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.