UNSWORTH TRANSPORT INTERNATIONAL (PHILS.), INC., vs. COURT OF
APPEALS and PIONEER INSURANCE AND SURETY CORPORATION
FACTS
On August 31, 1992, the shipper Sylvex Purchasing Corporation
delivered to UTI a shipment of 27 drums of various raw materials
for pharmaceutical manufacturing. UTI issued Bill of Lading No.
C320/C15991-2,[5]covering the aforesaid shipment.The subject
shipment was insured with private respondent Pioneer Insurance and
Surety Corporation in favor of Unilab against all risks in the
amount ofP1,779,664.77 under and by virtue of Marine Risk Note
Number MC RM UL 0627 92[6]and Open Cargo Policy No. HO-022-RIU.
On the same day that the bill of lading was issued, the shipment
was loaded in a sealed 1x40 container van, boarded on APLs
vesselM/V Pres. Jackson, Voyage 42, and transshipped to APLsM/V
Pres. Taft[8]for delivery to petitioner in favor of the consignee
United Laboratories, Inc. (Unilab).
On October 6, 1992, petitioner received the said shipment in its
warehouse after it stamped the Permit to Deliver Imported
Goods[9]procured by the Champs Customs Brokerage. Oceanica Cargo
Marine Surveyors Corporation (OCMSC) conducted a stripping survey
of the shipment located in petitioners warehouse. The survey
results stated:
2-pallets STC 40 bags Dried Yeast, both in good order condition
and properly sealed
19- steel drums STC Vitamin B Complex Extract, all in good order
condition and properly sealed
1-steel drum STC Vitamin B Complex Extra[ct] with cut/hole on
side, with approx. spilling of 1%[11]
On October 15, 1992, the arrastre Jardine Davies Transport
Services, Inc. (Jardine) issued Gate Pass No. 7614. The materials
were noted to be complete and in good order in the gate pass.[14]On
the same day, the shipment arrived in Unilabs warehouse and was
immediately surveyed by an independent surveyor, J.G. Bernas
Adjusters & Surveyors, Inc. (J.G. Bernas). The Report
stated:
1-p/bag torn on side contents partly spilled
1-s/drum #7 punctured and retaped on bottom side content
lacking
5-drums shortship/short delivery
On November 7, 1992, Unilab filed a formal claim[17]for the
damage against private respondent and UTI. On November 20, 1992,
UTI denied liability on the basis of the gate pass issued by
Jardine that the goods were in complete and good condition; while
private respondent paid the claimed amount on March 23, 1993.
On February 22, 2001, the RTC decided in favor of private
respondent and against APL (American President Lines, Ltd.), UTI
and petitioner. On appeal, the CA affirmed the RTC decision on
April 29, 2004.
Petitioner admits that it is a forwarder but disagrees with the
CAs conclusion that it is a common carrier. It also questions the
appellate courts findings that it failed to establish that it
exercised extraordinary or ordinary diligence in the vigilance over
the subject shipment. As to the damages allegedly suffered by
private respondent, petitioner counters that they were not
sufficiently proven.
ISSUES
WHETHER OR NOT PETITIONER UTI IS A COMMON CARRIER.
WHETHER OR NOT PETITIONER UTI EXERCISED THE REQUIRED ORDINARY
DILIGENCE.
WON PETITIONERS LIABILITY SHOULD BE LIMITED TO $500 PURSUANT TO
THE PACKAGE LIMITATION RULE.
RULING
The petition is partly meritorious.
1. Admittedly, petitioner is a freight forwarder. The
termfreight forwarder" refers to a firm holding itself out to the
general public (other than as a pipeline, rail, motor, or water
carrier) to provide transportation of property for compensation
and, in the ordinary courseofits business, (1) to assemble and
consolidate, or to provide for assembling and consolidating,
shipments, and to perform or provide for break-bulk and
distribution operations of the shipments; (2) to assume
responsibility for the transportation of goods from the place of
receipt to the place of destination; and (3) to use for any part of
the transportation a carrier subject to the federal law pertaining
to common carriers.[23]
A freight forwarders liability is limited to damages arising
from its own negligence, including negligence in choosing the
carrier; however, where the forwarder contracts to deliver goods to
their destination instead of merely arranging for their
transportation, it becomes liable as a common carrier for loss or
damage to goods. A freight forwarder assumes the responsibility of
a carrier, which actually executes the transport, even though the
forwarder does not carry the merchandise itself.[24]
It is undisputed that UTI issued a bill of lading in favor of
Unilab. Pursuant thereto, petitioner undertook to transport, ship,
and deliver the 27 drums of raw materials for pharmaceutical
manufacturing to the consignee.
A bill of lading is a written acknowledgement of the receipt of
goods and an agreement to transport and to deliver them at a
specified place to a person named or on his or her order.[25]It
operates both as a receipt and as a contract.It is a receipt for
the goods shipped and a contract to transport and deliver the same
as therein stipulated. As a receipt, it recites the date and place
of shipment, describes the goods as to quantity, weight,
dimensions, identification marks, condition, quality, and value. As
a contract, it names the contracting parties, which include the
consignee; fixes the route, destination, and freight rate or
charges; and stipulates the rights and obligations assumed by the
parties.[26]
Undoubtedly, UTI is liable as a common carrier. Common carriers,
as a general rule, are presumed to have been at fault or negligent
if the goods they transported deteriorated or got lost or
destroyed. That is, unless they prove that they exercised
extraordinary diligence in transporting the goods. In order to
avoid responsibility for any loss or damage, therefore, they have
the burden of proving that they observed such diligence.[27]Mere
proof of delivery of the goods in good order to a common carrier
and of their arrival in bad order at their destination constitutes
a prima facie case of fault or negligence against the carrier. If
no adequate explanation is given as to how the deterioration, loss,
or destruction of the goods happened, the transporter shall be held
responsible.[28]
2. Petitioner failed to rebut the prima facie presumption of
negligence in the carriage of the subject shipment. Petitioner
failed to prove that it observed the extraordinary diligence and
precaution which the law requires a common carrier to exercise and
to follow in order to avoid damage to or destruction of the goods
entrusted to it for safe carriage and delivery.
3. However, we affirm the applicability of the Package
Limitation Rule under the COGSA, contrary to the RTC and the CAs
findings.
It is to be noted that the Civil Code does not limit the
liability of the common carrier to a fixed amount per package. In
all matters not regulated by the Civil Code, the rights and
obligations of common carriers are governed by the Code of Commerce
and special laws. Thus, the COGSA supplements the Civil Code by
establishing a provision limiting the carriers liability in the
absence of a shippers declaration of a higher value in the bill of
lading.
In the present case, the shipper did not declare a higher
valuation of the goods to be shipped. Petitioners liability should
be limited to $500 per steel drum. In this case, as there was only
one drum lost, private respondent is entitled to receive only $500
as damages for the loss. In addition to said amount, as aptly held
by the trial court, an interest rate of 6%per annumshould also be
imposed, plus 25% of the total sum as attorneys fees.
PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY vs. PKS SHIPPING
COMPANY
FACTS
Davao Union Marketing Corporation (DUMC) contracted the services
of respondent PKS Shipping Company (PKS Shipping) for the shipment
to Tacloban City of seventy-five thousand (75,000) bags of cement
worth Three Million Three Hundred Seventy-Five Thousand Pesos
(P3,375,000.00).DUMC insured the goods for its full value with
petitioner Philippine American General Insurance Company
(Philamgen).The goods were loaded aboard the dumb bargeLimar
Ibelonging to PKS Shipping.On the evening of 22 December 1988,
about nine oclock, whileLimar Iwas being towed by respondents
tugboat,MT Iron Eagle, the barge sank a couple of miles off the
coast of Dumagasa Point, in Zamboanga del Sur, 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.
In the instant appeal, Philamgen contends that the appellate
court has committed a patent error in ruling that PKS Shipping is
not a common carrier and that it is not liable for the loss of the
subject cargo.The fact that respondent has a limited clientele,
petitioner argues, does not militate against respondents being a
common carrier and that the only way by which such carrier can be
held exempt for the loss of the cargo would be if the loss were
caused by natural disaster or calamity.
ISSUES
WON PKS SHIPPING IS A PRIVATE CARRIER OR A COMMON CARRIER. WHAT
IS ITS LIABILITY?
WON IT HAS OBSERVED THE PROPER DILIGENCE (ORDINARY, IF A PRIVATE
CARRIER, OR EXTRAORDINARY, IF A COMMON CARRIER) REQUIRED OF IT
GIVEN THE CIRCUMSTANCES.
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.
Complementary to the codal definition is Section 13, paragraph
(b), of the Public Service Act; it defines public service to be
x x x 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, 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, 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
communication systems, wire or wireless broadcasting stations and
other similar public services. x x x.(Underscoring supplied).
