from Bicomong's manner
of driving. An experienced driver who is presented with the same facts would have
adopted an attitude consistent with a desire to preserve life and property; for
common carriers, the diligence demanded is of the highest degree. Article 1756 of
the Civil Code provides that '[i]n case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to have acted negligently,
unless they prove that they observed extraordinary diligence as prescribed in
Articles 1733 and 1755…
The collision was certainly foreseen and avoidable but Sayson took no measures
to avoid it. To add insult to injury, Sayson hastily fled the scene of the collision
instead of rendering assistance to the victims — thus exhibiting a selfish, cold-

blooded attitude and utter lack of concern motivated by the self-centered desire to
escape liability, inconvenience, and possible detention by the authorities, rather
than secure the well-being of the victims of his own negligent act. The doctrine of
last clear chance provides that where both parties are negligent but the negligent act of
one is appreciably later in point of time than that of the other, or where it is impossible to
determine whose fault or negligence brought about the occurrence of the incident, the
one who had the last clear opportunity to avoid the impending harm but failed to do so, is
chargeable with the consequences arising therefrom.

LINDA CACHO, et. al. v. GERARDO MANAHAN, DAGUPAN BUS CO., INC., AND
RENATO DE VERA (R. M. DE VERA CONSTRUCTION)
G.R. No. 203081, January 17, 2018
MARTIRES, J.:
CARRIER: DAGUPAN BUS COMPANY

BUS DRIVER: GERARDO MANAHAN
FACTS:
A vehicular accident occurred along the national highway at Pogo, Alaminos, Pangasinan,
near the Embarcadero Bridge. Herein Petitioner, Cacho was driving a Nissan sentra from
Alaminos Pangasinan to Bani, Pangasinan when it collied with a Dagupan Bus, travelling on
the opposite lane. The car had already crossed the bridge when it collided with the bus which
was just about to enter the bridge. The collision caused heavy damage to the front of the bus,
the total wreckage of the Nissan Sentra, Cacho's instant death, and multiple injuries to 3
passengers inside the car.
It was alleged in the complaint that Cacho’s car was hit by the bus because the latter swerved
to the left lane as it tried to avoid a pile of rocks placed on the shoulder of the road. These
rocks were negligently placed by De Vera Construction who was contracted by the
government to do some work on the Embarcadero Bridge. On the other hand, the respondents
“Dagupan Bus”, claimed that it was Cacho who drove fast coming from the bridge and bumped
into the bus that was on a full stop and that it was Cacho who swerved from the left because
there were boulders of rocks scattered on his lane.
Dagupan Bus and Manahan, the bus driver, argued that the proximate cause of the accident
was because of De Vera Construction's negligence for leaving the boulders of rocks on both
shoulders of the national highway. These rocks obstructed passage on the highway and posed
an imminent danger to vehicles passing by. At the time of the accident, the rocks were piled
on both shoulders and some rocks rolled down to both lanes of the highway. In the answer of
De Vera, he maintained that he ensured the safety of the road by piling the boulders in a safe
place to make sure they did not encroach upon the road. He presented the municipality's local
civil engineer to testify that he inspected the road and found that De Vera Construction had
complied with the safety measures. Like his co-defendants, De Vera blamed Cacho for driving
recklessly and causing the collision with the bus
RTC: Ruled in favor of Cacho. It held that Dagupan Bus, Manahan and De Vera be jointly and
severally liable to pay Cacho.
CA: Reversed the ruling of the RTC. Contrary to the trial court's findings, the CA did not
believe that the bus was running very fast and that it suddenly swerved to the left to avoid
the boulders.
ISSUE: Whether or not Dagupan Bus and its driver is negligent as a common carrier and thus
should be held liable for damages.
RULING:
YES. The impact of the collision resulted in the car being thrown out to the opposite lane. The
resulting position of the vehicle after the collision is contradictory with the conclusion that the
bus was at full stop. Cacho's car would not be thrown off and be turned counterclockwise to
the opposite direction of its motion if there was no heavier and greater force that collided with

