Case Digest: Aboitiz Shipping Corp. v. CA, GR No. 84458

Aboitiz Shipping Corp. v. CA, GR No. 84458 Nov. 6, 1989

Subject: Transportation Law

FACTS

Aboitiz Shipping Corporation, the petitioner, appealed a decision by the Court of Appeals dated July 29, 1988. The decision affirmed a modified judgment by the trial court, which ordered Aboitiz Shipping to pay the plaintiffs various amounts for damages. The case stemmed from an incident where Anacleto Viana, a passenger of Aboitiz's vessel M/V Antonia, disembarked from the vessel and was later struck by a crane operated by Pioneer Stevedoring Corporation, causing his death.

The undisputed facts established that Anacleto Viana had boarded M/V Antonia in San Jose, Occidental Mindoro, bound for Manila. Upon arrival at Pier 4, North Harbor, Manila, passengers disembarked, and a gangplank was provided for this purpose. However, Anacleto Viana disembarked on the third deck of the vessel, which was level with the pier, instead of using the gangplank. While the crane operated by Alejo Figueroa, an employee of Pioneer Stevedoring Corporation, was unloading cargoes from the vessel, Anacleto Viana returned to the vessel to point out where his cargoes were loaded. During this time, the crane struck him, pinning him between the vessel and the crane. He was taken to the hospital and later died from injuries.

The plaintiffs, including Anacleto Viana's wife and parents, filed a complaint against Aboitiz Shipping for damages, alleging a breach of the contract of carriage. Aboitiz Shipping, in its defense, denied responsibility, claiming that Pioneer Stevedoring Corporation had exclusive control of the vessel at the time of the accident and that the crane operator was not its employee. Aboitiz Shipping also filed a third-party complaint against Pioneer Stevedoring Corporation, seeking to hold it liable for Anacleto Viana's death.

ISSUE

Whether or not Aboitiz Shipping was negligent and liable for damages.

RULING

Yes.

Under the law, common carriers are, from the nature of their business and for reasons of public policy, 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. More particularly, a common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. Thus, where a passenger dies or is injured, the common carrier is presumed to have been at fault or to have acted negligently.

In this case, Aboitiz Shipping failed to exercise the extraordinary diligence required of common carriers in ensuring passenger safety. While the victim was contributorily negligent, Aboitiz Shipping's inadequate precautions and failure to enforce safety measures were the proximate cause of the accident. The victim's contributory negligence did not absolve Aboitiz Shipping of liability.

Case Digest: Equitable v. Suyom, 388 SCRA 445, G.R. No. 143360

Equitable v. Suyom, 388 SCRA 445, G.R. No. 143360, July 5, 2002

Subject: Transportation Law

FACTS

A Fuso Road Tractor driven by Raul Tutor rammed into the house cum store of Myrna Tamayo located at Pier 18, Vitas, Tondo, Manila. A portion of the house was destroyed. Pinned to death under the engine of the tractor were Respondent Myrna Tamayo’s son, Reniel Tamayo, and Respondent Felix Oledan’s daughter, Felmarie Oledan. Injured were Respondent Oledan himself, Respondent Marissa Enano, and two sons of Respondent Lucita Suyom. Tutor was charged with and later convicted of reckless imprudence resulting in multiple homicide and multiple physical injuries.

The registered owner of the tractor was "Equitable Leasing Corporation/leased to Edwin Lim." respondents filed against Raul Tutor, Ecatine Corporation ("Ecatine") and Equitable Leasing Corporation ("Equitable") a Complaint for damages.

After trial on the merits, the RTC held that since the Deed of Sale between petitioner and Ecatine had not been registered with the Land Transportation Office, (LTO), the legal owner was still Equitable. Thus, petitioner was liable to respondents. Sustaining the RTC, the CA held that petitioner was still to be legally deemed the owner/operator of the tractor, even if that vehicle had been the subject of a Deed of Sale in favor of Ecatine on December 9, 1992. The reason cited by the CA was that the Certificate of Registration on file with the LTO still remained in petitioner’s name. In order that a transfer of ownership of a motor vehicle can bind third persons, it must be duly recorded in the LTO. Petitioner 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 Fuso Road 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

Whether or not Equitable Leasing Corporation is liable for damages

RULING

Yes, Equitable Leasing Corporation is liable for damages, deaths and the injuries complained of, because it was the registered owner of the tractor at the time of the accident on July 17, 1994.

