Digests - Transpo (rose).docx

GLOBE v. NTC G.R. No. 143964. July 26, 2004

it superintends. With the persistent advent of new offerings in the telecommunications industry, the NTC’s role will become more crucial than at any time before.

FACTS:

2. NO. There is no legal basis under the PTA or the memorandum circulars promulgated by the NTC to denominate SMS as VAS, and any subsequent determination by the NTC on whether SMS is VAS should be made with proper regard for due process and in conformity with the PTA.

On 4 June 1999, Smart filed a Complaint with public respondent NTC, praying that NTC order the immediate interconnection of Smarts and Globes GSM networks. Smart alleged that Globe, with evident bad faith and malice, refused to grant Smarts request for the interconnection of SMS. Globe filed its Answer with Motion to Dismiss on 7 June 1999, interposing grounds that the Complaint was premature, Smarts failure to comply with the conditions precedent required in Section 6 of NTC Memorandum Circular 9-7-93,19 and its omission of the mandatory Certification of Non-Forum Shopping. On 19 July 1999, NTC issued the Order now subject of the present petition. According to NTC Both Smart and Globe were equally blameworthy for their lack of cooperation in the submission of the documentation required for interconnection and for having unduly maneuvered the situation into the present impasse. NTC held that since SMS falls squarely within the definition of value-added (VAS) service or enhanced service given in NTC Memorandum Circular No. 8-9-95 (MC No. 8-9-95) their implementation of SMS interconnection is mandatory. The NTC also declared that both Smart and Globe have been providing SMS without authority from it. Globe filed with the CA a Petition for Certiorari and Prohibition to nullify and set aside the Order and to prohibit NTC from taking any further action in the case. Globe reiterated its previous arguments that the complaint should have been dismissed for failure to comply with conditions precedent and the non-forum shopping rule. They claimed that NTC acted without jurisdiction in declaring that it had no authority to render SMS, pointing out that the matter was not raised as an issue before it at all. They alleged that the Order is a patent nullity as it imposed an administrative penalty for an offense for which neither it nor Smart was sufficiently charged nor heard on in violation of their right to due process. The CA issued a Temporary Restraining Order (TRO) on 31 Aug 1999. In its Memorandum, Globe called the attention of the CA in an earlier NTC decision regarding Islacom, holding that SMS is a deregulated special feature and does not require the prior approval of the NTC. ISSUE: Whether NTC may legally require Globe to secure NTC approval before it continues providing SMS. WON SMS is a Value Added Service (VAS) under Public telecommunications Act (PTA) of 1995; HELD: 1. NO. The NTC may not legally require Globe to secure its approval for Globe to continue providing SMS. This does not imply though that NTC lacks authority to regulate SMS or to classify it as VAS. However, the move should be implemented properly, through unequivocal regulations applicable to all entities that are similarly situated, and in an even-handed manner. This should not be interpreted, however, as removing SMS from the ambit of jurisdiction and review by the NTC. The NTC will continue to exercise, by way of its broad grant, jurisdiction over Globe and Smart’s SMS offerings, including questions of rates and customer complaints. Yet caution must be had. Much complication could have been avoided had the NTC adopted a proactive position, promulgating the necessary rules and regulations to cope up with the advent of the technologies

Is SMS a VAS, enhanced service, or a special feature? Apparently, even the NTC is unsure. It had told Islacom that SMS was a special feature, then subsequently held that it was a VAS. However, the pertinent laws and regulations had not changed from the time of the Islacom letter up to the day the Order was issued. Only the thinking of NTC did. More significantly, NTC never required ISLACOM to apply for prior approval in order to provide SMS, even after the Order to that effect was promulgated against Globe and Smart. This fact was admitted by NTC during oral arguments. NTCs treatment of Islacom, apart from being obviously discriminatory, puts into question whether or not NTC truly believes that SMS is VAS. NTC is unable to point out any subsequent rule or regulation, enacted after it promulgated the adverse order against Globe and Smart, affirming the newly-arrived determination that SMS is VAS. In fact, as Smart admitted during the oral arguments, while it did comply with the NTC Order requiring it to secure prior approval, it was never informed by the NTC of any action on its request. While NTC counters that it did issue a Certificate of Registration to Smart, authorizing the latter as a provider of SMS, such Certificate of Registration was issued only on 13 March 2003, or nearly four (4) years after Smart had made its request.This inaction indicates a lack of seriousness on the part of the NTC to implement its own rulings. Also, it tends to indicate the lack of belief or confusion on NTCs part as to how SMS should be treated. Given the abstract set of rules the NTC has chosen to implement, this should come as no surprise. Yet no matter how content the NTC may be with its attitude of sloth towards regulation, the effect may prove ruinous to the sector it regulates. Moreover, the Court realizes that the PTA of 1995 is not intended to constrain the industry within a cumbersome regulatory regime. The policy as pre-ordained by legislative fiat renders the traditionally regimented business in an elementary free state to make business decisions, avowing that it is under this atmosphere that the industry would prosper. It is disappointing at least if the deregulation thrust of the law is skirted deliberately. But it is ignominious if the spirit is defeated through a crazy quilt of vague, overlapping rules that are implemented haphazardly. FACTS: Smart Communications filed a complaint against Globe Telecom before the NTC. Smart alleged that Globe Telecom refused interconnection and it asked the NTC to compel Globe Telecom to link up their respective networks. The NTC then issued the usual show cause order informing Globe Telecom about its alleged refusal to interconnect. On July 19, 1999, the NTC issued an order declaring both companies "equally blameworthy" for their failure to interconnect. The commission also held that SMS is a value added service or enhanced service under NTC Memorandum Circular No. 8-9-95, and that both companies were providing SMS without authority from the commission. The NTC also held that since SMS was a value added service or enhanced service, interconnection was mandatory under Executive Order 59.

GLOBE TELECOMS v. NTC G.R. No. 143964 July 26, 2004

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FACTS:

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7. 8.

On 4 June 1999, Smart filed a Complaint with public respondent NTC, praying that NTC order the immediate interconnection of Smarts and Globes GSM networks. Smart alleged that Globe, with evident bad faith and malice, refused to grant Smarts request for the interconnection of SMS. Globe filed its Answer with Motion to Dismiss on 7 June 1999, interposing grounds that the Complaint was premature, Smarts failure to comply with the conditions precedent required in Section 6 of NTC Memorandum Circular 9-7-93,19 and its omission of the mandatory Certification of Non-Forum Shopping. On 19 July 1999, NTC issued the Order now subject of the present petition. a. both Smart and Globe were equally blameworthy for their lack of cooperation in the submission of the documentation required for interconnection and for having unduly maneuvered the situation into the present impasse b. NTC held that since SMS falls squarely within the definition of value-added service or enhanced-service given in NTC Memorandum Circular No. 89-95 (MC No. 8-9-95) the implementation of SMS interconnection is mandatory c. The NTC also declared that both Smart and Globe have been providing SMS without authority from it Globe filed with the Court of Appeals a Petition for Certiorari and Prohibition25 to nullify and set aside the Order and to prohibit NTC from taking any further action in the case. Globe a. reiterated its previous arguments that the complaint should have been dismissed for failure to comply with conditions precedent and the non-forum shopping rule. b. claimed that NTC acted without jurisdiction in declaring that it had no authority to render SMS, pointing out that the matter was not raised as an issue before it at all. c. alleged that the Order is a patent nullity as it imposed an administrative penalty for an offense for which neither it nor Smart was sufficiently charged nor heard on in violation of their right to due process The CA issued a TRO on 31 Aug 1999. In its Memorandum, Globe called the attention of the CA in an earlier NTC decision regarding Islacom, holding that SMS is a deregulated special feature and does not require the prior approval of the NTC. Globe that its departure from its ruling in the Islacom case constitutes a denial of equal protection of the law. On 22 Nov 1999, the CA affirmed in toto the NTC Order. On 21 December 1999, Globe filed a Motion for Partial Reconsideration, seeking to reconsider only the portion of the Decision that upheld NTCs finding that Globe lacked the authority to provide SMS and its imposition of a fine. After the Court of Appeals denied the Motion , Globe elevated the controversy to this Court

ISSUES: 1. Whether NTC may legally require Globe to secure NTC approval before it continues providing SMS; 2. Whether SMS is a VAS under the PTA, or special feature under NTC MC No. 1411-97; and 3. Whether NTC acted with due process in levying the fine against Globe

RULING:

4.

