Transpo Digests.docx

GLOBE V. NTC

G.R. No. 143964. July 26, 2004

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.

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.

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.

FACTS:

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.

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:

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 enhancedservice given in NTC Memorandum Circular No. 8-995 (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

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 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.

content the NTC may be with its attitude of sloth towards regulation, the effect may prove ruinous to the sector it regulates.

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.

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.

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

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.

Asian Terminals, Inc. v Allied Guarantee Insurance, Co. Inc. (2015) Asian Terminals, Inc. v Allied Guarantee Insurance, Co., Inc. GR No. 182208, October 14, 2015 FACTS: Marina, the predecessor of Asian Terminals Inc., is an arrastre operator based on Manila. On February 5, 1989, a shipment of kraft linear board was loaded and received from the ports of Lake Charles, LA, and Mobile, Al, USA for transport and delivery to San Miguel. Upon offloading, it was assessed that a total of 158 rolls were damaged during shipping. Further, upon the goods' withdrawal from arrastre and their delivery to the customs broker, Dynamic and eventually to the consignee San Miguel, another 54 rolls were found to have been damaged, for a total of 212 rolls of damaged shipment worth P755,666.84. Allied Insurance was the insurer of the shipment. Thus, it paid San Miguel P755,666.84 and was subrogated in the latter's right. Allied filed a Complaint against Transocean, Philippine Transmarine, Dynamic and Marina seeking to be indemnified for the P755,666.84 it lost paying San Miguel.

ISSUES: Whether or not petitioner has been proven liable for the additional 54 rolls of damaged goods to respondent RULING: Yes. Marina, the arrastre operator, from the above evidence, was not able to overcome the presumption of negligence. The Bad Order Cargo Receipts, the Turn Over Survey of Bad Order Cargoes as well as the Request for Bad Order Survey did not establish that the additional 54 rolls were in good condition while in the custody of the arrastre. Said documents proved only that indeed the 158 rolls were already damaged when they were discharged to the arrastre operator and when it was subsequently withdrawn from the arrastre operator by [the] customs broker. Further, the Turn Over Inspector and the Bad Order Inspector who conducted the inspections and who signed the Turn Over Survey of Bad [Order] Cargoes and the Request for Bad Order Survey, respectively, were not presented by Marina as witnesses to verify the correctness of the document and to testify that only 158 rolls was reported and no others sustained damage while the shipment was in its possession. On the other hand, defendant Dynamic (which) in its capacity as broker, withdrew the 357 rolls of kraft linear board from the custody of defendant Marina and delivered the same to the consignee, San Miguel Corporation's warehouse in Tabacalera at United Nations, Manila, is considered a common carrier. It is noteworthy to mention that "in general, the nature of the work of an arrastre operator covers the handling of cargoes at piers and wharves," "To carry out its duties, the arrastre is required to provide cargo handling equipment which includes, among others, trailer, chassis for containers." Hence, the "legal relationship betw.een the consignee and the arrastre operator is akin to that of a depositor and the 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 develops upon the carrier. Both the arrastre and the carrier are, therefore, charged with and obligated to deliver the goods in good condition to the consignee." 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. the broker, Dynamic, cannot alone be held liable for the additional 54 rolls of damaged goods since such damage 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. While the trial court could not determine with pinpoint accuracy who among the two caused which particular damage and in what proportion or quantity, it was clear that both ATI and Dynamic failed to discharge the burden of proving that damage on the 54 rolls did not occur during their custody. As for petitioner ATI, in particular, what worked against it was the testimony, as cited above, that its employees' use of the wrong lifting equipment while loading the goods onto Dynamic's trucks had a role in causing the damage. Such is a finding of fact made by the trial court which this Court, without a justifiable ground, will not disturb, The arrastre operator's principal work is that of handling cargo, so that its drivers/operators or employees should observe the standards and measures necessary to prevent losses and damage to shipments under its custody.

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. And to prove the exercise of diligence in handling the subject cargoes, petitioner must do more than merely show the possibility that some other party could be responsible for the loss or the damage. It must prove that it exercised due care in the handling thereof. 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. As it is now established that there was negligence in both petitioner ATI's and Dynamic's performance of their duties in the handling, storage and delivery of the subject shipment to San Miguel, resulting in the loss of 54 rolls of kraft linear board, both shall be solidarily liable for such loss. Transportation Case Digest: Phil Am Gen Insurance Co, Et Al. V. PKS Shipping Co (2003) G.R. No. 149038

FACTS: 

Davao Union Marketing Corporation (DUMC) contracted the services of PKS Shipping Company (PKS Shipping) for the shipment to Tacloban City of 75,000 bags of cement worth P3,375,000.

