G.R. No. 143133 June 5, 2002 claims with the quantum of proof required by law.

claims with the quantum of proof required by law. In reversing the trial court, the CA
ruled that petitioners were liable for the loss or the damage of the goods shipped,
BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V. because they had failed to overcome the presumption of negligence imposed on
and JARDINE DAVIES TRANSPORT SERVICES, INC., petitioners, common carriers.
vs.
PHILIPPINE FIRST INSURANCE CO., INC., respondents.
ISSUES:
1. Whether petitioners have overcome the presumption of negligence of a
Proof of the delivery of common carrier
goods in good order to a
common carrier and of 2. Whether the notice of loss was timely filed
their arrival in bad order
at their destination
constitutes prima facie RULING:
fault or negligence on the 1. Owing to the high degree of diligence required of them, common carriers,
part of the carrier. If no as a general rule, are presumed to have been at fault or negligent if the goods they
adequate explanation is transported deteriorated or got lost or destroyed unless they prove that they exercised
given as to how the loss, extraordinary diligence in transporting the goods.
the destruction or the
deterioration of the Well-settled is the rule that common carriers, from the nature of their
goods happened, the business and for reasons of public policy, are bound to observe extraordinary diligence
carrier shall be held liable and vigilance with respect to the safety of the goods and the passengers they transport.
therefor. Thus, common carriers are required to render service with the greatest skill and
foresight and "to use all reasonable means to ascertain the nature and characteristics of
FACTS: the goods tendered for shipment, and to exercise due care in the handling and stowage,
On June 13, 1990, CMC Trading A.G. shipped on board the M/V 'Anangel Sky' including such methods as their nature requires."
at Hamburg, Germany 242 coils of various Prime Cold Rolled Steel sheets for
transportation to Manila consigned to the Philippine Steel Trading Corporation. On July This strict requirement is justified by the fact that, without a hand or a voice
28, 1990, M/V Anangel Sky arrived at the port of Manila and, within the subsequent in the preparation of such contract, the riding public enters into a contract of
days, discharged the subject cargo. Four (4) coils were found to be in bad order. Finding transportation with common carriers. Even if it wants to, it cannot submit its own
the four (4) coils in their damaged state to be unfit for the intended purpose, the stipulations for their approval. Hence, it merely adheres to the agreement prepared by
consignee Philippine Steel Trading Corporation declared the same as total loss. them. In order to avoid responsibility for any loss or damage, therefore, they have the
burden of proving that they observed such diligence.
Plaintiff-appellant instituted a complaint for recovery of the amount paid by
them, to the consignee as insured. The presumption of fault or negligence, however, will not arise if the loss is
due to any of the following causes: (1) flood, storm, earthquake, lightning, or other
Impugning the propriety of the suit against them, defendants-appellees natural disaster or calamity; (2) an act of the public enemy in war, whether international
imputed that the damage and/or loss was due to pre-shipment damage, to the inherent or civil; (3) an act or omission of the shipper or owner of the goods; (4) the character of
nature, vice or defect of the goods, or to perils, danger and accidents of the sea, or to the goods or defects in the packing or the container; or (5) an order or act of competent
insufficiency of packing thereof, or to the act or omission of the shipper of the goods or public authority.
their representatives. Finally, defendants-appellees averred that, in any event, they
exercised due diligence and foresight required by law to prevent any damage/loss to said Consequently, themere proof of delivery of the goods in good order to a
shipment. common carrier and of their arrival in bad order at their destination constitutes a
prima facie case of fault or negligence against the carrier. If no adequate explanation is
The RTC dismissed the Complaint because respondent had failed to prove its given as to how the deterioration, the loss or the destruction of the goods happened,
the transporter shall be held responsible.
2. The notice of loss was timely filed.
Notice of claim need not be given if the state of the goods, at the time of their
receipt, has been the subject of a joint inspection or survey. Prior to unloading the cargo,
an Inspection Report as to the condition of the goods was prepared and signed by
representatives of both parties. Furthermore, failure to file a notice of claim within three
days will not bar recovery if it is nonetheless filed within one year. This one-year
prescriptive period also applies to the shipper, the consignee, the insurer of the goods or
any legal holder of the bill of lading.
In Loadstar Shipping Co., Inc, v. Court of Appeals, a claim is not barred by
prescription as long as the one-year period has not lapsed. In the present case, the cargo
was discharged on July 31, 1990, while the Complaint was filed by respondent on July 25,
1991, within the one-year prescriptive period.
Hence, petitioner’s claim that pursuant to Section 3, paragraph 6 of the
Carriage of Goods by Sea Act44 (COGSA), respondent should have filed its Notice of Loss
within three days from delivery. They assert that the cargo was discharged on July 31,
1990, but that respondent filed its Notice of Claim only on September 18, 1990 is
untenable.
G.R. No. 127897 November 15, 2001
DELSAN TRANSPORT LINES, INC., petitioner,
vs.
COURT OF APPEALS, respondents.
FACTS:
Caltex Philippines (Caltex for brevity) entered into a contract of affreightment
with the petitioner, Delsan Transport Lines, Inc., for a period of one year whereby the
said common carrier agreed to transport Caltexs industrial fuel oil from the Batangas-
Bataan Refinery to different parts of the country. Under the contract, petitioner took on
board its vessel, MT Maysun, 2,277.314 kiloliters of industrial fuel oil of Caltex to be
delivered to the Caltex Oil Terminal in Zamboanga City. The shipment was insured with
the private respondent, American Home Assurance Corporation.
On August 14, 1986, MT Maysun set sail from Batangas for Zamboanga City.
Unfortunately, the vessel sank in the early morning of August 16, 1986 near Panay Gulf
in the Visayas taking with it the entire cargo of fuel oil.
Subsequently, private respondent paid Caltex the sum of Five Million Ninety-
Six Thousand Six Hundred Thirty-Five Pesos and Fifty-Seven Centavos (P5,096,635.57)
representing the insured value of the lost cargo. Exercising its right of subrogation under
Article 2207 of the New Civil Code, the private respondent demanded of the petitioner
the same amount it paid to Caltex.
Due to its failure to collect from the petitioner despite prior demand, private
respondent filed a complaint with the Regional Trial Court of Makati City, Branch 137, for
collection of a sum of money. After the trial and upon analyzing the evidence adduced,
the trial court rendered a decision on November 29, 1990 dismissing the complaint
against herein petitioner without pronouncement as to cost. The trial court found that
the vessel, MT Maysun, was seaworthy to undertake the voyage as determined by the
Philippine Coast Guard per Survey Certificate Report No. M5-016-MH upon inspection
during its annual dry-docking and that the incident was caused by unexpected inclement
weather condition or force majeure, thus exempting the common carrier (herein
petitioner) from liability for the loss of its cargo.
ISSUE:
Whether or not petitioner should be held liable for damages.
HELD:
YES. From the nature of their business and for reasons of public policy,
common carriers are bound to observe extraordinary diligence in the vigilance over the
goods and for the safety of passengers transported by them, according to all the
circumstance of each case.
In the event of loss, destruction or deterioration of the insured goods,
common carriers shall be responsible unless the same is brought about, among others,
by flood, storm, earthquake, lightning or other natural disaster or calamity. (Art. 1734)
In all other cases, 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. The tale of strong winds and big waves by the said
officers of the petitioner however, was effectively rebutted and belied by the weather
report from the PAGASA showing that from 2:00 o’clock to 8:00 o’clock in the morning
on August 16, 1986, the wind speed remained at ten (10) to twenty (20) knots per hour
whilethe height of the waves ranged from .7 to two (2) meters in the vicinity of Cuyo
East Pass and Panay Gulf where the subject vessel sank. Thus, as the appellate court
correctly ruled, petitioner’s vessel, MT Maysun, sank with its entire cargo for the reason
that it was not seaworthy. There was no squall or bad weather or extremely poor sea
condition in the vicinity when the said vessel sank. Thus not having overturned the
evidence presented, (that it observed extraordinary diligence) the presumption of
negligence stands, and therefore it is but right and proper to rule that petitioner should
be held liable for damages.

