TRANSPORTATION AND PUBLIC SERVICE ACT

G.R. No. 122494. October 8, 1998

EVERETT STEAMSHIP CORPORATION, vs. COURT OF APPEALS and HERNANDEZ TRADING CO. INC.
Everett seeks the reversal of the decision of the Court of Appeals affirming the decision of the Regional Trial Court holding Everett
liable to private respondent
Three (3) crates of bus spare parts imported by respondent were shipped from Japan to Manila through a vessel owned by petitioner.
It was however discovered upon arrival in Manila that a crate was missing resulting to respondents filing of claim against herein
petitioner amounting to the value of the lost cargo. Petitioner refused to pay the entire amount but instead offered to pay the
maximum amount stipulated in the bill of lading. Respondent rejected the offer and filed a suit before the Trial court.
The Trial court decided in favor of herein respondent holding petitioner liable for the actual price, with attorneys fees and price of
suit. This was affirmed by the Court of Appeals though it deleted the award for attorneys fees
Issue: Whether or not Everett is liable of paying the amount more than what was stipulated in the bill of lading
Held:
No. The liability of petitioner for the loss of the cargo is limited to One Hundred Thousand (Y100,000.00) Yen, pursuant to Clause 18
of the bill of lading.
A stipulation in the bill of lading limiting the common carriers liability for loss or destruction of a cargo to a certain sum, unless the
shipper or owner declares a greater value, is sanctioned by law, particularly Articles 1749 and 1750 of the Civil Code which provide:
ART. 1749. A stipulation that the common carriers liability is limited to the value of the goods appearing in the bill of lading, unless
the shipper or owner declares a greater value, is binding.
ART. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or deterioration of the
goods is valid, if it is reasonable and just under the circumstances, and has been freely and fairly agreed upon.
It seems clear that even if said section 4 (5) of the Carriage of Goods by Sea Act did not exist, the validity and binding effect of the
liability limitation clause in the bill of lading here are nevertheless fully sustainable on the basis alone of the cited Civil Code
Provisions. That said stipulation is just and reasonable is arguable from the fact that it echoes Art. 1750 itself in providing a limit to
liability only if a greater value is not declared for the shipment in the bill of lading. To hold otherwise would amount to questioning
the justness and fairness of the law itself, and this private respondent does not pretend to do. But over and above that
consideration, the just and reasonable character of such stipulation is implicit in it giving the shipper or owner the option of avoiding
accrual of liability limitation by the simple and surely far from onerous expedient of declaring the nature and value of the shipment
in the bill of lading.
Pursuant to the afore-quoted provisions of law, it is required that the stipulation limiting the common carriers liability for loss must
be reasonable and just under the circumstances, and has been freely and fairly agreed upon.
The bill of lading subject of the present controversy specifically provides, among others:
18. All claims for which the carrier may be liable shall be adjusted and settled on the basis of the shippers net invoice cost
plus freight and insurance premiums, if paid, and in no event shall the carrier be liable for any loss of possible profits or
any consequential loss.
The carrier shall not be liable for any loss of or any damage to or in any connection with, goods in an amount exceeding
One Hundred Thousand Yen in Japanese Currency (Y100,000.00) or its equivalent in any other currency per package or
customary freight unit (whichever is least) unless the value of the goods higher than this amount is declared in
writing by the shipper before receipt of the goods by the carrier and inserted in the Bill of Lading and extra
freight is paid as required.
The above stipulations are, to our mind, reasonable and just. In the bill of lading, the carrier made it clear that its liability would only
be up to One Hundred Thousand (Y100,000.00) Yen. However, the shipper, Maruman Trading, had the option to declare a higher
valuation if the value of its cargo was higher than the limited liability of the carrier. Considering that the shipper did not declare a
higher valuation, it had itself to blame for not complying with the stipulations.
The trial courts ratiocination that private respondent could not have fairly and freely agreed to the limited liability clause in the bill
of lading because the said conditions were printed in small letters does not make the bill of lading invalid. One cannot rely on the
defense that it was a contract of adhesion since it may be adduced that both parties have been engaged in shipping and trading and
thus aware of the business transaction.
The bill of lading in question confirms petitioners contention. To defeat the carriers limited liability, the aforecited Clause 18 of the
bill of lading requires that the shipper should have declared in writing a higher valuation of its goods before receipt thereof by the
carrier and insert the said declaration in the bill of lading, with the extra freight paid. These requirements in the bill of lading were
never complied with by the shipper, hence, the liability of the carrier under the limited liability clause stands. Thus the Supreme
Court reversed the decision.
G.R. No. 172822, December 18, 2009
MOF COMPANY, INC., vs SHIN YANG BROKERAGE CORPORATION
On October 25, 2001, Halla Trading Co., a company based in Korea, shipped to Manila secondhand cars and other articles on board
the vessel Hanjin Busan. The bill of lading covering the shipment was prepared by the carrier Hanjin Shipping Co., Ltd. (Hanjin),
named respondent Shin Yang Brokerage Corp. (Shin Yang) as the consignee and indicated that payment was on a Freight Collect
basis, i.e., that the consignee/receiver of the goods would be the one to pay for the freight and other charges in the total amount of
P57,646.00.

