Bascos v.

CA
221 SCRA 318, GR no. 101089, April 7, 1993.
Facts:
Rodolfo Cipriano, representing CIPTRADE(Cipriano Tradeing Enterprise), entered into a hauling
contract with Jibfair Shipping Agency Corporation whereby the former bound itself to haul the latters
2000m/tons of soya bean meal from Manila to Calamba Laguna. CIPTRADE subcontracted with
petitioner Estrellita Bascos to transport and deliver the 400 sacks of soya beans. Petitioner failed to
deliver the cargo, and as a consequence, Cipriano paid Jibfair the amount of goods lost in accordance with
their contract. Cipriano demanded reimbursement from petitioner but the latter refused to pay. Cipriano
filed a complaint for breach of contract of carriage. Petitioner denied that there was no contract of
carriage since CIPTRADE leased her cargo truck, and that the hijacking was a force majeure. The trial
court ruled against petitioner.
Issues:
(1) WON the petitioner is a common carrier.
(2) WON the hijacking is included to force majeure.

Held:
Yes. Article 1732 of the Civil Code defines a common carrier as "(a) person, corporation or firm, or
association engaged in the business of carrying or transporting passengers or goods or both, by land,
water or air, for compensation, offering their services to the public." The test to determine a common
carrier is "whether the given undertaking is a part of the business engaged in by the carrier which he has
held out to the general public as his occupation rather than the quantity or extent of the business
transacted." In this case, petitioner herself has made the admission that she was in the trucking business,
offering her trucks to those with cargo to move. Judicial admissions are conclusive and no evidence is
required to prove the same.
No. Since Hijacking is not included in article 1734 the court sited the article 1745 for its
application.Common carriers are obliged to observe extraordinary diligence in the vigilance over the
goods transported by them. Accordingly, they are presumed to have been at fault or to have acted
negligently if the goods are lost, destroyed or deteriorated. There are very few instances when the
presumption of negligence does not attach and these instances are enumerated in Article 1734. In those
cases where the presumption is applied, the common carrier must prove that it exercised extraordinary
diligence in order to overcome the presumption. The presumption of negligence was raised against
petitioner. It was petitioner's burden to overcome it. Thus, contrary to her assertion, private respondent
need not introduce any evidence to prove her negligence. Her own failure to adduce sufficient proof of
extraordinary diligence made the presumption conclusive against her.

National Steel Corporation vs CA and Vlasons Shipping, Inc.

283 SCRA 45, GR no. 112287, December 12, 1997.
Facts:
The MV Vlasons I is a vessel which renders tramping service and, as such, does not transport cargo or
shipment for the general public. Its services are available only to specific persons who enter into a special
contract of charter party with its owner. It is undisputed that the ship is a private carrier. On July 17, 1974,
plaintiff National Steel Corporation (NSC) as Charterer and defendant Vlasons Shipping, Inc. (VSI) as
Owner, entered into a Contract of Voyage Charter Hire whereby NSC hired VSI's vessel, the MV
"VLASONS I" to make one (1) voyage to load steel products at Iligan City and discharge them at North
Harbor, Manila. F.I.O.S.T. is included to the term of thier agreement which stands for "Freight In and Out
including Stevedoring and Trading", which means that the handling, loading and unloading of the cargoes
are the responsibility of the Charterer. Under Paragraph 5 of the NANYOZAI Charter Party, it states,
"Charterers to load, stow and discharge the cargo free of risk and expenses to owners. he vessel arrived
with the cargo at Pier 12, North Harbor, Manila, on August 12, 1974. The following day, August 13, 1974,
when the vessel's three (3) hatches containing the shipment were opened by plaintiff's agents, nearly all
the skids of tinplates and hot rolled sheets were allegedly found to be wet and rusty. The cargo was
discharged and unloaded by stevedores hired by the Charterer. Unloading was completed only on August
24, 1974 after incurring a delay of eleven (11) days due to the heavy rain which interrupted the unloading
operations. Plaintiff filed with the defendant its claim for damages suffered due to the downgrading of the
damaged tinplates but defendant VSI refused and failed to pay.

