PEDRO DE GUZMAN vs.

COURT OF APPEALS and ERNESTO CENDANA

FACTS: Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and scrap metal in Pangasinan, and bring such
material to Manila for resale. He utilized two (2) six-wheeler trucks which he owned for hauling the material to Manila. He charged
freight rates which were commonly lower than regular commercial rates for the cargo loaded in his vehicle. Pedro de Guzman a
merchant and authorized dealer of General Milk Company contracted with Cendana for the hauling of 750 cartons of Liberty filled milk
from a warehouse of General Milk in Makati, Rizal. 150 cartons were loaded on a truck driven by Cendana himself, while 600 cartons
were placed on board the other truck which was driven by Manuel Estrada, Cendanas driver and employee. The other 600 boxes
never reached de Guzman, since the truck which carried these boxes was hijacked somewhere along the MacArthur Highway in
Paniqui, Tarlac, by armed men who took with them the truck, its driver, his helper and the cargo. Having failed to exercise the
extraordinary diligence required of him by the law, he is held liable for the value of the undelivered goods. Cendana denied that he
was a common carrier and argued that he could not be held responsible for the value of the lost goods, such loss having been due to
force majeure.

ISSUE: Whether or not Ernesto Cendana may, under the facts earlier set forth, be properly characterized as a common carrier?
Whether or not high jacking with robbery can be properly regarded as a fortuitous event that can exempt the carrier?

HELD: The trial court rendered a Decision finding private respondent to be a common carrier and holding him liable for the value of
the undelivered goods as damages and as attorney's fees. The Court of Appeals reversed the judgment of the trial court and held that
respondent had been engaged in transporting return loads of freight "as a casual occupation a sideline to his scrap iron business"
and not as a common carrier. Liability arises the moment a person or firm acts as a common carrier, without regard to whether or not
such carrier has also complied with the requirements of the applicable regulatory statute and implementing regulations and has been
granted a certificate of public convenience or other franchise. To exempt private respondent from the liabilities of a common carrier
because he has not secured the necessary certificate of public convenience, would be offensive to sound public policy; that would be
to reward private respondent precisely for failing to comply with applicable statutory requirements.
Common carriers, "by the nature of their business and for reasons of public policy" 2 are held to a very high degree of care and
diligence ("extraordinary diligence") in the carriage of goods as well as of passengers. Article 1734 establishes the general rule that
common carriers are responsible for the loss, destruction or deterioration of the goods which they carry, "unless the same is due to
any of the following causes only:
(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 above list of causes of loss, destruction or deterioration which exempt the common carrier for responsibility therefor is a closed
list. Causes falling outside the foregoing list, even if they appear to constitute a species of force majeure fall within the scope of Article
1735, which provides as follows: In all cases other than those mentioned in numbers 1, 2, 3, 4 and 5 of the preceding article, if the
goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless
they prove that they observed extraordinary diligence as required in Article 1733.(Emphasis supplied)
The limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the goods are lost as a
result of a robbery which is attended by "grave or irresistible threat, violence or force." In the instant case, armed men held up the
second truck owned by private respondent which carried petitioner's cargo. The occurrence of the loss must reasonably be regarded
as quite beyond the control of the common carrier and properly regarded as a fortuitous event. It is necessary to recall that even
common carriers are not made absolute insurers against all risks of travel and of transport of goods, and are not held liable for acts or
events which cannot be foreseen or are inevitable, provided that they shall have complied with the rigorous standard of extraordinary
diligence. Cendana is not liable for the value of the undelivered merchandise which was lost because of an event
entirely beyond private respondent's control. Petition for Review on certiorari is hereby DENIED and the Decision of the Court of
Appeals dated 3 August 1977is AFFIRMED.


