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1*
Bascos vs. CA Facts Rodolfo A. Cipriano representing Cipriano
Trading Enterprise (CIPTRADE for short) entered into a hauling
contract with Jibfair Shipping Agency Corporation whereby the
former bound itself to haul the latter's soya bean meal. To carry
out its obligation, CIPTRADE, through Rodolfo Cipriano,
subcontracted with Estrellita Bascos (petitioner) to transport and
to deliver 400 sacks of soya bean meal. Petitioner failed to
deliver the said cargo. As a consequence of that failure, Cipriano
paid Jibfair Shipping Agency the amount of the lost goods in
accordance with the contract. In her answer, petitioner interposed
the following defenses:
1. that there was no contract of carriage since CIPTRADE leased
her cargo truck to load the cargo from Manila Port Area to
Laguna;
2. that the truck carrying the cargo was hijacked; that the
hijacking was immediately reported to CIPTRADE and that petitioner
and the police exerted all efforts to locate the hijacked
properties; that after preliminary investigation, an information
for robbery and carnapping were filed against Jose Opriano, et al.;
and that hijacking, being a force majeure, exculpated petitioner
from any liability to CIPTRADE.
Issue Whether or not petitioner is a common carrier. Held Common
carrier. The Court of Appeals, in holding that petitioner was a
common carrier, found that she admitted in her answer that she did
business under the name A.M. Bascos Trucking and that said
admission dispensed with the presentation by private respondent,
Rodolfo Cipriano, of proofs that petitioner was a common carrier.
Moreover, both courts appreciated the following pieces of evidence
as indicators that petitioner was a common carrier:
1. the fact that the truck driver of petitioner, Maximo Sanglay,
received the cargo consisting of 400 bags of soya bean meal as
evidenced by a cargo receipt signed by Maximo Sanglay;
2. the fact that the truck helper, Juanito Morden, was also an
employee of petitioner; and the fact that control of the cargo was
placed in petitioner's care.
In disputing the conclusion of the trial and appellate courts
that petitioner was a common carrier, she alleged in this petition
that the contract between her and Rodolfo A. Cipriano, representing
CIPTRADE, was lease of the truck. She cited as evidence certain
affidavits which referred to the contract as "lease". These
affidavits were made by Jesus Bascos and by petitioner herself. She
further averred that Jesus Bascos confirmed in his testimony his
statement that the contract was a lease contract. She also stated
that: she was not catering to the general public. Thus, in her
answer to the amended complaint, she said that she does business
under the same style of A.M. Bascos Trucking, offering her trucks
for lease to those who have cargo to move, not to the general
public but to a few customers only in view of the fact that it is
only a small business. We agree with the respondent Court in its
finding that petitioner is a common carrier. In this case,
petitioner herself has made the admission that she was in the
trucking business, offering her trucks to those with cargo to move.
Judicial admissions are conclusive and no evidence is required to
prove the same. But petitioner argues that there was only a
contract of lease because they offer their services only to a
select group of people and because the private respondents,
plaintiffs in the lower court, did not object to the presentation
of affidavits by petitioner where the transaction was referred to
as a lease contract.
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2*
Regarding the first contention, the holding of the Court in De
Guzman vs. Court of Appeals is instructive. 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 1732 deliberately refrained from making such
distinctions.
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3*
FGU Insurance vs. Sarmiento1 Facts G.P. Sarmiento Trucking
Corporation (GPS) undertook to deliver thirty (30) units of Condura
S.D. white refrigerators aboard one of its Isuzu truck from the
plant site of Concepcion Industries, Inc. to the Central Luzon
Appliances in Dagupan City. While the truck was traversing the road
it collided with an unidentified truck, causing it to fall into a
deep canal, resulting in damage to the cargoes. FGU Insurance
Corporation (FGU), an insurer of the shipment, paid to Concepcion
Industries, Inc., the value of the covered cargoes. FGU, in turn,
being the subrogee of the rights and interests of Concepcion
Industries, Inc., sought reimbursement of the amount it had paid to
the latter from GPS. Since the trucking company failed to heed the
claim, FGU filed a complaint for damages and breach of contract of
carriage against GPS and its driver. In its answer, respondents
asserted that GPS was the exclusive hauler only of Concepcion
Industries, Inc., since 1988, and it was not so engaged in business
as a common carrier. Respondents further claimed that the cause of
damage was purely accidental. Issue Whether or not GPS is a common
carrier. Held Not a common carrier. GPS, being an exclusive
contractor and hauler of Concepcion Industries, Inc., rendering or
offering its services to no other individual or entity, cannot be
considered a common carrier. Common carriers are persons,
corporations, firms or associations engaged in the business of
carrying or transporting passengers or goods or both, by land,
water, or air, for hire or compensation, offering their services to
the public, whether to the public in general or to a limited
clientele in particular, but never on an exclusive basis. The true
test of a common carrier is the carriage of passengers or goods,
providing space for those who opt to avail themselves of its
transportation service for a fee. Given accepted standards, GPS
scarcely falls within the term "common carrier."
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!!!!!!!!!!!!1!Offering!services!to!1!customer!exclusively,!even!if!on!a!regular!basis,!doesnt!make!one!a!common!
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4*
Schmitz vs. Transport Venture Facts SYTCO Pte Ltd. Singapore
shipped from the port of Ilyichevsk, Russia on board M/V Alexander
Saveliev steel sheets in coil. The cargoes, which were to be
discharged at the port of Manila in favor of the consignee, Little
Giant Steel Pipe Corporation (Little Giant), were insured against
all risks with Industrial Insurance Company Ltd. (Industrial
Insurance). The vessel arrived at the port of Manila. Schmitz
Transport engaged the services of TVI to send a barge and tugboat
at shipside. TVIs tugboat Lailani towed the barge Erika V to
shipside. The tugboat, after positioning the barge alongside the
vessel, left and returned to the port terminal. Arrastre operator
Ocean Terminal Services Inc. commenced to unload 37 of the 545
coils from the vessel unto the barge. The weather condition had
become inclement due to an approaching storm, the unloading unto
the barge of the 37 coils was accomplished. No tugboat pulled the
barge back to the pier, however. Due to strong waves, the crew of
the barge abandoned it and transferred to the vessel. The barge
pitched and rolled with the waves and eventually capsized, washing
the 37 coils into the sea. Earnest efforts on the part of both the
consignee Little Giant and Industrial Insurance to recover the lost
cargoes proved futile. Little Giant thus filed a formal claim
against Industrial Insurance. Industrial Insurance later filed a
complaint against Schmitz Transport, TVI, and Black Sea through its
representative Inchcape (the defendants) for the recovery of the
amount it paid to Little Giant plus adjustment fees, attorneys
fees, and litigation expenses. Industrial Insurance faulted the
defendants for undertaking the unloading of the cargoes while
typhoon signal No. 1 was raised in Metro Manila. Issue Whether or
not petitioner is a common carrier. Held Common carrier. Petitioner
undertook to transport the cargoes from the shipside of M/V
Alexander Saveliev to the consignees warehouse at Cainta, Rizal. As
the appellate court put it, as long as a person or corporation
holds [itself] to the public for the purpose of transporting goods
as [a] business, [it] is already considered a common carrier
regardless if [it] owns the vehicle to be used or has to hire one.
That petitioner is a common carrier, the testimony of its own
Vice-President and General Manager Noel Aro that part of the
services it offers to its clients as a brokerage firm includes the
transportation of cargoes reflects so. It is settled that under a
given set of facts, a customs broker may be regarded as a common
carrier. And in Calvo v. UCPB General Insurance Co. Inc., this
Court held that as the transportation of goods is an integral part
of a customs broker, the customs broker is also a common carrier.
For to declare otherwise would be to deprive those with whom [it]
contracts the protection which the law affords them notwithstanding
the fact that the obligation to carry goods for [its] customers, is
part and parcel of petitioners business.
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5*
Crisostomo vs. CA Facts Petitioner Estela L. Crisostomo
contracted the services of respondent Caravan Travel and Tours
International, Inc. to arrange and facilitate her booking,
ticketing and accommodation in a tour dubbed Jewels of Europe.
Pursuant to said contract, Menor, respondents ticketing manager and
petitioners niece, delivered petitioners travel documents and plane
tickets. Petitioner, in turn, gave Menor the full payment for the
package tour. Menor then told her to be at the Ninoy Aquino
International Airport (NAIA) on Saturday. Without checking her
travel documents, petitioner went to NAIA on Saturday, June 15,
1991, to take the flight for the first leg of her journey from
Manila to Hongkong. To petitioners dismay, she discovered that the
flight she was supposed to take had already departed the previous
day. She learned that her plane ticket was for the flight scheduled
on June 14, 1991. She thus called up Menor to complain.
