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.

Case Digest: LIGHT RAIL TRANSIT AUTHORITY vs Navidad, et.al., G.R. No. 145804, February 6, 2003

LIGHT RAIL TRANSIT AUTHORITY vs Navidad, et.al., G.R. No. 145804, February 6, 2003

Subject: Transportation Law

 

FACTS

Navidad, then drunk, entered the EDSA LRT station after purchasing a token representing payment of the fare. While Navidad was standing on the platform near the LRT tracks, Escartin, the security guard assigned to the area approached Navidad. An altercation between the two ensued that led to a fist fight. No evidence was adduced to indicate how the fight started or who delivered the first blow or how Navidad later fell on the LRT tracks. At the exact moment that Navidad fell, an LRT train, operated by Roman, was coming in. Navidad was struck and killed instantaneously by the moving train. The widow of Navidad, along with her children, filed a complaint for damages against Escartin, Roman, the LRTA, the Metro Transit Organization, Inc. (Metro Transit), and Prudent for the death of her husband.

The trial court ordered Prudent Security and Escartin to pay damages. On appeal, the appellate court exonerated Prudent from any liability for the death of Navidad and, instead, holding the LRTA and Roman jointly and severally liable. The appellate court ruled that while the deceased might not have then as yet boarded the train, a contract of carriage had already existed when the victim entered the place where passengers were supposed to be after paying the fare and getting the corresponding token.

ISSUE

Whether or not there exists a contract of carriage to make LRTA liable, as common carrier.

RULING

Yes, there exists a contract of carriage which will make LRTA, a common carrier, liable for the death of Natividad.

Under the law, 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 case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence.

In this case, a contract of carriage was created from the moment Navidad paid the fare at the LRT station and entered the premises of the latter, entitling Navidad to all the rights and protection under a contractual relation. LRTA is liable for the death of Navidad in failing to exercise extraordinary diligence imposed upon a common carrier. The law requires common carriers to carry passengers safely using the utmost diligence of very cautious persons with due regard for all circumstances. Such duty of a common carrier to provide safety to its passengers obligates it not only during the course of the trip but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage. Also, in the discharge of its commitment to ensure the safety of passengers, a carrier may choose to hire its own employees or avail itself of the services of an outsider or an independent firm to undertake the task. In either case, the common carrier is not relieved of its responsibilities.

Case Digest: ALU-TUCP, et.al., vs. NLRC et.al., G.R. No. 109902

ALU-TUCP, et.al., vs. NLRC et.al., G.R. No. 109902 August 2, 1994

Subject: Statutory Construction

FACTS

On 5 July 1990, Petitioners, as employees of private respondent National Steel Corporation (NSC), filed separate complaints for unfair labor practice, regularization and monetary benefits with the NLRC, Sub-Regional Arbitration Branch XII, Iligan City. The complaints were consolidated and after hearing, the Labor Arbiter declared petitioners “regular project employees who shall continue their employment as such for as long as such [project] activity exists,” but entitled to the salary of a regular employee pursuant to the provisions in the collective bargaining agreement. It also ordered payment of salary differentials.

The NLRC in its questioned resolutions modified the Labor Arbiter’s decision. It affirmed the Labor Arbiter’s holding that petitioners were project employees since they were hired to perform work in a specific undertaking — the Five Years Expansion Program, the completion of which had been determined at the time of their engagement and which operation was not directly related to the business of steel manufacturing. The NLRC, however, set aside the award to petitioners of the same benefits enjoyed by regular employees for lack of legal and factual basis.

The law on the matter is Article 280 of the Labor Code, where the petitioners argue that they are “regular” employees of NSC because: (i) their jobs are “necessary, desirable and work-related to private respondent’s main business, steel-making”; and (ii) they have rendered service for six (6) or more years to private respondent NSC.

ISSUE:

whether or not petitioners are properly characterized as "project employees" rather than "regular employees" of NSC.

Ruling:

YES.

The present case therefore strictly falls under the definition of "project employees" on paragraph one of Article 280 of the Labor Code, as amended. Moreover, it has been held that the length of service of a project employee is not the controlling test of employment tenure but whether or not "the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee.

In this case, the employment of each "project worker" is dependent and co-terminus with the completion or termination of the specific activity or undertaking for which he was hired which has been pre-determined at the time of engagement. Since, there is no showing that they (13 complainants) were engaged to perform work-related activities to the business of respondent which is steel making, there is no logical and legal sense of applying to them the proviso under the second paragraph of Article 280 of the Labor Code, as amended

Case Digest: O'Connor v. Oakhurst Dairy - 851 F.3d 69 (1st Cir. 2017)

O'Connor v. Oakhurst Dairy - 851 F.3d 69 (1st Cir. 2017)

Subject: Statutory Construction

FACTS

Plaintiffs Kevin O'Connor and four others ("Drivers") worked as delivery drivers for defendant Oakhurst Dairy ("Oakhurst"). The Drivers filed a lawsuit against Oakhurst in federal district court seeking unpaid overtime wages under the federal Fair Labor Standards Act, 29 U.S.C.S.  201 et seq., and the Maine overtime law, 26 M.R.S.A.  664(3).