In this case, SC ruled that 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. Since Equitable remained the registered owner of the tractor, it could not escape primary liability for the deaths and the injuries arising from the negligence of the driver. The finance-lease agreement between Equitable on the one hand and Lim or Ecatine on the other has already been superseded by the sale. In any event, it does not bind third persons. True, the LTO Certificate of Registration, dated "5/31/91," qualifies the name of the registered owner as "EQUITABLE LEASING CORPORATION/Leased to Edwin Lim." But the lease agreement between Equitable and Lim has been overtaken by the Deed of Sale on December 9, 1992, between petitioner and Ecatine. While this Deed does not affect respondents in this quasi-delict suit, it definitely binds petitioner because, unlike them, it is a party to it.

Case Digest: Benedicto v. Intermediate Appellate Court, 187 SCRA 547, G.R. No. 70876

Benedicto v. Intermediate Appellate Court, 187 SCRA 547, G.R. No. 70876, 19 July 1990.

Subject: Transportation Law

FACTS

The petitioner, Ma. Luisa Benedicto, was the registered owner of a cargo truck that was used to transport sawn lumber from Greenhills Wood Industries Company, Inc. to Blue Star Mahogany, Inc. The driver of the truck, Virgilio Licuden, was not an employee of Benedicto, but of Benjamin Tee, to whom Benedicto had sold the truck on an installment basis.

The truck never arrived at Blue Star Mahogany, and the sawn lumber was never delivered. Greenhills Wood Industries filed a civil case against Benedicto for the recovery of the value of the lost sawn lumber.

Benedicto denied liability, arguing that she was no longer the owner of the truck at the time of the loss. However, the trial court and the Court of Appeals both ruled in favor of Greenhills Wood Industries.

ISSUE

Whether or not Benedicto, being the registered owner of the carrier, should be held liable for the value of the undelivered or lost sawn lumber.

RULING

Yes.

Under the law, the registered owner is liable for the consequences 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.

In this case, 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. Therefore, Greenhills is not required to go beyond the vehicle’s certificate of registration to ascertain the owner of the carrier.

Case Digest: BA Finance v. Court of Appeals, 215 SCRA 715, G.R. No. 98275

BA Finance v. Court of Appeals, 215 SCRA 715, G.R. No. 98275, 13 November 1992.

Subject: Transportation Law

FACTS

On March 6, 1983, an accident occurred involving BA FINANCE CORPORATION Isuzu ten-wheeler truck then driven by an employee of Lino Castro.

Rogelio Villar y Amare, the driver of the Isuzu truck, was at fault when the mishap occurred in as much as he was found guilty beyond reasonable doubt of reckless imprudence resulting in triple homicide with multiple physical injuries with damage to property of the RTC at Malolos, Bulacan. Petitioner was adjudged liable for damages in as much as the truck was registered in its name during the incident in question.

Petitioner asseverates that it should not have been haled to court and ordered to respond for the damage in the manner arrived at by both the trial and appellate courts since the complaint lodged by the plaintiffs would indicate the petitioner was not the employer of the negligent driver who was under the control and supervision of Lino Castro at the time of the accident, apart from the fact that the Isuzu truck was in the physical possession of Rock Component Philippines by virtue of the lease agreement.

ISSUE

Whether or not petitioner can be held responsible to the victim albeit the truck was leased to Rock Component Philippines when the incident occurred.

RULING

Yes, BA Finance Corporation is liable.

The Revised Motor Vehicle Law (Act No. 3992, as amended) provides that the vehicle may be used or operated upon any public highway unless the same is properly registered. It has been stated that the system of licensing and the requirement that each machine must carry a registration number, conspicuously displayed, is one of the precautions taken to reduce the danger of injury of pedestrians and other travelers from the careless management of automobiles, and to furnish a means of ascertaining the identity of persons violating the laws and ordinances, regulating the speed and operation of machines upon the highways.

Registration is required not to make said registration the operative act by which ownership in vehicles is transferred, as in land registration cases, because the administrative proceeding of registration does not bear any essential relation to the contract of sale between the parties but to permit the use and operation of the vehicle upon any public highway, the main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual, the registered owner.

In this case, the petitioner being the registered owner of the vehicle is liable. The law, with its aim and policy in mind, does not relieve the registered owner directly of the responsibility that the law fixes and places upon him as an incident or consequence of registration. Were a registered owner allowed to evade responsibility by proving who the supposed transferee or owner is, it would be easy for him, by collusion with others or otherwise, to escape said responsibility and transfer the same to an indefinite person, or to one who possesses no property with which to respond financially for the damage or injury done.

Case Digest: Singson v. CA, G.R. No. 11999

Singson v. CA, G.R. No. 119995. Nov. 18, 1997

Subject: Transportation Law

 

FACTS

Carlos Singson, purchased a round trip ticket from Cathay Pacific Airways, Inc. (Cathay) to the United States. The ticket was open-dated, meaning that Singson could use it to travel at any time.

