Transportation Case Digest: Baliwag Transit Corp. V.

CA (1989)

G.R. No. 80447 January 31, 1989

Lessons Applicable: Contracting Parties (Transportation)

FACTS:

December 17 1984: George, who was a paying passenger on a Baliwag bus (Baliwag) he was thrown off
by the bus driven in a careless and negligent manner by Leonardo Cruz, authorized bus driver, along
Barangay Patubig, Marilao, Bulacan

suffered multiple serious physical injuries

confined in the hospital for treatment, incurring medical expenses, which were borne by his parents,
Spouses Sotero Cailipan, Jr. and Zenaida Lopez, in the sum of about P200,000.00 plus other incidental
expenses of about P10,000.00

April 10 1985:

Baliwag: solely attributable to his own voluntary act in that, without warning and provocation, he
suddenly stood up from his seat and headed for the door of the bus as if in a daze, opened it and
jumped off while said bus was in motion, in spite of the protestations by the driver and without the
knowledge of the conductor

Baliwag then filed a Third-Party Complaint against Fortune Insurance & Surety Company, Inc., on its
third-party liability insurance in the amount of P50,000.00

Fortune Insurance claimed limited liability, the coverage being subject to a Schedule of Indemnities
forming part of the insurance policy.

November 14 1985 and November 18 1985: Fortune Insurance and Baliwag each filed Motions to
Dismiss on the ground that George, in consideration of the sum of P8,020.50 had executed a notarized
"Release of Claims" dated 16 May 1985. - denied as they were filed beyond the time for pleading and
after the Answer were already filed so Baliwag amended its answer to include such

RTC: dismissed the Complaint and Third-party Complaint, ruling that since the contract of carriage is
between Baliwag and George L. Cailipan (of legal age) had the exclusive right to execute the Release of
Claims despite the fact that he is still a student and dependent on his parents for support

October 22 1987: setting aside the appealed Order and holding that the "Release of Claims" cannot
operate as a valid ground for the dismissal of the case because it does not have the conformity of all the
parties, particularly George's parents, who have a substantial interest in the case as they stand to be
prejudiced by the judgment because they spent a sizeable amount for the medical bills of their son
Baliwag filed Petition for Review on certiorari

ISSUE: W/N the contract signed by George during case pendency is valid discharging Fortune Insurance
and Baliwag from any and all liability

HELD: YES. CA SET ASIDE

George is of legal age, a graduating student of Agricultural Engineering, and had the capacity to do acts
with legal effect (Article 37 in relation to Article 402, Civil Code)

could sue and be sued even without the assistance of his parents

George had the right to be safely brought to his destination and Baliwag had the correlative obligation
to do so

Since a contract may be violated only by the parties thereto, as against each other, in an action upon
that contract, the real parties in interest, either as plaintiff or as defendant, must be parties to said
contract:

real party-in-interest -plaintiff - who has a legal right

real party-in-interest-defendant - who has a correlative legal obligation whose act or omission violates
the legal right of the former

In the absence of any contract of carriage between Baliwag and George's parents, the latter are not real
parties-in-interest in an action for breach of that contract

general rule of the common law is that every action must be brought in the name of the party whose
legal right has been invaded or infringed

The phraseology "any and all claims or causes of action" is broad enough to include all damages that
may accrue to the injured party arising from the unfortunate accident.

The Release of Claims had the effect of a compromise agreement since it was entered into for the
purpose of making a full and final compromise adjustment and settlement of the cause of action
involved.

compromise - contract whereby the parties, by making reciprocal concessions, avoid a litigation or put
an end to one already commenced (Article 2028, Civil Code).

Transportation Case Digest: British Airways V. CA (1993)

G.R. No. 92288 February 9, 1993

Lessons Applicable: Actionable Document (Transportation)

FACTS:

February 15, 1981: First International Trading and General Services Co. (First Int'l), a duly licensed
domestic recruitment and placement agency, received a telex message from its principal ROLACO
Engineering and Contracting Services (ROLACO) in Jeddah, Saudi Arabia to recruit Filipino contract
workers in its behalf

Early March 1981: ROLACO paid British Airways, Inc. (BA) Jeddah branch the airfare tickets for 93
contract workers with specific instruction to transport the workers to Jeddah on or before March 30,
1981

As soon as BA received a prepaid ticket advice from its Jeddah branch informed First Int'l.