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DUMC insured the goods for its full value with Philippine American General Insurance Company (Philamgen).

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The goods were loaded aboard the dumb barge Limar I belonging to PKS Shipping.

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December 22, 1988 9 pm: While Limar I was being towed by PKS’ tugboat MT Iron Eagle, the barge sank a couple of miles off the coast of Dumagasa Point, in Zamboanga del Sur, bringing down with it the entire cargo of 75,000 bags of cement.

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

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RTC: dismissed the complaint - fortuitous event

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

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

April 9, 2003

Lessons Applicable: Charter Party (Transportation)

HELD: NO. Petition is DENIED

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Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public 

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

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public service" to be – "x x x every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, subway motor vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship, or steamship line, pontines, ferries and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power petroleum, sewerage system, wire or wireless communication systems, wire or wireless broadcasting stations and other similar public services 

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So understood, the concept of `common carrier’ under Article 1732 may be seen to coincide neatly with the notion of `public service,’ under the Public Service Act distinction between: 

common or public carrier

private or special carrier - character of the business, such that if the undertaking is an isolated transaction , not a part of the business or occupation, and the carrier does not hold itself out to carry the goods for the general public or to a limited clientele, although involving the carriage of goods for a fee EX: charter party which includes both the vessel and its crew, such as in a bareboat or demise, where the charterer obtains the use and service of all or some part of a ship for a period of time or a voyage or voyages and gets the control of the vessel and its crew.

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The regularity of its activities in this area indicates more than just a casual activity on its part

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The appellate court ruled, gathered from the testimonies and sworn marine protests of the respective vessel masters ofLimar I and MT Iron Eagle, that there was no way by which the barge’s or the tugboat’s crew could have prevented the sinking of Limar I. The vessel was suddenly tossed by waves of extraordinary height of 6 to 8 feet and buffeted by strong winds of 1.5 knots resulting in the entry of water into the barge’s hatches. The official Certificate of Inspection of the barge issued by the Philippine Coastguard and the Coastwise Load Line Certificate would attest to the seaworthiness of Limar I and should strengthen the factual findings of the appellate court.

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Findings of fact of the Court of Appeals generally conclude this Court; none of the recognized exceptions from the rule - (1) when the factual findings of the Court of Appeals and the trial court are contradictory; (2) when the conclusion is a finding grounded entirely on speculation, surmises, or conjectures; (3) when the inference made by the Court of Appeals from its findings of fact is manifestly mistaken,

absurd, or impossible; (4) when there is a grave abuse of discretion in the appreciation of facts; (5) when the appellate court, in making its findings, went beyond the issues of the case and such findings are contrary to the admissions of both appellant and appellee; (6) when the judgment of the Court of Appeals is premised on a misapprehension of facts; (7) when the Court of Appeals failed to notice certain relevant facts which, if properly considered, would justify a different conclusion; (8) when the findings of fact are themselves conflicting; (9) when the findings of fact are conclusions without citation of the specific evidence on which they are based; and (10) when the findings of fact of the Court of Appeals are premised on the absence of evidence but such findings are contradicted by the evidence on record – would appear to be clearly extant in this instance.

FGU INSURANCE CORP. VS. G.P. SARMIENTO TRUCKING CORP. (GPS)G.R. No. 141910. August 6, 2002Facts: GPS is an exclusive contractor and hauler of Concepcion Industries, Inc. One day, it wasto deliver certaingoods of Concepcion Industries, Inc. aboard one of its trucks. On its way, thetruck collided with an unidentified truck, resulting in damage to the cargoes.FGU, insurer ofthe shipment paid to Concepcion Industries, Inc. the amount of the damage and filed a suitagainstGPS. GPS filed a motion to dismiss for failure to prove that it was a common carrier. Issue: Whether or not GPS falls under the category of a common carrier. Held:

Note that GPS is an exclusive contractor and hauler of Concepcion Industries, Inc.offering its service to noother individual or entity. A common carrier is one which offers itsservices whether to the public in general or to a limited clientele in particular but never on anexclusive basis. Therefore, GPS does not fit the category of a common carrier although it is notfreedfrom its liability based on culpa contractual Culpa Aquiliana vs. Culpa Contractual Culpa Aquiliana:1. Only private concern.2. Repairs the damage by indemnification.3. Covers all acts that are faulty or negligent.4. Preponderance of evidence.5. No reservation – it’s independent from crime. (Andamo vs IAC, 191 SCRA 203)6. Employer’s liability is solidary (Fabre Jr. vs CA, 259 SCRA 426, ‘ 96) Culpa Contractual(i) Pre-existing obligation between the parties(ii) Fault or negligence is incidental to the performance of the obligation(iii) Defense of having exercised diligence of a good father of a family is not available, just like in criminal action. Applied doctrine of Respondent Superior, or Master and Servant Rule.