CRISOSTOMO vs. CA, 409 SCRA 528, 2003

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. A 5% discount on the total cost of
P74,322.70 which included the airfare was given to the petitioner. The booking fee was also waived because petitioners niece,
Meriam Menor, was respondents ticketing manager. On June 12, 1991, Menor went to her aunts residence to deliver petitioners
travel documents and plane tickets. In return, petitioner gave the full payment for the package tour. Menor then told her to be at the
NAIA on Saturday, June 15, 1991, two hours before her flight on board British Airways. Without checking her travel documents,
petitioner went to NAIA and to her 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 called up Menor to complain and Menor
suggested upon petitioner to take another tour British Pageant. Petitioner was asked anew to pay US$785.00. Petitioner gave
respondent US$300 as partial payment and commenced the trip.

ISSUE: Whether or not respondent Caravan did not observe the standard of care required of a common carrier when it informed the
petitioner wrongly of the flight schedule.

HELD: The petition was denied for lack of merit. The decision of the Court of Appeals was affirmed.
A common carrier is defined under Article 1732 of the Civil Code as persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water or air, for compensation, affecting their services to
the public. It is obvious from the above definition that 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. 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.
The standard of care required of respondent is that of a good father of a family under Article 1173 of the Civil Code. This connotes
reasonable care consistent with that which an ordinarily prudent person would have observed when confronted with a similar situation.
It is clear that respondent performed its prestation under the contract as well as everything else that was essential to book petitioner
for the tour. Had petitioner exercised due diligence in the conduct of her affairs, there would have been no reason for her to miss the
flight. Needless to say, after the travel papers were delivered to petitioners, it became incumbent upon her to take ordinary care of her
concerns. This undoubtedly would require that she at least read the documents in order to assure herself of the important details
regarding the trip.


ABOITIZ SHIPPING vs. CA, GR No. 84458, 1989

FACTS: Anacleto Viana boarded the vessel M/V Antonia, owned by Aboitiz Shipping Corporation, at the port at San Jose, Occidental
Mindoro, bound for Manila. After said vessel had landed, the Pioneer Stevedoring Corporation took over the exclusive control of the
cargoes loaded on said vessel pursuant to the Memorandum of Agreement between Pioneer and petitioner Aboitiz. The crane owned
by Pioneer 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. He was thereafter brought to the hospital where he later died. Private
respondents Vianas filed a complaint for damages against petitioner for breach of contract of carriage. Aboitiz denied responsibility
contending that at the time of the accident, the vessel was completely under the control of respondent Pioneer Stevedoring
Corporation as the exclusive stevedoring contractor of Aboitiz, which handled the unloading of cargoes from the vessel of Aboitiz.

ISSUE: Whether or not Aboitiz is negligent and is thus liable for Vianas death.

HELD: Yes. The victim Anacleto Viana is guilty of contributory negligence, but it was the negligence of Aboitiz in prematurely turning
over the vessel to the arrastre operator for the unloading of cargoes which was the direct, immediate and proximate cause of the
victim's death. The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of
destination and has left the vessel owner's dock or premises. Once created, the relationship will not ordinarily terminate until the
passenger has, after reaching his destination, safely alighted from the carrier's conveyance or had a reasonable opportunity to leave
the carrier's premises. All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed
passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances, and
includes a reasonable time to see after his baggage and prepare for his departure. The carrier-passenger relationship is not
terminated merely by the fact that the person transported has been carried to his destination if, for example, such person remains in
the carrier's premises to claim his baggage. It is apparent from the foregoing that what prompted the Court to rule as it did in said case
is the fact of the passenger's reasonable presence within the carrier's premises. That reasonableness of time should be made to
depend on the attending circumstances of the case, such as the kind of common carrier, the nature of its business, the customs of the
place, and so forth, and therefore precludes a consideration of the time element per se without taking into account such other factors.
It is thus of no moment whether in the cited case of La Mallorca there was no appreciable interregnum for the passenger therein to
leave the carrier's premises whereas in the case at bar, an interval of one (1) hour had elapsed before the victim met the accident.
The primary factor to be considered is the existence of a reasonable cause as will justify the presence of the victim on or near the
petitioner's vessel. We believe there exist such a justifiable cause. It is of common knowledge that, by the very nature of petitioner's
business as a shipper, the passengers of vessels are allotted a longer period of time to disembark from the ship than other common
carriers such as a passenger bus. With respect to the bulk of cargoes and the number of passengers it can load, such vessels are
capable of accommodating a bigger volume of both as compared to the capacity of a regular commuter bus. Consequently, a ship
passenger will need at least an hour as is the usual practice, to disembark from the vessel and claim his baggage whereas a bus
passenger can easily get off the bus and retrieve his luggage in a very short period of time. Verily, petitioner cannot categorically
claim, through the bare expedient of comparing the period of time entailed in getting the passenger's cargoes, that the ruling in La
Mallorca is inapplicable to the case at bar. On the contrary, if we are to apply the doctrine enunciated therein to the instant petition, we
cannot in reason doubt that the victim Anacleto Viana was still a passenger at the time of the incident. When the accident occurred,
the victim was in the act of unloading his cargoes, which he had every right to do, from petitioner's vessel. As earlier stated, a carrier
is duty bound not only to bring its passengers safely to their destination but also to afford them a reasonable time to claim their
baggage.


