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G.R. No.

190271, September 14, 2016

TRANSIMEX CO., Petitioner, v. MAFRE ASIAN INSURANCE CORP., Respondent.

DECISION

SERENO, C.J.:

This case involves a money claim filed by an insurance company against the ship
agent of a common carrier. The dispute stemmed from an alleged shortage in a
shipment of fertilizer delivered by the carrier to a consignee. Before this Court, the
ship agent insists that the shortage was caused by bad weather, which must be
considered either a storm under Article 1734 of the Civil Code or a peril of the sea
under the Carriage of Goods by Sea Act (COGSA).1 chanrobles law

In the Decision2 and the Resolution3 assailed in this Petition for Review
on Certiorari,4 the Court of Appeals (CA) affirmed the Decision5 of the Regional Trial
Court (RTC). The RTC ordered petitioner Transimex Co. (Transimex) to pay
respondent Mafre Asian Insurance Corp.6 the amount of P1,617,527.37 in addition to
attorney's fees and costs. Petitioner is the local ship agent of the vessel, while
respondent is the subrogee of Fertiphil Corporation (Fertiphil),7 the consignee of a
shipment of Prilled Urea Fertilizer transported by M/V Meryem Ana.

FACTUAL ANTECEDENTS

On 21 May 1996, M/V Meryem Ana received a shipment consisting of 21,857 metric
tons of Prilled Urea Fertilizer from Helm Duengemittel GMBH at Odessa,
Ukraine.8 The shipment was covered by two separate bills of lading and consigned to
Fertiphil for delivery to two ports - one in Poro Point, San Fernando, La Union; and
the other in Tabaco, Albay.9 Fertiphil insured the cargo against all risks under Marine
Risk Note Nos. MN-MAR-HO-0001341 and MN-MAR-HO-0001347 issued by
respondent.10 chanrob leslaw

On 20 June 1996, M/V Meryem Ana arrived at Poro Point, La Union, and discharged
14,339.507 metric tons of fertilizer under the first bill of lading.11 The ship sailed on
to Tabaco, Albay, to unload the remainder of the cargo. The fertilizer unloaded at
Albay appeared to have a gross weight of 7,700 metric tons.12 The present
controversy involves only this second delivery.

As soon as the vessel docked at the Tabaco port, the fertilizer was bagged and
stored inside a warehouse by employees of the consignee.13 When the cargo was
subsequently weighed, it was discovered that only 7,350.35 metric tons of fertilizer
had been delivered.14 Because of the alleged shortage of 349.65 metric tons,
Fertiphil filed a claim with respondent for P1,617,527.37,15 which was found
compensable.16 chanrob leslaw

After paying the claim of Fertiphil, respondent demanded reimbursement from


petitioner on the basis of the right of subrogation. The claim was denied, prompting
respondent to file a Complaint with the RTC for recovery of sum of money.17 In
support of its claim, respondent presented a Report of Survey18 and a
Certification19 from David Cargo Survey Services to prove the shortage. In addition,
respondent submitted an Adjustment Report20 prepared by Adjustment Standards
Corporation (ASC) to establish the outturn quantity and condition of the fertilizer
discharged from the vessel at the Tabaco port.21 In the report, the adjuster also
stated that the shortage was attributable to the melting of the fertilizer while inside
the hatches, when the vessel took on water because of the bad weather experienced
at sea.22 Two witnesses were then presented by respondent to buttress its
documentary evidence.23 chanrobles law

Petitioner, on the other hand, denied that there was loss or damage to the
cargo.24 It submitted survey certificates and presented the testimony of a marine
surveyor to prove that there was, in fact, an excess of 3.340 metric tons of fertilizer
delivered to the consignee.25 Petitioner also alleged that defendants had exercised
cralawred

extraordinary diligence in the transport and handling of the cargo.26 chanrob leslaw

THE RTC RULING

The RTC ruled in favor of respondent and ordered petitioner to pay the claim of
P1,617,527.37. In its Decision,27 the trial court found that there was indeed a
shortage in the cargo delivered, for which the common carrier must be held
responsible under Article 1734 of the Civil Code. The RTC also refused to give
credence to petitioner's claim of overage and noted that the presumption of fault
and/or negligence on the part of the carrier remained unrebutted. The trial court
explained:ChanRoblesVirtualawl ibra ry

The defendants' defense is that there was no loss/damage to the cargo because
instead of a shortage there was an overage of 3.340, invoking the findings of Raul
Pelagio, a marine surveyor connected with Survey Specialists, Inc. whose services
were engaged by the defendants. However, the Court notes that what was loaded in
the vessel M/V Meryem Ana at Odessa, Ukraine on May 21, 1996 was 21,857 metric
tons of prilled urea fertilizer (Draft Survey Report, Exhibit F). How the quantity
loaded had increased to 21,860.34 has not been explained by the defendants. Thus,
the Court finds incredible the testimony of Raul Pelagio that he found an overage of
3.340 metric tons. The Court is inclined to give credence to the testimonies of
witness Jaime David, the cargo surveyor engaged by consignee Fertiphil Corporation,
and witness Fabian Bon, a cargo surveyor of Adjustment Standards Corporation,
whose services were engaged by plaintiff Mafre Asian Insurance Corporation, there
being no reason for the Court to disregard their findings which jibe with one another.

Thus, it appears crystal clear that on the vessel M/V Meryem Ana was loaded in bulk
on May 21, 1996 at Odessa, Ukraine a cargo consisting of 21,857 metric tons of
prilled urea fertilizer bound for delivery at Poro Point, San Fernando, La Union and at
Tabaco, Albay; that the cargo unloaded at said ports of destination had a shortage
of 349.65 metric tons.

xxxx

As to the defense that defendants had supposedly exercised extraordinary care and
diligence in the transport and handling of the cargo, the Court finds that the
evidence presented by the defendants is absolutely and completely bereft of
anything to support their claim of having exercised extraordinary care and diligence.

Hence, the presumption of fault and/or negligence as provided in Art. 1735 of the
Civil Code on the part of the defendants stands unrebutted as against the latter.28 chanrob lesvi rtua llawlib ra ry

THE CA RULING

The CA affirmed the ruling of the RTC and denied petitioner's appeal.29 After
evaluating the evidence presented during trial, the appellate court found no reason
to disturb the trial court's conclusion that there was indeed a shortage in the
shipment.30 chanrob leslaw

The CA also rejected the assertion that petitioner was not a common
carrier.31 Because the latter offered services to the public for the transport of goods
in exchange for compensation, it was considered a common carrier in accordance
with Article 1732 of the Civil Code. The CA further noted that petitioner had already
admitted this fact in the Answer32 and even raised the defenses usually invoked by
common carriers during trial and on appeal, i.e., the exercise of extraordinary care
and diligence, and fortuitous event.33 These defenses were, however, found
unmeritorious: ChanRoblesVi rtua lawlib rary

Defendants-appellants claim that the loss was due to a fortuitous event as the
Survey Report of Jaime David stated that during its voyage, the vessel encountered
bad weather. But to excuse a common carrier fully of any liability, Article 1739 of
the Civil Code requires that the fortuitous event must have been the proximate and
only cause of the loss. Moreover, it should have exercised due diligence to prevent
or minimize the loss before, during and after the occurrence of the fortuitous event.

xxxx

In the present case, defendants-appellants did not present proof that the "bad
weather" they encountered was a "storm" as contemplated by Article 1734(1).
String winds are the ordinary vicissitudes of a sea voyage. Even if the weather
encountered by the ship was to be deemed a natural disaster under Article 1739 of
the Civil Code, defendants-appellants failed to show that such natural disaster or
calamity was the proximate and only cause of the loss. The shortage must not have
been caused or worsened by human participation. The defense of fortuitous event or
natural disaster cannot be successfully made when the injury could have been
avoided by human precaution.34 chanroble svi rtual lawlib rary

Petitioner moved for reconsideration of the CA Decision, but the motion was
denied.35 Not only did the Motion for Reconsideration lack meit according to the
appellate court; it was also filed out of time.36 chanroble slaw

PROCEEDINGS BEFORE THIS COURT

On 3 December 2009, Transimex filed a Petition for Review on Certiorari37 before


this Court praying for the reversal of the CA Decision and Resolution.38 Petitioner
asserts that the lower courts erred in holding it liable for the alleged shortage in the
shipment of fertilizer. While it no longer questions the existence of the shortage, it
claims that the loss or damage was caused by bad weather.39 It then insists that the
dispute is governed by Section 4 of COGSA, which exempts the carrier from liability
for any loss or damage arising from "perils, dangers and accidents of the sea.40 chanrob leslaw

In its Comment,41 respondent maintains that petitioner was correctly held liable for
the shortage of the cargo in accordance with the Civil Code provisions on common
carriers.42 It insists that the factual findings of the lower courts must be
respected43 particularly in this case, since petitioner failed to timely appeal the
Decision of the CA.44 chanroble slaw

Petitioner, in its Reply,45 takes a position different from its initial stance as to the law
applicable to the dispute. It concedes that the Civil Code primarily governs its
liability as a carrier, with COGSA as a suppletory source.46 Under both laws,
petitioner contends that it is exempt from liability, because damage to the cargo was
caused by the bad weather encountered by the vessel while at sea. This kind of
weather supposedly qualifies as a violent storm under the Civil Code; or as a peril,
danger or accident of the sea under COGSA.47 chan robles law

ISSUES

The following issues are presented for resolution by this Court:


1. Whether the CA Decision has become final and executory

2. Whether the transaction is governed by the provisions of the Civil Code on


common carriers or by the provisions of COGSA

3. Whether petitioner is liable for the loss or damage sustained by the cargo
because of bad weather

OUR RULING

We DENY the Petition.

This Court finds that the CA Decision has become final because of the failure of
petitioner to timely file a motion for reconsideration. Furthermore, contrary to the
argument raised by the latter, there is insufficient evidence to establish that the loss
or damage to the cargo was caused by a storm or a peril of the sea.

The CA Decision has become final and executory.

In the assailed Resolution, in which the CA ruled that petitioner's Motion for
Reconsideration was filed late, it explained: ChanRoblesVi rtua lawlib rary

Defendants-appellants' motion for reconsideration of the Court's Decision dated


August 7, 2009 was filed out of time, as based on the reply letter dated October 13,
2009 of the Chief, Administrative Unit, Office of the Postmaster, Makati City, copy of
said Decision was received by defendants-appellants' counsel on September 4, 2009,
not September 14, 2009 as alleged in the motion for reconsideration. Consequently,
the subject Decision dated August 27, 2009 had become final and executory
considering that the motion for reconsideration was filed only on September 29,
2009, beyond the fifteen (15)-day reglementary period which lasted until September
19, 2009.48chanroble svirtual lawlib rary

The Court agrees. The Certification issued by the Office of the Postmaster of Makati,
which states that the Decision was received by respondent's counsel on 4 September
2009, is entitled to full faith and credence. In the absence of contradictory evidence,
the presumption is that the postmaster has regularly performed his duty.49 In this
case, there is no reason to doubt his statement as to the date respondent received
the CA Decision.