5.

The petition is GRANTED. The Decision of the Court of Appeals dated 22 November 1999, as well as its Resolution dated 29 July 2000, and the assailed Order of the NTC dated 19 July 1999 are hereby SET ASIDE. The assailed NTC Decision invokes the NTC Implementing Rules of the PTA (MC No. 8-9-95) to justify its claim that Globe and Smart need to secure prior authority from the NTC before offering SMS. a. The statutory basis for the NTCs determination must be thoroughly examined. b. Next, the regulatory framework devised by NTC in dealing with VAS should be examined. In short, the legal basis invoked by NTC in claiming that SMS is VAS has not been duly established. The fault falls squarely on NTC. NTC violated several of these cardinal rights due Globe in the promulgation of the assailed Order. a. The NTC Order is not supported by substantial evidence. Neither does it sufficiently explain the reasons for the decision rendered. b. Globe and Smart were denied opportunity to present evidence on the issues relating to the nature of VAS and the prior approval. Another disturbing circumstance attending this petition is that until the promulgation of the assailed Order Globe and Smart were never informed of the fact that their operation of SMS without prior authority was at all an issue for consideration. c. The imposition of fine is void for violation of due process. The matter of whether NTC could have imposed the fine on Globe in the assailed Order is necessarily related to due process considerations In summary: a. there is no legal basis under the PTA or the memorandum circulars promulgated by the NTC to denominate SMS as VAS, and any subsequent determination by the NTC on whether SMS is VAS should be made with proper regard for due process and in conformity with the PTA; b. the assailed Order violates due process for failure to sufficiently explain the reason for the decision rendered, for being unsupported by substantial evidence, and for imputing violation to, and issuing a corresponding fine on, Globe despite the absence of due notice and hearing which would have afforded Globe the right to present evidence on its behalf

ASIAN TERMINALS, INC. v. ALLIED GUARANTEE INSURANCE, CO., INC.

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ATI, as successor of Marina, elevated the matter to the Supreme Court and maintained that the goods were withdrawn by the broker in the same condition as they were discharged from the vessel. It argued that it is not liable for the damage to the additional 54 rolls as these were discovered only at the warehouse of San Miguel and these were the broker's responsibility after they were released from ATI's custody until delivery to the consignee.

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It also argues that the CA erroneously failed to note the so-called Turn Over Survey of Bad Order Cargoes and the Requests for Bad Order Survey which supposedly could absolve it from liability for the damaged shipment. The reports were allegedly made prior to the shipment's turnover from ATI to Dynamic and they purportedly show that no additional loss or damage happened while the shipment was in ATI's custody as the reports only mention the 158 rolls that were damaged during shipping or prior to ATI's possession. In particular, the Requests for Bad Order Survey was allegedly signed by Dynamic's representative stating that only 158 rolls were damaged as of the goods' transfer from ATI to Dynamic.

G.R. No. 182208, October 14, 2015 By: Mano, Razna I.

Doctrine: Since the relationship of an arrastre operator and a consignee is akin to that between a warehouseman and a depositor, then, in instances when the consignee claims any loss, the burden of proof is on the arrastre operator to show that it complied with the obligation to deliver the goods and that the losses were not due to its negligence or that of its employees. Parties: Marina Port Services, Inc. (Marina), the predecessor of herein petitioner Asian Terminals, Inc. (petitioner ATP) - arrastre operator; Transocean Marine, Inc. (Transocean), a foreign corporation and the shipping company; Philippine Transmarine Carrier, Inc. (Philippine Transmarine) – Philippine representative of Transocean; San Miguel Corporation (SMC) – consignee; Dynamic Brokerage Co. Inc. (Dynamic) – SMC’s customs broker; Allied Guarantee Insurance, Co., Inc., (Allied) – insurer of the shipment.

Respondent’s Argument: -

FACTS: On February 5, 1989, a shipment was made of 72,322 lbs. of kraft linear board (a type of paperboard) loaded and received from the ports of Lake Charles, LA, and Mobile, AL, U.S.A., for transport and delivery to San Miguel Corporation (SMC) in Manila, Philippines. The goods were shipped on board the vessel M/V Nicole, owned and operated by Transocean Marine, Inc. (Transocean), represented in the Philippines by Philippine Transmarine Carrier, Inc. (Philippine Transmarine). Upon arrival in Manila on April 8, 1989, the subject shipment was offloaded from the vessel to the Marina Port Services, Inc. (Marina), the predecessor of herein petitioner Asian Terminals, Inc. (petitioner ATP), which is an arrastre operator. It was found out that a total of 158 rolls of the goods were damaged during shipping. Further, an additional 54 rolls were found to have been damaged while in the custody of Marina and SMC’s broker, Dynamic Brokerage Co., Inc. (Dynamic). Thereafter, the private respondent which is the insurer of the shipment, Allied Guarantee Insurance, Co., In., (respondent Allied), paid SMC the value of the damaged goods and was subrogated in the latter’s rights. On March 8, 1990, respondent Allied filed a Complaint for maritime damages against Transocean, Philippine Transmarine, Dynamic and Marina seeking to be indemnified for the sum of money it lost in paying SMC. RTC: Ruled in favor of respondent. It found all the defendants, including the predecessor of herein petitioner, liable for the losses. It ruled that the shipping company Transocean liable for the 158 rolls of damaged goods due to the latter's failure to observe the necessary precautions and extraordinary diligence as common carrier to prevent such damage. Then, the additional 54 rolls of the goods that were lost were found to have been damaged while in the possession of Marina, the arrastre operator and Dynamic, the broker. CA: Affirmed the RTC’s ruling. It found the carriers Transocean and Philippine Transmarine liable to the insurer, the subrogee of the consignee, for the 158 rolls of kraft linear board that were lost or damaged while in the former's custody during shipping. The common carriers were held liable because they were found unable to overcome the presumption of negligence while in custody of the goods. Then, the arrastre ATI and the broker Dynamic were likewise found liable for the additional 54 rolls of the same goods destroyed as both failed to prove the exercise of the amount of diligence required in the safekeeping of said goods. In particular, the appellate court stated that ATI failed to present the Turn Over Inspector and Bad Order Inspector as witnesses who could have testified that no additional goods were damaged during its custody. Petitioner’s Arguments:

It alleged that the shipment was loaded from the ports of origin "in good and complete order condition," and all losses were due to the fault of the carrier, arrastre, and the broker.

ISSUE: Whether petitioner has been proven liable for the additional 54 rolls of damaged goods to respondent. HELD:

YES, petitioner is liable for the additional 54 rolls of damaged goods.