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When the shipment arrived in Manila, petitioner MOF Company, Inc. (MOF), Hanjins exclusive general agent in the Philippines,
repeatedly demanded the payment from Shin Yang. The latter, however, failed and refused to pay contending that it did not cause
the importation of the goods, that it is only the Consolidator of the said shipment, that the ultimate consignee did not endorse in its
favor the original bill of lading and that the bill of lading was prepared without its consent.
This resulted to MOFs filing of a case for sum of money alleging that Shin Yang, a regular client, caused the importation and
shipment of the goods and assured it that ocean freight and other charges would be paid upon arrival of the goods in Manila. Yet,
after Hanjin's compliance, Shin Yang unjustly breached its obligation to pay.
Shin Yang denied any involvement in shipping the goods or in promising to shoulder the freightage claiming that it was merely a
consolidator. It asserted that it never authorized Halla Trading Co. to ship the articles or to have its name included in the bill of
lading. Shin Yang also alleged that MOF failed to present supporting documents to prove that it was Shin Yang that caused the
importation or the one that assured payment of the shipping charges upon arrival of the goods in Manila.
The MTC ruled that Shin Yang cannot disclaim being a party to the contract of affreightment and decided in favor of MOF. This was
affirmed by the RTC but reversed by the Court of Appeals stating that MOF failed to substantiate its claim.
Issue: whether a consignee, who is not a signatory to the bill of lading, is bound by the stipulations thereof. Corollarily, whether
respondent who was not an agent of the shipper and who did not make any demand for the fulfillment of the stipulations of the bill
of lading drawn in its favor is liable to pay the corresponding freight and handling charges.
Held: Shin Yang consistently denied in all of its pleadings that it authorized Halla Trading, Co. to ship the goods on its behalf; or that
it got hold of the bill of lading covering the shipment or that it demanded the release of the cargo. Basic is the rule in evidence that
the burden of proof lies upon him who asserts it, not upon him who denies , since, by the nature of things, he who denies a
fact cannot produce any proof of it. Thus, MOF has the burden to controvert all these denials, it being insistent that Shin Yang
asserted itself as the consignee and the one that caused the shipment of the goods to the Philippines.
In civil cases, the party having the burden of proof must establish his case by preponderance of evidence, which means evidence
which is of greater weight, or more convincing than that which is offered in opposition to it. Here, MOF failed to meet the required
quantum of proof. Other than presenting the bill of lading, which, at most, proves that the carrier acknowledged receipt of the
subject cargo from the shipper and that the consignee named is to shoulder the freightage, MOF has not adduced any other credible
evidence to strengthen its cause of action. It did not even present any witness in support of its allegation that it was Shin Yang which
furnished all the details indicated in the bill of lading and that Shin Yang consented to shoulder the shipment costs. There is also
nothing in the records which would indicate that Shin Yang was an agent of Halla Trading Co. or that it exercised any act that would
bind it as a named consignee. Thus, the CA correctly dismissed the suit for failure of petitioner to establish its cause against
respondent.
G.R. No. 95582, October 7, 1991
DANGWA TRANSPORTATION CO., INC. vs. COURT OF APPEALS
Private respondents filed a complaint for damages against petitioners for the death of Pedrito Cudiamat as a result of a vehicular
accident. It was alleged that Pedrito Cudiamat was ran over by the passenger bus it rode, and drove by petitioner Theodore M.
Lardizabal and belonging to petitioner corporation. Driver was said to be driving in a reckless manner and with disregard to traffic
rules. Further instead of bringing Pedrito immediately to the nearest hospital, the said driver, in utter bad faith and without regard to
the welfare of the victim, first brought his other passengers and cargo to their respective destinations before banging said victim to
the Lepanto Hospital where he expired.
On the other hand, petitioners alleged that they had observed and continued to observe the extraordinary diligence required in the
operation of the transportation company and the supervision of the employees, even as they add that they are not absolute insurers
of the safety of the public at large. Further, it was alleged that it was the victim's own carelessness and negligence which gave rise
to the
The trial Court decided in favor of petitioner ruling that the victim was negligent. This was reversed on appeal.
Ruling:
The testimonies of witnesses show that the place of the accident and the place where one of the passengers alighted were both
between Bunkhouses 53 and 54, hence the finding of the Court of Appeals that the bus was at full stop when the victim boarded the
same is correct. 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, as shown by the physical evidence on where he was thereafter found
in relation to the bus when it stopped. Under such circumstances, it cannot be said that the deceased was guilty of negligence.
The contention of petitioners that the driver and the conductor had no knowledge that the victim would ride on the bus, since the
latter had supposedly not manifested his intention to board the same, does not merit consideration. When the bus is not in motion
there is no necessity for a person who wants to ride the same to signal his intention to board. A public utility bus, once it stops, is in
effect making a continuous offer to bus riders. Hence, it becomes the duty of the driver and the conductor, every time the bus stops,
to do no act that would have the effect of increasing the peril to a passenger while he was attempting to board the same. The
premature acceleration of the bus in this case was a breach of such duty.
It is the duty of common carriers of passengers, including common carriers by railroad train, streetcar, or motorbus, to stop their
conveyances a reasonable length of time in order to afford passengers an opportunity to board and enter, and they are liable for
injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their conveyances while they are doing
so.
The victim herein, by stepping and standing on the platform of the bus, is already considered a passenger and is
entitled all the rights and protection pertaining to such a contractual relation. Hence, it has been held that the duty which
the carrier passengers owes to its patrons extends to persons boarding cars as well as to those alighting therefrom.