Thereafter, First Int'l instructed ADB Travel and Tours. Inc. (its travel agent) to book the 93 workers with
BA but it failed

So First Int'l had to borrow P304,416.00 for the purchase of airline tickets from the other airlines for the
93 workers who must leave immediately since the visas are valid only for 45 days and the Bureau of
Employment Services mandates that contract workers must be sent to the job site within a period of 30
days

First week of June, 1981: First Int'l was again informed by BA that it had received a prepaid ticket advice
from its Jeddah branch for the transportation of 27 contract workers.

Immediately, First Int'l instructed its ADB to book the 27 contract workers with the BA but only 16 seats
were confirmed and booked on its June 9, 1981 flight.

June 9, 1981: only 9 workers were able to board said flight while the remaining 7 workers were
rebooked to:

June 30, 1981 - again cancelled by British without any prior notice to either First Int'l or the workers

July 4,1981 - (6 + 7 workers) 13 workers were again cancelled and rebooked to July 7, 1981.

July 6, 1981: First Int'l paid the travel tax of the workers as required by BA but when the receipt of the
tax payments was submitted, only 12 seats were confirmed for July 7, 1981 flight

July 7, 1981: Flight was again cancelled without any prior notice

12 workers were finally able to leave for Jeddah after First Int'l had bought tickets from the other airlines
As a result of these incidents, First Int'l sent a letter to BA demanding compensation for the damages it
had incurred by the repeated failure to transport its contract workers despite confirmed bookings and
payment of the corresponding travel taxes.

July 23, 1981: the counsel of First Int'l sent another letter to BA demanding P350,000.00 damages and
unrealized profit or income - denied

August 8, 1981: First Int'l received a telex message from ROLACO cancelling the hiring of the remaining
recruited workers due to the delay in transporting the workers to Jeddah.

January 27, 1982: First Int'l filed a complaint for damages against First Int'l

CA Affirmed RTC: BA to pay First Int'l damages, attorneys fees and costs

ISSUE: W/N BA is not liable because there was no contract of carriage as no ticket was ever issued

HELD: Affirmed. MODIFICATION that the award of actual damages be deleted (reimbursed by ROLACO)

In dealing with the contract of common carriage of passengers for purpose of accuracy, there are two
(2) aspects of the same, namely:

(a) the contract "to carry (at some future time)," which contract is consensual and is necessarily
perfected by mere consent - applicable in this case

(b) the contract "of carriage" or "of common carriage" itself which should be considered as a real
contract for not until the carrier is actually used can the carrier be said to have already assumed the
obligation of a carrier

Even if a prepaid ticket advice (PTA) is merely an advice from the sponsors that an airline is authorized
to issue a ticket and thus no ticket was yet issued, the fact remains that the passage had already been
paid for by the principal of the appellee, and the appellant had accepted such payment

Besides, appellant knew very well that time was of the essence as the prepaid ticket advice had specified
the period of compliance therewith, and with emphasis that it could only be used if the passengers fly
on BA

involvement of the BA in the contract "to carry" was well demonstrated when the it immediately
advised First Int'l

Acts of BA indeed constitute malice and evident bad faith which had caused damage and besmirched
the reputation and business image fo First Int'l

Transportation Case Digest: Korean Airlines Co. LTd V. CA (1994)

G.R. No. 114061 August 3, 1994

Lessons Applicable: Actionable Document (Transportation)

FACTS:

1980: Juanito C. Lapuz, an automotive electrician, was contracted for employment in Jeddah, Saudi
Arabia, for a period of 1 year through Pan Pacific Overseas Recruiting Services, Inc. Lapuz was supposed
to leave on November 8, 1980, via Korean Airlines.

initially, he was "wait-listed," (accommodated if any of the confirmed passengers failed to show up)

When 2 passengers did not appear, Lapuz and another person by the name of Perico were given the
seats.