Subsequently, Menor prevailed upon petitioner to take another tour
the British Pageant. For this tour package, petitioner was asked
anew to pay more, which she did, and commenced the trip. Upon
petitioners return from Europe, she demanded from respondent
reimbursement representing the difference between the sum she paid
for Jewels of Europe and the amount she owed respondent for the
British Pageant tour. Despite several demands, respondent company
refused to reimburse the amount, contending that the same was
non-refundable. Petitioner was thus constrained to file a complaint
against respondent for breach of contract of carriage and damages.
Issue Whether or not respondent is a common carrier. Held Not a
common carrier. Respondent is not an entity engaged in the business
of transporting either passengers or goods and is therefore,
neither a private nor a common carrier. Respondent did not
undertake to transport petitioner from one place to another since
its covenant with its customers is simply to make travel
arrangements in their behalf. Respondents services as a travel
agency include procuring tickets and facilitating travel permits or
visas as well as booking customers for tours. While petitioner
concededly bought her plane ticket through the efforts of
respondent company, this does not mean that the latter ipso facto
is a common carrier. At most, respondent acted merely as an agent
of the airline, with whom petitioner ultimately contracted for her
carriage to Europe. Respondents obligation to petitioner in this
regard was simply to see to it that petitioner was properly booked
with the airline for the appointed date and time. Her transport to
the place of destination, meanwhile, pertained directly to the
airline. The object of petitioners contractual relation with
respondent is the latters service of arranging and facilitating
petitioners booking, ticketing and accommodation in the package
tour. In contrast, the object of a contract of carriage is the
transportation of passengers or goods. It is in this sense that the
contract between the parties in this case was an ordinary one for
services and not one of carriage. Petitioners submission is
premised on a wrong assumption.
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6*
Occidental Transport vs. CA Facts The case began with the
collision of a Ford Fiera and a passenger bus. As a result of this,
the Ford Fiera was thrown into the canal on the right side of the
road. Its driver was killed. Trencio Almedilla, the owner of the
Fiera which was registered under Sevilla Line, and Alberto Pingkian
were likewise in the Fiera and suffered various injuries as a
result of the incident. Neither the driver nor the passengers of
the bus stopped to assist the victims, but rather the bus proceeded
towards Sapang Dalaga.
The owner of the Carina passenger bus, Occidental Land
Transportation Company filed a case for damages against Sevilla
Line and/or William Sevilla, the registered owner of the Ford Fiera
before the Court of First Instance, Branch III, Oroquieta City.
Trencio Almedilla and Alberto Pingkian also filed a civil suit for
damages against Occidental Land Transportation Company, Inc. and
the driver of the Carina bus. This case was docketed before the
Regional Trial Court of Zamboanga del Norte, Branch VI, Dipolog
City. Issue Whether or not damages should be awarded to Trencio.
Held Awarded. Petitioner alleges that the Ford Fiera did not belong
to Trencio Almedilla, but to its registered owner Sevilla Lines,
and therefore the grant of damages for its repair was improperly
awarded to private respondent Almedilla. This factual matter has
already been decided upon in the trial court. The fact that the
Fiera was owned by Almedilla though registered with Sevilla Line,
will not alter the conclusion arrived at by the lower court. The
party who stands to benefit or suffer from the decision is
admittedly private respondent Almedilla and not Sevilla Lines.
William Sevilla admitted that the real owner of the vehicle was
Trencio Almedilla, in the case for damages by Occidental Land
Transportation against Sevilla Lines and/or William Sevilla. Having
thus been settled in the lower court, petitioner is now no longer
in any position to question the ownership of the Fiera or the award
of damages to private respondent Almedilla.
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7*
Equitable vs. Suyon Facts A Fuso Road Tractor driven by Raul
Tutor rammed into the house cum store of Myrna Tamayo. A portion of
the house was destroyed and causing death/injuries to the
respondents. Tutor was charged with and later convicted of reckless
imprudence resulting in multiple homicide and multiple physical
injuries. Upon verification with the Land Transportation Office,
respondents were furnished a copy of Official Receipt and
Certificate of Registration showing that 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. Petitioner alleged that the vehicle had already been sold
to Ecatine and that the former was no longer in possession and
control thereof at the time of the incident. It also claimed that
Tutor was an employee, not of Equitable, but of Ecatine. Issue
Whether or not petitioner is liable for damages to respondents.
Held Liable. Petitioner contends that it should not be held liable
for the damages sustained by respondents 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. We are not persuaded. In the instant
case, respondents -- having failed to recover anything in the
criminal case -- elected to file a separate civil action for
damages, based on quasi delict under Article 2176 of the Civil
Code. The evidence is clear that the deaths and the injuries
suffered by respondents and their kins were due to the fault of the
driver of the Fuso tractor. The Lease Agreement between petitioner
and Edwin Lim stipulated that it is the intention of the parties to
enter into a FINANCE LEASE AGREEMENT. Under such scheme, ownership
of the subject tractor was to be registered in the name of
petitioner, until the value of the vehicle has been fully paid by
Edwin Lim. Further, in the Lease Schedule, the monthly rental for
the tractor was stipulated, and the term of the Lease was scheduled
to expire on December 4, 1992. After a few months, Lim completed
the payments to cover the full price of the tractor. Thus, on
December 9, 1992, a Deed of Sale over the tractor was executed by
petitioner in favor of Ecatine represented by Edwin Lim. However,
the Deed was not registered with the LTO. We hold petitioner liable
for the deaths and the injuries complained of, because it was the
registered owner of the tractor at the time of the accident. The
Court has consistently 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.
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8*
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. Further,
petitioners insistence on FGU Insurance Corp. v. Court of Appeals
is misplaced. First, in FGU Insurance, the registered vehicle
owner, which was engaged in a rent-a-car business, rented out the
car. In this case, the registered owner of the truck, which is
engaged in the business of financing motor vehicle acquisitions,
has actually sold the truck to Ecatine, which in turn employed
Tutor. Second, in FGU Insurance, the registered owner of the
vehicle was not held responsible for the negligent acts of the
person who rented one of its cars, because Article 2180 of the
Civil Code was not applicable. We held that no vinculum juris as
employer and employee existed between the owner and the driver. In
this case, the registered owner of the tractor is considered under
the law to be the employer of the driver, while the actual operator
is deemed to be its agent. Thus, Equitable, the registered owner of
the tractor, is -- for purposes of the law on quasi delict -- the
employer of Raul Tutor, the driver of the tractor. Ecatine, Tutors
actual employer, is deemed as merely an agent of Equitable. 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.
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9*
Delsan Transport vs. CA Facts The facts show that Caltex
Philippines (Caltex for brevity) 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 Caltexs 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 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. MT Maysun set sail
from Batangas for Zamboanga City. Unfortunately, the vessel sank
taking with it the entire cargo of fuel oil. Subsequently, private
respondent paid Caltex the sum representing the insured value of
the lost cargo. Exercising its right of subrogation, the private
respondent demanded of the petitioner the same amount it paid to
Caltex. Due to its failure to collect from the petitioner despite
prior demand, private respondent filed a complaint for collection
of a sum of money. Issue Whether or not petitioner is liable for
damages. Held Liable. 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 vessels seaworthiness by the private respondent as to foreclose
recourse against the petitioner for any liability under its
contractual obligation as a common carrier. Additionally, the
exoneration of MT Maysuns officers and crew by the Board of Marine
Inquiry merely concerns their respective administrative
liabilities. It does not in any way operate to absolve the
petitioner common carrier from its civil liability arising from its
failure to observe extraordinary diligence in the vigilance over
the goods it was transporting and for the negligent acts or
omissions of its employees, the determination of which properly
belongs to the courts. 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 event or force
majeure. From the testimonies of Jaime Jarabe and Francisco Berina,
captain and chief mate, respectively of the ill-fated vessel, it
appears that a sudden and unexpected change of weather condition
occurred, a squall (unos) carrying strong winds and big waves
repeatedly buffeted MT Maysun causing it to tilt, take in water and
eventually sink with its cargo. This tale of strong winds and big
waves by the said officers of the petitioner however, was
effectively rebutted and belied by the weather report from PAGASA.