Significantly, Transimex failed to address this matter in its Petition. While it


continued to allege that it received the CA Decision on 14 September 2009, it did
not refute the finding of the appellate court that the former's Motion for
Reconsideration had been filed late. It was only after respondent again asserted the
finality of the CA Decision in its Comment did petitioner attempt to explain the
discrepancy: ChanRoblesVirtualawl ibra ry

x x x Apparently, the said Decision dated 27 August 2009 was delivered by the
postman to the guard on duty at the ground floor of the building where undersigned
counsel's office is located. It was the guard on duty who received the said decision
on 4 September 2009 but it was only on 14 September 2009 that undersigned
counsel actually received the said decision. Hence, the date of receipt of the decision
should be reckoned from the date of receipt by the counsel of the decision and not
from the date of receipt of the guard who is not an employee of the law office of the
undersigned counsel.
This Court notes that the foregoing account remains unsupported by evidence. The
guard on duty or any employee of the law firm could have easily substantiated the
explanation offered by counsel for petitioner, but no statement from any of them
was ever submitted. Since petitioner was challenging the official statement of the
Office of the Postmaster of Makati on the matter, the former had the burden of
proving its assertions and presenting countervailing evidence. Unfounded allegations
would not suffice.

In any event, this Court has decided to review the merits of this case in the interest
of justice. After a judicious evaluation of the arguments interposed by the parties,
we find no reason to reverse the CA Decision and Resolution.

The provisions of the Civil Code on common carriers are applicable.

As previously discussed, petitioner initially argued that the CA erred in applying the
provisions of the Civil Code to this case. It insisted that the contract of carriage
between the parties was governed by COGSA,50 the law applicable to "all contracts
for the carriage of goods by sea to and from Philippine ports in foreign trade."51 This
assertion is bereft of merit.

This Court upholds the ruling of the CA with respect to the applicable law. As
expressly provided in Article 1753 of the Civil Code, "[t]he law of the country to
which the goods are to be transported shall govern the liability of the common
carrier for their loss, destruction or deterioration." Since the cargo in this case was
transported from Odessa, Ukraine, to Tabaco, Albay, the liability of petitioner for the
alleged shortage must be determined in accordance with the provisions of the Civil
Code on common carriers. In Eastern Shipping Lines, Inc. v. BPI/MS Insurance Corp.,
the Court declared: ChanRoblesVi rt ualawlib ra ry

According to the New Civil Code, the law of the country to which the goods are to be
transported shall govern the liability of the common carrier for their loss, destruction
or deterioration. The Code takes precedence as the primary law over the rights and
obligations of common carriers with the Code of Commerce and COGSA applying
suppletorily.52 chanroblesvi rt uallawl ibra ry

Besides, petitioner itself later conceded in its Reply that the Civil Code provisions on
common carriers are primarily applicable to the present dispute, while COGSA only
applies in a suppletory manner.53 chanrob leslaw

Petitioner is liable for the shortage incurred by the shipment.

Having settled the foregoing preliminary issues, the only argument left for this Court
to resolve is petitioner's assertion that it is exempt from liability for the loss or
damage to the cargo. As grounds for this exemption, petitioner cites both the Civil
Code and COGSA, particularly the provisions absolving a carrier from loss or damage
sustained as the result of a "storm" or a "peril of the sea."

In its Petition, Transimex summarizes the testimony of one witness for respondent
supposedly proving that the shortage in the shipment was caused by inclement
weather encountered by the vessel at sea. Petitioner claims that this testimony
proves that damage to the cargo was the result of the melting of the fertilizer after
seawater entered Hatch No. 1 of the vessel as a result of the bad weather conditions
at sea:ChanRoblesVirtualawl ibra ry

The evidence for the respondent clearly proves that the loss/damage/shortage
[suffered by] the cargo was caused by the bad weather encountered by the vessel
during the voyage from Odessa, Ukraine to Poro Point, San Fernando, La Union,
wherein due to bad weather[,] sea water found its way inside Hatch No. 1 resulting
in the wetting, melting and discoloration of the prilled urea fertilizer. The fact that
sea water found its way inside Hatch No. 1 was clearly testified to by the witness for
the respondent. Jaime R. Davis testified that: ChanRobles Virtualawl ibra ry

"He was present during the discharging operation, that he saw the hatches
opened whereupon he noticed the presence of water thereat; accordingly,
he informed the master of the vessel of the presence of water at the
hatches to which the master of the vessel replied that on the way they
encountered bad weather."54 (Emphasis in the original)
Petitioner also cites a portion of the Adjustment Report submitted by respondent
during trial as proof that damage to the cargo was caused by a storm: ChanRoblesVirtualawl ibra ry

How the sea water found its way inside Hatch No. 1 was clearly explained by
another witness for the respondent by the name of Fabian Bon who stated in his
Adjustment as follows: ChanRobles Virtualawl ibra ry

Our inquiries disclosed that the master of the vessel interviewed by the consignee's
surveyor (David Cargo Survey Services) that during sailing from Odessa (Ukraine)
bound to Poro Point, San Fernando, La Union, Philippines, the vessel encountered
bad weather on June 3, 1996 and was rolling from starboard to portside top
of the 1, 2, 3, 4, 5, 6 & 7 hatch covers and sea water were washing over all
main deck.

On the following day, June 4, 1996, wind reading up to 40 knots and very
high swells were coming from south west direction. The vessel was rolling
and pitching heavily. Heavy sea water were washing all main deck and were
jumping from main deck to top of the seven (7) hatch covers. As a result,
the master filed a Marine Note of Protest on June 19, 1996 at the Port of
Poro Point, San Fernando, La Union, Philippines.55 (Emphases in the original)
The question before this Court therefore comes down to whether there is sufficient
proof that the loss or damage incurred by the cargo was caused by a "storm" or a
"peril of the sea."

We rule in the negative. As will be discussed, petitioner failed to prove the existence
of a storm or a peril of the sea within the context of Article 1734(1) of the Civil Code
or Section 4(2)(c) of COGSA. Furthermore, there was no sufficient proof that the
damage to the shipment was solely and proximately caused by bad weather.

The presence of a "storm" or a "peril of the sea" was not established.

It must be emphasized that not all instances of bad weather may be categorized as
"storms" or "perils of the sea" within the meaning of the provisions of the Civil Code
and COGSA on common carriers. To be considered absolutory causes under either
statute, bad weather conditions must reach a certain threshold of severity.

With respect to storms, this Court has explained the difference between a storm and
ordinary weather conditions in Central Shipping Co. Inc. v. Insurance Company of
North America:56
Nonetheless, to our mind it would not be sufficient to categorize the weather
condition at the time as a "storm" within the absolutory causes enumerated in the
law. Significantly, no typhoon was observed within the Philippine area of
responsibility during that period.

According to PAGASA, a storm has a wind force of 48 to 55 knots, equivalent


to 55 to 63 miles per hour or 10 to 11 in the Beaufort Scale. The second mate
of the vessel stated that the wind was blowing around force 7 to 8 on the Beaufort
Scale. Consequently, the strong winds accompanying the southwestern
monsoon could not be classified as a "storm." Such winds are the ordinary
vicissitudes of a sea voyage.57 (Emphases supplied; citations omitted)
The phrase "perils of the sea" carries the same connotation. Although the term has
not been definitively defined in Philippine jurisprudence, courts in the United States
of America generally limit the application of the phrase to weather that is "so
unusual, unexpected and catastrophic as to be beyond reasonable
expectation."58 Accordingly, strong winds and waves are not automatically deemed
perils of the sea, if these conditions are not unusual for that particular sea area at
that specific time, or if they could have been reasonably anticipated or
foreseen.59 While cases decided by U.S. courts are not binding precedents in this
jurisdiction, the Court considers these pronouncements persuasive60 in light of the
fact that COGSA was originally an American statute61 that was merely adopted by
the Philippine Legislature in 1936.62
chanrobles law

In this case, the documentary and testimonial evidence cited by petitioner indicate
that M/V Meryem Ana faced winds of only up to 40 knots while at sea. This wind
force clearly fell short of the 48 to 55 knots required for "storms" under Article
1734(1) of the Civil Code based on the threshold established by
PAGASA.63 Petitioner also failed to prove that the inclement weather encountered by
the vessel was unusual, unexpected, or catastrophic. In particular, the strong winds
and waves, which allegedly assaulted the ship, were not shown to be worse than
what should have been expected in that particular location during that time of the
year. Consequently, this Court cannot consider these weather conditions as "perils of
the sea" that would absolve the carrier from liability.

As a side note, we observe that there are no definite statutory standards for
determining the existence of a "storm" or "peril of the sea" that would exempt a
common carrier from liability. Hence, in marine insurance cases, courts are
constrained to rely upon their own understanding of these terms of art, or upon
imprecise accounts of the speed of the winds encountered and the strength of the
waves experienced by a vessel. To obviate uncertainty, it may be time for Congress
to lay down specific rules to distinguish "storms" and other "perils of the sea" from
the ordinary action of the wind and waves. While uniform measures of severity may
prove difficult to establish, the legislature may consider providing more detailed
standards to be used by the judiciary in resolving maritime cases. These may
include wind velocity, violence of the seas, the height of the waves, or even the
expected weather conditions in the area involved at the time of the incident.

Petitioner failed to prove the other requisites for exemption from liability
under Article 1734 of the Civil Code.

Even assuming that the inclement weather encountered by the vessel amounted to a
"storm" under Article 1734(1) of the Civil Code, there are two other reasons why
this Court cannot absolve petitioner from liability for loss or damage to the cargo
under the Civil Code. First, there is no proof that the bad weather encountered
by M/V Meryem Ana was the proximate and only cause of damage to the shipment.
Second, petitioner failed to establish that it had exercised the diligence required
from common carriers to prevent loss or damage to the cargo.

We emphasize that common carriers are automatically presumed to have been at


fault or to have acted negligently if the goods they were transporting were lost,
destroyed or damaged while in transit.64 This presumption can only be rebutted by
proof that the carrier exercised extraordinary diligence and caution to ensure the
protection of the shipment in the event of foul weather.65 As this Court explained
in Fortune Sea Carrier, Inc. v. BPI/MS Insurance Corp.: ChanRoblesVi rt ualawlib ra ry

While the records of this case clearly establish that M/V Sea Merchant was damaged
as result of extreme weather conditions, petitioner cannot be absolved from liability.
As pointed out by this Court in Lea Mer Industries, Inc. v. Malayan Insurance, Inc., a
common carrier is not liable for loss only when (1) the fortuitous event was the only
and proximate cause of the loss and (2) it exercised due diligence to prevent or
minimize the loss. The second element is absent here. As a common carrier,
petitioner should have been more vigilant in monitoring weather disturbances within
the country and their (possible) effect on its routes and destination. More specifically,
it should have been more alert on the possible attenuating and dysfunctional effects
of bad weather on the parts of the ship. It should have foreseen the likely prejudicial
effects of the strong waves and winds on the ship brought about by inclement
weather and should have taken the necessary precautionary measures through
extraordinary diligence to prevent the weakening or dysfunction of the parts of the
ship to avoid or prune down the loss to cargo.66 (citations omitted)
In the instant case, there is absolutely no evidence that petitioner satisfied the two
requisites. Before the trial court, petitioner limited itself to the defense of denial. The
latter refused to admit that the shipment sustained any loss or damage and even
alleged overage of the cargo delivered.67 As a result, the evidence it submitted was
severely limited, i.e., the testimony of a witness that supposedly confirmed the
alleged excess in the quantity of the fertilizer delivered to the consignee in
Albay.68 No other evidence was presented to demonstrate either the proximate and
exclusive cause of the loss or the extraordinary diligence of the carrier.