Lapuz: he was allowed to check in with 1 suitcase and 1 shoulder bag at the check-in counter of KAL. He
passed through the customs and immigration sections for routine check-up and was cleared for
departure as Passenger No. 157 of KAL Flight No. KE 903. Together with the other passengers, he rode in
the shuttle bus and proceeded to the ramp of the KAL aircraft for boarding. However, when he was at
the third or fourth rung of the stairs, a KAL officer pointed to him and shouted "Down! Down!" He was
thus barred from taking the flight. When he later asked for another booking, his ticket was canceled by
KAL. Consequently, he was unable to report for his work in Saudi Arabia within the stipulated 2-week
period and so lost his employment.

KAL: Pan Pacific Recruiting Services Inc. coordinated with KAL for the departure of 30 contract workers,
of whom only 21 were confirmed and 9 were wait-listed passengers. The agent of Pan Pacific, Jimmie
Joseph, after being informed that there was a possibility of having one or two seats becoming available,
gave priority to Perico, who was one of the supervisors of the hiring company in Saudi Arabia. The other
seat was won through lottery by Lapuz. However, only one seat became available and so, pursuant to
the earlier agreement that Perico was to be given priority, he alone was allowed to board.

RTC: KAL to pay Lapuz

CA: Affirmed with modifications - the amount of actual damages and compensatory damages is reduced
to P60K and P100,000.00 moral and exemplary damages, at 6% interest per annum from the date of the
filing of the Complaint until fully paid

ISSUE: W/N there was a contract of carriage

HELD: YES. Affirmed

The status of Lapuz as standby passenger was changed to that of a confirmed passenger when his name
was entered in the passenger manifest of KAL for its Flight No. KE 903. His clearance through
immigration and customs clearly shows that he had indeed been confirmed as a passenger of KAL in that
flight. his baggage had already been loaded in KAL's aircraft, to be flown with him to Jeddah. KAL thus
committed a breach of the contract of carriage between them when it failed to bring Lapuz to his
destination.

contract to transport passengers is different in kind and degree from any other contractual relation

The contract of air carriage generates a relation attended with a public duty

Passengers have the 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

any discourteous conduct on the part of these employees toward a passenger gives the latter an action
for damages against the carrier

The breach of contract was aggravated in this case when, instead of courteously informing Lapuz of his
being a "wait-listed" passenger, a KAL officer rudely shouted "Down! Down!" while pointing at him, thus
causing him embarrassment and public humiliation

Korean Air Lines acted in a wanton, fraudulent, reckless, oppressive or malevolent manner when it
"bumped off" plaintiff-appellant on November 8, 1980, and in addition treated him rudely and
arrogantly as a "patay gutom na contract worker fighting Korean Air Lines," which clearly shows malice
and bad faith, thus entitling plaintiff-appellant to moral damages.amount

awarded should not be palpably and scandalously excessive

A perusal of the plaintiff-appellant's contract of employment shows that the effectivity of the contract is
for only one year, renewable every year for five years. Although plaintiff-appellant intends to renew his
contract, such renewal will still be subject to his foreign employer. Plaintiff-appellant had not yet started
working with his foreign employer, hence, there can be no basis as to whether his contract will be
renewed by his foreign employer or not. Thus, the damages representing the loss of earnings of plaintiff-
appellant in the renewal of the contract of employment is at most speculative

CA did not err in sustaining the trial court's dismissal of KAL's counterclaim against Pan Pacific Overseas
Recruiting Services Inc., whose responsibility ended with the confirmation by KAL of Lapuz as its
passenger in its Flight No. 903.
De Guzman v. Court of Appeals
G.R. No. L-47822, 22 December 1988, 186 SCRA 612

FACTS:

Respondent Ernesto Cendaña, a junk dealer, was engaged in buying up used bottles and scrap
metal in Pangasinan. Upon gathering sufficient quantities of such scrap material, respondent would
bring such material to Manila for resale. He utilized two (2) six-wheeler trucks which he owned for
hauling the material to Manila. On the return trip to Pangasinan, respondent would load his vehicles
with cargo which various merchants wanted delivered to differing establishments in Pangasinan. For
that service, respondent charged freight rates which were commonly lower than regular commercial
rates.