it. The Supreme Court cited a case wherein it laid down a test to determine the existence of
negligence. Did the defendant in doing the alleged negligent act use that reasonable
care and caution which an ordinary prudent person would have used in the same
situation? If not, then he is guilty of negligence.
Using the aforementioned test, Manahan was negligent when he was driving fast on a narrow
highway and approaching a narrow bridge. It would be difficult to maneuver and stop if it were
travelling at a high speed. Additionally, the time of the accident was early in the morning which
means that the there was still low visibility in the road.
Manahan should have been more prudent and careful in his driving the bus especially
considering that Dagupan Bus is a common carrier. Given the nature of the business and for
reasons of public policy, the common carrier is 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."
Based on the place and time of the accident, Manahan was actually violating a traffic rule
found in R.A. No. 4136, otherwise known as the Land Transportation and Traffic Code:
Sec. 35 – Restriction as to speed. - a) Any person driving a motor

vehicle on a highway shall drive the same at a careful and prudent
speed, not greater or less than is reasonable and proper, having
due regard for the traffic, the width of the highway, and of any
other condition then and there existing; and no person shall drive
any motor vehicle upon a highway at such speed as to endanger the
life, limb and property of any person, nor at a speed greater than will
permit him to bring the vehicle to a stop within the assured clear
distance ahead.
Considering that the bus was already approaching the Embarcadero Bridge, Manahan should
have already slowed down a few meters away from the bridge. Actually, he should have
stopped farther away from the bridge because he would have been able to see that Cacho's
car was already crossing the bridge. An experienced and competent bus driver would be able
to know how to properly react upon seeing another vehicle ahead that is about to exit a narrow
bridge. Obviously, Manahan failed to do so.
Having established Manahan's negligence, he is liable with Dagupan Bus to indemnify Cacho's
heirs. The Civil Code provides that when an injury is caused by the negligence of an employee
there instantly arises a presumption of the law that there was negligence on the part of the
employer either in the selection of his employee or in the supervision over him after such
selection. The presumption, however, may be rebutted by a clear showing on the part of the
employer that it had exercised the care and diligence of a good father of a family in the
selection and supervision of his employee. Hence, to escape solidary liability, for a quasi-delict
committed by its employees, an employer must overcome the presumption by presenting
convincing proof that it exercised the care and diligence of a good father of a family in the
selection and supervision of its employees.
A closer scrutiny of the evidence presented to overcome this presumption would show that
Dagupan Bus failed in this regard. Finding his requirements to be complete, Manahan was
cleared for actual driving and a written examination. Manahan passed his driving examination,
but the examiner noted his slow reaction in stopping. Manahan's written examination also
points out that he cannot recognize traffic signs indicating a narrow road.
On this point, we are surprised at how prompt Dagupan Bus had allowed Manahan to drive
one of its buses considering he had no prior experience driving one. The only time he was
actually able to drive a bus was probably during his driving examination and a few more times
while undergoing apprenticeship. We cannot simply brush aside and ignore Dagupan Bus'

haste to hire Manahan; to our mind, this is negligence on its part. In addition, we noted that
Manahan's apprenticeship record indicate that he is not fit to drive aircon buses nor to drive at
night. That the accident happened early in the morning, when the visibility conditions are the
same as driving at night, Manahan should not have been driving in the first place. Once more,
Dagupan Bus' negligence is clear.
While the immediate beneficiaries of the standard of extraordinary diligence are the passengers,
they are not the only persons the law seeks to benefit. If we were to solely require this standard of
diligence for a common carrier's passengers, this would be incongruent to the State's responsibility
to curb accidents on the road. That common carriers should carefully observe the statutory standard
of extraordinary diligence in respect of their passengers, such diligence should similarly benefit
pedestrians and the owners and passengers of other vehicles who are equally entitled to the safe
and convenient use of our roads and highways.

FEDERAL EXPRESS CORPORATION v. ANTONINO
G.R. No. 199455; June 27, 2018
J. Leonen
Petitioner: Federal Express Corporation