Under these circumstances, the Court cannot absolve petitioner from liability for the
shortage incurred by the shipment.

WHEREFORE, the Petition is DENIED. The Court of Appeals Decision and


Resolution dated 27 August 2009 and 10 November 2009, respectively, are
hereby AFFIRMED.

REYNALDA GATCHALIAN, petitioner,


vs.
ARSENIO DELIM and the HON. COURT OF APPEALS, respondents.

FELICIANO, J.:

At noon time on 11 July 1973, petitioner Reynalda Gatchalian boarded, as a paying passenger,
respondent's "Thames" mini bus at a point in San Eugenio, Aringay, La Union, bound for Bauang,
of the same province. On the way, while the bus was running along the highway in Barrio
Payocpoc, Bauang, Union, "a snapping sound" was suddenly heard at one part of the bus and,
shortly thereafter, the vehicle bumped a cement flower pot on the side of the road, went off the
road, turned turtle and fell into a ditch. Several passengers, including petitioner Gatchalian, were
injured. They were promptly taken to Bethany Hospital at San Fernando, La Union, for medical
treatment. Upon medical examination, petitioner was found to have sustained physical injuries on
the leg, arm and forehead, specifically described as follows: lacerated wound, forehead; abrasion,
elbow, left; abrasion, knee, left; abrasion, lateral surface, leg, left. 1

On 14 July 1973, while injured. passengers were confined in the hospital, Mrs. Adela Delim, wife of respondent, visited them and later paid for
their hospitalization and medical expenses. She also gave petitioner P12.00 with which to pay her transportation expense in going home from the
hospital. However, before Mrs. Delim left, she had the injured passengers, including petitioner, sign an already prepared Joint Affidavit which
stated, among other things:

That we were passengers of Thames with Plate No. 52-222 PUJ Phil. 73 and victims after the said Thames met an accident at Barrio
Payocpoc Norte, Bauang, La Union while passing through the National Highway No. 3;

That after a thorough investigation the said Thames met the accident due to mechanical defect and went off the road and turned turtle
to the east canal of the road into a creek causing physical injuries to us;

xxx xxx xxx


That we are no longer interested to file a complaint, criminal or civil against the said driver and owner of the said Thames, because it
was an accident and the said driver and owner of the said Thames have gone to the extent of helping us to be treated upon our
injuries.

Notwithstanding this document, petitioner Gathalian filed with the then Court of First Instance of La Union an action extra contractu to recover
compensatory and moral damages. She alleged in the complaint that her injuries sustained from the vehicular mishap had left her with a
conspicuous white scar measuring 1 by 1/2 inches on the forehead, generating mental suffering and an inferiority complex on her part; and that
as a result, she had to retire in seclusion and stay away from her friends. She also alleged that the scar diminished her facial beauty and deprived
her of opportunities for employment. She prayed for an award of: P10,000.00 for loss of employment and other opportunities; P10,000.00 for the
cost of plastic surgery for removal of the scar on her forehead; P30,000.00 for moral damages; and P1,000.00 as attorney's fees.

In defense, respondent averred that the vehicular mishap was due to force majeure, and that petitioner had already been paid and moreover had
waived any right to institute any action against him (private respondent) and his driver, when petitioner Gatchalian signed the Joint Affidavit on 14
July 1973.

After trial, the trial court dismissed the complaint upon the ground that when petitioner Gatchalian signed the Joint Affidavit, she relinquished any
right of action (whether criminal or civil) that she may have had against respondent and the driver of the mini-bus.

On appeal by petitioner, the Court of Appeals reversed the trial court's conclusion that there had been a valid waiver, but affirmed the dismissal of
the case by denying petitioner's claim for damages:

We are not in accord, therefore, of (sic) the ground of the trial court's dismissal of the complaint, although we conform to the trial
court's disposition of the case — its dismissal.

IN VIEW OF THE FOREGOING considerations, there being no error committed by the lower court in dismissing the plaintiff-
appellant's complaint, the judgment of dismissal is hereby affirmed.

Without special pronouncement as to costs.

In the present Petition for Review filed in forma pauperis, petitioner assails the decision of the Court of Appeals and ask this Court to award her
actual or compensatory damages as well as moral damages.

We agree with the majority of the Court of Appeals who held that no valid waiver of her cause of action had been made by petitioner. The relevant
language of the Joint Affidavit may be quoted again:

That we are no longer interested to file a complaint, criminal or civil against the said driver and owner of the said Thames, because it
was an accident and the said driver and owner of the said Thames have gone to the extent of helping us to be treated upon our
injuries. (Emphasis supplied)

A
A waiver, to be valid and effective, must in the first place be couched in clear and unequivocal terms which leave no doubt as to the intention of a person to give up a right or benefit which legally pertains to him. 4

waiver may not casually be attributed to a person when the terms thereof do not explicitly and
clearly evidence an intent to abandon a right vested in such person.

The degree of explicitness which this Court has required in purported waivers is illustrated
in Yepes and Susaya v. Samar Express Transit (supra), where the Court in reading and rejecting
a purported waiver said:

. . . It appears that before their transfer to the Leyte Provincial Hospital, appellees were
asked to sign as, in fact, they signed the document Exhibit I wherein they stated that "in
consideration of the expenses which said operator has incurred in properly giving us the
proper medical treatment, we hereby manifest our desire to waive any and all claims
against the operator of the Samar Express Transit."

xxx xxx xxx

Even a cursory examination of the document mentioned above will readily show
that appellees did not actually waive their right to claim damages from appellant for the
latter's failure to comply with their contract of carriage. All that said document proves is
that they expressed a "desire" to make the waiver — which obviously is not the same as
making an actual waiver of their right. A waiver of the kind invoked by appellant must be
clear and unequivocal (Decision of the Supreme Court of Spain of July 8, 1887) — which
is not the case of the one relied upon in this appeal. (Emphasis supplied)

If we apply the standard used in Yepes and Susaya, we would have to conclude that the terms of
the Joint Affidavit in the instant case cannot be regarded as a waiver cast in "clear and
unequivocal" terms. Moreover, the circumstances under which the Joint Affidavit was signed by
petitioner Gatchalian need to be considered. Petitioner testified that she was still reeling from the
effects of the vehicular accident, having been in the hospital for only three days, when the
purported waiver in the form of the Joint Affidavit was presented to her for signing; that while
reading the same, she experienced dizziness but that, seeing the other passengers who had also
suffered injuries sign the document, she too signed without bothering to read the Joint Affidavit in
its entirety. Considering these circumstances there appears substantial doubt whether petitioner
understood fully the import of the Joint Affidavit (prepared by or at the instance of private
respondent) she signed and whether she actually intended thereby to waive any right of action
against private respondent.

Finally, because what is involved here is the liability of a common carrier for injuries sustained by
passengers in respect of whose safety a common carrier must exercise extraordinary diligence,
we must construe any such purported waiver most strictly against the common carrier. For a
waiver to be valid and effective, it must not be contrary to law, morals, public policy or good
customs. 5 To uphold a supposed waiver of any right to claim damages by an injured passenger,
under circumstances like those exhibited in this case, would be to dilute and weaken the
standard of extraordinary diligence exacted by the law from common carriers and hence to
render that standard unenforceable. 6 We believe such a purported waiver is offensive to public
policy.

Petitioner Gatchalian also argues that the Court of Appeals, having by majority vote held that
there was no enforceable waiver of her right of action, should have awarded her actual or
compensatory and moral damages as a matter of course.

We have already noted that a duty to exercise extraordinary diligence in protecting the safety of
its passengers is imposed upon a common carrier. 7 In case of death or injuries to passengers, a
statutory presumption arises that the common carrier was at fault or had acted negligently
"unless it proves that it [had] observed extraordinary diligence as prescribed in Articles 1733 and
1755." 8 In fact, because of this statutory presumption, it has been held that a court need not
even make an express finding of fault or negligence on the part of the common carrier in order to
hold it liable. 9 To overcome this presumption, the common carrier must slow to the court that it
had exercised extraordinary diligence to prevent the injuries. 10 The standard of extraordinary
diligence imposed upon common carriers is considerably more demanding than the standard of
ordinary diligence, i.e., the diligence of a good paterfamilias established in respect of the ordinary
relations between members of society. A common carrier is bound to carry its passengers
safely" as far as human care and foresight can provide, using the utmost diligence of a very
cautious person, with due regard to all the circumstances". 11
Thus, the question which must be addressed is whether or not private respondent has successfully proved that he had exercised extraordinary diligence to prevent the mishap involving his mini-bus. The records before the Court
are bereft of any evidence showing that respondent had exercised the extraordinary diligence required by law. Curiously, respondent did not even attempt, during the trial before the court a quo, to prove that he had indeed
exercised the requisite extraordinary diligence. Respondent did try to exculpate himself from liability by alleging that the mishap was the result of force majeure. But allegation is not proof and here again, respondent utterly failed
to substantiate his defense of force majeure. To exempt a common carrier from liability for death or physical injuries to passengers upon the ground of force majeure, the carrier must clearly show not only that the efficient cause
of the casualty was entirely independent of the human will, but also that it was impossible to avoid. Any participation by the common carrier in the occurrence of the injury will defeat the defense of force majeure. In Servando v.
the Court summed up the essential characteristics of force majeure by quoting
Philippine Steam Navigation Company, 12

with approval from the Enciclopedia Juridica Española:

Thus, where fortuitous event or force majeure is the immediate and proximate cause of
the loss, the obligor is exempt from liability non-performance. The Partidas, the
antecedent of Article 1174 of the Civil Code, defines "caso fortuito" as 'an event that
takes place by accident and could not have been foreseen. Examples of this are
destruction of houses, unexpected fire, shipwreck, violence of robber.

In its dissertation on the phrase "caso fortuito" the Enciclopedia Juridica Española says:
'In legal sense and, consequently, also in relation to contracts, a "caso fortuito" presents
the following essential characteristics: (1) the cause of the unforeseen and unexpected
occurence, or of the failure of the debtor to comply with his obligation, must be
independent of the human will; (2) it must be impossible to foresee the event which
constitutes the "caso fortuito", or if it can be foreseen, it must be impossible to avoid; (3)
the occurrence must be such as to render it impossible for the debtor to fulfill his
obligation in a normal manner; and (4) the obligor must be free from any participation in
the aggravation of the injury resulting to the creditor.