The prevailing doctrine on the question is that enunciated in
the leading case ofDe Guzman vs. Court of Appeals.[2]Applying
Article 1732 of the Code, in conjunction with Section 13(b) of the
Public Service Act, this Court has held:
The above article makes no distinction between one
whoseprincipalbusiness activity is the carrying of persons or goods
or both, and one who does such carrying only as anancillaryactivity
(in local idiom, as `a sideline).Article 1732 also carefully avoids
making any distinction between a person or enterprise offering
transportation service on aregular or scheduled basisand one
offering such service on anoccasional, 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 anarrow segmentof the general population.We
think that Article 1732 deliberately refrained from making such
distinctions.
So understood, the concept of `common carrier under Article 1732
may be seen to coincide neatly with the notion of `public service,
under the Public Service Act (Commonwealth Act No. 1416, as
amended) which at least partially supplements the law on common
carriers set forth in the Civil Code.
Much of the distinction between a common or public carrier and a
private or special carrier lies in the character of the business,
such that if the undertaking is an isolated transaction, not a part
of the business or occupation, and the carrier does not hold itself
out to carry the goods for the general public or to a limited
clientele, although involving the carriage of goods for a
fee,[3]the person or corporation providing such service could very
well be just a private carrier.A typical case is that of a charter
party which includes both the vessel and its crew, such as in a
bareboat or demise, where the charterer obtains the use and service
of all or some part of a ship for a period of time or a voyage or
voyages[4]and gets the control of the vessel and its crew.[5]
Contrary to the conclusion made by the appellate court, its
factual findings indicate that PKS Shipping has engaged itself in
the business of carrying goods for others, although for a limited
clientele, undertaking to carry such goods for a fee.The regularity
of its activities in this area indicates more than just a casual
activity on its part.[6]Neither can the concept of a common carrier
change merely because individual contracts are executed or entered
into with patrons of the carrier.Such restrictive interpretation
would make it easy for a common carrier to escape liability by the
simple expedient of entering into those distinct agreements with
clients.
2. Article 1733 of the Civil Code requires common carriers to
observe extraordinary diligence in the vigilance over the goods
they carry.In case of loss, destruction or deterioration of goods,
common carriers are presumed to have been at fault or to have acted
negligently, and the burden of proving otherwise rests on
them.[7]The provisions of Article 1733, notwithstanding, common
carriers are exempt from liability for loss, destruction, or
deterioration of the goods due to any of the following causes:
(1) Flood, storm, earthquake, lightning, or other natural
disaster or calamity;
(2) Act of the public enemy in war, whether international or
civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in
the containers; and
(5) Order or act of competent public authority.
The appellate court ruled, gathered from the testimonies and
sworn marine protests of the respective vessel masters ofLimar
IandMT Iron Eagle, that there was no way by which the barges or the
tugboats crew could have prevented the sinking ofLimar I.The vessel
was suddenly tossed by waves of extraordinary height of six (6) to
eight (8) feet and buffeted by strong winds of 1.5 knots 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 ofLimar Iand should strengthen the factual
findings of the appellate court.
Findings of fact of the Court of Appeals generally conclude this
Court. All given then, the appellate court did not err in its
judgment absolving PKS Shipping from liability for the loss of the
DUMC cargo.
LOURDES J. LARA, ET AL. vs. BRIGIDO R. VALENCIA
FACTS
The deceased was an inspector of the Bureau of Forestry
stationed in Davao. The defendant is engaged in the business of
exporting logs from his lumber concession in Cotabato. Lara went to
said concession upon instructions of his chief to classify the logs
of defendant which were about to be loaded on a ship anchored in
the port of Parang. The work Lara of lasted for six days during
which he contracted malaria fever.
At that time, there was no available bus that could take him
back to Davao and so he requested the defendant if he could take
him in his own pick-up. Defendant agreed and, together with Lara,
other passengers tagged along, most of them were employees of the
Government. Defendant merely accommodated them and did not charge
them any fee for the service. It was also their understanding that
upon reaching barrio Samoay, the passengers would alight and
transfer to a bus that regularly makes the trip to Davao but
unfortunately there was none available at the time and so the same
passengers, including Lara, again requested the defendant to drive
them to Davao. Defendant again accommodated them and upon reaching
Km. 96, Lara accidentally fell suffering fatal injuries.
It therefore appears that the deceased, as well his companions
who rode in the pick-up of defendant, were merely accommodation
passengers who paid nothing for the service and so they can be
considered as invited guests within the meaning of the law. As
accommodation passengers or invited guests, defendant as owner and
driver of the pick-up owes to them merely the duty to exercise
reasonable care so that they may be transported safely to their
destination. Thus, "The rule is established by the weight of
authority that the owner or operator of an automobile owes the duty
to aninvited guestto exercise reasonable care in its operation, and
not unreasonably to expose him to danger and injury by increasing
the hazard of travel. This rule, as frequently stated by the
courts, is that an owner of an automobile owes a guest the duty to
exercise ordinary or reasonable care to avoid injuring him. Since
one riding in an automobile is no less a guest because he asked for
the privilege of doing so, the same obligation of care is imposed
upon the driver as in the case of one expressly invited to ride" (5
Am. Jur., 626-627). Defendant, therefore, is only required to
observe ordinary care, and is not in duty bound to exercise
extraordinary diligence as required of a common carrier by our law
(Articles 1755 and 1756, new Civil Code).
ISSUE
WON the defendant failed to observe ordinary care or diligence
in transporting the deceased from Parang to Davao on the date in
question.
RULING
NO. Even if we admit as true the facts found by the trial court,
still we find that the same are not sufficient to show that
defendant has failed to take the precaution necessary to conduct
his passengers safely to their place of destination for there is
nothing there to indicate that defendant has acted with negligence
or without taking the precaution that an ordinary prudent man would
have taken under similar circumstances. It should be noted that
Lara went to the lumber concession of defendant in answer to a call
of duty which he was bound to perform because of the requirement of
his office and he contracted the malaria fever in the course of the
performance of that duty. It should also be noted that defendant
was not in duty bound to take the deceased in his own pick-up to
Davao because from Parang to Cotabato there was a line of
transportation that regularly makes trips for the public, and if
defendant agreed to take the deceased in his own car, it was only
to accommodate him considering his feverish condition and his
request that he be so accommodated. It should also be noted that
the passengers who rode in the pick-up of defendant took their
respective seats therein at their own choice and not upon
indication of defendant with the particularitythat defendant
invited the deceased to sit with him in the front seat but which
invitation the deceased declined. The reason for this can only be
attributed to his desire to be at the back so that he could sit on
a bag and travel in a reclining position because such was more
convenient for him due to his feverish condition. All the
circumstances therefore clearly indicate that defendant had done
what a reasonable prudent man would have done under the
circumstances.
There is every reason to believe that the unfortunate happening
was only due to an unforeseen accident accused by the fact that at
the time the deceased was half asleep and must have fallen from the
pick-up when it ran into some stones causing it to jerk considering
that the road was then bumpy, rough and full of stones.
The finding of the trial court that the pick-up was running at
more than 40 kilometers per hour is not supported by the evidence.
This is a mere surmise made by the trial court considering the time
the pick-up left barrio Samoay and the time the accident occured in
relation to the distance covered by the pick-up. And even if this
is correct, still we say that such speed is not unreasonable
considering that they were traveling on a national road and the
traffic then was not heavy. We may rather attribute the incident to
lack of care on the part of the deceased considering that the
pick-up was open and he was then in a crouching position. Indeed,
the law provides that "A passenger must observe the diligence of a
good father of a family to avoid injury to himself" (Article 1761,
new Civil Code), which means that if the injury to the passenger
has beenproximatelycaused by his own negligence, the carrier cannot
be held liable.
All things considered, we are persuaded to conclude that the
accident occurred not due to the negligence of defendant but to
circumstances beyond his control and so he should be exempt from
liability.
JOSE P. MECENAS, ROMEO P. MECENAS, LILIA P. MECENAS, ORLANDO P.
MECENAS, VIOLETA M. ACERVO, LUZVIMINDA P. MECENAS; and OFELIA M.
JAVIER vs.HON. COURT OF APPEALS, CAPT. ROGER SANTISTEBAN and NEGROS
NAVIGATION CO., INC.,
FACTS
At 6:20 o'clock in the morning of 22 April 1980, the M/T
"Tacloban City," a barge-type oil tanker of Philippine registry
owned by the Philippine National Oil Company (PNOC) and operated by
the PNOC Shipping and Transport Corporation (PNOC Shipping), having
unloaded its cargo of petroleum products, left Amlan, Negros
Occidental, and headed towards Bataan. At about 1:00 o'clock in the
afternoon of that same day, the M/V "Don Juan," an interisland
vessel, also of Philippine registry owned and operated by the
Negros Navigation Co., Inc. (Negros Navigation) left Manila bound
for Bacolod with seven hundred fifty (750) passengers listed in its
manifest, and a complete set of officers and crew members.
On the evening of that same day, 22 April 1980, at about 10:30
o'clock, the "Tacloban City" and the "Don Juan" collided at the
Talbas Strait near Maestra de Ocampo Island in the vicinity of the
island of Mindoro. When the collision occurred, the sea was calm,
the weather fair and visibility good. As a result of this
collision, the M/V "Don Juan" sank and hundreds of its passengers
perished. Among the ill-fated passengers were the parents of
petitioners, the spouses Perfecto Mecenas and Sofia Mecenas, whose
bodies were never found despite intensive search by
petitioners.
