Transpo - Week 1.docx

TRANSPO - WEEK 1 Fabre Jr. and Cabil v. CA 259 SCRA 426 ALCAZAR

FACTS: ● Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model Mazda minibus. They used the bus principally in connection with a bus service for school children. ● The petitioners had a driver, Porfirio J. Cabil, whom they hired in 1981, after trying him out for two weeks. Cabil’s job was to take school children to and from the St. Scholastica’s College in Malate, Manila. ● Private respondent Word for the World Christian Fellowship Inc. (WWCF) arranged with petitioners for the transportation of 33 members of its Young Adults Ministry from Manila to La Union and back. ● The agreed time to leave was at 5pm but since several members were late, the bus only took off at 8pm. ● It was Cabil’s first time to drive to La Union. As he was driving the minibus came upon a sharp curve on the highway. The road was slippery because it was raining, causing the bus, which was running at the speed of 50 kilometers per hour, to skid to the left road shoulder. ● The bus hit the left traffic steel brace and sign along the road and rammed the fence of one Jesus Escano, then turned over and landed on its left side, coming to a full stop only after a series of impacts. The bus came to rest off the road. A coconut tree, which it had hit, fell on it and smashed its front portion. ● Several passengers were injured. Private respondent Amyline Antonio was thrown on the floor of the bus and pinned down by a wooden seat, which came off after being unscrewed. ● Petitioner Cabil, claimed that he did not see the curve until it was too late. He said he was not familiar with the area and he could not have seen the curve despite the care he took in driving the bus, because it was dark and there was no sign on the road. He said that he saw the curve when he was already within 15 to 30 meters of it. He allegedly slowed down to 30 kilometers per hour, but it was too late. ● Amyline Antonio, who was seriously injured, brought this case in the RTC of Makati. As a result of the accident, she is now suffering from paraplegia and is permanently paralyzed from the waist down. ● RTC: Ruled against the Fabre’s and Cabil and awarded damages in favor of Amyline Antonio. ● CA: Affirmed the RTC decision and ruled that Cabil failed to exercise due care and precaution in the operation of his vehicle considering the time and the place of the accident. BUT it held that the Fabres were themselves presumptively negligent. ISSUE: (1) Whether or not petitioners were negligent. YES. (2) Whether or not petitioners were liable for the injuries suffered by private respondents. YES. HELD: (1) Yes. Petitioners were negligent. ● The finding that Cabil drove his bus negligently, while his employer, the Fabres failed to exercise the diligence of a good father of the family in the selection and supervision of their employee is fully supported by the evidence on record.

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Considering the facts that it was raining and the road was slippery, that it was dark, that he drove his bus at 50 kilometers an hour when even on a good day the normal speed was only 20 kilometers an hour, and that he was unfamiliar with the terrain, Cabil was grossly negligent and should be held liable for the injuries suffered by private respondent Amyline Antonio. Pursuant to Arts. 2176 and 2180 of the Civil Code Cabil’s negligence gave rise to the presumption that his employers, the Fabres, were themselves negligent in the selection and supervision of their employee. Due diligence in selection of employees is not satisfied by finding that the applicant possessed a professional drivers license. The employer should also examine the applicant for his qualifications, experience and record of service. The Fabres, in allowing Cabil to drive the bus to La Union, did not consider the fact that Cabil had been driving for school children only. They had hired him only after a two-week apprenticeship. They had tested him for certain matters, such as whether he could remember the names of the children he would be taking to school, which were irrelevant to his qualification to drive on a long distance travel, especially considering that the trip to La Union was his first. The existence of hiring procedures and supervisory policies cannot be casually invoked to overturn the presumption of negligence on the part of an employer. Petitioners argue that they are not liable because (1) an earlier departure (made impossible by the congregations delayed meeting) could have averted the mishap and (2) under the contract, the WWCF was directly responsible for the conduct of the trip. Neither of these contentions hold water. As common carriers, the Fabres were bound to exercise extraordinary diligence for the safe transportation of the passengers to their destination. This duty of care is not excused by proof that they exercised the diligence of a good father of the family in the selection and supervision of their employee. Art. 1759 of the Civil Code provides: Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the formers employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers.

This case actually involves a contract of carriage. Petitioners, the Fabres, did not have to be engaged in the business of public transportation for the provisions of the Civil Code on common carriers to apply to them. As this Court has held: Art. 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public. The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity (in local idiom, as a sideline). Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the general public, i.e., the general community or population, and one who offers services or solicits business only from a narrow segment

of the general population. We think that Article 1732 deliberately refrained from making such distinctions. (2) Yes. The Fabre’s and Cabil are jointly and severally liable to pay for the damages caused. ● The basis of this allocation of liability was explained in Viluan v. Court of Appeals: The liability of petitioner [bus owner] springs from contract while that of respondents [owner and driver of other vehicle] arises from quasi-delict. 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 members of the Court, though, are of the view that under the circumstances they are liable on quasi-delict. ●

● Calvo v. UCPB GR 148496 3/19/02 ANTE

As in the case Lamalorca v.CA, private respondents and her co-plaintiffs did not stake out their claim against the carrier and the driver exclusively on one theory, much less on that of breach of contract alone. After all, it was permitted for them to allege alternative causes of action and join as many parties as may be liable on such causes of action so long as private respondent and her co-plaintiffs do not recover twice for the same injury It is the intent of the plaintiff to recover from both the carrier and the driver, thus justifying the holding that the carrier and the driver were jointly and severally liable because their separate and distinct acts concurred to produce the same injury.

FACTS ● Virgines Calvo is the owner of Transorient Container Terminal Services, Inc. (TCTSI), a sole proprietorship customs broker. ● Calvo entered into a contract with San Miguel Corporation (SMC) for the transfer of 114 reels of semi-chemical fluting paper and 124 reels of kraft liner board from the Port Area in Manila to SMC’s warehouse at the Tabacalera Compound, Romualdez St., Ermita, Manila. The cargo was insured by respondent UCPB General Insurance Co., Inc. ● The shipment in question, contained in 30 metal vans, arrived in Manila on board “M/V Hayakawa Maru” and, after 24 hours, were unloaded from the vessel to the custody of the arrastre operator, Manila Port Services, Inc. ● From July 23 to July 25, 1990, petitioner, pursuant to her contract with SMC, withdrew the cargo from the arrastre operator and delivered it to SMC’s warehouse in Ermita, Manila. ● On July 25, 1990, the goods were inspected by Marine Cargo Surveyors, who found that 15 reels of the semi-chemical fluting paper were “wet/stained/torn” and 3 reels of kraft liner board were likewise torn. The damage was placed at P93,112.00. ● SMC collected payment from respondent UCPB under its insurance contract for the aforementioned amount. In turn, respondent, as subrogee of SMC, brought suit against Calvo. ● Regional Trial Court rendered judgment finding petitioner liable to respondent for the damage to the shipment. ● CA affirmed ISSUE ● WHETHER TCTSI IS A COMMON CARRIER OR A PRIVATE OR SPECIAL CARRIER WHO DID NOT HOLD ITS SERVICES TO THE PUBLIC. COMMON CARRIER