Respondent: Eliza and Luwalhati Antonino
Shipper: Eliza and Luwalhati Antonino

Carrier: Federal Express Corporation
Consignee: Veronica Sison
Insurer:
Facts:
• Eliza was the owner of Unit 22-A in Allegro Condominium, located at 62 West 62nd St.,
New York, United States.
• In November 2003, the monthly common charges on the Unit became due. These
charges were for the period of July 2003 to November 2003, and were for a total amount
of US$9,742.81.
• On December 15, 2003, Luwalhati and Eliza were in the Philippines. As the monthly
common charges on the Unit had become due, they decided to send several Citibank
checks to Veronica Z. Sison, who was based in New York.
o The checks allegedly amounted to US$17,726.18 for the payment of monthly
charges and US$11,619.35 for the payment of real estate taxes. These were
sent by Luwalhati through FedEx.
• Sison allegedly did not receive the package, resulting in the non-payment of Luwalhati
and Eliza's obligations and the foreclosure of the Unit.
• Upon inquiry, Sison learned from Fedex that the package was delivered to her neighbor
but there was no signed receipt.
• On March 14, 2004, Luwalhati and Eliza sent a demand letter to FedEx for payment of
damages due to the non-delivery of the package
o FedEx refused to heed their demand.
• On April 5, 2004, Luwalhati and Eliza filed their Complaint for damages.
o FedEx claimed that Luwalhati and Eliza had no cause of action against it
because they failed to comply with a condition precedent, that of filing a written
notice of claim within the 45 calendar days from the acceptance of the shipment.
o Fedex also pointed to conditions under its Air Waybill prohibiting the
"transportation of money
RTC
• The RTC explained that common carriers are presumed to be at fault whenever goods
are lost.
• FedEx claimed that the shipment was released without the signature of the actual
recipient, as authorized by the shipper or recipient. However, it failed to show that this
authorization was made; thus, it was still liable for the loss of the package.
CA
• Affirmed the ruling of the RTC
ISSUE:

• W/N Federal express should be held liable despite respondents’ failure to abide with the
45-day period filing of notice of claim
• W/N Federal Express should be held liable for damages against the respondents
Held:
• Yes. Fed Ex insists that the 45-day period stated in its Air Waybill is sacrosanct. The SC
disagrees.
o The Court of Appeals noted petitioner's ambiguous and evasive responses,
nonchalant handling of respondents' concerns, and how these bogged down
respondents' actions and impaired their compliance with the required 45-day
period.
o The SC is one with the Regional Trial Court and the Court of Appeals in stressing
that respondents' inability to expediently file a formal claim can only be attributed
to petitioner hampering its fulfillment. Thus, respondents must be deemed to
have substantially complied with the requisite 45-day period for filing a formal
claim.
• Yes. The Civil Code mandates common carriers to observe extraordinary diligence in
caring for the goods they are transporting.
• The responsibility of common carriers to exercise extraordinary diligence lasts from the
time the goods are unconditionally placed in their possession until they are delivered "to
the consignee, or to the person who has a right to receive them."
• Thus, part of the extraordinary responsibility of common carriers is the duty to ensure
that shipments are received by none but "the person who has a right to receive them."
Common carriers must ascertain the identity of the recipient. Failing to deliver shipment to the
designated recipient amounts to a failure to deliver. The shipment shall then be considered lost,
and liability for this loss ensues.

KEIHIN-EVERETT FORWARDING CO., INC. V. TOKIO MARINE MALAYAN INSURANCE
CO., INC.,
[G.R. NO. 212107, 28 OCTOBER 2019 ]
J.C. Reyes, Jr.
Shipper:
Carrier:
Consignee:
Insurer: Tokio Marine Malayan Insurance
Facts
In 2005, Honda Trading ordered 80 bundles of Aluminum Alloy Ingots from PT Molten. PT Molten
loaded the goods in two container vans which were, in turn, received in Jakarta, Indonesia by
Nippon Express Co., Ltd. for shipment to Manila.
Aside from insuring the entire shipment with Tokio Marine & Nichido Fire Insurance Co., Inc.
(TMNFIC), Honda Trading also engaged the services of petitioner Keihin-Everett to clear and
withdraw the cargo from the pier and to transport and deliver the same to its warehouse at the
Laguna Technopark in Biñan, Laguna. Meanwhile, petitioner Keihin-Everett had an Accreditation
Agreement with respondent Sunfreight Forwarders whereby the latter undertook to render
common carrier services for the former and to transport inland goods within the Philippines.
The shipment arrived in Manila on November 3, 2005 and was, accordingly, offloaded from the
ocean liner and temporarily stored at the CY Area of the Manila International Port pending release
by the Customs Authority. On November 8, 2005, the shipment was caused to be released from
the pier by petitioner Keihin-Everett and turned over to respondent Sunfreight Forwarders for
delivery to Honda Trading. En route to the latter's warehouse, the truck carrying the containers
was hijacked and the container van was reportedly taken away. Although said container van was
subsequently found in the vicinity of the Manila North Cemetery and later towed to the compound
of the Metro Manila Development Authority (MMDA), it appears that the contents thereof were no
longer retrieved. Only the container van with Serial No. GATU 040516-3 reached the warehouse.
As a consequence, Honda Trading suffered losses in the total amount of P2,121,917.04,
representing the value of the lost 40 bundles of Aluminum Alloy Ingots.
Claiming to have paid Honda Trading's insurance claim for the loss it suffered, respondent Tokio
Marine commenced the instant suit with the filing of its complaint for damages against petitioner.
Respondent maintained that it had been subrogated to all the rights and causes of action
pertaining to Honda Trading. CAIHTE Served with summons, petitioner Keihin-Everett denied
liability for the lost shipment on the ground that the loss thereof occurred while the same was in
the possession of respondent Sunfreight Forwarders. Hence, petitioner Keihin-Everett filed a
third-party complaint against the latter, who, in turn, denied liability on the ground that it was not
privy to the contract between Keihin-Everett and Honda Trading. If at all, respondent Sunfreight
Forwarders claimed that its liability cannot exceed the P500,000.00 fixed in its Accreditation
Agreement with petitioner Keihin-Everett.
RTC
The RTC rendered a Decision finding petitioner Keihin-Everett and respondent Sunfreight
Forwarders jointly and severally liable to pay respondent Tokio Marine's claim in the sum of
P1,589,556.60, together with the legal interest due thereon and attorney's fees amounting to

