D.

#DEFENSES#OF#THE#COMMON#CARRIER#
(Full$Text)Cases)#
#
Edgar#Cokaliong#v#UCPB#
The$liability$of$a$common$carrier$for$the$loss$of$goods$may,$by$stipulation$in$the$bill$of$lading,$be$limited$
to$the$value$declared$by$the$shipper.$On$the$other$hand,$the$liability$of$the$insurer$is$determined$by$the$
actual$ value$ covered$ by$ the$ insurance$ policy$ and$ the$ insurance$ premiums$ paid$ therefor,$ and$ not$
necessarily$by$the$value$declared$in$the$bill$of$lading.$

The$Case$

Before$the$Court$is$a$Petition$for$Review1$under$Rule$45$of$the$Rules$of$Court,$seeking$to$set$aside$the$
August$31,$2000$Decision2$and$the$November$17,$2000$Resolution3$of$the$Court$of$Appeals4$(CA)$in$CAL
GR$SP$No.$62751.$The$dispositive$part$of$the$Decision$reads:$

"IN$ THE$ LIGHT$ OF$ THE$ FOREGOING,$ the$ appeal$ is$ GRANTED.$ The$ Decision$ appealed$ from$
is$ REVERSED.$ [Petitioner]$ is$ hereby$ condemned$ to$ pay$ to$ [respondent]$ the$ total$ amount$ of$
₱148,500.00,$ with$ interest$ thereon,$ at$ the$ rate$ of$ 6%$ per$ annum,$ from$ date$ of$ this$ Decision$ of$ the$
Court.$ [Respondent’s]$ claim$ for$ attorney’s$ fees$ [is]$ DISMISSED.$ [Petitioner’s]$ counterclaims$
are$DISMISSED."5$

The$assailed$Resolution$denied$petitioner’s$Motion$for$Reconsideration.$

On$the$other$hand,$the$disposition$of$the$Regional$Trial$Court’s6$Decision,7$which$was$later$reversed$by$
the$CA,$states:$
RTC Dismissed the case; but CA later on Reversed this ruling
"WHEREFORE,$premises$considered,$the$case$is$hereby$DISMISSED$for$lack$of$merit.$

"No$cost."8$

The$Facts$

The$facts$of$the$case$are$summarized$by$the$appellate$court$in$this$wise:$

"Sometime$on$December$11,$1991,$Nestor$Angelia$delivered$to$the$Edgar$Cokaliong$Shipping$Lines,$
Inc.$(now$Cokaliong$Shipping$Lines),$[petitioner]5for5brevity,$cargo$consisting$of$one$(1)$carton$of$
Christmas$décor$and$two$(2)$sacks$of$plastic$toys,$to$be$transported$on$board$the$M/V5Tandag$on$
its$ Voyage5 No.5 T?189$ scheduled$ to$ depart$ from$ Cebu$ City,$ on$ December$ 12,$ 1991,$ for$ Tandag,$
Surigao$del$Sur.$[Petitioner]$issued$Bill5of5Lading5No.558,$freight$prepaid,$covering$the$cargo.$Nestor$
Angelia$was$both$the$shipper$and$consignee$of$the$cargo$valued,$on$the$face$thereof,$in$the$amount$
of$₱6,500.00.$Zosimo$Mercado$likewise$delivered$cargo$to$[petitioner],$consisting$of$two$(2)$cartons$of$
plastic$toys$and$Christmas$decor,$one$(1)$roll$of$floor$mat$and$one$(1)$bundle$of$various$or$assorted$
goods$for$transportation$thereof$from$Cebu$City$to$Tandag,$Surigao$del$Sur,$on$board$the$said$vessel,$
and$ said$ voyage.$ [Petitioner]$ issued$ Bill5 of5 Lading5 No.5 59$ covering$ the$ cargo$ which,$ on$ the$ face$
thereof,$ was$ valued$ in$ the$ amount$ of$ ₱14,000.00.$ Under$ the$ Bill5 of5 Lading,$ Zosimo$ Mercado$ was$
both$the$shipper$and$consignee$of$the$cargo.$
"On$December$12,$1991,$Feliciana$Legaspi$insured$the$cargo,$covered$by$Bill5of5Lading5No.559,$with$
the$ UCPB$ General$ Insurance$ Co.,$ Inc.,$ [respondent]5 for5 brevity,$ for$ the$ amount$ of$ ₱100,000.00$
‘against$ all$ risks’$ under$ Open5 Policy5 No.5 002/95 1/254$ for$ which$ she$ was$ issued,$ by$
[respondent],$Marine5Risk5Note5No.518409$on$said$date.$She$also$insured$the$cargo$covered$by$Bill5
of5Lading5No.558,$with$[respondent],$for$the$amount$of$₱50,000.00,$under$Open5Policy5No.5002/95
1/2545on$the$basis$of$which$[respondent]$issued$Marine5Risk5Note5No.518410$on$said$date.$

"When$the$vessel$left$port,$it$had$thirtyLfour$(34)$passengers$and$assorted$cargo$on$board,$including$
the$goods$of$Legaspi.$After$the$vessel$had$passed$by$the$MandaueLMactan$Bridge,$fire$ensued$in$the$
engine$room,$and,$despite$earnest$efforts$of$the$officers$and$crew$of$the$vessel,$the$fire$engulfed$and$
destroyed$the$entire$vessel$resulting$in$the$loss$of$the$vessel$and$the$cargoes$therein.$The$Captain$
filed$the$required$Marine5Protest.$
UCPB
"Shortly$thereafter,$Feliciana$Legaspi$filed$a$claim,$with$[respondent],$for$the$value$of$the$cargo$insured$
under$Marine5Risk5Note5No.518409$and$covered$by$Bill5of5Lading5No.559.$She$submitted,$in$support$
of$her$claim,$a$Receipt,$dated$December$11,$1991,$purportedly$signed$by$Zosimo$Mercado,$and$Order5
Slips$purportedly$signed$by$him$for$the$goods$he$received$from$Feliciana$Legaspi$valued$in$the$amount$
of$₱110,056.00.$[Respondent]$approved$the$claim$of$Feliciana$Legaspi$and$drew$and$issued$UCPB$All of the claims
Check$No.$612939,$dated$March$9,$1992,$in$the$net$amount$of$₱99,000.00,$in$settlement$of$her$claim$were approved
after$which$she$executed$a$Subrogation5Receipt/Deed,$for$said$amount,$in$favor$of$[respondent].$She$
also$ filed$ a$ claim$ for$ the$ value$ of$ the$ cargo$ covered$ by$ Bill5 of5 Lading5 No.5 58.$ She$ submitted$ to$
[respondent]$a$Receipt,$dated$December$11,$1991$and$Order5Slips,$purportedly$signed$by$Nestor$
Angelia$ for$ the$ goods$ he$ received$ from$ Feliciana$ Legaspi$ valued$ at$ ₱60,338.00.$ [Respondent]$
approved$her$claim$and$remitted$to$Feliciana$Legaspi$the$net$amount$of$₱49,500.00,$after$which$she$
signed$a$Subrogation5Receipt/Deed,$dated$March$9,$1992,$in$favor$of$[respondent].$

"On$July$14,$1992,$[respondent],$as$subrogee$of$Feliciana$Legaspi,$filed$a$complaint$anchored$on$torts$
against$[petitioner],$with$the$Regional$Trial$Court$of$Makati$City,$for$the$collection$of$the$total$principal$
amount$ of$ ₱148,500.00,$ which$ it$ paid$ to$ Feliciana$ Legaspi$ for$ the$ loss$ of$ the$ cargo,$ praying$ that$
judgment$be$rendered$in$its$favor$and$against$the$[petitioner]$as$follows:$

‘WHEREFORE,$it$is$respectfully$prayed$of$this$Honorable$Court$that$after$due$hearing,$judgment$be$
rendered$ordering$[petitioner]$to$pay$[respondent]$the$following.$
Cokaliong UCPB

1.$Actual$damages$in$the$amount$of$₱148,500.00$plus$interest$thereon$at$the$legal$rate$from$
the$time$of$filing$of$this$complaint$until$fully$paidi$

2.$Attorney’s$fees$in$the$amount$of$₱10,000.00i$and$

3.$Cost$of$suit.$

‘[Respondent]$further$prays$for$such$other$reliefs$and$remedies$as$this$Honorable$Court$may$deem$
just$and$equitable$under$the$premises.’$

"[Respondent]$alleged,$inter&alia,$in$its$complaint,$that$the$cargo$subject$of$its$complaint$was$delivered$
to,$and$received$by,$[petitioner]$for$transportation$to$Tandag,$Surigao$del$Sur$under$‘Bill5of5Ladings,’$
Annexes$ ‘A’$ and$ ‘B’$ of$ the$ complainti$ that$ the$ loss$ of$ the$ cargo$ was$ due$ to$ the$ negligence$ of$ the$
[petitioner]i$ and$ that$ Feliciana$ Legaspi$ had$ executed$ Subrogation5 Receipts/Deeds$ in$ favor$ of$
[respondent]$after$paying$to$her$the$value$of$the$cargo$on$account$of$the$Marine5Risk5Notes$it$issued$
in$her$favor$covering$the$cargo.$
 Cokaliong
"In$its$Answer$to$the$complaint,$[petitioner]$alleged$that:$(a)$[petitioner]$was$cleared$by$the$Board$of$
Marine$Inquiry$of$any$negligence$in$the$burning$of$the$vesseli$(b)$the$complaint$stated$no$cause$of$
action$ against$ [petitioner]i$ and$ (c)$ the$ shippers/consignee$ had$ already$ been$ paid$ the$ value$ of$ the$
goods$as$stated$in$the$Bill5of5Lading$and,$hence,$[petitioner]$cannot$be$held$liable$for$the$loss$of$the$
cargo$beyond$the$value$thereof$declared$in$the$Bill5of5Lading.$ The issue now here is whether or not Cokaliong
can be held liable for the loos of the cargo
beyond the value declared in the BL
"After$[respondent]$rested$its$case,$[petitioner]$prayed$for$and$was$allowed,$by$the$Court$a&quo,$to$take$
the$depositions$of$Chester$Cokaliong,$the$ViceLPresident$and$Chief$Operating$Officer$of$[petitioner],$
and$a$resident$of$Cebu$City,$and$of$Noel$Tanyu,$an$officer$of$the$Equitable$Banking$Corporation,$in$
Cebu$City,$and$a$resident$of$Cebu$City,$to$be$given$before$the$Presiding$Judge$of$Branch$106$of$the$
Regional$Trial$Court$of$Cebu$City.$Chester$Cokaliong$and$Noel$Tanyu$did$testify,$by$way$of$deposition,$
before$ the$ Court$ and$ declared$ inter& alia,$ that:$ [petitioner]$ is$ a$ family$ corporation$ like$ the$ Chester5
Marketing,5 Inc.i$ Nestor$ Angelia$ had$ been$ doing$ business$ with$ [petitioner]$ and$ Chester$ Marketing,$
Inc.,$ for$ years,$ and$ incurred$ an$ account$ with$ Chester$ Marketing,$ Inc.$ for$ his$ purchases$ from$ said$
corporationi$[petitioner]$did$issue$Bills5of5Lading5Nos.5585and559$for$the$cargo$described$therein$with$
Zosimo$Mercado$and$Nestor$Angelia$as$shippers/consignees,$respectivelyi$the$engine$room$of$the$M/V5
Tandag$caught$fire$after$it$passed$the$Mandaue/Mactan$Bridge$resulting$in$the$total$loss$of$the$vessel$
and$its$cargoi$an$investigation$was$conducted$by$the$Board$of$Marine$Inquiry$of$the$Philippine$Coast$
Guard$which$rendered$a$Report,$dated$February$13,$1992$absolving$[petitioner]$of$any$responsibility$
on$ account$ of$ the$ fire,$ which$ Report$ of$ the$ Board$ was$ approved$ by$ the$ District$ Commander$ of$ the$
Philippine$Coast$Guardi$a$few$days$after$the$sinking$of$the$vessel,$a$representative$of$the$Legaspi$
Marketing$filed$claims$for$the$values$of$the$goods$under$Bills5of5Lading5Nos.5585and559$in$behalf$of$
the$shippers/consignees,$Nestor$Angelia$and$Zosimo$Mercadoi$[petitioner]$was$able$to$ascertain,$from$
the$ shippers/consignees$ and$ the$ representative$ of$ the$ Legaspi$ Marketing$ that$ the$ cargo$ covered$
by$Bill5of5Lading5No.559$was$owned$by$Legaspi$Marketing$and$consigned$to$Zosimo$Mercado$while$
that$covered$by$Bill5of5Lading5No.558$was$purchased$by$Nestor$Angelia$from$the$Legaspi$Marketingi$
that$[petitioner]$approved$the$claim$of$Legaspi$Marketing$for$the$value$of$the$cargo$under$Bill5of5Lading5
No.5 59$ and$ remitted$ to$ Legaspi$ Marketing$ the$ said$ amount$ under$ Equitable$ Banking$ Corporation$
Check$No.$20230486$dated$August$12,$1992,$in$the$amount$of$₱14,000.00$for$which$the$representative$
of$the$Legaspi$Marketing$signed$Voucher$No.$4379,$dated$August$12,$1992,$for$the$said$amount$of$
₱14,000.00$in$full$payment$of$claims$under$Bill5of5Lading5No.559i$that$[petitioner]$approved$the$claim$
of$Nestor$Angelia$in$the$amount$of$₱6,500.00$but$that$since$the$latter$owed$Chester$Marketing,$Inc.,$
for$some$purchases,$[petitioner]$merely$set$off$the$amount$due$to$Nestor$Angelia$under$Bill5of5Lading5
No.558$against$his$account$with$Chester$Marketing,$Inc.i$[petitioner]$lost/[misplaced]$the$original$of$the$
check$after$it$was$received$by$Legaspi$Marketing,$hence,$the$production$of$the$microfilm$copy$by$Noel$
Tanyu$ of$ the$ Equitable$ Banking$ Corporationi$ [petitioner]$ never$ knew,$ before$ settling$ with$ Legaspi$
Marketing$ and$ Nestor$ Angelia$ that$ the$ cargo$ under$ both$ Bills5 of5 Lading$ were$ insured$ with$
[respondent],$or$that$Feliciana$Legaspi$filed$claims$for$the$value$of$the$cargo$with$[respondent]$and$
that$the$latter$approved$the$claims$of$Feliciana$Legaspi$and$paid$the$total$amount$of$₱148,500.00$to$
heri$ [petitioner]$ came$ to$ know,$ for$ the$ first$ time,$ of$ the$ payments$ by$ [respondent]$ of$ the$ claims$ of$
Feliciana$ Legaspi$ when$ it$ was$ served$ with$ the$ summons$ and$ complaint,$ on$ October$ 8,$ 1992i$ after$
settling$ his$ claim,$ Nestor$ Angelia$ x$ x$ x$ executed$ the$ Release5 and5 Quitclaim,$ dated$ July$ 2,$ 1993,$
and$ Affidavit,$ dated$ July$ 2,$ 1993$ in$ favor$ of$ [respondent]i$ hence,$ [petitioner]$ was$ absolved$ of$ any$
liability$for$the$loss$of$the$cargo$covered$by$Bills5of5Lading5Nos.5585and559i$and$even$if$it$was,$its$
liability$should$not$exceed$the$value$of$the$cargo$as$stated$in$the$Bills5of5Lading.$

"[Petitioner]$did$not$anymore$present$any$other$witnesses$on$its$evidenceLinLchief.$x$x$x"9$ (Citations$
omitted)$

Ruling$of$the$Court$of$Appeals$
 The$CA$held$that$petitioner$had$failed$"to$prove$that$the$fire$which$consumed$the$vessel$and$its$cargo$
was$caused$by$something$other$than$its$negligence$in$the$upkeep,$maintenance$and$operation$of$the$
vessel."10$

ALTHOUGH Petitioner$had$paid$₱14,000$to$Legaspi$Marketing$for$the$cargo$covered$by$Bill$of$Lading$No.$59.$The$
CA,$however,$held$that$the$payment$did$not$extinguish$petitioner’s$obligation$to$respondent,$because$
there$ was$ no$ evidence$ that$ Feliciana$ Legaspi$ (the$ insured)$ was$ the$ owner/proprietor$ of$ Legaspi$
Marketing.$The$CA$also$pointed$out$the$impropriety$of$treating$the$claim$under$Bill$of$Lading$No.$58$LL$
covering$cargo$valued$therein$at$₱6,500$LL$as$a$setoff$against$Nestor$Angelia’s$account$with$Chester$
Enterprises,$Inc.$

Finally,$it$ruled$that$respondent$"is$not$bound$by$the$valuation$of$the$cargo$under$the$Bills$of$Lading,$x$
x$x$nor$is$the$value$of$the$cargo$under$said$Bills$of$Lading$conclusive$on$the$[respondent].$This$is$so$
because,$ in$ the$ first$ place,$ the$ goods$ were$ insured$ with$ the$ [respondent]$ for$ the$ total$ amount$ of$
₱150,000.00,$which$amount$may$be$considered$as$the$face$value$of$the$goods."11$

Hence$this$Petition.12$

Issues$

Petitioner$raises$for$our$consideration$the$following$alleged$errors$of$the$CA:$

"I$

"The$ Honorable$ Court$ of$ Appeals$ erred,$ granting$ arguendo$ that$ petitioner$ is$ liable,$ in$ holding$ that$
petitioner’s$ liability$ should$ be$ based$ on$ the$ ‘actual$ insured$ value’$ of$ the$ goods$ and$ not$ from$ actual$
valuation$declared$by$the$shipper/consignee$in$the$bill$of$lading.$

"II$

"The$Court$of$Appeals$erred$in$not$affirming$the$findings$of$the$Philippine$Coast$Guard,$as$sustained$
by$the$trial$court$a$quo,$holding$that$the$cause$of$loss$of$the$aforesaid$cargoes$under$Bill$of$Lading$
Nos.$ 58$ and$ 59$ was$ due$ to$ force$ majeure$ and$ due$ diligence$ was$ [exercised]$ by$ petitioner$ prior$ to,$
during$and$immediately$after$the$fire$on$[petitioner’s]$vessel.$

"III$

"The$Court$of$Appeals$erred$in$not$holding$that$respondent$UCPB$General$Insurance$has$no$cause$of$
action$against$the$petitioner."13$

In$sum,$the$issues$are:$(1)$Is$petitioner$liable$for$the$loss$of$the$goods?$(2)$If$it$is$liable,$what$is$the$
extent$of$its$liability?$

This$Court’s$Ruling$

The$Petition$is$partly$meritorious.$

First$Issue:$

Liability(for(Loss$
COKALIONG
Petitioner$argues$that$the$cause$of$the$loss$of$the$goods,$subject$of$this$case,$was$force$majeure.$It$
adds$that$its$exercise$of$due$diligence$was$adequately$proven$by$the$findings$of$the$Philippine$Coast$
Guard.$ SC: NOOO

We$are$not$convinced.$The$uncontroverted$findings$of$the$Philippine$Coast$Guard$show$that$the$M/V(
Tandag(sank$due$to$a$fire,$which$resulted$from$a$crack$in$the$auxiliary$engine$fuel$oil$service$tank.$Fuel$
spurted$out$of$the$crack$and$dripped$to$the$heating$exhaust$manifold,$causing$the$ship$to$burst$into$
flames.$The$crack$was$located$on$the$side$of$the$fuel$oil$tank,$which$had$a$mere$twoLinch$gap$from$the$
engine$room$walling,$thus$precluding$constant$inspection$and$care$by$the$crew.$

Having$originated$from$an$unchecked$crack$in$the$fuel$oil$service$tank,$the$fire$could$not$have$been$
caused$ by$ force$ majeure.$ Broadly$ speaking,$ force$ majeure$ generally$ applies$ to$ a$ natural$ accident,$
such$as$that$caused$by$a$lightning,$an$earthquake,$a$tempest$or$a$public$enemy.14$ Hence,$fire$is$not$
considered$a$natural$disaster$or$calamity.$In$Eastern(Shipping(Lines,(Inc.(v.(Intermediate(Appellate(
Court,15$we$explained:$

"x$x$x.$This$must$be$so$as$it$arises$almost$invariably$from$some$act$of$man$or$by$human$means.$It$
does$not$fall$within$the$category$of$an$act$of$God$unless$caused$by$lighting$or$by$other$natural$disaster$
or$calamity.$It$may$even$be$caused$by$the$actual$fault$or$privity$of$the$carrier.$

"Article$1680$of$the$Civil$Code,$which$considers$fire$as$an$extraordinary$fortuitous$event$refers$to$leases$
or$rural$lands$where$a$reduction$of$the$rent$is$allowed$when$more$than$oneLhalf$of$the$fruits$have$been$
lost$due$to$such$event,$considering$that$the$law$adopts$a$protective$policy$towards$agriculture.$

"As$the$peril$of$fire$is$not$comprehended$within$the$exceptions$in$Article$1734,$supra,$Article$1735$of$
the$ Civil$ Code$ provides$ that$ in$ all$ cases$ other$ than$ those$ mentioned$ in$ Article$ 1734,$ the$ common$
carrier$shall$be$presumed$to$have$been$at$fault$or$to$have$acted$negligently,$unless$it$proves$that$it$
has$observed$the$extraordinary$diligence$required$by$law."$

Where$loss$of$cargo$results$from$the$failure$of$the$officers$of$a$vessel$to$inspect$their$ship$frequently$
so$as$to$discover$the$existence$of$cracked$parts,$that$loss$cannot$be$attributed$to$force$majeure,$but$
to$the$negligence$of$those$officials.16$

The$law$provides$that$a$common$carrier$is$presumed$to$have$been$negligent$if$it$fails$to$prove$that$it$
exercised$ extraordinary$ vigilance$ over$ the$ goods$ it$ transported.$ Ensuring$ the$ seaworthiness$ of$ the$
vessel$is$the$first$step$in$exercising$the$required$vigilance.$Petitioner$did$not$present$sufficient$evidence$
showing$what$measures$or$acts$it$had$undertaken$to$ensure$the$seaworthiness$of$the$vessel.$It$failed$
to$show$when$the$last$inspection$and$care$of$the$auxiliary$engine$fuel$oil$service$tank$was$made,$what$
the$normal$practice$was$for$its$maintenance,$or$some$other$evidence$to$establish$that$it$had$exercised$
extraordinary$diligence.$It$merely$stated$that$constant$inspection$and$care$were$not$possible,$and$that$
the$last$time$the$vessel$was$dryLdocked$was$in$November$1990.$Necessarily,$in$accordance$with$Article$
173517$ of$the$Civil$Code,$we$hold$petitioner$responsible$for$the$loss$of$the$goods$covered$by$Bills$of$
Lading$Nos.$58$and$59.$