Singson and his cousin left Manila on June 6, 1988 and arrived safely in Los Angeles. They stayed in the United States for three weeks and decided to return to the Philippines on July 1, 1988.

When Singson went to Cathay's office to confirm his return flight reservation, he was informed that his ticket was missing flight coupon No. 5. Cathay refused to confirm his reservation without the missing coupon.

Singson explained to Cathay that he had not used the missing coupon and that it must have been lost. However, Cathay refused to listen to him. Singson was forced to purchase a new ticket to the Philippines.

Singson filed a complaint against Cathay for breach of contract of carriage. He alleged that Cathay had a duty to transport him back to the Philippines, even if his ticket was missing a coupon.

The trial court ruled in favor of Singson and awarded him damages. The Court of Appeals affirmed the trial court's decision.

ISSUE

Whether or not a breach of contract was committed by CATHAY when it failed to confirm the booking of petitioner for its 1 July 1988 flight.

RULING

Yes, a breach of contract was committed by CATHAY when it failed to confirm the booking of petitioner for its 1 July 1988 flight.

Under the law, a common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

In this case, CATHAY undoubtedly committed a breach of contract when it refused to confirm petitioner's flight reservation back to the Philippines on account of his missing flight coupon. Its contention that there was no contract of carriage that was breached because petitioner's ticket was open-dated is untenable. To begin with, the round trip ticket issued by the carrier to the passenger was in itself a complete written contract by and between the carrier and the passenger. It has all the elements of a complete written contract. In fact, the contract of carriage in the instant case was already partially executed as the carrier complied with its obligation to transport the passenger to his destination, i.e., Los Angeles. Only the performance of the other half of the contract — which was to transport the passenger back to the Philippines — was left to be done. Hence, petitioner was not a mere “chance passenger with no superior right to be boarded on a specific flight,” as erroneously claimed by CATHAY.  The loss of the coupon was attributed to the negligence of CATHAY's agents and was the proximate cause of the non-confirmation of petitioner's return flight on 1 July 1988. It virtually prevented petitioner from demanding the fulfillment of the carrier's obligations under the contract. To hold that no contractual breach was committed by CATHAY and totally absolve it from any liability would in effect put a premium on the negligence of its agent, contrary to the policy of the law requiring common carriers to exercise extraordinary diligence.

Case Digest: Air France v. Rafael Carrascoso and CA, GR No. L-21438

Air France v. Rafael Carrascoso and CA, GR No. L-21438, Sept 28, 1966

Subject: Transportation Law

 

FACTS

Rafael Carrascoso (Carrascoso) saw a Pilgrim that left Manila for Lourdes. Air France, through his authorized agent, Philippine Airlines (PAL) issued a first class ticket to Carrascoso destined from Manila to Rome. Already seated, the manager of the airline forced Carrascoso to vacate his first class seat and to move to tourist as a white man would be replacing him in his seat as he allegedly had a better right. The incident was witnessed by Ernesto Cuento (Cuento). Carrascoso was reluctant to part with his seat however, he was forced to vacate after a heated argument, and thus suffered humiliation and embarrassment. Not wanting to experience another set of inconveniences, he instead rode with Pan American Airlines for the return trip.

ISSUE

Whether Air France is liable for damages upon breach of contract of carriage.

RULING

Yes, Air France is liable for damages.

Under the law, a common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

In this case, evidence shows that the defendant violated its contract of transportation with plaintiff in bad faith. Carrascoso was removed from his seat and was transferred to a tourist class seat against his when the defendant’s employee considered the white man has the better right to the first-class seat even though Carrascoso has paid for a first-class ticket. Plaintiff contends that he suffered anxiety, shame and social humiliation from the incident. SC held that the contract to transport passengers is quite different in kind and degree from any other contractual relation because of the relation which an air-carrier sustains with the public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or malfeasance of the carrier's employees, naturally, could give ground for an action for damages. Passengers do not contract merely for transportation. They have a right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. So it is, that any rule or discourteous conduct on the part of employees towards a passenger gives the latter an action for damages against the carrier.

Case Digest: F. G. U. Insurance vs. G. P. Sarmiento Trucking Corporation, 386 SCRA 312

F. G. U. Insurance vs. G. P. Sarmiento Trucking Corporation, 386 SCRA 312, August 6, 2002

Subject: Transportation Law

 

FACTS

G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver thirty units of Condura white refrigerators aboard one of its Isuzu truck, driven by Lambert Eroles, from the plant site of Concepcion Industries, Inc., to the Central Luzon Appliances in Dagupan City. While the truck was traversing the north diversion road along McArthur highway, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes.

FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the value of the covered cargoes. FGU, in turn, being the subrogee of the rights and interests of Concepcion Industries, Inc., sought 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 its driver Lambert Eroles with the Regional Trial Court, which dismissed the case on the basis that GPS is not a common carrier. Thus, 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.

ISSUE

Whether or not GPS is a common carrier.

RULING

No, GPS is a private carrier.

Under the law, common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or good or both, by land, water, or air, for compensation, offering their services to the public.

In this case, 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 but rather a private carrier. 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.

Case Digest: Asia Lighterage and Shipping, Inc., v. CA, G.R. No. 147246

Asia Lighterage and Shipping, Inc., v. CA, G.R. No. 147246. Aug. 19, 2003

Subject: Transportation Law

FACTS

Wheat in bulk was shipped by Marubeni American Corporation to General Milling Corporation in Manila, insured by Prudential Guarantee and Assurance, Inc. The cargo was transferred to Asia Lighterage and Shipping, Inc., contracted by the consignee as carrier. However, the cargo did not reach its destination due to a typhoon warning. The barge was pulled to Engineering Island, developed a list, and ran aground at Sta. Mesa spillways. A portion of the goods was transferred to three other barges to avoid sinking. The barge broke, sank completely, and the private respondent indemnified the consignee. The private respondent filed a complaint for recovery of indemnity, attorney's fees, and cost of suit. The Regional Trial Court ruled in favor of the private respondent, but the petitioner appealed to the Court of Appeals, claiming it is not a common carrier.

ISSUE

Whether or not the petitioner is a common carrier, thus, liable for the goods lost.

RULING

Yes, the petitioner is a common carrier.

Under the law, common carriers 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. 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."

In this case, the principal business of the petitioner is that of lighterage and drayage and it offers its barges to the public for carrying or transporting goods by water for compensation. Petitioner is clearly a common carrier. Furthermore, SC held that the petitioner is a common carrier whether its carrying of goods is done on an irregular rather than scheduled manner, and with an only limited clientele. A common carrier need not have fixed and publicly known routes. Neither does it have to maintain terminals or issue tickets.

Case Digest: National Steel Corp. v. CA, G.R. No. 112287

National Steel Corp. v. CA, G.R. No. 112287. Dec. 12, 1997; 347 Phil. 345

Subject: Transportation Law

 

FACTS

In July 1974, the National Steel Corporation (NSC) and Vlasons Shipping, Inc. (VSI) entered into a Contract of Voyage Charter Hire, hiring VSI's vessel MV "VLASONS I" for a voyage to transport steel products from Iligan City to North Harbor, Manila, under specific terms and conditions. The contract included provisions about cargo, freight, laydays, loading/discharge rates, insurance, and other terms. The contract also incorporated terms from the NANYOZAI Charter Party, which specified that the charterer (NSC) was responsible for loading, stowing, and discharging the cargo.

In August 1974, MV "VLASONS I" loaded the cargo as per the contract's terms in Iligan City. When the cargo was unloaded in Manila in August 1974, it was discovered that a significant portion of the cargo, particularly tinplates and hot rolled sheets, was wet and rusty. NSC filed a claim for damages against VSI, alleging that VSI's negligence and failure to ensure the vessel's seaworthiness had caused the damage to the cargo.

VSI denied liability, asserting that the vessel was seaworthy, and the damage to the cargo was due to the inherent characteristics of the goods, negligence of the stevedores during unloading, and adverse weather conditions encountered during the voyage. VSI also had counterclaims for unpaid charter hire and demurrage charges due to delays in unloading.

The trial court found that the vessel was seaworthy and properly equipped, the cargo damage was not VSI's fault, and the charterer (NSC) was responsible for loading and unloading, absolving VSI of liability. The court also ruled in favor of VSI's counterclaims for unpaid charter hire and reduced the demurrage charges.

The Court of Appeals modified the decision, reducing the demurrage charges further but eliminating the award of attorney's fees and expenses. NSC and VSI both filed petitions for review with this Court, leading to the consolidation of the cases.

ISSUE

Whether or not the vessel MV Vlasons I is a common carrier.

RULING

No, MV Vlasons I is a private carrier.