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Common carriers, from the nature of their business and reasons of public policy, are bound to observe extraordina 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 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.
Moreover, the circumstances under which the driver and the conductor failed to bring the gravely injured victim immediately to the
hospital for medical treatment is a patent and incontrovertible proof of their negligence. It defies understanding and can even be
stigmatized as callous indifference.
G.R. No. 114061, August 3, 1994
KOREAN AIRLINES CO., LTD., vs. COURT OF APPEALS and JUANITO C. LAPUZ
Juanito Lapuz was supposed to leave to Jeddah via Korean Airlines. Initially, he was "wait-listed," which meant that he could only be
accommodated if any of the confirmed passengers failed to show up at the airport before departure. When two of such passengers
did not appear, Lapuz and another person by the name of Perico were given the two unclaimed seats.
According to Lapuz, he was allowed to check in with one suitcase and one shoulder bag at the check-in counter of KAL. He passed
through the customs and immigration sections for routine check-up and was cleared for departure as Passenger No. 157 of KAL
Flight No. KE 903. Together with the other passengers, he rode in the shuttle bus and proceeded to the ramp of the KAL aircraft for
boarding. However, when he was at the third or fourth rung of the stairs, a KAL officer pointed to him and shouted "Down! Down!"
He was thus barred from taking the flight. When he later asked for another booking, his ticket was canceled by KAL. Consequently,
he was unable to report for his work in Saudi Arabia within the stipulated 2-week period and so lost his employment.
KAL, alleged that Pan Pacific Recruiting Services Inc. coordinated with KAL for the departure of 30 contract workers, of whom only 21
were confirmed and 9 were wait-listed passengers. The agent of Pan Pacific, Jimmie Joseph, after being informed that there was a
possibility of having one or two seats becoming available, gave priority to Perico, who was one of the supervisors of the hiring
company in Saudi Arabia. The other seat was won through lottery by Lapuz. However, only one seat became available and so,
pursuant to the earlier agreement that Perico was to be given priority, he alone was allowed to board.
The Trial Court ruled in favor of KALs liability. This was modified upon appeal in relation to award given to herein respondent.
Ruling: The status of Lapuz as standby passenger was changed to that of a confirmed passenger when his name was entered in the
passenger manifest of KAL for its Flight No. KE 903. His clearance through immigration and customs clearly shows that he had
indeed been confirmed as a passenger of KAL in that flight. KAL thus committed a breach of the contract of carriage between them
when it failed to bring Lapuz to his destination.
This Court has held that a contract to transport passengers is different in kind and degree from any other contractual relation. The
business of the carrier is mainly with the traveling public. It invites people to avail themselves of the comforts and advantages it
offers. The contract of air carriage generates a relation attended with a public duty. Passengers have the right to be treated by the
carrier's employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal
misconduct, injurious language, indignities and abuses from such employees. 4 So it is that any discourteous conduct on the part of
these employees toward a passenger gives the latter an action for damages against the carrier.
KAL argues that "the evidence of confirmation of a chance passenger status is not through the entry of the name of a chance
passenger in the passenger manifest nor the clearance from the Commission on Immigration and Deportation, because they are
merely means of facilitating the boarding of a chance passenger in case his status is confirmed." The Court is not persuaded.
The evidence presented by Lapuz shows that he had indeed checked in at the departure counter, passed through customs and
immigration, boarded the shuttle bus and proceeded to the ramp of KAL's aircraft. In fact, his baggage had already been loaded in
KAL's aircraft, to be flown with him to Jeddah. The contract of carriage between him and KAL had already been perfected when he
was summarily and insolently prevented from boarding the aircraft.
G.R. No. 145804. February 6, 2003
LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, vs. MARJORIE NAVIDAD,
Nicanor Navidad entered the EDSA LRT station after purchasing a token. While Navidad was standing on the platform near the LRT
tracks, Junelito Escartin, the security guard assigned to the area approached Navidad. A misunderstanding or an altercation between
the two apparently ensued that led to a fist fight. No evidence, however, was adduced to indicate how the fight started or who,
between the two, delivered the first blow or how Navidad later fell on the LRT tracks. At the exact moment that Navidad fell, an LRT
train, operated by petitioner Rodolfo Roman, was coming in. Navidad was struck by the moving train, and he was killed
instantaneously.
The widow of Nicanor, along with her children, filed a complaint for damages against Junelito Escartin, Rodolfo Roman, the LRTA, the
Metro Transit Organization, Inc. (Metro Transit), and Prudent for the death of her husband.
Ruling: Law and jurisprudence dictate that a common carrier, both from the nature of its business and for reasons of public policy, is
burdened with the duty of exercising utmost diligence in ensuring the safety of passengers.[4] The Civil Code, governing the liability
of a common carrier for death of or injury to its passengers, provides:

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Article 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due regard for all the circumstances.
Article 1756. 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 extraordinary diligence as prescribed in articles 1733 and 1755.
Article 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the
formers employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the
common carriers.
This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in
the selection and supervision of their employees.
Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the willful acts or negligence of
other passengers or of strangers, if the common carriers employees through the exercise of the diligence of a good father of a
family could have prevented or stopped the act or omission.
The law requires common carriers to carry passengers safely using the utmost diligence of very cautious persons with due regard for
all circumstances. Such duty of a common carrier to provide safety to its passengers so obligates it not only during the
course of the trip but for so long as the passengers are within its premises and where they ought to be in pursuance
to the contract of carriage. The statutory provisions render a common carrier liable for death of or injury to passengers (a)
through the negligence or wilful acts of its employees or b) on account of wilful acts or negligence of other passengers or of
strangers if the common carriers employees through the exercise of due diligence could have prevented or stopped the act or
omission. In case of such death or injury, a carrier is presumed to have been at fault or been negligent, and by simple
proof of injury, the passenger is relieved of the duty to still establish the fault or negligence of the carrier or of its
employees and the burden shifts upon the carrier to prove that the injury is due to an unforeseen event or to force
majeure. In the absence of satisfactory explanation by the carrier on how the accident occurred, which petitioners,
according to the appellate court, have failed to show, the presumption would be that it has been at fault, an
exception from the general rule that negligence must be proved.
The foundation of LRTAs liability is the contract of carriage and its obligation to indemnify the victim arises from the breach of that
contract by reason of its failure to exercise the high diligence required of the common carrier. In the discharge of its commitment to
ensure the safety of passengers, a carrier may choose to hire its own employees or avail itself of the services of an outsider or an
independent firm to undertake the task. In either case, the common carrier is not relieved of its responsibilities under the contract of
carriage.
However, Prudent cannot be held liable for the failure to prove the negligence of its employee. The employer can then be made
liable on the basis of the presumption juris tantum that the employer failed to exercise diligentissimi patris families in the selection
and supervision of its employees. The liability is primary and can only be negated by showing due diligence in the selection and
supervision of the employee, a factual matter that has not been shown. Absent such a showing, one might ask further, The liability
of the common carrier and the independent contractor would then be solidary. A contractual obligation can be breached by tort and
when the same act or omission causes the injury, one resulting in culpa contractual and the other in culpa aquiliana, Article
2194[14] of the Civil Code can well apply.[15] In fine, a liability for tort may arise even under a contract, where tort is that which
breaches the contract.[16] Stated differently, when an act which constitutes a breach of contract would have itself constituted the
source of a quasi-delictual liability had no contract existed between the parties, the contract can be said to have been breached by
tort, thereby allowing the rules on tort to apply.
G.R. No. L-47822 December 22, 1988
PEDRO DE GUZMAN, vs. COURT OF APPEALS and ERNESTO CENDANA
Respondent is a junk dealer engaged in buying up used bottles and scrap metal in Pangasinan. Upon gathering sufficient quantities
of such scrap material, respondent would bring such material to Manila for resale. He utilized two (2) six-wheeler trucks which he
owned for hauling the material to Manila. On the return trip to Pangasinan, respondent would load his vehicles with cargo which
various merchants wanted delivered to differing establishments in Pangasinan. For that service, respondent charged freight rates
which were commonly lower than regular commercial rates.
Petitioner Pedro de Guzman a merchant and dealer contracted with respondent for the hauling of 750 cartons of Liberty filled milk
from a warehouse to petitioner's establishment in Urdaneta. Accordingly respondent loaded in Makati the merchandise on to his
trucks: 150 cartons were loaded on a truck driven by respondent himself, while 600 cartons were placed on board the other truck
which was driven by Manuel Estrada, respondent's driver and employee.
Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes never reached petitioner, since the truck
which carried these boxes was hijacked by armed men who took with them the truck, its driver, his helper and the cargo.
An action against private respondent was commenced demanding payment of the claimed value of the lost merchandise, plus
damages and attorney's fees. Petitioner argued that private respondent, being a common carrier, and having failed to exercise the
extraordinary diligence required of him by the law, should be held liable for the value of the undelivered goods. The Regional Trial
Court ruled in favor of the petitioner but such decision was reversed by the appellate court.
Issue:
1.
2.