Pedro De Guzman vs.
Court of Appeals and Ernesto Cendana
G.R. No. L-47822 December 22, 1988
Feliciano, J.
Facts:
Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used
bottles and scrap metal in Pangasinan. He would bring such material to Manila for
resale. He utilized two six-wheeler trucks which he owned for hauling the material to
Manila. On the return trip to Pangasinan, he 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 authorized dealer of General
Milk Company contracted with respondent for the hauling of 750 cartons of Liberty
filled milk from a warehouse of General Milk in Makati, Rizal, to petitioner's
establishment in Urdaneta. One hundred fifty (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.
The 600 boxes never reached petitioner, 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.
Petitioner commenced action against private respondent in the Court of First
Instance of Pangasinan. He 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.
Private respondent 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.
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 well as
for damages and attorney's fees. The Court of Appeals reversed the judgment of the
trial court.
ISSUES:
1. Whether or not Ernesto Cendana may, under the facts earlier set forth, be
properly characterized as a common carrier.
2. Whether or not high jacking with robbery can be properly regarded as a
fortuitous event that can exempt the carrier.
RULING:
Article 1732. Common carriers are persons, corporations, firms or associations engaged
in the business of carrying or transporting passengers or goods or both, by land, water,
or air for compensation, offering their services to the public.
The above article 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."
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. There is no dispute that private respondent charged his
customers a fee for hauling their goods; that fee frequently fell below commercial
freight rates is not relevant here.
Common carriers, "by the nature of their business and for reasons of public policy" 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.
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:
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.
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."
The Court held 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.
FORTUNE EXPRESS, INC. vs. COURT OF APPEALS
G.R. No. 119756. March 18, 1999
MENDOZA, J.
Facts:
On November 18, 1989, a bus of petitioner figured in an accident with a
jeepney in Lanao del Norte, resulting in the death of several passengers of the jeepney,
including two Maranaos. Crisanto Generalao, a volunteer field agent of the Constabulary
Regional Security Unit No. X, conducted an investigation of the accident. He found that
the owner of the jeepney was a Maranao and that certain Maranaos were planning to
take revenge on the petitioner by burning some of its buses. Diosdado Bravo, operations
manager of petitioner, was informed of the investigation and assured that the necessary
precautions to insure the safety of lives and property would be taken.
Three armed Maranaos who pretended to be passengers, seized a bus of
petitioner while on its way to Iligan City. Among the passengers of the bus was Atty.
Caorong. The leader of the Maranaos ordered the driver, Godofredo Cabatuan, to stop
the bus on the side of the highway. They started pouring gasoline inside the bus and
ordered the passengers to get off the bus.
However, Atty. Caorong returned to the bus to retrieve something from the
overhead rack. Atty. Caorong pleading with the armed men to spare the driver as he
was innocent of any wrong doing and was only trying to make a living. During this
exchange between Atty. Caorong and the assailants, Cabatuan climbed out of the left
window of the bus and crawled to the canal on the opposite side of the highway. He
heard shots from inside the bus. Larry de la Cruz, one of the passengers, saw that Atty.
Caorong was hit. Then the bus was set on fire. Some of the passengers were able to pull
Atty. Caorong out of the burning bus and rush him to the Mercy Community Hospital in
Iligan City, but he died while undergoing operation.
Private respondents brought this suit for breach of contract of carriage in the
Regional Trial Court. The trial court dismissed the complaint. On appeal, CA reversed the
decision of the trial court.
Issues:
1. Whether or not petitioner is liable for the death of Atty. Caorong.
2. Whether or not the attack of the Maranaos constituted causo fortuito.
Ruling:
Art. 1763 of the Civil Code provides that a common carrier is responsible for
injuries suffered by a passenger on account of the wilful acts of other passengers, if the
employees of the common carrier could have prevented the act the exercise of the
diligence of a good father of a family. In the present case, it is clear that because of the
negligence of petitioners employees, the seizure of the bus by Mananggolo and his men
was made possible.
Despite warning by the Philippine Constabulary at Cagayan de Oro that the
Maranaos were planning to take revenge on the petitioner by burning some of its buses
and the assurance of petitioners operation manager, Diosdado Bravo, that the
necessary precautions would be taken, petitioner did nothing to protect the safety of its
passengers.
 Under the circumstances, simple precautionary measures to protect the
safety of passengers, such as frisking passengers and inspecting their baggages,
preferably with non-intrusive gadgets such as metal detectors, before allowing them on
board could have been employed without violating the passengers constitutional rights.
From the foregoing, it is evident that petitioners employees failed to prevent the attack
on one of petitioners buses because they did not exercise the diligence of a good father
of a family. Hence, petitioner should be held liable for the death of Atty. Caorong.
Art. 1174 of the Civil Code defines a fortuitous even as an occurrence which
could not be foreseen or which though foreseen, is inevitable.
In the present case, the factor of being unforeseeable is lacking. As already
stated, despite the report of PC agent Generalao that the Maranaos were planning to
burn some of petitioners buses and the assurance of petitioners operations manager
(Diosdado Bravo) that the necessary precautions would be taken, nothing was really
done by petitioner to protect the safety of passengers.
G.R. No. L-16629 January 31, 1962
SOUTHERN LINES, INC., petitioner,
vs.
COURT OF APPEALS and CITY OF ILOILO, respondents.
In this case, the City of Iloilo requisitioned for rice from the National Rice and
Corn Corporation (NARIC) in Manila. NARIC, pursuant to the order, shipped 1,726 sacks
of rice consigned to the City of Iloilo on board the SS "General Wright" belonging to the
Southern Lines, Inc. Each sack of rice weighed 75 kilos and the entire shipment as
indicated in the bill of lading had a total weight of 129,450 kilos. The cost of the
shipment was P63,115.50.
The City of Iloilo received the shipment and paid the amount of P63,115.50.
However, it was noted that the foot of the bill of lading that the City of Iloilo 'Received
the above mentioned merchandise apparently in same condition as when shipped, save
as noted below: actually received 1685 sacks with a gross weight of 116,131 kilos upon
actual weighing. Total shortage ascertained 13,319 kilos. The shortage was equivalent
to 41 sacks of rice with a net weight of 13,319 kilos, the proportionate value of which
was P6,486.35.
On February 14, 1951 the City of Iloilo filed a complaint in the Court of First
Instance of Iloilo against NARIC and the Southern Lines, Inc. for the recovery of the
amount of P6,486.35 representing the value of the shortage of the shipment of rice.
Petitioner however, claims exemption fromliability contending that the shortage in the
shipment of rice was due to such factors as the shrinkage, leakage or spillage of the
rice on account of the bad condition of the sacks at the time it received the same and
the negligence of the agents of respondent City of Iloilo in receiving the shipment. After
trial, the lower court absolved NARIC from the complaint, but sentenced the Southern
Lines, Inc. to pay the amount of P4,931.41 which is the difference between the sum of
P6,486.35 and P1,554.94 representing the latter's counterclaim for handling and freight.
The Southern Lines, Inc. appealed to the Court of Appeals which affirmed the
judgment of the trial court. Hence, this petition for review.
In affirming the decision of the Court of Appeals, the Supreme Court held that:
1. The defendant-carrier is liable for the loss or shortage of the rice shipped.
Generally, according to Article 361, the merchandise shall be transported at
the risk and venture of the shipper, if the contrary has not been expressly stipulated.As
a consequence, all the losses and deteriorations which the goods may suffer during the
transportation by reason of fortuitous event, force majeure, or the inherent nature and
defect of the goods, shall be for the account and risk of the shipper.Nevertheless, in
Article 362, the carrier shall be liable for the losses and damages resulting from the
causes mentioned in the preceding article if it is proved, as against him, that they arose
through his negligence or by reason of his having failed to take the precautions which
usage his established among careful persons, unless the shipper has committed fraud
in the bill of lading, representing the goods to be of a kind or quality different from
what they really were.If, notwithstanding the precautions referred to in this article, the
goods transported run the risk of being lost, on account of their nature or by reason of
unavoidable accident, there being no time for their owners to dispose of them, the
carrier may proceed to sell them, placing them for this purpose at the disposal of the
judicial authority or of the officials designated by special provisions.
Under the provisions of Article 361, the defendant-carrier in order to free
itself from liability, was only obliged to prove that the damages suffered by the goods
were "by virtue of the nature or defect of the articles." Under the provisions of Article
362, the plaintiff, in order to hold the defendant liable, was obliged to prove that the
damages to the goods by virtue of their nature, occurred on account of its negligence or
because the defendant did not take the precaution adopted by careful persons.
(Government v. Ynchausti& Co., 40 Phil. 219, 223).
In the case at bar, the shortage resulted from the negligence of the petitioner
2. The contention is of petitioner is untenable.
For, if the fact of improper packing is known to the carrier or his servants, or
apparent upon ordinary observation, but it accepts the goods notwithstanding such
condition, it is not relieved of liability for loss or injury resulting therefrom.
G.R. No. L-23733 October 31, 1969
HERMINIO L. NOCUM, plaintiff-appellee,
vs.
LAGUNA TAYABAS BUS COMPANY, defendant-appellant.
In this case, HerminioNocum, who was a passenger of Laguna Tayabas Bus
Company Bus No. 120 then making a trip within the barrio of Dita, Municipality of Bay,
Laguna, was injured as a consequence of the explosion of firecrackers, contained in a
box, loaded in said bus and declared to its conductor as containing clothes and
miscellaneous items by a co-passenger.From its appearance there was no indication at
all that the contents were explosives or firecrackers. Neither the conductor did open the
box because he just relied on the word of the owner.
A judgment of the Court of First Instance of Batangassentencing appellant
Laguna Tayabas Bus Company to pay appellee the sum of P1,351.00 for actual damages
and P500.00 as attorney's fees with legal interest from the filing of the complaint plus
costs. The main basis of the trial court's decision is that appellant did not observe the
extraordinary or utmost diligence of a very cautious person required by law upon
common carriers. Hence, this appeal for purely questions of law.
In reversing and dismissing the case, the Supreme Court reasoned:
”It is to be presumed that a passenger will not take with him anything
dangerous to the lives and limbs of his co-passengers, not to speak of his own. Not to be
lightly considered must be the right to privacy to which each passenger is entitled. He
cannot be subjected to any unusual search, when he protests the innocuousness of his
baggage and nothing appears to indicate the contrary, as in the case at bar. In other
words, inquiry may be verbally made as to the nature of a passenger's baggage when
such is not outwardly perceptible, but beyond this, constitutional boundaries are
already in danger of being transgressed. Calling a policeman to his aid, as suggested by
the service manual invoked by the trial judge, in compelling the passenger to submit to
more rigid inspection, after the passenger had already declared that the box contained
mere clothes and other miscellaneous, could not have justified invasion of a
constitutionally protected domain. Police officers acting without judicial authority
secured in the manner provided by law are not beyond the pale of constitutional
inhibitions designed to protect individual human rights and liberties. Withal, what must
be importantly considered here is not so much the infringement of the fundamental
sacred rights of the particular passenger herein involved, but the constant threat any
contrary ruling would pose on the right of privacy of all passengers of all common
carriers, considering how easily the duty to inspect can be made an excuse for mischief
and abuse.Of course, when there are sufficient indications that the representations of
the passenger regarding the nature of his baggage may not be true, in the interest of
the common safety of all, the assistance of the police authorities may be solicited, not
necessarily to force the passenger to open his baggage, but to conduct the needed
investigation consistent with the rules of propriety and, above all, the constitutional
rights of the passenger.”
A carrier is ordinarily not liable for injuries to passengers from fires or
explosions caused by articles brought into its conveyances by other passengers, in the
absence of any evidence that the carrier, through its employees, was aware of the
nature of the article or had any reason to anticipate danger therefrom (Bogard v. Illinois).
It is undisputed that before the box containing the firecrackers were allowed to be
loaded in the bus by the conductor, inquiry was made with the passenger carrying the
same as to what was in it and that there is no indication at all that the contents were
explosives or firecrackers.
Furthermore, the supreme court that since the appellant has succeeded in
rebutting the presumption of negligence by showing that it has exercised extraordinary
diligence for the safety of its passengers, "according to the circumstances of the (each)
case", it deems it unnecessary to rule whether or not there was any fortuitous event in
this case.
Bachelor Express, Incorporated vs.The Honorable Court of Appeals
G.R. No. 85691 July 31, 1990
Gutierrez, Jr., J.
Facts:
On August 1, 1980, Bus No. 800 owned by Bachelor Express, Inc. departed
from Davao City and on its way to Cagayan de Oro City passing Butuan City. While at
Tabon-Tabon, Butuan City, the bus picked up a passenger and at about fifteen (15)
minutes later, a passenger at the rear portion suddenly stabbed a PC soldier which
caused commotion and panic among the passengers. When the bus stopped, passengers
Ornominio Beter and Narcisa Rautraut were found lying down the road, the former
already dead as a result of head injuries and the latter also suffering from severe injuries
which caused her death later. Thereafter, the heirs of victims filed a complaint for "sum
of money" against Bachelor Express, Inc. its alleged owner Samson Yasay and the driver.
The petitioners denied liability for the death of Ornominio Beter and Narcisa
Rautraut. They alleged that the driver was able to transport his passengers safely to
their respective places of destination except Ornominio Beter and Narcisa Rautraut who
jumped off the bus without the knowledge and consent, much less, the fault of the
driver and conductor and the defendants in this case; the defendant corporation had
exercised due diligence in the choice of its employees to avoid as much as possible
accidents; the incident on August 1, 1980 was not a traffic accident or vehicular
accident; it was an incident or event very much beyond the control of the defendants;
defendants were not parties to the incident complained of as it was an act of a third
party who is not in any way connected with the defendants and of which the latter have
no control and supervision.
The trial court dismissed the complaint. CA reversed the decision of trial
court.
Issue:
Whether or not petitioner is liable for the death of Beter and Rautraut.
Ruling:
The Court held that the liability, if any, of the petitioners is anchored on culpa
contractual or breach of contract of carriage.
There is no question that Bachelor Express, Inc. is a common carrier. Hence,
from the nature of its business and for reasons of public policy Bachelor Express, Inc. is
bound to carry its 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.
In the case at bar, Ornominio Beter and Narcisa Rautraut were passengers of
a bus belonging to petitioner Bachelor Express, Inc. and, while passengers of the bus,
suffered injuries which caused their death. Consequently, pursuant to Article 1756 of
the Civil Code, petitioner Bachelor Express, Inc. is presumed to have acted negligently
unless it can prove that it had observed extraordinary diligence in accordance with
Articles 1733 and 1755 of the New Civil Code.
Bachelor Express, Inc. denies liability for the death of Beter and Rautraut on
its posture that the death of the said passengers was caused by a third person who was
beyond its control and supervision. In effect, the petitioner, in order to overcome the
presumption of fault or negligence under the law, states that the vehicular incident
resulting in the death of passengers Beter and Rautraut was caused by force majeure or
caso fortuito over which the common carrier did not have any control.
The running amuck of the passenger was the proximate cause of the incident
as it triggered off a commotion and panic among the passengers such that the
passengers started running to the sole exit shoving each other resulting in the falling off
the bus by passengers Beter and Rautraut causing them fatal injuries. The sudden act of
the passenger who stabbed another passenger in the bus is within the context of force
majeure.
However, in order that a common carrier may be absolved from liability in
case of force majeure, it is not enough that the accident was caused by force majeure.
The common carrier must still prove that it was not negligent in causing the injuries
resulting from such accident.
The bus driver did not immediately stop the bus at the height of the
commotion; the bus was speeding from a full stop; the victims fell from the bus door
when it was opened or gave way while the bus was still running; the conductor panicked
and blew his whistle after people had already fallen off the bus; and the bus was not
properly equipped with doors in accordance with law-it is clear that the petitioners have
failed to overcome the presumption of fault and negligence found in the law governing
common carriers.
The petitioners' argument that the petitioners "are not insurers of their
passengers" deserves no merit in view of the failure of the petitioners to prove that the
deaths of the two passengers were exclusively due to force majeure and not to the
failure of the petitioners to observe extraordinary diligence in transporting safely the
passengers to their destinations as warranted by law.
Yobido vs. CA
G.R. No. 113003. October 17, 1997
ROMERO, J.:
Facts:
On April 26, 1988, spouses Tito and Leny Tumboy and their minor children
named Ardee and Jasmin, boarded at Mangagoy, Surigao del Sur, a Yobido Liner bus
bound for Davao City. Along Picop Road in Km. 17, Sta. Maria, Agusan del Sur, the left
front tire of the bus exploded. The bus fell into a ravine around three (3) feet from the
road and struck a tree. The incident resulted in the death of 28-year-old Tito Tumboy
and physical injuries to other passengers.
On November 21, 1988, a complaint for breach of contract of carriage,
damages and attorneys fees was filed by Leny and her children against Alberta Yobido,
the owner of the bus, and Cresencio Yobido, its driver, before the Regional Trial Court of
Davao City. When the defendants therein filed their answer to the complaint, they
raised the affirmative defense of caso fortuito.
The plaintiffs asserted that violation of the contract of carriage between them
and the defendants was brought about by the drivers failure to exercise the diligence
required of the carrier in transporting passengers safely to their place of destination.
According to Leny Tumboy. The winding road it traversed was not cemented and was
wet due to the rain; it was rough with crushed rocks. The bus which was full of
passengers had cargoes on top. Since it was running fast, she cautioned the driver to
slow down but he merely stared at her through the mirror. At around 3:30 p.m., in
Trento, she heard something explode and immediately, the bus fell into a ravine.
The defendants tried to establish that the accident was due to a fortuitous
event. Threy testified that the 42-seater bus was not full as there were only 32
passengers, such that he himself managed to get a seat. He added that the bus was
running at a speed of 60 to 50 and that it was going slow because of the zigzag road. He
affirmed that the left front tire that exploded was a brand new tire that he mounted on
the bus on April 21, 1988 or only five (5) days before the incident.
On August 29, 1991, the lower court rendered a decision dismissing the action
for lack of merit. The Court of Appeals rendered the Decision reversing that of the lower
court.
Issue:
Whether or not the tire blow out is a fortuitous event.
Ruling:
As a rule, when a passenger boards a common carrier, he takes the risks
incidental to the mode of travel he has taken. After all, a carrier is not an insurer of the
safety of its passengers and is not bound absolutely and at all events to carry them
safely and without injury. However, when a passenger is injured or dies while travelling,
the law presumes that the common carrier is negligent. Thus, the Civil Code provides:
Art. 1756. In case of death 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 1755 provides that (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.
Accordingly, in culpa contractual, once a passenger dies or is injured, the carrier is
presumed to have been at fault or to have acted negligently. This disputable
presumption may only be overcome by evidence that the carrier had observed
extraordinary diligence as prescribed by Articles 1733, 1755 and 1756 of the Civil Code
or that the death or injury of the passenger was due to a fortuitous event.
Under the circumstances of this case, the explosion of the new tire may not
be considered a fortuitous event. There are human factors involved in the situation. The
fact that the tire was new did not imply that it was entirely free from manufacturing
defects or that it was properly mounted on the vehicle. Neither may the fact that the
tire bought and used in the vehicle is of a brand name noted for quality, resulting in the
conclusion that it could not explode within five days use. Be that as it may, it is settled
that an accident caused either by defects in the automobile or through the negligence of
its driver is not a caso fortuito that would exempt the carrier from liability for damages.
While it may be true that the tire that blew-up was still good because the
grooves of the tire were still visible, this fact alone does not make the explosion of the
tire a fortuitous event. No evidence was presented to show that the accident was due to
adverse road conditions or that precautions were taken by the jeepney driver to
compensate for any conditions liable to cause accidents. The sudden blowing-up,
therefore, could have been caused by too much air pressure injected into the tire
coupled by the fact that the jeepney was overloaded and speeding at the time of the
accident.
G.R. No. L-9671 August 23, 1957
CESAR L. ISAAC, plaintiff-appellant,
vs.
A. L. AMMEN TRANSPORTATION CO., INC., defendant-appellee.
Contrib
utory
Neglige
nce of
the
passen
ger
Plaintiff Cesar Isaacboarded as a passenger in A. L. Ammen Transportation Co.,
Inc. bus from Ligao, Albay bound for Pili, Camarines Sur. Unfortunately, before reaching
his destination, the bus collided with a pick-up type motor vehicle coming from the
opposite direction, as a result of which plaintiff's left arm was completely severed and
the severed portion fell inside the bus. Hence, brought this action against defendants for
damages alleging that the collision which resulted in the loss of his left arm was mainly
due to the gross incompetence and recklessness of the driver of the bus operated by
defendant and that defendant incurred in culpa contractual arising from its non-
compliance with its obligation to transport plaintiff safely to his destination.
A circumstances which miliateshowever, against the stand of appellant is the
fact borne out by the evidence that when he boarded the bus in question, he seated
himself on the left side thereof resting his left arm on the window sill but with his left
elbow outside the window.
 Defendant set up as special defense that the injury suffered by plaintiff was
due entirely to the fault or negligence of the driver of the pick-up car which collided with
the bus driven by its driver and to the contributory negligence of plaintiff himself.
Defendant further claims that the accident which resulted in the injury of plaintiff is one
which defendant could not foresee or, though foreseen, was inevitable.
It found that the collision occurred due to the negligence of the driver of the
pick-up car and not to that of the driver of the bus it appearing that the latter did
everything he could to avoid the same but that notwithstanding his efforts, he was not
able to avoid it. As a consequence, the court dismissed complaint, with costs against
plaintiff. Thus, an appeal from said decision.
The question that now arises is: Has defendant observed extraordinary
diligence or the utmost diligence of every cautious person, having due regard for all
circumstances, in avoiding the collision which resulted in the injury caused to the
plaintiff?
In affirming the decision of the lower court, the Supreme Court reasoned:
Diligence Required:
The driver of the bus has done what a prudent man could have done to avoid
the collision.
In the case at bar, it appears that Bus No. 31, immediately prior to the
collision, was running at a moderate speed because it had just stopped at the school
zone of Matacong, Polangui, Albay. The pick-up car was at full speed and was running
outside of its proper lane. The driver of the bus, upon seeing the manner in which the
pick-up was then running, swerved the bus to the very extreme right of the road until its
front and rear wheels have gone over the pile of stones or gravel situated on the
rampart of the road. Said driver could not move the bus farther right and run over a
greater portion of the pile, the peak of which was about 3 feet high, without
endangering the safety of his passengers. And notwithstanding all these efforts, the rear
left side of the bus was hit by the pick-up car.
While the position taken by appellant appeals more to the sense of caution
that one should observe in a given situation to avoid an accident or mishap, such
however cannot always be expected from one who is placed suddenly in a predicament
where he is not given enough time to take the course of action as he should under
ordinary circumstances. One who is placed in such a predicament cannot exercise such
coolness or accuracy of judgment as is required of him under ordinary circumstances
and he cannot therefore be expected to observe the same judgment, care and
precaution as in the latter. For this reason, authorities abound where failure to observe
the same degree of care that as ordinary prudent man would exercise under ordinary
circumstances when confronted with a sadden emergency was held to be warranted and
a justification to exempt the carrier from liability.
Thus, it was held that "where a carrier's employee is confronted with a
sudden emergency, the fact that he is obliged to act quickly and without a chance for
deliberation must be taken into account, and he is held to the some degree of care that
he would otherwise be required to exercise in the absence of such emergency but must
exercise only such care as any ordinary prudent person would exercise under like
circumstances and conditions, and the failure on his part to exercise the best judgment
the case renders possible does not establish lack of care and skill on his part which
renders the company, liable. Considering all the circumstances, we are persuaded to
conclude that the driver of the bus has done what a prudent man could have done to
avoid the collision and in our opinion this relieves appellee from legibility under our law.
Contributory negligence:
The plaintiff is guilty of contributory negligence. It is the prevailing rule that it
is negligence per se for a passenger on a railroad voluntarily or inadvertently to protrude
his arm, hand, elbow, or any other part of his body through the window of a moving car
beyond the outer edge of the window or outer surface of the car, so as to come in
contact with objects or obstacles near the track, and that no recovery can be had for an
injury which but for such negligence would not have been sustained.
When plaintiff boarded the bus in question, he seated himself on the left side
thereof resting his left arm on the window sill but with his left elbow outside the window,
this being his position in the bus when the collision took place. It is for this reason that
the collision resulted in the severance of said left arm from the body of appellant thus
doing him a great damage. It is therefore apparent that appellant is guilty of
contributory negligence. Had he not placed his left arm on the window sill with a portion
thereof protruding outside, perhaps the injury would have been avoided as is the case
with the other passenger. It is to be noted that appellant was the only victim of the
collision.
It is true that such contributory negligence cannot relieve appellee of its
liability but will only entitle it to a reduction of the amount of damage caused (Article
1762, new Civil Code), but this is a circumstance which further militates against the
position taken by appellant in this case.
_______________________
Additional notes:
From the provisions of the law regarding common carriers, we can make the
following restatement of the principles governing the liability of a common carrier:
(1) The liability of a carrier is contractual and arises upon breach of its
obligation. There is breach if it fails to exert extraordinary diligence
according to all circumstances of each case;