HELD ● De Guzman v. Court of Appeals - The Civil Code defines “common carriers” in the following terms: “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.” ● Some ambiguities in Art 1732 ○ 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 ○ Avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. ○ Fails to distinguish between a carrier offering its services to the “general public,” i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population ● Concept of “common carrier” under Article 1732 may be seen to coincide neatly with the notion of “public service,” under the Public Service Act (Commonwealth Act No. 1416. Under Section 13, paragraph (b) of the Public Service Act, “public service” includes: ○ “ 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, traction 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 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 communications systems, wire or wireless broadcasting stations and other similar public services. x x x” ○ There is greater reason for holding petitioner to be a common carrier because the transportation of goods is an integral part of her business ● Now, as to petitioner’s liability, Art. 1733 of the Civil Code provides [torts; including this here since I’m not sure how Atty Mendoza conducts recits]: ○ Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case ○ Compania Maritima v. Court of Appeals - the meaning of “extraordinary diligence in the vigilance over goods” was explained thus: ○ vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to it for sale, carriage and delivery. ○ render service with the greatest skill and foresight

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Guzman v. CA 168 SCRA 612 BAUTISTA

use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment, and to exercise due care in the handling and stowage, including such methods as their nature requires. Contrary to petitioner’s assertion, the 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 petitioner’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. From the [Survey Report], it [is] clear that the shipment was discharged from the vessel to the arrastre, Marina Port Services Inc., in good order and condition as evidenced by clean Equipment Interchange Reports (EIRs). Had there been any damage to the shipment, there would have been a report to that effect made by the arrastre operator.

FACTS: ●

Private respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and scrap metal in Pangasinan. Upon gathering sufficient quantities of such scrap material, private respondent would bring such material to Manila for resale. He utilized 2 six-wheeler trucks which he owned for hauling the material to Manila.

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Petitioner de Guzman a merchant and authorized dealer of General Milk Company (Philippines), Inc. in Urdaneta, Pangasinan, contracted with private respondent for the hauling of 750 cartons of Liberty filled milk from a warehouse of General Milk in Makati, Rizal, to petitioner's establishment in Urdaneta. However, only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes never reached petitioner, since the truck which carried these boxes was hijacked somewhere along Tarlac by armed men who took with them the truck, its driver, his helper and the cargo.

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Petitioner then commenced an action against private respondent in the CFI of Pangasinan for the value of the lost merchandise. Petitioner argued that private respondent, being a common carrier, and having failed to exercise the extraordinary diligence required of him by the law, should be held liable for the value of the undelivered goods. In his Answer, private respondent denied that he was a common carrier and argued that he could not be held responsible for the value of the lost goods, such loss having been due to force majeure.

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The trial court rendered a Decision in favor of the petitioner finding private respondent to be a common carrier and holding him liable for the value of the undelivered goods as well as damages and attorney's fees. On appeal, the Court of Appeals reversed the judgment of the trial court and held that respondent had been engaged in transporting return loads of freight "as a casual occupation — a sideline to his scrap iron business" and not as a common carrier.

ISSUES: 1. Whether private respondent Cendana is a common carrier. 2. Whether the private respondent is liable for the value of the merchandise.

HELD: 1. YES. ● The Civil Code defines "common carriers" in the following terms: 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. ●

The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity (as "a sideline"). Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population.

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Furthermore, the concept of "common carrier" under Article 1732 may be seen to coincide neatly with the notion of "public service," under Section 13, par. (b) of the Public Service Act (Commonwealth Act No. 1416, as amended), which includes: ... 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, traction 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 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 communications systems, wire or wireless broadcasting stations and other similar public services. ...

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It appears to the Court that private respondent is properly characterized as a common carrier even though he merely "backhauled" goods for other merchants from Manila to Pangasinan, although such back-hauling was done on a periodic or occasional rather than regular or scheduled manner, and even though private respondent's principal occupation was not the carriage of goods for others. There is no dispute that private respondent charged his customers a fee for hauling their goods; that fee frequently fell below commercial freight rates is not relevant here.

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The Court of Appeals referred to the fact that private respondent held no certificate of public convenience, and concluded he

was not a common carrier. This is palpable error. A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers. That liability arises the moment a person or firm acts as a common carrier, without regard to whether or not such carrier has also complied with the requirements of the applicable regulatory statute and implementing regulations and has been granted a certificate of public convenience or other franchise. To exempt private respondent from the liabilities of a common carrier because he has not secured the necessary certificate of public convenience, would be offensive to sound public policy; that would be to reward private respondent precisely for failing to comply with applicable statutory requirements. ●

The business of a common carrier impinges directly and intimately upon the safety and well being and property of those members of the general community who happen to deal with such carrier. The law imposes duties and liabilities upon common carriers for the safety and protection of those who utilize their services and the law cannot allow a common carrier to render such duties and liabilities merely facultative by simply failing to obtain the necessary permits and authorizations.

2. NO. ●

Common carriers, "by the nature of their business and for reasons of public policy" are held to a very high degree of care and diligence ("extraordinary diligence") in the carriage of goods as well as of passengers.

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Even if the causes of loss, destruction or deterioration appear to constitute a species of force majeure, it is still within the scope of Article 1735, which provides as follows: In all cases other than those mentioned in numbers 1, 2, 3, 4 and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in Article 1733.

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It would follow, therefore, that the hijacking of the carrier's vehicle must be dealt with under the provisions of Article 1735, in other words, that the private respondent as common carrier is presumed to have been at fault or to have acted negligently. This presumption, however, may be overthrown by proof of extraordinary diligence on the part of private respondent. Under Article 1745 (6) of the Civil COde, 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."

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In the instant case, armed men held up the second truck owned by private respondent which carried petitioner's cargo. The record shows that a criminal case for robbery in band was filed in the CFI of Tarlac. There, the accused were charged with willfully and unlawfully taking and carrying away with them the second truck, driven by Manuel Estrada and loaded with the 600 cartons of Liberty filled milk destined for delivery at petitioner's store in Urdaneta, Pangasinan. The decision of the trial court shows that the accused acted with grave, if not irresistible, threat, violence or force.

Bascos v. CA 221 SCRA 318 CABUSORA

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In these circumstances, we hold that the occurrence of the loss must reasonably be regarded as quite beyond the control of the common carrier and properly regarded as a fortuitous event. It is necessary to recall that even common carriers are not made absolute insurers against all risks of travel and of transport of goods, and are not held liable for acts or events which cannot be foreseen or are inevitable, provided that they shall have complied with the rigorous standard of extraordinary diligence.

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We, therefore, agree with the result reached by the Court of Appeals that private respondent Cendana is not liable for the value of the undelivered merchandise which was lost because of an event entirely beyond private respondent's control.

FACTS: ● Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE) entered into a hauling contract with Jibfair Shipping Agency (Jibfair). ○ CIPTRADE was obliged to haul 2,000 m/tons of soya bean meal from Magallanes Dr., Del Pan Manila to Purefoods Corp. warehouse in Calamba, Laguna. ● In turn, CIPTRADE subcontracted Petitioner Estrellita Bascos to deliver 400 sacks of soya bean meal (~P156K, with a rate of P50.00 per metric ton). ● Bascos failed to deliver the cargo. (21 Oct 1988) The cargo was hijacked along Canonigo St., Paco, Manila at night. ● CIPTRADE had to pay Jibfair for the lost goods in accordance to a provision in the hauling contract. ○ "1. CIPTRADE shall be held liable and answerable for any loss in bags due to theft, hijacking and non-delivery or damages to the cargo during transport at market value, …" ● Cipriano demanded reimbursement from Bascos but the latter refused to pay. ● Cipriano filed a complaint for a sum of money and damages with writ of preliminary attachment for breach of contract of carriage. ● Bascos’ defenses: ○ Contract between CIPTRADE and Bascos was not of carriage but of LEASE. Her trucks were only offered for lease to those who have cargo to move, not to the general public and her business was only a small one. ○ Since the truck was hijacked, Bascos was exculpated from liability, it being FORCE MAJEURE. ● TC: Ruled in favor of CIPTRADE. ● CA: AFFIRMED TC’s Decision. ISSUE/S - HELD: 1. WON Petitioner Bascos is a common carrier. – YES. Bascos was doing business as a common carrier. 2. WON the contract was a lease. – NO. It was a contract of carriage. 3. WON the said hijacking in this case is considered force majeure. – NO. Petitioner failed to negate the presumption of negligence, thus, hijacking in this case cannot be considered force majeure.