Upon the other hand, the record yields affirmative evidence of fault or negligence on the part of
respondent common carrier. In her direct examination, petitioner Gatchalian narrated that shortly
before the vehicle went off the road and into a ditch, a "snapping sound" was suddenly heard at
one part of the bus. One of the passengers, an old woman, cried out, "What happened?" ("Apay
addan samet nadadaelen?"). The driver replied, nonchalantly, "That is only normal" ("Ugali ti
makina dayta"). The driver did not stop to check if anything had gone wrong with the bus.
Moreover, the driver's reply necessarily indicated that the same "snapping sound" had been
heard in the bus on previous occasions. This could only mean that the bus had not been checked
physically or mechanically to determine what was causing the "snapping sound" which had
occurred so frequently that the driver had gotten accustomed to it. Such a sound is obviously
alien to a motor vehicle in good operating condition, and even a modicum of concern for life and
limb of passengers dictated that the bus be checked and repaired. The obvious continued failure
of respondent to look after the roadworthiness and safety of the bus, coupled with the driver's
refusal or neglect to stop the mini-bus after he had heard once again the "snapping sound" and
the cry of alarm from one of the passengers, constituted wanton disregard of the physical safety
of the passengers, and hence gross negligence on the part of respondent and his driver.

We turn to petitioner's claim for damages. The first item in that claim relates to revenue which
petitioner said she failed to realize because of the effects of the vehicular mishap. Petitioner
maintains that on the day that the mini-bus went off the road, she was supposed to confer with
the district supervisor of public schools for a substitute teacher's job, a job which she had held off
and on as a "casual employee." The Court of Appeals, however, found that at the time of the
accident, she was no longer employed in a public school since, being a casual employee and not
a Civil Service eligible, she had been laid off. Her employment as a substitute teacher was
occasional and episodic, contingent upon the availability of vacancies for substitute teachers. In
view of her employment status as such, the Court of Appeals held that she could not be said to
have in fact lost any employment after and by reason of the accident. 13 Such was the factual
finding of the Court of Appeals, a finding entitled to due respect from this Court. Petitioner
Gatchalian has not submitted any basis for overturning this finding of fact, and she may not be
awarded damages on the basis of speculation or conjecture. 14
Petitioner's claim for the cost of plastic surgery for removal of the scar on her forehead, is another matter. A person is entitled to the physical integrity of his or her body; if that integrity is violated or diminished, actual injury is
suffered for which actual or compensatory damages are due and assessable. Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was before the mishap. A scar, especially one on the face
of the woman, resulting from the infliction of injury upon her, is a violation of bodily integrity, giving raise to a legitimate claim for restoration to her conditio ante. If the scar is relatively small and does not grievously disfigure the
victim, the cost of surgery may be expected to be correspondingly modest. In Araneta, et al. vs. Areglado, et al., 15 this Court awarded actual or compensatory damages for, among other things, the surgical removal of the scar
on the face of a young boy who had been injured in a vehicular collision. The Court there held:

We agree with the appellants that the damages awarded by the lower court for the injuries suffered by Benjamin Araneta are
inadequate. In allowing not more than P1,000.00 as compensation for the "permanent deformity and — something like an inferiority
complex" as well as for the "pathological condition on the left side of the jaw" caused to said plaintiff, the court below overlooked the
clear evidence on record that to arrest the degenerative process taking place in the mandible and restore the injured boy to a nearly
normal condition, surgical intervention was needed, for which the doctor's charges would amount to P3,000.00, exclusive of
hospitalization fees, expenses and medicines. Furthermore, the operation, according to Dr. Diño, would probably have to be repeated
in order to effectuate a complete cure, while removal of the scar on the face obviously demanded plastic surgery.

xxx xxx xxx

The father's failure to submit his son to a plastic operation as soon as possible does not prove that such treatment is not called for.
The damage to the jaw and the existence of the scar in Benjamin Araneta's face are physical facts that can not be reasoned out of
existence. That the injury should be treated in order to restore him as far as possible to his original condition is undeniable. The
father's delay, or even his negligence, should not be allowed to prejudice the son who has no control over the parent's action nor
impair his right to a full indemnity.

. . . Still, taking into account the necessity and cost of corrective measures to fully repair the damage; the pain suffered by the injured
party; his feelings of inferiority due to consciousness of his present deformity, as well as the voluntary character of the injury inflicted;
and further considering that a repair, however, skillfully conducted, is never equivalent to the original state, we are of the opinion that
the indemnity granted by the trial court should be increased to a total of P18,000.00. (Emphasis supplied)

Upon the other hand, Dr. Fe Tayao


Petitioner estimated that the cost of having her scar surgically removed was somewhere between P10,000.00 to P15,000.00. 16

Lasam, a witness presented as an expert by petitioner, testified that the cost would probably be
between P5,000.00 to P10,000.00. 17 In view of this testimony, and the fact that a considerable
amount of time has lapsed since the mishap in 1973 which may be expected to increase not only
the cost but also very probably the difficulty of removing the scar, we consider that the amount of
P15,000.00 to cover the cost of such plastic surgery is not unreasonable.

Turning to petitioner's claim for moral damages, the long-established rule is that moral damages
may be awarded where gross negligence on the part of the common carrier is shown. 18 Since we
have earlier concluded that respondent common carrier and his driver had been grossly
negligent in connection with the bus mishap which had injured petitioner and other passengers,
and recalling the aggressive manuevers of respondent, through his wife, to get the victims to
waive their right to recover damages even as they were still hospitalized for their injuries,
petitioner must be held entitled to such moral damages. Considering the extent of pain and
anxiety which petitioner must have suffered as a result of her physical injuries including the
permanent scar on her forehead, we believe that the amount of P30,000.00 would be a
reasonable award. Petitioner's claim for P1,000.00 as atttorney's fees is in fact even more
modest. 19

WHEREFORE, the Decision of the Court of Appeals dated 24 October 1980, as well as the decision of the then Court of First Instance of La
Union dated 4 December 1975 are hereby REVERSED and SET ASIDE.Respondent is hereby ORDERED to pay petitioner Reynalda Gatchalian
the following sums: 1) P15,000.00 as actual or compensatory damages to cover the cost of plastic surgery for the removal of the scar on
petitioner's forehead; 2) P30,000.00 as moral damages; and 3) P1,000.00 as attorney's fees, the aggregate amount to bear interest at the legal
rate of 6% per annum counting from the promulgation of this decision until full payment thereof. Costs against private respondent.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr., Bidin and Davide, Jr., JJ., concur.

G.R. No. L-31379 August 29, 1988

COMPAÑIA MARITIMA, petitioner,


vs.
COURT OF APPEALS and VICENTE CONCEPCION, respondents.
Rafael Dinglasan for petitioner.

Benjamin J. Molina for private respondent.

FERNAN, C.J.:

Petitioner Compañia Maritima seeks to set aside through this petition for review on certiorari the decision 1 of the Court of Appeals dated
December 5, 1965, adjudging petitioner liable to private respondent Vicente E. Concepcion for damages in the amount of P24,652.97
with legal interest from the date said decision shall have become final, for petitioner's failure to deliver safely private respondent's
payloader, and for costs of suit. The payloader was declared abandoned in favor of petitioner.

The facts of the case are as follows:

Private respondent Vicente E. Concepcion, a civil engineer doing business under the name and
style of Consolidated Construction with office address at Room 412, Don Santiago Bldg., Taft
Avenue, Manila, had a contract with the Civil Aeronautics Administration (CAA) sometime in
1964 for the construction of the airport in Cagayan de Oro City Misamis Oriental.

Being a Manila — based contractor, Vicente E. Concepcion had to ship his construction
equipment to Cagayan de Oro City. Having shipped some of his equipment through petitioner
and having settled the balance of P2,628.77 with respect to said shipment, Concepcion
negotiated anew with petitioner, thru its collector, Pacifico Fernandez, on August 28, 1964 for the
shipment to Cagayan de Oro City of one (1) unit payloader, four (4) units 6x6 Reo trucks and two
(2) pieces of water tanks. He was issued Bill of Lading 113 on the same date upon delivery of the
equipment at the Manila North Harbor. 2

These equipment were loaded aboard the MV Cebu in its Voyage No. 316, which left Manila on
August 30, 1964 and arrived at Cagayan de Oro City in the afternoon of September 1, 1964. The
Reo trucks and water tanks were safely unloaded within a few hours after arrival, but while the
payloader was about two (2) meters above the pier in the course of unloading, the swivel pin of
the heel block of the port block of Hatch No. 2 gave way, causing the payloader to fall. 3 The
payloader was damaged and was thereafter taken to petitioner's compound in Cagayan de Oro
City.

On September 7, 1964, Consolidated Construction, thru Vicente E. Concepcion, wrote Compañia


Maritima to demand a replacement of the payloader which it was considering as a complete loss
because of the extent of damage. 4 Consolidated Construction likewise notified petitioner of its
claim for damages. Unable to elicit response, the demand was repeated in a letter dated October
2, 1964. 5

Meanwhile, petitioner shipped the payloader to Manila where it was weighed at the San Miguel
Corporation. Finding that the payloader weighed 7.5 tons and not 2.5 tons as declared in the B-
111 of Lading, petitioner denied the claim for damages of Consolidated Construction in its letter
dated October 7, 1964, contending that had Vicente E. Concepcion declared the actual weight of
the payloader, damage to their ship as well as to his payloader could have been prevented. 6

To replace the damaged payloader, Consolidated Construction in the meantime bought a new
one at P45,000.00 from Bormaheco Inc. on December 3, 1964, and on July 6, 1965., Vicente E.
Concepcion filed an action for damages against petitioner with the then Court of First Instance of
Manila, Branch VII, docketed as Civil Case No. 61551, seeking to recover damages in the
amount of P41,225.00 allegedly suffered for the period of 97 days that he was not able to employ
a payloader in the construction job at the rate of P450.00 a day; P34,000.00 representing the
cost of the damaged payloader; Pl 1, 000. 00 representing the difference between the cost of the
damaged payloader and that of the new payloader; P20,000.00 representing the losses suffered
by him due to the diversion of funds to enable him to buy a new payloader; P10,000.00 as
attorney's fees; P5,000.00 as exemplary damages; and cost of the suit. 7

After trial, the then Court of First Instance of Manila, Branch VII, dismissed on April 24, 1968 the
complaint with costs against therein plaintiff, herein private respondent Vicente E. Concepcion,
stating that the proximate cause of the fall of the payloader was Vicente E. Concepcion's act or
omission in having misrepresented the weight of the payloader as 2.5 tons instead of its true
weight of 7.5 tons, which underdeclaration was intended to defraud Compañia Maritima of the
payment of the freight charges and which likewise led the Chief Officer of the vessel to use the
heel block of hatch No. 2 in unloading the payloader. 8

From the adverse decision against him, Vicente E. Concepcion appealed to the Court of Appeals
which, on December 5, 1965 rendered a decision, the dispositive portion of which reads:

IN VIEW WHEREOF, judgment must have to be as it is hereby reversed;


defendant is condemned to pay unto plaintiff the sum in damages of P24,652.07
with legal interest from the date the present decision shall have become final; the
payloader is declared abandoned to defendant; costs against the latter. 9

Hence, the instant petition.