(2) A carrier is obliged to carry its passenger with the utmost diligence of a
very cautious person, having due regard for all the circumstances;
(3) A carrier is presumed to be at fault or to have acted negligently in case of
death of, or injury to, passengers, it being its duty to prove that it
exercised extraordinary diligence; and
(4) The carrier is not an insurer against all risks of travel.
G.R. No. 122039 May 31, 2000
VICENTE CALALAS, petitioner,
vs.
COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and FRANCISCO SALVA, respondents.
FACTS:
At 10 o'clock in the morning of August 23, 1989, private respondent Eliza
Jujeurche G. Sunga, took a passenger jeepney owned and operated by petitioner Vicente
Calalas. As the jeepney was filled to capacity of about 24 passengers, Sunga was given by
the conductor an "extension seat," a wooden stool at the back of the door at the rear
end of the vehicle. On the way to PoblacionSibulan, Negros Occidental, the jeepney
stopped to let a passenger off. As she was seated at the rear of the vehicle, Sunga gave
way to the outgoing passenger. Just as she was doing so, a Isuzu truck driven by
IglecerioVerena and owned by Francisco Salva bumped the left rear portion of the
jeepney. As a result, Sunga was injured. She sustained a fracture of the "distal third of
the left tibia-fibula with severe necrosis of the underlying skin."
Sunga filed a complaint for damages against Calalas, alleging violation of the
contract of carriage by the former in failing to exercise the diligence required of him as a
common carrier. Calalas, on the other hand, filed a third-party complaint against
Francisco Salva, the owner of the Isuzu truck.
DECISION OF THE RTC
The lower court rendered judgment against Salva as third-party defendant
and absolved Calalas of liability, holding that it was the driver of the Isuzu truck who was
responsible for the accident. It took cognizance of another case (Civil Case No. 3490),
filed by Calalas against Salva and Verena, for quasi-delict, in which Branch 37 of the
same court held Salva and his driver Verena jointly liable to Calalas for the damage to his
jeepney.
DECISION OF THE CA
The Court of Appeals reversed the decision on the ground that Sunga's cause
of action was based on a contract of carriage, not quasi-delict, and that the common
carrier failed to exercise the diligence required under the Civil Code. The appellate court
dismissed the third-party complaint against Salva and adjudged Calalas liable for
damages to Sunga.
On appeal to the Supreme Court, Petitioner contends that the ruling in Civil
Case No. 3490 that the negligence of Verena was the proximate cause of the accident
negates his liability and that to rule otherwise would be to make the common carrier an
insurer of the safety of its passengers. He contends that the bumping of the jeepney by
the truck owned by Salva was a casofortuito1.
ISSUE:
Whether or not respondent Vicente Calasas is liable for breach of contract of
carriage.
RULING:
Respondent is liable for breach of contract of carriage.
Breach of contract or culpa contractual, is premised upon the negligence in
the performance of a contractual obligation. Here, the action can be prosecuted merely
by proving the existence of the contract and the fact that the obligor, in this case the
common carrier, failed to transport his passenger safely to his destination. It is
immaterial that the proximate cause of the collision between the jeepney and the truck
was the negligence of the truck driver.
The doctrine of proximate cause is applicable only in actions for quasi-delict,
not in actions involving breach of contract. The doctrine is a device for imputing liability
to a person where there is no relation between him and another party. In such a case,
the obligation is created by law itself. But, where there is a pre-existing contractual
relation between the parties, it is the parties themselves who create the obligation, and
the function of the law is merely to regulate the relation thus created.
In the case at bar, it is undisputed that petitioner's driver took in more
1
A casofortuito is an event which could not be foreseen, or which, though
foreseen, was inevitable.3 This requires that the following requirements be
present: (a) the cause of the breach is independent of the debtor's will; (b) the
event is unforeseeable or unavoidable; (c) the event is such as to render it
impossible for the debtor to fulfill his obligation in a normal manner, and (d)
the debtor did not take part in causing the injury to the creditor.
passengers than the allowed seating capacity of the jeepney, a violation of section 32(a)
of R.A. No. 4136, as amended, or the Land Transportation and Traffic Code. It provides:
Sec. 32 (a) Exceeding registered capacity. — “No person operating any motor
vehicle shall allow more passengers or more freight or cargo in his vehicle than its
registered capacity.”
The fact that Sunga was seated in an "extension seat" placed her in a peril
greater than that to which the other passengers were exposed. Therefore, not only was
petitioner unable to overcome the presumption of negligence imposed on him for the
injury sustained by Sunga, but also, the evidence shows he was actually negligent in
transporting passengers.
GAUDIOSO EREZO, ET AL. vs. AGUEDO JEPTE
G.R. No. L-9605 September 30, 1957
LABRADOR, J.:
Facts:
Defendant-appellant is the registered owner of a six by six truck. On August,
9, 1949, while the same was being driven by Rodolfo Espino y Garcia, it collided with a
taxicab at the intersection of San Andres and Dakota Streets, Manila. As the truck went
off the street, it hit Ernesto Erezo and another, and the former suffered injuries, as a
result of which he died. The driver was prosecuted for homicide through reckless
negligence. The accused pleaded guilty and was sentenced to suffer imprisonment and
to pay the heirs of Ernesto Erezo the sum of P3,000. As the amount of the judgment
could not be enforced against him, plaintiff brought this action against the registered
owner of the truck, the defendant-appellant.
The defendant does not deny at the time of the fatal accident the cargo truck
was registered in his name. He, however, claims that the vehicle belonged to the Port
Brokerage, of which he was the broker at the time of the accident. He explained, that
the trucks of the corporation were registered in his name as a convenient arrangement
so as to enable the corporation to pay the registration fee with his backpay as a pre-war
government employee.
The trial court held that as the defendant-appellant represented himself to be
the owner of the truck and the Motor Vehicle Office, relying on his representation,
registered the vehicles in his name, the Government and all persons affected by the
representation had the right to rely on his declaration of ownership and registration. It,
therefore, held that the defendant-appellant is liable because he cannot be permitted to
repudiate his own declaration.
Issue:
Whether or not defendant is liable.
Ruling:
The principle upon which this doctrine is based is that in dealing with vehicles
registered under the Public Service Law, the public has the right to assume or presume
that the registered owner is the actual owner thereof, for it would be difficult for the
public to enforce the actions that they may have for injuries caused to them by the
vehicles being negligently operated if the public should be required to prove who the
actual owner is. However, that the registered owner may recover whatever amount he
had paid by virtue of his liability to third persons to whom he had actually sold, assigned
or conveyed the vehicle.
There is a presumption that the owner of the guilty vehicle is the defendant-
appellant as he is the registered owner in the Motor Vehicle Office. The Revised Motor
Vehicle Law (Act No. 3992, as amended) provides that no vehicle may be used or
operated upon any public highway unless the same is properly registered. Not only are
vehicles to be registered and that no motor vehicles are to be used or operated without
being properly registered for the current year, but that dealers in motor vehicles shall
furnish the Motor Vehicles Office a report showing the name and address of each
purchaser of motor vehicle during the previous month and the manufacturer's serial
number and motor number.
Registration is required not to make said registration the operative act by
which ownership in vehicles is transferred, as in land registration cases, because the
administrative proceeding of registration does not bear any essential relation to the
contract of sale between the parties but to permit the use and operation of the vehicle
upon any public highway.The main aim of motor vehicle registration is to identify the
owner so that if any accident happens, or that any damage or injury is caused by the
vehicles on the public highways, responsibility therefore can be fixed on a definite
individual, the registered owner.
A registered owner who has already sold or transferred a vehicle has the
recourse to a third-party complaint, in the same action brought against him to recover
for the damage or injury done, against the vendee or transferee of the vehicle.
The registered owner, the defendant-appellant herein, is primarily
responsible for the damage caused to the vehicle of the plaintiff-appellee, but he
(defendant-appellant) has a right to be indemnified by the real or actual owner of the
amount that he may be required to pay as damage for the injury caused to the plaintiff-
appellant.