RATIONALE: 1. As ruled by the CA, Bascos was a common carrier. ● Common carrier is “(a) person, corporation or firm, or association engaged in the business of carrying or transporting passengers or goods or both, by land, water or air, for compensation, offering their services to the public.” (Art. 1732, Civil Code) ● The test to determine a common carrier is “whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business transacted.” ● The lower courts appreciated the following pieces of evidence: ○ Bascos herself admitted that she did business under the name of A.M. Bascos Trucking (judicial admission). ○ Maximo Sanglay, the truck driver of Bascos, received the cargo consisting of 400 bags of soya bean meal as evidenced by the cargo receipt signed by him. ○ Juan Morden, truck helper, was also the employee of Bascos. ○ Control of the cargo was also placed in petitioner’s care. ● De Guzman v. CA: Art. 1732 defining common carriers “makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity (in local idiom, as a "sideline").” It also “carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population. We think that Article 1732 deliberately refrained from making such distinctions." ● Thus, despite petitioner’s contention that she does not offer her trucking business to the general public, there being no distinction as to the customers, Bascos’ trucking business is a common carriage. 2. “A contract is what the law defines it to be and not what it is called by the contracting parties.” ● Since it was petitioner who was alleging that it was a contract of lease, she has the burden to prove the same. However, she was only able to present affidavits to prove that the contract was lease. The Court found this inadequate 3. “Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods transported by them” (Art. 1733). Thus, there is presumption of negligence if said goods are lost, destroyed or deteriorated (Art. 1735). To overcome the presumption, the common carrier needs to prove that it exercised extraordinary diligence. Exceptions to this presumption are enumerated in Art. 1734. ● De Guzman v. CA, “hijacking, not being included in the provisions of Article 1734, must be dealt with under the provisions of Article 1735, and thus, the common carrier is presumed to have been at fault. To exculpate the carrier from liability arising from hijacking, he must prove that the robber or hijackers acted with grave abuse of discretion or irresistible threat, violence, or force.” ● Bascos failed to negate the presumptions. She only also presented affidavits of the driver and truck helper. Court stated that “affidavits are not considered the best evidence if the affiants are available as witnesses.”

PETITION DISMISSED. Tatad v. Garcia GR 114222 4/6/95 CANDELARIA DOCTRINE: The operation of a rail system as a public utility, involves transportation. The right to operate such public utility may exists separately and independently of ownership. Consequently, the right to operate a public utility involving transportation must comply with obligations imposed upon common carriers. (NOTE: If Atty. Mendoza asks, the petitioners were senators, who filed the case being adversely affected as taxpayers)

FACTS: ● 1989: Department of Transportation and Commerce (DOTC) planned to construct a light railway transit line along EDSA which shall traverse Pasay, QC, Mandaluyong and Makati (referred to as EDSA LRT III). ● 1990: R.A. 6957 entitled “An Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure Projects by the Private Sector, and For Other Purposes” (or the “Build-Operate-Transfer [BOT] Law”) was signed by President Cory Aquino. The BOT law provided 2 schemes: ○ (1) Build-Operate-and-Transfer scheme [BOT scheme] – contractor undertakes the construction, financing, operation and maintenance of a given infrastructure facility. The contractor operates the facility for a fixed term (which shall not exceed [50] years) during which they can charge facility users fees sufficient to enable the contractor to recover the operating and maintenance expenses and investment. The ownership structure of the contractor of an infrastructure facility whose operation requires a public utility franchise must be in accordance with the Constitution. ○ (2) Build-and-Transfer scheme [BT scheme] – contractor undertakes the construction including financing, of a given infrastructure facility, and its turnover after completion to the government agency or local government unit concerned which shall pay the contractor its total investment expended on the project, plus a reasonable rate of return thereon. ● 1991: In accordance with the BOT law and to set the EDSA LRT III, the DOTC created a Bidding and Technical Committee to allow prequalification of contractors for the project. ○ 5 groups respondent to the invitation. Only the EDSA LRT Consortium, a foreign corporation organized in Hongkong, was qualified under the criteria set by the committees; with 82 out of 100 points. ○ Executive Secretary Orbos recommended private respondents for the award to the President, requesting authority to negotiate a contract. Approved. ○ DOTC and respondent EDSA LRT Corporation (“Private Respondent”), in substitution of EDSA LRT Consortium, entered into an “Agreement to Build, Lease and Transfer (BLT) a LRT System for EDSA” under the terms of the BOT Law. ● 1992: Executive Secretary Franklin Drilon (replaced Orbos) stated that the President could not grant the approval because (1) no actual bidding was conducted; and (2) negotiation is not contemplated under the BOT law to be a mode to award a contract. ○ DOTC and private respondents re-negotiated the contract and entered into a Revised and Supplemental Contract, which did not need the approval of the President. ○ Agreement: EDSA LRT III will use light rail vehicles from foreign countries and will have a maximum capacity of

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450K passengers a day, with a distance of 17.8 km from Pasay to QC. The system will have its own power facility and 13 passenger stations. ○ Private Respondents: finances the entire project. Upon full or partial completing, private respondent shall deliver the use and possession of the completed portion to DOTC which shall operate the same. DOTC shall pay the private respondent. After 25 years and DOTC shall complete the payment of rentals, ownership shall be transferred to the DOTC for a consideration of $1. 1994: R.A. 7718 was signed, expressly recognizing BLT schemes and allows their negotiation. Hence, the current petition. PETITIONER argues that the Revised and Supplemental Agreement are unconstitutional because – ○ EDSA LRT III is a public utility which, under the Consti, can only be owned and operated by Filipino Citizens and domestic corporations, not foreign corporations like private respondent; ○ They are BLT agreements, not yet allowed under the law which they were made; ○ Agreement is grossly disadvantageous to the government.

ISSUE: W/N the EDSA LRT Corporation is allowed to own the facilities under BLT Agreement. HELD: YES. ● It is undisputed that EDSA LRT Corporation, to whom the contract to construct the EDSA LRT III was awarded by DOTC, is a foreign corporation; and that once the EDSA LRT III is constructed, EDSA LRT Corp, as lessor, will turn it over to DOTC, as lessee, for the latter to operate the system and pay rentals for use. ● What private respondent 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 constitute a public utility. A public utility is constituted by their use to serve the public, not ownership. ○ Art XII, Sec. 11 of the Consti – requires a franchise to operate a public utility. But it does NOT require a franchise before one can own the facilities needed to operate a public utility so long as it does not operate them to serve the public. ○ There is a distinction between “Operation of a public utility” and the “Ownership of the facilities used to serve the public”. ● The operation of a rail system as a public utility involves the transportation of passengers from one point to another point, their loading and unloading at designated places and the movement of the trains at pre-scheduled times. ○ The right to operate a public utility may exists independently from the ownership of the facilities thereof.

