Transpo-case-doctrines.pdf

N O. 01

CASE Fabre Jr. v. CA

FACTS / ARGUMENTS WWCF (the entity which made arrangements with spouses Fabre – owner of the minibus – should be held liable).

DOCTRINE / NOTES A person who hires a public automobile and gives the driver directions as to the place to which he wishes to be conveyed, but exercises no other control over the conduct of the driver, is not responsible for acts of negligence of the latter or prevented from recovering for injuries suffered from a collision between the automobile and a train, caused by the negligence either of the locomotive engineer or the automobile driver. In case of injury to a passenger due to the negligence of the driver of the bus on which he was riding and of the driver of another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. Some justices believe that BOTH are liable for quasi-delict (instead of owner for the contract and driver for quasi-delict).

02

Calvo v. UCPB

Calvo 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. Calvo denies liability for the damage to the cargo. She claims that the "spoilage or wettage" took place 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 nine days

03

De Guzman v. CA

Ernesto here denies liability on the ground that the carrying of goods in merely an ancillary activity and his principal business is buying up used bottles and scrap material. He also denies liability on the ground of force majeure – Ernesto’s trucked was hijacked by armed men.

Article 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity. Neither does it 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 from a narrow segment of the general population. Transportation of goods was an integral part of Calvo’s business. Survey Report of the Marine Cargo Surveyors indicates that when the shipper transferred the cargo in question to the arrastre operator, these were covered by clean Equipment Interchange Report (EIR) and, when Calvo's employees withdrew the cargo from the arrastre operator, they did so without exception or protest either with regard to the condition of container vans or their contents. Common carriers must do more than merely show the possibility that some other party could be responsible for the damage to prove the exercise of extraordinary diligence. The Civil Code’s definition of common carrier makes no distinction between one whose principal business is the carrying of persons or thinfs, and one who does such only as an ancillary activity. A certificate of public convenience is likewise not required, as the liability arises the moment a person or firm acts as a common carrier. The duty of extraordinary diligence in the vigilance over goods is, under Article 1733, given additional specification not only by Articles 1734 and 1735 but also by Article 1745, numbers 4, 5 and

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6, Article 1745. Under Article 1745 (6)1, a common carrier is held responsible — and will not be allowed to divest or to diminish such responsibility — even for acts of strangers like thieves or robbers, except where such thieves or robbers in fact acted “with grave or irresistible threat, violence or force.” The SC believes and so holds that the limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the goods are lost as a result of a robbery which is attended by "grave or irresistible threat, violence or force." Also, in this case, the men who committed robbery were convicted of said crime in another case. 04

Bascos v. CA

Bascos denies liability on the ground that: 1. The contract between Bascos and Ciptrade is one of lease, not a contract of carriage 2. Truck was hijacked (force majeure) following the De Guzman v. CA ruling.

The affidavits presented where the transaction is referred to as a lease contract is self-serving. Yet, granting that the said evidence were not self-serving, the same were not sufficient to prove that the contract was one of lease. It must be understood that a contract is what the law defines it to be and not what it is called by the contracting parties. Furthermore, petitioner presented no other proof of the existence of the contract of lease. When goods are lost, such as in this case, the presumption of negligence on the part of the common carrier is triggered. To be exempt from liability on the ground of robbery, common carrier must establish grave and irresistible force (in this case, one affidavit about the hijacking was not a first-hand account, the second did not dwell on how the hijacking took place, and the court did not consider the third as best evidence because affiant was available as witness). Bascos failed to do this, hence, the presumption of negligence holds. The subsequent filing of the information for carnapping and robbery against the accused named in said affidavits did not necessarily mean that the contents of the affidavits were true because they were yet to be determined in the trial of the criminal cases. VDM: If the lease was proven, Bascos would not be held liable. The party to contract of carriage in that case would have been the lessee (Ciptrade).

05

Tatad v. Garcia

The agreement entered into between DOTC and EDSA LRT Corp, a foreign corporation, violates the Constitution.

What EDSA LRT Corp. owns are the rail tracks, rolling stocks like the coaches, rail stations, terminals and the power plant, not a public utility. While a franchise is needed to operate these facilities to serve the public, they do not by themselves constitute a public utility. What constitutes a public utility is not their ownership but their use to serve the public. The right to operate a public utility may exist independently and separately from the ownership of

Article 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy: x x x (6) That the common carrier’s liability for acts committed by thieves, or robbers who do not act with grave or irresistible threat, violence or force, is dispensed with or diminished. 1

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the facilities thereof. One can own said facilities without operating them as a public utility, or conversely, one may operate a public utility without owning the facilities used to serve the public. A mere owner and lessor of the facilities used by a public utility is not a public utility. In this case, the common carrier is DOTC – the law does not distinguish between public and private entities. DOTC is not required to secure a franchise because government is exempt from such (Section 132 – Public Service Act). 06

FGU Insurance v. Sarmiento

GP Sarmiento Trucking denied liability on the ground that it is not a common carrier. It asserted that it was the exclusive hauler only of Concepcion Industries, Inc., since 1988 and it was not so engaged in the business as a common carrier.

GPS, being an exclusive contractor and hauler of Concepcion Industries, Inc., rendering or offering its services to no other individual or entity, cannot be considered a common carrier. 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 hire or compensation, offering their services to the public whether to the public in general or to a limited clientele in particular, but never on an exclusive basis. The true test of a common carrier is the carriage of passengers or goods, providing space for those who opt to avail themselves of its transportation service for a fee. Given accepted standards, GPS scarcely falls within the term "common carrier." But GPS cannot escape liability. GPS trucking corporation recognizes the existence of a contract of carriage between it and FGU Insurance’s assured and admits that the cargoes it has assumed to deliver have been lost or damaged while in its custody. In such a situation, a default on, or failure of compliance with, the obligation — in this case, the delivery of the goods in its custody to the place of destination — gives rise to a presumption of lack of care and corresponding liability on the part of the contractual obligor the burden being on him to establish otherwise. GPS has failed to do so.

07

First Philippine Industrial v. CA

City Treasurer of Batangas collected taxes from FPIC (a grantee of a pipeline concession under RA 387 to contract, install and operate oil pipelines) on the ground that FPIC cannot be exempt from taxes under the LGC as said exemption applies only to “transportation contractors and persons engaged in the transportation by hire and common carriers by air, land, or water.”

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

Section 13. (a) The Commission shall have jurisdiction, supervision, and control over all public services and their franchises, equipment, and other properties, and in the exercise of its authority, it shall have the necessary powers and the aid of the public force: Provided, that public services owned or operated by government entities or government-owned or controlled corporations shall be regulated by the Commission in the same way as privately-owned public services, but certificates of public convenience or certificates of public convenience and necessity shall not be required of such entities or corporations. 2

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08

Schmitz Transport v. TVI

Pipelines are not included in the term “common carrier” which refers solely to ordinary carriers.

He must undertake to carry goods of the kind to which his business is confined ii. He must undertake to carry by the method by which his business is conducted and over his established roads; and iii. The transportation must be for hire Based on the above definitions and requirements, there is no doubt that FPIC is a common carrier i. It is engaged in the business of transporting or carrying goods (petroleum products) ii. 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 iii. The fact that FPIC has a limited clientele does not exclude it from the definition of a common carrier

Schmitz (customs broker) is arguing that its act of chartering (aka hiring) the barge and tugboat of TVI, it was acting only as an agent of Little Giant (consignee), therefore the transportation contract was actually between Little Giant and TVI.