P100,000.00. The RTC found the driver of Sunfreight Forwarders as the cause of the evil caused.
Under Article 2180 of the Civil Code, it provides: "Employers shall be liable for the damages
caused by their employees and household helpers acting within the scope of their assigned tasks,
even though the former are not engaged in any business or industry." Thus, Sunfreight
Forwarders is hereby held liable for the loss of the subject cargoes with Keihin-Everett, being a
common carrier. In case, Keihin-Everett pays for the amount, it has a right of reimbursement from
Sunfreight Forwarders.
CA
The CA modified the ruling of the RTC insofar as the solidary liability of Keihin-Everett and
Sunfreight Forwarders is concerned. The CA went to rule that solidarity is never presumed. There
is solidary liability when the obligation so states, or when the law or the nature of the obligation
requires the same. Thus, because of the lack of privity between Honda Trading and Sunfreight
Forwarders, the latter cannot simply be held jointly and severally liable with Keihin-Everett for
Tokio Marine's claim as subrogee. In view of the Accreditation Agreement between Keihin-Everett
and Sunfreight Forwarders, the former possesses a right of reimbursement against the latter for
so much of what Keihin-Everett has paid to Tokio Marine.
Issue
Whether or not Keihin-Everett is liable to Tokio Marine. [YES]
Ruling
Keihin-Everett alleged that at the time when the cargoes were lost, it was already in the custody
of Sunfreight Forwarders. Notwithstanding that the cargoes were in the possession of Sunfreight
Forwarders when they were hijacked, Keihin-Everett is not absolved from its liability as a common
carrier. Keihin-Everett seems to have overlooked that it was the one whose services were
engaged by Honda Trading to clear and withdraw the cargoes from the pier and to transport and
deliver the same to its warehouse. In turn, Keihin-Everett accredited Sunfreight Forwarders to
render common carrier service for it by transporting inland goods. As correctly held by the CA,
there was no privity of contract between Honda Trading (to whose rights Tokio Marine was
subrogated) and Sunfreight Forwarders. Hence, Keihin-Everett, as the common carrier, remained
responsible to Honda Trading for the lost cargoes.
In this light, Keihin-Everett, as a common carrier, is mandated to observe, under Article 1733 of
the Civil Code, extraordinary diligence in the vigilance over the goods it transports according to
all the circumstances of each case. In the event that the goods are lost, destroyed or deteriorated,
it is presumed to have been at fault or to have acted negligently, unless it proves that it observed
extraordinary diligence. To be sure, under Article 1736 of the Civil Code, a common carrier's
extraordinary responsibility over the shipper's goods lasts from the time these goods are
unconditionally placed in the possession of, and received by, the carrier for transportation, until
they are delivered, actually or constructively, by the carrier to the consignee, or to the person who
has a right to receive them. Hence, at the time Keihin-Everett turned over the custody of the
cargoes to Sunfreight Forwarders for inland transportation, it is still required to observe
extraordinary diligence in the vigilance of the goods. Failure to successfully establish this carries
with it the presumption of fault or negligence, thus, rendering Keihin-Everett liable to Honda
Trading for breach of contract.
It bears to stress that the hijacking of the goods is not considered a fortuitous event or a
force majeure. Nevertheless, a common carrier may absolve itself of liability for a resulting loss