Second$Issue:$
Arguments:
UCPB: Acutal Insured Value
Extent(of(Liability$ Cokaliong: Value declared by shipper in the BOL

Respondent$ contends$ that$ petitioner’s$ liability$ should$ be$ based$ on$ the$ actual$ insured$ value$ of$ the$
goods,$subject$of$this$case.$On$the$other$hand,$petitioner$claims$that$its$liability$should$be$limited$to$
the$value$declared$by$the$shipper/consignee$in$the$Bill$of$Lading.$
The$records18$show$that$the$Bills$of$Lading$covering$the$lost$goods$contain$the$stipulation$that$in$case$
of$claim$for$loss$or$for$damage$to$the$shipped$merchandise$or$property,$"[t]he$liability$of$the$common$
carrier$x$x$x$shall$not$exceed$the$value$of$the$goods$as$appearing$in$the$bill$of$lading."19$The$attempt$
by$respondent$to$make$light$of$this$stipulation$is$unconvincing.$As$it$had$the$consignees’$copies$of$the$
Bills$of$Lading,20$it$could$have$easily$produced$those$copies,$instead$of$relying$on$mere$allegations$and$
suppositions.$ However,$ it$ presented$ mere$ photocopies$ thereof$ to$ disprove$ petitioner’s$ evidence$
showing$the$existence$of$the$above$stipulation.$

A$stipulation$that$limits$liability$is$valid21$as$long$as$it$is$not$against$public$policy.$In$Everett(Steamship(
Corporation(v.(Court(of(Appeals,22$the$Court$stated:$

"A$stipulation$in$the$bill$of$lading$limiting$the$common$carrier’s$liability$for$loss$or$destruction$of$a$cargo$
to$ a$ certain$ sum,$ unless$ the$ shipper$ or$ owner$ declares$ a$ greater$ value,$ is$ sanctioned$ by$ law,$
particularly$Articles$1749$and$1750$of$the$Civil$Code$which$provides:$

‘Art.$1749.$A$stipulation$that$the$common$carrier’s$liability$is$limited$to$the$value$of$the$goods$appearing$
in$the$bill$of$lading,$unless$the$shipper$or$owner$declares$a$greater$value,$is$binding.’$

‘Art.$ 1750.$ A$ contract$ fixing$ the$ sum$ that$ may$ be$ recovered$ by$ the$ owner$ or$ shipper$ for$ the$ loss,$
destruction,$or$deterioration$of$the$goods$is$valid,$if$it$is$reasonable$and$just$under$the$circumstances,$
and$has$been$freely$and$fairly$agreed$upon.’$

"Such$limitedLliability$clause$has$also$been$consistently$upheld$by$this$Court$in$a$number$of$cases.$
Thus,$in$SeaCLand(Service,(Inc.(vs.(Intermediate(Appellate(Court,$we$ruled:$

‘It$seems$clear$that$even$if$said$section$4$(5)$of$the$Carriage$of$Goods$by$Sea$Act$did$not$exist,$the$
validity$and$binding$effect$of$the$liability$limitation$clause$in$the$bill$of$lading$here$are$nevertheless$fully$
sustainable$ on$ the$ basis$ alone$ of$ the$ cited$ Civil$ Code$ Provisions.$ That$ said$ stipulation$ is$ just$ and$
reasonable$is$arguable$from$the$fact$that$it$echoes$Art.$1750$itself$in$providing$a$limit$to$liability$only$if$
a$greater$value$is$not$declared$for$the$shipment$in$the$bill$of$lading.$To$hold$otherwise$would$amount$
to$ questioning$ the$ justness$ and$ fairness$ of$ the$ law$ itself,$ and$ this$ the$ private$ respondent$ does$ not$
pretend$ to$ do.$ But$ over$ and$ above$ that$ consideration,$ the$ just$ and$ reasonable$ character$ of$ such$
stipulation$is$implicit$in$it$giving$the$shipper$or$owner$the$option$of$avoiding$accrual$of$liability$limitation$
by$the$simple$and$surely$far$from$onerous$expedient$of$declaring$the$nature$and$value$of$the$shipment$
in$the$bill$of$lading.’$

"Pursuant$to$the$aforeLquoted$provisions$of$law,$it$is$required$that$the$stipulation$limiting$the$common$
carrier’s$liability$for$loss$must$be$‘reasonable$and$just$under$the$circumstances,$and$has$been$freely$
and$fairly$agreed$upon.$

"The$bill$of$lading$subject$of$the$present$controversy$specifically$provides,$among$others:$

’18.$ All$ claims$ for$ which$ the$ carrier$ may$ be$ liable$ shall$ be$ adjusted$ and$ settled$ on$ the$ basis$ of$ the$
shipper’s$net$invoice$cost$plus$freight$and$insurance$premiums,$if$paid,$and$in$no$event$shall$the$carrier$
be$liable$for$any$loss$of$possible$profits$or$any$consequential$loss.$

‘The$carrier$shall$not$be$liable$for$any$loss$of$or$any$damage$to$or$in$any$connection$with,$goods$in$an$
amount$exceeding$One$Hundred$Thousand$Yen$in$Japanese$Currency$(¥100,000.00)$or$its$equivalent$
in$any$other$currency$per$package$or$customary$freight$unit$(whichever$is$least)$unless(the(value(of(
the(goods(higher(than(this(amount(is(declared(in(writing(by(the(shipper(before(receipt(of(the(goods(by(
the(carrier(and(inserted(in(the(Bill(of(Lading(and(extra(freight(is(paid(as(required.’$
"The$above$stipulations$are,$to$our$mind,$reasonable$and$just. $In$the$bill$of$lading,$the$carrier$made$it$
1avvphi1

clear$that$its$liability$would$only$be$up$to$One$Hundred$Thousand$(Y100,000.00)$Yen.$However,$the$
shipper,$Maruman$Trading,$had(the(option(to(declare(a(higher(valuation(if(the(value(of(its(cargo(was(
higher( than( the( limited( liability( of( the( carrier.( Considering( that( the( shipper( did( not( declare( a( higher(
valuation,(it(had(itself(to(blame(for(not(complying(with(the(stipulations."$(Italics$supplied)$

In$the$present$case,$the$stipulation$limiting$petitioner’s$liability$is$not$contrary$to$public$policy.$In$fact,$
its$just$and$reasonable$character$is$evident.$The$shippers/consignees$may$recover$the$full$value$of$the$
goods$by$the$simple$expedient$of$declaring$the$true$value$of$the$shipment$in$the$Bill$of$Lading.$Other$
than$the$payment$of$a$higher$freight,$there$was$nothing$to$stop$them$from$placing$the$actual$value$of$
the$ goods$ therein.$ In$ fact,$ they$ committed$ fraud$ against$ the$ common$ carrier$ by$ deliberately$
undervaluing$the$goods$in$their$Bill$of$Lading,$thus$depriving$the$carrier$of$its$proper$and$just$transport$
fare.$

Concededly,$the$purpose$of$the$limiting$stipulation$in$the$Bill$of$Lading$is$to$protect$the$common$carrier.$
Such$ stipulation$ obliges$ the$ shipper/consignee$ to$ notify$ the$ common$ carrier$ of$ the$ amount$ that$ the$
latter$may$be$liable$for$in$case$of$loss$of$the$goods.$The$common$carrier$can$then$take$appropriate$
measures$LL$getting$insurance,$if$needed,$to$cover$or$protect$itself.$This$precaution$on$the$part$of$the$
carrier$is$reasonable$and$prudent.$Hence,$a$shipper/consignee$that$undervalues$the$real$worth$of$the$
goods$ it$ seeks$ to$ transport$ does$ not$ only$ violate$ a$ valid$ contractual$ stipulation,$ but$ commits$ a$
fraudulent$act$when$it$seeks$to$make$the$common$carrier$liable$for$more$than$the$amount$it$declared$
in$the$bill$of$lading.$

Indeed,$ Zosimo$ Mercado$ and$ Nestor$ Angelia$ misled$ petitioner$ by$ undervaluing$ the$ goods$ in$ their$
respective$Bills$of$Lading.$Hence,$petitioner$was$exposed$to$a$risk$that$was$deliberately$hidden$from$
it,$and$from$which$it$could$not$protect$itself.$

It$ is$ well$ to$ point$ out$ that,$ for$ assuming$ a$ higher$ risk$ (the$ alleged$ actual$ value$ of$ the$ goods)$ the$
insurance$company$was$paid$the$correct$higher$premium$by$Feliciana$Legaspii$while$petitioner$was$
paid$ a$ fee$ lower$ than$ what$ it$ was$ entitled$ to$ for$ transporting$ the$ goods$ that$ had$ been$ deliberately$
undervalued$by$the$shippers$in$the$Bill$of$Lading.$Between$the$two$of$them,$the$insurer$should$bear$
the$loss$in$excess$of$the$value$declared$in$the$Bills$of$Lading.$This$is$the$just$and$equitable$solution.$

In$Aboitiz(Shipping(Corporation(v.(Court(of(Appeals,23$the$description$of$the$nature$and$the$value$of$the$
goods$shipped$were$declared$and$reflected$in$the$bill$of$lading,$like$in$the$present$case.$The$Court$
therein$considered$this$declaration$as$the$basis$of$the$carrier’s$liability$and$ordered$payment$based$on$
such$amount.$Following$this$ruling,$petitioner$should$not$be$held$liable$for$more$than$what$was$declared$
by$the$shippers/consignees$as$the$value$of$the$goods$in$the$bills$of$lading.$

We$find$no$cogent$reason$to$disturb$the$CA’s$finding$that$Feliciana$Legaspi$was$the$owner$of$the$goods$
covered$by$Bills$of$Lading$Nos.$58$and$59.$Undoubtedly,$the$goods$were$merely$consigned$to$Nestor$
Angelia$and$Zosimo$Mercado,$respectivelyi$thus,$Feliciana$Legaspi$or$her$subrogee$(respondent)$was$
entitled$to$the$goods$or,$in$case$of$loss,$to$compensation$therefor.$There$is$no$evidence$showing$that$
petitioner$paid$her$for$the$loss$of$those$goods.$It$does$not$even$claim$to$have$paid$her.$

On$the$other$hand,$Legaspi$Marketing$filed$with$petitioner$a$claim$for$the$lost$goods$under$Bill$of$Lading$
No.$59,$for$which$the$latter$subsequently$paid$₱14,000.$But$nothing$in$the$records$convincingly$shows$
that$ the$ former$ was$ the$ owner$ of$ the$ goods.$ Respondent$ was,$ however,$ able$ to$ prove$ that$ it$ was$
Feliciana$Legaspi$who$owned$those$goods,$and$who$was$thus$entitled$to$payment$for$their$loss.$Hence,$
the$ claim$ for$ the$ goods$ under$ Bill$ of$ Lading$ No.$ 59$ cannot$ be$ deemed$ to$ have$ been$ extinguished,$
because$payment$was$made$to$a$person$who$was$not$entitled$thereto.$
With$regard$to$the$claim$for$the$goods$that$were$covered$by$Bill$of$Lading$No.$58$and$valued$at$₱6,500,$
the$parties$have$not$convinced$us$to$disturb$the$findings$of$the$CA$that$compensation$could$not$validly$
take$place.$Thus,$we$uphold$the$appellate$court’s$ruling$on$this$point.$

WHEREFORE,$the$Petition$is$hereby$PARTIALLY(GRANTED.&The$assailed$Decision$is$MODIFIED&in$
the$sense$that$petitioner$is(ORDERED$to$pay$respondent$the$sums$of$₱14,000$and$₱6,500,$which$
represent$the$value$of$the$goods$stated$in$Bills$of$Lading$Nos.$59$and$58,$respectively.$No$costs.$

SO$ORDERED.$

#
 Bascos#v.#Court#of#Appeals#
SYLLABUS#

1.#CIVIL#LAW;#COMMON#CARRIERS;#DEFINED;#TEST#TO#DETERMINE#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."#.#.#.#The#holding#of#the#
Court#in#De#Guzman#vs.#Court#of#Appeals#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# distinguished# between# a# carrier#
offering#its#services#to#the#"general#public,"#i.e.,#the#general#community#or#population,#and#one#who#offers#
services#or#solicits#business#only#from#a#narrow#segment#of#the#general#population.#We#think#that#Article#
1732#deliberately#refrained#from#making#such#distinctions."#

2.# ID.;# ID.;# DILIGENCE# REQUIRED# IN# VIGILANCE# OVER# GOODS# TRANSPORTED;# WHEN# PRESUMPTION# OF#
NEGLIGENCE# ARISES;# HOW# PRESUMPTION# OVERCAME;# WHEN# PRESUMPTION# MADE# ABSOLUTE.# —#
Common#carriers#are#obliged#to#observe#extraordinary#diligence#in#the#vigilance#over#the#goods#transported#
by#them.#Accordingly,#they#are#presumed#to#have#been#at#fault#or#to#have#acted#negligently#if#the#goods#are#
lost,#destroyed#or#deteriorated.#There#are#very#few#instances#when#the#presumption#of#negligence#does#
not#attach#and#these#instances#are#enumerated#in#Article#1734.#In#those#cases#where#the#presumption#is#
applied,#the#common#carrier#must#prove#that#it#exercised#extraordinary#diligence#in#order#to#overcome#the#
presumption#.#.#.#The#presumption#of#negligence#was#raised#against#petitioner.#It#was#petitioner's#burden#to#
overcome#it.#Thus,#contrary#to#her#assertion,#private#respondent#need#not#introduce#any#evidence#to#prove#
her#negligence.#Her#own#failure#to#adduce#sufficient#proof#of#extraordinary#diligence#made#the#presumption#
conclusive#against#her.#

3.# ID.;# ID.;# HIJACKING# OF# GOODS;# CARRIER# PRESUMED# NEGLIGENT;# HOW# CARRIER# ABSOLVED# FROM#
LIABILITY.#—#In#De#Guzman#vs.#Court#of#Appeals,#the#Court#held#that#hijacking,#not#being#included#in#the#
provisions#of#Article#1734,#must#be#dealt#with#under#the#provisions#of#Article#1735#and#thus,#the#common#
carrier#is#presumed#to#have#been#at#fault#or#negligent.#To#exculpate#the#carrier#from#liability#arising#from#
hijacking,#he#must#prove#that#the#robbers#or#the#hijackers#acted#with#grave#or#irresistible#threat,#violence,#
or#force.#This#is#in#accordance#with#Article#1745#of#the#Civil#Code#which#provides:#"Art.#1745.#Any#of#the#
following#or#similar#stipulations#shall#be#considered#unreasonable,#unjust#and#contrary#to#public#policy#.#.#.#
(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,# 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#of#irresistible#threat,#violence#of#
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."#
4.#REMEDIAL#LAW;#EVIDENCE;#JUDICIAL#ADMISSIONS#CONCLUSIVE.#—#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.#

5.#ID.;#ID.;#BURDEN#OF#PROOF#RESTS#WITH#PARTY#WHO#ALLEGES#A#FACT.#—#Petitioner#presented#no#other#
proof#of#the#existence#of#the#contract#of#lease.#He#who#alleges#a#fact#has#the#burden#of#proving#it.#

6.#ID.;#ID.;#AFFIDAVITS#NOT#CONSIDERED#BEST#EVIDENCE#IF#AFFIANTS#AVAILABLE#AS#WITNESSES.#—#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.# Affidavits# are# not#
considered#the#best#evidence#if#the#affiants#are#available#as#witnesses.#

7.#CIVIL#LAW;#OBLIGATIONS#AND#CONTRACTS;#CONTRACT#IS#WHAT#LAW#DEFINES#IT#TO#BE.#—#Granting#that#
the#said#evidence#were#not#selfdserving,#the#same#were#not#sufficient#to#prove#that#the#contract#was#one#of#
lease.#It#must#be#understood#that#a#contract#is#what#the#law#defines#it#to#be#and#not#what#it#is#called#by#the#
contracting#parties.#

D#E#C#I#S#I#O#N#

CAMPOS,#JR.,#J#p:#

This# is# a# petition# for# review# on# certiorari# of# the# decision# **# of# the# Court# of# Appeals# in# "RODOLFO# A.#
CIPRIANO,# doing# business# under# the# name# CIPRIANO# TRADING# ENTERPRISES# plaintiffdappellee,# vs.#
ESTRELLITA#M.#BASCOS,#doing#business#under#the#name#of#BASCOS#TRUCKING,#defendantdappellant,"#C.A.d
G.R.#CV#No.#25216,#the#dispositive#portion#of#which#is#quoted#hereunder:#

"PREMISES#considered,#We#find#no#reversible#error#in#the#decision#appealed#from,#which#is#hereby#affirmed#
in#toto.#Costs#against#appellant."#1#

The#facts,#as#gathered#by#this#Court,#are#as#follows:#

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.#
Bascos
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#nonddelivery#
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.# The# prayer# for# a# Writ# of# Preliminary# Attachment# was# supported# by# an# affidavit# 5# which#
contained#the#following#allegations:#
"4.#That#this#action#is#one#of#those#specifically#mentioned#in#Sec.#1,#Rule#57#the#Rules#of#Court,#whereby#a#
writ#of#preliminary#attachment#may#lawfully#issue,#namely:#

"(e)#in#an#action#against#a#party#who#has#removed#or#disposed#of#his#property,#or#is#about#to#do#so,#with#
intent#to#defraud#his#creditors;"#

5.#That#there#is#no#sufficient#security#for#the#claim#sought#to#be#enforced#by#the#present#action;#

6.#That#the#amount#due#to#the#plaintiff#in#the#abovedentitled#case#is#above#all#legal#counterclaims;"#

The#trial#court#granted#the#writ#of#preliminary#attachment#on#February#17,#1987.#

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;# that# the# hijacking# was#
immediately# reported# to# CIPTRADE# and# that# petitioner# and# the# police# exerted# all# efforts# to# locate# the#
hijacked#properties;#that#after#preliminary#investigation,#an#information#for#robbery#and#carnapping#were#
filed#against#Jose#Opriano,#et#al.;#and#that#hijacking,#being#a#force#majeure,#exculpated#petitioner#from#any#
liability#to#CIPTRADE.#

After#trial,#the#trial#court#rendered#a#decision#***#the#dispositive#portion#of#which#reads#as#follows:#

"WHEREFORE,#judgment#is#hereby#rendered#in#favor#of#plaintiff#and#against#defendant#ordering#the#latter#
In favor of CIPTRADE
to#pay#the#former:#

1.#The#amount#of#ONE#HUNDRED#FIFTYdSIX#THOUSAND#FOUR#HUNDRED#FOUR#PESOS#(P156,404.00)#as#an#
(sic)#for#actual#damages#with#legal#interest#of#12%#per#cent#per#annum#to#be#counted#from#December#4,#
1986#until#fully#paid;#

2.#The#amount#of#FIVE#THOUSAND#PESOS#(P5,000.00)#as#and#for#attorney's#fees;#and#

3.#The#costs#of#the#suit.#

The#"Urgent#Motion#To#Dissolve/Lift#preliminary#Attachment"#dated#March#10,#1987#filed#by#defendant#is#
DENIED#for#being#moot#and#academic.#

SO#ORDERED."#6#

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

Consequently,#petitioner#filed#this#petition#where#she#makes#the#following#assignment#of#errors;#to#wit:#

"I.# THE# RESPONDENT# COURT# ERRED# IN# HOLDING# THAT# THE# CONTRACTUAL# RELATIONSHIP# BETWEEN#
PETITIONER#AND#PRIVATE#RESPONDENT#WAS#CARRIAGE#OF#GOODS#AND#NOT#LEASE#OF#CARGO#TRUCK.#
II.# GRANTING,# EX# GRATIA# ARGUMENTI,# THAT# THE# FINDING# OF# THE# RESPONDENT# COURT# THAT# THE#
CONTRACTUAL# RELATIONSHIP# BETWEEN# PETITIONER# AND# PRIVATE# RESPONDENT# WAS# CARRIAGE# OF#
GOODS#IS#CORRECT,#NEVERTHELESS,#IT#ERRED#IN#FINDING#PETITIONER#LIABLE#THEREUNDER#BECAUSE#THE#
LOSS#OF#THE#CARGO#WAS#DUE#TO#FORCE#MAJEURE,#NAMELY,#HIJACKING.#

III.#THE#RESPONDENT#COURT#ERRED#IN#AFFIRMING#THE#FINDING#OF#THE#TRIAL#COURT#THAT#PETITIONER'S#
MOTION#TO#DISSOLVE/LIFT#THE#WRIT#OF#PRELIMINARY#ATTACHMENT#HAS#BEEN#RENDERED#MOOT#AND#
ACADEMIC#BY#THE#DECISION#OF#THE#MERITS#OF#THE#CASE."#7#
ISSUES
The#petition#presents#the#following#issues#for#resolution:#(1)#was#petitioner#a#common#carrier?;#and#(2)#was#
the#hijacking#referred#to#a#force#majeure?#

The# Court# of# Appeals,# in# holding# that# petitioner# was# a# common# carrier,# found# that# she# admitted# in# her#
answer#that#she#did#business#under#the#name#A.M.#Bascos#Trucking#and#that#said#admission#dispensed#with#
the#presentation#by#private#respondent,#Rodolfo#Cipriano,#of#proofs#that#petitioner#was#a#common#carrier.#
The#respondent#Court#also#adopted#in#toto#the#trial#court's#decision#that#petitioner#was#a#common#carrier,#
Moreover,# both# courts# appreciated# the# following# pieces# of# evidence# as# indicators# that# petitioner# was# a#
common#carrier:#the#fact#that#the#truck#driver#of#petitioner,#Maximo#Sanglay,#received#the#cargo#consisting#
of#400#bags#of#soya#bean#meal#as#evidenced#by#a#cargo#receipt#signed#by#Maximo#Sanglay;#the#fact#that#the#
truck#helper,#Juanito#Morden,#was#also#an#employee#of#petitioner;#and#the#fact#that#control#of#the#cargo#
was#placed#in#petitioner's#care.#