Schmitz and TVI was a common carrier and a private carrier, respectively. Schmitz is a common carrier because it undertook to transport the cargoes from the shipside of M/V Alexander Saveliev to Little Giant’s warehouse at Cainta. As long as a person or corporation holds itself to the public for the purpose of transporting goods as a business, it is already considered a common carrier regardless if it owns the vehicle to be used or has to hire one. Customs broker may be regarded as common carriers. It is enough that the party undertakes to deliver the goods for pecuniary estimation. Not being a party to the Contract, Little giant cannot directly sue TVI based on breach but it can maintain a cause of action for negligence. In the case of TVI, even if it acted as a private carrier which meant that it had no duty to observe extraordinary diligence, it was still required to observe ordinary diligence to ensure the proper and careful handling, care, and discharge of the goods.

The loss was due to a fortuitous event (barge capsized due to bad weather and strong waves).

i.

There was no fortuitous event in this case. The cause of the loss was that after unloading the coils, no tugboat towed back the barge to the pier. If only the barge was towed back right away to the pier, the loss could have been avoided. However, the barge was left to float in open sea until the big waves came in and this resulted to the sinking of both the barge and the coils. Clearly, the act of god doctrine does not apply. 09

Crisostomo v. CA

Estela contends that Caravan Travel did not observe the standard of care required of a common carrier when it informed her wrongly of the flight schedule. She could not be deemed more negligent than Caravan

The contract between Estela and Caravan is a contract of services. A travel agency is not a common carrier. Caravan Travel is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a

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10

BA Finance v. CA

Travel since the latter is required by law to exercise extraordinary diligence in the fulfillment of its obligation.

common carrier. Caravan Travel did not undertake to transport Estela from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Caravan Travel’s services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours. Hence, it was only required to exercise ordinary diligence. At most, Caravan Travel acted merely as an agent of the airline, with whom Estela ultimately contracted for her carriage to Europe. Caravan Travel’s obligation to Estela in this regard was simply to see to it that Estela was properly booked with the airline for the appointed date and time. Her transport to the place of destination, meanwhile, pertained directly to the airline. The object of Estela’s contractual relation with Caravan Travel is the latter’s service of arranging and facilitating Estela’s booking, ticketing and accommodation in the package tour. In contrast, the object of a contract of carriage is the transportation of passengers or goods. It is in this sense that the contract between the parties in this case was an ordinary one for services and not one of carriage.

BA Financed leased its truck to Rock Component Philippines. BA Finance denies liability on the ground that it is not the employer of the negligent driver who was under the control and supervision of Lino Castro at the time of accident and the truck was in physical possession of Rock by virtue of the lease agreement.

The registered owner of a certificate of public convenience is liable to the public for the injuries or damages suffered by passengers or third persons caused by the operation of said vehicle, even though the same had been transferred to a third person. The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual, the registered owner. Under the same principle the registered owner of any vehicle, even if not used for a public service, should primarily responsible to the public or to the third persons for injuries caused the latter while the vehicle is being driven on the highways or streets. A registered owner who has already sold or transferred a vehicle has the recourse to a third-party complaint, in the same action brought against him to recover for the damage or injury done, against the vendee or transferee of the vehicle. The protection that the law aims to extend to him would become illusory were the registered owner given the opportunity to escape liability by disproving his ownership. If the policy of the law is to be enforced and carried out, the registered owner should not be allowed to prove the contrary to the prejudice of the person injured, that is, to prove that a third person or another has become the owner, so that he may thereby be relieved of the responsibility to the injured person.

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VDM: Even if allowed to present evidence, still not exempted form liability. 11

Occidental Transport v. CA

Occidental claims that the Fiera did not belong to Trencio but to its registered owner, Sevilla Line, and therefore, the grant of damages for its repair was improperly awarded to Trencio.

The fact that the Fiera was owned by Trencio though registered with Sevilla Line, will not alter the conclusion arrived at by the lower court. The party who stands to benefit or suffer from the decision is admittedly private respondent Trencio and not Sevilla Lines. William Sevilla admitted that the real owner of the vehicle was Trencio. VDM: The difference between who is liable (registered owner) and who will be granted damages (real owner) arises out of public policy.

12

Benedicto v. IAC

Benedicto urges that she could not be held answerable for the loss of the cargo, because the doctrine which makes the registered owner of a common carrier vehicle answerable to the public for the negligence of the driver despite the sale of the vehicle to another person, applies only to cases involving death of or injury to passengers. Benedicto also argues that she cannot be held liable because she is a stranger to the contract of carriage. Benedicto further argues that there was no perfected contract of carriage for the reason that there was no proof that her consent or that of Tee had been obtained; no proof that the driver, Licuden, was authorized to bind the registered owner; and no proof that the parties had agreed on the freightage to be paid.

13

Equitable v. Suyom

Equitable denies liability on the following grounds: a. Vehicle had already been sold to Ecatine b. It was no longer in possession and control thereof at the time of the incident c. Tutor was an employee, not of Equitable but of Ecatine

A common carrier, both from the nature of its business and for insistent reasons of public policy, is burdened by the law with the duty of exercising extraordinary diligence not only in ensuring the safety of passengers but also in caring for goods transported by it. The prevailing doctrine on common carriers makes the registered owner liable for consequences flowing from the operations of the carrier, even though the specific vehicle involved may already have been transferred to another person. Private respondent is not required to go beyond the vehicle's certificate of registration to ascertain the owner of the carrier. Driver Licuden, under the circumstances, was clothed with at least implied authority to contract to carry goods and to accept delivery of such goods for carriage to a specified destination. That the freight to be paid may not have been fixed before loading and carriage, did not prevent the contract of carriage from arising, since the freight was at least determinable if not fixed by the tariff schedules in petitioner's main business office. Put in somewhat different terms, driver Licuden is in law regarded as the employee and agent of the petitioner, for whose acts petitioner must respond. Regardless of sale made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third persons are concerned; consequently, it is directly and primarily responsible for the consequences of its operation. In contemplation of law, the owner/operator of record is the employer of the driver, the actual operator and employer being considered as merely its agent. The same principle applies even if the registered owner of any vehicle does not use it for public service. Since Equitable remained the registered owner of the tractor, it could not escape

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primary liability for the deaths and the injuries arising from the negligence of the driver. In this case, though there was a registration of the lease, the same was overtaken by the Deed of Sale between Equitable and Ecatine. VDM: If there was no sale and the lease agreement was duly registered, Equitable would not be held liable because the registration is a notification to the entire world that the car is not in its possession or control. 14

Teodoro v. Sps. Nicolas

Sps. Perena argue that they exercised the diligence of a good father of the family in the selection and supervision of Alfaro, the van driver, by seeing to it that Alfaro had a driver’s license and that he had not been involved in any vehicular accident prior to the fatal collision with the train; that they even had their own son travel to and from school on a daily basis; and that Teodoro Pereña himself sometimes accompanied Alfaro in transporting the passengers to and from school.