Under the law, a common carrier 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 has been held that the true test of a common carrier is the carriage of passengers or goods, provided it has space, for all who opt to avail themselves of its transportation service for a fee. A carrier which does not qualify under the above test is deemed a private carrier. "Generally, private carriage is undertaken by special agreement and the carrier does not hold himself out to carry goods for the general public. The most typical, although not the only form of private carriage, is the charter party, a maritime contract by which the charterer, a party other than the shipowner, obtains the use and service of all or some part of a ship for a period of time or a voyage or voyages."

In this case, it is undisputed that VSI did not offer its services to the general public. It carried passengers or goods only for those it chose under a "special contract of charter party." As correctly concluded by the Court of Appeals, the MV Vlasons I "was not a common but a private carrier." Consequently, the rights and obligations of VSI and NSC, including their respective liability for damage to the cargo, are determined primarily by stipulations in their contract of private carriage or charter party.

Case Digest: Spouses Pereña v. Spouses Zarate, G.R. No. 157917

Spouses Pereña v. Spouses Zarate, G.R. No. 157917. Aug. 29, 2012

Subject: Transportation Law

FACTS

The Pereñas were engaged in the business of transporting students from their respective residences in Parañaque City to Don Bosco in Pasong Tamo, Makati City, and back. In their business, the Pereñas used a KIA Ceres Van (van) with Plate No. PYA 896, which had the capacity to transport 14 students at a time, two of whom would be seated in the front beside the driver, and the others in the rear, with six students on either side. They employed Clemente Alfaro (Alfaro) as driver of the van.

On August 22, 1996, just like the usual school days, the van picked up Aaron and other 13 students to school. The students were running late due to traffic. Alfaro decided to take an alternate route underneath the Magallanes Interchange. The railroad crossing along this route lacked warning signs, watchmen, or other safety measures. When the van approached the crossing, a PNR Commuter train operated by Jhonny Alano was nearing the area.

At about the time the van was to traverse the railroad crossing, PNR Commuter No. 302 (train), operated by Jhonny Alano (Alano), was in the vicinity of the Magallanes Interchange travelling northbound. As the train neared the railroad crossing, Alfaro drove the van eastward across the railroad tracks, closely tailing a large passenger bus. His view of the oncoming train was blocked because he overtook the passenger bus on its left side. The train blew its horn to warn motorists of its approach. When the train was about 50 meters away from the passenger bus and the van, Alano applied the ordinary brakes of the train. He applied the emergency brakes only when he saw that a collision was imminent. The passenger bus successfully crossed the railroad tracks, but the van driven by Alfaro did not. The train hit the rear end of the van, and the impact threw nine of the students in the rear, including Aaron, out of the van. Aaron landed in the path of the train, which dragged his body and severed his head, instantaneously killing him. Alano fled the scene on board the train and did not wait for the police investigator to arrive.

Spouses Zarates, parents of Aaron, filed a lawsuit seeking damages against Alfaro, the Perefias, Philippine National Railways (PNR), and Alano. The parties stipulated on several facts and issues, including those related to the incident, the absence of warning signs at the railroad crossing, and PNR's refusal to acknowledge liability.

RTC ruled in favor of the Zarates. Defendants appealed the lower court’s decision. CA upheld the RTC's decision but made some modifications, including award for the loss of Aaron's earning capacity.

ISSUE

Whether or not the petitioner is a private/special carrier, expected to exercise ordinary diligence.

RULING

No, the petitioner is not a private carrier but is a common carrier.

Under the law, 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.

In this case, SC held that the true test for a common carrier is not the quantity or extent of the business 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.

Applying the considerations mentioned above, there is no question that Perenas as the operators of a school service were: 1) engaged in transporting passengers generally as a business not just as a casual occupation;2) undertaking to carry passengers over established roads; 3) 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 at a particular school living within or near where they operated the service and for a fee.

Given the nature of the business and for reasons of public policy, the common carrier is bound "to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.

Case Digest: Crisostomo v. Court of Appeals, 409 SCRA 528, G.R. No. 138334

Crisostomo v. Court of Appeals, 409 SCRA 528, G.R. No. 138334, August 25, 2003

Subject: Transportation Law

FACTS

In May 1991, Estela Crisostomo (Petitioner) contracted the services of Respondent Caravan Travel and tours International Inc. (Respondent) to arrange and facilitate her booking, ticketing and accommodation in a tour dubbed as “Jewels of Europe.” The package tour included the countries of England, Holland, Germany, Austria, Liechstenstein, Switzerland and France at a total cost of P74, 322.70. Meriam Menor (Meriam), Respondent’s ticketing manager and Petitioner’s niece, went to the latter’s residence and delivered all her travel documents. Petitioner gave Menor the full payment of the package. Menor then told her to be at the Ninoy Aquino International Airport (NAIA) on Saturday, two hours before her flight on board British Airways. Without checking her travel documents, petitioner went to NAIA on Saturday, June 15, 1991, to take the flight for the first leg of her journey from Manila to Hongkong. To petitioner’s dismay, she discovered that the flight she was supposed to take had already departed the previous day. She learned that her plane ticket was for the flight scheduled on June 14, 1991.