RATIO: 1. In the performance of its obligations, an arrastre operator should observe the same degree of diligence as that required of a common carrier and a warehouseman. Being the custodian of the goods discharged from a vessel, an arrastre operator's duty is to take good care of the goods and to turn them over to the party entitled to their possession. With such a responsibility, the arrastre operator must prove that the losses were not due to its negligence or to that of its employees. It must prove that it exercised due care in the handling thereof. This burden, however, was not established by petitioner and it was found out that the additional 54 rolls of damaged goods occurred during the following instances: (1) while the goods were in the custody of the arrastre ATI; (2) when they were in transition from ATI's custody to that of Dynamic (i.e., during loading to Dynamic's trucks); and (3) during Dynamic's custody. 2. A mere sign-off from the customs broker's representative that he had received the subject shipment "in good order and condition without exception" would not absolve the arrastre from liability, simply because the representative's signature merely signifies that said person thereby frees the arrastre from any liability for loss or damage to the cargo so withdrawn while the same was in the custody of such representative to whom the cargo was released, but it does not foreclose the remedy or right of the consignee (or its subrogee) to prove that any loss or damage to the subject shipment occurred while the same was under the custody, control and possession of the arrastre operator. To reiterate, the signature by a customs broker's representative of "receipt in good order" does not foreclose the consignee's or its subrogee's right or remedy to prove that additional loss or damage to the subject shipment occurred while the same was under the custody, control and possession of the arrastre operator. Further, it is unclear whether these Requests for Bad Order Survey were executed prior to or after loading was done onto Dynamic's trucks.

PHILAMGEM v. PKS SHIPPING COMPANY

FIRST PHILIPPINE INDUSTRIAL CORP. v. CA

FACTS:

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). During the transport, the barge where the bags of cement were loaded, sank. Upon demand of payment by DUMC, Philamgen immediately paid them. Hence, it sought reimbursement from PKS Shipping but the latter refused.

Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in January 1995, petitioner applied for mayor’s permit in Batangas. However, the Treasurer required petitioner to pay a local tax based on gross receipts amounting to P956,076.04. In order not to hamper its operations, petitioner paid the taxes for the first quarter of 1993 amounting to P239,019.01 under protest. On January 20, 1994, petitioner filed a letter-protest to the City Treasurer, claiming that it is exempt from local tax since it is engaged in transportation business. The respondent City Treasurer denied the protest, thus, petitioner filed a complaint before the Regional Trial Court of Batangas for tax refund. Respondents assert that pipelines are not included in the term “common carrier” which refers solely to ordinary carriers or motor vehicles. The trial court dismissed the complaint, and such was affirmed by the Court of Appeals.

ISSUE: Whether PKS Shipping is a common carrier or a private carrier; and WON PKS Shipping exercised the required diligence over the goods they carry. Or, WON PKS Shipping is liable. HELD: PKS Shipping is a common carrier. PKS Shipping has engaged itself in the business of carrying goods for others, although for a limited clientele, undertaking to carry such goods for a fee. The regularity of its activities in this area indicates more than just a casual activity on its part. Neither can the concept of a common carrier change merely because individual contracts are executed or entered into with patrons of the carrier. PKS Shipping is not liable. 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. As such, under Art. 1733, NCC, common carriers are exempt from liability for loss, destruction, or deterioration of the goods due to any of the following causes, among others:

ISSUE: Whether a pipeline business is included in the term “common carrier” so as to entitle the petitioner to the exemption HELD: Article 1732 of the Civil Code defines a "common carrier" as "any person, corporation, firm or association engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public." The test for determining whether a party is a common carrier of goods is: (1) He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to engage in the transportation of goods for person generally as a business and not as a casual occupation; (2) He must undertake to carry goods of the kind to which his business is confined; (3) He must undertake to carry by the method by which his business is conducted and over his established roads; and (4) The transportation must be for hire.

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

VALENZUELA HARDWOOD AND INDUSTRIAL SUPPLY v. COURT OF APPEALS FACTS: Plaintiff shipped at Maconcon Port, Isabela 940 round logs on board M/V Seven Ambassador, a vessel owned by defendant Seven Brothers Shipping Corporation. Plaintiff insured the logs against loss and/or damage with defendant South Sea Surety and Insurance Co., Inc. for P2M and the latter issued its Marine Cargo Insurance Policy on said date. In the meantime, the M/V Seven Ambassador sank resulting in the loss of the plaintiff’s insured logs. Plaintiff demanded from defendant South Sea Surety and Insurance Co., Inc. the payment of the proceeds of the policy but the latter denied liability under the policy. Plaintiff likewise filed a formal claim with defendant Seven Brothers Shipping Corporation for the value of the lost logs but the latter denied the claim. Court of Appeals affirmed in part the RTC judgment by sustaining the liability of South Sea Surety and Insurance Company (“South Sea”), but modified it by holding that Seven Brothers Shipping Corporation (“Seven Brothers”) was not liable for the lost cargo. ISSUE: Whether defendants shipping corporation and the surety company are liable to the plaintiff for the latter’s lost logs. HELD: The charter party between the petitioner and private respondent stipulated that the “(o)wners shall not be responsible for loss, split, short-landing, breakages and any kind of damages to the cargo” –VALID There is no dispute between the parties that the proximate cause of the sinking of M/V Seven Ambassadors resulting in the loss of its cargo was the “snapping of the iron chains and the subsequent rolling of the logs to the portside due to the negligence of the captain in stowing and securing the logs on board the vessel and not due to fortuitous event.” Likewise undisputed is the status of Private Respondent Seven Brothers as a private carrier when it contracted to transport the cargo of Petitioner Valenzuela. Even the latter admits this in its petition. Private respondent had acted as a private carrier in transporting petitioner’s lauan logs. Thus, Article 1745 and other Civil Code provisions on common carriers which were cited by petitioner may not be applied unless expressly stipulated by the parties in their charter party. In a contract of private carriage, the parties may validly stipulate that responsibility for the cargo rests solely on the charterer, exempting the shipowner from liability for loss of or damage to the cargo caused even by the negligence of the ship captain. Pursuant to Article 1306 of the Civil Code, such stipulation is valid because it is freely entered into by the parties and the same is not contrary to law, morals, good customs, public order, or public policy. Indeed, their contract of private carriage is not even a contract of adhesion. We stress that in a contract of private carriage, the parties may freely stipulate their duties and obligations which perforce would be binding on them. Unlike in contract involving a common carrier, private carriage does not involve the general public. Hence, the stringent provisions of the Civil Code on common carriers protecting the general public cannot justifiably be applied to a ship transporting commercial goods as a private carrier. Consequently, the public policy embodied therein is not contravened by stipulations in a charter party that lessen or remove the protection given by law in contracts involving common carriers. The provisions of our Civil Code on common carriers were taken from Anglo-American law. Under American jurisprudence, a common carrier undertaking to carry a special cargo or chartered to a special person only, becomes a private carrier. As a private carrier a stipulation exempting the

owner from liability for the negligence of its agent is not against public policy and is deemed valid. Such doctrine We find reasonable. The Civil Code provisions on common carriers should not be applied where the carrier is not acting as such but as a private carrier. The stipulation in the charter party absolving the owner from liability for loss due to the negligence of its agent would be void only if the strict public policy governing common carriers is applied. Such policy has no force where the public at large is not involved as in this case of a ship totally chartered for the use of a single party. (Home Insurance Co. vs. American Steamship Agencies Inc., 23 SCRA 24, April 4, 1968)

PLANTERS PRODUCTS v. COURT OF APPEALS G.R. No. 101503 September 15, 1993 FACTS: Planters Product Inc. purchased from Mitsubishi international corporation metric tons of Urea fertilizer, which the latter shipped aboard the cargo vessel M/V Sun Plum owned by private respondent Kyosei Kisen Kabushiki Kaisha. Prior to its voyage, a time charter-party on the vessel respondent entered into between Mitsubishi as shipper/charterer and KKKK as ship owner, in Tokyo, Japan. Before loading the fertilizer aboard the vessel, (4) of her holds were presumably inspected by the charterer’s representative and found fit to take a load of urea in bulk. After the Urea fertilizer was loaded in bulk by stevedores hired by and under the supervision of the shipper, the steel hatches were closed with heavy iron lids. Upon arrival of vessel at port, the petitioner unloaded the cargo pursuant to the terms and conditions of the charter-party. The hatches remained open throughout the duration of the discharge. Upon arrival at petitioner’s warehouse a survey conducted over the cargo revealed a shortage and the most of the fertilizer was contaminated with dirt. As such, Planters filed an action for damages. The defendant argued that the public policy governing common carriers do not apply to them because they have become private carriers by reason of the provisions of the charterparty. ISSUE: Whether or not the charter-party contract between the ship owner and the charterer transforms a common carrier into a private carrier? HELD: A charter party may either her be time charter wherein the vessel is leased to the charterer, wherein the ship is leased to the charterer for a fixed period of time or voyage charter, wherein the ship is leased for a single voyage. In both cases, the charter party provides for the hire of the vessel only, either for a determinate time or for a single or consecutive voyage. It is therefor imperative that such common carrier shall remain as such, notwithstanding the charter of the whole or part of the vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a time-charter or voyage-charter. It is only when the charter includes both ship and its crew as in bareboat or demise that it becomes a private carrier. Undoubtedly, a shipowner in a time or voyage charter retains in possession and control of the ship, although her holds may be the property of the charterer.