DANGWA TRANSPORTATION vs. COURT OF APPEALS

FACTS: Private respondents filed a complaint for damages against petitioners for the death of Pedrito Cudiamat as a result of a
vehicular accident which occurred on March 25, 1985 at Marivic, Sapid, Mankayan, Benguet. Petitioner Theodore M. Lardizabal was
driving a passenger bus belonging to petitioner corporation in a reckless and imprudent manner and without due regard to traffic rules
and regulations and safety to persons and property, it ran over its passenger, Pedrito Cudiamat. Petitioners alleged that they had
observed and continued to observe the extraordinary diligence and that it was the victim's own carelessness and negligence which
gave rise to the subject incident. RTC pronounced that Pedrito Cudiamat was negligent, which negligence was the proximate cause of
his death. However, Court of Appeals set aside the decision of the lower court, and ordered petitioners to pay private respondents
damages due to negligence.

ISSUE: WON the CA erred in reversing the decision of the trial court and in finding petitioners negligent and liable for the damages
claimed.

HELD: CA Decision is AFFIRMED. The testimonies of the witnesses show that that the bus was at full stop when the victim boarded
the same. They further confirm the conclusion that the victim fell from the platform of the bus when it suddenly accelerated forward
and was run over by the rear right tires of the vehicle. Under such circumstances, it cannot be said that the deceased was guilty of
negligence. It is not negligence per se, or as a matter of law, for one attempt to board a train or streetcar which is moving slowly. An
ordinarily prudent person would have made the attempt board the moving conveyance under the same or similar circumstances. The
fact that passengers board and alight from slowly moving vehicle is a matter of common experience both the driver and conductor in
this case could not have been unaware of such an ordinary practice. Common carriers, from the nature of their business and reasons
of public policy, are bound to observe extraordinary diligence for the safety of the passengers transported by the according to all the
circumstances of each case. A common carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. It has also been repeatedly
held 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 to pay the damages sought by the passenger. By contract of carriage, the carrier assumes
the express obligation to transport the passenger to his destination safely and 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. This is an exception to the general rule that negligence must be proved, and it is therefore incumbent upon the carrier to prove
that it has exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code.