On 29 December 1980, petitioners filed a complaint in the then
Court- of First Instance of Quezon City against private respondents
Negros Navigation and Capt. Roger Santisteban, the captain of the
"Don Juan" without, however, impleading either PNOC or PNOC
Shipping. Petitioners prayed for actual damages of not less than
P100,000.00 as well as moral and exemplary damages in such amount
as the Court may deem reasonable to award to them. Another
complaint was filed in the same court by Lilia Ciocon claiming
damages against Negros Navigation, PNOC and PNOC Shipping for the
death of her husband Manuel Ciocon.
Negros Navigation, Capt. Santisteban, PNOC and PNOC Shipping
appealed the trial court's decision to the Court of Appeals. Later,
PNOC and PNOC Shipping withdrew their appeal citing a compromise
agreement reached by them with Negros Navigation; the Court of
Appeals granted the motion by a resolution dated 5 September 1988,
subject to the reservation made by Lilia Ciocon that she could not
be bound by the compromise agreement and would enforce the award
granted her by the trial court.
ISSUE
WON Negros Navigation and Capt. Santisteban were grossly
negligent during the events which culminated in the collision with
"Tacloban City" and the sinking of the "Don Juan" and the resulting
heavy loss of lives. (Consequently, WON petitioners were entitled
to award of moral and exemplary damages.)
RULING
We begin by noting that both the trial court and the Court of
Appeals considered the action brought by the sons and daughters of
the deceased Mecenas spouses against Negros Navigation as based on
quasi-delict. We believed that action is more appropriately
regarded as grounded on contract, the contract of carriage between
the Mecenas spouses as regular passengers who paid for their boat
tickets and Negros Navigation; the surviving children while not
themselves passengers are in effect suing the carrier in
representation of their deceased parents.3Thus, the suit filed by
the widow Lilia Ciocon was correctly treated by the trial and
appellate courts as based on contract (vis-a-vis Negros Navigation)
and as well on quasi-delict (vis-a-vis PNOC and PNOC Shipping). In
an action based upon a breach of the contract of carriage, the
carrier under our civil law is liable for the death of passengers
arising from the negligence or willful act of the carrier's
employees although such employees may have acted beyond the scope
of their authority or even in violation of the instructions of the
carrier,4which liability may include liability for moral
damages.5It follows that petitioners would be entitled to moral
damages so long as the collision with the "Tacloban City" and the
sinking of the "Don Juan" were caused or attended by negligence on
the part of private respondents.
In respect of the petitioners' claim for exemplary damages, it
is only necessary to refer to Article 2232 of the Civil Code:
Article 2332. In contracts and quasi-contracts, the court may
exemplary damages if the defendant acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner.6
Thus, whether petitioners are entitled to exemplary damages as
claimed must depend upon whether or not private respondents acted
recklessly, that is, with gross negligence.
Our own review of the record in the case at bar requires us to
answer this in the affirmative.
We believe that the behaviour of the captain of the "Don Juan"
in tills instance-playing mahjong "before and up to the time of
collision constitutes behaviour that is simply unacceptable on the
part of the master of a vessel to whose hands the lives and welfare
of at least seven hundred fifty (750) passengers had been
entrusted. Whether or not Capt. Santisteban was "off-duty" or
"on-duty" at or around the time of actual collision is quite
immaterial; there is, both realistically speaking and in
contemplation of law, no such thing as "off-duty" hours for the
master of a vessel at sea that is a common carrier upon whom the
law imposes the duty of extraordinary diligence-
[t]he duty 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.14
The record doesnotshow that was the first or only time that
Capt. Santisteban had entertained himself during a voyage by
playing mahjong with his officers and passengers; Negros Navigation
in permitting, or in failing to discover and correct such
behaviour, must be deemed grossly negligent.
Capt. Santisteban was also faulted in the Philippine Coast Guard
decision for failing after the collision, "to institute appropriate
measures to delay the sinking of M/V Don Juan." This appears to us
to be a euphemism for failure to maintain the sea-worthiness or the
water-tight integrity of the "Don Juan." The record shows that the
"Don Juan" sank within ten (10) to fifteen (15) minutes after
initial contact with the "Tacloban City.15While the failure of
Capt. Santisteban to supervise his officers and crew in the process
of abandoning the ship and his failure to avail of measures to
prevent the too rapid sinking of his vessel after collision, did
not cause the collision by themselves, such failures doubtless
contributed materially to the consequent loss of life and,
moreover, were indicative of the kind and level of diligence
exercised by Capt. Santisteban in respect of his vessel and his
officers and men prior to actual contact between the two (2)
vessels. The officer-on-watch in the "Don Juan" admitted that he
had failed to inform Capt. Santistebannot only of the "imminent
danger of collision" but even of "the actual collision itself"
There is also evidence that the "Don Juan" was carrying more
passengers than she had been certified as allowed to carry. The
total number of persons on board the "Don Juan" on that ill-starred
night of 22 April 1 980 was1,004, or 140 persons more than the
maximum lumber that could be safely carried by the "Don Juan," per
its own Certificate of Inspection.18We note in addition, thatonly
750 passengers had been listed in its manifestfor its final voyage;
in other words, at least 128 passengers on board had not even been
entered into the "Don Juan's" manifest. The "Don Juan's"
Certificate of Inspection showed that she carried life boat and
life raft accommodationsfor only 864 persons, the maximum number of
persons she was permitted to carry; in other words, she did not
carry enough boats and life rafts for all the persons actually on
board that tragic night of 22 April 1980.
We hold that under these circumstances, a presumption of gross
negligence on the part of the vessel (her officers and crew) and of
its ship-owner arises; this presumption was never rebutted by
Negros Navigation.
We conclude that Capt. Santisteban and Negros Navigation are
properly held liable for gross negligence in connection with the
collision of the "Don Juan" and "Tacloban City" and the sinking of
the "Don Juan" leading to the death of hundreds of passengers. We
find no necessity for passing upon the degree of negligence or
culpability properly attributable to PNOC and PNOC Shipping or the
master of the "Tacloban City," since they were never impleaded
here.
The Court is aware that petitioners here merely asked for the
restoration of the P 400.000.00 award of the trial court. We
underscore once more, however, the firmly settled doctrine that
this Court may consider and resolved all issues which must be
decided in order to render substantial justice to the parties,
including issues not explicity raised by the party affected. In the
case at bar, as inKapalaran Bus Line v. Coronado, et al.,30both the
demands of sustantial justice and the imperious requirements of
public policy compel us to the conclusion that the trial court's
implicit award of moral and exemplary damages was erronoeusly
deledted and must be restored and augmented and brought more
nearely to the level required by public policy and substantial
justice.
WHEREFORE, the Petition for Review oncertiorariis hereby GRANTED
and the Decision of the Court of Appeals insofar as it redurce the
amount of damages awarded to petitioners to P100,000.00 is hereby
REVERSED and SET ASIDE. The award granted by the trial court is
hereby RESTORED and AUGMENTED as follows:
(a) P 126,000.00 for actual damages;
(b) P 60,000.00 as compensatory damages for wrongful death;
(c) P 307,000.00 as moral damages;
(d) P 307,000.00 as exemplary damages making a total of P
800,000.00; and
(e) P 15,000.00 as attorney's fees
CLEMENTE BRIASvs. THE PEOPLE OF THE PHILIPPINES and HONORABLE
COURT OF APPEALS
FACTS
The evidence of the prosecution tends to show that in the
afternoon of January 6, 1957, Juanito Gesmundo bought a train
ticket at the railroad station in Tagkawayan, Quezon for his
55-year old mother Martina Bool and his 3-year old daughter Emelita
Gesmundo, who were bound for Barrio Lusacan, Tiaong, same province.
At about 2:00 p.m., Train No. 522 left Tagkawayan with the old
woman and her granddaughter among the passengers. At Hondagua the
train's complement were relieved, with Victor Millan taking over as
engineman, Clemente Brias as conductor, and Hermogenes Buencamino
as assistant conductor. Upon approaching Barrio Lagalag in Tiaong
at about 8:00 p.m. of that same night, the train slowed down and
the conductor shouted 'Lusacan', 'Lusacan'. Thereupon, the old
woman walked towards the left front door facing the direction of
Tiaong, carrying the child with one hand and holding her baggage
with the other. When Martina and Emelita were near the door, the
train suddenly picked up speed. As a result the old woman and the
child stumbled and they were seen no more. Next morning, the Tiaong
police received a report that two corpses were found along the
railroad tracks at Barrio Lagalag.
The Court of First Instance of Quezon convicted
defendant-appellant Clemente Brias for double homicide thru
reckless imprudence but acquitted Hermogenes Buencamino and Victor
Millan.
Court of Appeals affirmed the judgment of the lower court.
During the pendency of the criminal prosecution in the Court of
First Instance of Quezon, the heirs of the deceased victims filed
with the same court, a separate civil action for damages against
the Manila Railroad Company.
ISSUE
WON PETITIONER WAS NEGLIGENT UNDER THE FACTS AS FOUND BY THE
COURT.