The principal issue in the instant case is whether or not the act of private respondent Vicente E.
Concepcion in furnishing petitioner Compañia Maritima with an inaccurate weight of 2.5 tons
instead of the payloader's actual weight of 7.5 tons was the proximate and only cause of the
damage on the Oliver Payloader OC-12 when it fell while being unloaded by petitioner's crew, as
would absolutely exempt petitioner from liability for damages under paragraph 3 of Article 1734
of the Civil Code, which provides:

Art. 1734. Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the following causes
only:

xxx xxx xxx

(3) Act or omission of the shipper or owner of the goods.

Petitioner claims absolute exemption under this provision upon the reasoning that private
respondent's act of furnishing it with an inaccurate weight of the payloader constitutes
misrepresentation within the meaning of "act or omission of the shipper or owner of the goods"
under the above- quoted article. It likewise faults the respondent Court of Appeals for reversing
the decision of the trial court notwithstanding that said appellate court also found that by
representing the weight of the payloader to be only 2.5 tons, private respondent had led
petitioner's officer to believe that the same was within the 5 tons capacity of the heel block of
Hatch No. 2. Petitioner would thus insist that the proximate and only cause of the damage to the
payloader was private respondent's alleged misrepresentation of the weight of the machinery in
question; hence, any resultant damage to it must be borne by private respondent Vicente E.
Concepcion.

The general rule under Articles 1735 and 1752 of the Civil Code is that common carriers are
presumed to have been at fault or to have acted negligently in case the goods transported by
them are lost, destroyed or had deteriorated. To overcome the presumption of liability for the loss,
destruction or deterioration of the goods under Article 1735, the common carriers must prove that
they observed extraordinary diligence as required in Article 1733 of the Civil Code. The
responsibility of observing extraordinary diligence in the vigilance over the goods is further
expressed in Article 1734 of the same Code, the article invoked by petitioner to avoid liability for
damages.

Corollary is the rule that mere proof of delivery of the goods in good order to a common carrier,
and of their arrival at the place of destination in bad order, makes out prima facie case against
the common carrier, so that if no explanation is given as to how the loss, deterioration or
destruction of the goods occurred, the common carrier must be held responsible. 10 Otherwise
stated, it is incumbent upon the common carrier to prove that the loss, deterioration or
destruction was due to accident or some other circumstances inconsistent with its liability.
In the instant case, We are not persuaded by the proferred explanation of petitioner alleged to be
the proximate cause of the fall of the payloader while it was being unloaded at the Cagayan de
Oro City pier. Petitioner seems to have overlooked the extraordinary diligence required of
common carriers in the vigilance over the goods transported by them by virtue of the nature of
their business, which is impressed with a special public duty.

Thus, Article 1733 of the Civil Code provides:

Art. 1733. Common carriers, from the nature of their business and for reason of
public policy, are bound to observe extraordinary diligence in the vigilance over
the goods and for the safety of the passengers transported by them according to
all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed
in Articles 1734, 1735 and 1745, Nos. 5, 6 and 7, ...

The extraordinary diligence in the vigilance over the goods tendered for shipment requires the
common carrier to know and to follow the required precaution for avoiding damage to, or
destruction of the goods entrusted to it for safe carriage and delivery. It requires common carriers
to render service with the greatest skill and foresight and "to use all reasonable means to
ascertain the nature and characteristic of goods tendered for shipment, and to exercise due care
in the handling and stowage including such methods as their nature requires."11 Under Article
1736 of the Civil Code, the responsibility to observe extraordinary diligence commences and
lasts from the time the goods are unconditionally placed in the possession of, and received by
the carrier for transportation until the same are delivered, actually or constructively, by the carrier
to the consignee, or to the person who has the right to receive them without prejudice to the
provisions of Article 1738.

Where, as in the instant case, petitioner, upon the testimonies of its own crew, failed to take the
necessary and adequate precautions for avoiding damage to, or destruction of, the payloader
entrusted to it for safe carriage and delivery to Cagayan de Oro City, it cannot be reasonably
concluded that the damage caused to the payloader was due to the alleged misrepresentation of
private respondent Concepcion as to the correct and accurate weight of the payloader. As found
by the respondent Court of Appeals, the fact is that petitioner used a 5-ton capacity lifting
apparatus to lift and unload a visibly heavy cargo like a payloader. Private respondent has,
likewise, sufficiently established the laxity and carelessness of petitioner's crew in their methods
of ascertaining the weight of heavy cargoes offered for shipment before loading and unloading
them, as is customary among careful persons.

It must be noted that the weight submitted by private respondent Concepcion appearing at the
left-hand portion of Exhibit 8 12 as an addendum to the original enumeration of equipment to be
shipped was entered into the bill of lading by petitioner, thru Pacifico Fernandez, a company
collector, without seeing the equipment to be shipped.13 Mr. Mariano Gupana, assistant traffic
manager of petitioner, confirmed in his testimony that the company never checked the
information entered in the bill of lading. 14 Worse, the weight of the payloader as entered in the bill
of lading was assumed to be correct by Mr. Felix Pisang, Chief Officer of MV Cebu. 15

The weights stated in a bill of lading are prima facie evidence of the amount received and the fact
that the weighing was done by another will not relieve the common carrier where it accepted
such weight and entered it on the bill of lading. 16 Besides, common carriers can protect
themselves against mistakes in the bill of lading as to weight by exercising diligence before
issuing the same. 17

While petitioner has proven that private respondent Concepcion did furnish it with an inaccurate
weight of the payloader, petitioner is nonetheless liable, for the damage caused to the machinery
could have been avoided by the exercise of reasonable skill and attention on its part in
overseeing the unloading of such a heavy equipment. And circumstances clearly show that the
fall of the payloader could have been avoided by petitioner's crew. Evidence on record
sufficiently show that the crew of petitioner had been negligent in the performance of its
obligation by reason of their having failed to take the necessary precaution under the
circumstances which usage has established among careful persons, more particularly its Chief
Officer, Mr. Felix Pisang, who is tasked with the over-all supervision of loading and unloading
heavy cargoes and upon whom rests the burden of deciding as to what particular winch the
unloading of the payloader should be undertaken. 18 While it was his duty to determine the weight
of heavy cargoes before accepting them. Mr. Felix Pisang took the bill of lading on its face value
and presumed the same to be correct by merely "seeing" it. 19 Acknowledging that there was a
"jumbo" in the MV Cebu which has the capacity of lifting 20 to 25 ton cargoes, Mr. Felix Pisang
chose not to use it, because according to him, since the ordinary boom has a capacity of 5 tons
while the payloader was only 2.5 tons, he did not bother to use the "jumbo" anymore. 20

In that sense, therefore, private respondent's act of furnishing petitioner with an inaccurate
weight of the payloader upon being asked by petitioner's collector, cannot be used by said
petitioner as an excuse to avoid liability for the damage caused, as the same could have been
avoided had petitioner utilized the "jumbo" lifting apparatus which has a capacity of lifting 20 to
25 tons of heavy cargoes. It is a fact known to the Chief Officer of MV Cebu that the payloader
was loaded aboard the MV Cebu at the Manila North Harbor on August 28, 1964 by means of a
terminal crane. 21 Even if petitioner chose not to take the necessary precaution to avoid damage
by checking the correct weight of the payloader, extraordinary care and diligence compel the use
of the "jumbo" lifting apparatus as the most prudent course for petitioner.

While the act of private respondent in furnishing petitioner with an inaccurate weight of the
payloader cannot successfully be used as an excuse by petitioner to avoid liability to the damage
thus caused, said act constitutes a contributory circumstance to the damage caused on the
payloader, which mitigates the liability for damages of petitioner in accordance with Article 1741
of the Civil Code, to wit:

Art. 1741. If the shipper or owner merely contributed to the loss, destruction or
deterioration of the goods, the proximate cause thereof being the negligence of
the common carrier, the latter shall be liable in damages, which however, shall be
equitably reduced.

We find equitable the conclusion of the Court of Appeals reducing the recoverable amount of
damages by 20% or 1/5 of the value of the payloader, which at the time the instant case arose,
was valued at P34,000. 00, thereby reducing the recoverable amount at 80% or 4/5 of
P34,000.00 or the sum of P27,200.00. Considering that the freight charges for the entire cargoes
shipped by private respondent amounting to P2,318.40 remained unpaid.. the same would be
deducted from the P27,000.00 plus an additional deduction of P228.63 representing the freight
charges for the undeclared weight of 5 tons (difference between 7.5 and 2.5 tons) leaving,
therefore, a final recoverable amount of damages of P24,652.97 due to private respondent
Concepcion.

Notwithstanding the favorable judgment in his favor, private respondent assailed the Court of
Appeals' decision insofar as it limited the damages due him to only P24,652.97 and the cost of
the suit. Invoking the provisions on damages under the Civil Code, more particularly Articles
2200 and 2208, private respondent further seeks additional damages allegedly because the
construction project was delayed and that in spite of his demands, petitioner failed to take any
steps to settle his valid, just and demandable claim for damages.

We find private respondent's submission erroneous. It is well- settled that an appellee, who is not
an appellant, may assign errors in his brief where his purpose is to maintain the judgment on
other grounds, but he may not do so if his purpose is to have the judgment modified or reversed,
for, in such case, he must appeal. 22 Since private respondent did not appeal from the judgment
insofar as it limited the award of damages due him, the reduction of 20% or 1/5 of the value of
the payloader stands.
WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court of
Appeals is hereby AFFIRMED in all respects with costs against petitioner. In view of the length of
time this case has been pending, this decision is immediately executory.

EASTERN SHIPPING LINES INC., Petitioner,vs.


BPI/MS INSURANCE CORP. and MITSUI SUM TOMO INSURANCE CO. LTD., Respondents.

DECISION

Before this Court is a petition1 for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, seeking the reversal of the Decision2 of the Court of Appeals (CA) in
CA-G.R. CV No. 88361, which affirmed with modification the Decision3 of the Regional Trial Court
(RTC), of Makati City, Branch 138 in Civil Case No. 04-1005.