FIRST PHILIPPINE INDUSTRIAL vs. CA, 300 SCRA 661, 1998

FACTS: Petitioner is a grantee of a pipeline concession under RA 387 to contract, install and operate oil pipelines. The original
pipeline concession was granted in 1967 and was renewed by the Energy Regulatory Board (ERB) in 1992. In January 1995,
petitioner applied for a mayors permit in Batangas City. Respondent City Treasurer required petitioner to pay a local tax based on its
gross receipts for the fiscal year in 1993 pursuant to the Local Government Code before the permit could be issued. In order not to
hamper its operations, petitioner paid the tax under protest amounting to 239,019.01 for the first quarter of 1993. Petitioner filed a
letter-protest and states that FPIC is a pipeline operator with a government concession granted engaged in transporting petroleum
products from the Batangas refineries, via pipeline, to Sucat and JTF Pandacan Terminals. As such, it is exempt from paying tax on
gross receipts. Moreover, transportation contractors are not included in the enumeration of contractors under Section 131, Paragraph
(h) of LGC. City Treasurer denied the protest contending that petitioner cannot be considered engaged in the transportation business,
thus it cannot claim exemption. Petitioner filed with RTC a complaint for tax refund with prayer for writ of preliminary injunction against
respondents. Traversing the complaint, respondents argued that petitioner could not be exempt from taxes as said exemption applies
only to transportation contractors and persons engaged in the transportation by hire and common carriers by air, land and water. They
also assert that pipelines are not included in the term common carrier which refers solely to ordinary carriers such as trucks, trains,
ships and the like. They further posit that common carrier pertains to the mode or manner by which a product is delivered to its
destination.
TC: Dismissed the complaint. Exemption to tax has become unclear. Tax exemption granted under Sec 133 (j.) encompasses only
common carriers so as not to overburden the riding public or commuters with taxes. FPIC is not a common carrier but a special carrier
extending its services and facilities to a single specific or special customer under special contract. Moreover, even franchise grantees
are taxed as well as contractors.
CA: Affirmed TCs dismissal of petitioners complaint. MFR was also denied.
SC: At first, petition was denied. Petitioner moved for a reconsideration which was granted. Petition was reinstated.

ISSUE: Whether or not petitioner is a common carrier.

HELD: A common carrier is one who holds himself out to the public as engaged in the business of transporting persons or property
from place to place, for compensation, offering his services to the public generally. Article 1732 of the Civil Code defines common
carrier as any person, corporation, firm or association engaged in the business of carrying or transporting passengers or goods or
both, by land, water, or air, for compensation, offering their services to the public. The fact that petitioner has a limited clientele does
not exclude it from the definition of a common carrier. There is no doubt that petitioner is a common carrier. It is engaged in the
business of transporting or carrying goods, i.e. petroleum products, for hire as a public employment. It undertakes to carry for all
persons indifferently, that is, to all persons who choose to employ its services, and transports the goods by land and for
compensation. As correctly pointed out by petitioner, Civil Code makes no distinction as to the means of transporting, as long as it is
by land, water or air. It does not provide that the transportation of the passengers or goods should be by motor vehicle. In fact, in the
U.S., oil pipe line operators are considered common carriers. With regard to the other issue in the case at bar regarding the tax
exemption, it is clear that the legislative intent in excluding from the taxing power of the local government unit the imposition of
business tax against common carriers is to prevent a duplication of the so-called "common carrier's tax." Petitioner is already paying
3% common carrier's tax on its gross sales/earnings under the National Internal Revenue Code. To tax petitioner again on its gross
receipts in its transportation of petroleum business would defeat the purpose of the Local Government Code.

NOTES: TEST for determining whether a party is a common carrier of goods:
1. He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to
engage in the transportation of goods for person generally as a business and not as a casual occupation;
2. He must undertake to carry goods of the kind to which his business is confined;
3. He must undertake to carry by the method by which his business is conducted and over his established roads; and
4. The transportation must be for hire.


NATIONAL STEEL CORPORATION vs. COURT OF APPEALS, 1997

FACTS: NSC hired MV Vlasons I, a private vessel owned by VSI. They entered into a contract of voyage charter hire wherein the
contract states that NSC hired VSI's vessel to make one voyage to load steel products at Iligan City and discharge them at North
Harbor, Manila. On arrival and upon opening the three hatches containing the shipment, nearly all the skids of tinplates and hot rolled
sheets were allegedly found to be wet and rusty. NSC filed a complaint for damages but RTC dismissed the complaint.

ISSUES: 1. Whether VSI contracted with NSC as a common carrier or as a private carrier
2. Whether or not the provisions of the Civil Code of the Philippines on common carriers pursuant to which there exist[s] a
presumption of negligence against the common carrier in case of loss or damage to the cargo are applicable to a private carrier.