EQUITABLE LEASING CORPORATION vs. LUCITA SUYOM, MARISSA ENANO, MYRNA
TAMAYO and FELIX OLEDAN
G.R. No. 143360. September 5, 2002
PANGANIBAN, J.:
In an action based on quasi delict, the registered owner of a motor vehicle is solidarily
liable for the injuries and damages caused by the negligence of the driver, in spite of the
fact that the vehicle may have already been the subject of an unregistered Deed of Sale
in favor of another person. Unless registered with the Land Transportation Office, the
sale -- while valid and binding between the parties -- does not affect third parties,
especially the victims of accidents involving the said transport equipment. Thus, in the
present case, petitioner, which is the registered owner, is liable for the acts of the driver
employed by its former lessee who has become the owner of that vehicle by virtue of an
unregistered Deed of Sale.
Facts:
On July 17, 1994, a Fuso Road Tractor driven by Raul Tutor rammed into the
house cum store of Myrna Tamayo A portion of the house was destroyed. It resulted to
the death of Myra Tamayo’s son, Reniel Tamayo, and Respondent Felix Oledans
daughter, Felmarie Oledan. Injured were Respondent Oledan himself, Respondent
Marissa Enano, and two sons of Respondent Lucita Suyom.
Tutor was charged with and later convicted of reckless imprudence resulting
in multiple homicide and multiple physical injuries.
Upon verification with the Land Transportation Office, it showed that the
registered owner of the tractor was Equitable Leasing Corporation/leased to Edwin Lim.
The respondents filed against Raul Tutor, Ecatine Corporation (Ecatine) and Equitable
Leasing Corporation (Equitable) a complaint for damages
The trial court, issued an Order dropping Raul Tutor, Ecatine and Edwin Lim
from the Complaint, because they could not be located and served with summons.
Petitioner alleged that the vehicle had already been sold to Ecatine and that the former
was no longer in possession and control thereof at the time of the incident. It also
claimed that Tutor was an employee, not of Equitable, but of Ecatine.
The RTC rendered its Decision ordering petitioner to pay actual and moral
damages and attorneys fees to respondents. It held that since the Deed of Sale between
petitioner and Ecatine had not been registered with the Land Transportation Office
(LTO), the legal owner was still Equitable. Thus, petitioner was liable to respondents.
The CA sustained the ruling of RTC and held that petitioner was still to be
legally deemed the owner/operator of the tractor.
Issues:
Whether or not petitioner is liable for damages suffered by private respondents in an
action based on quasi delict for the negligent acts of a driver who’s not the employee of
the petitioner.
Ruling:
The Lease Agreement between petitioner and Edwin Lim stipulated that it is
the intention of the parties to enter into a FINANCE LEASE AGREEMENT. Under such
scheme, ownership of the subject tractor was to be registered in the name of petitioner;
until the value of the vehicle has been fully paid by Edwin Lim. Lim completed the
payments to cover the full price of the tractor. Thus, on December 9, 1992, a Deed of
Sale over the tractor was executed by petitioner in favor of Ecatine represented by
Edwin Lim. However, the Deed was not registered with the LTO.
The Court held that petitioner liable for the deaths and the injuries
complained of, because it was the registered owner of the tractor at the time of the
accident on July 17, 1994.The Court has consistently ruled that, regardless of sales made
of a motor vehicle, the registered owner is the lawful operator insofar as the public and
third persons are concerned; consequently, it is directly and primarily responsible for
the consequences of its operation. In contemplation of law, the owner/operator of
record is the employer of the driver, the actual operator and employer being considered
as merely its agent. The same principle applies even if the registered owner of any
vehicle does not use it for public service.
G.R. No. 102998 July 5, 1996
BA FINANCE CORPORATION, petitioner
Vs
HON. COURT OF APPEALS and ROBERTO M. REYES, respondents.
In this case, the spouses Reynaldo and Florencia Manahan executed, on 15
May 1980, a promissory note binding themselves to pay Carmasters, Inc., the amount of
P83,080.00 in thirty-six monthly installments commencing 01 July 1980. To secure
payment, the Manahan spouses executed a deed of chattel mortgage over a motor
vehicle. Carmasters later assigned the promissory note and the chattel mortgage to
petitioner BA Finance Corporation with the conformity of the Manahans.When the latter
failed to pay the due installments, petitioner sent demand letters. The demands not
having been heeded, petitioner filed a complaint for replevin with damages against the
spouses, as well as against a John Doe, praying for the recovery of the vehicle with an
alternative prayer for the payment of a sum of money should the vehicle not be
returned. Upon petitioner's motion and the filing of a bond in the amount of
P169,161.00, the lower court issued a writ of replevin.
On 27 February 1989, the trial court rendered a decision dismissing the
complaint against the Manahans for failure of petitioner to prosecute the case against
them. It also dismissed the case against private respondent for failure of petitioner to
show any legal basis for said respondent's liability.
In the instant appeal, petitioner insists that a mortgagee can maintain an
action for replevin against any possessor of the object of a chattel mortgage even if the
latter were not a party to the mortgage.
In affirming the decision of both lower courts, the Supreme Court explained:
In a suit for replevin, a clear right of possession must be established. A
foreclosure under a chattel mortgage may properly be commenced only once there is
default on the part of the mortgagor of his obligation secured by the mortgage. The
replevin in the instant case has been sought to pave the way for the foreclosure of the
object covered by the chattel mortgage. The conditions essential for that foreclosure
would be to show, firstly, the existence of the chattel mortgage and, secondly, the
default of the mortgagor. These requirements must be established since the validity of
the plaintiff's exercise of the right of foreclosure are inevitably dependent thereon. It
would thus seem, considering particularly an adverse and independent claim of
ownership by private respondent, that the lower court acted improvidently when it
granted the dismissal of the complaint against Dollente, albeit on petitioner's (then
plaintiff) plea, on the ground that the non-service of summons upon Ernesto Dollente
(would) only delay the determination of the merits of the case, to the prejudice of the
parties.
A chattel mortgagee, unlike a pledgee, need not be in, nor entitled to, the
possession of the property unless and until the mortgagor defaults and the mortgagee
thereupon seeks to foreclose thereon. Since the mortgagee's right of possession is
conditioned upon the actual fact of default which itself may be controverted, the
inclusion of other parties, like the debtor or the mortgagor himself, may be required in
order to allow a full and conclusive determination of the case. When the mortgagee
seeks a replevin in order to effect the eventual foreclosure of the mortgage, it is not only
the existence of, but also the mortgagor's default on, the chattel mortgage that, among
other things, can properly uphold the right to replevy the property. The burden to
establish a valid justification for that action lies with the plaintiff. An adverse possessor,
who is not the mortgagor, cannot just be deprived of his possession, let alone be bound
by the terms of the chattel mortgage contract, simply because the mortgagee brings up
an action for replevin.
G.R. No. 82318 May 18, 1989
GILBERTO M. DUAVIT, petitioner,
vs.
COURT OF APPEALS, respondents.
In this case, it appears that on July 28, 1971 plaintiffs Antonio Sarmiento, Sr.
and VirgilioCatuar were aboard a jeep owned by plaintiff, RupertoCatuar was driving the
said jeep on Ortigas Avenue, San Juan, Rizal. Plaintiff's jeep, at the time, was running
moderately at 20 to 35 kilometers per hour and while approaching Roosevelt Avenue,
VirgilioCatuar slowed down. Suddenly, another jeep driven by defendant Oscar
Sabiniano hit and bumped plaintiff's jeep on the portion near the left rear wheel, and as
a result of the impact plaintiff's jeep fell on its right and skidded by about 30 yards.
Plaintiffs jeep was damaged. Likewise, plaintiff VirgilioCatuar was thrown to the middle
of the road, his wrist was broken and he sustained contusions on the head. Also, plaintiff
Antonio Sarmiento, Sr. was trapped inside the fallen jeep, and one of his legs was
fractured. Hence, plaintiffs filed a case both against Oscar Sabiniano as driver, and
against GualbertoDuavit as owner of the jeep.
However, defendant GualbertoDuavit, while admitting ownership of the other
jeep, denied that the other defendant (Oscar Sabiniano) was his employee. Duavit
claimed that he has not been an employer of defendant Oscar Sabiniano at any time up
to the present.Defendant Sabiniano, in his testimony, categorically admitted that he took
the jeep from the garage of defendant Duavit without the consent or authority of the
latter. He testified further, that Duavit even filed charges against him for theft of the jeep,
but which Duavit did not push through as his (Sabiniano's) parents apologized to Duavit
on his behalf.
The trial court found Oscar Sabiniano negligent in driving the vehicle but
found no employer-employee relationship between him and the petitioner because the
latter was then a government employee and he took the vehicle without the authority
and consent of the owner. The petitioner was, thus, absolved from liability under Article
2180 of the Civil Code.The private respondents appealed the case.
The Court of Appeals rendered the questioned decision holding the petitioner
jointly and severally liable with Sabiniano. The appellate court in part ruled: “It is
immaterial whether or not the driver was actually employed by the operator of record
or registered owner, and it is even not necessary to prove who the actual owner of the
vehicle and who the employer of the driver is.”The petitioner contends that the
respondent appellate court committed grave abuse of discretion in holding him jointly
and severally liable with Sabiniano in spite of the absence of an employer-employee
relationship between them and despite the fact that the petitioner's jeep was taken out
of his garage and was driven by Sabiniano without his consent.
Thus, this petition raises the sole issue of whether or not the owner of a
private vehicle which figured in an accident can be held liable under Article 2180 of the
Civil Code when the said vehicle was neither driven by an employee of the owner nor
taken with the consent of the latter.
In reversing the decision of the Court of Appeals and reistating the decision of
the Trial Court, the Supreme Court explained:
An owner of a vehicle cannot be held liable for an accident involving the said
vehicle if the same was driven without his consent or knowledge and by a person not
employed by him (Duquillo v. Bayot).
Herein petitioner does not deny ownership of the vehicle involved in tire
mishap but completely denies having employed the driver Sabiniano or even having
authorized the latter to drive his jeep. The jeep was virtually stolen from the petitioner's
garage. To hold, therefore, the petitioner liable for the accident caused by the
negligence of Sabiniano who was neither his driver nor employee would be absurd as it
would be like holding liable the owner of a stolen vehicle for an accident caused by the
person who stole such vehicle. In this regard, we cannot ignore the many cases of
vehicles forcibly taken from their owners at gunpoint or stolen from garages and parking
areas and the instances of service station attendants or mechanics of auto repair shops
using, without the owner's consent, vehicles entrusted to them for servicing or repair.
ABELARDO LIM and ESMADITO GUNNABAN vs. COURT OF APPEALS and DONATO H.
GONZALES
G.R. No. 125817. January 16, 2002
BELLOSILLO, J.:
Facts:
Private respondent Donato Gonzales purchased an Isuzu passenger jeepney
from Gomercino Vallarta, holder of a certificate of public convenience for the operation
of public utility vehicles plying the Monumento-Bulacan route. He did not have the
registration of the vehicle transferred in his name nor did he secure for himself a
certificate of public convenience for its operation. Thus Vallarta remained on record as
its registered owner and operator.
While the jeepney was running northbound somewhere in Meycauayan,
Bulacan, it collided with a ten-wheeler-truck owned by petitioner Abelardo Lim and
driven Esmadito Gunnaban. Gunnaban owned responsibility for the accident. The
impact caused severe damage to both the Ferroza and the passenger jeepney and left
one (1) passenger dead and many others wounded.
Petitioner Lim shouldered the costs for hospitalization of the wounded,
compensated the heirs of the deceased passenger, and had the Ferroza restored to
good condition. He also negotiated with private respondent and offered to have the
passenger jeepney repaired at his shop. Private respondent however did not accept the
offer so Lim offered him P20,000.00, the assessment of the damage as estimated by his
chief mechanic. Again, petitioner Lim's proposition was rejected; instead, private
respondent demanded a brand-new jeep or the amount of P236,000.00. Lim increased
his bid to P40,000.00 but private respondent was unyielding. Hence, private respondent
herein filed an action for damages against herein plaintiff.
Lim denied liability by contending that he exercised due diligence in the
selection and supervision of his employees. He further asserted that as the jeepney was
registered in Vallartas name, it was Vallarta and not private respondent who was the
real party in interest.
The trial court upheld private respondent's claim and awarded him
P236,000.00 with legal interest The trial court ratiocinated that as vendee and current
owner of the passenger jeepney private respondent stood for all intents and purposes
as the real party in interest. The CA affirmed the decision of the trial court.
Issue:
Whether or not the defendant is the real party in interest.
Ruling:
The kabit system is an arrangement whereby a person who has been granted
a certificate of public convenience allows other persons who own motor vehicles to
operate them under his license, sometimes for a fee or percentage of the earnings.
Although the parties to such an agreement are not outrightly penalized by law, the kabit
system is invariably recognized as being contrary to public policy and therefore void and
inexistent under Art. 1409 of the Civil Code.
It would seem then that the thrust of the law in enjoining the kabit system is
not so much as to penalize the parties but to identify the person upon whom
responsibility may be fixed in case of an accident with the end view of protecting the
riding public. The policy therefore loses its force if the public at large is not deceived,
much less involved.
 In the present case it is at once apparent that the evil sought to be prevented
in enjoining the kabit system does not exist. First, neither of the parties to the
pernicious kabit system is being held liable for damages. Second, the case arose from
the negligence of another vehicle in using the public road to whom no representation,