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For example, Enfrachised airline and shipping companies may lease their aircraft and vessels instead of owning them themselves. In this case, while private respondent is the owner of the facilities necessary to operate the EDSA LRT III, it admits it is NOT enfranchised to operate a public utility. ○ Under the BLT scheme, private respondent and DOTC agreed that on completion, private respondent will immediately deliver possession of the LRT system by way of lease for 25 years, and the DOTC shall operate the same as common carrier and private respondent shall provide technical maintenance of the equipment. ○ After completion, the DOTC will operate the EDSA LRT III on its own. Since DOTC shall operate the EDSA LRT III, it shall assume all the obligations and liabilities of a common carrier. DOTC shall indemnify and hold harmless private respondent from any losses, damages, injuries or death which may be claimed in the operation or implementation, except losses due to defects in the EDSA LRT III on account of the defective condition of equipment or facilities. Private respondent will NOT run the LRT and collect fees.

PETITION DISMISSED. (Other issues: (1) BLT scheme is a variant of the BT scheme, allowed under the law which they agreed upon; and (2) Negotiation now captured under the new law, which is curative of the old law; and (3) not grossly disadvantageous to government because the exclusive rights over the stations shall be transferred to DOTC.) DISSENT: (1) DAVIDE – BLT contract an ultra vires act by the DOTC because, at the time it entered into the agreement, the law only recognized (2) schemes; the BOT and BT scheme. In addition, the contract did not comply with the mandatory requirement of public bidding, and instead allowed the negotiation of the contract. (2) FELICIANO – Similar argument with DAVIDE on requirement of public bidding. FGU Insurance v. Sarmiento GR 141910 8/6/02

● G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994 thirty (30) units of Condura S.D. white refrigerators aboard one of its Isuzu truck, driven by Lambert Eroles, from the plant site of Concepcion Industries, Inc., along South Superhighway in Alabang, Metro Manila, to the Central Luzon Appliances in Dagupan City. While the truck was traversing the north CAPUCHINO diversion road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the I’m not sure kung anong issue yung cargoes. impt for transpo. Sa SC decision kasi 3 issues so para sure lang. So ● FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the value of the covered cargoes sinama ko na lang lahat in case in the sum of P204,450.00. FGU, in turn, being the subrogee of the rights and interests of Concepcion Industries, Inc., sought

itanong ni sir.

reimbursement of the amount it had paid to the latter from GPS. Since the trucking company failed to heed the claim, FGU filed a complaint for damages and breach of contract of carriage against GPS and i ts driver Lambert Eroles with the Regional Trial Court, Branch 66, of Makati City. ● In the instant case, plaintiff did not present any single evidence that would prove that defendant is a common carrier. ● Accordingly, the application of the law on common carriers is not warranted and the presumption of fault or negligence on the part of a common carrier in case of loss, damage or deterioration of goods during transport under 1735 of the Civil Code is not availing. ● The laws governing the contract between the owner of the cargo to whom the plaintiff was subrogated and the owner of the vehicle which transports the cargo are the laws on obligation and contract of the Civil Code as well as the law on quasi delicts. ● RTC RULING - Art. 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap, he was violating any traffic regulation. Evidence for the plaintiff shows no proof that defendant was violating any traffic regulation. Hence, the presumption of negligence is not obtaining. Considering that plaintiff failed to adduce evidence that defendant is a common carrier and defendants driver was the one negligent, defendant cannot be made liable for the damages of the subject cargoes. ● CA RULING - "Based on the foregoing disquisitions and considering the circumstances that the appellee trucking corporation has been `its exclusive contractor, hauler since 1970, defendant has no choice but to comply with the directive of its principal, the inevitable conclusion is that the appellee is a private carrier the lower court correctly ruled that 'the application of the law on common carriers is not warranted and the presumption of fault or negligence on the part of a common carrier in case of loss, damage or deterioration of good[s] during transport under [article] 1735 of the Civil Code is not availing . ISSUE: ● 1. Whether or not GPS falls under the category of a common carrier. ● 2. Whether or not GPS either as a common carrier or may be a private carrier, may be presumed to have been negligent when the goods it undertook to transport safely were subsequently damaged while in it’s protective custody and possession ● 3. Whether the Doctrine of Res Ipsa Loquitur is applicable in the instant case HELD : 1. NO . ● 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 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. The above conclusion nothwithstanding, GPS cannot escape from liability. 2. YES. ● In culpa contractual, upon which the action of petitioner rests as being the subrogee of Concepcion Industries, Inc., the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief. The law, recognizing the obligatory force of contracts, will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. ● A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered.The remedy serves to preserve the interests of the promisee that may include his expectation interest , which is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed, or his reliance interest , which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made; or his restitution interest , which is his interest in having restored to him any benefit that he has conferred on the other party . ● Respondent trucking corporation recognizes the existence of a contract of carriage between it and petitioners 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. ● Respondent driver, on the other hand, without concrete proof of his negligence or fault, may not himself be ordered to pay petitioner. The driver, not being a party to the contract of carriage between petitioners principal and defendant, may not be held liable under the agreement. 3. NO. ● Resort to the doctrine, however, may be allowed only when (a) the event is of a kind which does not ordinarily occur in the absence of negligence; (b) other responsible causes, including the conduct of the plaintiff and third persons, are sufficiently eliminated by the evidence; and (c) the indicated negligence is within the scope of the defendant's duty to the plaintiff. Thus, it is not applicable when an unexplained accident may be attributable to one of several causes, for some of which the defendant could not be responsible. ● Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists between the plaintiff and the defendant, for the inference of negligence arises from the circumstances and nature of the occurrence and not from the nature of the relation of the parties. Nevertheless, the requirement that responsible causes other than those due to defendant's conduct must first be eliminated, for

the doctrine to apply, should be understood as being confined only to cases of pure (non-contractual) tort since obviously the presumption of negligence in culpa contractual, as previously so pointed out, immediately attaches by a failure of the covenant or its tenor. In the case of the truck driver, whose liability in a civil action is predicated on culpa acquiliana, while he admittedly can be said to have been in control and management of the vehicle which figured in the accident, it is not equally shown, however, that the accident could have been exclusively due to his negligence, a matter that can allow, forthwith, res ipsa loquitur to work against him First Phil Industrial v. CA 300 SCRA 661 DOROJA

FACTS: ● Petitioner is a grantee of a pipeline concession to contract, install and operate oil pipelines ● Sometime in 1995, petitioner applied for a mayor’s permit but before it could be issued, the City Treasurer required it to pay a local tax based on gross receipts pursuant to the LGC which petitioner paid under protest ● Thereafter, petitioner filed a letter-protest, claiming that it is exempt from paying tax on gross receipts as it is engaged in the business of transporting petroleum products and thus exempt from paying tax on gross receipts under Section 133 of the Local Government Code of 1991 ● The City Treasurer denied the protest contending that petitioner cannot be considered engaged in transportation business, thus it cannot claim exemption under Section 133 (j) of the Local Government Code as said exemption applies only to "transportation contractors and persons engaged in the transportation by hire and common carriers by air, land and water" ○ Asserted that pipelines are not included in the term "common carrier" which refers solely to ordinary carriers such as trucks, trains, ships and the like ● Petitioner had filed a case for tax refund with the RTC which was dismissed as it was considered by the lower court as either a contractor or other independent contractor ● CA affirmed ISSUE WON petitioner is a common carrier/transportation contractor – YES HELD ● A "common carrier" may be defined, broadly, as one who holds himself out to the public as engaged in the business of transporting persons or property from place to place, for compensation, offering his services to the public generally ● 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: ○ 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 ○ He must undertake to carry goods of the kind to which his business is confined