Sometime in November 1970, petitioner Pedro de Guzman, a merchant and authorized dealer of
General Milk Company (Philippines), Inc. in Urdaneta, Pangasinan, contracted with respondent for
the hauling of 750 cartons of Liberty filled milk from a warehouse of General Milk in Makati, Rizal, to
petitioner’s establishment in Urdaneta on or before 4 December 1970. Accordingly, on 1 December
1970, respondent loaded in Makati the merchandise on to his trucks: 150 cartons were loaded on a
truck driven by respondent himself; while 600 cartons were placed on board the other truck which
was driven by Manuel Estrada, respondent’s driver and employee.

Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes never reached
petitioner, since the truck which carried these boxes was hijacked somewhere along the MacArthur
Highway in Paniqui, Tarlac, by armed men who took with them the truck, its driver, his helper and
the cargo.

On 6 January 1971, petitioner commenced action against private respondent in the Court of First
Instance of Pangasinan, demanding payment of P22,150.00, the claimed value of the lost
merchandise, plus damages and attorney’s fees. On December 10, 1975, the trial court rendered a
Decision finding private respondent to be a common carrier and holding him liable for the value of
the undelivered goods (P22,150.00) as well as for P4,000.00 as damages and P2,000.00 as
attorney’s fees.

The Court of Appeals reversed the judgment of the trial court and held that respondent had been
engaged in transporting return loads of freight, as a casual occupation a sideline to his scrap iron
business and not as a common carrier.

ISSUES:

1. Whether or not the private respondent is considered a common carrier.

2. Whether or not the hijacking of respondent’s truck was force majeure.

RULING:

1. The Civil Code defines common carriers in the following terms:

Article 1732. 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 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. We think that Article 1733 deliberately refrained from making such distinctions.

The concept of “common carrier” under Art. 1732 may be seen to coincide neatly with the notion of
“public service” under the Public Service Act which states in section 13, par b, public service
includes: xxx every person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited clientele, whether permanent,
occasional or accidental, and done for general business purposes, any common
carrier, railroad, street railway, traction railway, subway motor vehicle, either for freight or
passenger, or both, with or without fixed route and whatever may be its classification, freight or
carrier service of any class, express service, steamboat, or steamship line, pontines, ferries and
water craft, engaged in the transportation of passengers or freight or both, shipyard, marine repair
shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat
and power, water supply and power petroleum, sewerage system, wire or wireless communications
systems, wire or wireless broadcasting stations and other similar public services. Xxx

Further, 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.

2. The hijacking of the carrier’s truck does not fall within any of the five (5) categories of exempting
causes in Art. 1734. Hence, the private respondent as common carrier is presumed to have been at
fault or to have acted negligently. This presumption, however, may be overthrown by proof of
extraordinary diligence on the part of private respondent.

However, under Article 1745 (6) above, 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. The
court believes and so holds that the limits of the duty of extraordinary diligence in the
vigilance over the goods carried are reached where the goods are lost as a result of a
robbery which is attended by grave or irresistible threat, violence or force.
In the instant case, armed men held up the second truck owned by private respondent which carried
petitioner’s cargo. The robbers not only took away the truck and its cargo but also kidnapped the
driver and his helper, detaining them for several days and later releasing them in another province
(in Zambales). In these circumstances, we hold 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. It is necessary to recall that even 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: 360 Phil. 852 SECOND DIVISION [ G.R. No. 125948, December 29, 1998 ] FIRST PHILIPPINE
INDUSTRIAL CORPORATION, petitioner, VS. COURT OF APPEALS, HONORABLE PATERNO V. TAC-AN,
BATANGAS CITY AND ADORACION C. ARELLANO, IN HER OFFICIAL CAPACITY AS CITY TREASURER OF
BATANGAS, RESPONDENTS.

FIRST PHILIPPINE INDUSTRIAL CORPORATION = FPIC

LOCAL GOVERNMENT CODE = LGC

FACTS: FPIC is a grantee of a pipeline concession under Republic Act No. 387, as amended, to contract,
install and operate oil pipelines. The original pipeline concession was granted in 1967[1] and renewed by
the Energy Regulatory Board in 1992.[2]

In January 1995, FPIC 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 FPIC to pay
a local tax based on its gross receipts for the fiscal year 1993 pursuant to the LGC.[3] The respondent
City Treasurer assessed a business tax on the FPIC amounting to P956,076.04 payable in four
installments based on the gross receipts for products pumped at GPS-1 for the fiscal year 1993 which
amounted to P181,681,151.00. In order not to hamper its operations, FPIC paid the tax under protest in
the amount of P239,019.01 for the first quarter of 1993.