Whether or not private respondent was a common carrier;

Whether or not the hijacking of respondent's truck was force majeure; and whether or not respondent was liable for the
value of the undelivered cargo.

Held:
1. Yes, the private respondent was a common carrier.
The Civil Code defines "common carriers" in the following terms:

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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.
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. ...
(Emphasis supplied)
It appears to the Court that private respondent is properly characterized as a common carrier even though he merely "back-hauled"
goods for other merchants from Manila to Pangasinan, although such back-hauling was done on a periodic or occasional rather than
regular or scheduled manner, and even though private respondent's principal occupation was not the carriage of goods for others.
Also, a certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing
common carriers. That liability arises the moment a person or firm acts as a common carrier, without regard to whether or not such
carrier has also complied with the requirements of the applicable regulatory statute and implementing regulations and has been
granted a certificate of public convenience or other franchise. 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. The business of a common
carrier impinges directly and intimately upon the safety and well being and property of those members of the general community
who happen to deal with such carrier. The law imposes duties and liabilities upon common carriers for the safety and protection of
those who utilize their services and the law cannot allow a common carrier to render such duties and liabilities merely facultative by
simply failing to obtain the necessary permits and authorizations.
2. Private respondent Cendana is not liable for the value of the undelivered merchandise which was lost because of an event entirely
beyond private respondent's control.
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)
(2)
(3)
(4)
(5)

Flood, storm, earthquake, lightning or other natural disaster or calamity;

Act of the public enemy in war, whether international or civil;
Act or omission of the shipper or owner of the goods;
The character-of the goods or defects in the packing or-in the containers; and
Order or act of competent public authority.

It is important to point out that 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)
Applying the above-quoted Articles 1734 and 1735, we note firstly that the specific cause alleged in the instant case the hijacking
of the carrier's truck does not fall within any of the five (5) categories of exempting causes listed in Article 1734. It would follow,
therefore, that the hijacking of the carrier's vehicle must be dealt with under the provisions of Article 1735, in other words, that the
private respondent as common carrier is presumed to have been at fault or to have acted negligently. This presumption, however,
may be overthrown by proof of extraordinary diligence on the part of private respondent.
Petitioner insists that private respondent had not observed extraordinary diligence in the care of petitioner's goods. Petitioner
argues that in the circumstances of this case, private respondent should have hired a security guard presumably to ride with the
truck carrying the 600 cartons of Liberty filled milk. We do not believe, however, that in the instant case, the standard of
extraordinary diligence required private respondent to retain a security guard to ride with the truck and to engage brigands in a
firelight at the risk of his own life and the lives of the driver and his helper.
The precise issue that we address here relates to the specific requirements of the duty of extraordinary diligence in the vigilance
over the goods carried in the specific context of hijacking or armed robbery.
As noted earlier, the duty of extraordinary diligence in the vigilance over goods is, under Article 1733, given additional specification
not only by Articles 1734 and 1735 but also by Article 1745, numbers 4, 5 and 6, Article 1745 provides in relevant part:
Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy:
xxx
xxx
xxx
(5) that the common carrier shall not be responsible for the acts or omissions of his or its employees;
(6) that the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or irresistible
threat, violence or force, is dispensed with or diminished; and
(7) that the common carrier shall not responsible for the loss, destruction or deterioration of goods on account of the defective
condition of the car vehicle, ship, airplane or other equipment used in the contract of carriage. (Emphasis supplied)