The government report showed there was no squall or bad weather or
extremely poor sea condition in the vicinity when the said vessel
sank. Thus, as the appellate court correctly ruled, petitioners
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. 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. The
certificates issued do not negate the presumption of
unseaworthiness triggered by an unexplained sinking. Seaworthiness
relates to a vessels actual condition. Neither the granting of
classification or
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10*
the issuance of certificates establishes seaworthiness.
Authorities are clear that diligence in securing certificates of
seaworthiness does not satisfy the vessel owners obligation. Also
securing the approval of the shipper of the cargo, or his surveyor,
of the condition of the vessel or her stowage does not establish
due diligence if the vessel was in fact unseaworthy, for the cargo
owner has no obligation in relation to seaworthiness. In the case
at bar, petitioner is liable for the insured value of the lost
cargo of industrial fuel oil belonging to Caltex for its failure to
rebut the presumption of fault or negligence as common carrier
occasioned by the unexplained sinking of its vessel, MT Maysun,
while in transit.
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11*
Philamgen vs. PKS Shipping Facts Davao Union Marketing
Corporation (DUMC) contracted the services of respondent PKS
Shipping Company (PKS Shipping) for the shipment to Tacloban City
of bags of cement. DUMC insured the goods for its full value with
petitioner Philippine American General Insurance Company
(Philamgen). The goods were loaded aboard the dumb barge Limar I
belonging to PKS Shipping. While Limar I was being towed by
respondents tugboat, MT Iron Eagle, the barge sank a couple of
miles off the coast bringing down with it the entire cargo of
75,000 bags of cement. DUMC filed a formal claim with Philamgen for
the full amount of the insurance. Philamgen promptly made payment;
it then sought reimbursement from PKS Shipping of the sum paid to
DUMC but the shipping company refused to pay, prompting Philamgen
to file suit against PKS Shipping with the Makati RTC. Petitioner
avers that typhoon "APIANG" has not entered the Philippine area of
responsibility and that, even if it did, respondent would not be
exempt from liability because its employees, particularly the
tugmaster, have failed to exercise due diligence to prevent or
minimize the loss. Issue Whether or not respondent is not liable
for damages. Held Not liable. The appellate court ruled, gathered
from the testimonies and sworn marine protests of the respective
vessel masters of Limar I and MT Iron Eagle, that there was no way
by which the barges or the tugboats crew could have prevented the
sinking of Limar I. The vessel was suddenly tossed by waves of
extraordinary height and buffeted by strong winds resulting in the
entry of water into the barges hatches. The official Certificate of
Inspection of the barge issued by the Philippine Coastguard and the
Coastwise Load Line Certificate would attest to the seaworthiness
of Limar I and should strengthen the factual findings of the
appellate court.
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12*
Lorenzo Shipping vs. BJ Mathel Facts Lorenzo Shipping Corp. is a
domestic corporation engaged in coastwise shipping. It used to own
the cargo vessel M/V Dadiangas Express. BJ Marthel International,
Inc. is an importer and distributor of different brands of engines
and spare parts. BJ Marthel supplied Lorenzo Shipping with parts
for the latters marine engines. Respondent sent Lorenzo Shipping a
quotation of prices of spare parts. The quotation also stated that
delivery of the parts would be within 2 months after receipt of
firm order. Lorenzo Shipping subsequently issued to BJ Marthel a
purchase order for the procurement of one set of cylinder liner to
be used for M/V Dadiangas Express. A second purchase order was
issued. Both purchase orders did not state the date of the
cylinders delivery. BJ Marthel delivered the cylinder liners at
petitioners warehouse 6 months after the date on the quotation,
instead of the 2 months stated. Petitioner failed to pay for the
cylinder liners. Hence, BJ Marthel sent a demand letter. Instead of
heeding the demand for the full payment, Lorenzo Shipping offered
to pay less claiming that the cylinders were delivered late and due
to the scrapping of the M/V Dadiangas Express, they had to sell the
cylinder liners in Singapore. Due to the failure of the parties to
settle, respondent filed an action for sum of money and damages
before the RTC. Lorenzo Shipping, on the other hand, claims that
time was of the essence in the delivery of the cylinder liners and
that the delivery was late as respondent committed to deliver the
items within 2 months after receipt of firm order. Issue Whether or
not there was late delivery of the subjects of the contract of sale
to justify petitioner to disregard the terms of the contract
considering that time was of the essence thereof. Held No late
delivery. Petitioner insists that although its purchase orders did
not specify the dates when the cylinder liners were supposed to be
delivered, nevertheless, respondent should abide by the term of
delivery appearing on the quotation it submitted to petitioner.
Petitioner theorizes that the quotation embodied the offer from
respondent while the purchase order represented its (petitioner's)
acceptance of the proposed terms of the contract of sale. We cannot
subscribe to the position of petitioner that the documents, by
themselves, embody the terms of the sale of the cylinder liners.
One can easily glean the significant differences in the terms as
stated in the formal quotation and Purchase Order 1 with regard to
the due date of the down payment for the first cylinder liner and
the date of its delivery as well as Purchase Order 2 with respect
to the date of delivery of the second cylinder liner. While the
quotation provided by respondent evidently stated that the cylinder
liners were supposed to be delivered within two months from receipt
of the firm order of petitioner and that the 25% down payment was
due upon the cylinder liners' delivery, the purchase orders
prepared by petitioner clearly omitted these significant items. The
petitioner's Purchase Order 1 made no mention at all of the due
dates of delivery of the first cylinder liner and of the payment of
25% down payment. Its Purchase Order 2 likewise did not indicate
the due date of delivery of the second cylinder liner. Notably,
petitioner was the one who caused the preparation of Purchase
Orders 1 and No. 2 yet it utterly failed to adduce any
justification as to why said documents contained terms which are at
variance with those stated in the quotation provided by respondent.
The only plausible reason for such failure on the part of
petitioner is that the parties had, in fact, renegotiated the
proposed terms of the contract of sale.
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In such cases, the delivery must be made within a reasonable
time. The law implies that if no time is fixed, delivery shall be
made within a reasonable time, in the absence of anything to show
that an immediate delivery intended. We, therefore, hold that in
the subject contracts, time was not of the essence. The delivery of
the cylinder liners on 20 April 1990 was made within a reasonable
period of time considering that respondent had to place the order
for the cylinder liners with its principal in Japan and that the
latter was, at that time, beset by heavy volume of work.
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14*
Coastwise Ligherage vs. CA Facts Pag-asa Sales, Inc. entered
into a contract to transport molasses from the province of Negros
to Manila with Coastwise Lighterage Corporation (Coastwise for
brevity), using the latter's dumb barges. The barges were towed in
tandem by the tugboat MT Marica, which is likewise owned by
Coastwise. Upon reaching Manila Bay, while approaching Pier 18, one
of the barges, "Coastwise 9", struck an unknown sunken object. As a
consequence, the molasses at the cargo tanks were contaminated and
rendered unfit for the use it was intended. This prompted the
consignee, Pag-asa Sales, Inc. to reject the shipment of molasses
as a total loss. Thereafter, Pag-asa Sales, Inc. filed a formal
claim with the insurer of its lost cargo, herein private
respondent, Philippine General Insurance Company (PhilGen, for
short) and against the carrier, herein petitioner, Coastwise
Lighterage. Coastwise Lighterage denied the claim and it was
PhilGen which paid the consignee, Pag-asa Sales, Inc., the amount
of P700,000.00, representing the value of the damaged cargo of
molasses. In turn, PhilGen then filed an action against Coastwise
Lighterage seeking to recover the amount which it paid to Pag-asa
Sales, Inc. for the latter's lost cargo. Issue Whether or not
petitioner is a common carrier. Held Common carrier. On the first
issue, petitioner contends that the RTC and the Court of Appeals
erred in finding that it was a common carrier. It stresses the fact
that it contracted with Pag-asa Sales, Inc. to transport the
shipment of molasses as a "charter agreement". It then proceeds to
cite the case of Home Insurance Company vs. American Steamship
Agencies, Inc. wherein this Court held: ". . . a common carrier
undertaking to carry a special cargo or chartered to a special
person only becomes a private carrier." Petitioner's reliance on
the aforementioned case is misplaced. In its entirety, the
conclusions of the court are as follows: Accordingly, the charter
party contract is one of affreightment over the whole vessel,
rather than a demise. As such, the liability of the shipowner for
acts or negligence of its captain and crew, would remain in the
absence of stipulation. The distinction between the two kinds of
charter parties (i.e. bareboat or demise and contract of
affreightment) is more clearly set out in the case of Puromines,
Inc. vs. Court of Appeals, wherein we ruled: Under the demise or
bareboat charter of the vessel, the charterer will generally be
regarded as the owner for the voyage or service stipulated. To
create a demise, the owner of a vessel must completely and
exclusively relinquish possession, command and navigation thereof
to the charterer, anything short of such a complete transfer is a
contract of affreightment (time or voyage charter party) or not a
charter party at all. On the other hand a contract of affreightment
is one in which the owner of the vessel leases part or all of its
space to haul goods for others. It is a contract for special
service to be rendered by the owner of the vessel and under such
contract the general owner retains the possession, command and
navigation of the ship, the charterer or freighter merely having
use of the space in the vessel in return for his payment of the
charter hire. . . . . . . . . An owner who retains possession of
the ship though the hold is the property of the charterer, remains
liable as carrier and must answer for any breach of duty as to the
care, loading and unloading of the cargo. . . .