Diligence of a good father of a family is not sufficient because a school bus service is a common carrier. In this case, there is no question that the Pereñas as the operators of a school bus service were: (a) engaged in transporting passengers generally as a business, not just as a casual occupation; (b) undertaking to carry passengers over established roads by the method by which the business was conducted; and (c) transporting students for a fee. Despite catering to a limited clientèle, the Pereñas operated as a common carrier because they held themselves out as a ready transportation indiscriminately to the students of a particular school living within or near where they operated the service and for a fee.

15

Eastern Shipping v. CA

Eastern Shipping denies liability on the ground that the shipment was discharged in good order from the vessel unto the custody of the arrastre operator so an damage after shipment is no longer its liability.

The common carrier’s duty to observe the requisite diligence in the shipment of goods lasts from the time the articles are surrendered to or unconditionally placed in the possession of, and received by, the carrier for transportation until delivered to, or until the lapse of a reasonable time for their acceptance by, the person entitled to receive them. The legal relationship between the consignee and the arrastre operator is akin to that of a depositor and warehouseman. The relationship between the consignee and the common carrier is similar to that of the consignee and the arrastre operator. Since it is the duty of the Arrastre to take good care of the goods that are in its custody and to deliver them in good condition to the consignee, such responsibility also devolves upon the Carrier. Both the Arrastre and the Carrier are therefore charged with the obligation to deliver the goods in good condition to the consignee. Possible defense of a common carrier for breach of contract is that the cause or loss of damage was not due to acts of the common carrier.

16

Delsan Transport v. CA

Delsan invokes Section 113 of the Insurance Code which provides that in every marine insurance upon a ship or

Though payment made by American Home for the insured value of the lost cargo operates as waiver of its right to enforce the term

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freight, or freightage, or upon any thing which is the subject of marine insurance there is an implied warranty by the shipper that the ship is seaworthy. Consequently, the insurer will not be liable to the assured for any loss under the policy in case the vessel would later on be found as not seaworthy at the inception of the insurance. It theorized that when private respondent paid Caltex the value of its lost cargo, the act of American Home is equivalent to a tacit recognition that the ill-fated vessel was seaworthy; otherwise, American Home was not legally liable to Caltex due to the latters breach of implied warranty under the marine insurance policy that the vessel was seaworthy.

of implied warranty against Caltex under the marine insurance, this cannot be validly interpreted as an automatic admission of the sea vessels seaworthiness as to foreclose recourse for any obligation as a common carrier. There was no fortuitous event in this case. Sudden and unexpected change of condition was belied by PAGASA weather update. Unexplained sinking gives rise to a presumption of unseaworthiness.

Delsana also attributes the loss to a fortuitous event. 17

Phil Charter v. Chemoil

ICTSI claims that the loss / damage to the shipment was caused exclusively by the defective material of the wooden battens of the shipment. The damage is attributed to the insufficient packing and unbalanced weight distribution of the cargo.

To exculpate itself from liability under any of the causes, the common carrier is burdened to prove any of the aforecited causes (Art. 1734) claimed by it by a preponderance of evidence. If the carrier succeeds, the burden of evidence is shifted to the shipper to prove that the carrier is negligent. “Defect” is the want or absence of something necessary for completeness or perfection. A deficiency in something essential to the proper use for the purpose for which the thing is to be used. The case falls under one of the exceptions mentioned in Article 1734, particularly the character of the goods or defects in the packing or in the containers. The trial court to which SC agreed found that the breakage was not due to the fault or negligence of ICTSI, but to the inherent defect and weakness of the materials used in the fabrication of the crate. VDM: General rule is that carrier can open the crate but thy take the risk in opening the cargo.

18

Philamgen v. PKS Shipping

PKS Shipping denies liability on the ground the loss was due to a fortuitous event (vessel was suddenly tossed by waves of extraordinary height of 6-8 feet and buffeted by strong winds of 1.5 knots resulting in the entry of water into the barge’s hatches.)

Loss was due to a fortuitous event. there was no way by which the barge's or the tugboat's crew could have prevented the sinking of the vessel.

19

Saludo v. CA

TWA and PAL failed to exercise extraordinary diligence required by law which resulted in the switching and/or misdelivery of the remains of Crispina Saludo to Mexico causing gross delay in its shipment to the Philippines, and consequently, damages. "(t)he issuance of a bill of lading carries the presumption that the goods were delivered to the carrier issuing the bill, for immediate

The two-fold character of a bill of lading is all too familiar; it is a receipt as to the quantity and description of the goods shipped and a contract to transport the goods to the consignee or other person therein designated, on the terms specified in such instrument. The Airway Bill in this case was issued, not as evidence of receipt of delivery of the cargo, but merely as a confirmation of the booking.

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20

21

Lorenzo Shipping v. BJ Marthel

Sealoader Shipping v. Grand Cement

shipment, and it is nowhere questioned that a bill of lading is prima facie evidence of the receipt of the goods by the carrier x x x In the absence of convincing testimony establishing mistake, recitals in the bill of lading showing that the carrier received the goods for shipment on a specified date control.

Where such a delivery has thus been accepted by the carrier, the liability of the common carrier commences eo instanti. Hence, while the SC agrees with the Saludo family that the extraordinary diligence statutorily required to be observed by the carrier instantaneously commences upon delivery of the goods thereto, for such duty to commence there must in fact have been delivery of the cargo subject of the contract of carriage. Only when such fact of delivery has been unequivocally established can the liability for loss, destruction or deterioration of goods in the custody of the carrier, absent the excepting causes under Article 1734, attach and the presumption of fault of the carrier under Article 1735 be invoked.

Lorenzo Shipping maintains that its obligation to pay fully the purchase price was extinguished because the adverted contract was validly terminated due to respondent's failure to deliver within the two-month period.

By accepting the cylinders when they were delivered to the warehouse, petitioner waived the claimed delay in the delivery of said items.

Sealoader contends that there was contributory negligence on the part of Grand Cement as they did not inform Sealoder of the weather and because of their late loading of cargo. Sealoder asserts that if the cargo was loaded earlier, the barge would not have suffered under the storm, eventually ramming on the wharf.

The proximate cause of the loss was Sealoader’s negligence evidenced by the fact that it lacked radio communication, manifest laxity of the crew in monitoring the weather and failure to keep a watchful eye on the prevailing weather conditions. Sealoader cannot merely rely on other vessels for weather updates and warnings on approaching storms, as what apparently happened in this case. Common sense and reason dictates this.

The law implies that if no time is fixed, delivery shall be made within a reasonable time, in the absence of anything to show that an immediate delivery intended.

Grand Cement was waiting for the signal from the crew of the tugboat so that the barge will not drift way. VDM: Even if there was delay in the loading of goods, possible defense of common carrier is that the delay is not the cause of the breach. 22

Mitsui Lines v. CA

Mitsui Lines claim that what happened in their case constitutes as ‘loss or damage’ within the purview of Sec. 3(6)3 of the COGSA, and that since it is, and Lavine

Based on the Civil Code and in Sec. 3(6), par. 4 of COGSA, loss contemplates merely a situation where no delivery at all was made by the shipper of the goods because the same had

Section 3 (6). Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading. If the loss or damage is not apparent, the notice must be given within three days of the delivery. Said notice of loss or damage may be endorsed upon the receipt for the goods given by the person taking delivery thereof. The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint survey or inspection. In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided, that, if a notice of loss or 3

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didn’t file within the 1 year period, then their action is already barred

perished, gone out of commerce, or disappeared in such a way that their existence is unknown or they cannot be recovered. There was no loss in this case. Common carrier is liable for the delay in the delivery – breach of contract. When damages are not due to deterioration and decay of goods while in transit and other causes independent of the condition of the cargo, the prescriptive period under COGSA does not apply. Misdelivery is not loss. Loss means no delivery at all (perished, gone out of commerce, disappeared, cannot be recovered).