In# disputing# the# conclusion# of# the# trial# and# appellate# courts# that# petitioner# was# a# common# carrier,# she#
alleged#in#this#petition#that#the#contract#between#her#and#Rodolfo#A.#Cipriano,#representing#CIPTRADE,#was#
lease#of#the#truck.#She#cited#as#evidence#certain#affidavits#which#referred#to#the#contract#as#"lease".#These#
affidavits#were#made#by#Jesus#Bascos#8#and#by#petitioner#herself.#9#She#further#averred#that#Jesus#Bascos#
confirmed#in#his#testimony#his#statement#that#the#contract#was#a#lease#contract.#10#She#also#stated#that:#
she#was#not#catering#to#the#general#public.#Thus,#in#her#answer#to#the#amended#complaint,#she#said#that#
she#does#business#under#the#same#style#of#A.M.#Bascos#Trucking,#offering#her#trucks#for#lease#to#those#who#
have#cargo#to#move,#not#to#the#general#public#but#to#a#few#customers#only#in#view#of#the#fact#that#it#is#only#
a#small#business.#11#

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."#

Regarding# the# affidavits# presented# by# petitioner# to# the# court,# both# the# trial# and# appellate# courts# have#
dismissed# them# as# selfdserving# and# petitioner# contests# the# conclusion.# We# are# bound# by# the# appellate#
court's#factual#conclusions.#Yet,#granting#that#the#said#evidence#were#not#selfdserving,#the#same#were#not#
sufficient#to#prove#that#the#contract#was#one#of#lease.#It#must#be#understood#that#a#contract#is#what#the#
law# defines# it# to# be# and# not# what# it# is# called# by# the# contracting# parties.# 15# Furthermore,# petitioner#
presented#no#other#proof#of#the#existence#of#the#contract#of#lease.#He#who#alleges#a#fact#has#the#burden#of#
proving#it.#16#

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.#In#De#Guzman#vs.#Court#of#Appeals,#20#the#Court#held#that#hijacking,#not#being#
included#in#the#provisions#of#Article#1734,#must#be#dealt#with#under#the#provisions#of#Article#1735#and#thus,#
the#common#carrier#is#presumed#to#have#been#at#fault#or#negligent.#To#exculpate#the#carrier#from#liability#
arising#from#hijacking,#he#must#prove#that#the#robbers#or#the#hijackers#acted#with#grave#or#irresistible#threat,#
violence,#or#force.#This#is#in#accordance#with#Article#1745#of#the#Civil#Code#which#provides:#

"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# firstdhand#
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.#Affidavits#are#not#considered#the#best#evidence#if#the#affiants#are#available#as#witnesses.#25#The#
subsequent# filing# of# the# information# for# carnapping# and# robbery# against# the# accused# named# in# said#
affidavits#did#not#necessarily#mean#that#the#contents#of#the#affidavits#were#true#because#they#were#yet#to#
be#determined#in#the#trial#of#the#criminal#cases.#

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.#

Having#affirmed#the#findings#of#the#respondent#Court#on#the#substantial#issues#involved,#We#find#no#reason#
to# disturb# the# conclusion# that# the# motion# to# lift/dissolve# the# writ# of# preliminary# attachment# has# been#
rendered#moot#and#academic#by#the#decision#on#the#merits.#

In#the#light#of#the#foregoing#analysis,#it#is#Our#opinion#that#the#petitioner's#claim#cannot#be#sustained.#The#
petition#is#DISMISSED#and#the#decision#of#the#Court#of#Appeals#is#hereby#AFFIRMED.#

SO#ORDERED.#

#
 Son#v#Cebu#Autobus#Company#
The#plaintiff,#Jose#Son,#instituted#in#the#Court#of#First#Instituted#of#Cebu#Autobus#Company,#damages#in#the#
total#sum#of#P2,660,#alleged#to#have#been#suffered#by#the#plaintiff#as#a#result#of#the#fact#that#the#defendant's#
TPU#truck#No.#312#fell#into#a#canal#in#the#barrio#of#Macaas,#municipality#of#Catmon,#Cebu,#on#September#
18,#1948,#due#to#a#defect#of#its#engine#or#to#the#negligence#of#its#driver,#the#plaintiff#(then#a#passenger#of#
the#vehicle)#having#received#serious#injuries#and#two#of#his#hogs#(loaded#therein)#having#been#killed.#The# Defendant
claims that
defense#set#up#by#the#defendant#is#that#the#accident#was#caused#by#events#which#were#unforeseen#or,#even# the accident
if#foreseen#or,#even#if#foreseen,#were#inevitable.#After#trial#the#court#rendered#a#decision,#sentencing#the# was caused by
defendant#to#pay#to#the#plaintiff#the#sum#of#P2,000#as#moral#damages,#and#the#sum#of#P286.80#as#plaintiff's# fortuitous
actual#expenses,#together#with#his#loss#and#unrealized#profit#in#connection#with#the#seven#hogs#loaded#by# events
the#plaintiff#in#defendant's#truck.#From#this#decision#the#defendant#has#appealed.#

As#the#defendant#has#elevated#the#case#directly#to#this#Court#on#questions#of#law,#we#are#bound#by#the#
findings#of#fact#contained#in#the#appealed#decision.#We#quote#hereunder#the#conclusions#pertinent#to#and#
decisive#of#the#present#appeal:#

The#evidence#adduced#conclusively#shows#that#TPUdTruck#No.#312#of#the#defendant#Cebu#Autobus#
Company#left#Cebu#City#on#September#17,#1948,#at#about#10:00#a.m.#bound#for#Maya,#municipality#
of#Daan#Bantayan,#Cebu#Province,#arriving#in#the#latter#place#at#about#5:00#p.m.#of#the#same#day.#it#
passed#the#night#in#Maya.#It#left#Maya,#Daan#Bantayan,#Cebu,#on#its#return#trip#to#Cebu#City#at#about#
4:00#a.m.#September#18,#1948,#without#having#been#inspected#or#examined#by#the#mechanic.#The#
plaintiff#boarded#defendant's#truck#in#barrio#Maya.#Daan#Bantayan,#Cebu,#and#loaded#seven#hogs#
for#his#home#at#Yati#Liloan,#Cebu,#paying#the#usual#fare#and#freight.#The#plaintiff#did#not#reach#his#
destination#safely,#because#the#truck#of#the#defendant#fell#into#a#canal#at#kilometer.#No.#56,#barrio#
of# Macaas,# municipality# of# Catmon,# Cebu.# He# was# pinned# down# or# pressed# by# the# truck# on#
September#18,#1948,#and,#as#a#consequence,#he#suffered#complete#fractures#on#his#pelvic#bone.#
Because#of#the#shock#and#pain#he#lost#his#consciousness#for#sometime.#He#was#brought#to#his#house#
at#Yati,#municipality#of#Liloan,#Cebu,#unconscious#on#board#another#truck.#Later,#on#the#same#day,#
he#was#brought#in#a#special#wagon#to#the#City#of#Cebu,#and#was#confined#in#the#Velez#Clinic#for#
fourteen#days,#from#September#18,#1948,#to#October#2,#1948.#On#October#2,#1948,#the#plaintiff#
went#out#of#the#Velez#Clinic,#but#according#to#Dr.#Jacinto#Velez,#physician#and#proprietor#of#the#
Velez#Clinic,#the#plaintiff#needed#60#days#more#of#treatment#and#rest#before#he#could#resume#his#
former#habitual#work,#inasmuch#as#he#suffered#complete#fractures#on#his#pelvic#bone.#

The# evidence# further# shows# that# two# hogs# of# the# plaintiff# loaded# on# TPU# truck# No.# 312# of# the#
defendant#on#September#18,#1948#died#when#the#said#truck#fell#into#a#canal#at#Macaas,#Catmon,#
Cebu.#

x#x#x###########x#x#x###########x#x#x#

The# theory# of# the# defendant# is# that# the# accident# was# unforeseen,# or# even# if# foreseen,# was#
inevitable.#This#theory#cannot#be#sustained.#Whether#the#accident#was#caused#by#the#defect#of#the#
engine#of#the#truck#of#the#defendant,#or#by#the#negligence#of#the#driver,#or#by#the#breakage#of#the#
dragdlink#spring,#the#defendant#is#civilly#liable#to#the#plaintiff#for#the#damages#suffered#by#him.#The#
evidence#shows#the#dragdlink#spring#of#the#truck#in#question#was#not#inspected#or#examined#when#
it#left#Maya,#Daan#Bantayan,#Cebu,#on#September#1,#1948,#for#Cebu#City.#If#it#were#inspected#or#
 examined,# the# accident# might# have# been# avoided.# The# plaintiff# had# no# means# of# avoiding# the#
danger#or#escaping#the#injury.#When#he#boarded#at#dawn#of#September#18,#1948,#in#Maya,#Daan#
Bantayan.# Cebu,# defendant's# TPU# Truck# No.# 312,# bound# for# his# home# at# Yati# Liloan,# Cebu,# and#
loaded# on# said# truck# seven# hogs,# he# had# every# right# to# presume# the# truck# perfectly# in# good#
condition#which#could#transport#him#safely#and#securely#to#his#destination.#He#paid#the#regular#fare#
and#the#freight#of#the#seven#hogs.#

The#plaintiff#is#suing#the#defendant#upon#its#contract#of#carriage#which#the#latter#had#failed#to#perform#by#
virtue# of# its# failure# to# safely# carry# the# plaintiff# to# his# destination# at# the# barrio# of# Yati,# Liloan,# Cebu,# as#
distinguished#from#an#action#based#on)culpa)acquiliana)under#which#it#is#necessary,#in#order#to#recover#
damages,#to#prove#fault#or#negligence#on#the#part#of#the#carrier.#The#distinction#is#clearly#set#out#in#the#case#
of#Castro)vs.)Acro)Taxicab)Co.,*#46#Off.#Gaz.,#2023,#as#follows:#"La#culpa#aquiliana#determina#y#engendra#la#
responsabilidad#y#por#eso#es#sustantiva,#independiente;#mientras#que#la#culpa#contractual#presupone#la#
preexistencia#de#una#obligacion,#por#tanto#es#solo#incidental#—#es#decir,#la#infraccion#o#incumplimiento#de#
esa#obligacion#es#lo#que#genera#la#culpa#contractual.#Una#implicacion#o#consecuencia#caracteristica#de#la#
diferencia#entre#ambos#conceptos#juridicos#es#que,#tratandose#de#la#culpa#extracontractual#o#aquiliana,#el#
demandante# que# reclame# indemnizacion# de# daños# y# perjuicios# tiene# que# probar,# como# requisito#
indispensable#para#que#prospere#su#accion,#la#culpa#o#negligencia#del#demandado,#mientras#que,#tratandose#
de#la#culpa#contractual,#es#bastante#que#se#prueba#la#existencia#del#contrato#y#que#la#obligacion#resultante#
del#mismo#se#ha#infringido#o#no#se#ha#cumplido,#siguiendose#daños#de#esta#infraccion#e#incumplimiento."#

The#trial#court#based#its#decision#in#favor#of#the#plaintiff#upon#the#finding#that#the#defendant#had#defaulted#
in#its#contract#of#carriage#due#to#the#accident,#regardless#of#whether#it#was#caused#by#a#defect#of#the#engine#
of#the#defendant's#truck,#by#the#negligence#of#its#driver,#or#by#the#breakage#of#the#dragdlink#spring;#the#
evidence#showing#that#the#said#dragdlink#spring#was#not#inspected#or#examined#when#the#vehicle#left#Maya,#
Daan#Bantayan,#Cebu,#for#Cebu#City.#In#other#words,#the#trial#court#overruled#the#defense#interposed#by#the#
defendant#that#the#accident#was#due#to#an#event#(unexpected#breakage#of#the#dragdlink#spring)#which#could#
not#be#foreseen#or#which,#even#if#foreseen,#was#inevitable.#In#our#opinion,#the#trial#court#was#correct.#Its#
express#finding#as#to#the#cause#of#the#accident#in#effect#blames#the#defendant#for#it#and#logically#rejects#the#
defendant's#theory#that#the#cause#emanated#from#an#unforeseen#or#inevitable#event.#In#essence,#the#trial#
court#held#that#the#dragdlink#spring#of#the#truck#in#question#was#defective.#In#the#case#of#Lazam#vs.)Smith,#
45#Phil.,#660,#it#was#already#held#that#an#accident#cause#either#by#defects#in#the#automobile#or#through#the#
negligence#of#its#driver#is#not#a)caso)fortuito.#

The#conclusion#of#the#trial#court#with#respect#to#the#amount#of#damages#sustained#by#and#award#in#favor#
of#the#plaintiff,#is#being#factual,#conclusive#herein,#since,#as#hereinbefore#noted,#the#defendant#has#appealed#
directly#to#this#court#solely#on#questions#of#law.#

Upon#the#other#hand,#plaintiff's#claim#that#the#amount#of#moral#damages#awarded#to#him#by#the#trial#court#
should#be#raised#to#P300,#cannot#be#sustained,#because#no#appeal#was#taken#by#him#from#the#decision#a)
quo.#

Wherefore,# the# appealed# decision# is# affirmed# and# it# is# so# ordered# with# costs# against# the# defendantd
appellant.#

#
#

Juntilla#v#Fontanar#
This$is$a$petition$for$review,$on$questions$of$law,$of$the$decision$of$the$Court$of$First$Instance$of$
Cebu$which$reversed$the$decision$of$the$City$Court$of$Cebu$and$exonerated$the$respondents$from$
any$liability$arising$from$a$vehicular$accident.$

The$background$facts$which$led$to$the$filing$of$a$complaint$for$breach$of$contract$and$damages$
against$the$respondents$are$summarized$by$the$Court$of$First$Instance$of$Cebu$as$follows:$

The$facts$established$after$trial$show$that$the$plaintiff$was$a$passenger$of$the$public$
utility$ jeepney$ bearing$ plate$ No.$ PUJL71L7$ on$ the$ course$ of$ the$ trip$ from$ Danao$
City$ to$ Cebu$ City.$ The$ jeepney$ was$ driven$ by$ defendant$ Berfol$ Camoro.$ It$ was$
registered$under$the$franchise$of$defendant$Clemente$Fontanar$but$was$actually$
owned$by$defendant$Fernando$Banzon.$When$the$jeepney$reached$Mandaue$City,$
the$right$rear$tire$exploded$causing$the$vehicle$to$turn$turtle.$In$the$process,$the$
plaintiff$ who$ was$ sitting$ at$ the$ front$ seat$ was$ thrown$ out$ of$ the$ vehicle.$ Upon$
landing$on$the$ground,$the$plaintiff$momentarily$lost$consciousness.$When$he$came$
to$his$senses,$he$found$that$he$had$a$lacerated$wound$on$his$right$palm.$Aside$
from$ this,$ he$ suffered$ injuries$ on$ his$ left$ arm,$ right$ thigh$ and$ on$ his$ back.$ (Exh.$
"D").$Because$of$his$shock$and$injuries,$he$went$back$to$Danao$City$but$on$the$
way,$ he$ discovered$ that$ his$ "Omega"$ wrist$ watch$ was$ lost.$ Upon$ his$ arrival$ in$
Danao$ City,$ he$ immediately$ entered$ the$ Danao$ City$ Hospital$ to$ attend$ to$ his$
injuries,$and$also$requested$his$fatherLinLlaw$to$proceed$immediately$to$the$place$
of$the$accident$and$look$for$the$watch.$In$spite$of$the$efforts$of$his$fatherLinLlaw,$the$
wrist$watch,$which$he$bought$for$P$852.70$(Exh.$"B")$could$no$longer$be$found.$

xxx$xxx$xxx$

Petitioner$ Roberto$ Juntilla$ filed$ Civil$ Case$ No.$ RL17378$ for$ breach$ of$ contract$ with$ damages$
before$the$City$Court$of$Cebu$City,$Branch$I$against$Clemente$Fontanar,$Fernando$Banzon$and$
Berfol$Camoro.$

The$respondents$filed$their$answer,$alleging$inter$alia$that$the$accident$that$caused$losses$to$the$
petitioner$was$beyond$the$control$of$the$respondents$taking$into$account$that$the$tire$that$exploded$
was$newly$bought$and$was$only$slightly$used$at$the$time$it$blew$up.$

After$trial,$Judge$Romulo$R.$Senining$of$the$Civil$Court$of$Cebu$rendered$judgment$in$favor$of$the$
petitioner$and$against$the$respondents.$The$dispositive$portion$of$the$decision$reads:$

WHEREFORE,$judgment$is$hereby$rendered$in$favor$of$the$plaintiff$and$against$
the$defendants$and$the$latter$are$hereby$ordered,$jointly$and$severally,$to$pay$the$
plaintiff$the$sum$of$P750.00$as$reimbursement$for$the$lost$Omega$wrist$watch,$the$
sum$of$P246.64$as$unrealized$salary$of$the$plaintiff$from$his$employer,$the$further$
sum$of$P100.00$for$the$doctor's$fees$and$medicine,$an$additional$sum$of$P300.00$
for$attorney's$fees$and$the$costs.$

The$respondents$appealed$to$the$Court$of$First$Instance$of$Cebu,$Branch$XIV.$
Judge$Leonardo$B.$Canares$reversed$the$judgment$of$the$City$Court$of$Cebu$upon$a$finding$that$
the$ accident$ in$ question$ was$ due$ to$ a$ fortuitous$ event.$ The$ dispositive$ portion$ of$ the$ decision$
reads:$

WHEREFORE,$judgment$is$hereby$rendered$exonerating$the$defendants$from$any$
liability$to$the$plaintiff$without$pronouncement$as$to$costs.$

A$motion$for$reconsideration$was$denied$by$the$Court$of$First$Instance.$

The$petitioner$raises$the$following$alleged$errors$committed$by$the$Court$of$First$Instance$of$Cebu$
on$appeal—$

a.$ The$ Honorable$ Court$ below$ committed$ grave$ abuse$ of$ discretion$ in$ failing$ to$
take$cognizance$of$the$fact$that$defendants$and/or$their$employee$failed$to$exercise$
"utmost$and/or$extraordinary$diligence"$required$of$common$carriers$contemplated$
under$Art.$1755$of$the$Civil$Code$of$the$Philippines.$

b.$The$Honorable$Court$below$committed$grave$abuse$of$discretion$by$deciding$
the$case$contrary$to$the$doctrine$laid$down$by$the$Honorable$Supreme$Court$in$the$
case$of$Necesito(et(al.(v.(Paras,(et(al.$

We$find$the$petition$impressed$with$merit.$

The$ City$ Court$ and$ the$ Court$ of$ First$ Instance$ of$ Cebu$ found$ that$ the$ right$ rear$ tire$ of$ the$
passenger$ jeepney$ in$ which$ the$ petitioner$ was$ riding$ blew$ up$ causing$ the$ vehicle$ to$ fall$ on$ its$
side.$The$petitioner$questions$the$conclusion$of$the$respondent$court$drawn$from$this$finding$of$
fact.$

The$Court$of$First$Instance$of$Cebu$erred$when$it$absolved$the$carrier$from$any$liability$upon$a$
finding$that$the$tire$blow$out$is$a$fortuitous$event.$The$Court$of$First$Instance$of$Cebu$ruled$that:$

After$ reviewing$ the$ records$ of$ the$ case,$ this$ Court$ finds$ that$ the$ accident$ in$
question$was$due$to$a$fortuitous$event.$A$tire$blowLout,$such$as$what$happened$in$
the$ case$ at$ bar,$ is$ an$ inevitable$ accident$ that$ exempts$ the$ carrier$ from$ liability,$
there$being$absence$of$a$showing$that$there$was$misconduct$or$negligence$on$the$
part$of$the$operator$in$the$operation$and$maintenance$of$the$vehicle$involved.$The$
fact$that$the$right$rear$tire$exploded,$despite$being$brand$new,$constitutes$a$clear$
case$of$caso$fortuito$which$can$be$a$proper$basis$for$exonerating$the$defendants$
from$liability.$...$

The$Court$of$First$Instance$relied$on$the$ruling$of$the$Court$of$Appeals$in$Rodriguez(v.(Red(Line(
Transportation(Co.,(CA$G.R.$No.$8136,$December$29,$1954,$where$the$Court$of$Appeals$ruled$
that:$

A$tire$blowLout$does$not$constitute$negligence$unless$the$tire$was$already$old$and$
should$not$have$been$used$at$all.$Indeed,$this$would$be$a$clear$case$of$fortuitous$
event.$
The$foregoing$conclusions$of$the$Court$of$First$Instance$of$Cebu$are$based$on$a$misapprehension$
of$ overall$ facts$ from$ which$ a$ conclusion$ should$ be$ drawn.$ The$ reliance$ of$ the$ Court$ of$ First$
Instance$ on$ the$ Rodriguez$ case$ is$ not$ in$ order.$ In$ La( Mallorca( and( Pampanga( Bus( Co.( v.( De(
Jesus,(et(al.((17$SCRA$23),$we$held$that:$

Petitioner$maintains$that$a$tire$blowLout$is$a$fortuitous$event$and$gives$rise$to$no$
liability$for$negligence,$citing$the$rulings$of$the$Court$of$Appeals$in$Rodriguez$v.$
Red$Line$Transportation$Co.,$CA$G.R.$No.$8136,$December$29,$1954,$and$People$
v.$Palapad,$CALG.R.$No.$18480,$June$27,$1958.$These$rulings,$however,$not$only$
are$not$binding$on$this$Court$but$were$based$on$considerations$quite$different$from$
those$that$obtain$in$the$case$at$bar.$The$appellate$court$there$made$no$findings$of$
any$specific$acts$of$negligence$on$the$part$of$the$defendants$and$confined$itself$to$
the$question$of$whether$or$not$a$tire$blowLout,$by$itself$alone$and$without$a$showing$
as$to$the$causative$factors,$would$generate$liability.$...$