On January 20, 1994, FPIC filed a letter-protest[4] addressed to the respondent City Treasurer, alleging
exemption under Section 133 (j) of the LGC. City Treasurer denied the protest contending that FPIC
cannot be considered engaged in transportation business, thus it cannot claim.[5]

"Section 133. Common Limitations on the Taxing Powers of Local Government Units. - Unless otherwise
provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays
shall not extend to the levy of the following: xxx

(j) Taxes on the gross receipts of transportation contractors and persons engaged in the transportation
of passengers or freight by hire and common carriers by air, land or water, except as provided in this
Code."

On June 15, 1994, FPIC filed with the Regional Trial Court of Batangas City a complaint[6] for tax refund
with prayer for a writ of preliminary injunction against respondents City of Batangas and City Treasurer.
Respondents argued that FPIC cannot be exempt from taxes under Section 133 (j) of the LGC as said
exemption applies only to "transportation contractors and persons engaged in the transportation by hire
and common carriers by air, land and water." Respondents assert that pipelines are not included in the
term "common carrier" which refers solely to ordinary carriers such as trucks, trains, ships and the like.
Respondents further posit that the term "common carrier" under the said code pertains to the mode or
manner by which a product is delivered to its destination.[8]

On October 3, 1994, RTC ruled against FPIC. CA ruled against FPIC. Affirmed RTC. MR denied.

ISSUES:

What is a common carrier?

Is FPIC, an oil pipeline operator, a common carrier?

Does Section 133 (j) of the LGC only refer to common carriers via land, water and air AND via motor
vehicle?

Does the law recognize pipeline operators as common carriers?

Why are common carriers exempt from local business tax?

HELD: There is merit in the petition. WHEREFORE, the petition is hereby GRANTED. The decision of the
respondent Court of Appeals dated November 29, 1995 in CA-G.R. SP No. 36801 is REVERSED and SET
ASIDE.

ISSUE [1]: A "common carrier" may be defined, broadly, as one who holds himself out to the public as
engaged in the business of transporting persons or property from place to place, for compensation,
offering his services to the public generally.
Article 1732 of the Civil Code defines 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.[15]

ISSUE [2]: Based on the above definitions and requirements, there is no doubt that FPIC 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
FPIC has a limited clientele does not exclude it from the definition of a common carrier.

ISSUE [3]: Also, respondent's argument that the term "common carrier" as used in Section 133 (j) of the
LGC refers only to common carriers transporting goods and passengers through moving vehicles or
vessels either by land, sea or water, is erroneous.
As correctly pointed out by FPIC, the definition of "common carriers" in the Civil Code 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 be by motor vehicle. In fact, in the United States,
oil pipe line operators are considered common carriers.[17]

ISSUE [4]: Under the Petroleum Act of the Philippines (Republic Act 387), FPIC is considered a "common
carrier." (Article 86)

Republic Act 387 also regards petroleum operation as a public utility. (Article 7)

The Bureau of Internal Revenue likewise considers the FPIC a "common carrier." (BIR Ruling No. 069-83)

ISSUE [5]: The legislative intent is to exclude from the taxing power of the local government unit the
imposition of business tax against common carriers is to prevent a duplication of the so-called "common
carrier's tax."

FPIC is already paying three (3%) percent common carrier's tax on its gross sales/earnings under the
National Internal Revenue Code.[19] To tax FPIC again on its gross receipts in its transportation of
petroleum business would defeat the purpose of the LGC.
Asia Lighterage Shipping Inc vs CA Case
Digest

Facts: Wheat in bulk, was shipped by Marubeni American Corporation of Portland,

Oregon on board the vessel M/V NEO for delivery to the consignee, General Milling
Corporation in Manila. The shipment was insured by the private respondent Prudential
Guarantee and Assurance, Inc. against loss or damage. The carrying vessel arrived in
Manila and the cargo was transferred to the custody of the petitioner Asia Lighterage
and Shipping, Inc. The petitioner was contracted by the consignee as carrier to deliver
the cargo to consignee's warehouse. On, 900 metric tons of the shipment was loaded on
barge PSTSI III for delivery to consignee. The cargo did not reach its destination.