RULING
YES. It is a matter of common knowledge and experience about
common carriers like trains and buses that before reaching a
station or flagstop they slow down and the conductor announces the
name of the place. It is also a matter of common experience that as
the train or bus slackens its speed, some passengers usually stand
and proceed to the nearest exit, ready to disembark as the train or
bus comes to a full stop. This is especially true of a train
because passengers feel that if the train resumes its run before
they are able to disembark, there is no way to stop it as a bus may
be stopped.
It was negligence on the conductor's part to announce the next
flag stop when said stop was still a full three minutes ahead. As
the respondent Court of Appeals correctly observed, "the
appellant's announcement was premature and erroneous.
That the announcement was premature and erroneous is shown by
the fact that immediately after the train slowed down, it
unexpectedly accelerated to full speed. Petitioner-appellant failed
to show any reason why the train suddenly resumed its regular
speed. The announcement was made while the train was still in
Barrio Lagalag.
The proximate cause of the death of the victims was the
premature and erroneous announcement of petitioner' appelant Brias.
This announcement prompted the victims to stand and proceed to the
nearest exit. Without said announcement, the victims would have
been safely seated in their respective seats when the train jerked
as it picked up speed. The connection between the premature and
erroneous announcement of petitioner-appellant and the deaths of
the victims is direct and natural, unbroken by any intervening
efficient causes.
Petitioner-appellant also argues that it was negligence per se
for Martina Bool to go to the door of the coach while the train was
still in motion and that it was this negligence that was the
proximate cause of their deaths.
We have carefully examined the records and we agree with the
respondent court that the negligence of petitioner-appellant in
prematurely and erroneously announcing the next flag stop was the
proximate cause of the deaths of Martina Bool and Emelita Gesmundo.
Any negligence of the victims was at most contributory and does not
exculpate the accused from criminal liability.
HERMINIO L. NOCUM vs. LAGUNA TAYABAS BUS COMPANY
FACTS
Appeal of the Laguna Tayabas Bus Co., defendant in the Court
below, from a judgment of the said court (Court of First Instance
of Batangas) in its Civil Case No. 834, wherein appellee Herminio
L. Nocum was plaintiff, sentencing appellant to pay appellee the
sum of P1,351.00 for actual damages and P500.00 as attorney's fees
with legal interest from the filing of the complaint plus costs.
Appellee, who was a passenger in appellant's Bus No. 120 then
making a trip within the barrio of Dita, Municipality of Bay,
Laguna, was injured as a consequence of the explosion of
firecrackers, contained in a box, loaded in said bus and declared
to its conductor as containing clothes and miscellaneous items by a
co-passenger.
ISSUE
WON the appellant (Laguna Tayabas Bus Company) did not observe
the extraordinary or utmost diligence of a very cautious person
required by the law for common carriers.
RULING
NO.
It is undisputed that before the box containing the firecrackers
were allowed to be loaded in the bus by the conductor, inquiry was
made with the passenger carrying the same as to what was in it,
since its "opening ... was folded and tied with abaca." (Decision
p. 16, Record on Appeal.) According to His Honor, "if proper and
rigid inspection were observed by the defendant, the contents of
the box could have been discovered and the accident avoided.
Refusal by the passenger to have the package opened was no excuse
because, as stated by Dispatcher Cornista, employees should call
the police if there were packages containing articles against
company regulations." That may be true, but it is Our considered
opinion that the law does not require as much. Article 1733 is not
as unbending as His Honor has held, for it reasonably qualifies the
extraordinary diligence required of common carriers for the safety
of the passengers transported by them to be "according to all the
circumstances of each case." In fact, Article 1755 repeats this
same qualification: "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 due regard
for all the circumstances."
In this particular case before Us, it must be considered that
while it is true the passengers of appellant's bus should not be
made to suffer for something over which they had no control, as
enunciated in the decision of this Court cited by His
Honor,1fairness demands that in measuring a common carrier's duty
towards its passengers, allowance must be given to the reliance
that should be reposed on the sense of responsibility of all the
passengers in regard to their common safety. It is to be presumed
that a passenger will not take with him anything dangerous to the
lives and limbs of his co-passengers, not to speak of his own. Not
to be lightly considered must be the right to privacy to which each
passenger is entitled. He cannot be subjected to any unusual
search, when he protests the innocuousness of his baggage and
nothing appears to indicate the contrary, as in the case at bar. In
other words, inquiry may be verbally made as to the nature of a
passenger's baggage when such is not outwardly perceptible, but
beyond this, constitutional boundaries are already in danger of
being transgressed. Calling a policeman to his aid, as suggested by
the service manual invoked by the trial judge, in compelling the
passenger to submit to more rigid inspection, after the passenger
had already declared that the box contained mere clothes and other
miscellaneous, could not have justified invasion of a
constitutionally protected domain. Police officers acting without
judicial authority secured in the manner provided by law are not
beyond the pale of constitutional inhibitions designed to protect
individual human rights and liberties. Withal, what must be
importantly considered here is not so much the infringement of the
fundamental sacred rights of the particular passenger herein
involved, but the constant threat any contrary ruling would pose on
the right of privacy of all passengers of all common carriers,
considering how easily the duty to inspect can be made an excuse
for mischief and abuse. Of course, when there are sufficient
indications that the representations of the passenger regarding the
nature of his baggage may not be true, in the interest of the
common safety of all, the assistance of the police authorities may
be solicited, not necessarily to force the passenger to open his
baggage, but to conduct the needed investigation consistent with
the rules of propriety and, above all, the constitutional rights of
the passenger. It is in this sense that the mentioned service
manual issued by appellant to its conductors must be
understood.
Appellant further invokes Article 1174 of the Civil Code which
relieves all obligors, including, of course, common carriers like
appellant, from the consequence of fortuitous events. The courta
quoheld that "the breach of contract (in this case) was not due to
fortuitous event and that, therefore, the defendant is liable in
damages." Since We hold that appellant has succeeded in rebutting
the presumption of negligence by showing that it has exercised
extraordinary diligence for the safety of its passengers,
"according to the circumstances of the (each) case", We deem it
unnecessary to rule whether or not there was any fortuitous event
in this case.
BATANGAS LAGUNA TAYABAS BUS COMPANY & ARMANDO PON vs.
INTERMEDIATE APPELLATE COURT, THE HEIRS OF PAZ VDA. DE PAMFILO, THE
HEIRS OF NORMA NERI, and BAYLON SALES and NENA VDA. DE ROSALES
FACTS
The collision between Bus No. 1046 of the Batangas Laguna
Tayabas Bus Company (BLTB, for brevity) driven by Armando Pon and
Bus No. 404 of Superlines Transportation Company (Superlines, for
brevity) driven by Ruben Dasco took place at the highway traversing
Barangay Isabong, Tayabas, Quezon in the afternoon of August 11,
1978, which collision resulted in the death of Aniceto Rosales,
Francisco Pamfilo and Romeo Neri and in several injuries to Nena
Rosales (wife of Anecito) and Baylon Sales, all passengers of the
BLTB Bus No. 1046. The evidence shows that as BLTB Bus No. 1046 was
negotiating the bend of the highway, it tried to overtake a Ford
Fiera car just as Bus No. 404 of Superlines was coming from the
opposite direction. Seeing thus, Armando Pon (driver of the BLTB
Bus) made a belated attempt to slacken the speed of his bus and
tried to return to his proper lane. It was an unsuccessful try as
the two (2) buses collided with each other.
Nena Vda. de Rosales and Baylon Sales and the surviving heirs of
the deceased Francisco Pamfilo, Aniceto Rosales and Romeo Neri
instituted separate cases in the Court of First Instance of
Marinduque against BLTB and Superlines together with their
respective drivers praying for damages, attorney's fees and
litigation expenses plus costs. Criminal cases against the drivers
of the two buses were filed in the Court of First Instance of
Quezon.
Defendants BLTB and Superlines, together with their drivers Pon
and Dasco, denied liability by claiming that they exercised due
care and diligence and shifted the fault, against each other.
It is argued by petitioners that if the intention of private
respondents were to file an action based onculpa contractualor
breach of contract of carriage, they could have done so by merely
impleading BLTB and its driver Pon. As it was in the trial court,
private respondents filed an action againstallthe defendants basing
their action onculpa aquilianaor tort.
ISSUE
WON THE ACTIONS OF PRIVATE RESPONDENTS ARE BASED ONCULPA
CONTRACTUAL
RULING
Petitioners' contentions deserve no merit. A reading of the
respondent court's decision shows that it anchored petitioners'
liability both onculpa contractual and culpa aquiliana.
It is settled that the proximate cause of the collision
resulting in the death of three and injuries to two of the
passengers of BLTB was thesole negligenceof the driver of the BLTB
Bus, whorecklessly operatedand drove said bus in a lane where
overtaking is not allowed by Traffic Rules and Regulations. Such
negligence and recklessness is binding against petitioner BLTB,
more so when we consider the fact that in an action based on a
contract of carriage, the court need not make an express finding of
fault or negligence on the part of the carrier in order to hold it
responsible for the payment of the damages sought by the passenger.