The facts follow:

On August 29, 2003, Sumitomo Corporation (Sumitomo) shipped through MV Eastern Challenger
V-9-S, a vessel owned by petitioner Eastern Shipping Lines, Inc. (petitioner), 31 various steel
sheets in coil weighing 271,828 kilograms from Yokohama, Japan for delivery in favor of the
consignee Calamba Steel Center Inc. (Calamba Steel).4 The cargo had a declared value of
US$125,417.26 and was insured against all risk by Sumitomo with respondent Mitsui Sumitomo
Insurance Co., Ltd. (Mitsui). On or about September 6 2003, the shipment arrived at the port of
Manila. Upon unloading from the vessel, nine coils were observed to be in bad condition as
evidenced by the Turn Over Survey of Bad Order Cargo No. 67327. The cargo was then turned
over to Asian Terminals, Inc. (ATI) for stevedoring, storage and safekeeping pending Calamba
Steel’s withdrawal of the goods. When ATI delivered the cargo to Calamba Steel, the latter
rejected its damaged portion, valued at US$7,751.15, for being unfit for its intended purpose.5

Subsequently, on September 13, 2003, a second shipment of 28 steel sheets in coil, weighing
215,817 kilograms, was made by Sumitomo through petitioner’s MV Eastern Challenger V-10-S
for transport and delivery again to Calamba Steel.6 Insured by Sumitomo against all risk with
Mitsui,7 the shipment had a declared value of US$121,362.59. This second shipment arrived at
the port of Manila on or about September 23, 2003. However, upon unloading of the cargo from
the said vessel, 11 coils were found damaged as evidenced by the Turn Over Survey of Bad
Order Cargo No. 67393. The possession of the said cargo was then transferred to ATI for
stevedoring, storage and safekeeping pending withdrawal thereof by Calamba Steel. When ATI
delivered the goods, Calamba Steel rejected the damaged portion thereof, valued at
US$7,677.12, the same being unfit for its intended purpose.8

Lastly, on September 29, 2003, Sumitomo again shipped 117 various steel sheets in coil
weighing 930,718 kilograms through petitioner’s vessel, MV Eastern Venus V-17-S, again in
favor of Calamba Steel.9 This third shipment had a declared value of US$476,416.90 and was
also insured by Sumitomo with Mitsui. The same arrived at the port of Manila on or about
October 11, 2003. Upon its discharge, six coils were observed to be in bad condition. Thereafter,
the possession of the cargo was turned over to ATI for stevedoring, storage and safekeeping
pending withdrawal thereof by Calamba Steel. The damaged portion of the goods being unfit for
its intended purpose, Calamba Steel rejected the damaged portion, valued at US$14,782.05,
upon ATI’s delivery of the third shipment.10

Calamba Steel filed an insurance claim with Mitsui through the latter’s settling agent, respondent
BPI/MS Insurance Corporation (BPI/MS), and the former was paid the sums of US$7,677.12,
US$14,782.05 and US$7,751.15 for the damage suffered by all three shipments or for the total
amount of US$30,210.32. Correlatively, on August 31, 2004, as insurer and subrogee of
Calamba Steel, Mitsui and BPI/MS filed a Complaint for Damages against petitioner and ATI.11

As synthesized by the RTC in its decision, during the pre-trial conference of the case, the
following facts were established, viz:
1. The fact that there were shipments made on or about August 29, 2003, September 13,
2003 and September 29, 2003 by Sumitomo to Calamba Steel through petitioner’s
vessels;

2. The declared value of the said shipments and the fact that the shipments were insured
by respondents;

3. The shipments arrived at the port of Manila on or about September 6, 2003,


September 23, 2003 and October 11, 2003 respectively;

4. Respondents paid Calamba Steel’s total claim in the amount of US$30,210.32.12

Trial on the merits ensued.

On September 17, 2006, the RTC rendered its Decision,13 the dispositive portion of which
provides:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against defendants
Eastern Shipping Lines, Inc. and Asian Terminals, Inc., jointly and severally, ordering the latter to
pay plaintiffs the following:

1. Actual damages amounting to US$30,210.32 plus 6% legal interest thereon


commencing from the filing of this complaint, until the same is fully paid;

2. Attorney’s fees in a sum equivalent to 25% of the amount claimed;

3. Costs of suit. The defendants’ counterclaims and ATI’s crossclaim are DISMISSED for
lack of merit.

SO ORDERED.14

Aggrieved, petitioner and ATI appealed to the CA. On July 9, 2010, the CA in its assailed
Decision affirmed with modification the RTC’s findings and ruling, holding, among others, that
both petitioner and ATI were very negligent in the handling of the subject cargoes. Pointing to the
affidavit of Mario Manuel, Cargo Surveyor, the CA found that "during the unloading operations,
the steel coils were lifted from the vessel but were not carefully laid on the ground. Some were
even ‘dropped’ while still several inches from the ground while other coils bumped or hit one
another at the pier while being arranged by the stevedores and forklift operators of ATI and
[petitioner]." The CA added that such finding coincides with the factual findings of the RTC that
both petitioner and ATI were both negligent in handling the goods. However, for failure of the
RTC to state the justification for the award of attorney’s fees in the body of its decision, the CA
accordingly deleted the same.15 Petitioner filed its Motion for Reconsideration16 which the CA,
however, denied in its Resolution17 dated October 6, 2010.

Both petitioner and ATI filed their respective separate petitions for review on certiorari before this
Court. However, ATI’s petition, docketed as G.R. No. 192905, was denied by this Court in our
1âwphi1

Resolution18 dated October 6, 2010 for failure of ATI to show any reversible error in the assailed
CA decision and for failure of ATI to submit proper verification. Said resolution had become final
and executory on March 22, 2011.19 Nevertheless, this Court in its Resolution20 dated September
3, 2012, gave due course to this petition and directed the parties to file their respective
memoranda.

In its Memorandum,21 petitioner essentially avers that the CA erred in affirming the decision of the
RTC because the survey reports submitted by respondents themselves as their own evidence
and the pieces of evidence submitted by petitioner clearly show that the cause of the damage
was the rough handling of the goods by ATI during the discharging operations. Petitioner attests
that it had no participation whatsoever in the discharging operations and that petitioner did not
have a choice in selecting the stevedore since ATI is the only arrastre operator mandated to
conduct discharging operations in the South Harbor. Thus, petitioner prays that it be absolved
from any liability relative to the damage incurred by the goods.

On the other hand, respondents counter, among others, that as found by both the RTC and the
CA, the goods suffered damage while still in the possession of petitioner as evidenced by various
Turn Over Surveys of Bad Order Cargoes which were unqualifiedly executed by petitioner’s own
surveyor, Rodrigo Victoria, together with the representative of ATI. Respondents assert that
petitioner would not have executed such documents if the goods, as it claims, did not suffer any
damage prior to their turn-over to ATI. Lastly, respondents aver that petitioner, being a common
carrier is required by law to observe extraordinary diligence in the vigilance over the goods it
carries.22

Simply put, the core issue in this case is whether the CA committed any reversible error in finding
that petitioner is solidarily liable with ATI on account of the damage incurred by the goods.

The Court resolves the issue in the negative.

Well entrenched in this jurisdiction is the rule that factual questions may not be raised before this
Court in a petition for review on certiorari as this Court is not a trier of facts. This is clearly stated
in Section 1, Rule 45 of the 1997 Rules of Civil Procedure, as amended, which provides:

SECTION 1. Filing of petition with Supreme Court. — A party desiring to appeal by certiorari from
a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional
Trial Court or other courts whenever authorized by law, may file with the Supreme Court a
verified petition for review on certiorari. The petition shall raise only questions of law which must
be distinctly set forth.

Thus, it is settled that in petitions for review on certiorari, only questions of law may be put in
issue. Questions of fact cannot be entertained.23

A question of law exists when the doubt or controversy concerns the correct application of law or
jurisprudence to a certain set of facts, or when the issue does not call for an examination of the
probative value of the evidence presented, the truth or falsehood of facts being admitted. A
question of fact exists when the doubt or difference arises as to the truth or falsehood of facts or
when the query invites calibration of the whole evidence considering mainly the credibility of the
witnesses, the existence and relevancy of specific surrounding circumstances as well as their
relation to each other and to the whole, and the probability of the situation.24

In this petition, the resolution of the question as to who between petitioner and ATI should be
liable for the damage to the goods is indubitably factual, and would clearly impose upon this
Court the task of reviewing, examining and evaluating or weighing all over again the probative
value of the evidence presented25 – something which is not, as a rule, within the functions of this
Court and within the office of a petition for review on certiorari.

While it is true that the aforementioned rule admits of certain exceptions,26 this Court finds that
none are applicable in this case. This Court finds no cogent reason to disturb the factual findings
of the RTC which were duly affirmed by the CA. Unanimous with the CA, this Court gives
credence and accords respect to the factual findings of the RTC – a special commercial
court27 which has expertise and specialized knowledge on the subject matter28 of maritime and
admiralty – highlighting the solidary liability of both petitioner and ATI. The RTC judiciously found:

x x x The Turn Over Survey of Bad Order Cargoes (TOSBOC, for brevity) No. 67393 and
Request for Bad Order Survey No. 57692 show that prior to the turn over of the first shipment to
the custody of ATI, eleven (11) of the twenty-eight (28) coils were already found in bad order
condition. Eight (8) of the said eleven coils were already "partly dented/crumpled " and the
remaining three (3) were found "partly dented, scratches on inner hole, crumple (sic)". On the
other hand, the TOSBOC No. 67457 and Request for Bad Order Survey No. 57777 also show
that prior to the turn over of the second shipment to the custody of ATI, a total of six (6) coils
thereof were already "partly dented on one side, crumpled/cover detach (sic)". These documents
were issued by ATI. The said TOSBOC’s were jointly executed by ATI, vessel’s representative
and surveyor while the Requests for Bad Order Survey were jointly executed by ATI, consignee’s
representative and the Shed Supervisor. The aforementioned documents were corroborated by
the Damage Report dated 23 September 2003 and Turn Over Survey No. 15765 for the first
shipment, Damage Report dated 13 October 2003 and Turn Over Survey No. 15772 for the
second shipment and, two Damage Reports dated 6 September 2003 and Turn Over Survey No.
15753 for the third shipment.

It was shown to this Court that a Request for Bad Order Survey is a document which is
requested by an interested party that incorporates therein the details of the damage, if any,
suffered by a shipped commodity. Also, a TOSBOC, usually issued by the arrastre contractor
(ATI in this case), is a form of certification that states therein the bad order condition of a
particular cargo, as found prior to its turn over to the custody or possession of the said arrastre
contractor.

The said Damage Reports, Turn Over Survey Reports and Requests for Bad Order Survey led
the Court to conclude that before the subject shipments were turned over to ATI, the said cargo
were already in bad order condition due to damage sustained during the sea voyage.
Nevertheless, this Court cannot turn a blind eye to the fact that there was also negligence on the
part of the employees of ATI and [Eastern Shipping Lines, Inc.] in the discharging of the cargo as
observed by plaintiff’s witness, Mario Manuel, and [Eastern Shipping Lines, Inc.’s] witness,
Rodrigo Victoria.