23

Sulpicio Lines v. First Lepanto

Common carrier denies liability on the ground that only external packaging was damaged. There was no actual damage to the goods. Sulpicio contends that its liability, if any, is only to the extent of the cargo damage or loss and should not include the lack of fitness of the shipment for transport to Singapore due to the damaged packing. This is erroneous.

It must be stressed that in the case at bar, the damage sustained by the packaging of the cargo while in their custody resulted in its unfitness to be transported to its consignee in Singapore. Such failure to ship the cargo to its final destination because of the ruined packaging, indeed, resulted in damages on the part of the owner of the goods. The falling of the crate during the unloading is evidence of their negligence in handling the cargo. VDM: Receipt by consignee of goods despite damaged packaging constitutes a waiver.

24

Coastwise Lighterage v. CA

Coastwise argues that it is not a common carrier. It contracted with Pag-asa Sales, Inc. to transport the shipment of molasses from Negros Oriental to Manila and refers to this contract as a "charter agreement". It then proceeds to cite the case of Home Insurance Company vs. American Steamship Agencies, Inc. wherein this Court held: ". . . a common carrier undertaking to carry a special cargo or chartered to a special person only becomes a private carrier."

Under the demise or bareboat charter of the vessel, the charterer will generally be regarded as the owner for the voyage or service stipulated. The charterer mans the vessel with his own people and becomes the owner pro hac vice, subject to liability to others for damages caused by negligence. To create a demise, the owner of a vessel must completely and exclusively relinquish possession, command and navigation thereof to the charterer, anything short of such a complete transfer is a contract of affreightment (time or voyage charter party) or not a charter party at all. On the other hand a contract of affreightment is one in which the owner of the vessel leases part or all of its space to haul goods for others. It is a contract for special service to be rendered by the owner of the vessel and under such contract the general owner retains the possession, command and navigation of the ship, the charterer or

damage, either apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of t he shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been delivered.

In the case of any actual or apprehended loss or damage, the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods.

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freighter merely having use of the space in the vessel in return for his payment of the charter hire x x x An owner who retains possession of the ship though the hold is the property of the charterer, remains liable as carrier and must answer for any breach of duty as to the care, loading and unloading of the cargo. Although a charter party may transform a common carrier into a private one, the same however is not true in a contract of affreightment on account of the aforementioned distinctions between the two. Coastwise Lighterage, by the contract of affreightment, was not converted into a private carrier, but remained a common carrier and was still liable as such. 25

Philippine First Insurance v. Wallem

Based on documents, the arrastre argues that that the shipment incurred damage or losses while still in the care and responsibility of Wallem and before it was turned over and delivered to the arrastre operator.

Common carrier and arrastre operator were held solidarily liable in this case. It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier. In the instant case, the damage or losses were incurred during the discharge of the shipment while under the supervision of the carrier. Consequently, the carrier is liable for the damage or losses caused to the shipment. However, arrastre and carrier is not solidarily liable AT ALL TIMES. This must still be decided on a case to case basis.

26

Philippine Rabbit Bus v. IAC

The driver cannot be held jointly and severally liable with the carrier in case of breach of contract of carriage. 1. Firstly, the contract of carriage is between the carrier and the passenger, and in the event of contractual liability, the carrier is exclusively responsible therefore to the passenger, even if such breach be due to the negligence of his driver. The carrier can neither shift his liability on the contract to his driver nor share it with him, for his driver’s negligence is his. 2.

27

Delsan Transport v. American Home

Delsan argues that it should be exculpated from liability because the loss due to backflow occurred when the diesel oil was already completely delivered to Caltex.

Secondly, if the driver is made jointly and severally liable with the carrier, that would make the carrier’s liability personal instead of merely vicarious and consequently, entitled to recover only the share which corresponds to the driver, contradictory to the explicit provision of Article 2181 of the New Civil Code.

Any of the causes under Article 1734 is not present in this case. It failed to prove extraordinary diligence in preventing the oil spill and the backflow from happening. It was also established from the facts that Caltex’s crew were not remiss of its duties. And, since the discharging of the cargo into the depot has not yet

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been completed at the time of the spillage, it thus means that there was no actual delivery of the cargo to the consignee. Because of the backflow, it was if there was no delivery. 28

Wildvalley Shipping v. CA

The master remains the overall commander of the vessel even when there is a pilot on board. He remains in control of the ship as he can still perform the duties conferred upon him by law despite the presence of a pilot who is temporarily in charge of the vessel. It is not required of him to be on the bridge while the vessel is being navigated by a pilot. The Orinoco River being a compulsory pilotage channel necessitated the engaging of a pilot who was presumed to be knowledgeable of every shoal, bank, deep and shallow ends of the river. Compulsory pilotage – PPL not negligent. The master of the vessel deemed it best not to order the pilot to stop the vessel, mayhap, because the latter had assured him that they were navigating normally before the grounding of the vessel. Moreover, the pilot had admitted that on account of his experience he was very familiar with the configuration of the river as well as the course headings, and that he does not even refer to river charts when navigating the Orinoco River. VDM: If it was voluntary pilotage, the carrier would be liable because it is liable for the acts of its people. VDM: When the dispute is between two ships, the contract of carriage is irrelevant.

29

Maersk Line v. CA

Maersk claims that it cannot be held for damages for the alleged delay in the delivery in the capsules since it acted in good faith and there was no special contract under which it undertook to deliver the shipment on or before a specific date.

While it is true that common carriers are not obligated by law to carry and to deliver merchandise, and persons are not vested with the right to prompt delivery, unless such common carriers previously assume the obligation to deliver at a given date or time, delivery of shipment or cargo should at least be made within a reasonable time. But where a carrier has made an express contract to transport and deliver properly within a specified time, it is bound to fulfill its contract and is liable for any delay, no matter from what cause it may have arisen. A delay in the delivery of the goods spanning a period of two (2) months and seven (7) days falls was beyond the realm of reasonableness.

30

FGU Insurance v. CA

ANCO disclaims liability on the ground that the loss was due to a fortuitous event.

To be exempted from responsibility, the natural disaster should have been the proximate and only cause of the loss. There must

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have been no contributory negligence on the part of the common carrier. In this case, there was blatant negligence on the part of M/T ANCO’s crewmembers: (1) in leaving the engine-less D/B Lucio at the mercy of the storm without the assistance of the tug-boat, and (2) in failing to heed the request of SMC’s representatives to have the barge transferred to a safer place, as was done by the other vessels in the port. Thus, making said blatant negligence the proximate cause of the loss of the cargoes. 31

DSR v. Federal

C.F. Sharp denied any liability on the ground that such liability was extinguished when the vessel carrying the cargo was gutted by fire.

Since the peril of fire is not comprehended within the exceptions in Article 1734, then the common carrier shall be presumed to have been at fault or to have acted negligently, unless it proves that it has observed the extraordinary diligence required by law. Common carrier’s duty to observe the requisite diligence in the shipment of goods ends when: (a) there has been actual or constructive delivery; (b) reasonable time of acceptance.