or misrepresentation, as regards the ownership and operation of the passenger jeepney
was made and to whom no such representation, or misrepresentation, was necessary.
Thus it cannot be said that private respondent Gonzales and the registered owner of the
jeepney were in estoppel for leading the public to believe that the jeepney belonged to
the registered owner. Third, the riding public was not bothered nor inconvenienced at
the very least by the illegal arrangement. On the contrary, it was private respondent
himself who had been wronged and was seeking compensation for the damage done to
him. Certainly, it would be the height of inequity to deny him his right.
Thus, it is evident that private respondent has the right to proceed against
petitioners for the damage caused on his passenger jeepney as well as on his business.
Any effort then to frustrate his claim of damages by the ingenuity with which petitioners
framed the issue should be discouraged, if not repelled.
BALIWAG TRANSIT, INC. vs. THE HON. COURT OF APPEALS AND ROMAN MARTINEZ
G.R. No. L-5749 January 7, 1987
PARAS, J.:
Facts:
Two passenger bus lines with similar buses and similar routes were being
operated by firm names "Baliwag Transit' and "Baliwag Transit, Inc." (BTI) the herein
petitioner. The former was owned by the late Pascual Tuazon who continued to operate
it until his death on January 26, 1972, while the latter was owned by petitioner
corporation, incorporated in the year 1968 and existing until the present time. Both bus
lines operate under different grants of franchises by the Public Service Commission, but
were issued only one ID Number 03-22151 by the Social Security System.
Private respondent claiming to be an employee of both bus lines filed a
petition with the Social Security Commision to compel BTI to remit to the Social Security
private respondent's SSS Premium contributions for the years 1958 to March, 1963 and
from 1967 to March 1971. He alleged that he was employed by petitioner from 1947 to
1971 as conductor and later as inspector with corresponding salary increases and that
petitioner deducted from his salaries, premium contributions, but what was remitted to
the SSS was only for a period covering June, 1963 to 1966, at a much lesser amount.
BTI denied having employed private respondent Ramon Martinez, the truth
being that he was employed by Pascual Tuazon who since 1948 owned and operated
buses under the trade name Baliwag Transit which were separate and distinct from the
buses operated by petitioner company owned by Mrs. Victoria Vda. de Tengco. The
employment of private respondent lasted until 1971 when his employer Pascual Tuazon
became bankrupt. It was the latter which deducted from private respondent the
amount corresponding to his SSS contributions for the years in question but allegedly
did not remit the same. Finally, herein petitioner BTI claims that private respondent
allowed 17 years to elapse and at a time when Pascual Tuazon was already dead before
filing the subject petition with the Social Security Commission.
Social Security Commission entered a resolution which provides that there
existed no employer-employee relationship between the petitioner and respondent as
would warrant further remittance of SSS contributions for and in behalf of petitioner
Roman Martinez.
The Court of Appeals finding that the late Pascual Tuazon operated his buses
under the "Kabit" System reversed and set aside the resolution of the Commission.
Issue:
Whether or not the issuance by the Social Security System of one SSS-ID-Number to two
bus lines necessarily indicates that one of them, operates his buses under the "Kabit
System."
Ruling:
The "Kabit System" has been defined by the Supreme Court as an
arrangement "whereby a person who has been granted a certificate of convenience
allows another person who owns motor vehicles to operate under such franchise for a
fee."
The determining factor, therefore, is the possession of a franchise to operate
which negates the existence of the "Kabit System" and not the issuance of one SSS ID
Number for both bus lines from which the existence of said system was inferred.
In the case at bar, it is undisputed that as testified to, lot only by seven (7)
witnesses presented by the petitioner but also by the Social Security System witness
Mangowan Macalaba, Clerk I ,of the R & A Division of the Board of Transportation, who
had access to the records of said office with respect to applications and grant of
franchises of public utility vehicles, that Victoria Vda. de Tengco and Pascual Tuazon
were granted separate franchises to operate public utility buses, under Cases Nos.
15904, 114913, 11564, 103366, 64157 and 65894 for the former and Case No. 69-4592
and Case No. 697775 for the latter, both operating between Manila and Baliuag routes.
However, the franchises of Pascual Tuazon were cancelled on December 16, 1971 and
may 14, 1972 respectively (Rollo, p. 22), when the latter terminated his operation.
It is thus evident that both bus lines operated under their own franchises but
opted to retain the firm name "Baliwag Transit" with slight modification, by the
inclusion of the word "Inc." in the case of herein petitioner, obviously to take advantage
of the goodwill such firm name enjoys with the riding public.
G.R. No. 120553. June 17, 1997
PHILTRANCO SERVICE ENTERPRISES, INC. petitioner,
vs.
COURT OF APPEALS and HEIRS OF THE LATE RAMON ACUESTA, respondents.
FACTS:
Ramon A. Acuesta was riding in his easy rider bicycle, along the Gomez Street
of Calbayog City. The Gomez Street is along the side of Nijaga Park. On the Magsaysay
Blvd., also in Calbayog City, defendant Philtranco Service Enterprises, Inc. (Philtranco for
brevity) Bus No. 4025 with plate No. EVA-725 driven by defendant RogasionesManilhig y
Dolira was being pushed by some persons in order to start its engine. The Magsaysay
Blvd. runs perpendicular to Gomez St. and the said Philtranco bus 4025 was heading in
the general direction of the said Gomez Street. Some of the persons who were pushing
the bus were on its back, while the others were on the sides. As the bus was pushed, its
engine started thereby the bus continued on its running motion and it occurred at the
time when Ramon A. Acuesta who was still riding on his bicycle was directly in front of
the said bus. As the engine of the Philtranco bus started abruptly and suddenly, its
running motion was also enhanced by the said functioning engine, thereby the subject
bus bumped on the victim Ramon A. Acuesta who, as a result thereof fell and, thereafter,
was run over by the said bus. The bus did not stop although it had already bumped and
ran over the victim; instead, it proceeded running towards the direction of the Rosales
Bridge which is located at one side of the Nijaga Park and towards one end of the Gomez
St., to which direction the victim was then heading when he was riding on his bicycle.
P/Sgt. Yabao who was then jogging thru the Gomez Street and was heading and meeting
the victim Ramon A. Acuesta as the latter was riding on his bicycle, saw when the
Philtranco bus was being pushed by some passengers, when its engine abruptly started
and when the said bus bumped and ran over the victim. He approached the bus driver
defendant Manilhig herein and signalled to him to stop, but the latter did not listen. So
the police officer jumped into the bus and introducing himself to the driver defendant as
policeman, ordered the latter to stop. The said defendant driver stopped the Philtranco
bus near the Nijaga Park and Sgt. Yabao thereafter, told the driver to proceed to the
Police Headquarter which was only 100 meters away from Nijaga Park because he was
apprehensive that the said driver might be harmed by the relatives of the victim who
might come to the scene of the accident.
Petitioners filed an Answer wherein they alleged that petitioner Philtranco
exercised the diligence of a good father of a family in the selection and supervision of its
employees, including petitioner Manilhig who had excellent record as a driver and had
undergone months of rigid training before he was hired. Petitioner Manilhig had always
been a prudent professional driver, religiously observing traffic rules and regulations. In
driving Philtranco's buses, he exercised the diligence of a very cautious person.
However, the petitioners were not able to present their evidence, as they
were deemed to have waived that right by the failure of their counsel to appear at the
scheduled hearings on 30 and 31 March 1992. The trial court handed down a decision
ordering the petitioners to jointly and severally pay the private respondents which was
affirmed by the Court of Appeals.
ISSUE:
Whether or not the petitioner is liable
The Civil Case No. 373 is an action for damages based on quasi-delict under
Article 2176 and 2180 of the Civil Code against petitioner Manilhig and his employer,
petitioner Philtranco, respectively. These articles pertinently provide:
ART. 2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such fault or negligence,
if there is no pre-existing contractual relation between the parties, is called a quasi-delict
and is governed by the provisions of this Chapter.
ART. 2180. The obligation imposed by Article 2176 is demandable not only for
one's own acts or omissions, but also for those of persons for whom one is responsible.
The owners and managers of an establishment or enterprise are likewise
responsible for damages caused by their employees in the service of the branches in
which the latter are employed or on the occasion of their functions.
Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks even though the
former are not engaged in any business or industry.
The responsibility treated of in this article shall cease when the persons
herein mentioned prove that they observed all the diligence of a good father of a family
to prevent damage.
Hence, that the liability of the registered owner of a public service vehicle, like
petitioner Philtranco, for damages arising from the tortious acts of the driver isprimary,
direct, and joint and several or solidary with the driver. As to solidarity, Article 2194
expressly provides:
ART. 2194. The responsibility of two or more persons who are liable for a quasi-delict is
solidary.
Since the employer's liability is primary, direct and solidary, its only recourse if the
judgment for damages is satisfied by it is to recover what it has paid from its employee
who committed the fault or negligence which gave rise to the action based on quasi-
delict.
G.R. Nos. L-12634 and L-12720 May 29, 1959
JOSE G. TAMAYO
vs.
INOCENCIO AQUINO, ET AL.,
FACTS:
Inocencio Aquino and his children brought this action against Jose G. Tamayo,
holder of a certificate of public convenience to operate two trucks for damages for the
death of Inocencio's wife, Epifania Gonzales, while riding aboard Tamayo's trucks. It is
alleged that while his (Inocencio Aquino) wife was making a trip aboard truck, it bumped
against a culvert on the side of the road in Bugallon, Pangasinan. As a consequence of
this accident Epifania Gonzales was thrown away from the vehicle and two pieces of
wood embedded in her skull, as a result of which she died. The impact of the truck
against the culvert was so violent that the roof of the vehicle was ripped off from its
body, one fender was smashed and the engine damaged beyond repair. Complaint was
filed for the recovery of P10,000 as actual damages, P10,000 as moral damages, and
costs.
Upon being summoned, defendant Tamayo answered alleging a that the truck
is owned by Silvestre Rayos, so he filed a third-party complaint against the latter, alleging
that he no longer had any interest whatsoever in the said truck, as he had sold the same
before the accident to the third-party defendant Silvestre Rayos. Answering the third-
party complaint, Rayos alleged that if any indemnity is due, it should come from Jose G.
Tamayo, because he did not have any transaction with him regarding such sale.
The Court of First Instance found that the truck was one of the trucks of
Tamayo under a certificate of public convenience issued to him; that he had sold it to
Rayos in March, 1953, but did not inform the Public Service Commission of the sale until
June 30, 1953, one month after the accident. On the basis of the above facts, the Court
of First Instance ordered the defendant Tamayo and the third-party defendant Rayos to
pay plaintiffs jointly and severally the sum of P6,000 as compensatory damages, and
another sum of P5,000 as moral damages, with interest, and authorized the defendant
or third-party defendant, whoever should pay the entire amount, to recover from the
other any sum in excess of one-half of the amount ordered to be paid, with interest. The
Court also dismissed the third-party complaint.
Appeals against the above decision was made to the Court of Appeals. This
court affirmed the judgment of the Court of First Instance in all respects, and against this
judgment certiorari was issued by us on separate petitions of Tamayo and Rayos.
ISSUE:
Whether or not the petitioner is liable
RULING:
The law with its aim and policy in mind, does not relieve him directly of the
responsibility that the law fixes and places upon him as an incident or consequence of
registration. Were a registered owner alleged to evade responsibility by proving who the
supposed transferee or owner is, it would be easy for him by collusion with others or
otherwise, to escape said responsibility and transfer the same to an indefinite person, or
to one who possesses no property with which to respond financially for the damage or
injury done. A victim of recklessness on the public highways is usually without means to
discover or identify the person actually causing the injury or damage. He has no means
other than by a recourse to the registration in the Motor Vehicles Office to determine
who is the owner. The protection that the law aims to extend to him would become
illusory were the registered owner given the opportunity to escape liability by disproving
his ownership. If the policy of the law is to be enforced and carried out, the registered
owner should not be allowed to prove the contrary to the prejudice of the person
injured, that is, to prove that a third person or another has become the owner, so that
he may thereby be relieved of the responsibility to the injured. (Erezo vs. Jepte).
In the case at bar, the court found, furthermore, that inspite of the fact that
the agreement between Tamayo and Rayos was for Rayos to use the truck in carrying of
gasoline, the latter used the same in transporting passengers outside the route covered
by the franchise of Tamayo. For this additional reason, the agent or Rayos must be held
responsible to the registered owner, to the extent that the latter may suffer damage by
reason of the death caused during the accident. The responsibility of the transferee was
already adverted to by us in the case ofErezo vs. Jepte, supra, when we held expressly:
In synthesis, we hold that the registered owner, the defendant-appellant
herein, is primarily responsible for the damage caused to the vehicle of the plaintiff-
appellee, but he (defendant-appellant) has a right to be indemnified by the real or actual
owner of the amount that he may be required to pay as damage for the injury caused to
the plaintiff-appellant.
UCPB GENERAL INSURANCE CO., INC., vs.
ABOITIZ SHIPPING CORP. EAGLE EXPRESS LINES, DAMCO INTERMODAL SERVICES, INC.,
and PIMENTEL CUSTOMS BROKERAGE CO.
G.R. No. 168433 February 10, 2009
TINGA, J.:
Facts:
On June 18, 1991, three (3) units of waste water treatment plant with