CENTRAL SHIPPING COMPANY, INC., petitioner, vs. INSURANCE COMPANY OF NORTH AMERICA, respondent. G.R. No. 150751 September 20, 2004 121 SCRA 769 FACTS: On July 25, 1990 at Puerto Princesa, Palawan, the petitioner received on board its vessel, the M/V Central Bohol, 376 pieces of Round Logs and undertook to transport said shipment to Manila for delivery to Alaska Lumber Co., Inc. The cargo is insured for P3, 000, 000.00 against total lost under respondents MarineCargo Policy. After loading the logs, the vessel starts its voyage. After few hours of the trip, the ship tilts 10 degrees to its side, due to the shifting of the logs in the hold. It continues to tilt causing the captain and the crew to abandon ship. The ship sank. Respondent alleged that the loss is due to the negligence and fault of the captain. While petitioner contends that the happening is due to monsoons which is unforeseen or casa fortuito. ISSUE: Whether or not petitioner is liable for the loss of cargo? HELD: From the nature of their business and for reasons of public policy, common carriers are bound to observe extraordinary diligence over the goods they transport, according to all the circumstances of each case. In the event of loss, destruction or deterioration of the insured goods, common carriers are responsible; that is, unless they can prove that such loss, destruction or deterioration was brought about -- among others -- by "flood, storm, earthquake, lightning or other natural disaster or calamity." In all other cases not specified under Article 1734 of the Civil Code, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence. The contention of the petitioner that the loss is due to casa fortuito exempting them from liability is untenable. Petitioner failed to show that such natural disaster or calamity was the proximate and only cause of the loss. Human agency must be entirely excluded from the cause of injury or loss. In other words, the damaging effects blamed on the event or phenomenon must not have been caused, contributed to, or worsened by the presence of human participation. The defense of fortuitous event or natural disaster cannot be successfully made when the injury could have been avoided by human precaution. The monsoon is not the proximate cause of the sinking but is due to the improper stowage of logs. The logs were not secured by cable wires, causing the logs to shift and later on the sinking the ship. This shows that they did not exercise extraordinary diligence, making them liable for such loss.

REGIONAL CONTAINER LINES (RCL) OF NETHERLANDSINSURANCE CO. (PHILIPPINES), INC.

SINGAPORE

vs.

THE

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HELD: 405 cartons of Epoxy molding compound were consigned to be shipped from Singapore to Manila for TEMIC. U-Freight Singapore contracted Pacific Eagle to transport cargo. It was stored in its refrigerated container as cargo is highly perishable. Pacific Eagle loaded it to M/V Piya Bhum owned by RCL which the former had a slot charter agreement with. RCL issued Bill of Lading in favor of Pacific Eagle. Netherlands Insurance issued a Marine Open Policy to insure cargo in favor of Temic to cover loss/damages. Upon arrival at Manila, the cargoes were surveyed and it was found to be at the constant required temperature for several days. But later on, it was found out that the temperature changed when the cargo had already been unloaded, to 33º Celsius. Surveyor believed the fluctuation was caused by the burnt condenser fan motor of the refrigerated container Temic received the shipment and found it to be damaged. Temic filed a claim for cargo loss against Netherlands Insurance, with supporting claims documents. The Netherlands Insurance paid Temic the sum ofP1,036,497.00 under the terms of the Marine Open Policy. Temic then executed a loss and subrogation receipt in favor of Netherlands Insurance. Seven months from delivery of the cargo - Netherlands Insurance filed a complaint for subrogation of insurance settlement with the Regional Trial Court, RCL and TMS Ship Agencies (TMS) thought to be the local agent of M/V Piya, EDSA Shipping, Eagle Liner Shipping Agencies, U-FreightSingapore, and U-Ocean (Phils.), Inc. (UOcean). RCL and EDSA Shippingfiled motion to dismiss based on demurer to evidence. They attributed negligence to their co-defendants, that fluctuation of temperature occurred after cargo has been discharged from vessel but in the reefer van and that Netherlands is not party in interest hence has no cause of action. RTC found RCL and EDSA Shipping not liable but this was reversed by CA and barred them from presenting evidence since they filed for demurer.

Defense of RCL and EDSA Shipping: 1.

2. 3. 4.

ISSUE: W/N RCL and EDSA Shipping is liable as CC under the theory of presumption of negligence?

They attributed any negligence that may have caused the loss of the shipment to their co-defendants. a. They contend that the cause of the damage to the cargo was the “fluctuation of the temperature in the reefer van,” which fluctuation occurred after the cargo had already been discharged from the vessel; no fluctuation, they point out, arose when the cargo was still on board M/V Piya Bhum. b. As the cause of the damage to the cargo occurred after the same was already discharged from the vessel and was under the custody of the arrastre operator (International Container Terminal Services, Inc. or ICTSI), RCL and EDSA Shipping posit that the presumption of negligence provided in Article 1735 of the Civil Code should not apply. What applies in this case is Article 1734, particularly paragraphs 3 and 4 thereof, which exempts the carrier from liability for loss or damage to the cargo when it is caused either by an act or omission of the shipper or by the character of the goods or defects in the packing or in the containers. They likewise asserted that no valid subrogation exists, as the payment made by Netherlands Insurance to the consignee was invalid. That the Netherland Insurance has no cause of action, and is not the real party-ininterest, The claim is barred by laches/prescription.

YES. SC held CC 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. RCL and EDSA Shipping failed to prove that they did exercise that degree of diligence required by law over the goods they transported. Indeed, there is sufficient evidence showing that the fluctuation of the temperature in the refrigerated container van, as recorded in the temperature chart, occurred after the cargo had been discharged from the vessel and was already under the custody of the arrastre operator, ICTSI. This evidence, however, does not disprove that the condenser fan – which caused the fluctuation of the temperature in the refrigerated container – was not damaged while the cargo was being unloaded from the ship. It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier; RCL and EDSA Shipping failed to dispute this. – BURDEN OF PROOF HAS SHIFTED TO THE SHIPPER.