It appears that the transport of said cargo was suspended due to a warning of an
incoming typhoon. The petitioner proceeded to pull the barge to Engineering Island off
Baseco to seek shelter from the approaching typhoon. A few days after, the barge
developed a list because of a hole it sustained after hitting an unseen protuberance
underneath the water. The barge was then towed to ISLOFF terminal before it finally
headed towards the consignee's wharf. Upon reaching the Sta. Mesa spillways, the
barge again ran aground due to strong current. To avoid the complete sinking of the
barge, a portion of the goods was transferred to three other barges.

The next day, the towing bits of the barge broke. It sank completely, resulting in the
total loss of the remaining cargo. Private respondent indemnified the
consignee.15Thereafter, as subrogee, it sought recovery of said amount from the
petitioner, but to no avail.

The private respondent filed a complaint against the petitioner for recovery of the
amount of indemnity, attorney's fees and cost of suit.

The Regional Trial Court ruled in favor of the private respondent.

Petitioner appealed to the Court of Appeals insisting that it is not a common carrier.

Issue: Whether the petitioner is a common carrier

Held: Common Carrier.  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. To be sure, petitioner fits the test of a common
carrier as laid down in Bascos vs. Court of Appeals. 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 the case at bar, the petitioner
admitted that it is engaged in the business of shipping and lighterage, offering its barges
to the public, despite its limited clientele for carrying or transporting goods by water for
compensation.

Transportation Digest: LRTA V. Navidad (2003)

G.R. No. 145804 February 6, 2003

Lessons Applicable: Actionable Document (transportation)

Laws Cited: Art. 1755,Art. 1756,Art. 1759,Art. 1763

FACTS:

October 14, 1993, 7:30 p.m. : Drunk Nicanor Navidad (Nicanor) entered the EDSA LRT station after
purchasing a “token”.

While Nicanor was standing at the platform near the LRT tracks, the guard Junelito Escartin approached
him.

Due to misunderstanding, they had a fist fight

Nicanor fell on the tracks and killed instantaneously upon being hit by a moving train operated by
Rodolfo Roman

December 8, 1994: The widow of Nicanor, along with her children, filed a complaint for damages against
Escartin, Roman, LRTA, Metro Transit Org. Inc. and Prudent (agency of security guards) for the death of
her husband.

LRTA and Roman filed a counter-claim against Nicanor and a cross-claim against Escartin and Prudent

Prudent: denied liability – averred that it had exercised due diligence in the selection and surpervision of
its security guards
LRTA and Roman: presented evidence

Prudent and Escartin: demurrer contending that Navidad had failed to prove that Escartin was negligent
in his assigned task

RTC: In favour of widow and against Prudent and Escartin, complaint against LRT and Roman were
dismissed for lack of merit

CA: reversed by exonerating Prudent and held LRTA and Roman liable

ISSUE: W/N LRTA and Roman should be liable according to the contract of carriage

HELD: NO. Affirmed with Modification: (a) nominal damages is DELETED (CANNOT co-exist w/
compensatory damages) (b) Roman is absolved.

Law and jurisprudence dictate that a common carrier, both from the nature of its business and for
reasons of public policy, is burdened with the duty off exercising utmost diligence in ensuring the safety
of passengers

Civil Code:

Art. 1755. 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

Art. 1756. In case of death 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 as
prescribed in articles 1733 and 1755

Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence
or wilful acts of the former’s employees, although such employees may have acted beyond the scope of
their authority or in violation of the orders of the common carriers

This liability of the common carriers does NOT cease upon proof that they

Exercised all the diligence of a good father of a family in the selection and

supervision of their employees

Art. 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful
acts or negligence of other passengers or of strangers, if the common carrier’s employees through the
exercise of the diligence of a good father of a family could have prevented or stopped the act or
omission.