32

Central Shipping v. Insurance Company

Central Shipping denies liability on the ground that the proximate and only cause of the sinking of its vessel and the loss of its cargo was a natural disaster, a tropical storm which neither Central shipping nor the captain of its vessel could have foreseen. The vessel was fully manned, fully equipped and in all respects seaworthy; that all the logs were properly loaded and secured; that the vessels master exercised due diligence to prevent or minimize the loss before, during and after the occurrence of the storm.

A southwest monsoon is not one of the exempting circumstances under Article 1734. Assuming there was a fortuitous event, Central Shipping is still liable because it was negligent – the sinking of the vessel was due to the shifting of the logs in the hold caused by improper stowage. To be exempt from liability due to a fortuitous event, the natural disaster must be the proximate and only cause of the loss with the entire exclusion of human agency. PAGASA declaration that there is a storm is not essential to establish “storm” as an excepting circumstance under the Civil Code. Storm can be established independently e.g. Beaufort scale Doctrine of Limited Liability is not applicable when there is concurrent negligence between the ship owner and the captain.

33

Citadel Lines v. CA

The liability should only be the amount fixed in the bill of lading.

Basic is the rule that a stipulation limiting the liability of the carrier to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon. Presumption of negligence on the part of the common carrier arises when there is loss. Common carrier in this case failed to prove that the loss was occasioned by an excepted cause.

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34

Everett Steamship v. CA

The consignee wanted to claim the full value of the lost goods (1,522,500 yen). However, the carrier claims that the bill of lading limits its liability for the lost cargo to 100,000 yen.

To defeat the carriers limited liability, Clause 18 of the bill of lading requires that the shipper should have declared in writing a higher valuation of its goods before receipt thereof by the carrier and insert the said declaration in the bill of lading, with the extra freight paid. These requirements in the bill of lading were never complied with by the shipper, hence, the liability of the carrier under the limited liability clause stands. Consignee is bound by the inaction of the shipper (by virtue of an agency relationship). Shipper is extensively engaged in the trading business and could not have been ignorant.

35

Sps. Cruz v. Sun Holidays Inc.

Sun Holidays denied any responsibility for the incident which it considered to be a fortuitous event. Sun Holidays denied being a common carrier, alleging that its boats are not available to the public but are only used as ferry resort carrier. It also claimed to have exercised the utmost diligence in ensuring the safety of its passengers, and that contrary to the spouses’ allegation, there was no storm as the Coast Guard in fact cleared the voyage.

36

PAL v. CA

PAL contends that under the Warsaw Convention, its liability, if any, cannot exceed US $20.00 based on weight as Co did not declare the contents of his baggage nor pay traditional charges before the flight.

A squall, in itself, is a fortuitous event. But Sun Holidays is still liable because it already knew that the weather condition was bad but they still sailed – here lies the negligence. A very cautious person exercising the utmost diligence would thus not brave such stormy weather and put other people’s lives at risk. The extraordinary diligence required of common carriers demands that they take care of the goods or lives entrusted to their hands as if they were their own. This respondent failed to do. The difference between a common carrier and a private carrier (aside from the degree of diligence) is that in the latter, there arises no presumption of negligence. The liability of the common carrier for the loss, destruction or deterioration of goods transported from a foreign country to the Philippines is governed primarily by the New Civil Code. In all matters not regulated by said Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by Special Laws. Since the passenger's destination in this case was the Philippines, Philippine law governs the liability of the carrier for the loss of the passenger's luggage.4 There was bad faith when PAL faked a retrieval receipt to bail itself out.

37

4

PANAM v. CA

PANAM assails the award of moral damages as without evidentiary foundation or at least excessive.

It is not a valid excuse that Ongsiako checked in at the last minute and that there was no time to load his in the plane. In fact, that makes the position of PanAm even more untenable, accepting and holding to Ongsiako as its passenger, it knew or must have

Article 1753. The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss, destruction or deterioration.

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known that the bag of Ongsiako might not be loaded on time, it was guilty of conduct amounting to bad faith. Bad faith was manifested in how he was treated (he was threatened that he will be bumped off if he keeps looking for his luggage) and in the delay of the delivery of the luggage. 38

Cathay Pacific v. CA

CATHAY alleges that as a result of mechanical trouble, all pieces of luggage on board the first aircraft bound for Jakarta were unloaded and transferred to the second aircraft which departed an hour and a half later.

CATHAY was not even aware that it left behind private respondent's luggage until its attention was called by the Hongkong Customs authorities. More, bad faith or otherwise improper conduct may be attributed to the employees of petitioner. While the mere failure of CATHAY to deliver respondent's luggage at the agreed place and time did not ipso facto amount to willful misconduct since the luggage was eventually delivered to private respondent, albeit belatedly, the employees of CATHAY acted in bad faith. To compound matters, CATHAY refused to have the luggage of Alcantara delivered to him at his hotel; instead, he was required to pick it up himself and an official of the Philippine Embassy. Under the circumstances, it is evident that petitioner was remiss in its duty to provide proper and adequate assistance to a paying passenger, more so one with first class accommodation. There is breach of contract of carriage when the carrier fails to deliver his luggage at the designated place and time, it being the obligation of a common carrier to carry its passengers and their luggage safely to their destination, which includes the duty not to delay their transportation. The Warsaw Convention must not be construed to preclude the operation of the Civil Code and other pertinent laws. It does not regulate, much less exempt, the carrier from liability for damages for violating the rights of its passengers under the contract of carriage, especially if willful misconduct on the part of the carrier's employees is found or established.

39

Trans-Asia v. CA

Trans-Asia argues that the safety of the vessel or passengers was never at stake because the sea was ‘calm’ in the vicinity where it stopped.

Plainly, the vessel was unseaworthy (only one engine running) even before the voyage began. The failure of a common carrier to maintain in seaworthy condition its vessel involved in a contract of carriage is a clear breach of its duty prescribed in Art. 1755 of the Civil Code. There was no delay in this case because it was his choice to get off the boat. VDM: The manner by which a passenger is treated should also be in an extraordinarily diligent manner. TRANSPORTATION LAW C2020 | 15

VDM: Rudeness is a matter of proof. 40

PAL v. CA

PAL theorizes that the hotel accommodations or cash assistance given in case a flight is cancelled is in the nature of an amenity and is merely a privilege that may be extended at its own discretion, but never a right that may be demanded by its passengers. Thus, when respondent Pantejo was offered cash assistance and he refused it, petitioner cannot be held liable for whatever befell respondent Pantejo on that fateful day, because it was merely exercising its discretion when it opted to just give cash assistance to its passengers.

The discriminatory act of a common carrier against its passenger ineludibly makes the former liable for moral damages under Article 21 in relation to Article 2219 (10) of the Civil Code. Assuming arguendo that the airline passengers have no vested right to these amenities in case a flight is cancelled due to force majeure, what makes petitioner liable for damages in this particular case and under the facts obtaining herein is its blatant refusal to accord the so-called amenities equally to all its stranded passengers who were bound for Surigao City. No compelling or justifying reason was advanced for such discriminatory and prejudicial conduct. More importantly, it has been sufficiently established that it is petitioners standard company policy, whenever a flight has been cancelled, to extend to its hapless passengers cash assistance or to provide them accommodations in hotels with which it has existing tie-ups. When there is delay due to a fortuitous event (typhoon Osang in this case), it is a matter of right to demand accommodation at least for a night. Extraordinary diligence includes care and attendance to welfare. This is a demandable right.