accessories were purchased by San Miguel Corporation (SMC) from Super Max
Engineering Enterprises, Co., Ltd. of Taipei, Taiwan. The goods came from Charleston,
U.S.A. and arrived at the port of Manila on board MV "SCANDUTCH STAR". The same
were then transported to Cebu on board MV "ABOITIZ SUPERCON II". After its arrival at
the port of Cebu and clearance from the Bureau of Customs, the goods were delivered
to and received by SMC at its plant site on August 2, 1991. It was then discovered that
one electrical motor of DBS Drive Unit Model DE-30-7 was damaged.
Pursuant to an insurance agreement, plaintiff-appellee paid SMC the amount
of ₱1,703,381.40 representing the value of the damaged unit. In turn, SMC executed a
Subrogation Form dated March 31, 1992 in favor of plaintiff-appellee.
Consequently, plaintiff-appellee filed a Complaint on July 21, 1992 as
subrogee of SMC seeking to recover from defendants the amount it had paid SMC.
On September 20, 1994, plaintiff-appellee moved to admit its Amended
Complaint whereby it impleaded East Asiatic Co. Ltd. (EAST) as among the defendants
for being the "general agent" of DAMCO.
Lower court decided in favor of UCPB making the defendant liable for
payment of indemnity due to the damage suffered by SMC.
In the meantime, defendant EAST filed a Motion for Preliminary Hearing on
its affirmative defenses seeking the dismissal of the complaint against it on the ground
of prescription, the court issued its Decision setting aside the lower court’s assailed
order of denial and further ordering the dismissal of the complaint against defendant
EAST.
The remaining defendants-appellants EAGLE and ABOITIZ filed an appeal on
the ground that UCPB’s right of action against respondents did not accrue because UCPB
failed to file a formal notice of claim within 24 hours from (SMC’s) receipt of the
damaged merchandise as required under Art. 366 of the Code of Commerce.
UCPB asserts that the claim requirement under Art. 366 of the Code of
Commerce does not apply to this case because the damage to the merchandise had
already been known to the carrier.
Eagle Express, asserts that it cannot be held liable for the damage to the
merchandise as it acted merely as a freight forwarder’s agent in the transaction. It
allegedly facilitated the transshipment of the cargo from Manila to Cebu but
represented the interest of the cargo owner, and not the carrier’s.
UCPB itself has revealed that when the shipment was discharged and opened
at the ICTSI in Manila in the presence of an Eagle Express representative, the cargo had
already been found damaged. In fact, a request for bad order survey was then made and
a turnover survey of bad order cargoes was issued, pursuant to the procedure in the
discharge of bad order cargo. The shipment was then repacked and transshipped from
Manila to Cebu on board MV Aboitiz Supercon II. When the cargo was finally received by
SMC at its Mandaue City warehouse, it was found in bad order, thereby confirming the
damage already uncovered in Manila.
CA ruled in favour of the defendants finding o cause of action since it has
already prescribed pursuant to Art. 366 of Code of Comerce.
Issue:
Whether any of the remaining parties may still be held liable by UCPB.
Ruling:
The provisions of the Code of Commerce, which apply to overland, river and
maritime transportation, come into play.
Art. 366 of the Code of Commerce states: Within twenty-four hours following
the receipt of the merchandise, the claim against the carrier for damage or average
which may be found therein upon opening the packages, may be made, provided that
the indications of the damage or average which gives rise to the claim cannot be
ascertained from the outside part of such packages, in which case the claim shall be
admitted only at the time of receipt.
The law clearly requires that the claim for damage or average must be made
within 24 hours from receipt of the merchandise if, as in this case, damage cannot be
ascertained merely from the outside packaging of the cargo.
The requirement to give notice of loss or damage to the goods is not an
empty formalism. The fundamental reason or purpose of such a stipulation is not to
relieve the carrier from just liability, but reasonably to inform it that the shipment has
been damaged and that it is charged with liability therefor, and to give it an opportunity
to examine the nature and extent of the injury. This protects the carrier by affording it
an opportunity to make an investigation of a claim while the matter is still fresh and
easily investigated so as to safeguard itself from false and fraudulent claims.17
The 24-hour claim requirement as a condition precedent to the accrual of a
right of action against a carrier for loss of, or damage to, the goods. The shipper or
consignee must allege and prove the fulfillment of the condition. Otherwise, no right of
action against the carrier can accrue in favor of the former.18
The shipment in this case was received by SMC on August 2, 1991. However,
as found by the Court of Appeals, the claims were dated October 30, 1991, more than
three (3) months from receipt of the shipment and, at that, even after the extent of the
loss had already been determined by SMC’s surveyor. The claim was, therefore, clearly
filed beyond the 24-hour time frame prescribed by Art. 366 of the Code of Commerce.
MD TRANSIT, INC. vs. THE HONORABLE COURT OF APPEALS and SERGIO MARIANO
G.R. No. L-49496 May 31, 1979
TEEHANKEE, J.:
Facts:
Carmen G. Mariano, wife of the defendant was recklessly hit, while crossing
the street on a pedestrian lane on Ayala Avenue in Makati, by petitioner's bus, thrown
six meters away and instantly killed.
Respondent Court of Appeals, affirmed in toto the judgment of the Court of
First Instance of Bataan in favor of respondent Sergio Mariano (for himself and in
representation of two minor children) as plaintiffs-appellees against herein petitioner
MD Transit, Inc. as defendant-appellant, awarding him damages as follows: a)
P50,000.00 as moral damages; b) P309,920.00 as compensatory damages for lost
earnings; c) P20,160.00 as actual damages; d)P10,000.00 as attorney's fees; and e) Costs
of suit.
Petitioner filed on January 8, 1979 with this Court the present petition for
review on certiorari of respondent appellate court's judgment.
Issue:
Whether or not the amount awarded for compensatory damages is reasonable.
Ruling:
The amount recoverable is not loss of the entire earning, but rather the loss
of that portion of the earnings which the beneficiary would have received. In other
words, only net earnings, not gross earning, are to be considered, that is, the total of the
earnings less expenses necessary in the creation of such earnings or income and less
living and other incidental expenses."
Petitioner, citing the Villa Rey doctrine, contends in its petition that the
maximum damages that should be awarded would amount to only P103,680.00 based
on its contention that the victim's life expectancy should be 24 years (not 26 years) and
net earnings only at P4,320.00 a year, thus:
In its memorandum, petitioner would further reduce the life expectancy of
the deceased Carmen G. Mariano to 20 years instead of 24 years, arguing that "while it
may be said that at the time of her death, Carmen G. Mariano was in relatively good
health, yet undergoing a major surgery such as caesarian operation is a circumstance
that would have affected her normal life expectancy and this fact should be considered
as further allowance and hence, for purposes of this e her life expectancy may be
reduced further to 20 years,"
Respondents, on the other hand, contend that in the absence of a clear
showing that the determination of the amount of compensatory damages based on life
expectancy and the net earning capacity of the deceased is manifestly arbitrary or
excessive, such award should be sustained.
All factors considered, the Court believes that it is fair and reasonable to fix
the deductible living and other expenses of the deceased at the sum of P4,800.00 a year
or P400.00 a month (one half of the amount of P9,600.00 a year or P800.00 a month
urged by petitioner), since the deceased's husband had also his own earnings and this
sum would be her fair share of the family's expenses. Petitioner has expressly conceded
the deceased's life expectancy to be at 20 to 24 years, supra. All in all, the Court believes
that an award of P200,000.00 as compensatory damages by way of the deceased's lost
earnings is completely justified, under the facts of the case at bar. Ts would be roughly
based on an annual net earning of P9,120.00 [P13,920.00 gross earnings less P4,800.00
annual expenses] x 22 years of life expectancy P200,640.00). Such award of P200,000.00
for compensatory damages incidentally coincides with the exact amount prayed for as
compensatory damages for loss of earning capacity in respondent's complaint.
G.R. No. 120027. April 21, 1999
RAYNERA, petitioners
vs.
FREDDIE HICETA and JIMMY ORPILLA, respondents.
Negligence
Proximate Cause
FACTS:
On March 23, 1989, at about 2:00 in the morning, when Reynaldo Raynera was on his
way home, riding a motorcycle traveling on the southbound lane of East Service Road,
Cupang, Muntinlupa, an accident happened. He crashed his motorcycle into the left rear
portion of an Isuzu truck trailer owned by Freddie Hiceta and was driven by Jimmy
Orpilla.
The truck was travelling ahead of him at 20 to 30 kilometers per hour. The truck was
loaded with two (2) metal sheets extended on both sides, two (2) feet on the left and
three (3) feet on the right. There were two (2) pairs of red lights, about 35 watts each,
on both sides of the metal plates. The asphalt road was not well lighted.
Due to the collision, Reynaldo sustained head injuries and which caused his
death.
Petitioners filed with the Regional Trial Court, Manila a complaint for damages against
respondents. In the complaint, they sought recovery of damages for the death of
Reynaldo Raynera caused by the negligent operation of the truck-trailer at nighttime on
the highway, without tail lights.
DECISION OF THE RTC
The trial court held that respondent’s negligence was the immediate and
proximate cause of Reynaldo Rayneras death, for which they are jointly and severally
liable to pay damages to petitioners. The trial court also held that the victim was
himself negligent, although this was insufficient to overcome respondent’s negligence.
The trial court applied the doctrine of contributory negligence and reduced the
responsibility of respondents by 20% on account of the victims own negligence.
DECISION OF THE CA
On April 28, 1995, the Court of Appeals rendered decision setting aside the
appealed decision. The appellate court held that Reynaldo Rayneras bumping into the
left rear portion of the truck was the proximate cause of his death,and consequently,
absolved respondents from liability.
ISSUE:
(1) Whether or not the respondents were negligent, and if so,
(2) Whether or not such negligence was the proximate cause of the death of
Reynaldo Raynera.
RULING:
1. Respondents are not negligent2.
Although the truck had no tail lights, there were an installation of two (2) pairs of lights
on top of the steel plates, and one (1) pair of lights in front of the truck. Despite the
absence of tail lights, respondent’s truck was visible in the highway. It was traveling at a
moderate speed, approximately 20 to 30 kilometers per hour. It used the service road,
instead of the highway, because the cargo they were hauling posed a danger to passing
motorists. In compliance with the Land Transportation Traffic Code (Republic Act No.
4136).
2. The proximate cause3 of the accident was the negligence of the victim.
Traveling behind the truck, he had the responsibility of avoiding bumping the vehicle in
front of him. He was in control of the situation. His motorcycle was equipped with
2Negligence is the omission to do something which a reasonable man, guided by
those considerations which ordinarily regulate the conduct of human affairs, would
do, or the doing of something, which a prudent and reasonable man would not do.
3 Proximate cause is that cause, which, in natural and continuous sequence,
unbroken by any efficient intervening cause, produces the injury, and without
which the result would not have occurred.
headlights to enable him to see what was in front of him. He was traversing the service
road where the prescribed speed limit was less than that in the highway.
A witness, Virgilio Santos admitted that from the tricycle where he was on board, he
saw the truck and its cargo of iron plates from a distance of ten (10) meters. In light of
these circumstances, an accident could have been easily avoided, unless the victim had
been driving too fast and did not exercise due care and prudence demanded of him
under the circumstances. Virgilio Santos testimony strengthened respondent’s defense
that it was the victim who was reckless and negligent in driving his motorcycle at high
speed. The tricycle where Santos was on board was not much different from the victim’s
motorcycle that figured in the accident. Although Santos claimed the tricycle almost
bumped into the improperly parked truck, the tricycle driver was able to avoid hitting
the truck.
It has been said that drivers of vehicles who bump the rear of another
vehicle are presumed to be the cause of the accident, unless contradicted by other
evidence. The rationale behind the presumption is that the driver of the rear vehicle has
full control of the situation as he is in a position to observe the vehicle in front of him.
The responsibility to avoid the collision with the front vehicle lies with the
driver of the rear vehicle. Consequently, no other person was to blame but the victim
himself since he was the one who bumped his motorcycle into the rear of the Isuzu
truck. He had the last clear chance of avoiding the accident.
37.
G.R. No. 108897 October 2, 1997
SARKIES TOURS PHILIPPINES, INC., petitioner,
vs.
COURT OF APPEALS, DR. ELINO G. FORTADES, MARISOL A. FORTADES and FATIMA
MINERVA A. FORTADES, respondents.
Breach of contract of carriage allegedly attended by bad faith
FACTS:
Fatima Fortades boarded Sarkies Tours Philippines Inc.’s De Luxe Bus No. 5 in Manila on
her way to Legazpi City. Her brother Raul helped her load three pieces of luggage
containing all of her optometry review books, materials and equipment, trial lenses, trial
contact lenses, passport and visa, as well as her mother Marisol's U.S. immigration
(green) card, among other important documents and personal belongings. Her
belongings were kept in the baggage compartment of the bus, but during a stopover at
Daet, it was discovered that only one bag remained in the open compartment. The
others, including Fatima's things, were missing and might have dropped along the way.
Respondents filed the case below to recover the value of the remaining lost items, as
well as moral and exemplary damages, attorney's fees and expenses of litigation. They
claimed that the loss was due to petitioner's failure to observe extraordinary diligence
in the care of Fatima's luggage and that petitioner dealt with them in bad faith from
the start. Petitioner, on the other hand, disowned any liability for the loss on the ground
that Fatima allegedly did not declare any excess baggage upon boarding its bus.
The Trial Court adjudged the case in favor of respondents. The Court of Appeals
affirmed the trial court's judgment, but deleted the award of moral and exemplary
damages.
ISSUE:
 Whether or not respondent as a common carrier, is responsible for the loss of G.R. No. 143133 June 5, 2002
the luggage.

BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V. and JARDINE DAVIES

RULING: TRANSPORT
Respondent SARKIES TOURS PHILIPPINES, INC., is responsible for the loss of the luggage SERVICES, INC., petitioners,
of their passengers.
vs.

Under the Civil Code, common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in the vigilance PHILIPPINE FIRST INSURANCE CO., INC., respondents.
over the goods transported by them. And this liability "lasts from the time the goods are
unconditionally placed in the possession of, and received by the carrier for Proof of Negligence / Exceptions
transportation until the same are delivered, actually or constructively, by the carrier to
the person who has a right to receive them," unless the loss is due to any of the FACTS:
excepted causes under Article 1734.
On June 13, 1990, CMC Trading A.G. shipped on board the M/V 'Anangel Sky' at
Hamburg, Germany 242 coils of various Prime Cold Rolled Steel sheets for
transportation to Manila consigned to the Philippine Steel Trading Corporation. On July
The cause of the loss in the case at bar was petitioner's negligence in not ensuring that
28, 1990, M/V Anangel Sky arrived at the port of Manila and, within the subsequent
the doors of the baggage compartment of its bus were securely fastened. As a result of
days, discharged the subject cargo. Four (4) coils were found to be in bad order. Finding
this lack of care, almost all of the luggage was lost, to the prejudice of the paying
the four (4) coils in their damaged state to be unfit for the intended purpose, the
passengers. Therefore, it is responsible for the consequent loss of the baggage.
consignee Philippine Steel Trading Corporation declared the same as total loss.

Plaintiff-appellant instituted a complaint for recovery of the amount paid by them, to

the consignee as insured.

Impugning the propriety of the suit against them, defendants-appellees imputed that
the damage and/or loss was due to pre-shipment damage, to the inherent nature, vice
or defect of the goods, or to perils, danger and accidents of the sea, or to insufficiency
of packing thereof, or to the act or omission of the shipper of the goods or their
representatives. Finally, defendants-appellees averred that, in any event, they exercised
due diligence and foresight required by law to prevent any damage/loss to said
shipment.

The RTC dismissed the Complaint because respondent had failed to prove its claims with
the quantum of proof required by law. In reversing the trial court, the CA ruled that
petitioners were liable for the loss or the damage of the goods shipped, because they defects in the packing or the container; or (5) an order or act of competent public
had failed to overcome the presumption of negligence imposed on common carriers. authority.

Consequently, the mere proof of delivery of the goods in good order to a

ISSUES: common carrier and of their arrival in bad order at their destination constitutes a
1. Whether petitioners have overcome the presumption of negligence of a prima facie case of fault or negligence against the carrier. If no adequate explanation is
common carrier given as to how the deterioration, the loss or the destruction of the goods happened,
the transporter shall be held responsible.
2. Whether the notice of loss was timely filed
2. The notice of loss was timely filed.

RULING:
Notice of claim need not be given if the state of the goods, at the time of their receipt,
1. Owing to the high degree of diligence required of them, common carriers, as a
has been the subject of a joint inspection or survey. Prior to unloading the cargo, an
general rule, are presumed to have been at fault or negligent if the goods they
Inspection Report as to the condition of the goods was prepared and signed by
transported deteriorated or got lost or destroyed unless they prove that they exercised
representatives of both parties. Furthermore, failure to file a notice of claim within
extraordinary diligence in transporting the goods.
three days will not bar recovery if it is nonetheless filed within one year. This one-year
prescriptive period also applies to the shipper, the consignee, the insurer of the goods
Well-settled is the rule that common carriers, from the nature of their business and for or any legal holder of the bill of lading.
reasons of public policy, are bound to observe extraordinary diligence and vigilance with
respect to the safety of the goods and the passengers they transport. Thus, common
In Loadstar Shipping Co., Inc, v. Court of Appeals, a claim is not barred by prescription as
carriers are required to render service with the greatest skill and foresight and "to use
long as the one-year period has not lapsed. In the present case, the cargo was
all reasonable means to ascertain the nature and characteristics of the goods tendered
discharged on July 31, 1990, while the Complaint was filed by respondent on July 25,
for shipment, and to exercise due care in the handling and stowage, including such
1991, within the one-year prescriptive period.
methods as their nature requires."