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○ He must undertake to carry by the method by which his business is conducted and over his established roads ○ 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 definition of "common carriers" in the Civil Code makes no distinction as to the means of transporting, as long as it is by land, water or air Moreover, under the Petroleum Act of the Philippines (Republic Act 387), petitioner is considered a "common carrier"

***As to the tax: It is clear that the legislative intent in excluding from the taxing power of the local government unit the imposition of business tax against common carriers is to prevent a duplication of the so-called "common carrier's tax." Petitioner is already paying three (3%) percent common carrier's tax on its gross sales/earnings under the National Internal Revenue Code. To tax petitioner again on its gross receipts in its transportation of petroleum business would defeat the purpose of the Local Government Code. Schmitz v. Transport Venture 456 SCRA 557

FACTS: ● 25 Sept 1991: SYTCO Pte Ltd. Singapore shipped from the port of Ilyichevsk, Russia on board M/V "Alexander Saveliev" (of Russian registry; owned by Black Sea) 545 hot rolled steel sheets in coil (6,992,450 metric tons). FUEGO ● Cargoes were to be discharged at the port of Manila; consignee was Little Giant Steel Pipe Corporation ○ Insured against all risks with Industrial Insurance Company Ltd. Sorry for the lengthy “digest.” Case has ● Little Giant availed the services of Schmitz Transport to secure requisite clearances and receive cargoes from shipside, and to deliver many parties, details needed for better them to Little Giant’s warehouse at Cainta, Rizal understanding. ● Schmitz engaged the services of TVI to send a barge and tugboat at shipside upon arrival of cargoes. ● 24 Oct 1991: M/V Alexander arrived at the port of Manila. Philippine Ports Authority (PPA) assigned it a place of berth at the outside breakwater at the Manila South Harbor. ● 26 Oct 1991 (around 4:30 p.m.) TVI’s tugboat "Lailani" towed the barge "Erika V" to shipside. ○ 7PM: the tugboat, after positioning the barge alongside the vessel, left and returned to the port terminal. ○ 9PM: arrastre operator Ocean Terminal Services Inc. commenced to unload 37 of the 545 coils from the vessel unto the barge. ● 27 Oct 1991 (12:30AM): weather had become inclement due to an approaching storm, the unloading unto the barge of the 37 coils was accomplished, BUT no tugboat pulled the barge back to the pier. ○ 5:30AM: due to strong waves, the crew of the barge abandoned it and transferred to the vessel. The barge pitched and rolled with the waves and eventually capsized, washing the 37 coils into the sea. ● 7AM: a tugboat finally arrived to pull the already empty and damaged barge back to the pier. ● Little Giant and Industrial Insurance tried to recover the lost cargoes to no avail. ● Little Giant filed a formal claim against Industrial Insurance. Industrial Insurance paid Little Giant ₱5,246,113.11. Little Giant executed a subrogation receipt in favor of Industrial Insurance.

● Industrial Insurance later filed a complaint against Schmitz Transport, TVI, and Black Sea for the recovery of the amount it paid to Little Giant plus adjustment fees, attorney’s fees, and litigation expenses. ● Industrial Insurance faulted the defendants for undertaking the unloading of the cargoes while typhoon signal No. 1 was raised in Metro Manila. ● RTC: all defendants negligent for unloading the cargoes outside of the breakwater notwithstanding the storm signal; denied MR. ● CA affirmed RTC’s decision: all the defendants were common carriers — Black Sea and TVI for engaging in the transport of goods and cargoes over the seas as a regular business and not as an isolated transaction, and Schmitz Transport for entering into a contract with Little Giant to transport the cargoes from ship to port for a fee. ○ Defendants are solidarily liable, as "each one was essential such that without each other’s contributory negligence the incident would not have happened and so much so that the person principally liable cannot be distinguished with sufficient accuracy." ○ Defense of fortuitous event discredited: "although defendants obviously had nothing to do with the force of nature, they however had control of where to anchor the vessel, where discharge will take place and even when the discharging will commence." ○ “Human intervention in the form of contributory negligence by all the defendants resulted to the loss of the cargoes...unloading outside the breakwater, instead of inside the breakwater, while a storm signal was up constitutes negligence.It thus concluded that the proximate cause of the loss was Black Sea’s negligence in deciding to unload the cargoes at an unsafe place and while a typhoon was approaching;” MR denied. ● Schmitz filed present petition against TVI, Industrial Insurance and Black Sea. ○ Asserts that in chartering the barge and tugboat of TVI, it was acting for its principal (Little Giant) – transportation contract was by and between Little Giant and TVI. ● Arguments: ○ Black Sea – cargoes were received by Little Giant through Schmitz in good order, hence, it cannot be faulted, it having had no control and supervision. ○ TVI – acted as a passive party; merely received the cargoes and transferred them unto the barge upon the instruction of Schmitz ISSUE-HELD: WON liability for the loss may attach to Black Sea, Schmitz, and TVI – YES. RATIO: ● In A.F. Sanchez Brokerage, Inc. v. CA, “Art. 1732 does not distinguish between one whose principal business activity is the carrying of goods and one who does such carrying only as an ancillary activity. The contention, therefore, of petitioner that it is not a common carrier but a customs broker whose principal function is to prepare the correct customs declaration and proper shipping documents as required by law is bereft of merit. It suffices that petitioner undertakes to deliver the goods for pecuniary consideration.” ● In Calvo v. UCPB General Insurance Co. Inc., “The transportation of goods is an integral part of a customs broker, the customs broker

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is also a common carrier. For to declare otherwise ‘would be to deprive those with whom [it] contracts the protection which the law affords them notwithstanding the fact that the obligation to carry goods for [its] customers, is part and parcel of petitioner’s business.’" Schmitz was Little Giant’s agent. BUT in this case, it does not follow that negligence of agent is deemed the negligence of its principal. ○ Schmitz was the broker-agent of Little Giant in securing the release of the cargoes. In effecting the transportation of the cargoes from the shipside and into Little Giant’s warehouse, however, Schmitz was discharging its own personal obligation under a contract of carriage. ○ Not having any barge or tugboat, Schmitz engaged the services of TVI as handler to provide the barge and the tugboat. In their Service Contract, while Little Giant was named as the consignee, Schmitz did not disclose that it was acting on commission and was chartering the vessel for Little Giant. Little Giant did not thus automatically become a party to the Service Contract and was not, therefore, bound by the terms and conditions therein. ○ Not being a party to the service contract, Little Giant cannot directly sue TVI based thereon but it can maintain a cause of action for negligence. While TVI acted as a private carrier for which it was under 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 carried goods. TVI’s failure to promptly provide a tugboat did not only increase the risk that might have been reasonably anticipated during the shipside operation, but was the proximate cause of the loss. ○ A man of ordinary prudence would not leave a heavily loaded barge floating for a considerable number of hours, at such a precarious time, and in the open sea, knowing that the barge does not have any power of its own and is totally defenseless from the ravages of the sea. That it was nighttime and, therefore, the members of the crew of a tugboat would be charging overtime pay did not excuse TVI from calling for one such tugboat. To be relieved of liability, Schmitz, following Article 1739, must prove that it exercised due diligence to prevent or minimize the loss, before, during and after the occurrence of the storm in order that it may be exempted from liability for the loss of the goods. ○ While Schmitz sent checkers and a supervisor on board the vessel to counter-check the operations of TVI, it failed to take all available and reasonable precautions to avoid the loss. After noting that TVI failed to arrange for the prompt towage of the barge despite the deteriorating sea conditions, it should have summoned the same or another tugboat to extend help, but it did not. Schmitz and TVI are solidarily liable for the loss of the cargoes.