41

Calalas v. CA

Calalas claims that Salva (driver of the Isuzu truck) who bumped the rear end of the jeep of Calalas that should be held liable.

Proximate cause of the accident was the negligence of Calalas. First, the jeepney was not properly parked, its rear portion being exposed about two meters from the broad shoulders of the highway, and facing the middle of the highway in a diagonal angle. Second, it is undisputed that Calalas took in more passengers than the allowed seating capacity of the jeepney. The fact that Sunga was seated in an "extension seat" placed her in a peril greater than that to which the other passengers were exposed.

42

Japan Airlines v. CA

Passengers asserted that JAL failed to live up to its duty to provide care and comfort to its stranded passengers when it refused to pay for their hotel and accommodation expenses from June 16 to 21. They insisted that JAL was obligated to shoulder their expenses as long as they were still stranded in Narita.

Failure on the part of the common carrier to live up to the exacting standards of care and diligence renders it liable for any damages that may be sustained by its passengers. However, this is not to say that common carriers are absolutely responsible for all injuries or damages even if the same were caused by a fortuitous event. To rule otherwise would render the defense of force majeure, as an exception from any liability, illusory and ineffective. The predicament of the passengers was not due to the fault or negligence of JAL but to the closure of NAIA. Indeed, to hold JAL, in the absence of bad faith or negligence, liable for

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the amenities of its stranded passengers by reason of a fortuitous event is too much of a burden to assume. While JAL was no longer required to defray private respondents living expenses during their stay in Narita on account of the fortuitous event, JAL had the duty to make the necessary arrangements to transport private respondents on the first available connecting flight to Manila. In determining that extent of expenses to be shouldered by the carrier, reasonableness and necessity must be considered. VDM: If the delay is due to technical reasons, passengers can demand for the entire time that they are stranded because delay was due to the fault of the carrier. 43

Northwest v. Catapang

Northwest raises as defense the fact that Atty. Catapang’s ticket was merely a discounted one. Northwest explained that the $50 rebooking charge was subject to “rules of applicability,” which rules could not be reflected on the ticket.

Atty. Catapang was not told by FUT and the ticket did not reflect it that the ticket being issued to him was a "restricted type" to call for its upgrading before a rebooking/rerouting. Northwest’s breach in this case was aggravated by the undenied treatment received by Atty. Catapang when he tried to rebook his ticket. Passengers have the right to be treated by a carrier's employees with kindness, respect, courtesy and due consideration. Any discourteous conduct on the part of these employees toward a passenger gives the latter an action for damages against the carrier. VDM: Courts give utmost consideration in the manner the passengers are treated. Moreover, if the inconvenience is due to the fault of the common carrier, passenger can claim for moral damages.

44

Dangwa v. CA

The bus driver and the owner alleged that they had observed and continued to observe the extraordinary diligence required in the operation of the transportation company and the supervision of the employees, even as they add that they are not absolute insurers of the safety of the public at large. Further, it was alleged that it was the victim's own carelessness and negligence which gave rise to the subject incident, hence they prayed for the dismissal of the complaint plus an award of damages in their favor by way of a counterclaim.

The proximate cause of the accident was the negligence of the bus driver. Even assuming that the bus was moving, the testimonies show that it is still in slow motion; common experience tells us that there is nothing negligent in boarding the bus that is moving slowly. It is not negligence per se, or as a matter of law, for one attempt to board a train or streetcar which is moving slowly. An ordinarily prudent person would have made the attempt board the moving conveyance under the same or similar circumstances. The fact that passengers board and alight from slowly moving vehicle is a matter of common experience both the driver and conductor in this case could not have been unaware of such an ordinary practice. It is the duty of common carriers of passengers, including common carriers by railroad train, streetcar, or motorbus, to stop their

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conveyances a reasonable length of time in order to afford passengers an opportunity to board and enter, and they are liable for injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their conveyances while they are doing so.The victim herein, by stepping and standing on the platform of the bus, is already considered a passenger and is entitled all the rights and protection pertaining to such a contractual relation . VDM: Overloading of passengers in a bus constitutes negligence. In doing so, the bus driver took the risk in loading more than it could. 45

Aboitiz v. CA

Aboitiz denied responsibility contending that at the time of the accident, the vessel was completely under the control of PIONEER as the exclusive stevedoring contractor of Aboitiz, (handled the unloading of cargoes from the vessel of Aboitiz). It also averred that since the CRANE OPERATOR was not an employee of Aboitiz, the latter cannot be held liable under the fellowservant rule.

It has been recognized as a rule that the relation of carrier and passenger does not cease at the moment the passenger flights from the carrier's vehicle at a place selected by the carrier at the point of destination BUT continues until the passenger has had a reasonable time or a reasonable opportunity to leave the carrier's premises. And, what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. In this case, Analecto was still a passenger at the time of his death. VDM: If the passenger stays longer within the premises to eat at a canteen, common carrier is no longer liable for any injury that may happen to the passenger.

46

Diaz v. CA

On the day of the incident, one of Diaz’ taxis, driven by one Arman Retes, was moving at an excessive speed when it rammed into the rear portion of a Hino cargo truck owned by Teodoro Lantoria and driven by Rogelio Francisco. As a result, nine passengers of the taxi died including Sherly Moneo.

VDM: In the case of terminals where the waiting area is within the control of a common carrier, the obligation to exercise extraordinary diligence kicks in. Level of care for the safety of passengers: A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. When presumption of negligence attaches: In a contract of carriage, it is presumed that the common carrier is at fault or is negligent when a passenger dies or is injured. In fact, there is even no need for the court to make an express finding of fault or negligence on the part of the common carrier. This statutory presumption may only be overcome by evidence that the carrier exercised extraordinary diligence. VDM: Even if the injuries sustained are not fatal and the autopsy shows that said injury is not the proximate cause of the death of a passenger, presumption of negligence on the part of common carrier in case of injury still applies because the law did not

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distinguish what kind of injury is necessary for presumption to apply. 47

Pestaño v. Sumayang

Pestaño (bus driver) blamed Sumayang (deceased – motorcycle rider) for the accident. He testified that when he first blew the horn the motorcycle which was about 15 or 20 meters ahead went to the right side of the highway that he again blew the horn and accelerated in order to overtake the motorcycle; that when he was just one meter behind, the motorcycle suddenly turned left towards the Tabagon Road and was bumped by his bus.

The negligence alluded to the operator is in its supervision over its driver, not in that which directly caused the accident. The fact that the bus driver was able to use a bus with a faulty speedometer shows that the operator was remiss in the supervision of its employees and in the proper care of its vehicles. Under Articles 2180 and 2176 of the Civil Code, owners and managers are responsible for damages caused by their employees. When an injury is caused by the negligence of a servant or an employee, the master or employer is presumed to be negligent either in the selection or in the supervision of that employee. This presumption may be overcome only by satisfactorily showing that the employer exercised the care and the diligence of a good father of a family in the selection and the supervision of its employee. The presumption of negligence that attaches to a common carrier in case of an injury or death of a passenger did not apply in this case because the motor rider-victim was not a passenger.