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Although a charter party may transform a common carrier into a
private one, the same however is not true in a contract of
affreightment on account of the aforementioned distinctions between
the two. Petitioner admits that the contract it entered into with
the consignee was one of affreightment. We agree. Pag-asa Sales,
Inc. only leased three of petitioner's vessels, in order to carry
cargo from one point to another, but the possession, command and
navigation of the vessels remained with petitioner Coastwise
Lighterage. Next, the law and jurisprudence on common carriers both
hold that the mere proof of delivery of goods in good order to a
carrier and the subsequent arrival of the same goods at the place
of destination in bad order makes for a prima facie case against
the carrier. It follows then that the presumption of negligence
that attaches to common carriers, once the goods it transports are
lost, destroyed or deteriorated, applies to the petitioner. This
presumption, which is overcome only by proof of the exercise of
extraordinary diligence, remained unrebutted in this case.
Petitioner's assertion is belied by the evidence on record where it
appeared that far from having rendered service with the greatest
skill and utmost foresight, and being free from fault, the carrier
was culpably remiss in the observance of its duties. Jesus R.
Constantino, the patron of the vessel "Coastwise 9" admitted that
he was not licensed. Clearly, petitioner Coastwise Lighterage's
embarking on a voyage with an unlicensed patron violates this rule.
It cannot safely claim to have exercised extraordinary diligence,
by placing a person whose navigational skills are questionable, at
the helm of the vessel which eventually met the fateful accident.
It may also logically, follow that a person without license to
navigate, lacks not just the skill to do so, but also the utmost
familiarity with the usual and safe routes taken by seasoned and
legally authorized ones. Had the patron been licensed, he could be
presumed to have both the skill and the knowledge that would have
prevented the vessel's hitting the sunken derelict ship that lay on
their way to Pier 18. As a common carrier, petitioner is liable for
breach of the contract of carriage, having failed to overcome the
presumption of negligence with the loss and destruction of goods it
transported, by proof of its exercise of extraordinary
diligence.
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Maersk Lines vs. CA Facts Respondent Efren Castillo of Ethegal
Laboratories ordered from Eli Lilly. Inc. of Puerto Rico empty
gelatin capsules. Through a Memorandum of Shipment, the shipper Eli
Lilly, Inc. of Puerto Rico advised private respondent as consignee
that the empty gelatin capsules were already shipped on board MV
"Anders Maerskline." In said Memorandum, shipper Eli Lilly, Inc.
specified the date of arrival to be April 3, 1977. For reasons
unknown, said cargo of capsules were misshipped and diverted to
Richmond, Virginia, USA and then transported back Oakland,
Califorilia. The goods finally arrived in the Philippines two (2)
months from the date specified in the memorandum. As a consequence,
private respondent as consignee refused to take delivery of the
goods on account of its failure to arrive on time. Private
respondent alleging gross negligence and undue delay in the
delivery of the goods, filed an action before the court a quo for
rescission of contract with damages against petitioner and Eli
Lilly, Inc. as defendants. Denying that it committed breach of
contract, petitioner alleged in its that answer that the subject
shipment was transported in accordance with the provisions of the
covering bill of lading2 and that its liability under the law on
transportation of good attaches only in case of loss, destruction
or deterioration of the goods as provided for in Article 1734 of
Civil Code. Issue Whether or not the petitioner is not liable for
delay. Held Liable for delay. Nonetheless, petitioner maintains
that it cannot be held for damages for the alleged delay in the
delivery since it acted in good faith and there was no special
contract under which the carrier undertook to deliver the shipment
on or before a specific date. On the other hand, private respondent
claims that during the period before the specified date of arrival
of the goods, he had made several commitments and contract of
adhesion. Therefore, petitioner can be held liable for the damages
suffered by private respondent for the cancellation of the
contracts he entered into. It is not disputed that the bill of
lading, in fine print, is a contract of adhesion. Generally,
contracts of adhesion are considered void since almost all the
provisions of these types of contracts are prepared and drafted
only by one party, usually the carrier. Nonetheless, settled is the
rule that bills of lading are contracts not entirely prohibited.
One who adheres to the contract is in reality free to reject it in
its entirety; if he adheres, he gives his consent. It is a long
standing jurisprudential rule that a bill of lading operates both
as a receipt and as contract to transport and deliver the same as
therein stipulated. It is presumed that the stipulations of the
bill were, in the absence of fraud, concealment or improper
conduct, known to the shipper, and he is generally bound by his
acceptance whether he reads the bill or not.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!!!!!!!!!!!!2!(1)!The!Carrier!does!not!undertake! that!
the!goods! shall! arive!at! the!port!of!discharge!or!
the!place!of!delivery!at!any!particular!time!or!to!meet!any!particular!market!or!use!and!save!as!is!provided!in!clause!4!the!Carrier!
shall! in!no! circumstances!be! liable! for! any!direct,! indirect!
or! consequential! loss!
or!damage!caused!by!delay.!If!the!Carrier!should!nevertheless!be!held!legally!liable!for!any!such!direct!or!indirect!or!consequential!loss!or!damage!caused!by!delay,!such!liability!shall!in!no!event!exceed!the!freight!paid!for!the!transport!covered!by!this!Bill!of!Lading.!
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However, the aforequoted ruling applies only if such contracts
will not create an absurd situation as in the case at bar. The
questioned provision in the subject bill of lading has the effect
of practically leaving the date of arrival of the subject shipment
on the sole determination and will of the carrier. While it is true
that common carriers are not obligated by law to carry and to
deliver merchandise, and persons are not vested with the right to
prompt delivery, unless such common carriers previously assume the
obligation to deliver at a given date or time, delivery of shipment
or cargo should at least be made within a reasonable time. The
oft-repeated rule regarding a carrier's liability for delay is that
in the absence of a special contract, a carrier is not an insurer
against delay in transportation of goods. When a common carrier
undertakes to convey goods, the law implies a contract that they
shall be delivered at destination within a reasonable time, in the
absence, of any agreement as to the time of delivery. But where a
carrier has made an express contract to transport and deliver
properly within a specified time, it is bound to fulfill its
contract and is liable for any delay, no matter from what cause it
may have arisen. An examination of the subject bill of lading shows
that the subject shipment was estimated to arrive in Manila on
April 3, 1977. While there was no special contract entered into by
the parties indicating the date of arrival of the subject shipment,
petitioner nevertheless, was very well aware of the specific date
when the goods were expected to arrive as indicated in the bill of
lading itself. In this regard, there arises no need to execute
another contract for the purpose as it would be a mere superfluity.
In the case before us, we find that a delay in the delivery of the
goods spanning a period of two (2) months and seven (7) days falls
was beyond the realm of reasonableness.
