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.