48

Ludo v. CA

Ludo (wharf owner) contends that the damage was due directly due to MV Miguela’s ramming into the pile clusters during docking. Gabisan (vessel owneroperator) argues that the damage could have been caused by prior and subsequent vessels which likewise docked in Ludo’s private wharf.

Ludo presented tangible proof that demonstrated Gabisan’s negligence: Capt. Olasiman testified that from a command of “slow ahead” and to “stop engine,” the vessel will still travel 100 meters before it finally stops. However, when Olasiman ordered “stop engine,” the vessel was already only 50 meters away from the pier. The conclusion is that it was already too late when Olasiman gave such order. Gabisan’s negligence likewise consists in allowing incompetent crew to man its vessel: Capitan Olasiman and Chief Mate Manuel Gabisan did not have a formal traning in marine navigation – the former was a mere elementary graduate, while the latter is a high school graduate. Their experience in navigation was only as watchman and a quartermaster, respectively.

49

Ong Yiu v. CA

Atty. Yiu’s luggage containing documents needed for a civil case and a special proceeding was miscarried to Manila. The luggage was delived to Yiu unlocked and with missing papers and items intended to be gifts.

PAL was not in bad faith because evidence shows that it exerted due diligence in complying with its duty to locate and deliver the miscarried luggage to YIu. PAL is only liable for P100 as stipulated at the back of the ticket. The Court considered the fact that Yiu, as a lawyer, businessman and frequent flier of PAL must be fully aware of this. Yiu did not declare a higher value and did not pay any additional transportation charge.

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VDM: If the passenger was an old-aged person, it is possible that the Court would have ruled differently because it can be argued that said passenger did not give its consent freely considering his age and the fact the these stipulations are normally in fine print that can be hardly seen by old-aged passengers. 50

Estrada v. Consolacion

The jeepney owner and driver argues that the proximate and only cause of the accident was the negligence of third persons: (1) driver of a Toyota pickup truck and (2) driver of a Ford pick-up truck, who were then driving at a fast speed and from different directions – as a result of which, the pick-up trucks collided causing the Ford to deviate from its lane and hit the jeepney.

In this case, the jeepney owner and operator was able to overcome the presumption of negligence that arises in case of death of a passenger. They submitted affidavits to show that the accident which resulted to the death of one of the passengers was due to the fault or negligence of the drivers of the pick-up trucks over whom the carrier had no supervision nor control. The Court also gave credence to the fact that the jeepney stopped to avoid the accident – this shows extraordinary diligence on the part of the jeepney driver.

51

Savellano v. Northwest

The Savellanos were bumped off from a NW Flight resulting to a longer route on their way home to Manila.

Condition 9 on the ticket allowed NW to substitute alternate carriers or aircraft without notice. However, nothing there permits shuttling passengers -- without so much as a by your-leave -- to stopping places that they have not been previously notified of, much less agreed to or been prepared for. Substituting aircrafts or carriers without notice is entirely different from changing stopping places or connecting cities without notice. Northwest failed to show a case of necessity for changing the stopping place from Tokyo to Los Angeles and Seoul. It is a fact that some of the passengers on the distressed flight continued on to the Tokyo connecting place. No explanation whatsoever was given to Savellano as to why they were not similarly allowed to do so. VDM: Substantial distinction must be proven to justify uneven treatment among passengers.

52

Yobido v. CA

Yobido Bus Liner disclaim liability on the ground that the accident was due to a fortuitous event. The bus conductor defends that the bus was not full, that it was going slow, and that the left tire that exploded was a brand new Goodyear tire that he just mounted on the bus 5 days ago, that the driver underwent tests.

An accident caused either by defects in the automobile or through the negligence of its driver is not a caso fortuito that would exempt the carrier from liability for damages. The explosion of the new tire may not be considered a fortuitous event. There are human factors involved in the situation. The fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle. Neither may the fact that the tire bought and used in the vehicle is of a brand name noted for quality, resulting in the conclusion that it could not explode within five days' use. The Yobidos should have shown that it undertook extraordinary

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diligence in the care of its carrier, such as conducting daily routinary check-ups of the vehicle's parts. 53

Air France v. CA

Air France refused to shorten the passenger’s trip.

Mere refusal to accede to the passenger’s wishes does not necessarily translate into damages in the absence of bad faith. It was not unreasonable for Air France to deny the passenger’s request because the ticket had original restrictions i.e. nonendorsable and valid for AF only. Of importance is the fact that Morales is a lawyer, and the restriction box clearly indicated the non-endorsable character of the ticket. Omissions by ordinary passengers may be condoned but more is expected of members of the bar who cannot feign ignorance of such limitations and restrictions.

54

Bayasen v. CA

There was testimonial evidence that the driver was not driving at an unreasonable speed, that there was no conversation between the passengers in the jeep that could have distracted the driver’s while he was driving, that the driver was no under the influence of alcohol.

It is a well-known physical fact that cars may skid on greasy/slippery road, as in this case, without fault on the manner of handling the car. Skidding means partial or complete loss of control of the car under circumstances not necessarily implying negligence. Skidding may occur without fault.

55

Gatchalian v. Delim

Wife of the driver of vehicle which was involved in an accident made the passengers sign a waiver stating that “, “we are no longer interested to file a complaint, criminal or civil against the driver and owner of Thames, because it was an accident and the driver and owner of the said Thames have gone to the extent of helping us to be treated upon our injuries.”

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. Such a purported waiver is offensive to public policy. Moral damages may be awarded where gross negligence on the part of the common carrier is shown.

56

Fortune Express v. CA

The bus company was warned by the Philippine Constabulary that the Maranaos were planning to take revenge on the bus company (two Maranaos died in an accident involving one of the buses of the bus company) by burning some of its buses. The bus company was seized by Maranaos resulting to the death of one of the passengers. Fortune Express denies liability on the ground that the loss was due to an fortuitous event.

Despite warning by the Philippine Constabulary that the Maranaos were planning to take revenge on the petitioner by burning some of its buses and the assurance of petitioner's operation manager, Diosdado Bravo, that the necessary precautions would be taken, petitioner did nothing to protect the safety of its passengers. Had petitioner and its employees been vigilant they would not have failed to see that the malefactors had a large quantity of gasoline with them. Under the circumstances, simple precautionary measures to protect the safety of passengers, such as frisking passengers and inspecting their baggage, preferably with non-intrusive gadgets such as metal detectors, before allowing them on board could have been employed without violating the passenger's constitutional rights. As for the defense of fortuitous event, SC ruled that the incident was not a fortuitous event because it was not unforeseen. Despite

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the report of Philippine Constabulary that the Maranaos were going to attack its buses, petitioner took no steps to safeguard the lives and properties of its passengers. The seizure of the bus of the petitioner was foreseeable and, therefore, was not a fortuitous event which would exempt petitioner from liability. 57

58

59

Tan v. Northwest Airlines

China Air v. CA

Singson v. CA

The airline failed to deliver their luggage on the date of their arrival. The airline admitted that the baggage of the passenger was not loaded on the same flight but reasoned that it was because of weight and balance restrictions.

There was no bad faith in this case because the act of not loading the luggage in the same flight is due to weight and balance restrictions.