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FGU Insurance vs. CA Facts Evidence shows that Anco Enterprises
Company (ANCO) owned the M/T ANCO tugboat and the D/B Lucio barge
which were operated as common carriers. Since the D/B Lucio had no
engine of its own, it could not maneuver by itself and had to be
towed by a tugboat for it to move from one place to another. San
Miguel Corporation (SMC) shipped from Mandaue City, Cebu, on board
the D/B Lucio, for towage by M/T ANCO, cases of Pale Pilsen and
Cerveza Negra. The D/B Lucio was towed by the M/T ANCO all the way
from Mandaue City to San Jose, Antique. The vessels arrived at San
Jose, Antique. The tugboat M/T ANCO left the barge immediately
after reaching San Jose, Antique. When the barge and tugboat
arrived at San Jose, Antique, the clouds over the area were dark
and the waves were already big. The arrastre workers unloading the
cargoes of SMC on board the D/B Lucio began to complain about their
difficulty in unloading the cargoes. SMCs District Sales Supervisor
requested ANCOs representative to transfer the barge to a safer
place because the vessel might not be able to withstand the big
waves. ANCOs representative did not heed the request because he was
confident that the barge could withstand the waves. This,
notwithstanding the fact that at that time, only the M/T ANCO was
left at the wharf of San Jose, Antique, as all other vessels
already left the wharf to seek shelter. With the waves growing
bigger and bigger, only some cases of beer were discharged into the
custody of the arrastre operator. Later, the crew of D/B Lucio
abandoned the vessel because the barges rope attached to the wharf
was cut off by the big waves. At around midnight, the barge run
aground and was broken and the cargoes of beer in the barge were
swept away. As a result, ANCO failed to deliver to SMCs consignee
all the cases of Pale Pilsen and Cerveza Negra. As a consequence of
the incident, SMC filed a complaint for Breach of Contract of
Carriage and Damages against ANCO. Issue Whether or not ANCO was
negligent. Held ANCO was negligent. ANCOs representatives failed to
exercise the extraordinary degree of diligence required by the law
to exculpate them from liability for the loss of the cargoes.
First, ANCO admitted that they failed to deliver to the designated
consignee the cases of Pale Pilsen and cases of Cerveza Negra.
Second, it is borne out in the testimony of the witnesses on record
that the barge D/B Lucio had no engine of its own and could not
maneuver by itself. Yet, the patron of ANCOs tugboat M/T ANCO left
it to fend for itself notwithstanding the fact that as the two
vessels arrived at the port of San Jose, Antique, signs of the
impending storm were already manifest. Petitioners Estate of Ang
Gui and Co To, in their Memorandum, asserted that the contention of
respondents SMC and FGU that the crewmembers of D/B Lucio should
have left port at the onset of the typhoon is like advising the
fish to jump from the frying pan into the fire and an advice that
borders on madness.
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The argument does not persuade. The records show that the D/B
Lucio was the only vessel left at San Jose, Antique, during the
time in question. The other vessels were transferred and
temporarily moved to Malandong, 5 kilometers from wharf where the
barge remained. Clearly, the transferred vessels were definitely
safer in Malandong than at the port of San Jose, Antique, at that
particular time, a fact which petitioners failed to dispute. ANCOs
arguments boil down to the claim that the loss of the cargoes was
caused by the typhoon Sisang, a fortuitous event (caso fortuito),
and there was no fault or negligence on their part. In fact, ANCO
claims that their crewmembers exercised due diligence to prevent or
minimize the loss of the cargoes but their efforts proved no match
to the forces unleashed by the typhoon which, in petitioners own
words was, by any yardstick, a natural calamity, a fortuitous
event, an act of God, the consequences of which petitioners could
not be held liable for. In this case, the calamity which caused the
loss of the cargoes was not unforeseen nor was it unavoidable. In
fact, the other vessels in the port of San Jose, Antique, managed
to transfer to another place, a circumstance which prompted SMCs
District Sales Supervisor to request that the D/B Lucio be likewise
transferred, but to no avail. The D/B Lucio had no engine and could
not maneuver by itself. Even if ANCOs representatives wanted to
transfer it, they no longer had any means to do so as the tugboat
M/T ANCO had already departed, leaving the barge to its own
devices. The captain of the tugboat should have had the foresight
not to leave the barge alone considering the pending storm. While
the loss of the cargoes was admittedly caused by the typhoon
Sisang, a natural disaster, ANCO could not escape liability to
respondent SMC. The records clearly show the failure of petitioners
representatives to exercise the extraordinary degree of diligence
mandated by law. To be exempted from responsibility, the natural
disaster should have been the proximate and only cause of the loss.
There must have been no contributory negligence on the part of the
common carrier. Therefore, as correctly pointed out by the
appellate court, there was blatant negligence on the part of M/T
ANCOs crewmembers, first in leaving the engine-less barge D/B Lucio
at the mercy of the storm without the assistance of the tugboat,
and again in failing to heed the request of SMCs representatives to
have the barge transferred to a safer place, as was done by the
other vessels in the port; thus, making said blatant negligence the
proximate cause of the loss of the cargoes.
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20*
DRS-Senator vs. Federal Facts Berde Plants, Inc. (Berde Plants)
delivered artificial trees to C.F. Sharp and Company, Inc. (C.F.
Sharp), the General Ship Agent of DSR-Senator Lines, a foreign
shipping corporation, for transportation and delivery to the
consignee, Al-Mohr International Group, in Riyadh, Saudi Arabia.
The cargo was loaded in M/S Arabian Senator. Federal Phoenix
Assurance Company, Inc. (Federal Phoenix Assurance) insured the
cargo against all risks. The M/S Arabian Senator left the Manila
South Harbor for Saudi Arabia with the cargo on board. When the
vessel arrived in Khor Fakkan Port, the cargo was reloaded on board
DSR-Senator Lines feeder vessel, M/V Kapitan Sakharov, bound for
Port Dammam, Saudi Arabia. However, while in transit, the vessel
and all its cargo caught fire. DSR-Senator Lines informed Berde
Plants that M/V Kapitan Sakharov with its cargo was gutted by fire
and sank. Consequently, Federal Phoenix Assurance paid Berde Plants
P941,429.61 corresponding to the amount of insurance for the cargo.
Federal Phoenix Assurance sent a letter to C.F. Sharp demanding
payment. C.F. Sharp denied any liability on the ground that such
liability was extinguished when the vessel carrying the cargo was
gutted by fire. Thus, Federal Phoenix Assurance filed a complaint
for damages against DSR-Senator Lines and C.F. Sharp. Issue Whether
or not C.F. Sharp is liable for damages. Held Liable. Fire is not
one of those enumerated under Art. 1734 which exempts a carrier
from liability for loss or destruction of the cargo. In Eastern
Shipping Lines, Inc. vs. Intermediate Appellate Court, we ruled
that since the peril of fire is not comprehended within the
exceptions in Article 1734, then the common carrier shall be
presumed to have been at fault or to have acted negligently, unless
it proves that it has observed the extraordinary diligence required
by law. Even if fire were to be considered a natural disaster
within the purview of Article 1734, it is required under Article
1739 of the same Code that the natural disaster must have been the
proximate and only cause of the loss, and that the carrier has
exercised due diligence to prevent or minimize the loss before,
during or after the occurrence of the disaster. We have held that a
common carriers duty to observe the requisite diligence in the
shipment of goods lasts from the time the articles are surrendered
to or unconditionally placed in the possession of, and received by,
the carrier for transportation until delivered to or until the
lapse of a reasonable time for their acceptance by the person
entitled to receive them. When the goods shipped either are lost or
arrive in damaged condition, a presumption arises against the
carrier of its failure to observe that diligence, and there need
not be an express finding of negligence to hold it liable. Common
carriers are obliged to observe extraordinary diligence in the
vigilance over the goods transported by them. Accordingly, they are
presumed to have been at fault or to have acted negligently if the
goods are lost, destroyed or deteriorated. There are very few
instances when the
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presumption of negligence does not attach and these instances
are enumerated in Article 1734. In those cases where the
presumption is applied, the common carrier must prove that it
exercised extraordinary diligence in order to overcome the
presumption. Respondent Federal Phoenix Assurance raised the
presumption of negligence against petitioners. However, they failed
to overcome it by sufficient proof of extraordinary diligence
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Central Shipping vs. Ins Facts Petitioner received on board its
vessel, the M/V Central Bohol, 376 pieces [of] Philippine Apitong
Round Logs and undertook to transport said shipment to Manila for
delivery to Alaska Lumber Co., Inc. The shipment was insured. Upon
completion of loading of the cargo, the vessel left Palawan and
commenced the voyage to Manila. While enroute to Manila, the vessel
listed about 10 degrees starboardside, due to the shifting of logs
in the hold. After the listing of the vessel had increased to 15
degrees, the ship captain ordered his men to abandon ship and the
vessel completely sank. Due to the sinking of the vessel, the cargo
was totally lost. Respondent alleged that the total loss of the
shipment was caused by the fault and negligence of the [petitioner]
and its captain and as direct consequence thereof the consignee
suffered damage. The consignee, Alaska Lumber Co. Inc., presented a
claim for the value of the shipment to the [petitioner] but the
latter failed and refused to settle the claim, hence [respondent],
being the insurer, paid said claim and now seeks to be subrogated
to all the rights and actions of the consignee as against the
petitioner. Petitioner, while admitting the sinking of the vessel,
interposed the defense that the vessel was fully manned, fully
equipped and in all respects seaworthy; that all the logs were
properly loaded and secured; that the vessels master exercised due
diligence to prevent or minimize the loss before, during and after
the occurrence of the storm. It raised as its main defense that the
proximate and only cause of the sinking of its vessel and the loss
of its cargo was a natural disaster, a tropical storm which neither
[petitioner] nor the captain of its vessel could have foreseen.