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Under Article 1745 (6) above, a common carrier is held responsible and will not be allowed to divest or to diminish such
responsibility even for acts of strangers like thieves or robbers, except where such thieves or robbers in fact acted "with grave or
irresistible threat, violence or force." We believe and so hold that the limits of the duty of extraordinary diligence in the vigilance
over the goods carried are reached where the goods are lost as a result of a robbery which is attended by "grave or irresistible
threat, violence or force."
In these circumstances, we hold that the occurrence of the loss must reasonably be regarded as quite beyond the control of the
common carrier and properly regarded as a fortuitous event. It is necessary to recall that even common carriers are not
made absolute insurers against all risks of travel and of transport of goods, and are not held liable for acts or events
which cannot be foreseen or are inevitable, provided that they shall have complied with the rigorous standard of
extraordinary diligence.
G.R. No. 101503 September 15, 1993
PLANTERS PRODUCTS, INC. vs. COURT OF APPEALS, SORIAMONT STEAMSHIP AGENCIES AND KYOSEI KISEN KABUSHIKI
KAISHA,
Planters Products, Inc. (PPI), purchased metric tons (M/T) of Urea fertilizer which the latter shipped in bulk aboard the cargo vessel
M/V "Sun Plum" owned by private respondent Kyosei Kisen Kabushiki Kaisha (KKKK). Before loading the fertilizer aboard the vessel,
four (4) of her holds were all presumably inspected by the charterer's representative and found fit to take a load of urea in bulk
pursuant to par. 16 of the charter-party
A private marine and cargo surveyor, Cargo Superintendents Company Inc. (CSCI), was hired by PPI to determine the "outturn" of
the cargo shipped, by taking draft readings of the vessel prior to and after discharge. The survey report submitted by CSCI to the
consignee revealed a shortage in the cargo and that a portion of the Urea fertilizer approximating was contaminated with dirt. The
same results were contained in a Certificate of Shortage/Damaged Cargo prepared by PPI which showed that the cargo delivered
was indeed short and were rendered unfit for commerce, having been polluted with sand, rust and dirt.
Consequently, PPI sent a claim letter dated 18 December 1974 to Soriamont Steamship Agencies (SSA), the resident agent of the
carrier, KKKK, for the cost of the alleged shortage in the goods shipped and the diminution in value of that portion said to have been
contaminated with dirt. Such claim was dismissed with SSA denying role in the discharge of the shipment. The PPI filed an action for
damages. The defendant carrier argued that the strict public policy governing common carriers does not apply to them because
they have become private carriers by reason of the provisions of the charter-party.
The Trial Court ruled in favor of herein petitioner but such was reversed by the appellate court.
Issue: Does a charter-party between a shipowner and a charterer transform a common carrier into a private one?
Held: A "charter-party" is defined as a contract by which an entire ship, or some principal part thereof, is let by the owner to another
person for a specified time or use; a contract of affreightment by which the owner of a ship or other vessel lets the whole or a part of
her to a merchant or other person for the conveyance of goods, on a particular voyage, in consideration of the payment of freight;
Charter parties are of two types: (a) contract of affreightment which involves the use of shipping space on vessels leased by the
owner in part or as a whole, to carry goods for others; and, (b) charter by demise or bareboat charter, by the terms of which the
whole vessel is let to the charterer with a transfer to him of its entire command and possession and consequent control over its
navigation, including the master and the crew, who are his servants. Contract of affreightment may either be time charter, wherein
the vessel is leased to the charterer for a fixed period of time, or voyage charter, wherein the ship is leased for a single voyage. In
both cases, the charter-party provides for the hire of vessel only, either for a determinate period of time or for a single or
consecutive voyage, the shipowner to supply the ship's stores, pay for the wages of the master and the crew, and defray the
expenses for the maintenance of the ship.
It is not disputed that respondent carrier, in the ordinary course of business, operates as a common carrier, transporting goods
indiscriminately for all persons. When petitioner chartered the vessel M/V "Sun Plum", the ship captain, its officers and compliment
were under the employ of the shipowner and therefore continued to be under its direct supervision and control. Hardly then can we
charge the charterer, a stranger to the crew and to the ship, with the duty of caring for his cargo when the charterer did not have
any control of the means in doing so. This is evident in the present case considering that the steering of the ship, the manning of the
decks, the determination of the course of the voyage and other technical incidents of maritime navigation were all consigned to the
officers and crew who were screened, chosen and hired by the shipowner.
It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the whole or
portion of a vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a timecharter or voyage-charter. It is only when the charter includes both the vessel and its crew, as in a bareboat or
demise that a common carrier becomes private, at least insofar as the particular voyage covering the charter-party is
concerned. Indubitably, a shipowner in a time or voyage charter retains possession and control of the ship, although
her holds may, for the moment, be the property of the charterer.
However respondent carrier cannot be held liable. It has sufficiently overcome, by clear and convincing proof, the prima facie
presumption of negligence. Verily, the presumption of negligence on the part of the respondent carrier has been efficaciously
overcome by the showing of extraordinary zeal and assiduity exercised by the carrier in the care of the cargo.
G.R. No. 101089. April 7, 1993.
ESTRELLITA M. BASCOS, vs. COURT OF APPEALS and RODOLFO A. CIPRIANO
Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE for short) entered into a hauling contract with Jibfair
Shipping Agency Corporation whereby the former bound itself to haul the latter's 2,000 m/tons of soya bean meal from Magallanes
Drive, Del Pan, Manila to the warehouse of Purefoods Corporation in Calamba, Laguna. To carry out its obligation, CIPTRADE, through
Rodolfo Cipriano, subcontracted with Estrellita Bascos (petitioner) to transport and to deliver 400 sacks of soya bean meal worth
P156,404.00 from the Manila Port Area to Calamba, Laguna at the rate of P50.00 per metric ton. Petitioner failed to deliver the said

