Case Digest: Delsan Transport v. Court of Appeals, 369 SCRA 24, G.R. No. 127897

Delsan Transport v. Court of Appeals, 369 SCRA 24, G.R. No. 127897, November 15, 2001

Subject: Transportation Law

FACTS

Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport Lines, Inc., for a period of one year whereby the said common carrier agreed to transport Caltex’s industrial fuel oil from the Batangas-Bataan Refinery to different parts of the country. Under the contract, petitioner took on board its vessel, MT Maysun, 2,277.314 kiloliters of industrial fuel oil of Caltex to be delivered to the Caltex Oil Terminal in Zamboanga City. The shipment was insured with the private respondent, American Home Assurance Corporation.

On August 14, 1986, MT Maysum set sail from Batangas for Zamboanga City. Unfortunately, the vessel sank in the early morning of August 16, 1986 near Panay Gulf in the Visayas taking with it the entire cargo of fuel oil.

Subsequently, private respondent paid Caltex representing the insured value of the lost cargo. Exercising its right of subrogation.

Due to its failure to collect from the petitioner despite prior demand, private respondent filed a complaint with the Regional Trial Court of Makati City. RTC dismissed the case on the ground that the vessel, MT Maysum, was seaworthy to undertake the voyage as determined by the Philippine Coast Guard per Survey Certificate Report upon inspection during its annual dry-docking and that the incident was caused by unexpected inclement weather condition or force majeure, thus exempting the common carrier (herein petitioner) from liability for the loss of its cargo.

However, CA set aside decision of RTC. CA gave credence to the weather report issued by the Philippine Atmospheric, Geophysical and Astronomical Services Administration. In the absence of any explanation as to what may have caused the sinking of the vessel coupled with the finding that the same was improperly manned, hence CA ruled that the petitioner is liable on its obligation as common carrier.

ISSUE

(1) Whether or not the payment made by the private respondent to Caltex for the insured value of the lost cargo amounted to an admission that the vessel was seaworthy, thus precluding any action for recovery against the petitioner.

(2) Whether or not the non-presentation of the marine insurance policy bars the complaint for recovery of sum of money for lack of cause of action.

RULING

No to both issues.

Under the law, common carriers are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of passengers transported by them, according to all the circumstance of each case. In the event of loss, destruction or deterioration of the insured goods, common carriers shall be responsible unless the same is brought about, among others, by flood, storm, earthquake, lightning or other natural disaster or calamity. In all other cases, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence.

On the first issue, the payment made by the private respondent for the insured value of the lost cargo operates as waiver of its (private respondent) right to enforce the term of the implied warranty against Caltex under the marine insurance policy. However, the same cannot be validly interpreted as an automatic admission of the vessel’s seaworthiness by the private respondent as to foreclose recourse against the petitioner for any liability under its contractual obligation as a common carrier. The fact of payment grants the private respondent subrogatory right which enables it to exercise legal remedies that would otherwise be available to Caltex as owner of the lost cargo against the petitioner common carrier.

SC agrees with CA that in order to escape liability for the loss of its cargo of industrial fuel oil belonging to Caltex, petitioner attributes the sinking of MT Maysun to fortuitous even or force majeure. Based from the weather report of PAGASA, the independent government agency charged with monitoring weather and sea conditions, there was no squall or bad weather or extremely poor sea condition in the vicinity when the said vessel sank. Thus, CA correctly ruled, petitioner’s vessel, MT Maysun, sank with its entire cargo for the reason that it was not seaworthy. Neither may petitioner escape liability by presenting in evidence certificates that tend to show that at the time of dry-docking and inspection by the Philippine Coast Guard, the vessel MT Maysun, was fit for voyage. SC held that these pieces of evidence do not necessarily take into account the actual condition of the vessel at the time of the commencement of the voyage.

On the second issue, the presentation in evidence of the marine insurance policy is not indispensable in this case before the insurer may recover from the common carrier the insured value of the lost cargo in the exercise of its subrogatory right. The subrogation receipt, by itself, is sufficient to establish not only the relationship of herein private respondent as insurer and Caltex, as the assured shipper of the lost cargo of industrial fuel oil, but also the amount paid to settle the insurance claim. The right of subrogation accrues simply upon payment by the insurance company of the insurance claim.

Case Digest: Eastern Shipping v. Court of Appeals, 196 SCRA 570, G.R. No. 94151

Eastern Shipping v. Court of Appeals, 196 SCRA 570, G.R. No. 94151, April 30, 1991

Subject: Transportation Law

FACTS

On September 4, 1978, thirteen coils of uncoated 7-wire stress relieved wire strand for prestressed concrete were shipped on board the vessel "Japri Venture," owned and operated by the defendant Eastern Shipping Lines, Inc., at Kobe, Japan, for delivery to Stresstek Post-Tensioning Phils., Inc. in Manila.

On September 16, 1978, the carrying vessel arrived in Manila and discharged the cargo to the custody of the defendant E. Razon, Inc., from whom the consignee's customs broker received it for delivery to the consignee's warehouse.