Issue:
WON the VSI is a common carrier.
WON the defendant VSI is liable to the dowbgrading of the damaged tinplates.
Held:
No. In the instant case, it is undisputed that VSI did not offer its services to the general public. As found
by the Regional Trial Court, it carried passengers or goods only for those it chose under a "special contract
of charter party." As correctly concluded by the Court of Appeals, the MV Vlasons I "was not a common
but a private carrier." Consequently, the rights and obligations of VSI and NSC, including their respective
liability for damage to the cargo, are determined primarily by stipulations in their contract of private
carriage or charter party.

No. In view of the aforementioned contractual stipulations, NSC must prove that the damage to its
shipment was caused by VSI's willful negligence or failure to exercise due diligence in making MV Vlasons
I seaworthy and fit for holding, carrying and safekeeping the cargo. Ineluctably, the burden of proof was
placed on NSC by the parties' agreement.
Because the MV Vlasons I was a private carrier, the shipowner's obligations are governed by the foregoing
provisions of the Code of Commerce and not by the Civil Code which, as a general rule, places the prima
facie presumption of negligence on a common carrier. It is a hornbook doctrine that:

In an action against a private carrier for loss of, or injury to, cargo, the burden is on the plaintiff to prove
that the carrier was negligent or unseaworthy, and the fact that the goods were lost or damaged while in
the carrier's custody does not put the burden of proof on the carrier.

Since . . . a private carrier is not an insurer but undertakes only to exercise due care in the protection of
the goods committed to its care, the burden of proving negligence or a breach of that duty rests on
plaintiff and proof of loss of, or damage to, cargo while in the carrier's possession does not cast on it the
burden of proving proper care and diligence on its part or that the loss occurred from an excepted cause in
the contract or bill of lading. However, in discharging the burden of proof, plaintiff is entitled to the
benefit of the presumptions and inferences by which the law aids the bailor in an action against a bailee,
and since the carrier is in a better position to know the cause of the loss and that it was not one involving
its liability, the law requires that it come forward with the information available to it, and its failure to do
so warrants an inference or presumption of its liability. However, such inferences and presumptions,
while they may affect the burden of coming forward with evidence, do not alter the burden of proof which
remains on plaintiff, and, where the carrier comes forward with evidence explaining the loss or damage,
the burden of going forward with the evidence is again on plaintiff.

Where the action is based on the shipowner's warranty of seaworthiness, the burden of proving a breach
thereof and that such breach was the proximate cause of the damage rests on plaintiff, and proof that the
goods were lost or damaged while in the carrier's possession does not cast on it the burden of proving
seaworthiness. . . . Where the contract of carriage exempts the carrier from liability for unseaworthiness
not discoverable by due diligence, the carrier has the preliminary burden of proving the exercise of due
diligence to make the vessel seaworthy.