Discussion on WON incident as due to fortuitous event -● Article 1174 absolves any party from any and all liability arising therefrom: (1) the cause of the unforeseen and unexpected occurrence, or the failure of the debtor to comply with his obligation, must be independent of human will; (2) it must be impossible to foresee the event which constitute the caso fortuito, or if it can be foreseen it must be impossible to avoid; (3) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in any manner; and (4) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor.

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Crisostomo v. CA GR 138334 8/25/03 MAGISTRADO

The act of God doctrine strictly requires that the act must be occasioned solely by the violence of nature. Human intervention is to be excluded from creating or entering into the cause of the mischief. When the effect is found to be in part the result of the participation of man, whether due to his active intervention or neglect or failure to act, the whole occurrence is then humanized and removed from the rules applicable to the acts of God. That no tugboat towed back the barge to the pier after the cargoes were completely loaded by 12:30 in the morning is, however, a material fact which the appellate court failed to properly consider and appreciate — the proximate cause of the loss of the cargoes. Had the barge been towed back promptly to the pier, the deteriorating sea conditions notwithstanding, the loss could have been avoided. But the barge was left floating in open sea until big waves set in at 5:30 a.m., causing it to sink along with the cargoes. The loss thus falls outside the "act of God doctrine."

FACTS: ● Petitioner Estela Crisostomo contracted the services of respondent Caravan Travel and Tours International, Inc. to arrange and facilitate her booking, ticketing and accommodation in a tour dubbed “Jewels of Europe” which included the countries of England, Holland, Germany, Austria, Liechtenstein, Switzerland and France at a total cost of P74,322.70. ● Caravan’s ticketing manager, Meriam Menor, went to Estela’s residence to deliver the travel documents and plane tickets. Estela paid the full amount and was advised by Meriam to be in NAIA on June 15, 1991, two hours before her flight on board British Airways. ● When Estela went to NAIA on June 15 to take the flight for the first leg of her journey (Manila to Hongkong), she discovered that the flight she was supposed to take had already departed the previous day as her plane ticket was for the flight scheduled on June 14. ● Menor told Estela to just take another tour called “British Pageant” which included England, Scotland and Wales at a total cost of P20,881.00. Estela gave P7,980.00 as partial payment and commenced the trip in July. ● Upon Estela’s return, she demanded from Caravan the reimbursement of P61,421.70, representing the difference between the sum she paid for “Jewels of Europe” and the amount she owed for the “British Pageant” tour. ● Caravan refused to reimburse the amount despite several demands. This prompted Estela to file a complaint against Caravan for breach of contract of carriage and damages. ● The trial court rendered a decision in favor of Estela. ○ It held that Caravan was negligent in erroneously advising Estela of her departure date through its employee, Menor, who was not presented as witness to rebut Estela’s testimony. ○ However, Estela was also guilty of contributory negligence as she should have verified the exact date and time of departure by looking at her ticket and should have simply not relied on Menor’s verbal representation. ● On appeal, the CA likewise found both parties to be at fault. ○ It held that Estela is more negligent than Caravan because as a lawyer and well-traveled person, she should have known better than to simply rely on what was told to her. ○ Thus, she is not entitled to any form of damages and is ordered to pay Caravan the balance of the price for the “British Pageant” tour.

ISSUE: ● W/N Caravan is negligent in its contractual obligations with Estela. HELD: ● NO ● Estela contends that Caravan did not observe the standard of care required of a common carrier when it informed her wrongly of the flight schedule. ● A common carrier is defined under Article 1732 of the Civil Code as 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. ● It is obvious from the above definition that Caravan is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier. ● Caravan 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. ○ At most, Caravan acted merely as an agent of the airline, with whom Estela ultimately contracted for her carriage to Europe. ○ Caravan’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. ● Since the contract between the parties is an ordinary one for services, the standard of care required of Caravan is that of a good father of a family under Article 1173 of the Civil Code. ○ This connotes reasonable care consistent with that which an ordinarily prudent person would have observed when confronted with a similar situation. ○ The test to determine whether negligence attended the performance of an obligation is: did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? ○ If not, then he is guilty of negligence. ● Contrary to Estela’s claim, the evidence on record shows that Caravan exercised due diligence in performing its obligations under the contract and followed standard procedure in rendering its services to Estela. ○ As correctly observed by the lower court, the plane ticket issued to Estela clearly reflected the departure date and time, contrary to Estela’s contention. ○ The travel documents, consisting of the tour itinerary, vouchers and instructions, were likewise delivered to Estela two days prior to the trip. ○ Caravan also properly booked Estela for the tour, prepared the necessary documents and procured the plane tickets. ○ It arranged Estela’s hotel accommodation as well as food, land transfers and sightseeing excursions, in accordance with its avowed undertaking.

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BA Finance v. CA 215 SCRA 715 MANAHAN MELO, J.

Therefore, it is clear that Caravan performed its prestation under the contract as well as everything else that was essential to book Estela for the tour. Had Estela exercised due diligence in the conduct of her affairs, there would have been no reason for her to miss the flight. Hence, she cannot recover and must bear her own damage.

FACTS: - An accident involving BA Finance’s ISUZU ten-wheeler truck which was then driven by driver Lino Castro is the thrust of this petition for review - The CA affirmed the TC’s decision holding Lino Castro guilty beyond reasonable doubt of reckless imprudence resulting in triple homicide with multiple injuries with damage to property. - BA Finance was adjudged liable for damages since the truck was registered under its name during the incident in question - To the question of whether petitioner can be held responsible to the victims albeit the truck was leased to Rock Component Philippines when the incident occurred, the appellate court answered in the affirmative on the basis of the jurisprudential dogmas - BA Finance argues that it should not be held liable for damages since par 5 of the complaint lodged by the plaintiffs indicated that BA Finance was not the employer of the negligent driver (also since there was a Lease Contract with Rock Component Philippines involving the truck) ISSUE: W/N BA FINANCE SHOULD BE HELD LIABLE? YES HELD: - ". . . In previous decisions, We already have held that 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 principle upon which this doctrine is based is that in dealing with vehicles registered under the Public Service Law, the public has the right to assume or presume that the registered owner is the actual owner thereof, for it would be difficult for the public to enforce the actions that they may have for injuries caused to them by the vehicles being negligently operated if the public should be required to prove who the actual owner is. How would the public or third persons know against whom to enforce their rights in case of subsequent transfers of the vehicles? We do not imply by this doctrine, however, that the registered owner may not recover whatever amount he had paid by virtue of his liability to third persons from the person to whom he had actually sold, assigned or conveyed the vehicle.||| - "Under the same principle the registered owner of any vehicle, even if not used for a public service, should primarily be responsible to the public or to third persons for injuries caused the latter while the vehicle is being driven on the highways or streets. The members of the Court are in agreement that the defendant-appellant should be held liable to plaintiff-appellee for the injuries occasioned to the latter because of the negligence of the driver, even if the defendant-

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Occidental Transport v. CA 220 SCRA 167 NAVAL

appellant was no longer the owner of the vehicle at the time of the damage because he had previously sold it to another. What is the legal basis for his (defendant-appellant's) liability? "There is a presumption that the owner of the guilty vehicle is the defendant-appellant as he is the registered owner in the Motor Vehicles Office. Should he not be allowed to prove the truth, that he had sold it to another and thus shift the responsibility for the injury to the real and actual owner? The defendant holds the affirmative of this proposition, the trial court held the negative.