In$the$case$at$bar,$there$are$specific$acts$of$negligence$on$the$part$of$the$respondents.$The$records$
show$that$the$passenger$jeepney$turned$turtle$and$jumped$into$a$ditch$immediately$after$its$right$
rear$tire$exploded.$The$evidence$shows$that$the$passenger$jeepney$was$running$at$a$very$fast$
speed$before$the$accident.$We$agree$with$the$observation$of$the$petitioner$that$a$public$utility$jeep$
running$at$a$regular$and$safe$speed$will$not$jump$into$a$ditch$when$its$right$rear$tire$blows$up.$
There$is$also$evidence$to$show$that$the$passenger$jeepney$was$overloaded$at$the$time$of$the$
accident.$The$petitioner$stated$that$there$were$three$(3)$passengers$in$the$front$seat$and$fourteen$
(14)$passengers$in$the$rear.$

While$it$may$be$true$that$the$tire$that$blewLup$was$still$good$because$the$grooves$of$the$tire$were$
still$visible,$this$fact$alone$does$not$make$the$explosion$of$the$tire$a$fortuitous$event.$No$evidence$
was$presented$to$show$that$the$accident$was$due$to$adverse$road$conditions$or$that$precautions$
were$taken$by$the$jeepney$driver$to$compensate$for$any$conditions$liable$to$cause$accidents.$The$
sudden$blowingLup,$therefore,$could$have$been$caused$by$too$much$air$pressure$injected$into$the$
tire$coupled$by$the$fact$that$the$jeepney$was$overloaded$and$speeding$at$the$time$of$the$accident.$

In$ Lasam( v.( Smith$ (45$ Phil.$ 657),$ we$ laid$ down$ the$ following$ essential$ characteristics$ of$ caso$
fortuito:$

xxx$xxx$xxx$

...$ In$ a$ 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$occurrence,$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$(debtor)$must$be$free$from$any$participation$in$the$aggravation$of$
the$injury$resulting$to$the$creditor.$(5$Encyclopedia(Juridica(Espanola,$309.)$

In$the$case$at$bar,$the$cause$of$the$unforeseen$and$unexpected$occurrence$was$not$independent$
of$the$human$will.$The$accident$was$caused$either$through$the$negligence$of$the$driver$or$because$
of$mechanical$defects$in$the$tire.$Common$carriers$should$teach$their$drivers$not$to$overload$their$
vehicles,$not$to$exceed$safe$and$legal$speed$limits,$and$to$know$the$correct$measures$to$take$
when$ a$ tire$ blows$ up$ thus$ insuring$ the$ safety$ of$ passengers$ at$ all$ times.$ Relative$ to$ the$
contingency$of$mechanical$defects,$we$held$in$Necesito,(et(al.(v.(Paras,(et(al.$(104$Phil.$75),$that:$

...$The$preponderance$of$authority$is$in$favor$of$the$doctrine$that$a$passenger$is$
entitled$to$recover$damages$from$a$carrier$for$an$injury$resulting$from$a$defect$in$
an$appliance$purchased$from$a$manufacturer,$whenever$it$appears$that$the$defect$
would$have$been$discovered$by$the$carrier$if$it$had$exercised$the$degree$of$care$
which$under$the$circumstances$was$incumbent$upon$it,$with$regard$to$inspection$
and$ application$ of$ the$ necessary$ tests.$ For$ the$ purposes$ of$ this$ doctrine,$ the$
manufacturer$is$considered$as$being$in$law$the$agent$or$servant$of$the$carrier,$as$
far$as$regards$the$work$of$constructing$the$appliance.$According$to$this$theory,$the$
good$repute$of$the$manufacturer$will$not$relieve$the$carrier$from$liability'$(10$Am.$
Jur.$205,$s,$1324i$see$also$Pennsylvania$R.$Co.$v.$Roy,$102$U.S.$451i$20$L.$Ed.$
141i$Southern$R.$Co.$v.$Hussey,$74$ALR$1172i$42$Fed.$2d$70i$and$Ed$Note,$29$
ALR$788.:$Ann.$Cas.$1916E$929).$

The$ rationale$ of$ the$ carrier's$ liability$ is$ the$ fact$ that$ the$ passenger$ has$ neither$
choice$nor$control$over$the$carrier$in$the$selection$and$use$of$the$equipment$and$
appliances$in$use$by$the$carrier.$Having$no$privity$whatever$with$the$manufacturer$
or$vendor$of$the$defective$equipment,$the$passenger$has$no$remedy$against$him,$
while$the$carrier$usually$has.$It$is$but$logical,$therefore,$that$the$carrier,$while$not$
an$insurer$of$the$safety$of$his$passengers,$should$nevertheless$be$held$to$answer$
for$the$flaws$of$his$equipment$if$such$flaws$were$at$all$discoverable.$...$

It$ is$ sufficient$ to$ reiterate$ that$ the$ source$ of$ a$ common$ carrier's$ legal$ liability$ is$ the$ contract$ of$
carriage,$and$by$entering$into$the$said$contract,$it$binds$itself$to$carry$the$passengers$safely$as$far$
as$human$care$and$foresight$can$provide,$using$the$utmost$diligence$of$a$very$cautious$person,$
with$a$due$regard$for$all$the$circumstances.$The$records$show$that$this$obligation$was$not$met$by$
the$respondents.$

The$respondents$likewise$argue$that$the$petitioner$cannot$recover$any$amount$for$failure$to$prove$
such$damages$during$the$trial.$The$respondents$submit$that$if$the$petitioner$was$really$injured,$
why$was$he$treated$in$Danao$City$and$not$in$Mandaue$City$where$the$accident$took$place.$The$
respondents$argue$that$the$doctor$who$issued$the$medical$certificate$was$not$presented$during$
the$trial,$and$hence$not$crossLexamined.$The$respondents$also$claim$that$the$petitioner$was$not$
wearing$any$wrist$watch$during$the$accident.$

It$should$be$noted$that$the$City$Court$of$Cebu$found$that$the$petitioner$had$a$lacerated$wound$on$
his$right$palm$aside$from$injuries$on$his$left$arm,$right$thigh$and$on$his$back,$and$that$on$his$way$
back$to$Danao$City,$he$discovered$that$his$"Omega"$wrist$watch$was$lost.$These$are$findings$of$
facts$of$the$City$Court$of$Cebu$which$we$find$no$reason$to$disturb.$More$so$when$we$consider$the$
fact$that$the$Court$of$First$Instance$of$Cebu$impliedly$concurred$in$these$matters$when$it$confined$
itself$to$the$question$of$whether$or$not$the$tire$blow$out$was$a$fortuitous$event.$

WHEREFORE,$the$decision$of$the$Court$of$First$Instance$of$Cebu,$Branch$IV$appealed$from$is$
hereby$ REVERSED$ and$ SET$ ASIDE,$ and$ the$ decision$ of$ the$ City$ Court$ of$ Cebu,$ Branch$ I$ is$
REINSTATED,$with$the$modification$that$the$damages$shall$earn$interest$at$12%$per$annum$and$
the$ attorney's$ fees$ are$ increased$ to$ SIX$ HUNDRED$ PESOS$ (P600.00).$ Damages$ shall$ earn$
interests$from$January$27,$1975.$
 Fortune#Express#v#Court#of#Appeals#
This#is#an#appeal#by#petition#for#review#on#certiorari)of#the#decision,#dated#July#29,#1994,#of#the#Court#of#
Appeals,# which# reversed# the# decision# of# the# Regional# Trial# Court,# Branch# VI,# Iligan# City.# The# aforesaid#
decision#of#the#trial#court#dismissed#the#complaint#of#public#respondents#against#petitioner#for#damages#for#
breach#of#contract#of#carriage#filed#on#the#ground#that#petitioner#had#not#exercised#the#required#degree#of#
diligence#in#the#operation#of#one#of#its#buses.#Atty.#Talib#Caorong,#whose#heirs#are#private#respondents#
herein,#was#a#passenger#of#the#bus#and#was#killed#in#the#ambush#involving#said#bus.#

The#facts#of#the#instant#case#are#as#follows:#

Petitioner#is#a#bus#company#in#northern#Mindanao.#Private#respondent#Paulie#Caorong#is#the#widow#of#Atty.#
Caorong,#while#private#respondents#Yasser#King,#Rose#Heinni,#and#Prince#Alexander#are#their#minor#children.#

On#November#18,#1989,#a#bus#of#petitioner#figured#in#an#accident#with#a#jeepney#in#Kauswagan,#Lanao#del#
Norte,# resulting# in# the# death# of# several# passengers# of# the# jeepney,# including# two# Maranaos.# Crisanto#
Generalao,# a# volunteer# field# agent# of# the# Constabulary# Regional# Security# Unit# No.# X,# conducted# an#
investigation#of#the#accident.#He#found#that#the#owner#of#the#jeepney#was#a#Maranao#residing#in#Delabayan,#
Lanao#del#Norte#and#that#certain#Maranaos#were#planning#to#take#revenge#on#the#petitioner#by#burning#
some#of#its#buses.#Generalao#rendered#a#report#on#his#findings#to#Sgt.#Reynaldo#Bastasa#of#the#Philippine#
Constabulary#Regional#Headquarters#at#Cagayan#de#Oro.#Upon#the#instruction#of#Sgt.#Bastasa,#he#went#to#
see#Diosdado#Bravo,#operations#manager#of#petitioner,#its#main#office#in#Cagayan#de#Oro#City.#Bravo#assured#
him#that#the#necessary#precautions#to#insure#the#safety#of#lives#and#property#would#be#taken.1#

At#about#6:45#P.M.#on#November#22,#1989,#three#armed#Maranaos#who#pretended#to#be#passengers,#seized#
a#bus#of#petitioner#at#Linamon,#Lanao#del#Norte#while#on#its#way#to#Iligan#City.#Among#the#passengers#of#the#
bus#was#Atty.#Caorong.#The#leader#of#the#Maranaos,#identified#as#one#Bashier#Mananggolo,#ordered#the#
driver,#Godofredo#Cabatuan,#to#stop#the#bus#on#the#side#of#the#highway.#Mananggolo#then#shot#Cabatuan#
on#the#arm,#which#caused#him#to#slump#on#the#steering#wheel.#The#one#of#the#companions#of#Mananggolo#
started#pouring#gasoline#inside#the#bus,#as#the#other#held#the#passenger#at#bay#with#a#handgun.#Mananggolo#
then#ordered#the#passenger#to#get#off#the#bus.#The#passengers,#including#Atty.#Caorong,#stepped#out#of#the#
bus#and#went#behind#the#bushes#in#a#field#some#distance#from#the#highway.2#

However,#Atty.#Caorong#returned#to#the#bus#to#retrieve#something#from#the#overhead#rack.#at#that#time,#
one# of# the# armed# men# was# pouring# gasoline# on# the# head# of# the# driver.# Cabatuan,# who# had# meantime#
regained#consciousness,#heard#Atty.#Caorong#pleading#with#the#armed#men#to#spare#the#driver#as#he#was#
innocent#of#any#wrong#doing#and#was#only#trying#to#make#a#living.#The#armed#men#were,#however,#adamant#
as# they# repeated# the# warning# that# they# were# going# to# burn# the# bus# along# with# its# driver.# During# this#
exchange#between#Atty.#Caorong#and#the#assailants,#Cabatuan#climbed#out#of#the#left#window#of#the#bus#
and#crawled#to#the#canal#on#the#opposite#side#of#the#highway.#He#heard#shots#from#inside#the#bus.#Larry#de#
la#Cruz,#one#of#the#passengers,#saw#that#Atty.#Caorong#was#hit.#Then#the#bus#was#set#on#fire.#Some#of#the#
passengers#were#able#to#pull#Atty.#Caorong#out#of#the#burning#bus#and#rush#him#to#the#Mercy#Community#
Hospital#in#Iligan#City,#but#he#died#while#undergoing#operation.3#

The#private#respondents#brought#this#suit#for#breach#of#contract#of#carriage#in#the#Regional#Trial#Court,#
Branch#VI,#Iligan#City.#In#its#decision,#dated#December#28,#1990,#the#trial#court#dismissed#the#complaint,#
holding#as#follows:#
 The#fact#that#defendant,#through#Operations#Manager#Diosdado#Bravo,#was#informed#of#
the# "rumors"# that# the# Moslems# intended# to# take# revenge# by# burning# five# buses# of#
defendant#is#established#since#the#latter#also#utilized#Crisanto#Generalao#as#a#witness.#Yet#
despite#this#information,#the#plaintiffs#charge,#defendant#did#not#take#proper#precautions.#
.#.#.#Consequently,#plaintiffs#now#fault#the#defendant#for#ignoring#the#report.#Their#position#
is#that#the#defendant#should#have#provided#its#buses#with#security#guards.#Does#the#law#
require#common#carriers#to#install#security#guards#in#its#buses#for#the#protection#and#safety#
of#its#passengers?#Is#the#failure#to#post#guards#on#omission#of#the#duty#to#"exercise#the#
diligence#of#a#good#father#of#the#family"#which#could#have#prevented#the#killing#of#Atty.#
Caorong?# To# our# mind,# the# diligence# demanded# by# law# does# not# include# the# posting# of#
security#guard#in#buses.#It#is#an#obligation#that#properly#belongs#to#the#State.#Besides,#will#
the#presence#of#one#or#two#security#guards#suffice#to#deter#a#determined#assault#of#the#
lawless#and#thus#prevent#the#injury#complained#of?#Maybe#so,#but#again,#perhaps#not.#In#
other#words,#the#presence#of#a#security#guard#is#not#a#guarantee#that#the#killing#of#Atty.#
Caorong#would#have#been#definitely#avoided.#

xxx#xxx#xxx#

Accordingly,# the# failure# of# defendant# to# accord# faith# and# credit# to# the# report# of# Mr.#
Generalao#and#the#fact#that#it#did#not#provide#security#to#its#buses#cannot,#in#the#light#of#
the#circumstances,#be#characterized#as#negligence.#

Finally,#the#evidence#clearly#shows#that#the#assalants#did#not#have#the#least#intention#of#the#
harming#any#of#the#passengers.#They#ordered#all#the#passengers#to#alight#and#set#fire#on#
the#bus#only#after#all#the#passengers#were#out#of#danger.#The#death#of#Atty.#Caorong#was#
an# unexpected# and# unforseen# occurrense# over# which# defendant# had# no# control.# Atty.#
Caorong#performed#an#act#of#charity#and#heroism#in#coming#to#the#succor#of#the#driver#
even#in#the#face#of#danger.#He#deserves#the#undying#gratitude#of#the#driver#whose#life#he#
saved.#No#one#should#blame#him#for#an#act#of#extraordinary#charity#and#altruism#which#cost#
his#life.#But#neither#should#any#blame#be#laid#on#the#doorstep#of#defendant.#His#death#was#
solely#due#to#the#willfull#acts#of#the#lawless#which#defendant#could#neither#prevent#nor#to#
stop.#

WHEREFORE,#in#view#of#the#foregoing,#the#complaint#is#hereby#dismissed.#For#lack#of#merit,#
the#counterdclaim#is#likewise#dismissed.#No#costs.4#

On#appeal,#however,#the#Court#of#Appeals#reversed.#It#held:#

In# the# case# at# bench,# how# did# defendantdappellee# react# to# the# tip# or# information# that#
certain#Maranao#hotheads#were#planning#to#burn#five#of#its#buses#out#of#revenge#for#the#
deaths# of# two# Maranaos# in# an# earlier# collision# involving# appellee's# bus?# Except# for# the#
remarks#of#appellee's#operations#manager#that#"we#will#have#our#action#.#.#.#.#and#I'll#be#the#
one# to# settle# it# personally,"# nothing# concrete# whatsoever# was# taken# by# appellee# or# its#
employees# to# prevent# the# execution# of# the# threat.# Defendantdappellee# never# adopted#
even# a# single# safety# measure# for# the# protection# of# its# paying# passengers.# Were# there#
available#safeguards?#Of#course,#there#were:#one#was#frisking#passengers#particularly#those#
en#route#to#the#area#where#the#threats#were#likely#to#be#carried#out#such#as#where#the#
earlier#accident#occurred#or#the#place#of#influence#of#the#victims#or#their#locality.#If#frisking#
 was#resorted#to,#even#temporarily,#.#.#.#.#appellee#might#be#legally#excused#from#liabilty.#
Frisking#of#passengers#picked#up#along#the#route#could#have#been#implemented#by#the#bus#
conductor;#for#those#boarding#at#the#bus#terminal,#frisking#could#have#been#conducted#by#
him# and# perhaps# by# additional# personnel# of# defendantdappellee.# On# hindsight,# the#
handguns#and#especially#the#gallon#of#gasoline#used#by#the#felons#all#of#which#were#brought#
inside#the#bus#would#have#been#discovered,#thus#preventing#the#burning#of#the#bus#and#
the#fatal#shooting#of#the#victim.#

Appellee's#argument#that#there#is#no#law#requiring#it#to#provide#guards#on#its#buses#and#
that# the# safety# of# citizens# is# the# duty# of# the# government,# is# not# well# taken.# To# be# sure,#
appellee#is#not#expected#to#assign#security#guards#on#all#its#buses;#if#at#all,#it#has#the#duty#
to#post#guards#only#on#its#buses#plying#predominantly#Maranaos#areas.#As#discussed#in#the#
next#preceding#paragraph,#least#appellee#could#have#done#in#response#to#the#report#was#
to#adopt#a#system#of#verification#such#as#the#frisking#of#passengers#boarding#at#its#buses.#
Nothing,# and# no# repeat,# nothing# at# all,# was# done# by# defendantdappellee# to# protect# its#
innocent# passengers# from# the# danger# arising# from# the# "Maranao# threats."# It# must# be#
observed#that#frisking#is#not#a#novelty#as#a#safety#measure#in#our#society.#Sensitive#places#
—#in#fact,#nearly#all#important#places#—#have#applied#this#method#of#security#enhancement.#
Gadgets#and#devices#are#avilable#in#the#market#for#this#purpose.#It#would#not#have#weighed#
much# against# the# budget# of# the# bus# company# if# such# items# were# made# available# to# its#
personnel#to#cope#up#with#situations#such#as#the#"Maranaos#threats."#

In#view#of#the#constitutional#right#to#personal#privacy,#our#pronouncement#in#this#decision#
should#not#be#construed#as#an#advocacy#of#mandatory#frisking#in#all#public#conveyances.#
What#we#are#saying#is#that#given#the#circumstances#obtaining#in#the#case#at#bench#that:#(a)#
two#Maranaos#died#because#of#a#vehicular#collision#involving#one#of#appellee's#vehicles;#(b)#
appellee# received# a# written# report# from# a# member# of# the# Regional# Security# Unit,#
Constabulary# Security# Group,# that# the# tribal/ethnic# group# of# the# two# deceased# were#
planning# to# burn# five# buses# of# appellee# out# of# revenge;# and# (c)# appelle# did# nothing# —#
absolutely#nothing#—#for#the#safety#of#its#passengers#travelling#in#the#area#of#influence#of#
the#victims,#appellee#has#failed#to#exercise#the#degree#of#dilegence#required#of#common#
carriers.#Hence,#appellee#must#be#adjudge#liable.#

xxx#xxx#xxx#

WHEREFORE# the# decision# appealed# from# is# hereby# REVERSED# and# another# rendered#
ordering#defendantdappellee#to#pay#plaintiffsdappellants#the#following:#

1)#P3,399,649.20#as#death#indemnity;#

2)#P50,000.00#and#P500.00#per#appearance#as#attorney's#
fee#and#

Costs#against#defendantdappellee.5#

Hence,#this#appeal.#Petitioner#contends:#
 (A)#THAT#PUBLIC#RESPONDENT#ERRED#IN#REVERSING#THE#
DECISION# OF# THE# REGIONAL# TRIAL# COURT# DATED#
DECEMBER# 28,# 1990# DISMISSING# THE# COMPLAINT# AS#
WELL# AS# THE# COUNTERCLAIM,# AND# FINDING# FOR#
PRIVATE# RESPONDENTS# BY# ORDERING# PETITIONER# TO#
PAY# THE# GARGANTUAN# SUM# OF# P3,449,649.20# PLUS#
P500.00#PER#APPEARANCE#AS#ATTORNEY'S#FEES,#AS#WELL#
AS# DENYING# PETITIONERS# MOTION# FRO#
RECONSIDERATION# AND# THE# SUPPLEMENT# TO# SAID#
MOTION,#WHILE#HOLDING,#AMONG#OTHERS,#THAT#THE#
PETITIONER# BREACHED# THE# CONTRACT# OF# THE#
CARRIAGE#BY#ITS#FAILURE#TO#EXCERCISE#THE#REQUIRED#
DEGREE#OF#DILIGENCE;#

(B)#THAT#THE#ACTS#OF#THE#MARANAO#OUTLAWS#WERE#
SO#GRAVE,#IRRESISTABLE,#VIOLENT,#AND#FORCEFULL,#AS#
TO#BE#REGARDED#AS#CASO)FORTUITO;#AND#

(C)# THAT# PUBLIC# RESPONDENT# COURT# OF# APPEALS#

SERIOUSLY#ERRED#IN#HOLDING#THAT#PETITIONER#COULD#
HAVE# PROVIDED# ADEQUATE# SECURITY# IN#
PREDOMINANTLY#MUSLIM#AREAS#AS#PART#OF#ITS#DUTY#
TO# OBSERVE# EXTRAdORDINARY# DILIGENCE# AS# A#
COMMON#CARRIER.#

The#instant#has#no#merit.#

First.#Petitioner's#Breach#of#the#Contract#of#Carriage.#

Art.#1763#of#the#Civil#Code#provides#that#a#common#carrier#is#responsible#for#injuries#suffered#by#a#passenger#
on# account# of# wilfull# acts# of# other# passengers,# if# the# employees# of# the# common# carrier# could# have#
prevented#the#act#through#the#exercise#of#the#diligence#of#a#good#father#of#a#family.#In#the#present#case,#it#
is#clear#that#because#of#the#negligence#of#petitioner's#employees,#the#seizure#of#the#bus#by#Mananggolo#
and#his#men#was#made#possible.#

Despite#warning#by#the#Philippine#Constabulary#at#Cagayan#de#Oro#that#the#Maranaos#were#planning#to#
take#revenge#on#the#petitioner#by#burning#some#of#its#buses#and#the#assurance#of#petitioner's#operation#
manager,#Diosdado#Bravo,#that#the#necessary#precautions#would#be#taken,#petitioner#did#nothing#to#protect#
the#safety#of#its#passengers.#