Menor prevailed upon Petitioner to take another tour, the “British Pageant,” which included England, Scotland and Wales in its itinerary. Upon Petitioner’s return, she demanded reimbursement for the difference between the sum paid in the “Jewels of Europe” package and the amount she paid for the “British Pageant” tour. Respondent declined. Petitioner filed a Complaint against Respondent for breach of contract of carriage and damages with the RTC of Makati City.

ISSUE

Whether or not a travel agency is a common carrier and is therefore required to exercise extraordinary diligence.

RULING

No, a travel agency is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier.

Under the law, a contract of carriage or transportation is one whereby a certain person or association of persons obligate themselves to transport persons, things, or news from one place to another for a fixed price.9 Such person or association of persons are regarded as carriers and are classified as private or special carriers and common or public carriers. A common carrier is 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.

In this case, it is obvious from the above definition that respondent is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier. Respondent did not undertake to transport petitioner from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Respondent’s services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours. The object of petitioner’s contractual relation with respondent is the latter’s service of arranging and facilitating petitioner’s booking, ticketing and accommodation in the package tour. In contrast, the object of a contract of carriage is the transportation of passengers or goods. It is in this sense that the contract between the parties in this case was an ordinary one for services and not one of carriage. Petitioner’s submission is premised on a wrong assumption.

Case Digest: Sanchez Brokerage v. Court of Appeals, 447 SCRA 427, G.R. 147079, December 21, 2004.

Sanchez Brokerage v. Court of Appeals, 447 SCRA 427, G.R. 147079, December 21, 2004.

Subject: Transportation Law

FACTS

On July 8, 1992, Wyeth-Pharma GMBH shipped on board an aircraft of KLM Royal Dutch Airlines at Dusseldorf, Germany oral contraceptives consisting of 86,800 Blisters Femenal tablets, 14,000 Blisters Nordiol tablets and 42,000 Blisters Trinordiol tablets for delivery to Manila in favor of the consignee, Wyeth-Suaco Laboratories, Inc. Wyeth-Suaco insured the shipment against all risks with FGU Insurance.

Upon arrival of the shipment on July 11, 1992 at the Ninoy Aquino International Airport (NAIA), it was discharged "without exception" and delivered to the warehouse of the Philippine Skylanders, Inc. (PSI) located also at the NAIA for safekeeping.

In order to secure the release of the cargoes from the PSI and the Bureau of Customs, Wyeth-Suaco engaged the services of Sanchez Brokerage which had been its licensed broker since 1984. Representative of Sanchez Brokerage, M. Sison, acknowledged that he received the cargoes consisting of pieces in good condition.

On July 31, 1992, Ronnie Likas, a representative of Wyeth-Suaco, acknowledged the delivery of the cargoes by affixing his signature on the delivery receipt. Upon inspection, however, he, together with Ruben Alonzo of Elite Surveyors, discovered that 44 cartons containing Femenal and Nordiol tablets were in bad order.

FGU Insurance Corporation (FGU) then brought an action for reimbursement against petitioner A.F. Sanchez Brokerage Inc. (Sanchez Brokerage) to collect the amount paid by the former to Wyeth-Suaco Laboratories Inc. (Wyeth-Suaco) as insurance payment for the goods delivered in bad condition.

A.F. Brokerage refused to admit liability for the damaged goods which it delivered from Philippines Skylanders, Inc. (PSI) to Wyeth-Suaco as it maintained that the damage was due to improper and insufficient export packaging, discovered when the sealed containers were opened outside the PSI warehouse.

The Regional Trial Court of Makati dismissed the said complaint; however, the decision was subsequently reversed and set aside by the Court of Appeals, finding that Sanchez Brokerage is liable for the carriage of cargo as a ―common carrier by definition of the New Civil Code.

ISSUE

Whether or not Sanzhez Brokerage Inc. is a common carrier and is liable for the delivery of the damaged goods.

RULING

Yes, A.F. Sanchez Brokerage Inc. is a common carrier and expected to exercise extraordinary diligence.

Under the law, 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. It 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.