FACTS: ● A collision occurred between a Ford Fiera and a Passenger bus in Misamis Occidental. As a result, the Ford Fiera was thrown into the canal on the right side of the road. The driver of the passenger bus did not stop to assist the victims, but rather proceeded towards its destination. ● The driver of the Ford Fiera suffered fatal injuries and eventually died. The owner of the Ford Fiera,Trencio Almedilla, and another passenger of the Ford Fiera, Alberto, suffered various injuries due to the incident. It is important to note that although Trencio Almedilla was the owner of the said Ford Fiera, the car was registered under the name of Sevilla Lines and/or William Sevilla. ● The two parties (passengers of the Ford Fiera and the owner of the Passenger bus) filed cases against each other before the lower courts and eventually, Judge Ortiz rendered a decision and ruled that the driver of the Passenger bus was negligent. ● Ten years after the case between the two parties started, another judge named Judge Bernaldez also rendered a decision against the Passenger bus company in a totally different civil case. A grant for damages for the repair of the Ford Fiera was awarded to Trencio Almedilla as the owner of the said Ford Fiera. ● The owner of the Passenger bus, Occidental Transport, alleged that the grant of damages for the repair of the car was erroneously awarded to Almedilla because the registered owner of the Ford Fiera was William Sevilla and not Almedilla. ISSUE: ● (1) WON the grant for damages was erroneously awarded to Almedilla (not the registered owner) -- NO ● (2) WON it was error for the respondent court to uphold the decision of the trial court based on the judgment rendered in another case -- NO (In case he asks lang about this) HELD: (1) ● The grant for damages for the repair of the Ford Fiera was not erroneously awarded to Almedilla. The fact that the Fiera was owned by Almedilla though registered with William Sevilla, 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 Almedilla and not Sevilla Lines. William Sevilla admitted that the real owner of the vehicle was Trencio Almedilla, in the case for damages by Occidental Land Transportation against Sevilla Lines and/or William Sevilla.Having thus been settled in the lower court, petitioner is now no longer in any position to question the ownership of the Fiera or the award of damages to private respondent Almedilla.

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No error was committed by the respondent court when it upheld the findings of the other trial court. As a general rule, courts are not authorized to take judicial notice, in the adjudication of cases pending before them, of the contents of the records of other cases. However, the exception would be when there is an absence of objection, with the knowledge of the opposing party, or at the request or with the consent of the parties. The decision in Civil Case No. 3156 formed part of the records of the instant case (Civil Case No. 2728) with the knowledge of the parties and in the absence of their objection. This being the case, petitioners were aware that Exhibit "O" (Decision in Civil Case No. 3156) had formed part of the records of the case and would thereby be considered by the trial court in its decision.

Benedicto v. IAC and Greenhills FACTS: 220 SCRA 167 (? idk why the citation is the same as the case ● Greenhills Wood Industries (lumber manufacturing firm with business address at Dagupan City, operates a sawmill at Maddela, above) Quirino) - bound itself to sell and deliver to Blue Star Mahogany, Inc. (in May 1980) 100,000 board feet of sawn lumber with the understanding that an initial delivery would be made on May 15, 1980. PELONGCO ● Greenhills resident manager in Maddela, Dominador Cruz, contracted Virgilio Licuden, the driver of a cargo truck, to transport its sawn lumber to the consignee Blue Star in Valenzuela, Bulacan; this cargo truck was registered in the name of Ma. Luisa Benedicto, the proprietor of Macoven Trucking, a business enterprise engaged in hauling freight, with main office at B.F. Homes, Paranaque. ● On 15 May 1980, Cruz in the presence and with the consent of driver Licuden, supervised the loading of 7,690 board feet of sawn lumber with invoice value of P16,918.00 aboard the cargo truck. Before the cargo truck left Maddela for Valenzuela, Bulacan, Cruz issued to Licuden Charge Invoices Nos. 3259 and 3260 both of which were initialed by the latter at the bottom left corner. The first invoice was for the amount of P11,822.80 representing the value of 5,374 board feet of sawn lumber, while the other set out the amount of P5,095.20 as the value of 2,316 board feet. Cruz instructed Licuden to give the original copies of the two (2) invoices to the consignee upon arrival in Valenzuela, Bulacan and to retain the duplicate copies in order that he could afterwards claim the freightage from private respondent's Manila office. ● The Manager of Blue Star called up Greenhills’ president on May 16, 1980 informing him that the sawn lumber on board the subject cargo truck had not yet arrived in Valenzuela, Bulacan; because of the delay in delivery Blue Star was “constrained to look for other suppliers.” ● After confirming with Blue Star and trying vainly to persuade it to continue with contract, Greenhill’s filed criminal case against driver Licuden for estafa; and a civil case for recovery of the value of the lost sawn lumber plus damages against Benedicto. ● Benedicto denied liability as she was a complete stranger to the contract of carriage, the subject truck having been earlier sold by her to Benjamin Tee; but the truck had remained registered in her name because Tee have not yet fully paid the amount of the truck (only paid 58K of agreed 68K price); be that as it may, Benedicto admitted that Tee had been operating the said truck in Central Luzon from that and Licuden was Tee’s employee and not hers. ● RTC rendered judgment against Benedicto, ordering her to pay the Greenhills Wood Industries Co. Inc., thru its President and General Manager, the amount of P16,016 cost of the sawn lumber loaded on the cargo truck, with legal rate of interest from the

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filing of the complaint to pay attorney's fees in the amount of P2,000.00; and to pay the costs of this suit. IAC affirmed RTC in toto. Like the trial court, the appellate court held that since petitioner was the registered owner of the subject vehicle, Licuden the driver of the truck, was her employee, and that accordingly petitioner should be responsible for the negligence of said driver and bear the loss of the sawn lumber plus damages. Petitioner moved for reconsideration, without success.