SINGAPORE AIRLINES LTD. VS. FERNANDEZ, GR 142305, DEC. 10, 2003

PHIL. RABBIT BUS LINES v. IAC G.R. Nos. L-66102-04 August 30, 1990

FACTS: FACTS: Respondent Andion Fernandez is an acclaimed soprano in the Philippines and abroad. At the time of the incident she was availing of an educational grant from the Federal Republic of Germany pursuing a Master’s Degree in Music major in Voice. She was invited to sing before the King and Queen of Malaysia on Feb. 3-4, 1991. For this purpose, she took an airline ticket from Singapore Airlines (SAL) FOR THE Frankfurt-Manila-Malaysia route. Respondent had to pass by Manila in order to gather her wardrobe and rehearse with the pianist. SAL issued ticket for Flight SQ 27 leaving Frankfurt on Jan. 27, 1991 for Singapore with connections to Manila in the morning of Jan. 28, 1991. On Jan. 27, 1991 SQ 27 LEFT Frankfurt but arrived two hours late in Singapore on Jan. 28, 1991. By then, the aircraft bound for Manila had already left. Upon deplaning in Singapore, Fernandez approached the transit counter at Changi Airport and was told by a lady employee that there were no more flights to Manila on that day and that she had to stay in Singapore, if she wanted, she could fly to HK but at her own expense. Respondent stayed with a relative in Singapore for the night. The next day, she was brought back to the airport and approached a counter for immediate booking but was told by a male employee: “Can’t you see I am doing something.” She explained her predicament but was told: “It’s your problem, not ours.” The respondent never made it to Manila and was forced to take a direct flight to Malaysia on Jan. 29, 1991 through the efforts of her mother and a travel agency in Manila. Her mother had to travel to Malaysia with the wardrobe which caused them to incur expenses of ₱ 50,000. RTC Manila ordered SAL to pay respondent ₱ 50k as actual damages, ₱ 250k as moral damages, ₱ 100k as exemplary damages, ₱ 75k as attorney’s fees and costs of suit. CA affirmed RTC decision.



The passengers boarded the jeep owned by the Mangune Spouses and driven by Manalo to bring them to Carmen Rosales Pangasinan.



Upon reaching barrio Sinayoan Tarlack,The right rear wheel of the truck was detouch so the driver steps on the brake as a result of which, the jeep who is running unbalance made a uturn so that the front part face the south where it come from and its rear face the north where it is going.



The bus of the petitioner driven by Delos Reyes bump the jeep resulting in the death of the three passengers of the jeepney and injuries to others.



The two drivers was charged of multiple homicide before the MTC of San Miguel Tarlac.



A probable cause was found with respect to the case of Manalo and the case of Delos Reyes was dismissed and Manalo was convicted by the court of first instance of Pangasinan.



Then the heirs of the deceased passengers filed a complaint for recovery of civil damages before the court of first instance impleading both the defendant and the respondent.



The CFI found Manalo guilty of negligence but this was reverse by the IAC.

ISSUE: Did SAL break the contract of carriage?

ISSUE.

RULING:

Who is liable for the death and physical injuries suffered by the passengers of the jeepney?

Yes, when an airline issues a ticket to a passenger, confirmed for a particular flight on a certain date, a contract of carriage arises. The passenger has every right to expect that he be transported on that flight and on that date. If he does not, then the carrier opens itself to a suit for a breach of contract of carriage. A contract of carriage requires common carriers to transport passengers safely as human care and foresight can provide (Art. 1755, NCC). In an action for brech of a contract of carriage, the aggrieved party does not have to prove that the common carrier was at fault or was negligent. All that is necessary is to prove the existence of the contract and the fact of its non-performance by the carrier. SAL failed to inform of the delay in the turnaround aircraft in Frankfurt, neither did it ask if the respondent and 25 other delayed passengers are amenable to a stay in Singapore. Even SAL’s manual mandates that in cases of urgent connections the head office of defendant in Singapore has to be informed of delays so as to make needed arrangements for connecting passengers. When respondent conveyed her apprehension in Frankfurt of the impending delay, she was assured by petitioner’s personnel in Frankfurt that she will be transported to Manila on the same date. The lady employee at the counter in Singapore only allowed respondent to use the phone upon threat of suit, the male employee at the counter marked “Immediate Attention to Passengers with Immediate Booking” was rude to her. Petition is denied. CA decision affirmed.

HELD: According to the Supreme Court, The IAC erred in applying the doctrine of last clear chance in this case because this doctrine applies only in a suit between the owners and drivers of two colliding vehicles and not in a suit where passengers demand responsibility from a carries to enforce its contractual obligation. So the decision of the IAC was set aside and the decision of the CFI was reinstated.

ARADA v. CA FACTS: -

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Petitioner Alejandro Arada is the proprietor and operator of the firm South Negros Enterprises which has been organized and established for more than 10 years. It is engaged in the business of small scale shipping as a common carrier, servicing the hauling of cargoes of different corporations and companies with the 5 vessels it was operating. On March 24, 1982, petitioner entered into a contract with private respondent to safely transport as a common carrier, cargoes of the latter from San Carlos City, Negros Occidental to Mandaue City using one of petitioner's vessels, M/L Maya. The cargoes of private respondent San Miguel Corporation consisted of 9,824 cases of beer empties valued at P176,824.80. Petitioner thru its crew master, Mr. Vivencio Babao, applied for a clearance with the Philippine Coast Guard for M/L Maya to leave the port of San Carlos City, but due to a typhoon, it was denied clearance. The next day, M/L Maya was given clearance as there was no storm and the sea was calm. Hence, said vessel left for Mandaue City. While it was navigating towards Cebu, a typhoon developed and said vessel was buffeted on all its sides by big waves. Its rudder was destroyed and it drifted for sixteen (16) hours although its engine was running. At about 4:00 a.m., the vessel sank with whatever was left of its cargoes. The crew was rescued by a passing pump boat and was brought to Calanggaman Island. Later in the afternoon, they were brought to Palompon, Leyte, where Vivencio Babao filed a marine protest. On the basis of such marine protest, the Board of Marine Inquiry recommended that the owner/operator, officers and crew of M/L Maya be exonerated or absolved from any administrative liability on account of this incident. The Board's report containing its findings and recommendation was then forwarded to the headquarters of the Philippine Coast Guard for appropriate action. On the basis of such report, the Commandant of the Philippine Coast Guard rendered a decision exonerating the owner/operator officers and crew of the ill-fated M/L Maya from any administrative liability on account of said incident. SMC filed a complaint in the RTC its first cause of action being for the recovery of the value of the cargoes anchored on breach of contract of carriage. RTC dismissed the plaintiff’s claim on the basis of its first cause of action. SMC appealed to the CA. CA reversed the decision and Arada was ordered to pay unto the appellant SMC. It ruled that "in view of his failure to observe extraordinary diligence over the cargo in question and his negligence previous to the sinking of the carrying vessel, as above shown, the appellee is liable to the appellant for the value of the lost cargo

ISSUE: Whether or not petitioner is liable for the value of the lost cargoes? YES RULING: There is no doubt that petitioner was exercising its function as a common carrier when it entered into a contract with private respondent to carry and transport the latter's cargoes. A common carrier, both from the nature of its business and for insistent reasons of public policy is burdened by law with the duty of exercising extraordinary diligence not only in ensuring the safety of passengers, but in caring for the goods transported by it. The loss or destruction or deterioration of goods turned over to the common carrier for the conveyance to a designated destination raises instantly a presumption of fault or negligence on the part of the carrier, save only where such loss, destruction or damage arises from extreme circumstances such as a natural disaster or calamity.

In order that the common carrier may be exempted from responsibility, the natural disaster must have been the proximate and only cause of the loss. However, the common carrier must exercise due diligence to prevent or minimize the loss before, during and after the occurrence of flood, storm or other natural disaster in order that the common carrier may be exempted from liability for the destruction or deterioration of the goods (Article 1739, New Civil Code). In the instant case, the appellate court was correct in finding that petitioner failed to observe the extraordinary diligence over the cargo in question and he or the master in his employ was negligent previous to the sinking of the carrying vessel. Respondent court's conclusion as to the negligence of petitioner is supported by evidence. It will be noted that Vivencio Babao knew of the impending typhoon when the Philippine Coast Guard denied M/L Maya the issuance of a clearance to sail. Less than 24 hours elapsed since the time of the denial of said clearance and the time a clearance to sail was finally issued. A common carrier is obliged to observe extraordinary diligence and the failure of Babao to ascertain the direction of the storm and the weather condition of the path they would be traversing, constitute lack of foresight and minimum vigilance over its cargoes taking into account the surrounding circumstances of the case. Furthermore, the records show that the crew of M/L Maya did not have the required qualifications provided for in P.D. No. 97 or the Philippine Merchant Marine Officers Law, all of whom were unlicensed. While it is true that they were given special permit to man the vessel, such permit was issued at the risk and responsibility of the owner. Finally, petitioner claims that the factual findings of the Special Board of Marine Inquiry exonerating the owner/operator, crew officers of the ill-fated vessel M/L Maya from any administrative liability is binding on the court. In rejecting petitioner's claim, respondent court was correct in ruling that "such exoneration was but with respect to the administrative liability of the owner/operator, officers and crew of the illfated" vessel. It could not have meant exoneration of appellee from liability as a common carrier for his failure to observe extraordinary diligence in the vigilance over the goods it was transporting and for the negligent acts or omissions of his employees. Such is the function of the Court, not the Special Board of Marine Inquiry."