In ascertaining the cause of the damage to the subject shipments, Mario Manuel stated that the
"coils were roughly handled during their discharging from the vessel to the pier of (sic) ASIAN
TERMINALS, INC. and even during the loading operations of these coils from the pier to the
trucks that will transport the coils to the consignee’s warehouse. During the aforesaid operations,
the employees and forklift operators of EASTERN SHIPPING LINES and ASIAN TERMINALS,
INC. were very negligent in the handling of the subject cargoes. Specifically, "during unloading,
the steel coils were lifted from the vessel and not carefully laid on the ground, sometimes were
even ‘dropped’ while still several inches from the ground. The tine (forklift blade) or the portion
that carries the coils used for the forklift is improper because it is pointed and sharp and the
centering of the tine to the coils were negligently done such that the pointed and sharp tine
touched and caused scratches, tears and dents to the coils. Some of the coils were also dragged
by the forklift instead of being carefully lifted from one place to another. Some coils bump/hit one
another at the pier while being arranged by the stevedores/forklift operators of ASIAN
TERMINALS, INC. and EASTERN SHIPPING LINES.29 (Emphasis supplied.)

Verily, it is settled in maritime law jurisprudence that cargoes while being unloaded generally
remain under the custody of the carrier.30 As hereinbefore found by the RTC and affirmed by the
CA based on the evidence presented, the goods were damaged even before they were turned
over to ATI. Such damage was even compounded by the negligent acts of petitioner and ATI
which both mishandled the goods during the discharging operations. Thus, it bears stressing
unto petitioner that common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence in the vigilance over the goods transported
by them. Subject to certain exceptions enumerated under Article 173431 of the Civil Code,
common carriers are responsible for the loss, destruction, or deterioration of the goods. The
extraordinary responsibility of the common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by the carrier for transportation until the
same are delivered, actually or constructively, by the carrier to the consignee, or to the person
who has a right to receive them.32 Owing to this high degree of diligence required of them,
common carriers, as a general rule, are presumed to have been at fault or negligent if the goods
they transported deteriorated or got lost or destroyed. That is, unless they prove that they
exercised extraordinary diligence in transporting the goods. In order to avoid responsibility for
any loss or damage, therefore, they have the burden of proving that they observed such high
level of diligence.33 In this case, petitioner failed to hurdle such burden.
In sum, petitioner failed to show any reversible error on the part of the CA in affirming the ruling
of the RTC as to warrant the modification, much less the reversal of its assailed decision.

WHEREFORE, the petition is DENIED. The Decision dated July 9, 2010 of the Court of Appeals
in CA-G.R. CV No. 88361 is hereby AFFIRMED.

With costs against the petitioner.

SO ORDERED.
GANZON vs.COURT OF APPEALS and GELACIO E. TUMAMBING

(G.R. No. L-48757, May 30, 1988)

FACTS: On November 28, 1956, Gelacio Tumambing contracted the services of Mauro B.
Ganzon to haul 305 tons of scrap iron from Mariveles, Bataan, to the port of Manila on board
the lighter LCT "Batman. Pursuant to that agreement, Mauro B. Ganzon sent his lighter
"Batman" to Mariveles where it docked in three feet of water. Gelacio Tumambing delivered
the scrap iron to defendant Filomeno Niza, captain of the lighter, for loading which was
actually begun on the same date by the crew of the lighter under the captain's supervision.
When about half of the scrap iron was already loaded, Mayor Jose Advincula of Mariveles,
Bataan, arrived and demanded P5,000.00 from Gelacio Tumambing. The latter resisted the
shakedown and after a heated argument between them, Mayor Jose Advincula drew his gun
and fired at Gelacio Tumambing who sustained injuries.

After sometime, the loading of the scrap iron was resumed. But on December 4, 1956, Acting
Mayor Basilio Rub, accompanied by three policemen, ordered captain Filomeno Niza and his
crew to dump the scrap iron where the lighter was docked. The rest was brought to the
compound of NASSCO. Later on Acting Mayor Rub issued a receipt stating that the
Municipality of Mariveles had taken custody of the scrap iron.

Tumabing sued Ganzon; the latter alleged that the goods have not been unconditionally
placed under his custody and control to make him liable. The trial court dismissed the case
but on appeal, respondent Court rendered a decision reversing the decision of the trial court
and ordering Ganzon to pay damages.

ISSUE: Whether or not a contract of carriage has been perfected.

HELD: Yes. By the said act of delivery, the scraps were unconditionally placed in the
possession and control of the common carrier, and upon their receipt by the carrier for
transportation, the contract of carriage was deemed perfected. Consequently, the petitioner-
carrier's extraordinary responsibility for the loss, destruction or deterioration of the goods
commenced.

Pursuant to Art. 1736, such extraordinary responsibility would cease only upon the delivery,
actual or constructive, by the carrier to the consignee, or to the person who has a right to
receive them. The fact that part of the shipment had not been loaded on board the lighter did
not impair the said contract of transportation as the goods remained in the custody and
control of the carrier, albeit still unloaded.

Before Ganzon could be absolved from responsibility on the ground that he was ordered by
competent public authority to unload the scrap iron, it must be shown that Acting Mayor
Basilio Rub had the power to issue the disputed order, or that it was lawful, or that it was
issued under legal process of authority. The appellee failed to establish this. Indeed, no
authority or power of the acting mayor to issue such an order was given in evidence. Neither
has it been shown that the cargo of scrap iron belonged to the Municipality of Mariveles.
What we have in the record is the stipulation of the parties that the cargo of scrap iron was
accumulated by the appellant through separate purchases here and there from private
individuals. The fact remains that the order given by the acting mayor to dump the scrap iron
into the sea was part of the pressure applied by Mayor Jose Advincula to shakedown
Tumambing for P5,000.00. The order of the acting mayor did not constitute valid authority
for Ganzon and his representatives to carry out.
BASCO VS CA

Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE for short) entered into
a hauling contract 2 with Jibfair Shipping Agency Corporation

whereby the former bound itself to haul the latter's 2,000 m/tons of soya bean meal

from Magallanes Drive, Del Pan, Manila to the warehouse of Purefoods Corporation in Calamba,
Laguna.

To carry out its obligation, CIPTRADE, through Rodolfo Cipriano, subcontracted with Estrellita
Bascos (petitioner) to transport and to deliver 400 sacks of soya bean meal worth P156,404.00
from the Manila Port Area to Calamba, Laguna at the rate of P50.00 per metric ton.

Petitioner failed to deliver the said cargo. As a consequence of that failure, Cipriano paid Jibfair
Shipping Agency the amount of the lost goods in accordance with the contract which stated that:

"1. CIPTRADE shall be held liable and answerable for any loss in bags due to theft, hijacking and
non-delivery or damages to the cargo during transport at market value, . . ." 3

Cipriano demanded reimbursement from petitioner but the latter refused to pay.

Eventually, Cipriano filed a complaint for a sum of money and damages with writ of preliminary
attachment 4 for breach of a contract of carriage.

In her answer, petitioner interposed the following defenses: that there was no contract of carriage
since CIPTRADE leased her cargo truck to load the cargo from Manila Port Area to Laguna; that
CIPTRADE was liable to petitioner in the amount of P11,000.00 for loading the cargo; that the
truck carrying the cargo was hijacked along Canonigo St., Paco, Manila on the night of October
21, 1988;

and that hijacking, being a force majeure, exculpated petitioner from any liability to CIPTRADE.

TRIAL COURT: rendered in favor of plaintiff and against defendant ordering the latter to pay the
former:

Petitioner appealed to the Court of Appeals but respondent Court affirmed the trial court's
judgment.

CONTENTION: NOT COMMON CARRIER BUT ONLY LEASE CONTRACT

The petition presents the following issues for resolution: (1) was petitioner a common carrier?;
and (2) was the hijacking referred to a force majeure?

We agree with the respondent Court in its finding that petitioner is a common carrier.

Article 1732 of the Civil Code defines a common carrier as "(a) person, corporation or firm, or
association engaged in the business of carrying or transporting passengers or goods or both, by
land, water or air, for compensation, offering their services to the public." The test to determine a
common carrier is "whether the given undertaking is a part of the business engaged in by the
carrier which he has held out to the general public as his occupation rather than the quantity or
extent of the business transacted." 12 In this case, petitioner herself has made the admission
that she was in the trucking business, offering her trucks to those with cargo to move. Judicial
admissions are conclusive and no evidence is required to prove the same. 13
But petitioner argues that there was only a contract of lease because they offer their services
only to a select group of people and because the private respondents, plaintiffs in the lower court,
did not object to the presentation of affidavits by petitioner where the transaction was referred to
as a lease contract.

Regarding the first contention, the holding of the Court in De Guzman vs. Court of Appeals 14 is
instructive. In referring to Article 1732 of the Civil Code, it held thus:

"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," i.e., the general community or population, and one who offers services or solicits
business only from a narrow segment of the general population. We think that Article 1732
deliberately refrained from making such distinctions."

Likewise, We affirm the holding of the respondent court that the loss of the goods was not due to
force majeure.

Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods
transported by them. 17 Accordingly, they are presumed to have been at fault or to have acted
negligently if the goods are lost, destroyed or deteriorated. 18 There are very few instances when
the presumption of negligence does not attach and these instances are enumerated in Article
1734.

19 In those cases where the presumption is applied, the common carrier must prove that it
exercised extraordinary diligence in order to overcome the presumption.

In this case, petitioner alleged that hijacking constituted force majeure which exculpated her from
liability for the loss of the cargo.

"Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust
and contrary to public policy;

xxx xxx xxx

(6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act
with grave or irresistible threat, violences or force, is dispensed with or diminished;"

In the same case, 21 the Supreme Court also held that:

"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."

To establish grave and irresistible force, petitioner presented her accusatory affidavit, 22 Jesus
Bascos' affidavit, 23 and Juanito Morden's 24 "Salaysay".
However, both the trial court and the Court of Appeals have concluded that these affidavits were
not enough to overcome the presumption

. Petitioner's affidavit about the hijacking was based on what had been told her by Juanito
Morden. It was not a first-hand account. While it had been admitted in court for lack of objection
on the part of private respondent, the respondent Court had discretion in assigning weight to
such evidence. We are bound by the conclusion of the appellate court. In a petition for review on
certiorari, We are not to determine the probative value of evidence but to resolve questions of
law. Secondly, the affidavit of Jesus Bascos did not dwell on how the hijacking took place. Thirdly,
while the affidavit of Juanito Morden, the truck helper in the hijacked truck, was presented as
evidence in court, he himself was a witness as could be gleaned from the contents of the petition

The presumption of negligence was raised against petitioner. It was petitioner's burden to
overcome it. Thus, contrary to her assertion, private respondent need not introduce any evidence
to prove her negligence. Her own failure to adduce sufficient proof of extraordinary diligence
made the presumption conclusive against her.