FIRST PHILIPPINES INDUSTRIAL CORP. VS. CA

300 SCRA 661, GR no. 125948, December 29, 1998.
Facts:
Petitioner is a grantee of a pipeline concession under R.A. No. 387, asamended, a contract, install and
operate oil pipelines. The original pipelineconcession was granted in 1967 and renewed by the Energy
RegulatoryBoard in 1992.
Sometime in January 1995, petitioner applied for a mayors permit withthe Office of the Mayor of
Batangas City. However, before the mayors permitcould be issued, the respondent City Treasurer
required petitioner to pay alocal tax based on its gross receipts for the fiscal year 1993 pursuant to
theLocal Government Code. The respondent City Treasure assessed a businesstax on the petitioner
amounting to P956,076.04 payable in four installmentsbased on the gross receipts for products pumped
at GPS-1 for the fiscal year 1993 which amounted to P181,681,151.00. In order not to hamper its
operations, petitioner paid the tax but under protest in the amount of P239,019.01 for the first quarter of
1993.
On June 15, 1994, petitioner filed with the RTC of Batangas City acomplaint for tax refund with prayer for
writ of preliminary injunction againstrespondents City of Batangas and Adoracion Arellano in her
capacity as CityTreasurer.
Traversing the complaint, the respondents argued that petitioner cannot be exempt from taxes under Sec.
133(J) of the Local GovernmentCode as said exemption applied only to transportation contractors
andpersons engaged in the transportation by hire and common carriers by air land and water.
Respondents assert that pipelines are not included in theterm common carrier which refers solely to
ordinary carriers as trucks,trains, ships and the like. Respondents further posit that the term
commoncarrier under the said Code pertains to the mode or manner by which aproduct is delivered to
its destination.
Issue:
Whether the petitioner, an oil pipeline operator is a common carrier,and therefore exempted from paying
local taxes.
Held:
Yes.Petitioner is a common carrier.Article 1732 of the Civil Code defines a common carrier as
anyperson, corporation, firm or association engaged in the business of carryingor transporting
passengers or goods or both, by land, water, or air, for compensation, offering their services to the public.
A common carrier may be defined, broadly, as one who holds himself out to the public as engaged in the
business of transporting persons or property from place to place, for compensation, offering his services
to thepublic generally.
The test for determining whether a party is a common carrier of goodsis: 1. He must be engaged in the
carrying of goods for others as a publicemployment, and must hold himself out as ready to engage in
thetransportation of goods or persons generally as a business and not as acasual occupation; 2.He must
undertake to carry goods of the kind to whichhis business is confined; 3. He must undertake to carry by
the method bywhich his business is conducted and over his established roads; and 4. Thetransportation
must be for hire.Based on the above definition and requirements, there is no doubt thatthe petitioner is a
common carrier

CALVO V. UCPB GENERAL INSURANCE

G.R. NO. 148496 MARCH 19,2002
Facts:
Petitioner Virgines Calvo, owner of Transorient Container TerminalServices, Inc. (TCTSI), and a custom
broker, entered into a contract with SanMiguel Corporation (SMC) for the transfer of 114 reels of semichemicalfluting paper and 124 reels of kraft liner board from the port area to theTabacalera Compound,
Ermita, Manila. The cargo was insured by respondent UCPB General Insurance Co., Inc.
On July 14, 1990, contained in 30 metal vans, arrived in Manila onboard M/V Hayakawa Maru. After 24
hours, they were unloaded fromvessel to the custody of the arrastre operator, Manila Port Services,
Inc.From July 23 to 25, 1990, petitioner, pursuant to her contract with SMC,withdrew the cargo from the
arrastre operator and delivered it to SMCswarehouse in Manila. On July 25, the goods were inspected by
Marine CargoSurveyors, reported that 15 reels of the semi-chemical fluting paper werewet/stained/torn
and 3 reels of kraft liner board were also torn. Thedamages cost P93,112.00.
SMC collected the said amount from respondent UCPB under its insurance contract. Respondent on the
other hand, as a subrogee of SMC,brought a suit against petitioner in RTC, Makati City. On December 20,
1995,the RTC rendered judgment finding petitioner liable for the damage to theshipment. The decision
was affirmed by the CA.
Issue:
Whether or not Calvo is a common carrier.
Held:
In this case the contention of the petitioner, that he is not a commoncarrier but a private carrier, has no
merit.
Article 1732 makes no distinction between one whose principalbusiness activity is the carrying of persons
or goods or both, and one whodoes such carrying only as ancillary activity. Article 1732 also
carefullyavoids making any distinction between a person or enterprise offeringtransportation service on a
regular or scheduled basis and one offering suchservice on an occasional, episodic or unscheduled basis.
Neither does Article1732 distinguish between a carrier offering its services to the "general public ,"i.e., the
general community or population, and one who offers services or solicits business only from a narrow
segment of the general population. Wethink that Article 1733 deliberately refrained from making such
distinction. (DeGuzman v. CA, 68 SCRA 612)
The concept of common carrier under Article 1732 coincide with thenotion of public service, under the
Public Service Act which partiallysupplements the law on common carrier. Under Section 13, paragraph
(b) of the Public Service Act, it includes:
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, tractionrailway, 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 freightor 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
wirelesscommunications systems, wire or wireless broadcasting stations and other similar public services.
x x x