By the contract of carriage, the carrier BLTB assumed the express
obligation to transport the passengers to their destination safely
and to observe extraordinary diligence with a due regard for all
the circumstances, and any injury that might be suffered by its
passengers is right away attributable to the fault or negligence of
the carrier (Art. 1756, New Civil Code).
As ruled by the CA: It is well settled that a driver abandoning
his proper lane for the purpose of overtaking another vehicle in
ordinary situation has the duty to see that the road is clear and
not to proceed if he cannot do so in safety (People v. Enriquez, 40
O.G. No. 5, 984).
... Before attempting to pass the vehicle ahead, the rear driver
must see that the road is clear and if there is no sufficient room
for a safe passage, or the driver ahead does not turn out so as to
afford opportunity to pass, or if, after attempting to pass, the
driver of the overtaking vehicle finds that he cannot make the
passage in safety, the latter must slacken his speed so as to avoid
the danger of a collision, even bringing his car to a stop if
necessary. (3-4 Huddy Encyclopedia of Automobile Law, Sec. 212, p.
195).
The above rule becomes more particularly applicable in this case
when the overtaking took place on an ascending curved highway
divided into two lanes by a continuous yellow line. Appellant Pon
should have remembered that:
When a motor vehicle is approaching or rounding a curve there is
special necessity for keeping to the right side of the road and the
driver has not the right to drive on the left hand side relying
upon having time to turn to the right if a car is approaching from
the opposite direction comes into view. (42 C.J. 42 906).
Unless there is proof to the contrary, it is presumed that a
person driving a motor vehicle has been negligent if at the time of
the mishap, he was violating any traffic regulation. (Art. 2165,
Civil Code).
In failing to observe these simple precautions, BLTB's driver
undoubtedly failed to act with the diligence demanded by the
circumstances.
_______
Petitioners also contend that "a common carrier is not an
absolute insurer against all risks of travel and are not liable for
acts or accidents which cannot be foreseen or inevitable and that
responsibility of a common carrier for the safety of its passenger
prescribed in Articles 1733 and 1755 of the New Civil Code is not
susceptible of a precise and definite formulation." (p. 13, Rollo)
Petitioners' contention holds no water because they had totally
failed to point out any factual basis for their defense offorce
majeurein the light of the undisputed fact that the cause of the
collision was thesole negligenceandrecklessnessof petitioner
Armando Pon. For the defense of force majeureor act of God to
prosper the accident must be due to natural causes and exclusively
without human intervention.
LIABILITY OF THE APPELLANTS (APPELLATE COURT as affirmed by the
SC)
For his own negligence in recklessly driving the truck owned by
his employer, appellant Armando Pon is primarily liable (Article
2176, Civil Code).
On the other hand the liability of Pon's employer, appellant
BLTB, is also primary, direct and immediate in view of the fact
that the death of or injuries to its passengers was through the
negligence of its employee (Marahan v. Mendoza, 24 SCRA 888, 894),
and such liability does not cease even upon proof that BLTB had
exercised all the diligence of a good father of a family in the
selection and supervision of its employees (Article 1759, Civil
Code).
The common carrier's liability for the death of or injuries to
its passengers is based on its contractual obligation to carry its
passengers safely to their destination. That obligation is so
serious that the Civil Code requires "utmost diligence of very
cautious person (Article 1755, Civil Code). They are presumed to
have been at fault or to have acted negligently unless they prove
that they have observed extraordinary diligence" (Article 1756,
Civil Code). In the present case, the appellants have failed to
prove extraordinary diligence. Indeed, this legal presumption was
confirmed by the fact that the bus driver of BLTB was negligent. It
must follow that both the driver and the owner must answer for
injuries or death to its passengers.
The liability of BLTB is also solidarily with its driver (Viluan
v. Court of Appeals, 16 SCRA 742, 747) even though the liability of
the driver springs from quasi delict while that of the bus company
from contract. (pp. 17-19, Rollo)
PHILIPPINE AIRLINES, INC. vs. COURT OF APPEALS and PEDRO
ZAPATOS
FACTSOn 25 November 1976, private respondent filed a complaint
for damages for breach of contract of carriage2against Philippine
Airlines, Inc. (PAL). According to him, on 2 August 1976, he was
among the twenty-one (21) passengers of PAL Flight 477 that took
off from Cebu bound for Ozamiz City. The routing of this flight was
Cebu-Ozamiz-Cotabato. While on flight and just about fifteen (15)
minutes before landing at Ozamiz City, the pilot received a radio
message that the airport was closed due to heavy rains and
inclement weather and that he should proceed to Cotabato City
instead.
Upon arrival at Cotabato City, the PAL Station Agent informed
the passengers of their options to return to Cebu on flight 560 of
the same day and thence to Ozamiz City on 4 August 1975, or take
the next flight to Cebu the following day, or remain at Cotabato
and take the next available flight to Ozamiz City on 5 August
1975.3The Station Agent likewise informed them that Flight 560
bound for Manila would make a stop-over at Cebu to bring some of
the diverted passengers; that there were only six (6) seats
available as there were already confirmed passengers for Manila;
and, that the basis for priority would be the check-in sequence at
Cebu.
Private respondent chose to return to Cebu but was not
accommodated because he checked-in as passenger No. 9 on Flight
477. He insisted on being given priority over the confirmed
passengers in the accommodation, but the Station Agent refused
private respondent's demand explaining that the latter's
predicament was not due to PAL's own doing but to be aforce
majeure.4
Private respondent was left at the airport and could not even
hitch a ride in the Ford Fiera loaded with PAL personnel.6PAL
neither provided private respondent with transportation from the
airport to the city proper nor food and accommodation for his stay
in Cotabato City.
The following day, private respondent purchased a PAL ticket to
Iligan City. He informed PAL personnel that he would not use the
free ticket because he was filing a case against PAL.7In Iligan
City, private respondent hired a car from the airport to
Kolambugan, Lanao del Norte, reaching Ozamiz City by crossing the
bay in a launch.8His personal effects including the camera, which
were valued at P2,000.00 were no longer recovered.
On 13 January 1977, PAL filed its answer denying that it
unjustifiably refused to accommodate private respondent.9It alleged
that there was simply no more seat for private respondent on Flight
560 since there were only six (6) seats available and the priority
of accommodation on Flight 560 was based on the check-in sequence
in Cebu.
PAL vigorously maintains that private respondent's principal
cause of action was its alleged denial of private respondent's
demand for priority over the confirmed passengers on Flight 560.
Likewise, PAL points out that the complaint did not impute to PAL
neglect in failing to attend to the needs of the diverted
passengers; and, that the question of negligence was not and never
put in issue by the pleadings or proved at the trial.
Contrary to the above arguments, private respondent's amended
complaint touched on PAL's indifference and inattention to his
predicament.
With regard to the award of damages affirmed by the appellate
court, PAL argues that the same is unfounded. It asserts that it
should not be charged with the task of looking after the
passengers' comfort and convenience because the diversion of the
flight was due to a fortuitous event, and that if made liable, an
added burden is given to PAL which is over and beyond its duties
under the contract of carriage. It submits that granting
arguendothat negligence exists, PAL cannot be liable in damages in
the absence of fraud or bad faith; that private respondent failed
to apprise PAL of the nature of his trip and possible business
losses; and, that private respondent himself is to be blamed for
unreasonably refusing to use the free ticket which PAL issued.
ISSUE
WON PAL WAS NEGLIGENT IN CARING FOR ITS STRANDED PASSENGERS
RULING
The contract of air carriage is a peculiar one. Being imbued
with public interest, the law requires common carriers to carry the
passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with due
regard for all the circumstances.
The position taken by PAL in this case clearly illustrates its
failure to grasp the exacting standard required by law.
Undisputably, PAL's diversion of its flight due to inclement
weather was a fortuitous event. Nonetheless, such occurrence did
not terminate PAL's contract with its passengers. Being in the
business of air carriage and the sole one to operate in the
country, PAL is deemed equipped to deal with situations as in the
case at bar. What we said in one case once again must be
stressed,i.e., the relation of carrier and passenger continues
until the latter has been landed at the port of destination and has
left the carrier's premises.22Hence, PAL necessarily would still
have to exercise extraordinary diligence in safeguarding the
comfort, convenience and safety of its stranded passengers until
they have reached their final destination. On this score, PAL
grossly failed considering the then ongoing battle between
government forces and Muslim rebels in Cotabato City and the fact
that the private respondent was a stranger to the place.
While we find PAL remiss in its duty of extending utmost care to
private respondent while being stranded in Cotabato City, there is
no sufficient basis to conclude that PAL failed to inform him about
his non-accommodation on Flight 560, or that it was inattentive to
his queries relative thereto.
Admittedly, private respondent's insistence on being given
priority in accommodation was unreasonable considering the
fortuitous event and that there was a sequence to be observed in
the booking,i.e., in the order the passengers checked-in at their
port of origin. His intransigence in fact was the main cause for
his having to stay at the airport longer than was necessary.