HELD: 1. VSI was not a common carrier but a private carrier. It is undisputed that VSI did not offer its services to the general public.
The extent of VSI's responsibility and liability over NSC's cargo are determined primarily by the stipulations in the contract of carriage
or charter party and the Code of Commerce. The burden of proof lies on the part of NSC and not the VSI. Article 1732 of the Civil
Code defines a common carrier as "persons, corporations, firms or associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water or air, for


SCHIMITZ TRANSPORT vs. TRANSORT VENTURE INC., GR 150255, 2005

FACTS: On September 25, 1991, SYTCO Pte Ltd. Singapore shipped from the port of Ilyichevsk, Russia on board M/V Alexander
Saveliev 545 hot rolled steel sheets in coil weighing 6,992,450 metric tons. 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) under Marine Policy No. M-91-3747-TIS. The vessel arrived at the port of Manila and
the Philippine Ports Authority (PPA) assigned it a place of berth at the outside breakwater at the Manila South Harbor. Schmitz
Transport, whose services the consignee engaged to secure the requisite clearances, to receive the cargoes from the shipside, and to
deliver them to its (the consignees) warehouse at Cainta, Rizal, in turn 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. By 12:30 a.m. of October 27, 1991 during which 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. At around 5:30 a.m. of October 27, 1991, 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. Little Giant thus filed
a formal claim against Industrial Insurance which paid it the amount of P5,246,113.11. Little Giant thereupon executed a subrogation
receipt in favor of Industrial Insurance. Industrial Insurance later filed a complaint against Schmitz Transport, TVI, and Black Sea
through its representative Inchcape (the defendants) before the RTC of Manila, they faulted the defendants for undertaking the
unloading of the cargoes while typhoon signal No. 1 was raised. The RTC held all the defendants negligent. Defendants Schmitz
Transport and TVI filed a joint motion for reconsideration assailing the finding that they are common carriers. RTC denied the motion
for reconsideration. CA affirmed the RTC decision in toto, finding that all the defendants were common carriers Black Sea and TVI
for engaging in the transport of goods and cargoes over the seas as a regular business and not as an isolated transaction, and
Schmitz Transport for entering into a contract with Little Giant to transport the cargoes from ship to port for a fee.

ISSUE: Whether or not Black Sea and TVI are common carriers.

HELD: Contrary to petitioners insistence, this Court, as did the appellate court, finds that petitioner is a common carrier. For it
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. Thus, this Court, in A.F. Sanchez Brokerage, Inc. v. The Honorable Court of Appeals,
held: The appellate court did not err in finding petitioner, a customs broker, to be also a common carrier, as defined under Article 1732
of the Civil Code, to wit, Art. 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.
Article 1732 does not distinguish between one whose principal business activity is the carrying of goods and one who does such
carrying only as an ancillary activity. The contention, therefore, of petitioner that it is not a common carrier but a customs broker
whose principal function is to prepare the correct customs declaration and proper shipping documents as required by law is bereft of
merit. It suffices that petitioner undertakes to deliver the goods for pecuniary consideration.