FGU Insurance Corporation vs. G.P. Sarmiento Trucking Corporation and Lambert Eroles
G.R. No. 141910,August 6, 2002
FACTS:
G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on June 18, 1994, 30 units of Condura
S.D. white refrigerators aboard its Isuzu truck driven by Lambert Eroles, to the Central Luzon Appliances
in Dagupan City. While traversing the North Diversion Road along McArthur highway in Barangay
Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal,
resulting in damage to the cargoes.
FGU, an insurer of the shipment, paid the value of the covered cargoes (P204,450.00) to Concepcion
Industries, Inc.,. Being subrogee of CIIs rights & interests, FGU, in turn, sought reimbursement from
GPS. Since GPS failed to heed the claim, FGU filed a complaint for damages & breach of contract of
carriage against GPS and Eroles with the RTC. In its answer, respondents asserted that GPS was only the
exclusive hauler of CII since 1988, and it was not so engaged in business as a common carrier.
Respondents further claimed that the cause of damage was purely accidental.
GPS filed a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner
had failed to prove that it was a common carrier.
The RTC granted the motion to dismiss on April 30, 1996. It subsequently dismissed the complaint
holding that GPS was not a common carrier defined under the law & existing jurisprudence. The
subsequent motion for reconsideration having been denied, FGU interposed an appeal to the CA. The CA
rejected the FGUs appeal & ruled in favor of GPS. It also denied petitioners motion for reconsideration.
ISSUES:
WON GPS may be considered a common carrier as defined under the law & existing jurisprudence.
WON GPS, can be presumed to have been negligent when the goods it undertook to transport safely were
subsequently damaged while in its protective custody & possession.
WON the doctrine of Res ipsa loquitur is applicable in the instant case.
HELD:
YES.The SC finds the conclusion of the RTC and the CA to be amply justified. GPS, being an exclusive
contractor & hauler of Concepcion Industries, Inc., rendering/offering its services to no other individual
or entity, cannot be considered a common carrier. Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting passengers or goods or both, by land,
water, or air, for hire or compensation, offering their services to the public, whether to the public in
general or to a limited clientele in particular, but never on an exclusive basis. The true test of a common
carrier is the carriage of passengers/goods, providing space for those who opt to avail themselves of its
transportation service for a fee. Given accepted standards, GPS scarcely falls within the term common
carrier.

YES. GPS cannot escape from liability. In culpa contractual, the mere proof of the existence of the contract
& the failure of its compliance justify, prima facie, a corresponding right of relief. The law will not permit
a party to be set free from liability for any kind of misperformance of the contractual undertaking or a
contravention of the tenor thereof. A breach upon the contract confers upon the injured party a valid