caused by robbery or hijacked if it is proven that the robber or hijacking was attended by grave or
irresistible threat, violence or force. In this case, Keihin-Everett failed to prove the existence of
the aforementioned instances.
We likewise agree with the CA that the liability of Keihin-Everett and Sunfreight Forwarders are
not solidary. There is solidary liability only when the obligation expressly so states, when the law
so provides, or when the nature of the obligation so requires. 32 Thus, under Article 2194 of the
Civil Code, liability of two or more persons is solidary in quasi-delicts. But in this case, Keihin-
Everett's liability to Honda Trading (to which Tokio Marine had been subrogated as an insurer)
stemmed not from quasi-delict, but from its breach of contract of carriage. Sunfreight Forwarders
was only impleaded in the case when Keihin-Everett filed a third-party complaint against it. As
mentioned earlier, there was no direct contractual relationship between Sunfreight Forwarders
and Honda Trading. Accordingly, there was no basis to directly hold Sunfreight Forwarders liable
to Honda Trading for breach of contract. If at all, Honda Trading can hold Sunfreight Forwarders
for quasi- delict, 33 which is not the action filed in the instant case.
It is not expected however that Keihin-Everett must shoulder the entire loss. Keihin-Everett has a
right to be reimbursed based on its Accreditation Agreement with Sunfreight Forwarders. By
accrediting Sunfreight Forwarders to render common carrier services to it, Keihin-Everett in effect
entered into a contract of carriage with a fellow common carrier, Sunfreight Forwarders.
It is undisputed that the cargoes were lost when they were in the custody of Sunfreight
Forwarders. Hence, under Article 1735 of the Civil Code, the presumption of fault on the part of
Sunfreight Forwarders (as common carrier) arose. Since Sunfreight Forwarders failed to prove
that it observed extraordinary diligence in the performance of its obligation to Keihin-Everett, it is
liable to the latter for breach of contract. Consequently, Keihin-Everett is entitled to be reimbursed
by Sunfreight Forwarders due to the latter's own breach occasioned by the loss and damage to
the cargoes under its care and custody. As with the cited Torres-Madrid Brokerage case,
Sunfreight Forwarders, too, has the option to absorb the loss or to proceed after its missing driver,
the suspect in the hijacking incident.

Tan v. Great Harvest Enterprises, Inc.
G.R. No. 220400, 20 March 2019

Transpo Case Digests C D

Uploaded by

Document Informationclick to expand document information

Copyright:

Available Formats

Transpo Case Digests C D

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Transpo Case Digests C D

Uploaded by

Copyright:

Available Formats

Philippine American General Insurance Company vs.

PKS Shipping Company

SHIPPER: Davao Union Marketing Corp.

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

HEIRS OF AMPARO DE LOS SANTOS et. Al Vs. CA and Compania Maritima

Carrier: M/V Mindoro.

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

SHIPPER: Cheng Hwa Pulp Corporation

RTC: dismissed for lack of cause of action.

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Issue: W/n PAL observe extra ordinary diligence.

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

WHEREFORE the decision appealed from is AFFIRMED with modification…

SHIPPER: Ben-Mac Enterprise

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

WHEREFORE, the petition is DENIED.

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

RTC: Calvo is liable to respondent for the damage to the shipment.

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Petitioner: Vector Shipping Corp

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

COMMON CARRIER: R Transport Corporation (Bus Line)

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

(1) Award of moral damages

(2) Award of exemplary damages

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

SHIPPER: Glow Laks Enterprises, Ltd.

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Article 1736. The extraordinary responsibility of the common carrier lasts

Article 1738. The extraordinary liability of the common carrier continues

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Shipper: Yokohama Japan, Sumitomo Corporation

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Whether or not ESLI exercised extra-ordinary diligence [NO]

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

SHIPPER: Contiquincybunge Export Company

On November 25, 1995, Contiquincybunge Export Company made another shipment to

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Common carrier: Greenstar Express Inc.

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

CA: Affirmed the decision of the RTC.

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

1. That they had no employment relationship with Bicomong; or

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

CARRIER: DAGUPAN BUS COMPANY

Abaja, Bataller, Jose, Lalu, Nadonga, Tamayo, Tolosa

Sec. 35 – Restriction as to speed. - a) Any person driving a motor