In this case, Anacleto F. Sanchez, Jr., the Manager and Principal Broker of Sanchez Brokerage, himself testified that the services the firm offers include the delivery of goods to the warehouse of the consignee or importer. 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 this light, petitioner as a common carrier is mandated to observe extraordinary diligence in the vigilance over the goods it transports according to all the circumstances of each case. In the event that the goods are lost, destroyed or deteriorated, it is presumed to have been at fault or to have acted negligently, unless it proves that it observed extraordinary diligence.

It was established that Sanchez Brokerage received the cargoes from the PSI warehouse in good order and condition and that upon delivery by petitioner some of the cargoes were found to be in bad order as noted in the Delivery Receipt and as indicated in the Survey and Destruction Report. If the claim of Sanchez Brokerage that some of the cartons were already damaged upon delivery to it were true, then it should naturally have received the cargo under protest or with reservation duly noted on the receipt issued by PSI but it made no such protest or reservation. Therefore, A.F. Sanchez Brokerage Inc., being a common carrier, was found negligent and is held liable of the damaged goods.  

Case Digest: Schmitz v. Transportation Venture, 456 SCRA 557, G.R. No. 150255

Schmitz v. Transportation Venture, 456 SCRA 557, G.R. No. 150255, April 22, 2005.

Subject: Transportation Law

FACTS

On September 25, 1991, SYTCO Pte Ltd. Singapore shipped from the port of Ilyichevsk, Russia on board M/V "Alexander Saveliev" (a vessel of Russian registry and owned by Black Sea) 545 hot rolled steel sheets in coil weighing 6,992,450 metric tons.

The cargoes, which were to be discharged at the port of Manila in favor of the consignee, Little Giant Steel Pipe Corporation (Little Giant), were insured against all risks with Industrial Insurance Company Ltd. (Industrial Insurance).

The vessel arrived at the port of Manila on October 24, 1991 and the Philippine Ports Authority (PPA) assigned it a place of berth at the outside breakwater at the Manila South Harbor.

Schmitz Transport, whose services the consignee engaged to secure the requisite clearances, to receive the cargoes from the shipside, and to deliver them to its (the consignee’s) warehouse at Cainta, Rizal, in turn engaged the services of TVI to send a barge and tugboat at shipside.

By 12:30 a.m. of October 27, 1991 during which the weather condition had become inclement due to an approaching storm, the unloading unto the barge of the 37 coils was accomplished. No tugboat pulled the barge back to the pier, however. 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.

Little Giant thus filed a formal claim against Industrial Insurance. Little Giant thereupon executed a subrogation receipt in favor of Industrial Insurance. As subrogee, Industrial Insurance, later filed a complaint against Schmitz Transport, TVI, and Black Sea through its representative Inchcape (the defendants) before the RTC of Manila, for the recovery of the amount it paid to Little Giant plus adjustment fees, attorney’s fees, and litigation expenses.

RTC held all the defendants negligent for unloading the cargoes outside of the breakwater notwithstanding the storm signal. CA affirmed in toto the decision of the trial court, finding that 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.

Hence this petition for review.

ISSUE

Whether or not the petitioner, a custom broker, is a common carrier and is liable for the loss goods.

RULING

Yes, the petitioner, a custom broker, is a common carrier, enshrined in Article 1732 of the Civil Code.

Under the law, 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. In addition, Article 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.

In this case, the contention 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 effecting the transportation of the cargoes from the shipside and into Little Giant’s warehouse, however, petitioner was discharging its own personal obligation under a contact of carriage. 

Case Digest: First Philippine Industrial v. Court of Appeals, 300 SCRA 661, G.R. No. 125948

First Philippine Industrial v. Court of Appeals, 300 SCRA 661, G.R. No. 125948 December 29, 1998

Subject: Transportation Law

FACTS

Petitioner FPIC is a grantee of a pipeline concession under RA No. 387, as amended, to contract, install and operate oil pipelines. Its original pipeline concession was renewed by the Energy Regulatory Board in 1992. 

Sometime in January 1995, petitioner applied for a mayor’s permit with the Office of the Mayor of Batangas City. However, before the mayor’s permit could be issued, the respondent City Treasurer required petitioner to pay a local tax based on its gross receipts for the fiscal year 1993 pursuant to the Local Government Code. The respondent City Treasurer assessed a business tax on the petitioner amounting to P956,076.04, payable in four installments, based on the gross receipts for products pumped for the fiscal year 1993 which amounted to P181,681,151.00. FPIC paid the tax under protest in the amount of P239,019.01 for the first quarter of 1993. 

On January 20, 1994, petitioner filed a letter-protest addressed to the respondent City Treasurer, alleging exemption under Sec. 133(j) of the Local Government Code.