cause for recovering that which may have been lost/suffered. The remedy serves to preserve the interests
of the promisee that may include his:
1. Expectation interest interest in having the benefit of his bargain by being put in as good a position as
he would have been in had the contract been performed;
2. Reliance interest interest in being reimbursed for loss caused by reliance on the contract by being put
in as good a position as he would have been in had the contract not been made;
3. Restitution interest interest in having restored to him any benefit that he has conferred on the other
party.
Agreements can accomplish little unless they are made the basis for action. The effect of every infraction
is to create a new duty, or to make recompense to the one who has been injured by the failure of another
to observe his contractual obligation unless he can show extenuating circumstances, like proof of his
exercise of due diligence (normally that of the diligence of a good father of a family or, exceptionally by
stipulation or by law such as in the case of common carriers, that of extraordinary diligence) or of the
attendance of fortuitous event, to excuse him from his ensuing liability.
A default on, or failure of compliance with, the obligation gives rise to a presumption of lack of care &
corresponding liability on the part of the contractual obligor the burden being on him to establish
otherwise. GPS has failed to do so.
Eroles, on the other hand, may not be ordered to pay petitioner without concrete proof of his
negligence/fault. The driver, not being a party to the contract of carriage between petitioners principal
and defendant, may not be held liable under the agreement. A contract can only bind the parties who have
entered into it or their successors who have assumed their personality/juridical position. Consonantly
with the axiom res inter alios acta aliis neque nocet prodest, such contract can neither favor nor prejudice
a third person. Petitioners civil action against the driver can only be based on culpa aquiliana, which
would require the claimant for damages to prove the defendants negligence/fault.

NO.Res ipsa loquitur holds a defendant liable where the thing which caused the injury complained of is
shown to be under the latters management and the accident is such that, in the ordinary course of things,
cannot be expected to happen if those who have its management/control use proper care. In the absence
of the defendants explanation, it affords reasonable evidence that the accident arose from want of care. It
is not a rule of substantive law and does not create an independent ground of liability. Instead, it is
regarded as a mode of proof, or a mere procedural convenience since it furnishes a substitute for, and
relieves the plaintiff of, the burden of producing specific proof of negligence. The maxim simply places the
burden of going forward with the proof on the defendant.
However, resort to the doctrine may only be allowed when:
(a) the event is of a kind which does not ordinarily occur in the absence of negligence;
(b) other responsible causes are sufficiently eliminated by the evidence (includes the conduct of the
plaintiff and third persons); and
(c) the indicated negligence is within the scope of the defendants duty to the plaintiff.

Thus, it is not applicable when an unexplained accident may be attributable to one of several causes, for
some of which the defendant could not be responsible.
Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists between the
plaintiff and the defendant, for the inference of negligence arises from the circumstances and nature of
the occurrence and not from the nature of the relation of the parties. Nevertheless,for the doctrine to
apply, the requirement that responsible causes (other than those due to defendants conduct) must first be
eliminated should be understood as being confined only to cases of pure (non-contractual) tort since
obviously the presumption of negligence in culpa contractual immediately attaches by a failure of the
covenant or its tenor.
On the other hand, while the truck driver, whose civil liability is predicated on culpa acquiliana, can be
said to have been in control & management of the vehicle, it is not equally shown that the accident has
been exclusively due to his negligence. If it were so, the negligence could allow res ipsa loquitur to
properly work against him. However, clearly this is not the case

HOME INSURANCE VS. AMEARICAN STEAMSHIP

23 SCRA 24, G.R. No. L-25599, April 4, 1968
Facts:
The Consorcio Pesquero del Peru of South America shipped jute bagsof Peruvian fishmeal through SS
Crowborough, consigned to San MiguelBrewery, Inc. The cargo, which was insured by Home Insurance
Company,arrived at the port of Manila and was discharged to the lighters of the LuzonStevedoring
Corporation. When the same was delivered to the consignee,there were shortages amounting to P 12,
033.85, prompting the latter to payagainst Luzon Stevedoring Co.
Because the others denied liability, Home Insurance paid San Miguelthe insurance value loss. This cost
was brought by the former to recover indemnity from Luzon Stevedoring and the ship owner. Luzon
Stevedoringraised the defense that it deliver with due diligence in the same from thecarrier. Mexican
Steamship Agencies denied liability on the ground that thecharter party referred to in the bills of lading,
the charter, not the ship owner,was responsible for any loss or damage of the cargo. Furthermore, it
claimedto have exercised due diligence in stowing the goods and as a mereforwarding agent, it was not
responsible for losses or damages to the cargo.
Issue:
Whether or not the stipulation in the charter party to owners non-liability was valid as to absolve the
American Steamship from liability loss.
Held:
The Civil Code provision on common carriers should not be appliedwhere the carrier is not acting as such
but as a private carrier. The stipulationin the charter party absolving the owner from liability for loss due
to thenegligence of its agent is void only if the strict public policy governingcommon carriers is applied.
Such policy has no force where the public atlarge is not involved, as in the case of a ship totally chartered
for the use of asingle party.

