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.

Case Digest: De Guzman v. Court of Appeals, 168 SCRA 612, G.R. No. L-47822

De Guzman v. Court of Appeals, 168 SCRA 612, G.R. No. L-47822, December 22, 1988

Subject: Transportation Law

FACTS

Ernesto Cendaña, a junk dealer, was involved in buying up used bottles and scrap metal in Pangasinan and bringing it to Manila for resale. He used two six-wheeler trucks to haul the material and loaded cargo with various merchants' requests. In November 1970, petitioner Pedro de Guzman contracted Cendaña to haul 750 cartons of Liberty filled milk from General Milk Company's warehouse in Makati, Rizal, to his establishment in Urdaneta.

On December 1, 1970, Cendaña loaded 150 cartons on one truck, driven by Cendaña himself, and 600 on another truck, driven by Manuel Estrada. However, only 150 boxes of milk were delivered to the petitioner, while the other 600 boxes were hijacked by armed men along the MacArthur Highway in Paniqui, Tarlac.

The petitioner filed a lawsuit against Cendaña, demanding payment of P22,150.00, the claimed value of the lost merchandise, plus damages and attorney's fees. Cendaña argued that Cendaña, as a common carrier, should be held liable for the value of the undelivered goods. However, Cendaña denied being a common carrier and argued that the loss was due to force majeure.

ISSUE

1. Whether or not Ernesto Candena was a common carrier; 

2. Whether or not Candena, as common carrier, be held responsible for the value of the lost goods, such loss having been due to force majeure.

RULING

1. Yes, respondent Candena was 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. 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").

In this case, the alleged fact that private respondent held no certificate of public convenience, and concluded he was not a common carrier 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. Private respondent is properly characterized as a common carrier even though he merely "back-hauled" 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.

2. No, as a common carrier, he is not liable for the stolen goods as it is a force majure.

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, armed men held up the second truck owned by private respondent which carried petitioner's cargo. The record shows that an information for robbery in band was filed in the Court of First Instance of Tarlac, who later issued a decision that the accused acted with grave, if not irresistible, threat, violence or force. Thus, SC held 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. 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.

Case Digest: VIRGINES CALVO vs. UCPB GENERAL INSURANCE CO., INC, G.R. No. 148496

Virgines Calvo vs. UCPB General Insurance Co., Inc., G.R. No. 148496, March 19, 2002

Subject: Transportation Law

 

FACTS

Petitioner Virgines Calvo is the owner of Transorient Container Terminal Services, Inc. (TCTSI), a sole proprietorship customs broker. At the time material to this case, petitioner 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.

On July 14, 1990, 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 petitioner in the Regional Trial Court, Branch 148, Makati City, which rendered judgment finding petitioner liable to respondent for the damage to the shipment and accordingly ordered petitioner to pay the sum of P93,112.00 plus interest; 25% thereof as lawyer's fee; and costs of suit. The decision was affirmed by the Court of Appeals on appeal. Hence this petition for review on certiorari.

Petitioner contends that she is not a common carrier but a private carrier because she does not indiscriminately hold her services out to the public but only offers the same to select parties with whom she may contract in the conduct of her business.

ISSUE

1. Whether or not the petitioner is a common carrier.

2. Whether or not the petitioner is liable for the damaged goods.

RULING

1. Yes, the petitioner 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." 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 this case, petitioner is a common carrier because the transportation of goods is an integral part of her business. To uphold petitioner's contention would be to deprive those with whom she contracts the protection which the law affords them notwithstanding the fact that the obligation to carry goods for her customers, as already noted, is part and parcel of petitioner's business.

2. Yes, petitioner is liable for the damaged goods.

Under the law, Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the following causes only: (4) The character of the goods or defects in the packing or in the containers.

The claim of petitioner that the "spoilage or wettage" took place while the goods were in the custody of either the carrying vessel "M/V Hayakawa Maru," which transported the cargo to Manila, or the arrastre operator and not in her custody is untenable. Improper packing or defect/s in the container, is/are known to the carrier or his employees or apparent upon ordinary observation, but he nevertheless accepts the same without protest or exception notwithstanding such condition, he is not relieved of liability for damage resulting therefrom.

In this case, petitioner accepted the cargo without exception despite the apparent defects in some of the container vans. Hence, for failure of petitioner to prove that she exercised extraordinary diligence in the carriage of goods in this case or that she is exempt from liability, the presumption of negligence as provided under Art. 1735 holds true. Therefore, petitioner is liable for the damaged goods.

Case Digest: Fabre v. Court of Appeals, GR No. 111127

Fabre v. Court of Appeals, GR No. 111127 July 26, 1996

Subject: Transportation Law

FACTS

The case stemmed from an accident that occurred on November 2, 1984.The petitioners owned a 1982 model Mazda minibus, which they used for a bus service for school children in Manila. They employed a driver, Porfirio J. Cabil, to operate the bus. On the mentioned date, private respondent Word for the World Christian Fellowship Inc. (WWCF) arranged for the transportation of its members from Manila to La Union and back, paying the petitioners P3,000.00 for the service. The trip was delayed due to some members' tardiness and finally commenced at 8:00 PM. Cabil drove the minibus.

While en route to Caba, La Union, the bus encountered a slippery road due to rain and approached a sharp curve known as "siete." Despite being unfamiliar with the area and the late hour, Cabil did not reduce speed adequately. The bus skidded, hit a traffic sign, crashed into a fence, and overturned, resulting in injuries to several passengers, including Amyline Antonio.

Amyline Antonio suffered severe injuries and became permanently paralyzed from the waist down, a condition known as paraplegia. She underwent extensive medical treatment, including surgery and therapy. She filed a case against the petitioners for damages in the RTC of Makati.

ISSUE

Whether or not the spouses Fabre are common carriers. 

RULING

Yes. Spouses Fabre are common carriers.

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 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. 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"). 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.