Had#petitioner#and#its#employees#been#vigilant#they#would#not#have#failed#to#see#that#the#malefactors#had#
a#large#quantity#of#gasoline#with#them.#Under#the#circumstances,#simple#precautionary#measures#to#protect#
the#safety#of#passengers,#such#as#frisking#passengers#and#inspecting#their#baggages,#preferably#with#nond
intrusive# gadgets# such# as# metal# detectors,# before# allowing# them# on# board# could# have# been# employed#
without# violating# the# passenger's# constitutional# rights.# As# this# Court# amended# in# Gacal) v.) Philippine) Air)
Lines,)Inc.,#6#a#common#carrier#can#be#held#liable#for#failing#to#prevent#a#hijacking#by#frisking#passengers#and#
inspecting#their#baggages.#
From# the# foregoing,# it# is# evident# that# petitioner's# employees# failed# to# prevent# the# attack# on# one# of#
petitioner's#buses#because#they#did#not#exercise#the#diligence#of#a#good#father#of#a#family.#Hence,#petitioner#
should#be#held#liable#for#the#death#of#Atty.#Caorong.#

Second.#Seizure#of#Petitioner's#Bus#not#a#Case#of#Force#Majeure#

The#petitioner#contends#that#the#seizure#of#its#bus#by#the#armed#assailants#was#a#fortuitous#event#for#which#
it#could#not#be#held#liable.#

Art.# 1174# of# the# Civil# Code# defines# a# fortuitous# event# as# an# occurence# which# could# not# be# foreseen,# is#
inevitable.#In#Yobido)v.)Court)of)Appeals,#7#we#held#that#to#considered#as#force#majeure,#it#is#necessary#that#
(1)#the#cause#of#the#breach#of#the#obligation#must#be#independent#of#the#human#will;#(2)#the#event#must#be#
either#unforeseeable#or#unavoidable;#(3)#the#occurence#must#be#render#it#impossible#for#the#debtor#to#fulfill#
the#obligation#in#a#normal#manner;#and#(4)#the#obligor#must#be#free#of#participation#in,#or#aggravation#of,#
the#injury#to#the#creditor.#The#absence#of#any#of#the#requisites#mentioned#above#would#prevent#the#obligor#
from#being#excused#from#liability.#

Thus,#in#Vasquez)v.)Court)of)Appeals,#8#it#was#held#that#the#common#carrier#was#liable#for#its#failure#to#take#
the#necessary#precautions#against#an#approaching#typhoon,#of#which#it#was#warned,#resulting#in#the#loss#of#
the#lives#of#several#passengers.#The#event#was#forseeable,#and,#thus,#the#second#requisite#mentioned#above#
was# not# fulfilled.# This# ruling# applies# by# analogy# to# the# present# case.# Despite# the# report# of# PC# agent#
Generalao#that#the#Maranaos#were#going#to#attack#its#buses,#petitioner#took#no#steps#to#safeguard#the#lives#
and#properties#of#its#passengers.#The#seizure#of#the#bus#of#the#petitioner#was#foreseeable#and,#therefore,#
was#not#a#fortuitous#event#which#would#exempt#petitioner#from#liabilty.#

Petitioner#invokes#the#ruling#in#Pilapil)v.)Court)of)Appeals,#9#and#De)Guzman)v.)Court)of)Appeals,#10#in#support#
of#its#contention#that#the#seizure#of#its#bus#by#the#assailants#constitutes#force#majeure.#In)Pilapil)v.)Court)of)
Appeals,#11#it#was#held#that#a#common#carrier#is#not#liable#for#failing#to#install#window#grills#on#its#buses#to#
protect#the#passengers#from#injuries#cause#by#rocks#hurled#at#the#bus#by#lawless#elements.#On#the#other#
hand,#in#De)Guzman)v.)Court)of)Appeals,#12#it#was#ruled#that#a#common#carriers#is#not#responsible#for#goods#
lost#as#a#result#of#a#robbery#which#is#attended#by#grave#or#irresistable#threat,#violence,#or#force.#

It#is#clear#that#the#cases#of#Pilapil#and#De#Guzman#do#not#apply#to#the#prensent#case.#Art.#1755#of#the#Civil#
Code#provides#that#"a#common#carrier#is#bound#to#carry#the#passengers#as#far#as#human#care#and#foresight#
can#provide,#using#the#utmost#diligence#of#very#cautious#persons,#with#due#regard#for#all#the#circumstances."#
Thus,#we#held#in#Pilapil#and#De#Guzman#that#the#respondents#therein#were#not#negligent#in#failing#to#take#
special#precautions#against#threats#to#the#safety#of#passengers#which#could#not#be#foreseen,#such#as#tortious#
or#criminal#acts#of#third#persons.#In#the#present#case,#this#factor#of#unforeseeability#(the#second#requisite#
for#an#event#to#be#considered#force#majeure)#is#lacking.#As#already#stated,#despite#the#report#of#PC#agent#
Generalao# that# the# Maranaos# were# planning# to# burn# some# of# petitioner's# buses# and# the# assurance# of#
petitioner's#operation#manager#(Diosdado#Bravo)#that#the#necessary#precautions#would#be#taken,#nothing#
was#really#done#by#petitioner#to#protect#the#safety#of#passengers.#

Third.#Deceased#not#Guilty#of#Contributory#Negligence#

The#petitioner#contends#that#Atty.#Caorong#was#guilty#of#contributory#negligence#in#returning#to#the#bus#to#
retrieve#something.#But#Atty.#Caorong#did#not#act#recklessly.#It#should#be#pointed#out#that#the#intended#
targets#of#the#violence#were#petitioners#and#its#employees,#not#its#passengers.#The#assailant's#motive#was#
to#retaliate#for#the#loss#of#life#of#two#Maranaos#as#a#result#of#the#collision#between#petitioner's#bus#and#the#
jeepney#in#which#the#two#Maranaos#were#riding.#Mananggolo,#the#leader#of#the#group#which#had#hijacked#
the#bus,#ordered#the#passengers#to#get#off#the#bus#as#they#intended#to#burn#it#and#its#driver.#The#armed#
men#actually#allowed#Atty.#Caorong#to#retrieve#something#from#the#bus.#What#apparently#angered#them#
was#his#attempt#to#help#the#driver#of#the#bus#by#pleading#for#his#life.#He#was#playing#the#role#of#the#good#
Samaritan.#Certainly,#this#act#cannot#considered#an#act#of#negligence,#let#alone#recklessness.#

Fourth.#Petitioner#Liable#to#Private#Respaondents#for#Damages#

We#now#consider#the#question#of#damages#that#the#heirs#of#Atty.#Caorong,#private#respondents#herein,#are#
entitled#to#recover#from#the#petitioner.#

Indemnity)for)Death.#Art.#1764#of#the#Civil#Code,#in#relation#to#Art.#2206#thereof,#provides#for#the#payment#
of#indemnity#for#the#death#of#passengers#caused#by#the#breach#of#contract#of#carriage#by#a#common#carrier.#
Initially#fixed#in#Art.#2206#at#P3,000.00,#the#amount#of#the#said#indemnity#for#death#has#through#the#years#
been# gradually# increased# in# view# of# the# declining# value# of# the# peso.# It# is# presently# fixed# at#
P50,000.00.#13#Private#respondents#are#entitled#to#this#amount.#

Actual)Damages.)Art.#2199#provides#that#"except#as#provided#by#law#or#by#stipulation,#one#is#entitled#to#an#
adequate#compensation#only#for#such#pecuniary#loss#suffered#by#him#as#has#duly#proved."#The#trial#court#
found#that#the#private#respondents#spent#P30,000.00#for#the#wake#and#burial#of#Atty.#Caorong.# 14#Since#
petitioner# does# not# question# this# finding# of# the# trial# court,# it# is# liable# to# private# respondent# in# the# said#
amount#as#actual#damages.#

Moral)Damages.#Under#Art.#2206,#the#"spouse,#legitimate#and#illegitimate#descendants#and#ascendants#of#
the#deceased#may#demand#moral#damages#for#mental#anguish#by#reason#of#the#death#of#the#deceased."#
The#trial#court#found#that#private#respondent#Paulie#Caorong#suffered#pain#from#the#death#of#her#husband#
and#worry#on#how#to#provide#support#for#their#minor#children,#private#respondents#Yasser#King,#Rose#Heinni,#
and#Prince#Alexander.# 15#The#petitioner#likewise#does#not#question#this#finding#of#the#trial#court.#Thus,#in#
accordance# with# recent# decisions# of# this# Court,# 16# we# hold# that# the# petitioner# is# liable# to# the# private#
respondents#in#the#amount#of#P100,000.00#as#moral#damages#for#the#death#of#Atty.#Caorong.#

Exemplary) Damages.# Art.# 2232# provides# that# "in# contracts# and# quasidcontracts,# the# court# may# award#
exemplary#damages#if#the#defendant#acted#in#a#wanton,#fraudulent,#reckless,#oppressive,#or#malevolent#
reckless# manner."# In# the# present# case,# the# petitioner# acted# in# a# wanton# and# reckless# manner.# Despite#
warning#that#the#Maranaos#were#planning#to#take#revenge#against#the#petitioner#by#burning#some#of#its#
buses,#and#contary#to#the#assurance#made#by#its#operations#manager#that#the#necessary#precautions#would#
be# take,# the# petitioner# and# its# employees# did# nothing# to# protect# the# safety# of# passengers.# Under# the#
circumtances,#we#deem#it#reasonable#to#award#private#respondents#exemplary#damages#in#the#amount#of#
P100,000.00.17#

Attorney's) Fees.# Pursuant# to# Art.# 2208,# attorney's# fees# may# be# recovered# when,# as# in# the# instant# case,#
exemplary#damages#are#awarded.#In#the#recent#case#of#Sulpicio)Lines,)Inc.)v.)Court)of)Appeals,#18#we#held#an#
award#of#P50,000.00#as#attorney's#fees#to#be#reasonable.#Hence,#the#private#respondents#are#entitled#to#
attorney's#fees#in#that#amount.#
Compensation)for)Loss)of)Earning)Capacity.#Art.#1764#of#the#Civil#Code,#in#relation#to#Art.#2206#thereof,#
provides#that#in#addition#to#the#indemnity#for#death#arising#from#the#breach#of#contrtact#of#carriage#by#a#
common#carrier,#the#"defendant#shall#be#liable#for#the#loss#of#the#earning#capacity#of#the#deceased,#and#the#
indemnity#shall#be#paid#to#the#heirs#of#the#latter."#The#formula#established#in#decided#cases#for#computing#
net#earning#capacity#is#as#follows:19#

Gross#Necessary#

Net#Earning#=#Life#x#Annual#—#Living#

Capacity#Expectancy#Income#Expenses#

Life#expectancy#is#equivalent#to#two#thirds#(2/3)#multiplied#by#the#difference#of#eighty#(80)#and#the#age#of#
the#deceased.#20#Since#Atty.#Caorong#was#37#years#old#at#that#time#of#his#death,#21#he#had#a#life#expectancy#
of# 28# 2/3# more# years.22# His# projected# gross# annual# income,# computed# based# on# his# monthly# salary# of#
P11,385.00.# 23# as# a# lawyer# in# the# Department# of# Agrarian# Reform# at# the# time# of# his# death,# was#
P148,005.00.#24#Allowing#for#necessary#living#expenses#of#fifty#percent#(50%)#25#of#his#projected#gross#annual#
income,#his#total#earning#capacity#amounts#to#P2,121,404.90.#26#Hence,#the#petitioner#is#liable#to#the#private#
respondents#in#the#said#amount#as#a#compensation#for#loss#of#earning#capacity.#

WHEREFORE,# the# decision,# dated# July# 29,# 1994,# of# the# Court# of# Appeals# is# hereby# AFFIRMED# with# the#
MODIFICATION#that#petitioner#Fortune#Express,#Inc.#is#ordered#to#pay#the#following#amounts#to#private#
respondents#Paulie,#Yasser#King,#Rose#Heinni,#and#Prince#Alexander#Caorong:#

1.#death#indemnity#in#the#amount#of#fifty#thousand#pesos#(P50,000.00);#

2.#actual#damages#in#the#amount#of#thirty#thousand#pesos#(P30,000.00);#

3.#moral#damages#in#the#amount#of#one#hundred#thousand#pesos#(P100,000.00);#

4.#exemplary#damages#in#the#amount#of#one#hundred#thousand#pesos#(P100,000.00);#

5.#attorney's#fees#in#the#amount#of#fifty#thousand#pesos#(P50,000.00);#

6.# compensation# for# loss# of# earning# capacity# in# the# amount# of# two# million# one# hundred# twentydone#
thousand#four#hundred#four#pesos#and#ninety#centavos#(P2,121,404.90);#and#

7.#cost#of#suits.#

SO#ORDERED.#

$
 Gacal#v#Philippine#Airlines#
This#is#a,#petition#for#review#on#certiorari#of#the#decision#of#the#Court#of#First#Instance#of#South#Cotabato,#
Branch#1,#*#promulgated#on#August#26,#1980#dismissing#three#(3)#consolidated#cases#for#damages:#Civil#Case#
No.#1701,#Civil#Case#No.#1773#and#Civil#Case#No.#1797#(Rollo,#p.#35).#

The#facts,#as#found#by#respondent#court,#are#as#follows:#

Plaintiffs#Franklin#G.#Gacal#and#his#wife,#Corazon#M.#Gacal,#Bonifacio#S.#Anislag#and#his#wife,#
Mansueta# L.# Anislag,# and# the# late# Elma# de# Guzman,# were# then# passengers# boarding#
defendant's#BAC#1d11#at#Davao#Airport#for#a#flight#to#Manila,#not#knowing#that#on#the#same#
flight,# Macalinog,# Taurac# Pendatum# known# as# Commander# Zapata,# Nasser# Omar,# Liling#
Pusuan#Radia,#Dimantong#Dimarosing#and#Mike#Randa,#all#of#Marawi#City#and#members#of#
the# Moro# National# Liberation# Front# (MNLF),# were# their# codpassengers,# three# (3)# armed#
with#grenades,#two#(2)#with#.45#caliber#pistols,#and#one#with#a#.22#caliber#pistol.#Ten#(10)#
minutes# after# take# off# at# about# 2:30# in# the# afternoon,# the# hijackers# brandishing# their#
respective#firearms#announced#the#hijacking#of#the#aircraft#and#directed#its#pilot#to#fly#to#
Libya.#With#the#pilot#explaining#to#them#especially#to#its#leader,#Commander#Zapata,#of#the#
inherent#fuel#limitations#of#the#plane#and#that#they#are#not#rated#for#international#flights,#
the#hijackers#directed#the#pilot#to#fly#to#Sabah.#With#the#same#explanation,#they#relented#
and#directed#the#aircraft#to#land#at#Zamboanga#Airport,#Zamboanga#City#for#refueling.#The#
aircraft#landed#at#3:00#o'clock#in#the#afternoon#of#May#21,#1976#at#Zamboanga#Airport.#
When#the#plane#began#to#taxi#at#the#runway,#it#was#met#by#two#armored#cars#of#the#military#
with# machine# guns# pointed# at# the# plane,# and# it# stopped# there.# The# rebels# thru# its#
commander# demanded# that# a# DCdaircraft# take# them# to# Libya# with# the# President# of# the#
defendant# company# as# hostage# and# that# they# be# given# $375,000# and# six# (6)# armalites,#
otherwise#they#will#blow#up#the#plane#if#their#demands#will#not#be#met#by#the#government#
and#Philippine#Air#Lines.#Meanwhile,#the#passengers#were#not#served#any#food#nor#water#
and#it#was#only#on#May#23,#a#Sunday,#at#about#1:00#o'clock#in#the#afternoon#that#they#were#
served# 1/4# slice# of# a# sandwich# and# 1/10# cup# of# PAL# water.# After# that,# relatives# of# the#
hijackers#were#allowed#to#board#the#plane#but#immediately#after#they#alighted#therefrom,#
an#armored#car#bumped#the#stairs.#That#commenced#the#battle#between#the#military#and#
the# hijackers# which# led# ultimately# to# the# liberation# of# the# surviving# crew# and# the#
passengers,#with#the#final#score#of#ten#(10)#passengers#and#three#(3)#hijackers#dead#on#the#
spot#and#three#(3)#hijackers#captured.#

City# Fiscal# Franklin# G.# Gacal# was# unhurt.# Mrs.# Corazon# M.# Gacal# suffered# injuries# in# the#
course#of#her#jumping#out#of#the#plane#when#it#was#peppered#with#bullets#by#the#army#and#
after#two#(2)#hand#grenades#exploded#inside#the#plane.#She#was#hospitalized#at#General#
Santos# Doctors# Hospital,# General# Santos# City,# for# two# (2)# days,# spending# P245.60# for#
hospital# and# medical# expenses,# Assistant# City# Fiscal# Bonifacio# S.# Anislag# also# escaped#
unhurt#but#Mrs.#Anislag#suffered#a#fracture#at#the#radial#bone#of#her#left#elbow#for#which#
she#was#hospitalized#and#operated#on#at#the#San#Pedro#Hospital,#Davao#City,#and#therefore,#
at#Davao#Regional#Hospital,#Davao#City,#spending#P4,500.00.#Elma#de#Guzman#died#because#
of# that# battle.# Hence,# the# action# of# damages# instituted# by# the# plaintiffs# demanding# the#
following#damages,#to#wit:#
 Civil#Case#No.#1701#—#

City#Fiscal#Franklin#G.#Gacal#and#Mrs.#Corazon#M.#Gacal#—#actual#damages:#
P245.60# for# hospital# and# medical# expenses# of# Mrs# Gacal;# P8,995.00# for#
their#personal#belongings#which#were#lost#and#not#recovered;#P50,000.00#
each#for#moral#damages;#and#P5,000.00#for#attorney's#fees,#apart#from#the#
prayer#for#an#award#of#exemplary#damages#(Record,#pp.#4d6,#Civil#Case#No.#
1701).#

Civil#Case#No.#1773#—#

x#x#x###########x#x#x##########x#x#x#

Civil#Case#No.#1797#—#

xxx#xxx#xxx#

The#trial#court,#on#August#26,#1980,#dismissed#the#complaints#finding#that#all#the#damages#sustained#in#the#
premises#were#attributed#to)force)majeure.#

On#September#12,#1980#the#spouses#Franklin#G.#Gacal#and#Corazon#M.#Gacal,#plaintiffs#in#Civil#Case#No.#
1701,#filed#a#notice#of#appeal#with#the#lower#court#on#pure#questions#of#law#(Rollo,#p.#55)#and#the#petition#
for#review#on#certiorari#was#filed#with#this#Court#on#October#20,#1980#(Rollo,#p.#30).#

The#Court#gave#due#course#to#the#petition#(Rollo,#p.#147)#and#both#parties#filed#their#respective#briefs#but#
petitioner#failed#to#file#reply#brief#which#was#noted#by#the#Court#in#the#resolution#dated#May#3,#1982#(Rollo,#
p.#183).#
GWIN of the Respondent
Petitioners#alleged#that#the#main#cause#of#the#unfortunate#incident#is#the#gross,#wanton#and#inexcusable#
negligence#of#respondent#Airline#personnel#in#their#failure#to#frisk#the#passengers#adequately#in#order#to#
discover#hidden#weapons#in#the#bodies#of#the#six#(6)#hijackers.#They#claimed#that#despite#the#prevalence#of#
skyjacking,#PAL#did#not#use#a#metal#detector#which#is#the#most#effective#means#of#discovering#potential#
skyjackers#among#the#passengers#(Rollo,#pp.#6d7).#

Respondent#Airline#averred#that#in#the#performance#of#its#obligation#to#safely#transport#passengers#as#far#
as#human#care#and#foresight#can#provide,#it#has#exercised#the#utmost#diligence#of#a#very#cautious#person#
with#due#regard#to#all#circumstances,#but#the#security#checks#and#measures#and#surveillance#precautions#in#
all#flights,#including#the#inspection#of#baggages#and#cargo#and#frisking#of#passengers#at#the#Davao#Airport#
were#performed#and#rendered#solely#by#military#personnel#who#under#appropriate#authority#had#assumed#
exclusive#jurisdiction#over#the#same#in#all#airports#in#the#Philippines.#

Similarly,#the#negotiations#with#the#hijackers#were#a#purely#government#matter#and#a#military#operation,#
handled# by# and# subject# to# the# absolute# and# exclusive# jurisdiction# of# the# military# authorities.# Hence,# it#
concluded#that#the#accident#that#befell#RPdC1161#was#caused#by#fortuitous#event,)force)majeure#and#other#
causes#beyond#the#control#of#the#respondent#Airline.#
 The#determinative#issue#in#this#case#is#whether#or#not#hijacking#or#air#piracy#during#martial#law#and#under#
the#circumstances#obtaining#herein,#is#a#caso#fortuito#or)force#majeure#which#would#exempt#an#aircraft#from#
payment#of#damages#to#its#passengers#whose#lives#were#put#in#jeopardy#and#whose#personal#belongings#
were#lost#during#the#incident.#

Under#the#Civil#Code,#common#carriers#are#required#to#exercise#extraordinary#diligence#in#their#vigilance#
over#the#goods#and#for#the#safety#of#passengers#transported#by#them,#according#to#all#the#circumstances#of#
each#case#(Article#1733).#They#are#presumed#at#fault#or#to#have#acted#negligently#whenever#a#passenger#
dies#or#is#injured#(Philippine#Airlines,#Inc.#v.#National#Labor#Relations#Commission,#124#SCRA#583#[1983])#or#
for#the#loss,#destruction#or#deterioration#of#goods#in#cases#other#than#those#enumerated#in#Article#1734#of#
the#Civil#Code#(Eastern#Shipping#Lines,#Inc.#v.#Intermediate#Appellate#Court,#150#SCRA#463#[1987]).#

The#source#of#a#common#carrier's#legal#liability#is#the#contract#of#carriage,#and#by#entering#into#said#contract,#
it#binds#itself#to#carry#the#passengers#safely#as#far#as#human#care#and#foresight#can#provide.#There#is#breach#
of#this#obligation#if#it#fails#to#exert#extraordinary#diligence#according#to#all#the#circumstances#of#the#case#in#
exercise#of#the#utmost#diligence#of#a#very#cautious#person#(Isaac#v.#Ammen#Transportation#Co.,#101#Phil.#
1046#[1957];#Juntilla#v.#Fontanar,#136#SCRA#624#[1985]).#