FGU Insurance Corp. vs. GP Sarmiento Trucking Corp. and Lambert M. ErolesFacts Respondent GP Sarmiento Trucking Company (GTS) undertook to transport cargoesfor Concepcion Industries Inc. when it collided with an unidentified truck causing damage tothe cargoes. Petitioner !G" insurer of the shipment paid to Concepcion Industries the#alue of the co#ered cargoes. Then as su$rogee of Concepcion Industries Inc. petitioner!G" sued GPS for $reach of contract of carriage for reim$ursement. Instead of filing ananswer GPS filed a demurrer to e#idence claiming that it could not $e held lia$le as acommon carrier $ecause it was only a pri#ate carrier $eing the e%clusi#e hauler only of Concepcion Industries Inc. since &' .The lower court granted

the motion ruling that plaintiff !G" failed to pro#e that GPSwas a common carrier. The C affirmed the trial court*s order. Issue +hether or not GPS is considered a common carrier and may $e presumed negligentand therefore lia$le for damages. uling The Supreme Court held that GPS cannot $e considered a common carrier as itrenders ser#ice e%clusi#ely to Concepcion Industries, that notwithstanding GPS cannotescape from lia$ility since in culpa contractual mere proof of the e%istence contractand the failure of its compliance -ustify

of

the

prima facie a corresponding right of relief.Respondent dri#er howe#er who is not a party to the contract of carriage may not $e heldlia$le under the agreement without concrete proof of his negligence or fault. ence the Supreme Court affirmed the assailed order of the trial court and the C insofar as the respondent dri#er was concerned $ut GPS trucking company was ordered topay the petitioner !G" the #alue of the damaged and lost cargoes. First Philippine Industrial Corp. vs. CA Facts: 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 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.

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 vs. CA (GR 102316, 30 June 1997) FACTS: Valenzuela Hardwood and Industrial Supply, Inc. (VHIS) entered into an agreement with the Seven Brothers whereby the latter undertook to load on board its vessel M/V Seven Ambassador the former’s lauan round logs numbering 940 at the port of Maconacon, Isabela for shipment to Manila. VHIS insured the logs against loss and/or damage with South Sea Surety and Insurance Co. The said vessel sank resulting in the loss of VHIS’ insured logs. VHIS demanded from South Sea Surety the payment of the proceeds of the policy but the latter denied liability under the policy for non-payment of premium. VHIS likewise filed a formal claim with Seven Brothers for the value of the lost logs but the latter denied the claim. The RTC ruled in favor of the petitioner.Both Seven Brothers and South Sea Surety appealed. The Court of Appeals affirmed the judgment except as to the liability of Seven Brothers.South Sea Surety and VHIS filed separate petitions for review before the Supreme Court. In a Resolution dated 2 June 1995, the Supreme Court denied the petition of South Sea Surety. The present decision concerns itself to the petition for review filed by VHIS. ISSUE:

Is a stipulation in a charter party that the “(o)wners shall not be responsible for loss, split, short-landing, breakages and any kind of damages to the cargo” valid? HELD: Yes. Xxx [I]t is undisputed that 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 a 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. x

x

x

The general public enters into a contract of transportation with common carriers without a hand or a voice in the preparation thereof. The riding public merely adheres to the contract; even if

the public wants to, it cannot submit its own stipulations for the approval of the common carrier. Thus, the law on common carriers extends its protective mantle against one-sided stipulations inserted in tickets, invoices or other documents over which the riding public has no understanding or, worse, no choice. Compared to the general public, a charterer in a contract of private carriage is not similarly situated. It can -- and in fact it usually does -- enter into a free and voluntary agreement. In practice, the parties in a contract of private carriage can stipulate the carrier’s obligations and liabilities over the shipment which, in turn, determine the price or consideration of the charter. Thus, a charterer, in exchange for convenience and economy, may opt to set aside the protection of the law on common carriers. When the charterer decides to exercise this option, he takes a normal business risk. Planters Products vs. Court of Appeals

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?

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

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.