Hence, petitioner’s claim that pursuant to Section 3, paragraph 6 of the Carriage of

This strict requirement is justified by the fact that, without a hand or a voice
in the preparation of such contract, the riding public enters into a contract of Goods by Sea Act44 (COGSA), respondent should have filed its Notice of Loss within
transportation with common carriers. Even if it wants to, it cannot submit its own three days from delivery. They assert that the cargo was discharged on July 31, 1990,
stipulations for their approval. Hence, it merely adheres to the agreement prepared by but that respondent filed its Notice of Claim only on September 18, 1990 is untenable.
them. In order to avoid responsibility for any loss or damage, therefore, they have the
burden of proving that they observed such diligence.

The presumption of fault or negligence, however, will not arise if the loss is due to any
of the following causes: (1) flood, storm, earthquake, lightning, or other natural disaster
or calamity; (2) an act of the public enemy in war, whether international or civil; (3) an
act or omission of the shipper or owner of the goods; (4) the character of the goods or
G.R. No. 122039 May 31, 2000
VICENTE CALALAS, petitioner,
vs.
COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and FRANCISCO SALVA, respondents.
FACTS:
At 10 o'clock in the morning of August 23, 1989, private respondent Eliza Jujeurche G.
Sunga, took a passenger jeepney owned and operated by petitioner Vicente Calalas. As
the jeepney was filled to capacity of about 24 passengers, Sunga was given by the
conductor an "extension seat," a wooden stool at the back of the door at the rear end of
the vehicle. On the way to PoblacionSibulan, Negros Occidental, the jeepney stopped to
let a passenger off. As she was seated at the rear of the vehicle, Sunga gave way to the
outgoing passenger. Just as she was doing so, a Isuzu truck driven by IglecerioVerena
and owned by Francisco Salva bumped the left rear portion of the jeepney. As a result,
Sunga was injured. She sustained a fracture of the "distal third of the left tibia-fibula
with severe necrosis of the underlying skin."
Sunga filed a complaint for damages against Calalas, alleging violation of the contract of
carriage by the former in failing to exercise the diligence required of him as a common
carrier. Calalas, on the other hand, filed a third-party complaint against Francisco Salva,
the owner of the Isuzu truck.
DECISION OF THE RTC
The lower court rendered judgment against Salva as third-party defendant and absolved
Calalas of liability, holding that it was the driver of the Isuzu truck who was responsible
for the accident. It took cognizance of another case (Civil Case No. 3490), filed by Calalas
against Salva and Verena, for quasidelict, in which Branch 37 of the same court held
Salva and his driver Verena jointly liable to Calalas for the damage to his jeepney.
DECISION OF THE CA
The Court of Appeals reversed the decision on the ground that Sunga's cause of action
was based on a contract of carriage, not quasi-delict, and that the common carrier failed
to exercise the diligence required under the Civil Code. The appellate court dismissed
the third-party complaint against Salva and adjudged Calalas liable for damages to
Sunga.
On appeal to the Supreme Court, Petitioner contends that the ruling in Civil Case No.
3490 that the negligence of Verena was the proximate cause of the accident negates his
liability and that to rule otherwise would be to make the common carrier an insurer of
the safety of its passengers. He contends that the bumping of the jeepney by the truck
owned by Salva was a casofortuito4.
ISSUE:
Whether or not respondent Vicente Calasas is liable for breach of contract of
carriage.
RULING:
Respondent is liable for breach of contract of carriage.
Breach of contract or culpa contractual, is premised upon the negligence in the
performance of a contractual obligation. Here, the action can be prosecuted merely by
proving the existence of the contract and the fact that the obligor, in this case the
common carrier, failed to transport his passenger safely to his destination. It is
immaterial that the proximate cause of the collision between the jeepney and the truck
was the negligence of the truck driver.
The doctrine of proximate cause is applicable only in actions for quasi-delict, not in
actions involving breach of contract. The doctrine is a device for imputing liability to a
4 A casofortuito is an event which could not be foreseen, or which, though
foreseen, was inevitable.3 This requires that the following requirements be
present: (a) the cause of the breach is independent of the debtor's will; (b) the
event is unforeseeable or unavoidable; (c) the event is such as to render it
impossible for the debtor to fulfill his obligation in a normal manner, and (d) the
debtor did not take part in causing the injury to the creditor.
person where there is no relation between him and another party. In such a case, the
obligation is created by law itself. But, where there is a pre-existing contractual relation
between the parties, it is the parties themselves who create the obligation, and the
function of the law is merely to regulate the relation thus created.
In the case at bar, it is undisputed that petitioner's driver took in more passengers than
the allowed seating capacity of the jeepney, a violation of section 32(a) of R.A. No. 4136,
as amended, or the Land Transportation and Traffic Code. It provides:
Sec. 32 (a) Exceeding registered capacity. — “No person operating any motor
vehicle shall allow more passengers or more freight or cargo in his vehicle than its
registered capacity.”
The fact that Sunga was seated in an "extension seat" placed her in a peril greater than
that to which the other passengers were exposed. Therefore, not only was petitioner
unable to overcome the presumption of negligence imposed on him for the injury
sustained by Sunga, but also, the evidence shows he was actually negligent in
transporting passengers.
G.R. No. 150403 January 25, 2007
CEBU SALVAGE CORPORATION, Petitioner,
vs.
PHILIPPINE HOME ASSURANCE CORPORATION, Respondent.
FACTS:
On November 12, 1984, petitioner Cebu Salvage Corporation (as carrier) and Maria
Cristina Chemicals Industries, Inc. [MCCII] (as charterer) entered into a voyage charter5
wherein petitioner was to load 800 to 1,100 metric tons of silica quartz on board the
M/T Espiritu Santo at Ayungon, Negros Occidental for transport to and discharge at
Tagoloan, Misamis Oriental to consignee Ferrochrome Phils., Inc.
Pursuant to the contract, on December 23, 1984, petitioner received and loaded 1,100
metric tons of silica quartz on board the M/T Espiritu Santo which left Ayungon for
Tagoloan the next day. The shipment never reached its destination because the M/T
Espiritu Santo sank in the afternoon of December 24, 1984 off the beach of Opol,
Misamis Oriental, resulting in the total loss of the cargo.
MCCII filed a claim for the loss of the shipment with its insurer, respondent Philippine
Home Assurance Corporation. Respondent paid the claim in the amount of P211,500
and was subrogated to the rights of MCCII. Thereafter, it filed a case in the RTC13
against petitioner for reimbursement of the amount it paid MCCII.
5A "voyage charter," also known as a contract of affreightment wherein the ship
was leased for a single voyage for the conveyance of goods, in consideration of the
payment of freight. Under a voyage charter, the shipowner retains the possession,
command and navigation of the ship, the charterer or freighter merely having use
of the space in the vessel in return for his payment of freight. An owner who
retains possession of the ship remains liable as carrier and must answer for loss or
non-delivery of the goods received for transportation.
The RTC rendered judgment in favor of respondent. It ordered petitioner to pay
respondent P211,500 plus legal interest, attorney’s fees equivalent to 25% of the award
and costs of suit. The CA affirmed the decision of the RTC.
ISSUE:
1. Whether or not petitioner is a common carrier
2. Whether or not a carrier may be held liable for the loss of cargo
resulting from the sinking of a ship which it does not own.
RULING:
1. There is no dispute that petitioner was a common carrier. At the
time of the loss of the cargo, it was engaged in the business of carrying and transporting
goods by water, for compensation, and offered its services to the public.
From the nature of their business and for reasons of public policy, common carriers are
bound to observe extraordinary diligence over the goods they transport according to
the circumstances of each case. In the event of loss of the goods, common carriers are
responsible, unless they can prove that this was brought about by the causes specified
in Article 1734 of the Civil Code. In all other cases, common carriers are presumed to be
at fault or to have acted negligently, unless they prove that they observed extraordinary
diligence.
Here, petitioner was the one which contracted with MCCII for the transport of the
cargo. It had control over what vessel it would use. All throughout its dealings with
MCCII, it represented itself as a common carrier. The fact that it did not own the vessel
it decided to use to consummate the contract of carriage did not negate its character
and duties as a common carrier. The MCCII (respondent’s subrogor) could not be
reasonably expected to inquire about the ownership of the vessels which petitioner
carrier offered to utilize. As a practical matter, it is very difficult and often impossible for
the general public to enforce its rights of action under a contract of carriage if it should
be required to know who the actual owner of the vessel is. In fact, in this case, the
voyage charter itself denominated petitioner as the "owner/operator" of the vessel.
Hence, a contract of carriage of goods was shown to exist; petitioner is a common
carrier.
2. Petitioner may be held liable for the loss of the cargo although the
ship was not owned by them.
To permit a common carrier to escape its responsibility for the goods it agreed to
transport (by the expedient of alleging non-ownership of the vessel it employed) would
radically derogate from the carrier's duty of extraordinary diligence. It would also open
the door to collusion between the carrier and the supposed owner and to the possible
shifting of liability from the carrier to one without any financial capability to answer for
the resulting damages. Hence, it could not exculpate the carrier from liability for the
breach of its contract of carriage. The law, in fact, prohibits it and condemns it as unjust
and contrary to public policy.
42.
G.R. No. L-55347 October 4, 1985
PHILIPPINE NATIONAL RAILWAYS, petitioner,
vs.
COURT OF APPEALS and ROSARIO TUPANG, respondents.
FACTS:
WinifredoTupang, husband of plaintiff Rosario Tupang, boarded 'Train No. 516 of
appellant at Libmanan, Camarines Sur, as a paying passenger bound for Manila. Due to
some mechanical defect, the train stopped at Sipocot, Camarines Sur, for repairs, taking
some two hours before the train could resume its trip to Manila. Unfortunately, upon
passing Iyam Bridge at Lucena, Quezon, WinifredoTupang fell off the train resulting in
his death.The train did not stop despite the alarm raised by the other passengers that
somebody fell from the train. Instead, the train conductor Perfecto Abrazado, called the
station agent at Candelaria, Quezon, and requested for verification of the information.
Police authorities of Lucena City were dispatched to the Iyam Bridge where they found
the lifeless body of WinifredoTupang.
The then Court of First Instance of Rizal, held the petitioner PNR liable for damages for
breach of contract of carriage. The Appellate Court sustained the holding of the trial
court that the PNR did not exercise the utmost diligence required by law of a common
carrier.
PNR raised as a defense, the doctrine of state immunity from suit. It alleged that it is a
mere agency of the Philippine government without distinct or separate personality of its
own, and that its funds are governmental in character and, therefore, not subject to
garnishment or execution.
ISSUE:
1. Whether or not the contention of PNR tenable
2. Whether or not PNR as common carrier, liable for the death of
WinifredoTupang
RULING:
1. The petition is devoid of merit. The PNR was created under Rep. Act 4156, as
amended. Section 4 of the said Act provides:
The Philippine national Railways shall have the following powers:
a. To do all such other things and to transact all such business directly
or indirectly
necessary, incidental or conducive to the attainment of the purpose of the corporation;
and
b. Generally, to exercise all powers of a corporation under the
Corporation Law.
Under the foregoing section, the PNR has all the powers, the characteristics and
attributes of a corporation under the Corporation Law. There can be no question then
that the PNR may sue and be sued and may be subjected to court processes just like any
other corporation.
Hence, petitioner PNR cannot legally set up the doctrine of non-suability as a bar to the
plaintiff's suit for damages.
2. PNR is responsible for the death of WinifredoTupang for its failure to exercise
extraordinary diligence required to common carriers.
Petitioner has the obligation to transport its passengers to their destinations and to
observe extraordinary diligence in doing so. Death or any injury suffered by any of its
passengers gives rise to the presumption that it was negligent in the performance of its
obligation under the contract of carriage. Here, the petitioner failed to overthrow such
presumption of negligence with clear and convincing evidence.
In the case at bar, it is undisputed the train boarded by the deceased
WinifredoTupang was so over-crowded that he and many other passengers
had no choice but to sit on the open platforms between the coaches of the
train. Likewise, the train did not even slow down when it approached the
Iyam Bridge which was under repair at the time, neither did the train stop,
despite the alarm raised by other passengers that a person had fallen off the
train at lyam Bridge. Hence, PNR is liable.
However, while petitioner failed to exercise extraordinary diligence as required by law,
it appears that the deceased was chargeable with contributory negligence. Since he
opted to sit on the open platform between the coaches of the train, he should have held
tightly and tenaciously on the upright metal bar found at the side of said platform to
avoid falling off from the speeding train. Such contributory negligence, while not
exempting the PNR from liability, nevertheless justified the deletion of the amount
adjudicated as moral damages.