Issue Whether or not petitioner is liable for damages. Held Liable.
In the present case, petitioner disclaims responsibility for the
loss of the cargo by claiming the occurrence of a storm under
Article 1734(1). It attributes the sinking of its vessel solely to
the weather condition. Established is the fact that the M/V Central
Bohol encountered a southwestern monsoon in the course of its
voyage. Having made such factual representation, petitioner cannot
now be allowed to retreat and claim that the southwestern monsoon
was a storm. Normally expected on sea voyages were such monsoons,
during which strong winds were not unusual. It would not be
sufficient to categorize the weather condition at the time as a
storm within the absolutory causes enumerated in the law.
Significantly, no typhoon was observed within the Philippine area
of responsibility during that period. The strong winds accompanying
the southwestern monsoon could not be classified as a storm. Such
winds are the ordinary vicissitudes of a sea voyage. Even if the
weather encountered by the ship is to be deemed a natural disaster
under Article 1739 of the Civil Code, petitioner failed to show
that such natural disaster or calamity was the proximate and only
cause of the loss. Human agency must be entirely excluded from the
cause of injury or loss. The defense of fortuitous event or natural
disaster cannot be successfully made when the injury could have
been avoided by human precaution.
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However, the loss of the vessel was caused not only by the
southwestern monsoon, but also by the shifting of the logs in the
hold. Such shifting could been due only to improper stowage. The
vessel felt the strain because the logs in the bodega shifted and
there were already seawater that seeped inside. Had the logs not
shifted, the ship could have survived and reached at least the port
of El Nido. Being clearly prone to shifting, the round logs should
not have been stowed with nothing to hold them securely in place.
Each pile of logs should have been lashed together by cable wire,
and the wire fastened to the side of the hold. Considering the
strong force of the wind and the roll of the waves, the loose
arrangement of the logs did not rule out the possibility of their
shifting. By force of gravity, those on top of the pile would
naturally roll towards the bottom of the ship. The evidence
indicated that strong southwest monsoons were common occurrences
during the month of July. Thus, the officers and crew of M/V
Central Bohol should have reasonably anticipated heavy rains,
strong winds and rough seas. They should then have taken extra
precaution in stowing the logs in the hold, in consonance with
their duty of observing extraordinary diligence in safeguarding the
goods. But the carrier took a calculated risk in improperly
securing the cargo. Having lost that risk, it cannot now escape
responsibility for the loss.
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24*
Cruz vs. Sun Holidays Facts Spouses Dante and Leonora Cruz
(petitioners) lodged a Complaint against Sun Holidays, Inc.
(respondent) with the Regional Trial Court (RTC) for damages
arising from the death of their son Ruelito C. Cruz (Ruelito) who
perished with his wife on board the boat M/B Coco Beach III that
capsized. As it was still windy, Matute (a scuba instructor) and 25
other Resort guests including petitioners son and his wife trekked
to the other side of the Coco Beach mountain that was sheltered
from the wind where they boarded M/B Coco Beach III, which was to
ferry them. Shortly after the boat sailed, it started to rain. As
it moved farther away from Puerto Galera and into the open seas,
the rain and wind got stronger, causing the boat to tilt from side
to side and the captain to step forward to the front, leaving the
wheel to one of the crew members. The waves got more unwieldy.
After getting hit by two big waves which came one after the other,
M/B Coco Beach III capsized putting all passengers underwater. The
passengers, who had put on their life jackets, struggled to get out
of the boat. Upon seeing the captain, Matute and the other
passengers who reached the surface asked him what they could do to
save the people who were still trapped under the boat. The captain
replied Iligtas niyo na lang ang sarili niyo (Just save
yourselves). Help came after about 45 minutes when two boats passed
by the capsized M/B Coco Beach III. Eight passengers, including
petitioners son and his wife, died during the incident. At the time
of Ruelitos death, he was 28 years old and employed as a
contractual worker for Mitsui Engineering & Shipbuilding
Arabia, Ltd. in Saudi Arabia, with a basic monthly salary of $900.
Petitioner demanded indemnification from respondent for the death
of their son in the amount of at least P4,000,000. Replying,
respondent denied any responsibility for the incident which it
considered to be a fortuitous event. It nevertheless offered, as an
act of commiseration, the amount of P10,000 to petitioners upon
their signing of a waiver. As petitioners declined respondents
offer, they filed the Complaint, as earlier reflected, alleging
that respondent, as a common carrier, was guilty of negligence in
allowing M/B Coco Beach III to sail notwithstanding storm warning
bulletins issued by PAGASA as early as 5:00 a.m. The RTC and CA
ruled in favor of Sun Holidays. On appeal to the SC, Sun Holidays
was held liable. Issue Whether or not respondent is negligent. Held
Negligent. The evidence shows that PAGASA issued 24-hour public
weather forecasts and tropical cyclone warnings for shipping
advising of tropical depressions in Northern Luzon which would also
affect the province of Mindoro. By the testimony of Dr. Frisco
Nilo, supervising weather specialist of PAGASA, squalls are to be
expected under such weather condition.
A very cautious person exercising the utmost diligence would
thus not brave such stormy weather and put other peoples lives at
risk. The extraordinary diligence required of common carriers
demands that they take care of the goods or lives entrusted to
their hands as if they were their own. This respondent failed to
do. Respondents insistence that the incident was caused by a
fortuitous event does not impress either. The elements of a
"fortuitous event" are:
(a) the cause of the unforeseen and unexpected occurrence, or
the failure of the debtors to comply with their obligations, must
have been independent of human will;
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(b) the event that constituted the caso fortuito must have been
impossible to foresee or, if foreseeable, impossible to avoid;
(c) the occurrence must have been such as to render it
impossible for the debtors to fulfill their obligation in a normal
manner; and
(d) the obligor must have been free from any participation in
the aggravation of the resulting injury to the creditor.
To fully free a common carrier from any liability, the
fortuitous event must have been the proximate and only cause of the
loss. And it should have exercised due diligence to prevent or
minimize the loss before, during and after the occurrence of the
fortuitous event.
Respondent cites the squall that occurred during the voyage as
the fortuitous event that overturned M/B Coco Beach III. As
reflected above, however, the occurrence of squalls was expected
under the weather condition. Moreover, evidence shows that M/B Coco
Beach III suffered engine trouble before it capsized and sank. The
incident was, therefore, not completely free from human
intervention.
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PAL vs. CA Facts Respondent Co accompanied by his wife and son,
arrived at the Manila International Airport aboard defendant
airline's PAL Flight from San Francisco, California, U.S.A. Soon
after his embarking (sic), plaintiff proceeded to the baggage
retrieval area to claim his checks in his possession. Plaintiff
found eight of his luggage, but despite diligent search, he failed
to locate his ninth luggage. He then immediately notified defendant
company. The printed form known as a Property Irregularity Report
was filled out acknowledging one of the plaintiff's luggages to be
missing and signed after asking respondent himself to sign the same
document. In accordance with this procedure in cases of this
nature, PAL asked plaintiff to surrender the nine claim checks
corresponding to the nine luggages, i.e., including the one that
was missing. The incontestable evidence further shows that
plaintiff lost luggage was a Samsonite suitcase measuring about 62
inches in length, worth about US$200.00 and containing various
personal effects purchased by plaintiff and his wife during their
stay in the United States and similar other items sent by their
friends abroad to be given as presents to relatives in the
Philippines. Plaintiff's invoices evidencing their purchases show
their missing personal effects to be worth US$1,243.01, in addition
to the presents entrusted to them by their friends which plaintiffs
testified to be worth about US$500.00 to US$600.00. Plaintiff on
several occasions unrelentingly called at defendant's office in
order to pursue his complaint about his missing luggage but no
avail. Thus, plaintiff wrote a demand letter to defendant company.
PAL never found plaintiff's missing luggage or paid its
corresponding value. Consequently, on May 3, 1985, respondent filed
his present complaint against said petitioner. Issue Whether or not
the Warsaw Convention on limits of liability should be disregarded.