Valenzuela Hardwood and Industrial Suppy, Inc vs CA

274 SCRA 642, G.R. No. 102316, June 30, 1997
Facts:
On January 16, 1984 plaintiff Valenzuela Hardwood and Industrial Supply Inc. entered into an agreement
with the defendant Seven Brothers whereby the latter undertook to load on board its vessel the formers
lavan round logs. On January 20, 1984 plaintiff insured the loss and/or damages with defendant South
Sea Surety and insured company for 2 million pesos on January 24, 1984, plaintiff gave the check in
payment of the premium on the insurance policy. In the meantime, the said vessel sank on January 25,
1984 resulting in the loss of the plaintiffs insured logs. Plaintiff demanded payment of the proceeds and
lost claim for the value of the lost logs to insurance company and Seven Brothers Shipping Corporation
respectively to which both of them denied liability.
After due hearing, the RTC rendered judgment in favor of plaintiff. Both defendants appealed. The CA
affirmed in part the RTC judgment by sustaining liability of South Sea Surety but modified it by holding
that the Seven Brothers was not liable for the lost of the cargo. The CA held that the stipulation in the
character party that the ship owner would be exempted from liability in case of loss or even for negligence
of its agent is valid.
ISSUE: Whether or not patrimonial rights may be waived.
HELD: As a general rule, patrimonial rights may be waived. In the case at bar, the waiver of petitioner per
contractual stipulation and that it is solely responsible for any damage to the cargo, thereby exempting
the private carrier from any responsibility for loss or damage thereto. The Supreme Court cited Article 6
of the Civil Code which states that rights may be waived unless the waiver is contrary to law, public order,
public policy, morals or good customs or prejudicial to a person of a right recognized by law.

Loadstar Shipping Co. v. CA

315 SCRA 339
Facts:
On November 19, 1984, Loadstar received on board its vessel M/V Cherokee the following goods for
shipment:
1. 705 bales of lawanit hardwood
2. 27 boxes and crates of tilewood assemblies and others
3. 49 bundles of mouldings R & W (3) Apitong Bolidenized
The goods, amounting to P6,067,178, were insured by Manila Insurance Co. The vessel is insured by
Prudential Guarantee and Assurance, Inc. On November 20, 1984, on its way to Manila from Agusan, the
vessel sank off Limasawa Island. MIC paid the consignee P6,075,000 for the value of the goods lost, and
filed a complaint against Loadstar and PGAI, claiming subrogation into the rights of the consignee. When
PGAI paid Loadstar, it was dropped from the complaint. The trial court ruled against Loadstar, and this
was affirmed by the Court of Appeals.
Loadstar submits that the vessel was a private carrier because it was not issued a certificate of public
convenience, it did not have a regular trip or schedule nor a fixed route, and there was only "one shipper,
one consignee for a special cargo." In refutation, MIC argues that the issue as to the classification of the
M/V "Cherokee" was not timely raised below; hence, it is barred by estoppel. While it is true that the
vessel had on board only the cargo of wood products for delivery to one consignee, it was also carrying
passengers as part of its regular business. Moreover, the bills of lading in this case made no mention of
any charter party but only a statement that the vessel was a "general cargo carrier." Neither was there any
"special arrangement" between LOADSTAR and the shipper regarding the shipment of the cargo. The
singular fact that the vessel was carrying a particular type of cargo for one shipper is not sufficient to
convert the vessel into a private carrier.
LOADSTAR argues that as a private carrier, it cannot be presumed to have been negligent, and the burden
of proving otherwise devolved upon MIC. It also maintains that the vessel was seaworthy, and that the
loss was due to force majeure. LOADSTAR goes on to argue that, being a private carrier, any agreement
limiting its liability, such as what transpired in this case, is valid. Since the cargo was being shipped at
"owners risk," LOADSTAR was not liable for any loss or damage to the same. Finally, LOADSTAR avers
that MICs claim had already prescribed, the case having been instituted beyond the period stated in the
bills of lading for instituting the same suits based upon claims arising from shortage, damage, or nondelivery of shipment shall be instituted within sixty days from the accrual of the right of action. MIC, on
the other hand, claims that LOADSTAR was liable, notwithstanding that the loss of the cargo was due to
force majeure, because the same concurred with LOADSTARs fault or negligence. Secondly, LOADSTAR
did not raise the issue of prescription in the court below; hence, the same must be deemed waived.
Thirdly, the "limited liability" theory is not applicable in the case at bar because LOADSTAR was at fault
or negligent, and because it failed to maintain a seaworthy vessel. Authorizing the voyage notwithstanding
its knowledge of a typhoon is tantamount to negligence.
Issues:
(1) Whether Loadstar was a common carrier or a private carrier
(2) Whether Loadstar exercised the degree of diligence required under the circumstances