Anent the plaint that PAL employees were disrespectful and
inattentive toward private respondent, the records are bereft of
evidence to support the same. Thus, the ruling of respondent Court
of Appeals in this regard is without basis.27On the contrary,
private respondent was attended to not only by the personnel of PAL
but also by its Manager."
WHEREFORE the decision appealed from is AFFIRMED with
modification however that the award of moral damages of Fifty
Thousand Pesos (P50,000.00) is reduced to Ten Thousand Pesos
(P10,000.00) while the exemplary damages of Ten Thousand Pesos
(P10,000.00) is also reduced to Five Thousand Pesos (P5,000.00).
The award of actual damages in the amount Five Thousand Pesos
(P5,000.00) representing business losses occasioned by private
respondent's being stranded in Cotabato City is deleted.
CONRADA VDA. DE ABETO, CARMELO ABETO, CECILIA ABETO, CONCEPCION
ABETO, MARIA ABETO, ESTELA ABETO, PERLA ABETO, PATRIA ABETO and
ALBERTO ABETO vs. PHILIPPINE AIR LINES, INCORPORATED
FACTS
Plaintiff's evidence shows that about 5:30 in the afternoon of
November 23, 1960, Judge Quirico Abeto, with the necessary tickets,
boarded the Philippine Air Lines' PI-C133 plane at the Mandurriao
Airport, Iloilo City for Manila. He was listed as the No. 18
passenger in its Load Manifest (Exhibit A). The plane which would
then take two hours from Iloilo to Manila did not reach its
destination and the next day there was news that the plane was
missing. After three weeks, it was ascertained that the plane
crashed at Mt. Baco, Province of Mindoro. All the passengers,
including Judge Abeto, must have been killed instantly and their
remains were scattered all over the area. Among the articles
recovered on the site of the crash was a leather bag with the name
"Judge Quirico Abeto."
When defendant-appellant would not hear demands for settlement
of damages, plaintiffs-appellees were compelled to hire counsel for
the institution and prosecution of this case.
Defendant-appellant tried to prove that the plane crash at Mt.
Baco was beyond the control of the pilot. The plane at the time of
the crash was airworthy for the purpose of conveying passengers
across the country as shown by the certificate of airworthiness
issued by the Civil Aeronautics Administration (CAA). There was
navigational error but no negligence or malfeasance on the part of
the pilot.
Further, deviation from its prescribed route was due to the bad
weather conditions between Mt. Baco and Romblon and strong winds
which caused the plane to drift to Mt. Baco. Under the
circumstances, appellant argues that the crash was a fortuitous
event and, therefore, defendant-appellant cannot be held liable
under the provisions of Article 1174 of the New Civil Code.
Besides, appellant tried to prove that it had exercised all the
cares, skill and diligence required by law on that particular
flight in question.
ISSUE
WON THE DEFENDANT IS LIABLE FOR VIOLATION OF ITS CONTRACT OF
CARRIAGE.
RULING
The provisions of the Civil Code on this question of liability
are clear and explicit. Article 1733 binds common carriers, "from
the nature of their business and by reasons of public policy, ...
to observe extraordinary diligence in the vigilance ... for the
safety of the passengers transported by them according to all the
circumstances of each case." Article 1755 establishes the standard
of care required of a common carrier, which is, "to carry the
passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with due
regard for all the circumstances." Article 1756 fixes the burden of
proof by providing that "in case of death of or injuries to
passengers, common carriers are presumed to have been at fault or
to have acted negligently, unless they prove that they observed
extra-ordinary diligence as prescribed in Articles 1733 and 1755."
Lastly, Article 1757 states that "the responsibility of a common
carrier for the safety of passengers ... cannot be dispensed with
or lessened by stipulation, by the posting of notices, by
statements on tickets, or otherwise."
The prescribed airway of plane PI-C133 that afternoon of
November 23, 1960, with Capt. de Mesa, as the pilot, was
Iloilo-Romblon-Manila, denominated as airway "Amber l," and the
prescribed elevation of the flight was 6,000 ft. The fact is, the
plane did not take the designated route because it was some 30
miles to the west when it crashed at Mt. Baco. According to
defendant's witness, Ramon A. Pedroza, Administrative Assistant of
the Philippine Air Lines, Inc., this tragic crash would have not
happened had the pilot continued on the route indicated.
At any rate, in the absence of a satisfactory explanation by
appellant as to how the accident occurred, the presumption is, it
is at fault.
In an action based on a contract of carriage, the court need not
make an express finding of fault or negligence on the part of the
carrier in order to hold it responsible to pay the damages sought
for by the passenger. By the contract of carriage, the carrier
assumes the express obligation to transport the passenger to his
destination safely and to observe extraordinary diligence with a
due regard for all the circumstances, and any injury that might be
suffered by the passenger is right away attributable to the fault
or negligence of the carrier (Art. 1756, New Civil Code). This is
an exception to the general rule that negligence must be proved.
(Batangas Transportation Company vs. Caguimbal, 22 SCRA 171.)
MALAYAN INSURANCE CO., INC. vs. PHILIPPINES FIRST INSURANCE CO.,
INC. and REPUTABLE FORWARDER SERVICES, INC.
FACTS
Since 1989, Wyeth Philippines, Inc. (Wyeth) and respondent
Reputable Forwarder Services, Inc. (Reputable) had been annually
executing a contract of carriage, whereby the latter undertook to
transport and deliver the formers products to its customers,
dealers or salesmen.3
On November 18, 1993, Wyeth procured Marine Policy No. MAR 13797
(Marine Policy) from respondent Philippines First Insurance Co.,
Inc. (Philippines First) to secure its interest over its own
products. Philippines First thereby insured Wyeths nutritional,
pharmaceutical and other products usual or incidental to the
insureds business while the same were being transported or shipped
in the Philippines.
Wyeth executed its annual contract of carriage with Reputable.
It turned out, however, that the contract was not signed by Wyeths
representative/s.4Nevertheless, it was admittedly signed by
Reputables representatives, the terms thereof faithfully observed
by the parties and, as previously stated, the same contract of
carriage had been annually executed by the parties every year since
1989.
The contract also required Reputable to secure an insurance
policy on Wyeths goods.7Thus, on February 11, 1994, Reputable
signed a Special Risk Insurance Policy (SR Policy) with petitioner
Malayan for the amount of P1,000,000.00.
On October 6, 1994, during the effectivity of the Marine Policy
and SR Policy, Reputable received from Wyeth 1,000 boxes of Promil
infant formula worth P2,357,582.70 to be delivered by Reputable to
Mercury Drug Corporation in Libis, Quezon City. Unfortunately, on
the same date, the truck carrying Wyeths products was hijacked by
about 10 armed men. They threatened to kill the truck driver and
two of his helpers should they refuse to turn over the truck and
its contents to the said highway robbers. The hijacked truck was
recovered two weeks later without its cargo.
On March 8, 1995, Philippines First, after due investigation and
adjustment, and pursuant to the Marine Policy, paid Wyeth
P2,133,257.00 as indemnity. Philippines First then demanded
reimbursement from Reputable, having been subrogated to the rights
of Wyeth by virtue of the payment. The latter, however, ignored the
demand.
Consequently, Philippines First instituted an action for sum of
money against Reputable on August 12, 1996.8In its complaint,
Philippines First stated that Reputable is a "private corporation
engaged in the business of a common carrier." In its
answer,9Reputable claimed that it is a private carrier. It also
claimed that it cannot be made liable under the contract of
carriage with Wyeth since the contract was not signed by Wyeths
representative and that the cause of the loss was force majeure,
i.e., the hijacking incident.
Reputable impleaded Malayan as third-party defendant in an
effort to collect the amount covered in the SR Policy. According to
Reputable, "it was validly insured with Malayan for P1,000,000.00
with respect to the lost products under the latters Insurance
Policy No. SR-0001-02577 effective February 1, 1994 to February 1,
1995" and that the SR Policy covered the risk of robbery or
hijacking.10
Disclaiming any liability, Malayan argued, among others, that
under Section 5 of the SR Policy, the insurance does not cover any
loss or damage to property which at the time of the happening of
such loss or damage is insured by any marine policy and that the SR
Policy expressly excluded third-party liability.
ISSUES
1) Whether Reputable is a private carrier;
2) Whether Reputable is strictly bound by the stipulations in
its contract of carriage with Wyeth, such that it should be liable
for any risk of loss or damage, for any cause whatsoever, including
that due to theft or robbery and other force majeure;
3) Whether the RTC and CA erred in rendering "nugatory" Sections
5 and Section 12 of the SR Policy; and
4) Whether Reputable should be held solidarily liable with
Malayan for the amount of P998,000.00 due to Philippines First.
RULING
1. Reputable is a private carrier. Well-entrenched in
jurisprudence is the rule that factual findings of the trial court,
especially when affirmed by the appellate court, are accorded the
highest degree of respect and considered conclusive between the
parties, save for certain exceptional and meritorious
circumstances, none of which are present in this case.18
Malayan relies on the alleged judicial admission of Philippines
First in its complaint that Reputable is a common carrier.
Consequently, pursuant to Article 1745(6) of the Civil Code, the
liability of Reputable for the loss of Wyeths goods should be
dispensed with, or at least diminished.