CHINA AIRLINES vs. CHIOK, 407 SCRA 432, 2003

FACTS: On September 18, 1981, Daniel Chiok purchased from China Airlines, Ltd. (CAL) airline passenger ticket for air transportation
covering Manila-Taipei-Hongkong-Manila. Said ticket was exclusively endorseable to Philippine Airlines (PAL).On November 21,
1981, Chiok took his trip from Manila to Taipei using the CAL ticket. When he arrived in Taipei, he went to the CAL office and
confirmed his Hongkong to Manila trip on board PAL Flight no. PR311. The CAL office attached a yellow sticker appropriately
indicating that his flight status was OK. On November 24, 1981, Chiok proceeded to Hongkong International Airport for his return trip
to Manila; however it was cancelled because of a typhoon in Manila. He was then informed that ticket holders of the same flight were
automatically booked for its next flight. He informed PAL personnel that, being the founding director of the Philippine Polysterene
Paper Corporation, he had to reach Manila on November 25, 1981 because of a business option which he had to execute on said
date. On November 25, 1981, Chiok went to the airport. Cathay Pacific stewardess Lok Chan received Chiok's plane ticket and his
luggage. However, Carmen Chan, PAL's terminal supervisor, informed Chiok that his name did not appear in PAL's computer list of
passengers and thus cannot be permitted to board the PAL flight. Chiok sought to recover his luggage but found only two. Chiok
proceeded to PAL's Hongkong office and confronted PAL's reservation officer, Carie Chao, who previously confirmed his flight back to
Manila. In the ensuing commotion, Chiok lost his clutch bag containing the following, to wit: (a) $2,000.00; (b) HK$2,000.00; (c) Taipei
$8,000.00; (d) P2,000.00; (e) a three-piece set of gold (18 carats) cross pens valued at P3,500; (f) a Cartier watch worth about
P7,500.00; (g) a tie clip with a garnet birthstone and diamond worth P1,800.00; and (h) a [pair of] Christian Dior reading glasses.
LC: The Regional Trial Court (RTC) of Manila held CAL and PAL jointly and severally liable to respondent. On PALs appeal, the
appellate court held that the carrier had reneged on its obligation to transport respondent when, in spite of the confirmations he had
secured for Flight PR 311, his name did not appear in the computerized list of passengers. Ruling that the airlines negligence was the
proximate cause of his excoriating experience, the appellate court sustained the award of moral and exemplary damages. CA,
however, deleted the RTCs award of actual damages amounting to HK$14,128.80 and US$2,000.00, because the lost piece of
luggage and clutch bag had not actually been "checked in" or delivered to PAL for transportation to Manila.

ISSUE: WON CAL is liable for damages.

HELD: It is significant to note that the contract of air transportation was between petitioner and respondent, with the former endorsing
to PAL the Hong Kong-to-Manila segment of the journey. Such contract of carriage has always been treated in this jurisdiction as a
single operation. Decision followed our ruling in Lufthansa German Airlines v. Court of Appeals, in which we had held that the
obligation of the ticket-issuing airline remained and did not cease, regardless of the fact that another airline had undertaken to carry
the passengers to one of their destinations. In the instant case, we also rule that CAL cannot evade liability to respondent, even
though it may have been only a ticket issuer for the Hongkong-Manila sector.


LEA MER INDUSTRIES INC vs. MALAYAN INSURANCE CO, INC., GR No. 161745, 2005

FACTS: Ilian Silica Mining entered into a contract of carriage with the petitioner, Lea Mer Industries Inc. for the shipment of 900 metric
tons of silica sand worth P565,000. The cargo was consigned to Vulcan Industrial and Mining Corporation and was to be shipped from
Palawan to Manila. The silica sand was boarded to Judy VII, the vessel leased by Lea Mer.However, during the course of its voyage,
the vessel sank which led to the loss of the cargo. Consequently, the respondent, as the insurer, paid Vulcan the value of the lost
cargo. Malayan Insurance Co., Inc. then collected from the petitioner the amount it paid to Vulcan as reimbursement and as its
exercise on the right of subrogation. Lea Mer refused to pay which led Malayan to institute a complaint with the RTC. The RTC
dismissed the complaint stating that the loss was due to a fortuitous event, Typhoon Trining. Petitioner did not know that a typhoon
was coming and that it has been cleared by the Philippine Coast Guard to travel from Palawan to Manila. The CA reversed the ruling
of the trial court for the reason that said vessel was not seaworthy when it sailed to Manila.

ISSUE: Whether or not the petitioner is liable for the loss of the cargo.