Email ThisBlogThis!Share to TwitterShare to FacebookShare to Pinterest REGIONAL CHARTER LINES OF SG et al vs THE NETHERLANDS INSURANCE Co.FACTS:Parties:Regional Charter Lines –DEFENDANT, Carrier, based in SGEDSA Shipping Agency –Agent of RCLNetherlands Insurance –insured the goods shipped, paid claims, subrogated RCLTemic Telefunken Microelectronices (Temic) –ConsigneeU Freight – forwarding agent based in SG contracted services of Eagle LinesEagle Lines –tasked by U Freight to transport cargo, contracted services of RCL (as a ship owner)-Epoxy Molding Compound (the merchandise) was to be shipped from SG to Manila. -The merchandise is temperature sensitive thus it is refrigerated in transit at O degrees Celsius. -Unloaded from the ship in good condition, refrigerator was working well.-However, goods were damaged because temperature in the ref fluctuated to 33 degree C allegedly because of burnt condenser more of the ref container-Temic claimed from Netherlands, Netherlands paid the insurance claim-Netherlands filed a complaint for subrogation of insurance settlement against RCL RCL and agent EDSA Shipping denied any negligence in the shipment, and that there is no valid subrogationISSUE/S:W/N RCL and EDSA Shipping is liable as CC under the theory of presumption of negligence?HELD: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. 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.

Transportation Law Case Singapore Airlines Ltd. vs. Fernandez, GR 142305, Dec. 10, 2003 FACTS:Respondent Andion Fernandez is an acclaimed soprano in the Philippines andabroad. 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 Malaysiaon Feb. 3-4, 1991. For this purpose, she took an airline ticket from SingaporeAirlines (SAL) FOR THE Frankfurt-Manila-Malaysia route. Respondent had to passby Manila in order to gather her wardrobe and rehearse with the pianist. SALissued ticket for Flight SQ 27 leaving Frankfurt on Jan. 27, 1991 for Singapore withconnections to Manila in the morning of Jan. 28, 1991. On Jan. 27, 1991 SQ 27LEFT 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 alady employee that there were no more flights to Manila on that day and thatshe had to stay in Singapore, if she wanted, she could fly to HK but at her ownexpense. Respondent stayed with a relative in Singapore for the night. The nextday, 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 amdoing something.” She explained her predicament but was told: “It’s yourproblem, not ours.” The respondent never made it to Manila and was forced to take a direct flightto Malaysia on Jan. 29, 1991 through the efforts of her mother and a travelagency in Manila. Her mother had to travel

to Malaysia with the wardrobewhich caused them to incur expenses of ₱ 50,000.RTC Manila ordered SAL to pay respondent ₱ 50k as actual damages, ₱ 250k asmoral damages, ₱ 100k as exemplary damages, ₱ 7 5k as attorney’s fees and costs of suit.CA affirmed RTC decision.ISSUE:Did SAL break the contract of carriage?RULING:Yes, when an airline issues a ticket to a passenger, confirmed for a particularflight on a certain date, a contract of carriage arises. The passenger has everyright to expect that he be transported on that flight and on that date. If he does

Transportation Law Case not, then the carrier opens itself to a suit for a breach of contract of carriage. Acontract of carriage requires common carriers to transport passengers safely ashuman care and foresight can provide (Art. 1755, NCC). In an action for brechof a contract of carriage, the aggrieved party does not have to prove that thecommon carrier was at fault or was negligent. All that is necessary is to provethe 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, neitherdid it ask if the respondent and 25 other delayed passengers are amenable to astay in Singapore. Even SAL’s manual mandates that in cases of urgent connections the head office of defendant in Singapore has to be informed ofdelays 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 inSingapore only allowed respondent to use the phone upon threat of suit, the male employee at the counter marked “Immediate Attention to Passengers withImmediate Booking” was rude to her. Petition is denied. CA decision affirmed. Arada v. CAFacts: Alejandro Arada doing business under the name and style South Negros Enterprises is engaged in the business of small scale shipping as a common carrier, servicing the hauling of cargoes of different corporationsand companies with 5 vessels it was operating. It entered into a contract with San Miguel Corporation totransport as a common carrier cargoes of the latter from San Carlos City Negros Occidental to Mandaue Cityusing one of its vessels M/L Maya. The cargoes of San Mig Corp valued at 176, 824. 80.The master crew applied for clearance to sail which was denied by the Phil Coast Guard due to a typhoon.However, the next day, it was granted clearance as there was no storm and the sea was calm. So, ML Maya leftfor Mandaue City. While it was navigating towards Cebu, a typhoon developed and said vessel sank