The plaintiff indemnified the consignee for damage and loss to the insured cargo, whereupon the former was subrogated for the latter. The plaintiff now seeks to recover from the defendants what it has indemnified the consignee.

RTC dismissed the complaint. Plaintiff appealed their cause to the CA. CA set aside the decision of RTC and ordered the appellees to pay the petitioner. Eastern Shipping Lines, Inc. to assume 8/13 thereof, and E. Razon, Inc. to assume 5/13 thereof. Only Eastern Shipping files a review for certiorari to SC.

ISSUE

Whether or not Eastern Shipping Lines exercised extraordinary diligence and is not liable for the damage to the cargo.

RULING

No, Eastern Shipping Lines was not able to prove that they had exercised extraordinary diligence with the cargo.

Under the law, common carriers are bound to observe "extra-ordinary vigilance over goods…according to all circumstances of each case". If the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in article 1733.

In this case, while it is true the cargo was delivered to the arrastre operator in apparent good order condition, it is also undisputed that while en route from Kobe to Manila, the vessel encountered "very rough seas and stormy weather”. SC held that the heavy seas and rains referred to in the master's report were not caso fortuito but normal occurrences that an ocean-going vessel, particularly in the month of September which, in our area, is a month of rains and heavy seas would encounter as a matter of routine. They are not unforeseen nor unforeseeable. Rainwater (not sea water) found its way into the holds of the Jupri Venture is a clear indication that care, and foresight did not attend the closing of the ship's hatches so that rainwater would not find its way into the cargo holds of the ship. The carrier has failed to establish any caso fortuito, the presumption by law of fault or negligence on the part of the carrier applies; and the carrier must present evidence that it has observed the extraordinary diligence required by Article 1733 of the Civil Code in order to escape liability for damage or destruction to the goods that it had admittedly carried in this case. No such evidence exists of record. Thus, the carrier cannot escape liability.

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

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

Subject: Transportation Law

FACTS

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

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

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

ISSUE

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

RULING

Yes.

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

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

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

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

Subject: Transportation Law

FACTS

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

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

After trial on the merits, the RTC held that since the Deed of Sale between petitioner and Ecatine had not been registered with the Land Transportation Office, (LTO), the legal owner was still Equitable. Thus, petitioner was liable to respondents. Sustaining the RTC, the CA held that petitioner was still to be legally deemed the owner/operator of the tractor, even if that vehicle had been the subject of a Deed of Sale in favor of Ecatine on December 9, 1992. The reason cited by the CA was that the Certificate of Registration on file with the LTO still remained in petitioner’s name. In order that a transfer of ownership of a motor vehicle can bind third persons, it must be duly recorded in the LTO. Petitioner contends that it should not be held liable for the damages sustained by respondents and that arose from the negligence of the driver of the Fuso Road Tractor, which it had already sold to Ecatine at the time of the accident. Not having employed Raul Tutor, the driver of the vehicle, it could not have controlled or supervised him.

ISSUE

Whether or not Equitable Leasing Corporation is liable for damages

RULING

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

In this case, SC ruled that regardless of sales made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third persons are concerned; consequently, it is directly and primarily responsible for the consequences of its operation. In contemplation of law, the owner/operator of record is the employer of the driver, the actual operator and employer being considered as merely its agent. The same principle applies even if the registered owner of any vehicle does not use it for public service. Since Equitable remained the registered owner of the tractor, it could not escape primary liability for the deaths and the injuries arising from the negligence of the driver. The finance-lease agreement between Equitable on the one hand and Lim or Ecatine on the other has already been superseded by the sale. In any event, it does not bind third persons. True, the LTO Certificate of Registration, dated "5/31/91," qualifies the name of the registered owner as "EQUITABLE LEASING CORPORATION/Leased to Edwin Lim." But the lease agreement between Equitable and Lim has been overtaken by the Deed of Sale on December 9, 1992, between petitioner and Ecatine. While this Deed does not affect respondents in this quasi-delict suit, it definitely binds petitioner because, unlike them, it is a party to it.

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

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

Subject: Transportation Law

FACTS

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

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

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

ISSUE

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

RULING

Yes.

Under the law, the registered owner is liable for the consequences from the operations of the carrier, even though the specific vehicle involved may already have been transferred to another person. This doctrine rests upon the principle that in dealing with vehicles registered under the Public Service Law, the public has the right to assume that the registered owner is the actual or lawful owner thereof.

In this case, it would be very difficult and often impossible as a practical matter, for members of the general public to enforce the rights of action that they may have for injuries inflicted by the vehicles being negligently operated if they should be required to prove who the actual owner is. Therefore, Greenhills is not required to go beyond the vehicle’s certificate of registration to ascertain the owner of the carrier.

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

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

Subject: Transportation Law

FACTS

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

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

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

ISSUE

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

RULING

Yes, BA Finance Corporation is liable.

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

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

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

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

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

Subject: Transportation Law

 

FACTS

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

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

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

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

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

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

ISSUE

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

RULING

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

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

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