GATCHALIAN v. DELIM WHO WON: Gatchalian

to him. A waiver may not casually be attributed to a person when the terms thereof do not explicitly and clearly evidence an intent to abandon a right vested in such person.

DOCTRINE: For a waiver to be valid and effective, it must not be contrary to law, morals, public policy, or good customs. To uphold a supposed waiver of any right to claim damages by an injured passenger, under circumstances like those exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence exacted by the law from common carriers and hence to render that standard unenforceable. The purported waiver is offensive to public policy. A common carrier is bound to carry its passengers safely" as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard to all the circumstances". In case of death or injuries to passengers, a statutory presumption arises that the common carrier was at fault or had acted negligently "unless it proves that it had observed extraordinary diligence as prescribed in Articles 1733 and 1755." To exempt a common carrier from liability for death or physical injuries to passengers upon the ground of force majeure, the carrier must clearly show not only that the efficient cause of the casualty was entirely independent of the human will, but also that it was impossible to avoid. Any participation by the common carrier in the occurrence of the injury will defeat the defense of force majeure.

The terms of the Joint Affidavit in the instant case cannot be regarded as a waiver cast in "clear and unequivocal" terms. Moreover, the circumstances under which the Joint Affidavit was signed by petitioner Gatchalian need to be considered. Petitioner testified that she was still reeling from the effects of the vehicular accident, having been in the hospital for only three days, when the purported waiver in the form of the Joint Affidavit was presented to her for signing; that while reading the same, she experienced dizziness but that, seeing the other passengers who had also suffered injuries sign the document, she too signed without bothering to read the Joint Affidavit in its entirety. Considering these circumstances there appears substantial doubt whether petitioner understood fully the import of the Joint Affidavit (prepared by or at the instance of private respondent) she signed and whether she actually intended thereby to waive any right of action against private respondent.

FACTS: -

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Petitioner Reynalda Gatcalian boarded, as paying passenger, respondent’s “Thames” mini bus at a point in San Eugenio, LU bound for Bauang, LU. On the way, while the bus was running along the highway in Barrio Payocpoc, Bauang, Union, “a snapping sound” was suddenly heard at one part of the bus and, shortly thereafter, the vehicle bumped a cement flower pot on the side of the road, went off the road, turned turtle and fell into a ditch. Several passengers, including Gatchalian, were injured and were promptly brought to a hospital. Upon medical examination, petitioner was found to have sustained physical injuries on the leg, arm and forehead. Passengers were confined in the hospital, Mrs. Adela Delim, wife of respondent, visited them and later paid for their hospitalization and medical expenses. She also gave petitioner P12with which to pay her transportation expense in going home from the hospital. However, before Mrs. Delim left, she had the injured passengers, including petitioner, sign an already prepared Joint Affidavit which stated, among other things that plaintiffs are “no longer interested to file a complaint, criminal or civil against the said driver and owner of the said Thames, because it was an accident” and that the said driver and owner has already helped them. Notwithstanding such document, Gatchalian filed with the CFI an action extra contractu to recover compensatory and moral damages. She alleged in the complaint that her injuries sustained from the vehicular mishap had left her with a conspicuous white scar on the forehead, generating mental suffering and an inferiority complex on her part; and that as a result, she had to retire in seclusion and stay away from her friends. She also alleged that the scar diminished her facial beauty and deprived her of opportunities for employment. Respondent averred that the vehicular mishap was due to force majeure, and that petitioner had already been paid and moreover had waived any right to institute any action against him (private respondent) and his driver, when petitioner Gatchalian signed the Joint Affidavit. CFI dismissed the complaint upon the ground that when petitioner Gatchalian signed the Joint Affidavit, she relinquished any right of action (whether criminal or civil) that she may have had against respondent and the driver of the mini-bus. On appeal, CA reversed the TC’s conclusion that there had been a valid waiver, but affirmed the dismissal of the case by denying petitioner’s claim for damages.

ISSUE/S: 1. W/N a waiver relinquishing the rights to file a civil/criminal suit against a common carrier is valid? NO 2. W/N defendant common carrier is liable to plaintiff? YES RULING: 1. A waiver, to be valid and effective, must in the first place be couched in clear and unequivocal terms which leave no doubt as to the intention of a person to give up a right or benefit which legally pertains

Since what is involved here is the liability of a common carrier for injuries sustained by passengers in respect of whose safety a common carrier must exercise extraordinary diligence, any waiver limiting its liability must be construed strictly against it. For a waiver to be valid and effective, it must not be contrary to law, morals, public policy, or good customs. To uphold a supposed waiver of any right to claim damages by an injured passenger, under circumstances like those exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence exacted by the law from common carriers and hence to render that standard unenforceable. The purported waiver is offensive to public policy. 2. A common carrier is bound to carry its passengers safely" as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard to all the circumstances". In case of death or injuries to passengers, a statutory presumption arises that the common carrier was at fault or had acted negligently "unless it proves that it had observed extraordinary diligence as prescribed in Articles 1733 and 1755." In fact, because of this statutory presumption, it has been held that a court need not even make an express finding of fault or negligence on the part of the common carrier in order to hold it liable. To overcome this presumption, the common carrier must show to the court that it had exercised extraordinary diligence to prevent the injuries. The standard of extraordinary diligence imposed upon common carriers is considerably more demanding than the standard of ordinary diligence, i.e., the diligence of a good pater familias established in respect of the ordinary relations between members of society. In the case at bar, there is no evidence showing that respondent had exercised the extraordinary diligence required by law. Respondent did not even attempt, during the trial, to prove that he had indeed exercised the requisite extraordinary diligence. Respondent did try to exculpate himself from liability by alleging that the mishap was the result of force majeure. But allegation is not proof and here again, respondent utterly failed to substantiate his defense of force majeure. To exempt a common carrier from liability for death or physical injuries to passengers upon the ground of force majeure, the carrier must clearly show not only that the efficient cause of the casualty was entirely independent of the human will, but also that it was impossible to avoid. Any participation by the common carrier in the occurrence of the injury will defeat the defense of force majeure. Moreover, the record yields affirmative evidence of fault or negligence on the part of respondent common carrier. The driver did not stop to check if anything had gone wrong with the bus despite the fact that one of the passengers had already apprised him of the “snapping sound”. This could only mean that the bus had not been checked physically or mechanically to determine what was causing the "snapping sound" which had occurred so frequently that the driver had gotten accustomed to it.

GACAL v. PHILIPPINE AIRLINES (183 SCRA 189, G.R. No. 55300 March 16, 1990)

BACHELOR EXPRESS, INC. v. COURT OF APPEALS G.R. No. 85691, 31 July 1990, 188 SCRA 216

FACTS: Plaintiffs Franklin Gacal, his wife and three others were passengers of PAL plane at Davao Airport for a flight to Manila, not knowing that the flight, were Commander Zapata with other members of Moro National Liberation Front. They were armed with grenades and pistols. After take off, the members of MNLF announced a hijacking and directed the pilot to fly directly to Libya, later to Sabah. They were, however, forced to land in Zamboanga airport for refueling, because the plane did not have enough fuel to make direct flight to Sabah. When the plane began to taxi at the runaway of Zamboanga airport, it was met by two armored cars of the military.