Held Disregarded. In Alitalia vs. IAC, the Warsaw Convention
limiting the carrier's liability was applied because of a simple
loss of baggage without any improper conduct on the part of the
officials or employees of the airline, or other special injury
sustained by the passengers. The petitioner therein did not declare
a higher value for his luggage, much less did he pay an additional
transportation charge. Petitioner contends that under the Warsaw
Convention, its liability, if any, cannot exceed US $20.00 based on
weight as private respondent Co did not declare the contents of his
baggage nor pay traditional charges before the flight. We find no
merit in that contention. The liability of the common carrier for
the loss, destruction or deterioration of goods transported from a
foreign country to the Philippines is governed primarily by the New
Civil Code. In all matters not regulated by said Code, the rights
and obligations of common carriers shall be governed by the Code of
Commerce and by Special Laws. Since the passenger's destination in
this case was the Philippines, Philippine law governs the liability
of the carrier for the loss of the passenger's luggage. In this
case, the petitioner failed to overcome, not only the presumption,
but more importantly, the private respondent's evidence, proving
that the carrier's negligence was the proximate cause of the loss
of his baggage. Furthermore, petitioner acted in bad faith in
faking a retrieval receipt to bail itself out of having to pay Co's
claim.
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The Court of Appeals therefore did not err in disregarding the
limits of liability under the Warsaw Convention. As stated in the
Cathay Pacific case, although the Warsaw Convention has the force
and effect of law in this country, being a treaty commitment
assumed by the Philippine government, said convention does not
operate as an exclusive enumeration of the instances for declaring
a carrier liable for breach of contract of carriage or as an
absolute limit of the extent of that liability. The Warsaw
Convention declares the carrier liable in the enumerated cases and
under certain limitations. However, it must not be construed to
preclude the operation of the Civil Code and pertinent laws. It
does not regulate, much less exempt, the carrier from liability for
damages for violating the rights of its passengers under the
contract of carriage, especially if willful misconduct on the part
of the carriers employees is found or established.
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Transasia Shipping vs. CA Facts Respondent, a public attorney,
bought a ticket from petitioner for the voyage of M/V Asia Thailand
vessel to Cagayan de Oro City from Cebu City on November 12, 1991.
Plaintiff boarded the M/V Asia Thailand vessel. At that instance,
plaintiff noticed that some repair works [sic] were being
undertaken on the engine of the vessel. The vessel departed with
only one (1) engine running. After an hour of slow voyage, the
vessel stopped near Kawit Island and dropped its anchor thereat.
After half an hour of stillness, some passengers demanded that they
should be allowed to return to Cebu City for they were no longer
willing to continue their voyage to, Cagayan de Oro City. The
captain acceeded [sic] to their request and thus the vessel headed
back to Cebu City. At Cebu City, plaintiff together with the other
passengers who requested to be brought back to Cebu City, were
allowed to disembark. Thereafter, the vessel proceeded to Cagayan
de Oro City. Plaintiff, the next day, boarded the M/V Asia Japan
for its voyage to Cagayan de Oro City, likewise a vessel of
defendant. On account of this failure of defendant to transport him
to the place of destination on November 12, 1991, plaintiff filed
before the trial court a complaint for damages against defendant.
Issue Whether or not a common carrier is liable for damages to a
passenger who disembarked from the vessel upon its return to the
port of origin, after it suffered engine trouble and had to stop at
sea, having commenced the contracted voyage on one engine. Held Not
liable. Before commencing the contracted voyage, the petitioner
undertook some repairs on the cylinder head of one of the vessel's
engines. But even before it could finish these repairs, it allowed
the vessel to leave the port of origin on only one functioning
engine, instead of two. Moreover, even the lone functioning engine
was not in perfect condition as sometime after it had run its
course, it conked out. This caused the vessel to stop and remain a
drift at sea, thus in order to prevent the ship from capsizing, it
had to drop anchor. Plainly, the vessel was unseaworthy even before
the voyage began. The Court of Appeals did not grant the private
respondent actual or compensatory damages, reasoning that no delay
was incurred since there was no demand, as required by Article 1169
of the Civil Code. This article, however, finds no application in
this case because, as found by the respondent Court, there was in
fact no delay in the commencement of the contracted voyage. If any
delay was incurred, it was after the commencement of such voyage,
more specifically, when the voyage was subsequently interrupted
when the vessel had to stop near Kawit Island after the only
functioning engine conked out. As to the rights and duties of the
parties strictly arising out of such delay, the Civil Code is
silent. However, as correctly pointed out by the petitioner,
Article 698 of the Code of Commerce specifically provides for such
a situation. It reads: In case a voyage already begun should be
interrupted, the passengers shall be obliged to pay the fare in
proportion to the distance covered, without right to recover for
losses and damages if the interruption is due to fortuitous event
or force majeure, but with a right to indemnity if the interruption
should have been caused by the captain exclusively. If the
interruption should be caused by the disability of the vessel and a
passenger should agree to await the repairs, he may not be required
to pay any increased price of passage, but his living expenses
during the stay shall be for his own account. This article applies
suppletorily pursuant to Article 1766 of the Civil Code.
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Of course, this does not suffice for a resolution of the case at
bench for, as earlier stated, the cause of the delay or
interruption was the petitioner's failure to observe extraordinary
diligence. Article 698 must then be read together with Articles
2199, 2200, 2201, and 2208 in relation to Article 21 of the Civil
Code. So read, it means that the petitioner is liable for any
pecuniary loss or loss of profits which the private respondent may
have suffered by reason thereof. For the private respondent, such
would be the loss of income if unable to report to his office on
the day he was supposed to arrive were it not for the delay. This,
however, assumes that he stayed on the vessel and was with it when
it thereafter resumed its voyage; but he did not. As he and some
passengers resolved not to complete the voyage, the vessel had to
return to its port of origin and allow them to disembark. The
private respondent then took the petitioner's other vessel the
following day, using the ticket he had purchased for the previous
day's voyage. Any further delay then in the private respondent's
arrival at the port of destination was caused by his decision to
disembark. Had he remained on the first vessel, he would have
reached his destination at noon of 13 November 1991, thus been able
to report to his office in the afternoon. He, therefore, would have
lost only the salary for half of a day. But actual or compensatory
damages must be proved,
which the private respondent failed to do. There is no
convincing evidence that he did not receive his salary for 13
November 1991 nor that his absence was not excused.
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Calalas vs. CA Facts Private respondent Eliza Jujeurche G. Sunga
took a passenger jeepney owned and operated by petitioner Vicente
Calalas. As the jeepney was filled to capacity of about 24
passengers, Sunga was given by the conductor an "extension seat," a
wooden stool at the back of the door at the rear end of the
vehicle. Along the way, the jeepney stopped to let a passenger off.
As she was seated at the rear of the vehicle, Sunga gave way to the
outgoing passenger. Just as she was doing so, an Isuzu truck driven
by Iglecerio Verena and owned by Francisco Salva bumped the left
rear portion of the jeepney. As a result, Sunga was injured. Sunga
filed a complaint for damages against Calalas, alleging violation
of the contract of carriage by the former in failing to exercise
the diligence required of him as a common carrier. Calalas, on the
other hand, filed a third-party complaint against Francisco Salva,
the owner of the Isuzu truck. The lower court took cognizance of
another case filed by Calalas against Salva and Verena, for
quasi-delict, in which Salva and his driver Verena were held
jointly liable to Calalas for the damage to his jeepney. Issue
Whether or not the decision in the civil case finding Salva and his
driver liable for damage to petitioner is binding on Sunga. Held
The decision isnt binding. The argument that Sunga is bound by the
ruling in Civil Case finding the driver and the owner of the truck
liable for quasi-delict ignores the fact that she was never a party
to that case and, therefore, the principle of res judicata does not
apply. Nor are the issues in Civil Case and in the present case the
same. The issue in Civil Case was whether Salva and his driver
Verena were liable for quasi-delict for the damage caused to
petitioners jeepney. On the other hand, the issue in this case is
whether petitioner is liable on his contract of carriage. There is,
thus, no basis for the contention that the ruling in Civil Case
finding Salva and his driver Verena liable for the damage to
petitioners jeepney, should be binding on Sunga. It is immaterial
that the proximate cause of the collision between the jeepney and
the truck was the negligence of the truck driver. The doctrine of
proximate cause is applicable only in actions for quasi-delict, not
in actions involving breach of contract.3 The doctrine is a device
for imputing liability to a person where there is no relation
between him and another party. In such a case, law itself creates
the obligation. But, where there is a pre-existing contractual
relation between the parties, it is the parties themselves who
create the obligation, and the function of the law is merely to
regulate the relation thus created. Insofar as contracts of
carriage are concerned, some aspects regulated by the Civil Code
are those respecting the diligence required of common carriers with
regard to the safety of passengers as well as the presumption of
negligence in cases of death or injury to passengers. Now, did the
driver of jeepney carry Sunga "safely as far as human care and
foresight could provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances? We do
not think so. Several factors militate against petitioners
contention. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!!!!!!!!!!!!3!Statement!not!absolute,!see!Bataclan!vs.!Medina!