withwhatever was left if its cargoes. The crew was rescued. The Board of Marine Inquiry exonerated Arada and hiscrew from administrative liability.Meanwhile, San Miguel Corporation filed with the RTC for the recovery of the value of its cargoes anchored on breach of contract of carriage.The RTC rendered its decision dismissing the claim of San Miguel for recovery of the value of its cargoes. Onappeal, the CA reversed the decision of the RTC.Hence, this petition.Issue: WON Arada is liable for the loss of the cargo of San Miguel Corporation.Held: Yes. South Negros Enterprises was exercising its function as a common carrier when it entered into acontract with San Miguel Corp to carry and transport the latter’s cargoes. A common carrier both from thenature of its business and for insistent reasons of public policy is burdened by law with the duty of exercisingextraordinary diligence not only in ensuring the safety of passengers, but in caring for the goods transported byit. The loss, or deterioration or destruction of goods turned over to the common carrier for the conveyance to adesignated destination raises instantly a presumption of fault or negligence on the part of the carrier, save onlyin cases where such loss, destruction or deterioration arises from extreme circumstances such as a naturaldisaster or calamity.In order that a common carrier may be exempted from responsibility, the natural disaster must have been the proximate cause of the loss. However, the common carrier must exercise due diligence to prevent or minimizethe loss before, during and after the occurrence of the flood, storm or other natural disaster in order that thecommon carrier may be exempted from liability from the destruction or deterioration of the goods.In the case at bar, Southern Negros failed to observe extraordinary diligence over the cargo in question wasnegligent previous to the sinking of the carrying vessel. The master crew knew that there was a typhoon coming before his departure but did not check where it was. He should have verified first where the typhoon was beforedeparting. The master crew did not ascertain where the typhoon was headed by the use of his vessel’s barometer and radio. Neither did the captain of the vessel monitor and record the

weather conditions as required under Art.612 of the Code of Commerce.A common carrier is obliged to observed extraordinary diligence and the failure of the master crew to ascertainthe 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.

Gatchalian vs Delim Case Digest Gatchalian v Delim and Court of Appeals 203 SCRA 126

Facts: Gatchalian boarded the respondent’s “Thames” minibus at San Eugenio, Aringay, La Union bound of the same province. On the way, 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 and fell into a ditch. Several passengers including the petitioner was injured. They were taken into an hospital for treatment. While there, private respondent’s wife Adela Delim visited and paid for the expenses, hospitalization and transportation fees. However, before she left, she had the injured passengers including the petitioner sign an already prepared Joint Affidavit constituting a waiver of any future complaint. However, notwithstanding this document, petitioner filed an action Ex Contractu to recover compensatory and Actual Damages. Private respondent denied liability on the ground that it was an accident and the Joint which constitutes as a waiver. The trial court dismissed the complaint based on the waiver and the CA affirmed.

Issue: Whether or not the private respondent has successfully proved that he exercised extraordinary diligence.

Held: The court held that they failed to prove extraordinary diligence. After a snapping sound was suddenly heard at one part of the bus, the driver didn’t even bother to stop and look f anything had gone wrong with the bus. With regard to the waiver, it must to be valid and effective, couched in clear and unequivocal terms which leave no doubt as to the intention of the person to give up a right or benefit which legally pertains to him. In this case, such waiver is not clear and unequivocal. When petitioner signed the waiver, she was reeling from the effects of the accident and while reading the paper, she experienced dizziness but upon seeing other passengers sign the document, she too signed which bothering to read to its entirety. There appears substantial doubt whether the petitioner fully understood the joint affidavit.

Gacal vs. Philippine Airlines (183 SCRA 189, G.R. No. 55300 March 16, 1990)

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.

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.

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?

Held: 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.

Bachelor Express vs. CAG.R. No. 85691, July 31, 1990FACTS:A bus owned by Bachelor express and driven by Cresencio Rivera was thesitus of a stampeded which resulted in the death of passengers Ornominio Beterand Narcisa Rautraut. A passenger at the rear portion suddenly stabbed a PC soldier which causedcommotion and panic among the passengers. When the bus stopped, the two saidpassengers were found lying on the road and dead because of head injuries. Thepassenger-assailant ran alighted the bus and ran towards the bushes but was killedby the police. The heirs of the deceased filed a complaint for “a sum of money”against Bachelor Express, the owner, and the driver Rivera. RTC dismissed complaint and later on reversed and found Bachelor Express, its owner and the driver solidarily liable. Bachelor Express, Inc. denies liability for the death of Beter and Rautraut on its posture that the death of the said passengers was caused by a third person who was beyond its control and supervision; that the accident resulting in the death of the two passengers was caused by force majeure over which the CC did not have any control. (1174) ISSUE:Whether or not Bachelor Express is liable. RULING:The liability is anchored on culpa contractual. Bachelor Express, being a CC, is presumed to have acted negligently unless itcan prove that it had observed extraordinary diligence in accordance with Art. 1733and 1755. A caso fortuito presents the following essential characteristics: (1) The causeof the unforeseen and unexpected occurrence, or of the failure of the debtor tocomply with his obligation, must be independent of the human will. (2) It must beimpossible to foresee the event which constitutes the caso fortuito, or if it can beforeseen, it must be impossible to avoid. (3) The occurrence must be such as torender 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 theinjury resulting to the creditor.The running amuck of the passenger was the proximate cause of the incident as it triggered off a commotion