The passenger switched to another travel agency (Amexco) because the first travel agency (Morelia) it contracted with charges steeper prices than the former. Amexco used the record locater number (combination of letters and numbers issued by an airline to a travel agency when the airline confirms the travel agency's booking. of Morelia to confirm the booking of the passenger, which CAL did confirm. Upon calling Morelia, the latter revoked the booking, so CAL cancelled the reservation.

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 would fly on that flight and on that date. When CAL did not allow respondents, who were in possession of the confirmed tickets, from boarding its airplane because their names were not in the manifest, it constituted a breach of contract of carriage.

Singson and Tiongson bought two open-dated roundtrip plane tickets from Philippines to US. The ticket had 6 coupons and the procedure was that at the start of each leg of the trip a flight coupon corresponding to the particular sector of the travel would be removed from the ticket booklet so that at the end of the trip no more coupon would be left in the ticket booklet. Singson was not able to book a flight back to US because his ticket booklet did not have flight coupon no. 5 corresponding to the San Francisco-Hongkong leg of the trip. Instead, what was in his ticket was flight coupon

A round trip ticket issued by the carrier to a passenger was in itself a complete written contract by and between the carrier and the passenger. In fact, the contract of carriage in the instant case was already partially executed as the carrier complied with its obligation to transport the passenger to his destination, i.e., Los Angeles. the loss of the coupon was attributable to the negligence of CATHAY’s agents and was the proximate cause of the non-confirmation of petitioner's return flight.

Where in breaching the contract of carriage the defendant airline is not shown to have acted fraudulently or in bad faith, liability for damages is limited to the natural and probable consequences of the breach of obligation which the parties had foreseen or could have reasonably foreseen. In that case, such liability does not include moral and exemplary damages.

Such breach, however, was not attended with bad faith. There were three reasons CAL cancelled the reservations and did not notify Salvador and Lao of the cancellation. First was Amexcos unauthorized use of the record locator number. Second was CALs negligence in confirming the reservations of Amexco. Third was the absence of the correct contact numbers of private respondents and Lea. There was no concerted effort on the part of CALs employees to cancel Salvador and Lao’s reservations in favor of other passengers.

Cathay’s mistake in removing the wrong coupon was compounded by several other independent acts of negligence. Taken together, they indubitably signify more than ordinary

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no. 3 - San Francisco to LA- which was supposed to have been used and removed from the ticket booklet. CATHAY denied these allegations and averred that since Singson was holding an "open-dated" ticket, which meant that he was not booked on a specific flight on a particular date, there was no contract of carriage yet existing such that CATHAYs refusal to immediately book him could not be construed as breach of contract of carriage. An auditor assigned to the bus company took the wheel and told the bus driver to sit somewhere else. While the bus was traversing Isabela, it figured in an accident with a freight truck. The bus company argued that since the auditor was not the bus company’s employee, it should not be held liable for the auditor’s acts.

inadvertence or inattention and thus constitute a radical departure from the extraordinary standard of care required of common carriers. Although the rule is that moral damages predicated upon a breach of contract of carriage may only be recoverable in instances where the mishap results in the death of a passenger, or where the carrier is guilty of fraud or bad faith, there are situations where the negligence of the carrier is so gross and reckless as to virtually amount to bad faith, in which case, the passenger likewise becomes entitled to recover moral damages.

60

Manila Railroad v. Ballesteros

Art. 17635 of the Civil Code and Sec. 48(b)6 of the Motor Vehicle Law are clear about this matter. The acts of the bus personnel, particularly "in allowing the auditor to drive despite two occasions when the bus stopped and the regular driver could have taken over, constitute reckless imprudence and wanton injurious conduct on the part of the bus company’s employees."

61

Bachelor Express v. CA

The bus of Bachelor Express was the situs of the stampede (one of the passengers stabbed a solider which caused commotion and panic) which resulted to the death of two passengers. Bachelor contends that it should not be liable because the proximate cause of the death was the act of the passenger who caused the stabbing incident, which is beyond their control, and that they exercising extraordinary diligence as a common carrier.

Although the sudden act of the stabbing is a fortuitous event, Bachelor must still prove that it was not negligent in causing the injuries resulting from such accident. In this case, Bachelor was not able to overcome the presumption of negligence of common carriers when damage or injury result to a passenger. It was proven in evidence and testimonies that Bachelor failed to exercise the extraordinary diligence required when it belatedly stopped during the commotion and opened the solitary door at an appreciably fast speed.

62

Nocum v. BLTB

Nocum was injured as a result of the explosion of firecrackers. This happened while he was riding a bus of BLTB. The bus conductor and the dispatcher both testified that they helped a passenger load a box who declared that only miscellaneous items and clothes were inside when in reality those were explosives. CFI judge ruled that "if proper and rigid inspection were observed by the defendant, the contents of the box could have been discovered and the accident avoided. Refusal by the passenger to have the package opened was no excuse because, as stated by the dispatcher, employees should call the police if there were packages containing articles against company regulations."

SC ruled that this (what the CFI judge said) may be true but the SC ruled that the law does not require as much. Article 1733 is not as unbending for its reasonably qualifies the extraordinary diligence required of common carriers for the safety of the passengers transported by them to be “according to all the circumstances of each case.” It is to be presumed that a passenger will not take with him anything dangerous to the lives and limbs of his co-passengers, not to speak of his own. Not to be lightly considered be the right to privacy to which each passenger is entitled. He cannot be subjected to any unusual search, when he protests the innocuousness of his baggage and nothing appears to indicate the contrary, as in the case at bar. In other words, inquiry may be verbally made as to the nature of a passenger's baggage when

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. 6 Sec. 48 (b). No professional chauffeur shall permit any unlicensed person to drive the motor vehicle under his control, or permit a person, sitting beside him or in any other part of the car, to interfere with him in the operation of the motor vehicle, by allowing said person to take hold of the steering wheel, or in any other manner take part in the manipulation or control of the car. 5

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Smith Bell v. Borja

Borja was an inspector from the Bureau of Customs and was inspecting on the vessel. Borja heard an explosion and immediately went out of the cabin to the deck. He heard another explosion and found that the vessel was on fire. To save his life, he jumped overboard. But the water was also on fire because of the spilled chemicals. Despite this, Borja swam for his life and was later taken to the hospital where he suffered injuries.

such is not outwardly perceptible, but beyond this, constitutional boundaries are already in danger of being transgressed. The owner or the person in possession and control of a vessel and the vessel are liable for all natural and proximate damage caused to persons and property by reason of negligent management or navigation. Smith Bell’s vessel was carrying chemical cargo -- alkyl benzene and methyl methacrylate monomer. While knowing that their vessel was carrying dangerous inflammable chemicals, its officers and crew failed to take all the necessary precautions to prevent an accident. Smith Bell was, therefore, negligent. Note: the action in this case was based on quasi-delict.

Other Notes: Bill of Lading -

Not essential for the validity/creation of a contract of carriage. It is a written acknowledgement of the receipt of foods and agreement to transport. Function – receipt of foods shipped, contract of carriage, documentary evidence of title to goods Is in the nature of a contract of adhesion, hence, if there is ambiguity, the same is strictly construed against the party that cause the ambiguity

Elements of a Fortuitous Event as a Defense 1. 2. 3.

Must be the proximate and only cause of the loss Common carrier must have exercised extraordinary diligence to prevent or minimize the loss Entire exclusion of human agency.

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