On March 8, 1994, the respondent City Treasurer denied the protest contending that petitioner cannot be considered engaged in transportation business because pipelines are not included in the term “common carrier” which refers solely to ordinary carriers such as trucks, trains, ships and the like. Thus, petitioner cannot claim exemption under the aforementioned provision.

RTC and CA ruled against FPIC. Hence, this petition for review on certiorari.

ISSUE

Whether or not petitioner FPIC is a common carrier.

RULING

Yes, FPIC is a common carrier.

Under the law, 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.

In this case, 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. Furthermore, the law makes no distinction as to the means of transporting, as long as it is by land, water or air. It does not provide that the transportation of the passengers or goods should only be by motor vehicle.

Case Digest: FGU Insurance v. Sarmiento, 386 SCRA 312, G.R. No. 141910

FGU Insurance v. Sarmiento, 386 SCRA 312, G.R. No. 141910, August 6, 2002

Subject: Transportation Law

 

FACTS

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 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 cargoes.

FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the value of the covered cargoes, being the subrogee of the rights and interests of Concepcion Industries, Inc., sought 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 its driver Lambert Eroles. In its answer, respondents asserted that GPS was the exclusive hauler only of Concepcion Industries, Inc., since 1988, and it was not so engaged in business as a common carrier. Respondents further claimed that the cause of damage was purely accidental.

The lower court granted the motion, ruling that plaintiff FGU failed to prove that GPS was a common carrier. The CA affirmed the trial court’s order.

ISSUE

Whether or not GPS is considered a common carrier and may be presumed negligent and therefore liable for damages.

RULING

No. GPS is not a common carrier.

Under the law, common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for hire or compensation, offering their services to the public, whether to the public in general or to a limited clientele in particular, but never on an exclusive basis.

In this case, SC finds the conclusion of the trial court and the Court of Appeals to be amply justified. 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. 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."

Case Digest: Bascos v. Court of Appeals, 221 SCRA 318, G.R. No. 101089

Bascos v. Court of Appeals, 221 SCRA 318, G.R. No. 101089, April 7, 1993

Subject: Transportation Law

FACTS

Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE) entered into a hauling contract with Jibfair Shipping Agency Corp whereby CIPTRADE bound itself to haul JIBFAIR’s 2,000 m/tons of soya bean meal to the warehouse in Calamba, Laguna. To carry out its obligation, CIPTRADE, through Cipriano, subcontracted with Bascos to transport and to deliver 400 sacks of soya bean meal from the Manila Port Area to Calamba, Laguna. BASCOS failed to deliver the said cargo. As a consequence of that failure, Cipriano paid Jibfair Shipping Agency the amount of the lost goods in accordance with their contract.

Cipriano demanded reimbursement from Bascos but the latter refused to pay. Eventually, Cipriano filed a complaint for a sum of money and damages with writ of preliminary attachment for breach of a contract of carriage. The trial court granted the writ of preliminary attachment. In her answer, Bascos interposed the defense that there was no contract of carriage since CIPTRADE leased her cargo truck to load the cargo from Manila Port Area to Laguna and that the truck carrying the cargo was hijacked and being a force majeure, exculpated petitioner from any liability.

After trial, the court rendered a decision in favor of Cipriano and against Bascos ordering the latter to pay the former for actual damages for attorney’s fees and cost of suit. The Court of Appeals affirmed the trial court’s judgment.

ISSUE

1.     Whether or not Bascos was a common carrier

2.     Whether or not the hijacking referred to a force majeure

RULING

1.     Yes. Bascos was a common carrier.

Under the law, a 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. In addition, 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.

In this case, petitioner herself has made the admission that she was in the trucking business, offering her trucks to those with cargo to move. Judicial admissions are conclusive, and no evidence is required to prove the same. The law 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”), neither does said provision distinguishes 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. Therefore, Basco is a common carrier.

2.   No, SC affirmed the holding of the respondent court that the loss of the goods was not due to force majeure.

Under the law, 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.

In this case, to establish grave and irresistible force, petitioner presented her accusatory affidavit, Jesus Bascos' affidavit, and Juanito Morden's "Salaysay". Affidavits are not considered the best evidence if the affiants are available as witnesses. The subsequent filing of the information for carnapping and robbery against the accused named in said affidavits did not necessarily mean that the contents of the affidavits were true because they were yet to be determined in the trial of the criminal cases. The presumption of negligence was raised against petitioner. It was petitioner's burden to overcome it. Thus, contrary to her assertion, private respondent need not introduce any evidence to prove her negligence. Her own failure to adduce sufficient proof of extraordinary diligence made the presumption conclusive against her. Therefore, the hijacking was not force majure; there was lack of conclusive evidence to prove it was.