It#is#the#duty#of#a#common#carrier#to#overcome#the#presumption#of#negligence#(Philippine#National#Railways#
v.#Court#of#Appeals,#139#SCRA#87#[1985])#and#it#must#be#shown#that#the#carrier#had#observed#the#required#
extraordinary#diligence#of#a#very#cautious#person#as#far#as#human#care#and#foresight#can#provide#or#that#
the#accident#was#caused#by#a#fortuitous#event#(Estrada#v.#Consolacion,#71#SCRA#523#[1976]).#Thus,#as#ruled#
by#this#Court,#no#person#shall#be#responsible#for#those#"events#which#could#not#be#foreseen#or#which#though#
foreseen#were#inevitable.#(Article#1174,#Civil#Code).#The#term#is#synonymous#with#caso)fortuito#(Lasam#v.#
Smith,#45#Phil.#657#[1924])#which#is#of#the#same#sense#as#"force)majeure"#(Words#and#Phrases#Permanent#
Edition,#Vol.#17,#p.#362).#

In# order# to# constitute# a# caso) fortuito) or) force) majeure# that# would# exempt# a# person# from# liability# under#
Article#1174#of#the#Civil#Code,#it#is#necessary#that#the#following#elements#must#concur:#(a)#the#cause#of#the#
THE GOLD:
Requirsites
breach#of#the#obligation#must#be#independent#of#the#human#will#(the#will#of#the#debtor#or#the#obligor);#(b)#
the# event# must# be# either# unforeseeable# or# unavoidable;# (c)# the# event# must# be# such# as# to# render# it#
impossible#for#the#debtor#to#fulfill#his#obligation#in#a#normal#manner;#and#(d)#the#debtor#must#be#free#from#
any#participation#in,#or#aggravation#of#the#injury#to#the#creditor#(Lasam#v.#Smith,#45#Phil.#657#[1924];#Austria#
v.#Court#of#Appeals,#39#SCRA#527#[1971];#Estrada#v.#Consolacion,#supra;#Vasquez#v.#Court#of#Appeals,#138#
SCRA#553#[1985];#Juan#F.#Nakpil#&#Sons#v.#Court#of#Appeals,#144#SCRA#596#[1986]).#Caso)fortuito)or)force)
majeure,# by# definition,# are# extraordinary# events# not# foreseeable# or# avoidable,# events# that# could# not# be#
foreseen,#or#which,#though#foreseen,#are#inevitable.#It#is,#therefore,#not#enough#that#the#event#should#not#
have#been#foreseen#or#anticipated,#as#is#commonly#believed,#but#it#must#be#one#impossible#to#foresee#or#
to#avoid.#The#mere#difficulty#to#foresee#the#happening#is#not#impossibility#to#foresee#the#same#(Republic#v.#
Luzon#Stevedoring#Corporation,#21#SCRA#279#[1967]).#

Applying#the#above#guidelines#to#the#case#at#bar,#the#failure#to#transport#petitioners#safely#from#Davao#to#
Manila#was#due#to#the#skyjacking#incident#staged#by#six#(6)#passengers#of#the#same#plane,#all#members#of#
the# Moro# National# Liberation# Front# (MNLF),# without# any# connection# with# private# respondent,# hence,#
independent#of#the#will#of#either#the#PAL#or#of#its#passengers.#

Under# normal# circumstances,# PAL# might# have# foreseen# the# skyjacking# incident# which# could# have# been#
avoided#had#there#been#a#more#thorough#frisking#of#passengers#and#inspection#of#baggages#as#authorized#
by#R.A.#No.#6235.#But#the#incident#in#question#occurred#during#Martial#Law#where#there#was#a#military#taked
over#of#airport#security#including#the#frisking#of#passengers#and#the#inspection#of#their#luggage#preparatory#
to# boarding# domestic# and# international# flights.# In# fact# military# takedover# was# specifically# announced# on#
October#20,#1973#by#General#Jose#L.#Rancudo,#Commanding#General#of#the#Philippine#Air#Force#in#a#letter#
to#Brig.#Gen.#Jesus#Singson,#then#Director#of#the#Civil#Aeronautics#Administration#(Rollo,#pp.#71d72)#later#
confirmed#shortly#before#the#hijacking#incident#of#May#21,#1976#by#Letter#of#Instruction#No.#399#issued#on#
April#28,#1976#(Rollo,#p.#72).#

Otherwise# stated,# these# events# rendered# it# impossible# for# PAL# to# perform# its# obligations# in# a# nominal#
manner#and#obviously#it#cannot#be#faulted#with#negligence#in#the#performance#of#duty#taken#over#by#the#
Armed#Forces#of#the#Philippines#to#the#exclusion#of#the#former.#

Finally,# there# is# no# dispute# that# the# fourth# element# has# also# been# satisfied.# Consequently# the# existence#
of) force) majeure# has# been# established# exempting# respondent# PAL# from# the# payment# of# damages# to# its#
passengers#who#suffered#death#or#injuries#in#their#persons#and#for#loss#of#their#baggages.#

PREMISES#CONSIDERED,#the#petition#is#hereby#DISMISSED#for#lack#of#merit#and#the#decision#of#the#Court#of#
First#Instance#of#South#Cotabato,#Branch#I#is#hereby#AFFIRMED.#

SO#ORDERED.#

$
$

Asian#Terminals#v#Simon#
Before# us# is# a# petition# for# review# on# certiorari# under# Rule# 45# of# the# 1997# Rules# of# Civil# Procedure,# as#
amended,#assailing#the#Decision1#dated#November#27,#2006#and#Resolution2#dated#March#23,#2007#of#the#
Court#of#Appeals#(CA)#in#CAdG.R.#CV#No.#71210.#

The#facts#are#as#follows:#

On#October#25,#1995,#Contiquincybunge#Export#Company#loaded#6,843.700#metric#tons#of#U.S.#Soybean#
Meal#in#Bulk#on#board#the#vessel#MN)"Sea#Dream"#at#the#Port#of#Darrow,#Louisiana,#U.S.A.,#for#delivery#to#
the# Port# of# Manila# to# respondent# Simon# Enterprises,# Inc.,# as# consignee.# When# the# vessel# arrived# at# the#
South#Harbor#in#Manila,#the#shipment#was#discharged#to#the#receiving#barges#of#petitioner#Asian#Terminals,#
Inc.#(ATI),#the#arrastre#operator.#Respondent#later#received#the#shipment#but#claimed#having#received#only#
6,825.144#metric#tons#of#U.S.#Soybean#Meal,#or#short#by#18.556#metric#tons,#which#is#estimated#to#be#worth#
US$7,100.16#or#₱186,743.20.3#

On#November#25,#1995,#Contiquincybunge#Export#Company#made#another#shipment#to#respondent#and#
allegedly#loaded#on#board#the#vessel#M/V#"Tern"#at#the#Port#of#Darrow,#Louisiana,#U.S.A.#3,300.000#metric#
tons#of#U.S.#Soybean#Meal#in#Bulk#for#delivery#to#respondent#at#the#Port#of#Manila.#The#carrier#issued#its#
clean#Berth#Term#Grain#Bill#of#Lading.4#

On# January# 25,# 1996,# the# carrier# docked# at# the# inner# Anchorage,# South# Harbor,# Manila.# The# subject#
shipment# was# discharged# to# the# receiving# barges# of# petitioner# ATI# and# received# by# respondent# which,#
however,#reported#receiving#only#3,100.137#metric#tons#instead#of#the#manifested#3,300.000#metric#tons#
of#shipment.#Respondent#filed#against#petitioner#ATI#and#the#carrier#a#claim#for#the#shortage#of#199.863#
metric#tons,#estimated#to#be#worth#US$79,848.86#or#₱2,100,025.00,#but#its#claim#was#denied.#

Thus,#on#December#3,#1996,#respondent#filed#with#the#Regional#Trial#Court#(RTC)#of#Manila#an#action#for#
damages5#against#the#unknown#owner#of#the#vessels#M/V#"Sea#Dream"#and#M/V#"Tern,"#its#local#agent#Interd
Asia# Marine# Transport,# Inc.,# and# petitioner# ATI# alleging# that# it# suffered# the# losses# through# the# fault# or#
negligence#of#the#said#defendants.#Respondent#sought#to#claim#damages#plus#attorney’s#fees#and#costs#of#
suit.#Its#claim#against#the#unknown#owner#of#the#vessel#M/V#"Sea#Dream,"#however,#was#later#settled#in#a#
Release#and#Quitclaim6#dated#June#9,#1998,#and#only#the#claims#against#the#unknown#owner#of#the#M/V#
"Tern,"#InterdAsia#Marine#Transport,#Inc.,#and#petitioner#ATI#remained.#

In# their# Answer,7# the# unknown# owner# of# the# vessel# M/V# "Tern"# and# its# local# agent# InterdAsia# Marine#
Transport,#Inc.,#prayed#for#the#dismissal#of#the#complaint#essentially#alleging#lack#of#cause#of#action#and#
prescription.#They#alleged#as#affirmative#defenses#the#following:#that#the#complaint#does#not#state#a#cause#
of#action;#that#plaintiff#and/or#defendants#are#not#the#real#partiesdindinterest;#that#the#cause#of#action#had#
already#prescribed#or#laches#had#set#in;#that#the#claim#should#have#been#filed#within#three#days#from#receipt#
of#the#cargo#pursuant#to#the#provisions#of#the#Code#of#Commerce;#that#the#defendant#could#no#longer#check#
the# veracity# of# plaintiff’s# claim# considering# that# the# claim# was# filed# eight# months# after# the# cargo# was#
discharged#from#the#vessel;#that#plaintiff#hired#its#own#barges#to#receive#the#cargo#and#hence,#any#damages#
or# losses# during# the# discharging# operations# were# for# plaintiff’s# account# and# responsibility;# that# the#
statement#of#facts#bears#no#remarks#on#any#shortdlanded#cargo;#that#the#draft#survey#report#indicates#that#
the#cargo#discharged#was#more#than#the#figures#appearing#in#the#bill#of#lading;#that#because#the#bill#of#lading#
states#that#the#goods#are#carried#on#a#"shipper’s#weight,#quantity#and#quality#unknown"#terms#and#on#"all#
terms,#conditions#and#exceptions#as#per#charter#party#dated#October#15,#1995,"#the#vessel#had#no#way#of#
knowing#the#actual#weight,#quantity,#and#quality#of#the#bulk#cargo#when#loaded#at#the#port#of#origin#and#
the#vessel#had#to#rely#on#the#shipper#for#such#information;#that#the#subject#shipment#was#discharged#in#
Manila# in# the# same# condition# and# quantity# as# when# loaded# at# the# port# of# loading;# that# defendants’#
responsibility#ceased#upon#discharge#from#the#ship’s#tackle;#that#the#damage#or#loss#was#due#to#the#inherent#
vice#or#defect#of#the#goods#or#to#the#insufficiency#of#packing#thereof#or#perils#or#dangers#or#accidents#of#the#
sea,#predshipment#damage#or#to#improper#handling#of#the#goods#by#plaintiff#or#its#representatives#after#
discharge#from#the#vessel,#for#which#defendants#cannot#be#made#liable;#that#damage/loss#occurred#while#
the#cargo#was#in#the#possession,#custody#or#control#of#plaintiff#or#its#representative,#or#due#to#plaintiff’s#
own#negligence#and#careless#actuations#in#the#handling#of#the#cargo;#that#the#loss#is#less#than#0.75%#of#the#
entire# cargo# and# assuming# arguendo# that# the# shortage# exists,# the# figure# is# well# within# the# accepted#
parameters#when#loading#this#type#of#bulk#cargo;#that#defendants#exercised#the#required#diligence#under#
the#law#in#the#performance#of#their#duties;#that#the#vessel#was#seaworthy#in#all#respects;#that#the#vessel#
went#straight#from#the#port#of#loading#to#Manila,#without#passing#through#any#intermediate#ports#so#there#
was#no#chance#for#any#loss#of#the#cargo;#the#plaintiff’s#claim#is#excessive,#grossly#overstated,#unreasonable#
and#a#mere#paper#loss#and#is#certainly#unsubstantiated#and#without#any#basis;#the#terms#and#conditions#of#
the#relevant#bill#of#lading#and#the#charter#party,#as#well#as#the#provisions#of#the#Carriage#of#Goods#by#Sea#
Act#and#existing#laws,#absolve#the#defendants#from#any#liability;#that#the#subject#shipment#was#received#in#
bulk#and#thus#defendant#carrier#has#no#knowledge#of#the#condition,#quality#and#quantity#of#the#cargo#at#the#
time#of#loading;#that#the#complaint#was#not#referred#to#the#arbitrators#pursuant#to#the#bill#of#lading;#that#
liability,#if#any,#should#not#exceed#the#CIF#value#of#the#lost#cargo,#or#the#limits#of#liability#set#forth#in#the#bill#
of#lading#and#the#charter#party.#As#counterclaim,#defendants#prayed#for#the#payment#of#attorney’s#fees#in#
the# amount# of# ₱220,000.# By# way# of# crossdclaim,# they# ask# for# reimbursement# from# their# coddefendant,#
petitioner#ATI,#in#the#event#that#they#are#held#liable#to#plaintiff.#

Petitioner# ATI# meanwhile# alleged# in# its# Answer8# that# it# exercised# the# required# diligence# in# handling# the#
subject#shipment.#It#moved#for#the#dismissal#of#the#complaint,#and#alleged#by#way#of#special#and#affirmative#
defense#that#plaintiff#has#no#valid#cause#of#action#against#petitioner#ATI;#that#the#cargo#was#completely#
discharged#from#the#vessel#M/V#"Tern"#to#the#receiving#barges#owned#or#hired#by#the#plaintiff;#and#that#
petitioner#ATI#exercised#the#required#diligence#in#handling#the#shipment.#By#way#of#counterclaim,#petitioner#
ATI# argued# that# plaintiff# should# shoulder# its# expenses# for# attorney’s# fees# in# the# amount# of# ₱20,000# as#
petitioner#ATI#was#constrained#to#engage#the#services#of#counsel#to#protect#its#interest.#

On# May# 10,# 2001,# the# RTC# of# Manila# rendered# a# Decision9# holding# petitioner# ATI# and# its# coddefendants#
solidarily#liable#to#respondent#for#damages#arising#from#the#shortage.#The#RTC#held:#

WHEREFORE,#premises#considered,#judgment#is#hereby#rendered#ordering#defendants#M/V#"Tern"#Interd
Asia# Marine# Transport,# Inc.# and# Asian# Terminal# Inc.# jointly# and# severally# liable# to# pay# plaintiff# Simon#
Enterprises#the#sum#of#₱2,286,259.20#with#legal#interest#from#the#date#the#complaint#was#filed#until#fully#
satisfied,#10%#of#the#amount#due#plaintiff#as#and#for#attorney’s#fees#plus#the#costs#of#suit.#

Defendants’#counterclaim#and#cross#claim#are#hereby#DISMISSED#for#lack#of#merit.#

SO#ORDERED.10#
The#trial#court#found#that#respondent#has#established#that#the#losses/shortages#were#incurred#prior#to#its#
receipt#of#the#goods.#As#such,#the#burden#shifted#to#the#carrier#to#prove#that#it#exercised#extraordinary#
diligence#as#required#by#law#to#prevent#the#loss,#destruction#or#deterioration.#

However,# the# trial# court# held# that# the# defendants# failed# to# prove# that# they# did# so.# The# trial# court# gave#
credence#to#the#testimony#of#Eduardo#Ragudo,#a#super#cargo#of#defendant#InterdAsia#Marine#Transport,#
Inc.,#who#admitted#that#there#were#spillages#or#overflow#down#to#the#spillage#saver.#The#trial#court#also#
noted#that#said#witness#also#declared#that#respondent’s#representative#was#not#allowed#to#sign#the#Master’s#
Certificate.#Such#declaration,#said#the#trial#court,#placed#petitioner#ATI#in#a#bad#light#and#weakened#its#stand.#

Not#satisfied,#the#unknown#owner#of#the#vessel#M/V#"Tern,"#InterdAsia#Marine#Transport,#Inc.#and#petitioner#
ATI#respectively#filed#appeals#to#the#CA.#In#their#petition,#the#unknown#owner#of#the#vessel#M/V#"Tern"#and#
InterdAsia#Marine#Transport,#Inc.#raised#the#question#of#whether#the#trial#court#erred#in#finding#that#they#
did#not#exercise#extraordinary#diligence#in#the#handling#of#the#goods.11#

On#the#other#hand,#petitioner#ATI#alleged#that:#

THE#COURT$A$QUO)COMMITTED#SERIOUS#AND#REVERSIBLE#ERROR#IN#HOLDING#DEFENDANT[d]APPELLANT#
ATI#SOLIDARILY#LIABLE#WITH#COdDEFENDANT#APPELLANT#INTERASIA#MARINE#TRANSPORT,#INC.#CONTRARY#
TO#THE#EVIDENCE#PRESENTED.12#

On#November#27,#2006,#the#CA#promulgated#the#assailed#Decision,#the#decretal#portion#of#which#reads:#

WHEREFORE,#the#appealed#Decision#dated#May#10,#2001#is#affirmed,#except#the#award#of#attorney’s#fees#
which#is#hereby#deleted.#

SO#ORDERED.13#

In#affirming#the#RTC#Decision,#the#CA#held#that#there#is#no#justification#to#disturb#the#factual#findings#of#the#
trial#court#which#are#entitled#to#respect#on#appeal#as#they#were#supported#by#substantial#evidence.#It#agreed#
with#the#findings#of#the#trial#court#that#the#unknown#owner#of#the#vessel#M/V#"Tern"#and#InterdAsia#Marine#
Transport,#Inc.#failed#to#establish#that#they#exercised#extraordinary#diligence#in#transporting#the#goods#or#
exercised#due#diligence#to#forestall#or#lessen#the#loss#as#provided#in#Article#174214#of#the#Civil#Code.#The#CA#
also#ruled#that#petitioner#ATI,#as#the#arrastre#operator,#should#be#held#jointly#and#severally#liable#with#the#
carrier# considering# that# petitioner# ATI’s# stevedores# were# under# the# direct# supervision# of# the# unknown#
owner#of#M/V#"Tern"#and#that#the#spillages#occurred#when#the#cargoes#were#being#unloaded#by#petitioner#
ATI’s#stevedores.#

Petitioner# ATI# filed# a# motion# for# reconsideration,15# but# the# CA# denied# its# motion# in# a# Resolution16dated#
March#23,#2007.#The#unknown#owner#of#the#vessel#M/V#"Tern"#and#InterdAsia#Marine#Transport,#Inc.#for#
their#part,#appealed#to#this#Court#via#a#petition#for#review#on#certiorari,#which#was#docketed#as#G.R.#No.#
177170.#Its#appeal,#however,#was#denied#by#this#Court#on#July#16,#2007#for#failure#to#sufficiently#show#any#
reversible#error#committed#by#the#CA#in#the#challenged#Decision#and#Resolution#as#to#warrant#the#exercise#
of#this#Court’s#discretionary#appellate#jurisdiction.#The#unknown#owner#of#M/V#"Tern"#and#InterdAsia#Marine#
Transport,# Inc.# sought# reconsideration# of# the# denial# but# their# motion# was# denied# by# the# Court# in# a#
Resolution#dated#October#17,#2007.17#
 Meanwhile,#on#April#20,#2007,#petitioner#ATI#filed#the#present#petition#raising#the#sole#issue#of#whether#the#
appellate#court#erred#in#affirming#the#decision#of#the#trial#court#holding#petitioner#ATI#solidarily#liable#with#
its#codefendants#for#the#shortage#incurred#in#the#shipment#of#the#goods#to#respondent.#

Petitioner#ATI#argues#that:#

1.#Respondent#failed#to#prove#that#the#subject#shipment#suffered#actual#loss/shortage#as#there#was#
no#competent#evidence#to#prove#that#it#actually#weighed#3,300#metric#tons#at#the#port#of#origin.#

2.#Stipulations#in#the#bill#of#lading#that#the#cargo#was#carried#on#a#"shipper’s#weight,#quantity#and#
quality#unknown"#is#not#contrary#to#public#policy.#Thus,#herein#petitioner#cannot#be#bound#by#the#
quantity#or#weight#of#the#cargo#stated#in#the#bill#of#lading.#

3.# Shortage/loss,# if# any,# may# have# been# due# to# the# inherent# nature# of# the# shipment# and# its#
Focus ani nga issue insufficient# packing# considering# that# the# subject# cargo# was# shipped# in# bulk# and# had# a# moisture#
Fortuitous? content#of#12.5%.#

4.# Respondent# failed# to# substantiate# its# claim# for# damages# as# no# competent# evidence# was#
presented#to#prove#the#same.1âwphi1#

5.#Respondent#has#not#presented#any#scintilla#of#evidence#showing#any#fault/negligence#on#the#part#
of#herein#petitioner.#

6.#Petitioner#ATI#should#be#entitled#to#its#counterclaim.18#

Respondent,#on#the#other#hand,#quotes#extensively#the#CA#decision#and#maintains#its#correctness.#

We#grant#the#petition.#

The#CA#erred#in#affirming#the#decision#of#the#trial#court#holding#petitioner#ATI#solidarily#liable#with#its#cod
defendants#for#the#shortage#incurred#in#the#shipment#of#the#goods#to#respondent.#

We# note# that# the# matters# raised# by# petitioner# ATI# involve# questions# of# fact# which# are# generally# not#
reviewable# in# a# petition# for# review# on# certiorari# under# Rule# 45# of# the# 1997# Rules# of# Civil# Procedure,# as#
amended,#as#the#Court#is#not#a#trier#of#facts.#Section#1#thereof#provides#that#"the#petition#x#x#x#shall#raise#
only#questions#of#law,#which#must#be#distinctly#set#forth."#