In this case, the pleader or the plaintiff who alleged that
Reputable is a common carrier was Philippines First. It cannot, by
any stretch of imagination, be made conclusive as against Reputable
whose nature of business is in question. It should be stressed that
Philippines First is not privy to the SR Policy between Wyeth and
Reputable; rather, it is a mere subrogee to the right of Wyeth to
collect from Reputable under the terms of the contract of carriage.
Philippines First is not in any position to make any admission,
much more a definitive pronouncement, as to the nature of
Reputables business and there appears no other connection between
Philippines First and Reputable which suggests mutual familiarity
between them. Moreover, records show that the alleged judicial
admission of Philippines First was essentially disputed by
Reputable when it stated in paragraphs 2, 4, and 11 of its answer
that it is actually a private or special carrier. The settled rule
is that mere allegation is not proof.
Under Article 1732 of the Civil Code, common carriers are
persons, corporations, firms, or associations engaged in the
business of carrying or transporting passenger or goods, or both by
land, water or air for compensation, offering their services to the
public. On the other hand, a private carrier is one wherein the
carriage is generally undertaken by special agreement and it does
not hold itself out to carry goods for the general public.28A
common carrier becomes a private carrier when it undertakes to
carry a special cargo or chartered to a special person only.29For
all intents and purposes, therefore, Reputable operated as a
private/special carrier with regard to its contract of carriage
with Wyeth.
2. Reputable is bound by the terms of the contract of carriage.
The extent of a private carriers obligation is dictated by the
stipulations of a contract it entered into, provided its
stipulations, clauses, terms and conditions are not contrary to
law, morals, good customs, public order, or public policy. "The
Civil Code provisions on common carriers should not be applied
where the carrier is not acting as such but as a private carrier.
Public policy governing common carriers has no force where the
public at large is not involved."30
Thus, being a private carrier, the extent of Reputables
liability is fully governed by the stipulations of the contract of
carriage, one of which is that it shall be liable to Wyeth for the
loss of the goods/products due to any and all causes whatsoever,
including theft, robbery and other force majeure while the
goods/products are in transit and until actual delivery to Wyeths
customers, salesmen and dealers.
3. Malayan refers to Section 5 of its SR Policy as an "over
insurance clause" and to Section 12 as a "modified other insurance
clause".32In rendering inapplicable said provisions in the SR
Policy, the CA ruled in this wise:
Since Sec. 5 calls for Malayans complete absolution in case the
other insurance would be sufficient to cover the entire amount of
the loss, it is in direct conflict with Sec. 12 which provides only
for a pro-rated contribution between the two insurers. Being the
later provision, and pursuant to the rules on interpretation of
contracts, Sec. 12 should therefore prevail.
The intention of both Reputable and Malayan should be given
effect as against the wordings of Sec. 12 of their contract, as it
was intended by the parties to operate only in case of double
insurance, or where the benefits of the policies of both
plaintiff-appellee and Malayan should pertain to Reputable alone.
But since the court a quo correctly ruled that there is no double
insurance in this case inasmuch as Reputable was not privy thereto,
and therefore did not stand to benefit from the policy issued by
plaintiff-appellee in favor of Wyeth, then Malayans stand should be
rejected.
To rule that Sec. 12 operates even in the absence of double
insurance would work injustice to Reputable which, despite paying
premiums for a P1,000,000.00 insurance coverage, would not be
entitled to recover said amount for the simple reason that the same
property is covered by another insurance policy, a policy to which
it was not a party to and much less, from which it did not stand to
benefit. Plainly, this unfair situation could not have been the
intention of both Reputable and Malayan in signing the insurance
contract in question.
Section 5 is actually the other insurance clause (also called
"additional insurance" and "double insurance"). In this case,
similar to Condition No. 3 in Geagonia, Section 5 does not provide
for the nullity of the SR Policy but simply limits the liability of
Malayan only up to the excess of the amount that was not covered by
the other insurance policy. In interpreting the "other insurance
clause" in Geagonia, the Court ruled that the prohibition applies
only in case of double insurance. The Court ruled that in order to
constitute a violation of the clause, the other insurance must be
upon same subject matter, the same interest therein, and the same
risk. Thus, even though the multiple insurance policies involved
were all issued in the name of the same assured, over the same
subject matter and covering the same risk, it was ruled that there
was no violation of the "other insurance clause" since there was no
double insurance.
Section 12 of the SR Policy, on the other hand, is the over
insurance clause. More particularly, it covers the situation where
there is over insurance due to double insurance. In such case,
Section 15 provides that Malayan shall "not be liable to pay or
contribute more than its ratable proportion of such loss or
damage." This is in accord with the principle of contribution
provided under Section 94(e) of the Insurance Code,37which states
that "where the insured is over insured by double insurance, each
insurer is bound, as between himself and the other insurers, to
contribute ratably to the loss in proportion to the amount for
which he is liable under his contract."
Clearly, both Sections 5 and 12 presuppose the existence of a
double insurance. The pivotal question that now arises is whether
there is double insurance in this case such that either Section 5
or Section 12 of the SR Policy may be applied.
By the express provision of Section 93 of the Insurance Code,
double insurance exists where the same person is insured by several
insurers separately in respect to the same subject and interest.
The requisites in order for double insurance to arise are as
follows:38
1. The person insured is the same;
2. Two or more insurers insuring separately;
3. There is identity of subject matter;
4. There is identity of interest insured; and
5. There is identity of the risk or peril insured against.
In the present case, while it is true that the Marine Policy and
the SR Policy were both issued over the same subject matter, i.e.
goods belonging to Wyeth, and both covered the same peril insured
against, it is, however, beyond cavil that the said policies were
issued to two different persons or entities. It is undisputed that
Wyeth is the recognized insured of Philippines First under its
Marine Policy, while Reputable is the recognized insured of Malayan
under the SR Policy. The fact that Reputable procured Malayans SR
Policy over the goods of Wyeth pursuant merely to the stipulated
requirement under its contract of carriage with the latter does not
make Reputable a mere agent of Wyeth in obtaining the said SR
Policy.
Therefore, even though the two concerned insurance policies were
issued over the same goods and cover the same risk, there arises no
double insurance since they were issued to two different
persons/entities having distinct insurable interests. Necessarily,
over insurance by double insurance cannot likewise exist. Hence, as
correctly ruled by the RTC and CA, neither Section 5 nor Section 12
of the SR Policy can be applied.
4. Reputable is not solidarily liable with Malayan. There is
solidary liability only when the obligation expressly so states,
when the law so provides or when the nature of the obligation so
requires.
In Heirs of George Y. Poe v. Malayan lnsurance Company.,
lnc.,42the Court ruled that:
Where the insurance contract provides for indemnity against
liability to third persons, the liability of the insurer is direct
and such third persons can directly sue the insurer. The direct
liability of the insurer under indemnity contracts against third
party[- ]liability does not mean, however, that the insurer can be
held solidarily liable with the insured and/or the other parties
found at fault, since they are being held liable under different
obligations. The liability of the insured carrier or vehicle owner
is based on tort, in accordance with the provisions of the Civil
Code; while that of the insurer arises from contract, particularly,
the insurance policy:43(Citation omitted and emphasis supplied)
Suffice it to say that Malayan's and Reputable's respective
liabilities arose from different obligations- Malayan's is based on
the SR Policy while Reputable's is based on the contract of
carriage.
LOADMASTERS CUSTOMS SERVICES, INC. vs. GLODEL BROKERAGE
CORPORATIONand R&B INSURANCE CORPORATION
FACTS
OnAugust 28, 2001, R&B Insurance issued Marine Policy No.
MN-00105/2001 in favor ofColumbiato insure the shipment of 132
bundles of electric copper cathodes against All Risks.
Columbiaengaged the services of Glodel for the release and
withdrawal of the cargoes from the pier and the subsequent delivery
to its warehouses/plants.Glodel, in turn, engaged the services of
Loadmasters for the use of its delivery trucks to transport the
cargoes toColumbias warehouses/plants in Bulacan
andValenzuelaCity.
The goods were loaded on board twelve (12) trucks owned by
Loadmasters, driven by its employed drivers and accompanied by its
employed truck helpers.Of the six (6) trucks en route to Balagtas,
Bulacan, however, only five (5) reached the destination.One (1)
truck, loaded with 11 bundles or 232 pieces of copper cathodes,
failed to deliver its cargo.
Later on, the said truck, an Isuzu with Plate No. NSD-117, was
recovered but without the copper cathodes.Because of this
incident,Columbiafiled with R&B Insurance a claim for insurance
indemnity in the amount ofP1,903,335.39. R&B Insurance,
thereafter, filed a complaint for damages against both Loadmasters
and Glodel.
ISSUES
WON GLODEL AND LOADMASTERS ARE COMMON CARRIERS.