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cargo. As a consequence of that failure, Cipriano paid Jibfair Shipping Agency the amount of the lost goods in accordance with the
contract
A case was subsequently filed where herein petition argued that there was no contract of carriage since CIPTRADE leased her cargo
truck to load the cargo from Manila Port Area to Laguna; that CIPTRADE was liable to petitioner in the amount of P11,000.00 for
loading the cargo; that the truck carrying the cargo was hijacked along Canonigo St., Paco, Manila on the night of October 21, 1988;
that the hijacking was immediately reported to CIPTRADE and that petitioner and the police exerted all efforts to locate the hijacked
properties; that after preliminary investigation, an information for robbery and carnapping were filed against Jose Opriano, et al.; and
that hijacking, being a force majeure, exculpated petitioner from any liability to CIPTRADE.
The Trial Court ruled in favor of herein respondent. This was affirmed by the Court of Appeals
Issue:
1. Whether or not there was a contractual relationship of carriage of goods between petition and the private respondent.
2. Granting that it was a carriage of good, may the carnapping/ hijacking fall under force majeure and exclude petitioner from
liability
Held:
1. Yes the petitioner is a common carrier.
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.
The argument of petitioner that the relationship was a contract of lease since their services are offered only to a select group of
people cannot be sustained. The Court held in De Guzman vs. Court of Appeals that "The above article (Art 1732) makes no
distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such
carrying only as an ancillary activity (in local idiom, as a "sideline"). Article 1732 also carefully avoids making any distinction
between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the
"general public," i.e., the general community or population, and one who offers services or solicits business only from a narrow
segment of the general population. We think that Article 1732 deliberately refrained from making such distinctions."
2. The loss of the goods was not due to force majeure.
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.
In this case, petitioner alleged that hijacking constituted force majeure which exculpated her from liability for the loss of the cargo.
In De Guzman vs. Court of Appeals, the Court held that hijacking, not being included in the provisions of Article 1734, must be dealt
with under the provisions of Article 1735 and thus, the common carrier is presumed to have been at fault or negligent. To exculpate
the carrier from liability arising from hijacking, he must prove that the robbers or the hijackers acted with grave or irresistible threat,
violence, or force.
To establish grave and irresistible force, petitioner presented her accusatory affidavit, Jesus Bascos' affidavit, and Juanito Morden's
"Salaysay". However, both the trial court and the Court of Appeals have concluded that these affidavits were not enough to
overcome the presumption. Petitioner's affidavit about the hijacking was based on what had been told her by Juanito Morden. It was
not a first-hand account. While it had been admitted in court for lack of objection on the part of private respondent, the respondent
Court had discretion in assigning weight to such evidence.
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.
G.R. No. 111127. July 26, 1996
MR. & MRS. ENGRACIO FABRE, JR.* and PORFIRIO CABIL, vs. COURT OF APPEALS
Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model Mazda minibus. They used the bus principally in connection
with a bus service for school children which they operated in Manila. The couple had a driver, whom they hired in 1981.
Private respondent Word for the World Christian Fellowship Inc. (WWCF) arranged with petitioners for the transportation of 33
members of its Young Adults Ministry from Manila to La Union and back in consideration of which private respondent paid petitioners
the amount of P3,000.00. The group in one of its trips was delayed because of the tardiness of some of the participants. The usual
route was changed and driver was forced to take a detour. Since the road was slippery the bus, which was running at the speed of
50 kilometers per hour, hit the left traffic steel brace and sign along the road and rammed the fence of one Jesus Escano, then
turned over and landed on its left side, coming to a full stop only after a series of impacts. The bus came to rest off the road. A
coconut tree which it had hit fell on it and smashed its front portion.
Several passengers were injured. Private respondent Amyline Antonio was thrown on the floor of the bus and pinned down by a
wooden seat which came off after being unscrewed. It took three persons to safely remove her from this position. She was in great
pain and could not move. The driver, petitioner Cabil, claimed he did not see the curve until it was too late. He said he was not
familiar with the area and he could not have seen the curve despite the care he took in driving the bus, because it was dark and