an panic among the passengers such that the passengers started running to the sole exit shoving each other resulting in the falling off the bus by passengers Beter and Rautraut causing them fatal injuries. Thesudden act o the passenger who stabbed another passenger in the bus is within the context of force majeure.However, in order that a common carrier may be absolved from liability in case of force majeure, it is not enough that the accident was caused by force majeure. The common carrier must still prove that it was not negligent I causing theinjuries resulting from such accident.The CC was negligent in the provision of safety precautions so that its passengers may be transported safely to their destinations. The door was not locked as to prevent the passengers from alighting. The conductor opened the door when the passengers started shouting. The door was forced open by the onrushing passengers. The speed of the bus was not slow, 30/40. Appeals the bus driver did not immediately stop the bus at the height of the commotion; the bus was speeding from a full stop; the victims fell from the bus doorwhen it was opened or gave way while the bus was still running; the conductor panicked and blew his whistle after people had already fallen off the bus; and the bus was not properly equipped with doors in accordance with lawit is clear that the petitioners have failed to overcome the presumption of fault and negligence found in the law governing common carriers.

JOSE PILAPIL vs. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY, INC. (G.R. No. 52159, December 22, 1989) 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. ISSUE: Whether or not common carriers assume risks to passengers such as the stoning in this case?

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.

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. x

x

x

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. x

x

x

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

Sweet Lines Inc, vs. Court of Appeals (121 SCRA 769)

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

Held: 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 by-passing a port of call. Philippine Rabbit Bus Lines, Inc. vs. IAC DOCTRINE: (1) The principle of "the last clear" chance is applicable in a suit between the owners and drivers of the two colliding vehicles. It does not arise where a passenger demands responsibility from the carrier to enforce its contractual obligations. For it would be inequitable to exempt the negligent driver and its owners on the ground that the other driver was likewise guilty of negligence. (2)In culpa contractual, the moment a passenger dies or is injured, the carrier is presumed to have been at fault or to have acted negligently, and this disputable presumption may only be overcome by evidence that he had observed extra-ordinary diligence as prescribed in Articles 1733, 1755 and 1756 of the New Civil Code or that the death or injury of the passenger was due to a fortuitous event. (3) The driver cannot be held jointly and severally liable with the carrier in case of breach of the contract of carriage. Firstly, the contract of carriage is between the carrier and the passenger, and in the event of contractual liability, the carrier is exclusively responsible to the passenger, even if such breach be due to the

negligence of his driver. In other words, 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. Secondly, 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. FACTS: At 11am on December 24, 1966, Catalina Pascua, Caridad Pascua, Adelaida Estomo, Erlinda Meriales, Mercedes Lorenzo, Alejandro Morales and Zenaida Parejas boarded the jeepney owned by spouses Isidro Mangune and Guillerma Carreon and driven by Tranquilino Manalo at Dau, Mabalacat, Pampanga bound for Carmen, Rosales, Pangasinan to spend Christmas with their families for P 24.00. Upon reaching barrio Sinayoan, San Manuel, Tarlac, the right rear wheel of the jeepney detached causing it to run in an unbalanced position. Driver Manalo stepped on the brake, causing the jeepney to make a Uturn, invading and eventually stopping on the opposite lane of the road (the jeepney's front faced the south (from where it came) and its rear faced the north (towards where it was going)). The jeepney occupied and blocked the greater portion of the western lane, which is the right of way of vehicles coming from the north. Petitioner Phil. Rabbit Bus Lines claims that almost immediately after the sudden U-turn the bus bumped the right rear portion of the jeep. Defendants, on the other hand, claim that the bus stopped a few minutes before hitting the jeepney. Either way, as a result of the collision, three passengers of the jeepney (Catalina Pascua, Erlinda Meriales and Adelaida Estomo) died while the other jeepney passengers sustained physical injuries. A criminal complaint was filed against the two drivers for Multiple Homicide. The case against delos Reyes (driver of Phil. Rabbit) was dismissed for insufficieny of evidence. Manalo (jeepney driver), however, was convicted and sentenced to suffer imprisonment.