DISMISSED:

Torres vs FEB MITSUI INSURANCE

Sony filed an insurance claim with the Mitsui, the insurer of the goods. After evaluating the
merits of the claim, Mitsui paid Sony PHP7,293,386.23 corresponding to the value of the lost
goods.As a result, Mitsui filed a complaint against TMBI on November 6, 2001,

TMBI prayed that in the event it is held liable to Mitsui for the loss, it should be reimbursed
by BMT,

The RTC held that TMBI and Manalastas were common carriers and had acted negligently.

should be absolved of liability because the truck was "hijacked" and this was a fortuitous
event. Further, TMBI now insists that the service it offered was limited to the processing of
paperwork attendant to the entry of Sony's goods. It denies that delivery of the shipment was
a part of its obligation.

The Court's Ruling

A brokerage may be considered a common

carrier if it also undertakes to deliver the

goods for its customers

Common carriers are persons, corporations, firms or associations engaged in the business of
transporting passengers or goods or both, by land, water, or air, for compensation, offering
their services to the public.32 By the nature of their business and for reasons of public policy,
they are bound to observe extraordinary diligence in the vigilance over the goods and in the
safety of their passengers.

we find that the delivery of the goods is an integral, albeit ancillary, part of its brokerage
services

Consequently, TMBI should be held responsible for the loss, destruction, or deterioration of
the goods it transports unless it results from:
chanRoblesvirtualLawlibrary

(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 of omission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the containers;

(5) Order or act of competent public authority.

Specifically, TMBI's current theory - that the hijacking was attended by force or intimidation
- is untenable.

Since BMT failed to prove that it observed extraordinary diligence in the performance of its
obligation to TMBI, it is liable to TMBI for breach of their contract of carriage.

In these lights, TMBI is liable to Sony (subrogated by Mitsui) for breaching the contract of
carriage. In turn, TMBI is entitled to reimbursement from BMT due to the latter's own breach
of its contract of carriage with TMBI. The proverbial buck stops with BMT who may either:
(a) absorb the loss, or (b) proceed after its missing driver, the suspected culprit, pursuant to
Article 2181,

interpreted Article 1745 to mean that a robbery attended by "grave or irresistible threat,
violence or force" is a fortuitous event that absolves the common carrier from liability.

Despite the subcontract, TMBI remained responsible for the cargo. Under Article 1736, a
common carrier's extraordinary responsibility over the shipper's goods lasts from the time
these goods are unconditionally placed in the possession of, and received by, the carrier for
transportation, until they are delivered, actually or constructively, by the carrier to the
consignee. 48chanrobleslaw

G.R. No. 199455, June 27, 2018

FEDERAL EXPRESS CORPORATION, Petitioner, v. LUWALHATI R. ANTONINO


AND ELIZA BETTINA RICASA ANTONINO, Respondents.

DECISION

LEONEN, J.:

The duty of common carriers to observe extraordinary diligence in shipping goods


does not terminate until delivery to the consignee or to the specific person
authorized to receive the shipped goods. Failure to deliver to the person authorized
to receive the goods is tantamount to loss of the goods, thereby engendering the
common carrier's liability for loss. Ambiguities in contracts of carriage, which are
contracts of adhesion, must be interpreted against the common carrier that
prepared these contracts.
This resolves a Petition for Review on Certiorari1 under Rule 45 of the 1997 Rules of
Civil Procedure praying that the assailed Court of Appeals August 31, 2011
Decision2 and November 21, 2011 Resolution3 in CA-G.R. CV No. 91216 be reversed
and set aside and that Luwalhati R. Antonino (Luwalhati) and Eliza Bettina Ricasa
Antonino (Eliza) be held liable on Federal Express Corporation's (FedEx)
counterclaim.

liza was the owner of Unit 22-A (the Unit) in Allegro Condominium, located at 62
West 62nd St., New York, United States.7 In November 2003, monthly common
charges on the Unit became due. These charges were for the period of July 2003 to
November 2003, and were for a total amount of US$9,742.81.

he Court of Appeals affirmed the ruling of the Regional Trial Court.27 According to it,
by accepting the package despite its supposed defect, FedEx was deemed to have
acquiesced to the transaction. Thus, it must deliver the package in good condition
and could not subsequently deny liability for loss.28 The Court of Appeals sustained
the Regional Trial Court's conclusion that checks are not legal tender, and thus, not
covered by the Air Waybill's prohibition.

HELD: The Civil Code mandates common carriers to observe extraordinary diligence
in caring for the goods they are transporting:

Article 1733. Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence in the vigilance over the
goods and for the safety of the passengers transported by them, according to all the
circumstances of each case.

"Extraordinary diligence is that extreme measure of care and caution which persons
of unusual prudence and circumspection use for securing and preserving their own
property or rights."45 Consistent with the mandate of extraordinary diligence, the
Civil Code stipulates that in case of loss or damage to goods, common carriers are
presumed to be negligent or at fault,46 except in the following instances:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

(2) Act of the public enemy in war, whether international or civil;

(3) Act or omission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the containers;

(5) Order or act or competent public authority.47


Petitioner is unable to prove that it exercised extraordinary diligence in ensuring
delivery of the package to its designated consignee.

"LGAA 385507" is nothing but an alphanumeric code that outside of petitioner's


personnel and internal systems signifies nothing. This code does not represent a
definite, readily identifiable person, contrary to how commonly accepted identifiers,
such as numbers attached to official, public, or professional identifications like social
security numbers and professional license numbers, function.
Certainly, this cannot satisfy the requisite of extraordinary diligence consummated
through delivery to none but "the person who has a right to receive"52 the package.

AS TO FORTUITOUS:

Items Not Acceptable for Transportation. We do not accept transportation of


money (including but not limited to coins or negotiable instruments equivalent to
cash such as endorsed stocks and bonds). We exclude all liability for shipments of
such items accepted by mistake. Other items may be accepted for carriage only to
limited destinations or under restricted conditions. We reserve the right to reject
packages based upon these limitations or for reasons of safety or security. You may
consult our Service Guide, Standard Conditions of Carriage, or any applicable tariff
for specific details.54

It is settled in jurisprudence that checks, being only negotiable instruments, are only
substitutes for money and are not legal tender; more so when the check has a
named payee and is not payable to bearer.

The Air Waybill's prohibition mentions "negotiable instruments" only in the course of
making an example. Thus, they are not prohibited items themselves. Moreover, the
illustrative example does not even pertain to negotiable instruments per se but to
"negotiable instruments equivalent to cash."63

The checks involved here are payable to specific payees, Maxwell-Kates, Inc. and
the New York County Department of Finance.64 Thus, they are order instruments.
They are not payable to their bearer, i.e., bearer instruments.

Ultimately, in shipping checks, respondents were not violating petitioner's Air Waybill.
From this, it follows that they committed no breach of warranty that would absolve
petitioner of liability.

DENIED.

SHEWARAM VS CA; PAL

FACTS:

After trial the municipal court of Zamboanga City rendered judgment ordering the
appellant to pay appellee P373.00 as actual damages, P100.00 as exemplary
damages, P150.00 as attorney’s fees, and the costs of the action.

"That Parmanand Shewaram, the plaintiff herein, was on November 23, 1959, a
paying passenger with ticket No. 4-30976, on defendant’s aircraft flight No. 976/910
from Zamboanga City bound for Manila; that defendant is a common carrier
engaged in air line transportation in the Philippines, offering its services to the public
to carry and transport passengers and cargoes from and to different points in the
Philippines; that on the above-mentioned date of November 23, 1959, he checked in
(3) pieces of baggages — a suitcase and two (2) other pieces; that the suitcase was
mistagged by defendant’s personnel in Zamboanga City, as I.G.N. (for Iligan) with
claim check No. B-3883, instead of MNL (for Manila). When plaintiff Parmanand
Shewaram arrived in Manila on the date of November 23, 1959, his suitcase did not
arrive with his flight because it was sent to Iligan.
The lower court erred in not dismissing this case or limiting the liability of the
defendant-appellant to P100.00

In Iligan caused the same to be sent to Manila for delivery to Mr. Shewaram and
which suitcase belonging to the plaintiff herein arrived in Manila airport on
November 24

This proven fact that baggage may and could be opened without the necessary
authorization and presence of its owner, applied too, to the suitcase of plaintiff
which was missent to Iligan City because of mistagging.

court had found that the suitcase of the appellee was tampered, and the transistor
radio and the camera contained therein were lost, and that the loss of those articles
was due to the negligence of the employees of the appellant.

Domestic Tariff Regulations No. 2 which was filed with the Civil Aeronautics

"The liability, if any, for loss or damage to checked baggage or for delay in the
delivery thereof is limited to its value and, unless the passenger declares in advance
a higher valuation and pay an additional charge therefor, the value shall be
conclusively deemed not to exceed P100.00 for each ticket."

Issue: WHETHER OR NOT stipulation limiting the liability is VALID:

We hold, therefore, that the appellee is not, and can not be, bound by the conditions
of carriage found at the back of the ticket stub issued to him when he made the
flight on appellant’s plane on November 23, 1959.

It having been clearly found by the trial court that the transistor radio and the
camera of the appellee were lost as a result of the negligence of the appellant as a
common carrier, the liability of the appellant is clear — it must pay the appellee the
value of those two articles.

Held: In accordance with the above-quoted provision of Article 1750 of the New Civil
Code, the pecuniary liability of a common carrier may, by contract, be limited to a
fixed amount. It is required, however, that the contract must be "reasonable and
just under the circumstances and has been fairly and freely agreed upon."

‘Par. 194. 6. Reasonableness of Limitation. — The validity of stipulations limiting the


carrier’s liability is to be determined by their reasonableness and their conformity to
the sound public policy, in accordance with which the obligations of the carrier to the
public are settled. It cannot lawfully stipulate for exemption from liability, unless
such exemption is just and reasonable, and unless the contract is freely and fairly
made. No contractual limitation is reasonable which is subversive of public policy.

The rule, it is said, rests on considerations of public policy. The undertaking is to


carry the goods, and to relieve the shipper from all liability for loss or damage
arising from negligence in performing its contract is to ignore the contract itself. The
natural effect of a limitation of liability against negligence is to induce want of care
on the part of the carrier in the performance of its duty. The shipper and the
common carrier are not on equal terms; the shipper must send his freight by the
common carrier, or not at all; he is therefore entirely at the mercy of the carrier
unless protected by the higher power of the law against being forced into contracts
limiting the carrier’s liability. Such contracts are wanting in the element of voluntary
assent.

In the case before us We believe that the requirements of said article have not been
met. It can not be said that the appellee had actually entered into a contract with
the appellant, embodying the conditions as printed at the back of the ticket stub that
was issued by the appellant to the appellee. The fact that those conditions are
printed at the back of the ticket stub in letters so small that they are hard to read
would not warrant the presumption that the appellee was aware of those conditions
such that he had "fairly and freely agreed" to those conditions. The trial court has
categorically stated in its decision that the "Defendant admits that passengers do
not sign the ticket, much less did plaintiff herein sign his ticket when he made the
flight on November 23, 1959.

AFFIRMED

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