Carriers presumed to be at fault or been negligent and by simple proof of injury, the passenger is
relieaved of the duty to still establish the fault or negligence of the carrier or of its employees and the
burden shifts upon the carrier to prove that the injury is due to an unforeseen event or to force majeure

Where it hires its own employees or avail itself of the services of an outsider or an independent firm to
undertake the task, the common carrier is NOT relieved of its responsibilities under the contract of
carriage

GR: Prudent can be liable only for tort under Art. 2176 and related provisions in conjunction with Art.
2180 of the Civil Code. (Tort may arise even under a contract, where tort [quasi-delict liability] is that
which breaches the contract)

EX: if employer’s liability is negligence or fault on the part of the employee, employer can be made
liable on the basis of the presumption juris tantum that the employer failed to exercise diligentissimi
patris families in the selection and supervision of its employees.

EX to the EX: Upon showing due diligence in the selection and supervision of the employee

Factual finding of the CA: NO link bet. Prudent and the death of Nicanor for the reason that the
negligence of Escartin was NOT proven

NO showing that Roman himself is guilty of any culpable act or omission, he must also be absolved from
liability

Contractual tie bet. LRT and Nicanor is NOT itself a juridical relation bet. Nicanor and Roman

Roman can be liable only for his own fault or negligence

PERENA VS. ZARATE

PERENA VS. ZARATE

G.R. NO. 157917

August 29, 2012

Bersamin, J.

FACTS:
Perenas were engaged in the business of transporting students to Don Bosco. The Zarates engaged
Perenas services to transport their son, Aaron, to school.

While on the way to school, the van’s air-conditioned unit was turned on and the stereo playing loudly.
The driver took a detour because they were running late due to the traffic in SLEX. The detour was
through a narrow path underneath the Magallanes Interchange used as short cut into Makati. When the
van was to traverse the PNR railroad crossing, the van was tailing a large passenger bus so the driver’s
view of the oncoming train was blocked. The train hit the van at the rear end and the impact threw 9
students 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.

The Zarates filed for damages against Alfaro, Perenas, PNR, and the train driver. The cause of action
against Perena was for contract of carriage while for PNR, quasi delict. Perena posited the defense of
diligence of a good father in the selection and supervision of their driver

ISSUE/S: Were Perenas and PNR jointly and severally liable for damages? Is the petitioner a common
carrier?

RULING:

YES. A school bus operator is a common carrier.

Perena’s defense of diligence of a good father in the selection and supervision of their driver is
unavailable for breach of contract of carriage. Perenas operated as a common carrier; and their
standard of care was extraordinary diligence, not only diligence of a good father.

A carrier is a person or corporation who undertakes to transport or convey goods from one place to
another, gratuitously or for hire. They may be private or common
Private carrier is one who, without holding himself or itself out to the public as ready to act for all who
may desire his or its services, undertakes, by special agreement in a particular instance only, to transport
goods or persons from one place to another either gratutitously or for hire. The diligence required of a
private carrier is only ordinary

Common Carrier is a 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 such
services to the public. Diligence required is to observe extraordinary diligence, and is presumed to be at
fault or to have acted negligently in case of the loss of effects of passengers, or death or injuries to
passengers

The true test for a common carrier is not the quantity or extent of business actually transacted, or the
number of conveyances, BUT WHETHER the undertaking is a part of the activity that he has held out to
the general public as his business or occupation.

The Perenas held themselves out as a ready transportation indiscriminately to the students of a
particular school living within or near where they operated the service and for a fee. Perena, being a
common carrier, was already presumed to be negligent at the time of the accident because death
occurred to their passenger. The omissions of care on the part of the driver constituted negligence.

National Steel Corp. v. Court of Appeals

G.R. No. 112287, 12 December 1997, 283 SCRA 45

FACTS:

The MV Vlasons I is a vessel which renders tramping service and, as such, does not transport cargo
or shipment for the general public. Its services are available only to specific persons who enter into a
special contract of charter party with its owner. The ship is a private carrier, and it is in this capacity
that its owner, Vlasons Shipping, Inc. (VSA), entered into a contract of affreightment or contract of
voyage charter hire with National Steel Corporation (NSC) on 17 July 1974, whereby NSC hired
VSI’s vessel, the MV ‘VLASONS I’ to make 1 voyage to load steel products at Iligan City and
discharge them at North Harbor, Manila

The shipment was placed in the 3 hatches of the ship which arrived with the cargo at Pier 12, North
Harbor, Manila, on 12 August 1974. The following day, when the vessel’s 3 hatches containing the
shipment were opened by NSC’s agents, nearly all the skids of tinplates and hot rolled sheets were
allegedly found to be wet and rusty. The cargo was discharged and unloaded by stevedores hired by
the Charterer.