3 complaints for recovery of damages were then filed before the CFI of Pangasinan. (1) Spouses Casiano Pascua and Juana Valdez sued as heirs of Catalina Pascua while Caridad Pascua sued in her behalf Court of First Instance of Pangasinan. (2) Spouses Manuel Millares and Fidencia Arcica sued as heirs of Erlinda Meriales. And (3) spouses Mariano Estomo and Dionisia Sarmiento sued as heirs of Adelaida Estomo. All three cases impleaded spouses Mangune and Carreon, Manalo (jeepney owners), Rabbit and delos Reyes as defendants. Plaintiffs anchored their suits against spouses Mangune and Carreon and Manalo on their contractual liability. As against Rabbit and delos Reyes, plaintiffs based their suits on their culpability for a quasidelict. Filriters Guaranty Assurance Corporation, Inc. was also impleaded as additional defendant in the first case only. The trial court ruled in favour of then plaintiffs, finding defendants negligent and having breached the contract of carriage with their passengers and ordering them, jointly and severally, to pay the plaintiffs damages. The IAC reversed the ruling of the trial court, applying primarily (1) the doctrine of last clear chance, (2) the presumption that drivers who bump the rear of another vehicle guilty and the cause of the accident unless contradicted by other evidence, and (3) the substantial factor test (which concluded that bus driver delos Reyes, NOT jeepney driver Manalo, was negligent). Issue: Who are liable for the death and injuries of the passenger? - Trial court decision reinstated with modification. Only Isidro Mangune, Guillerma Carreon and Filriters Guaranty Assurance Corporation, Inc. are liable to the victims or their heirs. RATIO: (1) The principle of "the last clear" chance is applicable in a suit between the owners and drivers of the two colliding vehicles. It does not arise where a passenger demands

responsibility from the carrier to enforce its contractual obligations. For it would be inequitable to exempt the negligent driver of the jeepney and its owners on the ground that the other driver was likewise guilty of negligence. (2) The IAC erred in applying the presumption that the driver who bumps the rear of another vehicle is guilty and the cause of the accident, unless contradicted by other evidence. This presumption is based on the responsibility given to a rear vehicle of avoiding a collision with the front vehicle for it is the rear vehicle who has full control of the situation as it is in a position to observe the vehicle in front of it. Such presumption is rebutted by the evidence that shows that the jeepney, which was then traveling on the eastern shoulder, making a straight, skid mark of approximately 35 meters, crossed the eastern lane at a sharp angle, making a skid mark of approximately 15 meters from the eastern shoulder to the point of impact. (Basically, the U-turn was sudden and delos Reyes could not have reasonably anticipated it even though he was the rear vehicle) (3) Likewise, the bus cannot be made liable under the substantial factor test (that if the actor's conduct is a substantial factor in bringing about harm to another, the fact that the actor neither foresaw nor should have foreseen the extent of the harm or the manner in which it occurred does not prevent him from being liable). Contrary to the findings of the appellate court, the bus was travelling within the speed limit allowed in highways. He also had only a few seconds to react to the situation. To require delos Reyes to avoid the collision is to ask too much from him. Aside from the time element involved, there were no options available to him to have avoided the collision.

The proximate cause of the accident was the negligence of jeepney driver Manalo and spouses Mangune and Carreon. They all failed to exercise the precautions that are needed precisely pro hac vice. In culpa contractual, the moment a passenger dies or is injured, the carrier is presumed to have been at fault or to have acted negligently, and this disputable presumption may only be overcome by evidence that he had observed extra-ordinary diligence as prescribed in Articles 1733, 1755 and 1756 of the New Civil Code or that the death or injury of the passenger was due to a fortuitous event. The negligence of Manalo was proven during the trial by the unrebutted testimonies of Caridad Pascua, the police who arrived on the scene, his (Manalo's) conviction and the application of the doctrine of res ipsa loquitur supra. Spouses Mangune and Carreon alleged that their mechanic regularly maintains the jeepney and on the day before the collision, the mechanic actually checked the vehicle and even tightened the bolts, thus the incident was caused by a caso fortuito. The SC upheld the trial court’s findings that "in an action for damages against the carrier for his failure to safely carry his passenger to his destination, an accident caused either by defects in the automobile or through the negligence of its driver, is not a caso fortuito which would avoid the carriers’ liability. The SC modified the decision holding spouses Mangune and Carreon jointly and severally liable with Manalo. The driver cannot be held jointly and severally liable with the carrier in case of breach of the contract of carriage. Firstly, the contract of carriage is between the carrier and the passenger, and in the event of contractual liability, the carrier is exclusively responsible to the passenger, even if such breach be due to the negligence of his driver. In other words, 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. Secondly, 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.