(3) Whether the stipulation that the goods are at the owners risk is valid
(4) Whether the action has prescribed
Held:
YES. We hold that LOADSTAR is a common carrier. It is not necessary that the carrier be issued a
certificate of public convenience, and this public character is not altered by the fact that the carriage of the
goods in question was periodic, occasional, episodic or unscheduled. There was no charter party. The bills
of lading failed to show any special arrangement, but only a general provision to the effect that the M/V
"Cherokee" was a "general cargo carrier." Further, the bare fact that the vessel was carrying a particular
type of cargo for one shipper, which appears to be purely coincidental, is not reason enough to convert the
vessel from a common to a private carrier, especially where, as in this case, it was shown that the vessel
was also carrying passengers.

NO. The doctrine of limited liability does not apply where there was negligence on the part of the vessel
owner or agent. LOADSTAR was at fault or negligent in not maintaining a seaworthy vessel and in having
allowed its vessel to sail despite knowledge of an approaching typhoon. In any event, it did not sink
because of any storm that may be deemed as force majeure, inasmuch as the wind condition in the area
where it sank was determined to be moderate. Since it was remiss in the performance of its duties,
LOADSTAR cannot hide behind the "limited liability" doctrine to escape responsibility for the loss of the
vessel and its cargo.

(3) Three kinds of stipulations have often been made in a bill of lading. The first is one exempting the
carrier from any and all liability for loss or damage occasioned by its own negligence. The second is one
providing for an unqualified limitation of such liability to an agreed valuation. And the third is one
limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and
pays a higher rate of freight. According to an almost uniform weight of authority, the first and second
kinds of stipulations are invalid as being contrary to public policy, but the third is valid and enforceable.
Since the stipulation in question is null and void, it follows that when MIC paid the shipper, it was
subrogated to all the rights which the latter has against the common carrier, LOADSTAR.

(4) MICs cause of action had not yet prescribed at the time it was concerned. Inasmuch as neither the
Civil Code nor the Code of Commerce states a specific prescriptive period on the matter, the Carriage of
Goods by Sea Act (COGSA) which provides for a one-year period of limitation on claims for loss of, or
damage to, cargoes sustained during transit may be applied suppletorily to the case at bar. This oneyear prescriptive period also applies to the insurer of the goods. In this case, the period for filing the
action for recovery has not yet elapsed. Moreover, a stipulation reducing the one-year period is null and
void; it must, accordingly, be struck down.