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.19#

The#welldentrenched#rule#in#our#jurisdiction#is#that#only#questions#of#law#may#be#entertained#by#this#Court#
in#a#petition#for#review#on#certiorari.#This#rule,#however,#is#not#ironclad#and#admits#certain#exceptions,#such#
as# when# (1)# the# conclusion# is# grounded# on# speculations,# surmises# or# conjectures;# (2)# the# inference# is#
manifestly#mistaken,#absurd#or#impossible;#(3)#there#is#grave#abuse#of#discretion;#(4)#the#judgment#is#based#
on#a#misapprehension#of#facts;#(5)#the#findings#of#fact#are#conflicting;#(6)#there#is#no#citation#of#specific#
evidence#on#which#the#factual#findings#are#based;#(7)#the#findings#of#absence#of#facts#are#contradicted#by#
the#presence#of#evidence#on#record;#(8)#the#findings#of#the#Court#of#Appeals#are#contrary#to#those#of#the#
trial#court;#(9)#the#Court#of#Appeals#manifestly#overlooked#certain#relevant#and#undisputed#facts#that,#if#
properly# considered,# would# justify# a# different# conclusion;# (10)# the# findings# of# the# Court# of# Appeals# are#
beyond#the#issues#of#the#case;#and#(11)#such#findings#are#contrary#to#the#admissions#of#both#parties.20#

After#a#careful#review#of#the#records,#we#find#justification#to#warrant#the#application#of#the#fourth#exception.#
The#CA#misapprehended#the#following#facts.#

First,) petitioner# ATI# is# correct# in# arguing# that# the# respondent# failed# to# prove# that# the# subject# shipment#
suffered# actual# shortage,# as# there# was# no# competent# evidence# to# prove# that# it# actually# weighed# 3,300#
metric#tons#at#the#port#of#origin.#

Though#it#is#true#that#common#carriers#are#presumed#to#have#been#at#fault#or#to#have#acted#negligently#if#
the#goods#transported#by#them#are#lost,#destroyed,#or#deteriorated,#and#that#the#common#carrier#must#
prove#that#it#exercised#extraordinary#diligence#in#order#to#overcome#the#presumption,21#the#plaintiff#must#
still,# before# the# burden# is# shifted# to# the# defendant,# prove# that# the# subject# shipment# suffered# actual#
shortage.#This#can#only#be#done#if#the#weight#of#the#shipment#at#the#port#of#origin#and#its#subsequent#weight#
at#the#port#of#arrival#have#been#proven#by#a#preponderance#of#evidence,#and#it#can#be#seen#that#the#former#
weight#is#considerably#greater#than#the#latter#weight,#taking#into#consideration#the#exceptions#provided#in#
Article#173422#of#the#Civil#Code.#

In#this#case,#respondent#failed#to#prove#that#the#subject#shipment#suffered#shortage,#for#it#was#not#able#to#
establish#that#the#subject#shipment#was#weighed#at#the#port#of#origin#at#Darrow,#Louisiana,#U.S.A.#and#that#
the#actual#weight#of#the#said#shipment#was#3,300#metric#tons.#

The#Berth#Term#Grain#Bill#of#Lading23#(Exhibit#"A"),#the#Proforma#Invoice24#(Exhibit#"B"),#and#the#Packing#
List25# (Exhibit# "C"),# being# used# by# respondent# to# prove# that# the# subject# shipment# weighed# 3,300# metric#
tons,#do#not,#in#fact,#help#its#cause.#The#Berth#Term#Grain#Bill#of#Lading#states#that#the#subject#shipment#
was#carried#with#the#qualification#"Shipper’s#weight,#quantity#and#quality#unknown,"#meaning#that#it#was#
transported#with#the#carrier#having#been#oblivious#of#the#weight,#quantity,#and#quality#of#the#cargo.#This#
interpretation#of#the#quoted#qualification#is#supported#by#Wallem)Philippines)Shipping,)Inc.#v.)Prudential)
Guarantee) &) Assurance,) Inc.,26# a# case# involving# an# analogous# stipulation# in# a# bill# of# lading,# wherein# the#
Supreme#Court#held#that:#

Indeed,#as#the#bill#of#lading#indicated#that#the#contract#of#carriage#was#under#a#"said#to#weigh"#clause,#the#
shipper# is# solely# responsible# for# the# loading# while# the# carrier# is# oblivious# of# the# contents# of# the#
shipment.#(Emphasis#supplied)#

Similarly,# International) Container) Terminal) Services,) Inc.# v.) Prudential) Guarantee) &) Assurance) Co.,)
Inc.,27#explains#the#meaning#of#clauses#analogous#to#"Shipper’s#weight,#quantity#and#quality#unknown"#in#
this#manner:#
This#means#that# the#shipper#was#solely#responsible#for#the#loading#of#the#container,#while#the#carrier#was#
oblivious#to#the#contents#of#the#shipment# x#x#x.#The#arrastre#operator#was,#like#any#ordinary#depositary,#
dutydbound#to#take#good#care#of#the#goods#received#from#the#vessel#and#to#turn#the#same#over#to#the#party#
entitled#to#their#possession,#subject)to)such)qualifications)as)may)have)validly)been)imposed)in)the)contract)
between)the)parties.)The#arrastre#operator#was#not#required#to#verify#the#contents#of#the#container#received#
and#to#compare#them#with#those#declared#by#the#shipper#because,#as#earlier#stated,#the#cargo#was#at#the#
shipper’s#load#and#count#x#x#x.#(Italics#in#the#original;#emphasis#supplied)#

Also,#Bankers)&)Manufacturers)Assurance)Corporation)v.)Court)of)Appeals28#elucidates#thus:#

The# recital# of# the# bill# of# lading# for# goods# thus# transported# [i.e.,# transported# in# sealed# containers# or#
"containerized"]#ordinarily#would#declare#"Said#to#Contain",# "Shipper’s#Load#and#Count",#"Full#Container#
Load",# and# the# amount# or# quantity# of# goods# in# the# container# in# a# particular# package# is# only# prima)
facie)evidence#of#the#amount#or#quantity#x#x#x.#

A#shipment#under#this#arrangement#is#not#inspected#or#inventoried#by#the#carrier#whose#duty#is# only#to#
transport#and#deliver#the#containers#in#the#same#condition#as#when#the#carrier#received#and#accepted#the#
containers#for#transport#x#x#x.#(Emphasis#supplied)#

Hence,#as#can#be#culled#from#the#abovedmentioned#cases,#the#weight#of#the#shipment#as#indicated#in#the#
bill#of#lading#is#not#conclusive#as#to#the#actual#weight#of#the#goods.#Consequently,#the#respondent#must#still#
prove#the#actual#weight#of#the#subject#shipment#at#the#time#it#was#loaded#at#the#port#of#origin#so#that#a#
conclusion#may#be#made#as#to#whether#there#was#indeed#a#shortage#for#which#petitioner#must#be#liable.#
This,#the#respondent#failed#to#do.#

The#Proforma#Invoice#militates#against#respondent’s#claim#that#the#subject#shipment#weighed#3,300#metric#
tons.# The# pertinent# portion# of# the# testimony# of# Mr.# Jose# Sarmiento,# respondent’s# Claims# Manager,# is#
narrated#below:#

Atty.# Rebano:# You# also# identified# a# while# ago,# Mr.# Witness# Exhibit# B,# the# invoice.# Why# does# it# state# as#
description#of#the#cargo#three#thousand#metric#tons#and#not#three#thousand#three#hundred?#

A:#Usually#there#is#a#contract#between#the#supplier#and#our#company#that#embodied#[sic]#in#the#letter#credit#
[sic]#that#they#have#the#option#to#ship#the#cargo#plus#or#minus#ten#percent#of#the#quantity.#

x#x#x#x#

Q:# So,#it#is#possible#for#the#shipper#to#ship#less#than#ten#percent#in#[sic]#the#quantity#stated#in#the#invoice#
and#it#will#still#be#a#valid#shipment.#Is#it#[sic]#correct?#

A:#It#[sic]#is#correct#but#we#must#be#properly#advised#and#the#commercial#invoice#should#indicate#how#much#
they#sent#to#us.29#(Emphasis#supplied)#

The#quoted#part#of#Mr.#Sarmiento’s#testimony#not#only#shows#uncertainty#as#to#the#actual#weight#of#the#
shipment,#it#also#shows#that#assuming#respondent#did#order#3,300#metric#tons#of#U.S.#Soybean#Meal#from#
Contiquincybunge#Export#Company,#and#also#assuming#that#it#only#received#3,100.137#metric#tons,#such#
volume#would#still#be#a#valid#shipment#because#it#is#well#within#the#10%#allowable#shortage.#Note#that#Mr.#
Sarmiento#himself#mentioned#that#the#supplier#has#the#option#to#"ship#the#cargo#plus#or#minus#ten#percent#
of#the#quantity."30#

Notably#also,#the#genuineness#and#the#due#execution#of#the#Packing#List,#the#Berth#Term#Grain#Bill#of#Lading,#
and#the#Proforma#Invoice,#were#not#established.#

Wallem)Philippines)Shipping,)Inc.,31#is#instructive#on#this#matter:#

We# find# that# the# Court# of# Appeals# erred# in# finding# that# a# shortage# had# taken# place.# Josephine# Suarez,#
Prudential’s# claims# processor,# merely# identified# the# papers# submitted# to# her# in# connection# with# GMC’s#
claim#(Bill#of#Lading#BEDI/1#(Exh.#"B"),#Commercial#Invoice#No.#1401#issued#by#Toepfer#International#Asia#
Pte,#Ltd.#(Exh.#"C"),#SGS#Certificate#of#Quality#(Exh.#"Fd1"),#and#SGS#Certificate#of#Weight#(Exh.#"Fd3")).# Ms.#
Suarez#had#no#personal#knowledge#of#the#contents#of#the#said#documents#and#could#only#surmise#as#to#the#
actual#weight#of#the#cargo#loaded#on#M/V#Gao)Yang)x#x#x.#

x#x#x#x#

Ms.# Suarez’s# testimony# regarding# the# contents# of# the# documents# is# thus# hearsay,# based# as# it# is# on# the#
knowledge#of#another#person#not#presented#on#the#witness#stand.#

Nor#has#the#genuineness#and#due#execution#of#these#documents#been#established.#In#the#absence#of#clear,#
convincing,#and#competent#evidence#to#prove#that#the#shipment#indeed#weighed#4,415.35#metric#tons#at#
the#port#of#origin#when#it#was#loaded#on#the#M/V#Gao)Yang,#it#cannot#be#determined#whether#there#was#a#
shortage#of#the#shipment#upon#its#arrival#in#Batangas.#(Emphasis#supplied)#

As#in#the#present#case,#Mr.#Sarmiento#merely#identified#the#three#abovedmentioned#exhibits,#but#he#had#no#
personal#knowledge#of#the#weight#of#the#subject#shipment#when#it#was#loaded#onto#the#M/V#"Tern"#at#the#
port#of#origin.#His#testimony#as#regards#the#weight#of#the#subject#shipment#as#described#in#Exhibits#"A,"#"B,"#
and#"C"#must#then#be#considered#as#hearsay,32#for#it#was#based#on#the#knowledge#of#a#person#who#was#not#
presented#during#the#trial#in#the#RTC.#

The#presumption#that#the#Berth#Term#Grain#Bill#of#Lading#serves#as#prima)facie)evidence#of#the#weight#of#
the#cargo#has#been#rebutted,#there#being#doubt#as#to#the#weight#of#the#cargo#at#the#time#it#was#loaded#at#
the#port#of#origin.#Further,#the#fact#that#the#cargo#was#shipped#with#the#arrangement#"Shipper’s#weight,#
quantity#and#quality#unknown,"#indeed#means#that#the#weight#of#the#cargo#could#not#be#determined#using#
as#basis#the#figures#written#on#the#Berth#Term#Grain#Bill#of#Lading.#This#is#in#line#with#Malayan)Insurance)
Co.,)Inc.)v.)Jardine)Davies)Transport)Services,)Inc.,33#where#we#said:#

The# presumption# that# the# bill# of# lading,# which# petitioner# relies# upon# to# support# its# claim# for#
restitution,# constitutes#prima)facie)evidence#of#the#goods# therein#described#was#correctly#deemed#by#the#
appellate#court#to#have#been#rebutted#in#light#of#abundant#evidence#casting#doubts#on#its#veracity.#

That#MV)Hoegh)undertook,#under#the#bill#of#lading,#to#transport#6,599.23#MT#of#yellow#crude#sulphur#on#a#
"said#to#weigh"#basis#is#not#disputed.#Under#such#clause,#the#shipper#is#solely#responsible#for#the#loading#of#
the# cargo# while# the# carrier# is# oblivious# of# the# contents# of# the# shipment.# Nobody# really# knows#
the#actual)weight#of#the#cargo#inasmuch#as#what#is#written#on#the#bill#of#lading,#as#well#as#on#the#manifest,#
is#based#solely#on#the#shipper’s#declaration.#
The#bill#of#lading#carried#an#added#clause#–#the#shipment’s#weight,#measure,#quantity,#quality,#condition,#
contents# and# value# unknown.# Evidently,# the# weight# of# the# cargo# could# not# be# gauged# from# the# bill# of#
lading.#(Italics#in#the#original;#emphasis#supplied)#

The#respondent#having#failed#to#present#evidence#to#prove#the#actual#weight#of#the#subject#shipment#when#
it#was#loaded#onto#the#M/V#"Tern,"#its#cause#of#action#must#then#fail#because#it#cannot#prove#the#shortage#
that#it#was#alleging.#Indeed,#if#the#claimant#cannot#definitively#establish#the#weight#of#the#subject#shipment#
at#the#point#of#origin,#the#fact#of#shortage#or#loss#cannot#be#ascertained.#The#claimant#then#has#no#basis#for#
claiming# damages# resulting# from# an# alleged# shortage.# Again,# Malayan) Insurance) Co.,) Inc.,34# provides#
jurisprudential#basis:#

In#the#absence#of#clear,#convincing#and#competent#evidence#to#prove#that#the#cargo#indeed#weighed,#albeit#
the#Bill#of#Lading#qualified#it#by#the#phrase#"said#to#weigh,"# 6,599.23#MT#at#the#port#of#origin#when#it#was#
loaded# onto#the#MV)Hoegh,# the#fact#of#loss# or#shortage#in#the#cargo#upon#its#arrival#in#Manila# cannot#be#
definitively#established.#The#legal#basis#for#attributing#liability#to#either#of#the#respondents#is#thus#sorely#
wanting.#(Emphasis#supplied)#

Second,#as#correctly#asserted#by#petitioner#ATI,#the#shortage,#if#any,#may#have#been#due#to#the#inherent#
nature# of# the# subject# shipment# or# its# packaging# since# the# subject# cargo# was# shipped# in# bulk# and# had# a#
moisture#content#of#12.5%.#

It#should#be#noted#that#the#shortage#being#claimed#by#the#respondent#is#minimal,#and#is#an#indication#that#
it# could# be# due# to# consolidation# or# settlement# of# the# subject# shipment,# as# accurately# observed# by# the#
petitioner.#A#Kansas#State#University#study#on#the#handling#and#storage#of#soybeans#and#soybean#meal35#is#
instructive#on#this#matter.#Pertinent#portions#of#the#study#reads:#

Soybean#meal#is#difficult#to#handle#because#of#poor#flow#ability#and#bridging#characteristics.#Soybean#meal#
tends#to#settle#or#consolidate#over#time.#This#phenomenon#occurs#in#most#granular#materials#and#becomes#
more#severe#with#increased#moisture,#time#and#small#particle#size#x#x#x.#

x#x#x#x#

Moisture# is# perhaps# the# most# important# single# factor# affecting# storage# of# soybeans# and# soybean#
meal.#Soybeans#contain#moisture#ranging#from#12%#to#15%#(wet#basis)#at#harvest#time#x#x#x.#

x#x#x#x#

Soybeans# and# soybean# meal# are# hygroscopic# materials# and# will# either# lose# (desorb)# or# gain# (adsorb)#
moisture# from# the# surrounding# air.# The# moisture# level# reached# by# a# product# at# a# given# constant#
temperature# and# equilibrium# relative# humidity# (ERH)# is# its# equilibrium# moisture# content# (EMC)# x# x# x.#
(Emphasis#supplied)#

As#indicated#in#the#Proforma#Invoice#mentioned#above,#the#moisture#content#of#the#subject#shipment#was#
12.5%.#Taking#into#consideration#the#phenomena#of#desorption,#the#change#in#temperature#surrounding#
the# Soybean# Meal# from# the# time# it# left# wintertime# Darrow,# Louisiana,# U.S.A.# and# the# time# it# arrived# in#
Manila,#and#the#fact#that#the#voyage#of#the#subject#cargo#from#the#point#of#loading#to#the#point#of#unloading#
was#36#days,#the#shipment#could#have#definitely#lost#weight,#corresponding#to#the#amount#of#moisture#it#
lost#during#transit.#

The# conclusion# that# the# subject# shipment# lost# weight# in# transit# is# bolstered# by# the# testimony# of# Mr.#
Fernando# Perez,# a# Cargo# Surveyor# of# L.J.# Del# Pan.# The# services# of# Mr.# Perez# were# requested# by#
respondent.36#Mr.#Perez#testified#that#it#was#possible#for#the#subject#shipment#to#have#lost#weight#during#
the# 36dday# voyage,# as# it# was# wintertime# when# M/V# "Tern"# left# the# United# States# and# the# climate# was#
warmer# when# it# reached# the# Philippines;# hence# the# moisture# level# of# the# Soybean# Meal# could# have#
changed.37#Moreover,#Mr.#Perez#himself#confirmed,#by#answering#a#question#propounded#by#the#RTC,#that#
loss#of#weight#of#the#subject#cargo#cannot#be#avoided#because#of#the#shift#in#temperature#from#the#colder#
United#States#weather#to#the#warmer#Philippine#climate.38#

More# importantly,# the# 199.863# metricdton# shortage# that# respondent# alleges# is# a# minimal# 6.05%# of# the#
weight#of#the#entire#Soy#Bean#Meal#shipment.#Taking#into#consideration#the#previously#mentioned#option#
of#the#shipper#to#ship#10%#more#or#less#than#the#contracted#shipment,#and#the#fact#that#the#alleged#shortage#
is#only#6.05%#of#the#total#quantity#of#3,300#metric#tons,#the#alleged#percentage#loss#clearly#does#not#exceed#
the#allowable#10%#allowance#for#loss,#as#correctly#argued#by#petitioner.#The#alleged#loss,#if#any,#not#having#
exceeded#the#allowable#percentage#of#shortage,#the#respondent#then#has#no#cause#of#action#to#claim#for#
shortages.#

Third,) we#agree#with#the#petitioner#ATI#that#respondent#has#not#proven#any#negligence#on#the#part#of#the#
former.#

As#petitioner#ATI#pointed#out,#a#reading#of#the#Survey#Report#of#Del#Pan#Surveyors39#(Exhibits#"D"#to#"Dd4"#
of#respondent)#would#not#show#any#untoward#incident#or#negligence#on#the#part#of#petitioner#ATI#during#
the#discharging#operations.#

Also,#a#reading#of#Exhibits#"D",#"Dd1",#and#"Dd2"#would#show#that#the#methods#used#in#determining#whether#
there#was#a#shortage#are#not#accurate.#

Respondent#relied#on#the#Survey#Reports#of#Del#Pan#Surveyors#to#prove#that#the#subject#shipment#suffered#
loss.#The#conclusion#that#there#was#a#shortage#arose#from#an#evaluation#of#the#weight#of#the#cargo#using#
the# barge# displacement# method.# This# is# a# type# of# draught# survey,# which# is# a# method# of# cargo# weight#
determination# by# ship’s# displacement# calculations.40# The# basic# principle# upon# which# the# draught# survey#
methodology#is#based#is#the#Principle#of#Archimedes,#i.e.,)a#vessel#when#floating#in#water,#will#displace#a#
weight#of#water#equal#to#its#own#weight.41#It#then#follows#that#if#a#weight#of#cargo#is#loaded#on#(or#unloaded#
from)#a#vessel#freely#floating#in#water,#then#the#vessel#will#sink#(or#float)#into#the#water#until#the#total#weight#
of#water#displaced#is#equal#to#the#original#weight#of#the#vessel,#plus#(or#minus)#the#cargo#which#has#been#
loaded#(or#unloaded)#and#plus#(or#minus)#density#variation#of#the#water#between#the#starting#survey#(first#
measurement)#and#the#finishing#survey#(second#measurement).42#It#can#be#seen#that#this#method#does#not#
entail#the#weighing#of#the#cargo#itself,#but#as#correctly#stated#by#the#petitioner,#the#weight#of#the#shipment#
is#being#measured#by#mere#estimation#of#the#water#displaced#by#the#barges#before#and#after#the#cargo#is#
unloaded#from#the#said#barges.#

In#addition,#the#fact#that#the#measurements#were#done#by#Del#Pan#Surveyors#in#prevailing#slight#to#slightly#
rough# sea# condition43# supports# the# conclusion# that# the# resulting# measurement# may# not# be# accurate.# A#
United# Nations# study# on# draught# surveys44# in# fact# states# that# the# accuracy# of# draught# surveys# will# be#
dependent#upon#several#factors,#one#of#which#is#the#weather#and#seas#condition#in#the#harbor.#

Also,#it#can#be#seen#in#respondent’s#own#Exhibit#"Dd1"#that#the#actual#weight#of#the#cargo#was#established#
by#weighing#20%#of#the#cargo.#Though#we#recognize#the#practicality#of#establishing#cargo#weight#through#
random# sampling,# we# note# the# discrepancy# in# the# weights# used# in# the# determination# of# the# alleged#
shortage.#

Exhibit# "Dd1"# of# respondent# states# that# the# average# weight# of# each# bag# is# 52# kilos.# A# total# of# 63,391#
bags45#were#discharged#from#the#barges,#and#the#tare#weight46#was#established#at#0.0950#kilos.47#Therefore,#
if#one#were#to#multiply#52#kilos#per#bag#by#63,391#bags#and#deduct#the#tare#weight#of#0.0950#kilos#multiplied#
by#63,391#bags,#the#result#would#be#3,290,309.65#kilos,#or#3,290.310#metric#tons.#This#would#mean#that#the#
shortage#was#only#9.69#metric#tons,#if#we#suppose#that#respondent#was#able#to#establish#that#the#shipment#
actually#weighed#3,300#metric#tons#at#the#port#of#loading.#