FACTS: 

On Aug 1980, a bus owned by Bachelor Express, Inc. (BEI) and driven by Cresencio Rivera came from Davao City on its way to Cagayan de Oro City passing Butuan City.



While at Tabon-Tabon, Butuan City, the bus picked up a passenger and about 15 mins later, a passenger at the rear portion suddenly stabbed a PC soldier which caused commotion and panic among the passengers.

An armored car subsequently bumped the stairs leading inside the plane. That commenced the battle between the military and the hijackers, which led ultimately to the liberation of the plane’s surviving crew and passengers with the final score of ten passengers and three hijackers dead.



When the bus stopped, passengers Ornominio Beter and Narcisa Rautraut were found lying down the road, the former already dead as a result of head injuries and the latter also suffering from severe injuries which caused her death later.

ISSUE: Whether or not hijacking is a case fortuito or force majeure, which would exempt an aircraft from liability for, damages to its passengers and personal belongings that were lost during the incident?



The passenger assailant alighted from the bus and ran toward the bushes but was killed by the police. Thereafter, the heirs of Ornominio Beter and Narcisa Rautraut, private respondents herein the parents of Beter and Rautraut.

HELD:



RTC dismissed the complaint. Upon appeal, the decision was reversed and set aside. CA found BEI and Rivera solidarily liable to pay the private respondents herein.

In order to constitute a caso fortuito that would exempt from liability under Art 1174 of the civil code, it is necessary that the following elements must occur: (a) the cause of the breach of obligation must be independent of human will; (b) the event must be unforeseeable or unavoidable; (c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; (d) the debtor must be free from any participation in or aggravation of the injury to the creditor. Applying the above guidelines, the failure to transport the petitioners safely from Davao to Manila was due to the skyjacking incident staged buy the MNLF without connection to the private respondent, hence, independent of will of PAL or its passengers. The events rendered it impossible for PAL to perform its obligation in a normal manner and it cannot be faulted for negligence on the duty performed by the military. The existence of force majeure has been established thus exempting PAL from payment of damages.

ISSUE: What was the proximate cause of the whole incident? Whether or not the petitioner’ common carrier observed extraordinary diligence to safeguard the lives of its passengers? NO RULING: Petitioner, in order to overcome the presumption of fault/negligence under the law, states that the vehicular incident resulting in the death of the passengers Beter and Rautraut was caused by force majeure/casa fortuito. The following essential characteristics of casa fortuito are: (1) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will; (2) It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid; (3) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner. and (4) the obligor (debtor) must be free from any participation in the aggravation of the injury resulting to the creditor. The running amuck of the passenger was the proximate cause of the incident as it triggered off a commotion and panic among passengers started running to the sole exit shoving each other resulting in the falling off the passengers Beter and Rautraut causing them fatal injuries. The sudden act of the passenger who stabbed another passenger in the bus is within context of force majeure.

JOSE PILAPIL vs. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY, INC. (G.R. No. 52159, December 22, 1989)

SWEET LINES INC. v. COURT OF APPEALS (121 SCRA 769) FACTS:

FACTS: Petitioner Pilapil, on board respondent’s bus was hit above his eye by a stone hurled by an unidentified bystander. Respondent’s personnel lost no time in bringing him to a hospital, but eventually petitioner partially lost his left eye’s vision and sustained a permanent scar. Thus, Petitioner lodged an action for recovery of damages before the Court of First Instance of Camarines Sur which the latter granted. On appeal, the Court of Appeals reversed said decision.

Herein private respondents purchased first-class tickets from petitioner at the latter’s office in Cebu City. They were to board M/V Sweet Grace bound for Catbalogan, Western Samar. Instead of departing at the scheduled hour of about midnight on July 8, 1972, the vessel set sail at 3:00 am of July 9, 1972 only to be towed back to Cebu due to engine trouble, arriving there on the same day at about 4:00 pm. The vessel lifted anchor again on July 10, 1972 at around 8:00 am. Instead of docking at Catbalogan (the first port of call), the vessel proceeded direct to Tacloban. Private respondents had no recourse but to disembark and board a ferry boat to Catbalogan. Hence, the suit for breach of contract of carriage.

ISSUE: ISSUE: Whether or not common carriers assume risks to passengers such as the stoning in this case?

Whether or not the mechanical defect constitutes a fortuitous event which would exempt the carrier from liability.

HELD: HELD: In consideration of the right granted to it by the public to engage in the business of transporting passengers and goods, a common carrier does not give its consent to become an insurer of any and all risks to passengers and goods. It merely undertakes to perform certain duties to the public as the law imposes, and holds itself liable for any breach thereof. xxx While the law requires the highest degree of diligence from common carriers in the safe transport of their passengers and creates a presumption of negligence against them, it does not, however, make the carrier an insurer of the absolute safety of its passengers. xxx Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful acts or negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission. Clearly under the above provision, a tort committed by a stranger which causes injury to a passenger does not accord the latter a cause of action against the carrier. The negligence for which a common carrier is held responsible is the negligent omission by the carrier's employees to prevent the tort from being committed when the same could have been foreseen and prevented by them. Further, under the same provision, it is to be noted that when the violation of the contract is due to the willful acts of strangers, as in the instant case, the degree of care essential to be exercised by the common carrier for the protection of its passenger is only that of a good father of a family.

No. As found by the trial court and the Court of Appeals, there was no fortuitous event or force majeure which prevented the vessel from fulfilling its undertaking of taking the private respondents to Catbalogan. In the first place, mechanical defects in the carrier are not considered a caso fortuito that exempts the carrier from responsibility. In the second place, even granting arguendo that the engine failure was a fortuitous event, it accounted on for the delay of departure. When the vessel finally left the port, there was no longer any force majeure that justified bypassing a port of call.