Compania Maritima vs 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.

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 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: 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.

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. 132 REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF HEALTH, NATIONAL TRUCKING AND FORWARDING CORPORATION (NTFC), and COOPERATIVE FOR AMERICAN RELIEF EVERYWHERE, INC. (CARE Philippines) vs. LORENZO SHIPPING CORPORATION

G.R. No. 153563, [February 7, 2005], 491 PHIL 151-160)

Facts: On June 5, 1987, the Republic of the Philippines, through the Department of Health (DOH), and the Cooperative for American Relief Everywhere, Inc. (CARE) signed an agreement wherein CARE would acquire from the United States government donations of non-fat dried milk and other food products. In turn, the Philippines would transport and distribute the donated commodities to the intended beneficiaries in the country.

The government entered into a contract of carriage of goods with National Trucking and Forwarding Corporation (NTFC). Thus, the latter shipped 4,868 bags of non-fat dried milk through herein Lorenzo Shipping Corporation (LSC). The consignee named in the bills of lading issued by the LSC was Abdurahman (NTFC’s branch supervisor in Zamboanga City).

On reaching the port of Zamboanga City, LSC's agent, Efren Ruste Shipping Agency, unloaded the goods to NTFC’s warehouse. Before each delivery, Rogelio Rizada and Ismael Zamora, both delivery checkers of Efren Ruste Shipping Agency, requested Abdurahman to surrender the original bills of lading, but the latter merely presented certified true copies thereof. Upon completion of each delivery, Rogelio and Ismael asked Abdurahman to sign the delivery receipts. However, at times when Abdurahman had to attend to other business before a delivery was completed, he instructed his subordinates to sign the delivery receipts for him.

Notwithstanding the precautions taken, the NTFC allegedly did not receive the goods. Thus, NTFC filed a formal claim for nondelivery of the goods shipped to LSC.

LSC explained that the cargo had already been delivered to NTFC’s supervisor. NTFC then decided to investigate the loss of the goods. But before the investigation was over, Abdurahman Jama resigned as branch supervisor of NTC.

NTFC filed an action for breach of contract of carriage LSC. The RTC and CA dismissed the complaint of NTFC.

of lading. They also asked the latter and in his absence, his designated subordinates, to sign the cargo delivery receipts.

According to LSC, this practice is its standard operating procedure. This SOP finds support in Article 353 of the Code of Commerce which states that

“After the contract has been complied with, the bill of lading which the carrier has issued shall be returned to him, and by virtue of the exchange of this title with the thing transported, the respective obligations and actions shall be considered cancelled, . . .

In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier, because of its loss or of any other cause, he must give the latter a receipt for the goods delivered, this receipt producing the same effects as the return of the bill of lading. “

Conformably with the aforecited provision, the surrender of the original bill of lading is not a condition precedent for a common carrier to be discharged of its contractual obligation. If surrender of the original bill of lading is not possible, acknowledgment of the delivery by signing the delivery receipt suffices. This is what LSC did.

Issue: WON LSC is presumed at fault or negligent as common carrier for the loss or deterioration of the goods?

Ruling: No. LSC exercised extra ordinary diligence. Although the original bills of lading remained with NTFC, LSC's agents demanded from Abdurahman the certified true copies of the bills

We also note that some delivery receipts were signed by Abdurahman's subordinates and not by Abdurahman himself as consignee. Further, delivery checkers Rogelio and Ismael testified that Abdurahman was always present at the initial phase of each delivery, although on the few occasions when

Abdurahman could not stay to witness the complete delivery of the shipment, he authorized his subordinates to sign the delivery receipts for him. This, to our mind, is sufficient and substantial compliance with the requirements.

We further note that, strangely, NFTC made no effort to disapprove Abdurahman's resignation until after the investigation and after he was cleared of any responsibility for the loss of the goods. With Abdurahman outside of its reach, NFTC cannot now pass to LSC what could be Abdurahman's negligence, if indeed he were responsible.

GR. No. 177116 FEB 27, 2013

ASIAN TERMINALS, INC., Petitioner, vs. SIMON ENTERPRISES, INC., Respondent.

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 InterAsia 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 codefendants 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 codefendants 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.