 The matter was referred to a magistrate judge, and the parties filed cross-motions for partial summary judgment to resolve their dispute over whether the Drivers were covered by Exemption F of Maine's minimum wage and overtime law. Exemption F stated that the protection of the overtime law did not apply to certain listed occupations, and particularly work that involved the "packing for shipment or distribution" of agricultural produce, meat and fish products, and perishable foods.

The Drivers contended that they fell outside of Exemption F and thus the overtime law protected them. Oakhurst argued to the contrary. The magistrate judge recommended that Oakhurst's motion for summary judgment be granted, and that the Drivers' motion be denied. The district court adopted the magistrate's recommendation and granted Oakhurst summary judgment. The Drivers appealed.

ISSUE

Whether or not the drivers fall within Exemption F of Maine's overtime law.

RULING

No.

The appellate court reversed the district court's decision and remanded the matter for further proceedings. The court observed that 664(3) omitted a final comma after the word "shipment," and thus there was an ambiguity as to whether it referred to two distinct exempt activities—"packing for shipment" and "distribution," and the act's legislative history did not cure that ambiguity.

Maine's default rule of construction, which required that wage and hours law be liberally construed to further its remedial purpose, favored a narrow reading, such as that urged by the Drivers. The court adopted the Drivers' interpretation: 664(3) referred to the single activity of "packing," whether the "packing" was for "shipment" or for "distribution," and although the Drivers handled perishable foods, they did not engage in "packing" them. As a result, the Drivers fell outside Exemption F.

Exemption F covers employees whose work involves the handling—in one way or another—of certain, expressly enumerated food products. Specifically, Exemption F states that the protection of the overtime law does not apply to: The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of: (1) Agricultural produce; (2) Meat and fish products; and (3) Perishable foods. Me. Rev. Stat. Ann. tit. 26, 664(3)(F).

Case Digest: Loyola Grand Villas Homeowners Association, Inc. vs CA, et. al., G.R. No. 117188

Loyola Grand Villas Homeowners Association, Inc. vs CA, et. al., G.R. No. 117188

Subject: Statutory Construction

FACTS

On August 7, 1997, Loyola Grand Villas Homeowners Association, Inc. (LGVHAI) was organized on 8 February 1983 as the homeowners' association for Loyola Grand Villas. It was also registered as the sole homeowners' association in the said village with the Home Financing Corporation (which eventually became Home Insurance Guarantee Corporation ["HIGC"]).

However, the association was not able file its corporate by-laws. The LGVHAI officers then tried to register its By-Laws in 1988, but they failed to do so. They then discovered that there were two other homeowners' organizations within the subdivision - the Loyola Grand Villas Homeowners (North) Association, Inc. [North Association] and herein Petitioner Loyola Grand Villas Homeowners (South) Association, Inc. ["South Association].

Upon inquiry by the LGVHAI to HIGC, it was discovered that LGVHAI was dissolved for its failure to submit its by-laws within the period required by the Corporation Code and for its non-user of corporate charter because HIGC had not received any report on the association's activities. These paved the way for the formation of the North and South Associations. LGVHAI then lodged a complaint with HIGC Hearing Officer Danilo Javier and questioned the revocation of its registration.

Hearing Officer Javier ruled in favor of LGVHAI, revoking the registration of the North and South Associations. Petitioner South Association appealed the ruling, contending that LGVHAI's failure to file its by-laws within the period prescribed by Section 46 of the Corporation Code effectively automatically dissolved the corporation. The Appeals Board of the HIGC and the Court of Appeals both rejected the contention of the Petitioner affirmed the decision of Hearing Officer Javier.

ISSUE

W/N LGVHAI's failure to file its by-laws within the period prescribed by Section 46 of the Corporation Code had the effect of automatically dissolving the said corporation.

RULING

No.

The pertinent provision of the Corporation Code that is the focal point of controversy in this case states: Sec. 46. Adoption of by-laws. - Every corporation formed under this Code, must within one (1) month after receipt of official notice of the issuance of its certificate of incorporation by the Securities and Exchange Commission, adopt a code of by-laws for its government not inconsistent with this Code.

Ordinarily, the word "must" connote an imposition of duty which must be enforced. However, the word "must" in a statute, like "shall," is not always imperative. It may be consistent with an exercise of discretion. If the language of a statute, considered as a whole with due regard to its nature and object, reveals that the legislature intended to use the words "shall" and "must" to be directory, they should be given that meaning. Moreover, By-Laws may be necessary to govern the corporation, but By-Laws are still subordinate to the Articles of Incorporation and the Corporation Code.

In fact, there are cases where By-Laws are unnecessary to the corporate existence and to the valid exercise of corporate powers. The Corporation Code does not expressly provide for the effects of non-filing of By-Laws. However, these have been rectified by Section 6 of PD 902-A which provides that SEC shall possess the power to suspend or revoke, after proper notice and hearing, the franchise or certificate of registration of corporations upon failure to file By-Laws within the required period. This shows that there must be notice and hearing before a corporation is dissolved for failure to file its By-Laws. Even assuming that the existence of a ground, the penalty is not necessarily revocation, but may only be suspension.