HELD: CA reversed. 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 when this service is offered to the public for compensation.
Petitioner is clearly a common carrier, because it offers to the public its business of transporting goods through its vessels. Thus, the
Court corrects the trial court's finding that petitioner became a private carrier when Vulcan chartered it. Charter parties are classified
as contracts of demise (or bareboat) and affreightment, which are distinguished as follows: "Under the demise or bareboat charter of
the vessel, the charterer will generally be considered as owner for the voyage or service stipulated. The charterer mans the vessel
with his own people and becomes, in effect, the owner pro hac vice, subject to liability to others for damages caused by negligence.
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." The distinction is significant, because a demise or bareboat charter indicates a business undertaking that is private in
character. Consequently, 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. The Contract in the present case was one of affreightment, as shown by the fact that
it was petitioner's crew that manned the tugboat M/V Ayalit and controlled the barge Judy VII. Common carriers are bound to observe
extraordinary diligence in their vigilance over the goods and the safety of the passengers they transport, as required by the nature of
their business and for reasons of public policy. Extraordinary diligence requires rendering service with the greatest skill and foresight
to avoid damage and destruction to the goods entrusted for carriage and delivery. Common carriers are presumed to have been at
fault or to have acted negligently for loss or damage to the goods that they have transported. This presumption can be rebutted only
by proof that they observed extraordinary diligence, or that the loss or damage was occasioned by 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;
(5) Order or act of competent public authority.
Jurisprudence defines the elements of a "fortuitous event" as follows: (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; (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 excuse the common carrier fully of any liability, the fortuitous
event must have been the proximate and only cause of the loss. Moreover, it should have exercised due diligence to prevent or
minimize the loss before, during and after the occurrence of the fortuitous event. As required by the pertinent law, it was not enough
for the common carrier to show that there was an unforeseen or unexpected occurrence. It had to show that it was free from any fault
a fact it miserably failed to prove.


LA MALLORCA vs. CA, 17 SCRA 793, 1966

FACTS: On December 20, 1953, plaintiffs husband and wife together with their minor daughters namely, Milagros, 13 years old,
Raquel 4 years old, and Fe over 2 years old, boarded the Pambusco Bus no. 352, owned and operated by defendant, at San
Fernando, Pampanga bound for Anao, Mexico, Pampanga. At the same time, they were carrying four pieces of baggage containing
their personal things. The conductor of the bus, who happened to be a half-brother of Plaintiff Mariano Beltran, issued three tickets. It
covered the full fares of plaintiff and their eldest child, Milagros. No fare was charged on Raquel and Fe. After an hour, the plaintiffs
and their children was about to get off. Mariano Beltran, then carrying some of their baggage, was the first to get down the bus,
followed by his wife and his children. He returned to the bus to get his other bayong which he had left behind, but in so doing, his
daughter Racquel followed him, unnoticed by her father. While Mariano waited for the conductor to hand him his bayong, the bus
suddenly started moving forward. Mariano Beltran saw people beginning to gather around the body of a child lying prostrate on the
ground, her skull crushed, and without life. The child was none other than his daughter Raquel, who was run over by the bus in which
she rode earlier together with her parents. For the death of the said child, the plaintiffs commenced the present suit against the
defendant seeking to recover an aggregate amount of P16,000 to cover moral damages and actual damages and attorney's fees.
LC: The trial court found defendant liable for breach of contract of carriage and sentenced to pay P3,000 for the death of the child and
P400.00 as compensatory damages representing burial and expenses and costs.

ISSUE: WON, as to the child, who was already led by the father to a place about 5 meters away from the bus the liability of the carrier
for her safety under the contract of carriage also persisted.

HELD: The petitioner is liable for damages for the death of the child, Raquel Beltran. There can be no controversy that as far as the
father is concerned, when he returned to the bus for his bayong which was not unloaded, the relation of passenger and carrier
between him and the petitioner remained subsisting. It has been recognized as a rule that the relation of carrier and passenger does
not cease at the moment the passenger alights form the carrier's vehicle at a place selected by the carrier at the point of destination,
but continues until the passenger has had a reasonable time or opportunity to leave the carrier's premises. Thus, a person who, after
alighting from a train, walks along the station platform is considered still a passenger. It cannot be claimed that the carrier's agent had
exercised the "utmost diligence" of a "very cautious person" required by Article 1755 of the Civil Code. In the first place, the driver
nevertheless did not put off the engine. Secondly, he started to run the bus even before the bus conductor gave him the signal to do
so and while the latter was still unloading part of the baggages of the passengers Mariano Beltran. The decision of the Court of
Appeals is hereby modified by sentencing, the petitioner to pay to the respondents Mariano Beltran, et.al the sum of P3,000 for the
death of the child, Raquel Beltran, and the amount of P400.00 as actual damages.