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there was no sign on the road. He said that he saw the curve when he was already within 15 to 30 meters of it. He allegedly slowed
down to 30 kilometers per hour, but it was too late.
Amyline Antonio, who was seriously injured, brought this case in the RTC of Makati, Metro Manila. As a result of the accident, she is
now suffering from paraplegia and is permanently paralyzed from the waist down. During the trial she described the operations she
underwent and adduced evidence regarding the cost of her treatment and therapy.
The Trial Court ruled in favor of respondent. This ws sustained by the Court of Appeals
Issue: Whether or not petitioners were negligent. And thus liable for the injuries suffered by private respondents.
Ruling:
It is unnecessary for our purpose to determine whether to decide this case on the theory that petitioners are liable for breach of
contract of carriage or culpa contractual or on the theory of quasi delict or culpa aquiliana as both the Regional Trial Court and the
Court of Appeals held, for although the relation of passenger and carrier is contractual both in origin and nature, nevertheless the
act that breaks the contract may be also a tort. In either case, the question is whether the bus driver, petitioner Porfirio Cabil, was
negligent.
The finding that Cabil drove his bus negligently, while his employer, the Fabres, who owned the bus, failed to exercise the diligence
of a good father of the family in the selection and supervision of their employee is fully supported by the evidence on record. These
factual findings of the two courts we regard as final and conclusive, supported as they are by the evidence. Indeed, it was admitted
by Cabil that on the night in question, it was raining, and, as a consequence, the road was slippery, and it was dark. He averred
these facts to justify his failure to see that there lay a sharp curve ahead. However, it is undisputed that Cabil drove his bus at the
speed of 50 kilometers per hour and only slowed down when he noticed the curve some 15 to 30 meters ahead. By then it was too
late for him to avoid falling off the road. Given the conditions of the road and considering that the trip was Cabils first one outside of
Manila, Cabil should have driven his vehicle at a moderate speed. There is testimony that the vehicles passing on that portion of the
road should only be running 20 kilometers per hour, so that at 50 kilometers per hour, Cabil was running at a very high speed.
Considering the foregoing the fact that it was raining and the road was slippery, that it was dark, that he drove his bus at 50
kilometers an hour when even on a good day the normal speed was only 20 kilometers an hour, and that he was unfamiliar with the
terrain, Cabil was grossly negligent and should be held liable for the injuries suffered by private respondent Amyline Antonio.
Due diligence in selection of employees is not satisfied by finding that the applicant possessed a professional drivers license. The
employer should also examine the applicant for his qualifications, experience and record of service.Due diligence in supervision, on
the other hand, requires the formulation of rules and regulations for the guidance of employees and the issuance of proper
instructions as well as actual implementation and monitoring of consistent compliance with the rules.
In the case at bar, the Fabres, in allowing Cabil to drive the bus to La Union, apparently did not consider the fact that Cabil had been
driving for school children only, from their homes to the St. Scholasticas College in Metro Manila. They had hired him only after a
two-week apprenticeship. They had tested him for certain matters, such as whether he could remember the names of the children
he would be taking to school, which were irrelevant to his qualification to drive on a long distance travel, especially considering that
the trip to La Union was his first. The existence of hiring procedures and supervisory policies cannot be casually invoked to overturn
the presumption of negligence on the part of an employer.
As common carriers, the Fabres were bound to exercise extraordinary diligence for the safe transportation of the passengers to their
destination. This duty of care is not excused by proof that they exercised the diligence of a good father of the family in the selection
and supervision of their employee.
G.R. No. 125948. December 29, 1998
FIRST PHILIPPINE INDUSTRIAL CORPORATION, vs. COURT OF APPEALS
Petitioner is a grantee of a pipeline concession under Republic Act No. 387, as amended, to contract, install and operate oil
pipelines. The original pipeline concession was granted in 1967 and renewed by the Energy Regulatory Board in 1992.
Sometime in January 1995, petitioner applied for a mayor's permit with the Office of the Mayor of Batangas City. However, before
the mayor's permit could be issued, the respondent City Treasurer required petitioner to pay a local tax based on its gross receipts
pursuant to the Local Government Code. Petitioner filed a letter-protest addressed to the respondent City Treasurer. In its letter it
stated that the Company (FPIC) is a pipeline operator with a government concession granted under the Petroleum Act. It is engaged
in the business of transporting petroleum products and as such Transportation contractors are not included in the enumeration of
contractors under Section 131, Paragraph (h) of the Local Government Code. Therefore, the authority to impose tax 'on contractors
and other independent contractors' under Section 143, Paragraph (e) of the Local Government Code does not include the power to
levy on transportation contractors.
The respondent City Treasurer denied the protest contending that petitioner cannot be considered engaged in transportation
business, thus it cannot claim exemption under Section 133 (j) of the Local Government Code. Petitioner filed with the Regional Trial
Court a complaint for tax refund .
Issue: Whether or not petitioner is a common carrier
Ruling: A "common carrier" may be defined, broadly, as one who holds himself out to the public as engaged in the business of
transporting persons or property from place to place, for compensation, offering his services to the public generally.
Article 1732 of the Civil Code defines a "common carrier" as "any person, corporation, firm or association engaged in the business of
carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public."
The test for determining whether a party is a common carrier of goods is:

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1.
2.
3.
4.

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;
He must undertake to carry goods of the kind to which his business is confined;
He must undertake to carry by the method by which his business is conducted and over his established roads; and
The transportation must be for hire.

Based on the above definitions and requirements, 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. The
fact that petitioner has a limited clientele does not exclude it from the definition of a common carrier.

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