ASIAN TERMINALS, INC. V. SIMON ENTERPRISES, INC. GR. No. 177116 FEB 27, 2013 FACTS: Simon Enterprise Inc. (Simon) has entered into contract with Contiquincybunge Export Company (Contiquincybunge) as its consignee of the shipped Soybean Meal. On October 25, 1995 and on November 25, 1995 Contiquincybunge has made a shipment through M/V Sea Dream and M/V Tern respectively at the Port of Darrow, Louisiana, U.S.A. For the first shipment, Contiquincybunge made a shipment of 6,825.144 metric tons of U.S. Soybean Meal which when the M/V Sea Dream arrived at the Port of Manila the bulk of soybean meal was received by the Asian Terminals, Inc. (ATI), for shipment to Simon. However, when it reached its receiver Simon, it was already short by 18.556 metric tons. For the second shipment, Contiquincybunge made shipment, through M/V Tern, of 3,300.000 metric tons of U.S. Soybean Meal in Bulk for delivery to Simon at the Port of Manila. The shipment was received by ATI again for delivery to Simon. However, the shipped cargos were found lacking 199.863 metric tons. Simon has filed an action for damages against the unknown owner of the vessels M/V Sea Dream and M/V Tern, its local agent Inter-Asia Marine Transport, Inc., and petitioner ATI alleging that it suffered the losses through the fault or negligence of the said defendants. The case of the unknown owner of the vessel M/V Sea Dream has been settled in release and quitclaim and therefore has been stricken out of the case, leaving M/V Tern, its local agent Inter-Asia Marine Transport, Inc., and petitioner ATI’s case remaining. The RTC has ruled that the defendants be solidarily liable for the damages incurred by Simon. Unsatisfied with the RTC ruling, the owner of the M/V Tern, and Inter-Asia Marine Transport, Inc. appealed to CA on the issue whether RTC has erred in finding that they did not exercise extraordinary diligence in the handling of the goods. On the other hand, the petitioner ATI has also appealed to CA on the issue that the RTC, the court-a-quo, committed serious and reversible error in holding ATI solidarily liable with co-defendant appellant Inter-Asia Marine Transport, Inc. contrary to the evidence presented. The CA ruled that the RTC ruling be assailed with some modifications on the basis that M/V Tern and Inter-Asia Marine Transport, Inc. have failed to establish that they exercised extraordinary diligence in transporting the goods or exercised due diligence to forestall or lessen the loss as provided in Article 1742 of the Civil Code. And on ATI’s RTC ruling, it was assailed as well on the basis that the stevedore of the M/V Tern has witnessed that during the dischargement of the cargo, there has been spillage done by the stevedores of ATI which is an evidence that ATI has been negligible in handling the goods. ATI filed a motion for reconsideration at CA but was denied. It then filed a petition for certiorari with the sole issue of whether the appellate court erred in affirming the decision of the trial court holding petitioner ATI solidarily liable with its co-defendants for the shortage incurred in the shipment of the goods to respondent. The issue involves questions of facts which cannot be entertained by SC for it is not a trier of facts under rule 45 of the 1997 rules of civil procedure. However, the said rule 45 is not ironclad and has certain exceptions. The issue raised by ATI was merited to be entertained by SC under the rule 4, when the judgment is based on a misapprehension of facts. ISSUE: Whether the appellate court erred in affirming the decision of the trial court holding petitioner ATI solidarily liable with its co-defendants for the shortage incurred in the shipment of the goods to respondent. RULING: The petition for review on certiorari was granted to ATI. The SC agreed to ATI’s claim that the CA erred in affirming the decision of the trial court holding petitioner ATI solidarily liable with its co-defendants for the shortage incurred in the shipment of the goods to respondent. The CA misapprehended the following facts:

First, petitioner ATI is correct in arguing that the respondent failed to prove that the subject shipment suffered actual shortage, as there was no competent evidence to prove that it actually weighed 3,300 metric tons at the port of origin. Second, as correctly asserted by petitioner ATI, the shortage, if any, may have been due to the inherent nature of the subject shipment or its packaging since the subject cargo was shipped in bulk and had a moisture content of 12.5%. Third, SC agreed with the petitioner ATI that respondent has not proven any negligence on the part of the former.

REPUBLIC OF THE PHIL., represented by the DEPARTMENT OF HEALTH, NATIONAL TRUCKING AND FORWARDING CORPORATION (NTFC) and COOPERATIVE FOR AMERICAN RELIEF EVERYWHERE, INC. (CARE) VS. LORENZO SHIPPING CORPORATION (LSC) G.R. No. 153563. February 7, 2005 FACTS: The Philippine government entered into a contract of carriage of goods with petitioner NTFC whereby the latter shipped bags of non-fat dried milk through respondent LSC. The consignee named in the bills of lading issued by the respondent was Abdurahma Jama, petitioner’s branch supervisor in Zamboanga City. On reaching the port of Zamboanga City, the respondent’s agent unloaded the goods and delivered the same to petitioner’s warehouse. Before each delivery, the delivery checkers of respondent’s agent requested Jama to surrender the original bills of lading, but the latter merely presented certified true copies thereof. Upon completion of each delivery, the delivery checkers asked Jama to sign the delivery receipts. However, at times when Jama had to attend to other business before a delivery was completed, he instructed his subordinates to sign the delivery receipts for him.

COMPANIA MARITIMA V. COURT OF APPEALS AND VICENTE CONCEPCION (162 SCRA 685) FACTS: Vicente Concepcion is doing business under the name of Consolidated Construction. Being a Manila based contractor, Concepcion had to ship his construction equipment to Cagayan de Oro. On August 28, 1964, Concepcion shipped 1 unit pay loader, 4 units of 6x6 Roe trucks, and 2 pieces of water tanks. The aforementioned equipment was loaded aboard the MV Cebu, which left Manila on August 30, 1964 and arrived at Cagayan de Oro on September 1, 1964. The Reo trucks and water tanks were safely unloaded however the pay loader suffered damage while being unloaded. The damaged pay loader was taken to the petitioner’s compound in Cagayan de Oro.

Notwithstanding the precautions taken, petitioner NTFC allegedly did not receive the good and filed a formal claim for non-delivery of the goods shipped through respondent. Respondent explained that the cargo had already been delivered to Jama. The government through the DOH, CARE and NTFC as plaintiffs filed an action for breach of contract of carriage against respondent as defendant.

Consolidated Construction thru Vicente Concepcion wrote Compania Maritima to demand a replacement of the broken pay loader and also asked for damages. Unable to get a response, Concepcion sent another demand letter. Petitioner meanwhile, sent the damaged payloader to Manila, it was weighed at San Miguel Corporation, where it was found that the payloader actually weighed 7.5 tons and not 2.5 tons as declared in its bill of lading. Due to this, petitioner denied the claim for damages of Consolidated Construction. Consolidated then filed an action for damages against petitioner with the Court of First Instance of Manila. The Court of First Instance dismissed the complaint stating that the proximate cause of the fall of the payloader which caused its damage was the act or omission of Vicente Concepcion for misrepresenting the weight of the payloader as 2.5 tons instead of its true weight of 7.5 tons. On appeal, the Court of Appeals, reversed the decision of the Court of First Instance and ordered the plaintiff to pay Concepcion damages. Hence this petition.

ISSUE: Whether or not respondent is presumed at fault or negligent as common carrier for the loss or deterioration of the goods.

ISSUE: Whether or not the act of respondent Concepcion of misdeclaring the true weight of the payloader the proximate and only cause of the damage of the payloader?

HELD:

HELD:

Article 1733 of the Civil Code demands that a common carrier observe extraordinary diligence over the goods transported by it. Extraordinary diligence is that extreme measure of care and caution which persons of unusual prudence and circumspection use for securing and preserving their own property or rights. This exacting standard imposed on common carriers in a contract of carriage of goods is intended to tilt the scales in favor of the shipper who is at the mercy of the common carrier once the goods have been lodged for shipment. Hence, in case of loss of goods in transit, the common carrier is presumed under the law to have been at fault or negligent. However, the presumption of fault or negligence may be overturned by competent evidence showing that the common carrier has observed extraordinary diligence over the goods.

No, Compania Maritima is liable for the damage to the payloader. The General rule under Articles 1735 and 1752 of the Civil Code is that common carriers are presumed to be at fault or to have acted negligently in case the goods transported by them are lost, destroyed, or had deteriorated. To overcome the presumption of liability for the loss destruction or deterioration common carriers must prove that they have exercised extraordinary diligence as required by Article 1733 of the Civil Code.

The respondent has observed such extraordinary diligence in the delivery of the goods. Prior to releasing the goods to Jama, the delivery checkers required the surrender of the original bills of lading, and in their absence, the certified true copies showing that Jama was indeed the consignee of the goods. In addition, they required Jama or his designated subordinates to sign the delivery receipts upon completion of each delivery.

Extraordinary Diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and follow the required precaution fro avoiding damage or destruction of the goods entrusted to it for safe carriage and delivery. It requires common carriers to render service with the greatest skill and foresight and to use all reasonable means to ascertain the nature and characteristics of goods tendered for shipment and to exercise due care in the handling and stowage including such methods as their nature requires. The Supreme Court further held that the weight in a bill of lading are prima facie evidence of the amount received and the fact that the weighing was done by another will not relieve the common carrier where it accepted such weight and entered it in on the bill of lading. The common carrier can protect themselves against mistakes in the bill of lading as to weight by exercising extraordinary diligence before issuing such.