ISSUE: W/N Benedicto, being the registered owner of the carrier, should be held liable for the value of the undelivered or lost sawn lumber. (YES) HELD: ● ● ● ● ● ●

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YES. There is no dispute that petitioner Benedicto has been holding herself out to the public as engaged in the business of hauling or transporting goods for hire or compensation. Petitioner Benedicto is, in brief, a common carrier. 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. This doctrine rests upon the principle that in dealing with vehicles registered under the Public Service Law, the public has the right to assume that the registered owner is the actual or lawful owner thereof. It would be very difficult and often impossible as a practical matter, for members of the general public to enforce the rights of action that they may have for injuries inflicted by the vehicles being negligently operated if they should be required to prove who the actual owner is. Moreover, assuming the truth of her story, petitioner Benedicto retained registered ownership of the freight truck for her own benefit and convenience, that is, to secure the payment of the balance of the selling price of the truck. She may have been unaware of the legal security device of chattel mortgage; or she, or her buyer, may have been unwilling to absorb the expenses of registering a chattel mortgage over the truck. In either case, considerations both of public policy and of equity require that she bear the consequences flowing from registered ownership of the subject vehicle. 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. 13 The loss or destruction or deterioration of goods turned over to the common carrier for conveyance to a designated destination, raises instantly a presumption of fault or negligence on the part of the carrier, save only where such loss, destruction or damage arises from extreme circumstances such as a natural disaster or calamity or act of the public enemy in time of war, or from an act or omission of the shipper himself or from the character of the goods or their packaging or container. This presumption may be overcome only by proof of extraordinary diligence on the part of the carrier. Clearly, to permit a

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common carrier to escape its responsibility for the passengers or goods transported by it by proving a prior sale of the vehicle or means of transportation to an alleged vendee would be to attenuate drastically the carrier's duty of extraordinary diligence. It would also open wide the door to collusion between the carrier and the supposed vendee and to shifting liability from the carrier to one without financial capability to respond for the resulting damages. In other words, the thrust of the public policy here involved is as sharp and real in the case of carriage of goods as it is in the transporting of human beings. Greenhills is not required to go beyond the vehicle’s certificate of registration to ascertain the owner of the carrier. To require the shipper to go behind a certificate of registration of a public utility vehicle, would be utterly subversive of the purpose of the law and doctrine.

PETITION DENIED, IAC DECISION AFFIRMED. Equitable v. Suyon GR 143360 7/05/02 PEREZ

FACTS: ● A Fuso Road Tractor driven by Raul Tutor rammed into the house cum store of Tamayo. A portion of the house was destroyed and several persons died. Tutor was charged with and later convicted of reckless imprudence resulting in multiple homicide and multiple physical injuries. ● This tractor was originally owned by Equitable Leasing Corporation. It has been leased and later on sold by Equitable to Ecatine Corporation (represented by Edwin Lim). However, the Deed of Sale was not registered with the LTO. Upon verification by the respondents with the LTO, the Official Receipt and Certificate of Registration shows that the registered owner of the tractor was Equitable Leasing. ● Respondents filed against Raul Tutor, Ecatine Corporation ("Ecatine") and Equitable Leasing Corporation ("Equitable") a Complaint for damages. ○ RTC held that Equitable is liable for damages since it is still the legal owner of the tractor as the Deed of Sale between petitioner and Ecatine had not been registered with the LTO. CA sustained the decision. ● Equitable now contends that it should not be held liable for the damages sustained by respondents and that arose from the negligence of the driver of the Tractor, which it had already sold to Ecatine at the time of the accident. Not having employed Raul Tutor, the driver of the vehicle, it could not have controlled or supervised him. ISSUE/HELD Whether Equitable is liable for damages suffered by respondents in an action based on quasi delict for the negligent acts of a driver who was not the employee of the Equitable - YES RATIONALE: ● In negligence cases, the aggrieved party may sue the negligent party under (1) Article 100 19 of the Revised Penal Code, for civil liability ex delicto; or (2) under Article 2176 20 of the Civil Code, for civil liability ex quasi delicto. ○ Under Article 103 of the RPC, employers may be held subsidiarily liable for felonies committed by their employees in the discharge of the latter's duties. This liability attaches when the employees who are convicted of crimes committed in

the performance of their work are found to be insolvent and are thus unable to satisfy the civil liability adjudged. Under Article 2176 in relation to Article 2180 of the Civil Code, an action predicated on quasi delict may be instituted against the employer for an employee's act or omission. The liability for the negligent conduct of the subordinate is direct and primary, but is subject to the defense of due diligence in the selection and supervision of the employee. ○ The enforcement of the judgment against the employer for an action based on Article 2176 does not require the employee to be insolvent, since the liability of the former is solidary — the latter being statutorily considered a joint tortfeasor. ○ These two causes of action (ex delicto or ex quasi delicto) may be availed of, subject to the caveat that the offended party cannot "recover damages twice for the same act or omission" or under both causes. Since these two civil liabilities are distinct and independent of each other, the failure to recover in one will not necessarily preclude recovery in the other. Here, respondents — having failed to recover anything in the criminal case — elected to file a separate civil action for damages, based on quasi delict under Article 2176 of the Civil Code.It is clear that the deaths and the injuries suffered by respondents were due to the fault of the driver of the tractor. Equitable could not escape primary liability for the deaths and the injuries complained of arising from the negligence of the driver,, because it was the registered owner of the tractor as of the time of the accident. ○ Regardless of sales 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. ○

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Teodoro v. Spouses Nicolas GR 157917 8/29/12 SANTOS

FACTS: ● Spouses Perena were engaged in school bus service, transporting students from Paranaque to Don Bosco Technical Institute in Makati. In June 1996, spouses Zarate contracted spouses Perena to transport their son, Aaron Zarate, from their residence in Paranaque to Don Bosco. As on the usual days of school in August 22, 1996, the van picked-up Aaron in their house, he then took the left side seat near the rear door of the said vehicle. Considering that the students were due by 7:15am at Don Bosco, and because of heavy traffic at the South Superhighway, the driver, Clemente Alfaro, decided to take the narrow path underneath the Magallanes interchange which then is being used by Makati bound vehicles as short cut. ●

The said narrow path has a railroad crossing, and while traversing the said narrow path, closely tailing a huge passenger bus, the driver of the school service decided to overtake the said bus at about 50 meters away from the railroad crossing. Considering that the stereo is playing loudly and blinded by the bus, he did not hear the blowing of horn of the oncoming train as a warning to the vehicles. The bus successfully crossed the railroad crossing but the van did not. The train hit the rear side of the van and the impact threw 9 of the 12 students including Aaron. His body landed in the path of the train, which dragged him, severed his

head, instantaneously killing him. ●

Devastated by the sudden death of their son, spouses Zarate commenced this action for damages. The Regional Trial Court ruled in favor of the spouses Zarate. On appeal, The Court of Appeals affirmed the decision of the lower court but lowered the moral damages to php 2,500,000.00.

ISSUE: Whether or not there is a breach of contract of a common carrier and whether there is negligence? HELD: ●

The Supreme Court ruled in favor spouses Zarate, affirming the decision of the Court of Appeals.In this case, the Supreme Court, once and for all lay the matter to rest that the school service is a common carrier and not a private carrier, and as such, they are required to observe the extraordinary diligence as provided under Article 1733 of the Civil Code.

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According to the Supreme Court, the true test for a common carrier is not the quantity or extent of the business actually transacted, or the number and character of the conveyances used in the activity, but whether the undertaking is a part of the activity engaged in by the carrier that he has held out to the general public as his business or occupation. Otherwise stated, making the activity or holding himself or itself out to the public as a ready to act for all who may desire his or its services to transport goods or persons for a fee.

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Applying the considerations mentioned above, there is no question that Perenas as the operators of a school 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; c) transporting students for a fee. Despite catering limited clientele, the Perenas operated as a common carrier because they hold 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.

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Article 1756 of the Civil code provides that, In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755. In this case, Aaron Zarate died, and thus as provided under the above-mentioned law, they are negligent.