WON PETITIONER LOADMASTERS CAN BE HELD LIABLE TO
RESPONDENTGLODEL DESPITE THE FACT THAT GLODEL DID NOT FILE A
CROSS-CLAIM AGAINST LOADMASTERS
WON LOADMASTERS CAN BE LEGALLY CONSIDERED AS AN AGENT OF
RESPONDENT GLODEL
RULING
Subrogation is the substitution of one person in the place of
another with reference to a lawful claim or right, so that he who
is substituted succeeds to the rights of the other in relation to a
debt or claim, including its remedies or securities.[9]Doubtless,
R&B Insurance is subrogated to the rights of the insured to the
extent of the amount it paid the consignee under the marine
insurance. As subrogee of the rights and interest of the consignee,
R&B Insurance has the right to seek reimbursement from either
Loadmasters or Glodel or both for breach of contract and/or
tort.
1. YES. Under Article 1732 of the Civil Code,common carriersare
persons, corporations, firms, or associations engaged in the
business of carrying or transporting passenger or goods, or both by
land, water or air for compensation, offering their services to the
public.
Based on the aforecited definition, Loadmasters is a common
carrier because it is engaged in the business of transporting goods
by land, through its trucking service.It is acommon carrieras
distinguished from aprivate carrierwherein thecarriage is generally
undertaken by special agreement and it does not hold itself out to
carry goods for the general public.[10]The distinction is
significant in the sense that the rights and obligations of the
parties to a contract of private carriage are governed principally
by their stipulations, not by the law on common carriers.[11]
In the present case, there is no indication that the undertaking
in the contract between Loadmasters and Glodel was private in
character.There is no showing that Loadmasters solely and
exclusively rendered services to Glodel. In fact,
Loadmastersadmittedthat it is a common carrier.[12]
In the same vein, Glodel is also considered a common carrier
within the context of Article 1732.In its Memorandum,[13]it states
that it is a corporation duly organized and existing under the laws
of the Republic of thePhilippinesand is engaged in the business of
customs brokering.
Loadmasters and Glodel, being both common carriers, are mandated
from the nature of their business and for reasons of public policy,
to observe the extraordinary diligence in the vigilance over the
goods transported by them according to all the circumstances of
such case, as required by Article 1733 of the Civil Code.When the
Court speaks of extraordinary diligence, itis that extreme measure
of care and caution which persons of unusual prudence and
circumspection observe for securing and preserving their own
property or rights.[15]This exacting standard imposed on common
carriers in a contract of carriage of goods is intended to tilt the
scales in favor of the shipper who is at the mercy of the common
carrier once the goods have been lodged for shipment.[16]Thus, in
case of loss of the goods, the common carrier is presumed to have
been at fault or to have acted negligently.[17]This presumption of
fault or negligence, however, may be rebutted by proof that the
common carrier has observed extraordinary diligence over the
goods.
LIABILITY OF GLODEL AND LOADMASTERS: Premises considered, the
Court is of the view that both Loadmasters and Glodel are jointly
and severally liable to R & B Insurance for the loss of the
subject cargo.Under Article 2194 of the New Civil Code, the
responsibility of two or more persons who are liable for a
quasi-delict is solidary.
It is not disputed that the subject cargo was lost while in the
custody of Loadmasters whose employees (truck driver and helper)
were instrumental in the hijacking or robbery of the shipment.As
employer, Loadmasters should be made answerable for the damages
caused by its employees who acted within the scope of their
assigned task of delivering the goods safely to the warehouse.
Whenever an employees negligence causes damage or injury to
another, there instantly arises a presumptionjuris tantumthat the
employer failed to exercisediligentissimi patris familiesin the
selection(culpa in eligiendo)or supervision(culpa in vigilando)of
its employees.[20]To avoid liability for a quasi-delict committed
by its employee, an employer must overcome the presumption by
presenting convincing proof that he exercised the care and
diligence of a good father of a family in the selection and
supervision of his employee.[21]In this regard, Loadmasters
failed.
Glodel is also liable because of its failure to exercise
extraordinary diligence.It failed to ensure that Loadmasters would
fully comply with the undertaking to safely transport the subject
cargo to the designated destination.It should have been more
prudent in entrusting the goods to Loadmasters by taking
precautionary measures, such as providing escorts to accompany the
trucks in delivering the cargoes.Glodel should, therefore, be held
liable with Loadmasters.Its defense offorce majeureis
unavailing.
2. Undoubtedly, Glodel has a definite cause of action against
Loadmasters for breach of contract of service as the latter is
primarily liable for the loss of the subject cargo.In this case,
however, it cannot succeed in seeking judicial sanction against
Loadmasters because the records disclose that it did not properly
interpose a cross-claim against the latter.Glodel did not even pray
that Loadmasters be liable for any and all claims that it may be
adjudged liable in favor of R&B Insurance.Under the Rules, a
compulsory counterclaim,or a cross-claim, not set up shall be
barred.[25]Thus, a cross-claim cannot be set up for the first time
on appeal.
3. At this juncture, the Court clarifies that there exists no
principal-agent relationship between Glodel and Loadmasters, as
erroneously found by the CA.Article 1868 of the Civil Code
provides: By the contract of agency a person binds himself to
render some service or to do something in representation or on
behalf of another, with the consent or authority of the latter.The
elements of a contract of agency are: (1) consent, express or
implied, of the parties to establish the relationship; (2) the
object is the execution of a juridical act in relation to a third
person; (3) the agent acts as a representative and not for himself;
(4) the agent acts within the scope of his authority.[22]
Accordingly, there can be no contract of agency between the
parties.Loadmasters never represented Glodel.Neither was it ever
authorized to make such representation.It is a settled rule that
the basis for agency is representation, that is, the agent acts for
and on behalf of the principal on matters within the scope of his
authority and said acts have the same legal effect as if they were
personally executed by the principal.On the part of the principal,
there must be an actual intention to appoint or an intention
naturally inferable from his words or actions, while on the part of
the agent, there must be an intention to accept the appointment and
act on it.[23]Such mutual intent is not obtaining in this case.
SPOUSES DANTE CRUZ and LEONORA CRUZ vs. SUN HOLIDAYS, INC.
FACTS
Spouses Dante and Leonora Cruz (petitioners) lodged a Complaint
against Sun Holidays, Inc. for damages arising from the death of
their son Ruelito C. Cruz (Ruelito) who perished with his wife on
September 11, 2000 on board the boat M/B Coco Beach III that
capsized en route to Batangas from Puerto Galera, Oriental Mindoro
where the couple had stayed at Coco Beach Island Resort (Resort)
owned and operated by respondent.
The stay of the newly wed Ruelito and his wife at the Resort
from September 9 to 11, 2000 was by virtue of a tour
package-contract with respondent that included transportation to
and from the Resort and the point of departure in Batangas.
On September 11, 2000, as it was still windy, Matute 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 to Batangas.
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.
Help came after about 45 minutes when two boats owned by Asia
Divers in Sabang, Puerto Galera passed by the capsized M/B Coco
Beach III. Boarded on those two boats were 22 persons, consisting
of 18 passengers and four crew members, who were brought to Pisa
Island. Eight passengers, including petitioners son and his wife,
died during the incident.
Petitioners allege 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 the Philippine
Atmospheric, Geophysical and Astronomical Services Administration
(PAGASA) as early as 5:00 a.m. of September 11, 2000.6
In its Answer,7respondent denied being a common carrier,
alleging that its boats are not available to the general public as
they only ferry Resort guests and crew members. Nonetheless, it
claimed that it exercised the utmost diligence in ensuring the
safety of its passengers; contrary to petitioners allegation, there
was no storm on September 11, 2000 as the Coast Guard in fact
cleared the voyage; and M/B Coco Beach III was not filled to
capacity and had sufficient life jackets for its passengers.
ISSUES
WON RESPONDENT IS A COMMON CARRIER.
WON RESPONDENT WAS GUILTY OF NEGLIGENCE, THUS, IN BREACH OF ITS
CONTRACT OF CARRIAGE
RULING
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 makesno distinctionbetweenone whoseprincipal
businessactivityis the carrying of persons or goods or both, and
one who does such carrying only as anancillary activity(in local
idiom, as "a sideline"). Article 1732 also carefully avoids making
any distinction between a person or enterprise offering
transportation service on aregular or scheduled basisand one
offering such service on anoccasional, 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 anarrow segment of the general population. We
think that Article 1733 deliberately refrained from making such
distinctions.
So understood, the concept of "common carrier" under Article
1732 may be seen to coincide neatly with the notion of "public
service," under the Public Service Act (Commonwealth Act No. 1416,
as amended) which at least partially supplements the law on common
carriers set forth in the Civil Code. Under Section 13, paragraph
(b) of the Public Service Act, "public service" includes:
. . . 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 . . .18(emphasis and underscoring
supplied.)
Indeed, respondent is a common carrier. Its ferry services are
so intertwined with its main business as to be properly considered
ancillary thereto. The constancy of respondents ferry services in
its resort operations is underscored by its having its own Coco
Beach boats. And the tour packages it offers, which include the
ferry services, may be availed of by anyone who can afford to pay
the same. These services are thus available to the public.
That respondent does not charge a separate fee or fare for its
ferry services is of no moment. It would be imprudent to suppose
that it provides said services at a loss. The Court is aware of the
practice of beach resort operators offering tour packages to factor
the transportation fee in arriving at the tour package price. That
guests who opt not to avail of respondents ferry services pay