On 6 September 1974 NSC filed with VSI its claim for damages suffered due to the downgrading of
the damaged tinplates in the amount of P941,145.18. Then on 3 October 1974, NSC formally
demanded payment of said claim but VSI refused and failed to pay.
On appeal, and on 12 August 1993, the Court of Appeals modified the decision of the trial court by
reducing the demurrage from P88,000.00 to P44,000.00 and deleting the award of attorneys fees
and expenses of litigation. NSC and VSI filed separate motions for reconsideration. The CA denied
both motions. NSC and VSI filed their respective petitions for review before the Supreme Court.

ISSUE:

Whether or not VSI contracted with NSC as a common carrier or a private carrier.

RULING:

Article 1732 of the Civil Code defines 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 test of a common carrier 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.”Herein, 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.” 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.

In Valenzuela Hardwood and Industrial Supply, Inc., vs. Court of Appeals and Seven Brothers
Shipping Corporation, the Court ruled that “in a contract of private carriage, the parties may freely
stipulate their duties and obligations which perforce would be binding on them. Unlike in a contract
involving a common carrier, private carriage does not involve the general public. Hence, the
stringent provisions of the Civil Code on common carriers protecting the general public cannot
justifiably be applied to a ship transporting commercial goods as a private carrier. Consequently, the
public policy embodied therein is not contravened by stipulations in a charter party that lessen or
remove the protection given by law in contracts involving common carriers.”

From the parties’ Contract of Voyage Charter Hire, dated 17 July 1974, VSI “shall not be responsible
for losses except on proven willful negligence of the officers of the vessel.” The NANYOZAI Charter
Party, which was incorporated in the parties’ contract of transportation further provided that the
shipowner shall not be liable for loss of or damage to the cargo arising or resulting from
unseaworthiness, unless the same was caused by its lack of due diligence to make the vessel
seaworthy or to ensure that the same was “properly manned, equipped and supplied,” and to “make
the holds and all other parts of the vessel in which cargo was carried, fit and safe for its reception,
carriage and preservation.” The NANYOZAI Charter Party also provided that “owners shall not be
responsible for split, chafing and/or any damage unless caused by the negligence or default of the
master or crew.”
Herein, NSC must prove that the damage to its shipment was caused by VSI’s willful negligence or
failure to exercise due diligence in making MV Vlasons I seaworthy and fit for holding, carrying and
safekeeping the cargo. Ineluctably, the burden of proof was placed on NSC by the parties’
agreement.
Article 361 of the Code of Commerce provides that “Merchandise shall be transported at the risk and
venture of the shipper, if the contrary has not been expressly stipulated. Therefore, the damage and
impairment suffered by the goods during the transportation, due to fortuitous event, force majeure, or
the nature and inherent defect of the things, shall be for the account and risk of the shipper. The
burden of proof of these accidents is on the carrier.”

Article 362 of the Code of Commerce provides that “The carrier, however, shall be liable for
damages arising from the cause mentioned in the preceding article if proofs against him show that
they occurred on account of his negligence or his omission to take the precautions usually adopted
by careful persons, unless the shipper committed fraud in the bill of lading, making him to believe
that the goods were of a class or quality different from what they really were.”

As the MV Vlasons I was a private carrier, the shipowner’s obligations are governed by the foregoing
provisions of the Code of Commerce and not by the Civil Code which, as a general rule, places the
prima facie presumption of negligence on a common carrier.

The Supreme Court denied the consolidated petitions; and affirmed the questioned Decision of the
Court of Appeals with the modification that the demurrage awarded to VSI is deleted. No
pronouncement as to costs.

*Case digest by Karl Bation, LLB-IV, Andres Bonifacio Law School, SY 2018-2019