However,#the#computation#in#Exhibit#"Dd2"#would#show#that#Del#Pan#Surveyors#inexplicably#used#49#kilos#as#
the#weight#per#bag,#instead#of#52#kilos,#therefore#resulting#in#the#total#net#weight#of#3,100,137#kilos#or#
3,100.137#metric#tons.#This#was#the#figure#used#as#basis#for#respondent's#conclusion#that#there#is#a#shortage#
of#199.863#metric#tons.48#

These#discrepancies#only#lend#credence#to#petitioner#ATI's#assertion#that#the#weighing#methods#respondent#
used#as#bases#are#unreliable#and#should#not#be#completely#relied#upon.#

Considering# that# respondent# was# not# able# to# establish# conclusively# that# the# subject# shipment# weighed#
3,300# metric# tons# at# the# port# of# loading,# and# that# it# cannot# therefore# be# concluded# that# there# was# a#
shortage#for#which#petitioner#should#be#responsible;#bearing#in#mind#that#the#subject#shipment#most#likely#
lost#weight#in#transit#due#to#the#inherent#nature#of#Soya#Bean#Meal;#assuming#that#the#shipment#lost#weight#
in#transit#due#to#desorption,#the#shortage#of#199.863#metric#tons#that#respondent#alleges#is#a#minimal#6.05%#
of#the#weight#of#the#entire#shipment,#which#is#within#the#allowable#10%#allowance#for#loss;#and#noting#that#
the# respondent# was# not# able# to# show# negligence# on# the# part# of# the# petitioner# and# that# the# weighing#
methods#which#respondent#relied#upon#to#establish#the#shortage#it#alleges#is#inaccurate,#respondent#cannot#
fairly#claim#damages#against#petitioner#for#the#subject#shipment's#alleged#shortage.#

WHEREFORE,#the#petition#for#review#on#certiorari#is#GRANTED.#The#Decision#dated#November#27,#2006#and#
Resolution#dated#March#23,#2007#of#the#Court#of#Appeals#in#CAdG.R.#CV#No.#71210#are#REVERSED#AND#SET#
ASIDE# insofar# as# petitioner# Asian# Terminals,# Inc.# is# concerned.# Needless# to# add,# the# complaint# against#
petitioner#docketed#as#RTC#Manila#Civil#Case#No.#96d81101#is#ordered#DISMISSED.#

#
#

Southern#Lines#v#Court#of#Appeals#
This#is#a#petition#to#review#on#certiorari#the#decision#of#the#Court#of#Appeals#in#CAdG.R.#No.#15579dR#affirming#
that#of#the#Court#of#First#Instance#of#Iloilo#which#sentenced#petitioner#Southern#Lines,#Inc.#to#pay#respondent#
City#of#Iloilo#the#amount#of#P4,931.41.#

Sometime#in#1948,#the#City#of#Iloilo#requisitioned#for#rice#from#the#National#Rice#and#Corn#Corporation#(hereafter#
referred#to#as#NARIC)#in#Manila.#On#August#24#of#the#same#year,#NARIC,#pursuant#to#the#order,#shipped#1,726#
sacks#of#rice#consigned#to#the#City#of#Iloilo#on#board#the#SS#"General#Wright"#belonging#to#the#Southern#Lines,#
Inc.#Each#sack#of#rice#weighed#75#kilos#and#the#entire#shipment#as#indicated#in#the#bill#of#lading#had#a#total#weight#
of#129,450#kilos.#According#to#the#bill#of#lading,#the#cost#of#the#shipment#was#P63,115.50#itemized#and#computed#
as#follows:#.#

Unit#Price#per#bag#P36.25# P62,567.50#

Handling#at#P0.13#per#bag# 224.38#

Trucking#at#P2.50#per#bag# 323.62#

#
T#o#t#a#l#.#.#.#.#.#..#.#.#.#.# 63,115.50#

On#September#3,#1948,#the#City#of#Iloilo#received#the#shipment#and#paid#the#amount#of#P63,115.50.#However,#it#
was#noted#that#the#foot#of#the#bill#of#lading#that#the#City#of#Iloilo#'Received#the#above#mentioned#merchandise#
apparently#in#same#condition#as#when#shipped,#save#as#noted#below:#actually#received#1685#sacks#with#a#gross#
weight# of# 116,131# kilos# upon# actual# weighing.# Total# shortage# ascertained# 13,319# kilos."# The# shortage# was#
equivalent#to#41#sacks#of#rice#with#a#net#weight#of#13,319#kilos,#the#proportionate#value#of#which#was#P6,486.35.#

On#February#14,#1951#the#City#of#Iloilo#filed#a#complaint#in#the#Court#of#First#Instance#of#Iloilo#against#NARIC#and#
the#Southern#Lines,#Inc.#for#the#recovery#of#the#amount#of#P6,486.35#representing#the#value#of#the#shortage#of#
the#shipment#of#rice.#After#trial,#the#lower#court#absolved#NARIC#from#the#complaint,#but#sentenced#the#Southern#
Lines,#Inc.#to#pay#the#amount#of#P4,931.41#which#is#the#difference#between#the#sum#of#P6,486.35#and#P1,554.94#
representing#the#latter's#counterclaim#for#handling#and#freight.#

The#Southern#Lines,#Inc.#appealed#to#the#Court#of#Appeals#which#affirmed#the#judgment#of#the#trial#court.#Hence,#
this#petition#for#review.#

The# only# question# to# be# determined# in# this# petition# is# whether# or# not# the# defendantdcarrier,# the# herein#
petitioner,#is#liable#for#the#loss#or#shortage#of#the#rice#shipped.#

Article#361#of#the#Code#of#Commerce#provides:#.#

ART.#361.#—#The#merchandise#shall#be#transported#at#the#risk#and#venture#of#the#shipper,#if#the#contrary#
has#not#been#expressly#stipulated.#
 As# a# consequence,# all# the# losses# and# deteriorations# which# the# goods# may# suffer# during# the#
transportation#by#reason#of#fortuitous#event,#force#majeure,#or#the#inherent#nature#and#defect#of#the#
goods,#shall#be#for#the#account#and#risk#of#the#shipper. # 1äwphï1.ñët

Proof#of#these#accidents#is#incumbent#upon#the#carrier.#

Article#362#of#the#same#Code#provides:#.#

ART.# 362.# —# Nevertheless,# the# carrier# shall# be# liable# for# the# losses# and# damages# resulting# from# the#
causes#mentioned#in#the#preceding#article#if#it#is#proved,#as#against#him,#that#they#arose#through#his#
negligence#or#by#reason#of#his#having#failed#to#take#the#precautions#which#usage#his#establisbed#among#
careful#persons,#unless#the#shipper#has#committed#fraud#in#the#bill#of#lading,#representing#the#goods#to#
be#of#a#kind#or#quality#different#from#what#they#really#were.#

If,#notwithstanding#the#precautions#referred#to#in#this#article,#the#goods#transported#run#the#risk#of#being#
lost,# on# account# of# their# nature# or# by# reason# of# unavoidable# accident,# there# being# no# time# for# their#
owners#to#dispose#of#them,#the#carrier#may#proceed#to#sell#them,#placing#them#for#this#purpose#at#the#
disposal#of#the#judicial#authority#or#of#the#officials#designated#by#special#provisions.#

Under#the#provisions#of#Article#361,#the#defendantdcarrier#in#order#to#free#itself#from#liability,#was#only#obliged#
to#prove#that#the#damages#suffered#by#the#goods#were#"by#virtue#of#the#nature#or#defect#of#the#articles."#Under#
the#provisions#of#Article#362,#the#plaintiff,#in#order#to#hold#the#defendant#liable,#was#obliged#to#prove#that#the#
damages#to#the#goods#by#virtue#of#their#nature,#occurred#on#account#of#its#negligence#or#because#the#defendant#
did#not#take#the#precaution#adopted#by#careful#persons.#(Government#v.#Ynchausti#&#Co.,#40#Phil.#219,#223).#

Petitioner#claims#exemption#from#liability#by#contending#that#the#shortage#in#the#shipment#of#rice#was#due#to#
such#factors#as#the#shrinkage,#leakage#or#spillage#of#the#rice#on#account#of#the#bad#condition#of#the#sacks#at#the#
time#it#received#the#same#and#the#negligence#of#the#agents#of#respondent#City#of#Iloilo#in#receiving#the#shipment.#
The# contention# is# untenable,# for,# if# the# fact# of# improper# packing# is# known# to# the# carrier# or# his# servants,# or#
apparent#upon#ordinary#observation,#but#it#accepts#the#goods#notwithstanding#such#condition,#it#is#not#relieved#
of#liability#for#loss#or#injury#resulting#thereform.#(9#Am#Jur.#869.)#Furthermore,#according#to#the#Court#of#Appeals,#
"appellant#(petitioner)#itself#frankly#admitted#that#the#strings#that#tied#the#bags#of#rice#were#broken;#some#bags#
were#with#holes#and#plenty#of#rice#were#spilled#inside#the#hull#of#the#boat,#and#that#the#personnel#of#the#boat#
collected# no# less# than# 26# sacks# of# rice# which# they# had# distributed# among# themselves."# This# finding,# which# is#
binding#upon#this#Court,#shows#that#the#shortage#resulted#from#the#negligence#of#petitioner.#

Invoking#the#provisions#of#Article#366#of#the#Code#of#Commerce#and#those#of#the#bill#of#lading,#petitioner#further#
contends#that#respondent#is#precluded#from#filing#an#action#for#damages#on#account#of#its#failure#to#present#a#
claim#within#24#hours#from#receipt#of#the#shipment.#It#also#cites#the#cases#of#Government)v.)Ynchausti)&)Co.,#24#
Phil.#315#and#Triton)Insurance)Co.)v.)Jose,#33#Phil.#194,#ruling#to#the#effect#that#the#requirement#that#the#claim#
for#damages#must#be#made#within#24#hours#from#delivery#is#a#condition#precedent#to#the#accrual#of#the#right#of#
action#to#recover#damages.#These#two#cases#abovedcited#are#not#applicable#to#the#case#at#bar.#In#the#first#cited#
case,#the#plaintiff#never#presented#any#claim#at#all#before#filing#the#action.#In#the#second#case,#there#was#payment#
of#the#transportation#charges#which#precludes#the#presentation#of#any#claim#against#the#carrier.#(See#Article#366,#
Code#of#Commerce.)#It#is#significant#to#note#that#in#the#American#case#of#Hoye)v.)Pennsylvania)Railroad)Co.,#13#
Ann.#Case.#414,#it#has#been#said:#.#

...#"It#has#been#held#that#a#stipulation#in#the#contract#of#shipment#requiring#the#owner#of#the#goods#to#
present#a#notice#of#his#claim#to#the#carrier#within#a#specified#time#after#the#goods#have#arrived#at#their#
 destination#is#in#the#nature#of#a#condition#precedent#to#the#owner's#right#to#enforce#a#recovery,#that#he#
must#show#in#the#first#instance#that#be#has#complied#with#the#condition,#or#that#the#circumstances#were#
such#that#to#have#complied#with#it#would#have#required#him#to#do#an#unreasonable#thing.#The#weight#of#
authority,#however,#sustains#the#view#that#such#a#stipulation#is#more#in#the#nature#of#a#limitation#upon#
the#owner's#right#to#recovery,#and#that#the#burden#of#proof#is#accordingly#on#the#carrier#to#show#that#
the#limitation#was#reasonable#and#in#proper#form#or#within#the#time#stated."#(Hutchinson#on#Carrier,#3d#
ed.,#par.#44)#Emphasis#supplied.#

In#the#case#at#bar,#the#record#shows#that#petitioner#failed#to#plead#this#defense#in#its#answer#to#respondent's#
complaint#and,#therefore,#the#same#is#deemed#waived#(Section#10,#Rule#9,#Rules#of#Court),#and#cannot#be#raised#
for#the#first#time#at#the#trial#or#on#appeal.#(Maxilom#v.#Tabotabo,#9#Phil.#390.)#Moreover,#as#the#Court#of#Appeals#
has#said:#.#

...#the#records#reveal#that#the#appellee#(respondent)#filed#the#present#action,#within#a#reasonable#time#
after#the#short#delivery#in#the#shipment#of#the#rice#was#made.#It#should#be#recalled#that#the#present#
action#is#one#for#the#refund#of#the#amount#paid#in#excess,#and#not#for#damages#or#the#recovery#of#the#
shortage;#for#admittedly#the#appellee#(respondent)#had#paid#the#entire#value#of#the#1726#sacks#of#rice,#
subject#to#subsequent#adjustment,#as#to#shortages#or#losses.#The#bill#of#lading#does#not#at#all#limit#the#
time#for#filing#an#action#for#the#refund#of#money#paid#in#excess.#

WHEREFORE,# the# decision# of# the# Court# of# Appeals# is# hereby# affirmed# in# all# respects# and# the# petition#
for#certiorari#denied.#

$
$

Ganzon#v#Court#of#Appeals#
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"#(Exhibit#1,#
Stipulation#of#Facts,#Amended#Record#on#Appeal,#p.#38).#Pursuant#to#that#agreement,#Mauro#B.#Ganzon#sent#
his#lighter#"Batman"#to#Mariveles#where#it#docked#in#three#feet#of#water#(t.s.n.,#September#28,#1972,#p.#31).#
On#December#1,#1956,#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#(t.s.n.,#December#14,#1972,#p.#
20),# 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#(t.s.n.,#March#19,#1971,#p.#9;#September#28,#1972,#
pp.# 6d7).<äre||anº•1àw>) The# gunshot# was# not# fatal# but# Tumambing# had# to# be# taken# to# a# hospital# in#
Balanga,#Bataan,#for#treatment#(t.s.n.,#March#19,#1971,#p.#13;#September#28,#1972,#p.#15).#

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#
(t.s.n.,#June#16,#1972,#pp.#8d9)#where#the#lighter#was#docked#(t.s.n.,#September#28,#1972,#p.#31).#The#rest#
was#brought#to#the#compound#of#NASSCO#(Record#on#Appeal,#pp.#20d22).#Later#on#Acting#Mayor#Rub#issued#
a#receipt#stating#that#the#Municipality#of#Mariveles#had#taken#custody#of#the#scrap#iron#(Stipulation#of#Facts,#
Record#on#Appeal,#p.#40;#t.s.n.,#September#28,#1972,#p.#10.)#

On#the#basis#of#the#above#findings,#the#respondent#Court#rendered#a#decision,#the#dispositive#portion#of#
which#states:#

WHEREFORE,#the#decision#appealed#from#is#hereby#reversed#and#set#aside#and#a#new#one#
entered#ordering#defendantdappellee#Mauro#Ganzon#to#pay#plaintiffdappellant#Gelacio#E.#
Tumambimg#the#sum#of#P5,895.00#as#actual#damages,#the#sum#of#P5,000.00#as#exemplary#
damages,# and# the# amount# of# P2,000.00# as# attorney's# fees.# Costs# against# defendantd
appellee#Ganzon.#3#

In#this#petition#for#review#on#certiorari,#the#alleged#errors#in#the#decision#of#the#Court#of#Appeals#are:#

I#

THE# COURT# OF# APPEALS# FINDING# THE# HEREIN# PETITIONER# GUILTY# OF# BREACH# OF# THE# CONTRACT# OF#
TRANSPORTATION#AND#IN#IMPOSING#A#LIABILITY#AGAINST#HIM#COMMENCING#FROM#THE#TIME#THE#SCRAP#
WAS#PLACED#IN#HIS#CUSTODY#AND#CONTROL#HAVE#NO#BASIS#IN#FACT#AND#IN#LAW.#

II#
THE#APPELLATE#COURT#ERRED#IN#CONDEMNING#THE#PETITIONER#FOR#THE#ACTS#OF#HIS#EMPLOYEES#IN#
DUMPING# THE# SCRAP# INTO# THE# SEA# DESPITE# THAT# IT# WAS# ORDERED# BY# THE# LOCAL# GOVERNMENT#
OFFICIAL#WITHOUT#HIS#PARTICIPATION.#

III#

THE#APPELLATE#COURT#FAILED#TO#CONSIDER#THAT#THE#LOSS#OF#THE#SCRAP#WAS#DUE#TO#A#FORTUITOUS#
EVENT#AND#THE#PETITIONER#IS#THEREFORE#NOT#LIABLE#FOR#LOSSES#AS#A#CONSEQUENCE#THEREOF.#4#

The# petitioner,# in# his# first# assignment# of# error,# insists# that# the# scrap# iron# had# not# been# unconditionally#
placed# under# his# custody# and# control# to# make# him# liable.# However,# he# completely# agrees# with# the#
respondent# Court's# finding# that# on# December# 1,# 1956,# the# private# respondent# delivered# the# scraps# to#
Captain#Filomeno#Niza#for#loading#in#the#lighter#"Batman,"#That#the#petitioner,#thru#his#employees,#actually#
received#the#scraps#is#freely#admitted.#Significantly,#there#is#not#the#slightest#allegation#or#showing#of#any#
condition,#qualification,#or#restriction#accompanying#the#delivery#by#the#private#respondentdshipper#of#the#
scraps,#or#the#receipt#of#the#same#by#the#petitioner.#On#the#contrary,#soon#after#the#scraps#were#delivered#
to,#and#received#by#the#petitionerdcommon#carrier,#loading#was#commenced.#

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# petitionerdcarrier'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.#5#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.#

The# petitioner# has# failed# to# show# that# the# loss# of# the# scraps# was# due# to# any# of# the# following# causes#
enumerated#in#Article#1734#of#the#Civil#Code,#namely:#

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

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

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

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

(5)#Order#or#act#of#competent#public#authority.#

Hence,#the#petitioner#is#presumed#to#have#been#at#fault#or#to#have#acted#negligently.# 6#By#reason#of#this#
presumption,#the#court#is#not#even#required#to#make#an#express#finding#of#fault#or#negligence#before#it#
could#hold#the#petitioner#answerable#for#the#breach#of#the#contract#of#carriage.#Still,#the#petitioner#could#
have#been#exempted#from#any#liability#had#he#been#able#to#prove#that#he#observed#extraordinary#diligence#
in#the#vigilance#over#the#goods#in#his#custody,#according#to#all#the#circumstances#of#the#case,#or#that#the#
loss#was#due#to#an#unforeseen#event#or#to#force)majeure.#As#it#was,#there#was#hardly#any#attempt#on#the#
part#of#the#petitioner#to#prove#that#he#exercised#such#extraordinary#diligence.#
It#is#in#the#second#and#third#assignments#of#error#where#the#petitioner#maintains#that#he#is#exempt#from#
any#liability#because#the#loss#of#the#scraps#was#due#mainly#to#the#intervention#of#the#municipal#officials#of#
Mariveles#which#constitutes#a#caso#fortuito#as#defined#in#Article#1174#of#the#Civil#Code.#7#

We#cannot#sustain#the#theory#of#caso)fortuito.#In#the#courts#below,#the#petitioner's#defense#was#that#the#
loss# of# the# scraps# was# due# to# an# "order# or# act# of# competent# public# authority,"# and# this# contention# was#
correctly#passed#upon#by#the#Court#of#Appeals#which#ruled#that:#

...#In#the#second#place,#before#the#appellee#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#accilmillated#by#the#appellant#through#separate#
purchases#here#and#there#from#private#individuals#(Record#on#Appeal,#pp.#38d39).#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# the# appellant# for#
P5,000.00.#The#order#of#the#acting#mayor#did#not#constitute#valid#authority#for#appellee#
Mauro#Ganzon#and#his#representatives#to#carry#out.#

Now#the#petitioner#is#changing#his#theory#to#caso#fortuito.#Such#a#change#of#theory#on#appeal#we#cannot,#
however,#allow.#In#any#case,#the#intervention#of#the#municipal#officials#was#not#In#any#case,#of#a#character#
that#would#render#impossible#the#fulfillment#by#the#carrier#of#its#obligation.#The#petitioner#was#not#duty#
bound#to#obey#the#illegal#order#to#dump#into#the#sea#the#scrap#iron.#Moreover,#there#is#absence#of#sufficient#
proof#that#the#issuance#of#the#same#order#was#attended#with#such#force#or#intimidation#as#to#completely#
overpower#the#will#of#the#petitioner's#employees.#The#mere#difficulty#in#the#fullfilment#of#the#obligation#is#
not# considered# force) majeure.# We# agree# with# the# private# respondent# that# the# scraps# could# have# been#
properly#unloaded#at#the#shore#or#at#the#NASSCO#compound,#so#that#after#the#dispute#with#the#local#officials#
concerned#was#settled,#the#scraps#could#then#be#delivered#in#accordance#with#the#contract#of#carriage.#

There#is#no#incompatibility#between#the#Civil#Code#provisions#on#common#carriers#and#Articles#361# 8#and#
362#9#of#the#Code#of#Commerce#which#were#the#basis#for#this#Court's#ruling#in#Government#of#the#Philippine#
Islands#vs.#Ynchausti#&#Co.10#and#which#the#petitioner#invokes#in#tills#petition.#For#Art.#1735#of#the#Civil#
Code,#conversely#stated,#means#that#the#shipper#will#suffer#the#losses#and#deterioration#arising#from#the#
causes#enumerated#in#Art.#1734;#and#in#these#instances,#the#burden#of#proving#that#damages#were#caused#
by#the#fault#or#negligence#of#the#carrier#rests#upon#him.#However,#the#carrier#must#first#establish#that#the#
loss#or#deterioration#was#occasioned#by#one#of#the#excepted#causes#or#was#due#to#an#unforeseen#event#or#
to# force# majeure.# Be# that# as# it# may,# insofar# as# Art.# 362# appears# to# require# of# the# carrier# only# ordinary#
diligence,#the#same#is#.deemed#to#have#been#modified#by#Art.#1733#of#the#Civil#Code.#

Finding#the#award#of#actual#and#exemplary#damages#to#be#proper,#the#same#will#not#be#disturbed#by#us.#
Besides,#these#were#not#sufficiently#controverted#by#the#petitioner.#

WHEREFORE,#the#petition#is#DENIED;#the#assailed#decision#of#the#Court#of#Appeals#is#hereby#AFFIRMED.#
Costs#against#the#petitioner.#
This#decision#is#IMMEDIATELY#EXECUTORY.#