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First, as found by the Court of Appeals, the jeepney was not
properly parked, its rear portion being exposed about two meters
from the broad shoulders of the highway, and facing the middle of
the highway in a diagonal angle. Second, it is undisputed that
petitioners driver took in more passengers than the allowed seating
capacity of the jeepney. The fact that Sunga was seated in an
"extension seat" placed her in a peril greater than that to which
the other passengers were exposed. Therefore, not only was
petitioner unable to overcome the presumption of negligence imposed
on him for the injury sustained by Sunga, but also, the evidence
shows he was actually negligent in transporting passengers. We find
it hard to give serious thought to petitioners contention that
Sungas taking an "extension seat" amounted to an implied assumption
of risk. It is akin to arguing that the injuries to the many
victims of the tragedies in our seas should not be compensated
merely because those passengers assumed a greater risk of drowning
by boarding an overloaded ferry. This is also true of petitioners
contention that the jeepney being bumped while it was improperly
parked constitutes caso fortuito. A caso fortuito is an event which
could not be foreseen, or which, though foreseen, was inevitable.
This requires that the following requirements be present:
1. The cause of the breach is independent of the debtors will;
2. The event is unforeseeable or unavoidable; 3. The event is such
as to render it impossible for the debtor to fulfill his obligation
in a normal
manner, and 4. The debtor did not take part in causing the
injury to the creditor.
Petitioner should have foreseen the danger of parking his
jeepney with its body protruding two meters into the highway.
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Japan Airlines vs. CA Facts Private respondents boarded JAL
flight in San Francisco, California bound for Manila. As an
incentive for travelling on the said airline, the flight was to
make an overnight stopover at Narita, Japan, at the airlines
expense, thereafter proceeding to Manila the following day. On June
14, 1991, upon arrival at Narita, Japan, private respondents were
billeted at Hotel Nikko Narita for the night. The next day, private
respondents, on the final leg of their journey, went to the airport
to take their flight to Manila. However, due to the Mt. Pinatubo
eruption, unrelenting ashfall blanketed Ninoy Aquino International
Airport (NAIA), rendering it inaccessible to airline traffic.
Hence, private respondents trip to Manila was cancelled
indefinitely. To accommodate the needs of its stranded passengers,
JAL rebooked all the Manila-bound passengers on flight No. 741 due
to depart on June 16, 1991 and also paid for the hotel expenses for
their unexpected overnight stay. On June 16, 1991, much to the
dismay of the private respondents, their long anticipated flight to
Manila was again cancelled due to NAIAs indefinite closure. At this
point, JAL informed the private respondents that it would no longer
defray their hotel and accommodation expense during their stay in
Narita. Since NAIA was only reopened to airline traffic on June 22,
1991, private respondents were forced to pay for their
accommodations and meal expenses from their personal funds from
June 16 to June 21, 1991. Their unexpected stay in Narita ended on
June 22, 1991 when they arrived in Manila on board JL flight No.
741. Obviously, still reeling from the experience, private
respondents, commenced an action for damages against JAL. To
support their claim, private respondents asserted that JAL failed
to live up to its duty to provide care and comfort to its stranded
passengers when it refused to pay for their hotel and accommodation
expenses from June 16 to 21, 1991 at Narita, Japan. On the other
hand, JAL denied this allegation and averred that airline
passengers have no vested right to these amenities in case a flight
is cancelled due to force majeure. Issue Whether or not JAL, as a
common carrier has the obligation to shoulder the hotel and meal
expenses of its stranded passengers until they have reached their
final destination, even if the delay were caused by force majeure.
Held No obligation. While we sympathize with the private
respondents plight, we are unable to accept this contention. Common
carriers are not absolutely responsible for all injuries or damages
even if the same were caused by a fortuitous event. To rule
otherwise would render the defense of force majeure, as an
exception from any liability, illusory and ineffective. When a
party is unable to fulfill his obligation because of force majeure,
the general rule is that he cannot be held liable for damages for
non-performance. Corollarily, when JAL was prevented from resuming
its flight to Manila due to the effects of Mt. Pinatubo eruption,
whatever losses or damages in the form of hotel and meal expenses
the stranded passengers incurred, cannot be charged to JAL. Yet it
is undeniable that JAL assumed the hotel expenses of respondents
for their unexpected overnight stay on June 15, 1991. Indeed, to
hold JAL, in the absence of bad faith or negligence, liable for the
amenities of its stranded passengers by reason of a fortuitous
event is too much of a burden to assume. Furthermore, it has been
held that airline passengers must take such risks incident to the
mode of travel. In this regard, adverse weather conditions or
extreme climatic changes are some of the perils involved in air
travel, the
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consequences of which the passenger must assume or expect. After
all, common carriers are not the insurer of all risks.
Paradoxically, the Court of Appeals, despite the presence of force
majeure, still ruled against JAL relying in our decision in PAL v.
Court of Appeals. The reliance is misplaced. The factual background
of the PAL case is different from the instant petition. In that
case there was indeed a fortuitous event resulting in the diversion
of the PAL flight. However, the unforeseen diversion was worsened
when private respondents (passenger) was left at the airport and
could not even hitch a ride in a Ford Fiera loaded with PAL
personnel, not to mention the apparent apathy of the PAL station
manager as to the predicament of the stranded passengers. In light
of these circumstances, we held that if the fortuitous event was
accompanied by neglect and malfeasance by the carriers employees,
an action for damages against the carrier is permissible.
Unfortunately, for private respondents, none of these conditions
are present in the instant petition. We are not prepared, however,
to completely absolve petitioner JAL from any liability. While JAL
was no longer required to defray private respondents living
expenses during their stay in Narita on account of the fortuitous
event, JAL had the duty to make the necessary arrangements to
transport private respondents on the first available connecting
flight to Manila. Petitioner JAL reneged on its obligation to look
after the comfort and convenience of its passengers when it
declassified private respondents from transit passengers to new
passengers as a result of which private respondents were obliged to
make the necessary arrangements themselves for the next flight to
Manila. We are not oblivious to the fact that the cancellation of
JAL flights to Manila from June 15 to June 21, 1991 caused
considerable disruption in passenger booking and reservation.
Nevertheless, this does not excuse JAL from its obligation to make
the necessary arrangements to transport private respondents on its
first available flight to Manila. After all, it had a contract to
transport private respondents from the United States to Manila as
their final destination. Consequently, the award of nominal damages
is in order.
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Aboitiz Shipping vs. CA Facts Anacleto Viana boarded the vessel
M/V Antonia, owned by petitioner, at the port at San Jose,
Occidental Mindoro, bound for Manila, having purchased a ticket.
Said vessel arrived at Pier 4, North Harbor, Manila, and the
passengers therein disembarked, a gangplank having been provided
connecting the side of the vessel to the pier. Instead of using
said gangplank Anacleto Viana disembarked on the third deck which
was on the level with the pier. After said vessel had landed, the
Pioneer Stevedoring Corporation took over the exclusive control of
the cargoes loaded on said vessel. The crane owned by the third
party petitioner and operated by its crane operator Alejo Figueroa
was placed alongside the vessel and one (1) hour after the
passengers of said vessel had disembarked, it started operation by
unloading the cargoes from said vessel. While the crane was being
operated, Anacleto Viana who had already disembarked from said
vessel obviously remembering that some of his cargoes were still
loaded in the vessel, went back to the vessel, and it was while he
was pointing to the crew of the said vessel to the place where his
cargoes were loaded that the crane hit him, pinning him between the
side of the vessel and the crane. Private respondents Vianas filed
a complaint for damages against petitioner corporation (Aboitiz,
for brevity) for breach of contract of carriage. In its answer.
Aboitiz denied responsibility contending that at the time of the
accident, the vessel was completely under the control of respondent
Pioneer Stevedoring Corpora