Fabre vs. Court of Appeals Facts: Petitioners Engracio Fabre, Jr.

and his wife were owners of a Mazda minibus. They used the bus principally in connection with a bus service for school children which they operated in Manila. It was driven by PorfirioCabil. On November 2, 1984 private respondent Word for the World Christian Fellowship Inc. (WWCF) arranged with the petitioners for the transportation of 33 members of its Young Adults Ministry from Manila to La Union and back in consideration of which private respondent paid petitioners the amount of P3,000.00. The usual route to Caba, La Union was through Carmen, Pangasinan. However, the bridge at Carmen was under repair, so that petitioner Cabil, who was unfamiliar with the area (it being his first trip to La Union), was forced to take a detour through the town of Ba-ay in Lingayen, Pangasinan. At 11:30 that night, petitioner Cabil came upon a sharp curve on the highway. The road was slippery because it was raining, causing the bus, which was running at the speed of 50 kilometers per hour, to skid to the left road shoulder. The bus hit the left traffic steel brace and sign along the road and rammed the fence of one Jesus Escano, then turned over and landed on its left side, coming to a full stop only after a series of impacts. The bus came to rest off the road. A coconut tree which it had hit fell on it and smashed its front portion. Because of the mishap, several passengers were injured particularly Amyline Antonio. Criminal complaint was filed against the driver and the spouses were also made jointly liable. Spouses Fabre on the other hand contended that they are not liable since they are not a common carrier. The RTC of Makati ruled in favor of the plaintiff and the defendants were ordered to pay jointly and severally to the plaintiffs. The Court of Appeals affirmed the decision of the trial court. Issue: Whether the spouses Fabre are common carriers? Held: Petition was denied. Spouses Fabre are common carriers. The Supreme Court held that this case actually involves a contract of carriage. Petitioners, the Fabres, did not have to be engaged in the business of public transportation for the provisions of the Civil Code on common carriers to apply to them. As this Court has held: 10 Art. 1732, Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public. The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity (in local idiom, as "a sideline"). Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or

unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the "general public," 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. Calvo v. UCPB General Insurance Facts: Petitioner VirginesCalvo, owner of Transorient Container Terminal Services, Inc. (TCTSI), and a custom broker, entered into a contract with San Miguel Corporation (SMC) for the transfer of 114 reels of semi-chemical fluting paper and 124 reels of kraft liner board from the port area to the Tabacalera Compound, Ermita, Manila. The cargo was insured by respondent UCPB General Insurance Co., Inc. On July 14, 1990, contained in 30 metal vans, arrived in Manila on board M/V Hayakawa Maru. After 24 hours, they were unloaded from vessel to the custody of the arrastre operator, Manila Port Services, Inc. From July 23 to 25, 1990, petitioner, pursuant to her contract with SMC, withdrew the cargo from the arrastre operator and delivered it to SMCs warehouse in Manila. On July 25, the goods were inspected by Marine Cargo Surveyors, reported that 15 reels of the semi-chemical fluting paper were wet/stained/torn and 3 reels of kraft liner board were also torn. The damages cost P93,112.00. SMC collected the said amount from respondent UCPB under its insurance contract. Respondent on the other hand, as a subrogee of SMC, brought a suit against petitioner in RTC, Makati City. On December 20, 1995, the RTC rendered judgment finding petitioner liable for the damage to the shipment. The decision was affirmed by the CA. Issue: Whether or not Calvo is a common carrier? Held: In this case the contention of the petitioner, that he is not a common carrier but a private carrier, has no merit. Article 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as ancillary activity. 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 1733 deliberately refrained from making such distinction. (De Guzman v. CA, 68 SCRA 612) The concept of common carrier under Article 1732 coincide with the notion of public service, under the Public Service Act which partially supplements the law on common carrier. Under Section 13, paragraph (b) of the Public Service Act, it includes:

 xxx every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, subway motor vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, icerefrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power petroleum, sewerage system, wire or wireless communications systems, wire or wireless broadcasting stations and other similar public services. xxx DE GUZMAN VS CA Facts: Cendena was a junk dealer and was engaged in buying used bottles and scrap materials in Pangasinan and brought these to Manila for resale. He used two 6-wheeler trucks. On the return trip to Pangasinan, he would load his vehicles with cargo which various merchants wanted delivered to Pangasinan. For that service, he charged freight lower than regular rates. General Milk Co. contacted with him for the hauling of 750 cartons of milk. On the way to Pangasinan, one of the trucks was hijacked by armed men who took with them the truck and its cargo and kidnapped the driver and his helper. Only 150 cartons of milk were delivered. The Milk Co. sued to claim the value of the lost merchandise based on an alleged contract of carriage. Cendena denied that he was a common carrier and contended that he could not be liable for the loss it was due to force majeure. The trial court ruled that he was a common carrier. The CA reversed. Issue: Whether or not Cendena is a common carrier? Held: Yes, Cendena is properly characterized as a common carrier even though he merely backhauled goods for other merchants, and even if it was done on a periodic basis rather than on a regular basis, and even if his principal occupation was not the carriage of goods. Article 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity. It also avoids making a distinction between a person or enterprise offering transportation services on a regular or scheduled basis and one offering service on an occasional, episodic or unscheduled basis. Neither does it make a distinction between a carrier offering its services to the general public and one who offers services or solicits business only from a narrow segment of population.

BASCOS vs.COURT OF APPEALS and RODOLFO A. CIPRIANO FACTS: Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE for short) entered into a hauling contract with Jibfair Shipping Agency Corp whereby the former bound itself to haul the latters 2,000 m/tons of soya bean meal to the warehouse in Calamba, Laguna. To carry out its obligation, CIPTRADE, through Cipriano, subcontracted with Bascos to transport and to deliver 400 sacks of soya bean meal from the Manila Port Area to Calamba, Laguna. 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 their contract. 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 for breach of a contract of carriage. The trial court granted the writ of preliminary attachment. In her answer, petitioner interposed the defense that there was no contract of carriage since CIPTRADE leased her cargo truck to load the cargo from Manila Port Area to Laguna and that the truck carrying the cargo was hijacked and being a force majeure, exculpated petitioner from any liability After trial, the trial court rendered a decision in favor of Cipriano and against Bascos ordering the latter to pay the former for actual damages for attorneys fees and cost of suit. The Urgent Motion To Dissolve/Lift preliminary Attachment Bascos is DENIED for being moot and academic. Petitioner appealed to the Court of Appeals but respondent Court affirmed the trial courts judgment. Hence this petition for review on certiorari ISSUE: (1) WON petitioner a common carrier (2) WON the hijacking referred to a force majeure HELD: The petition is DISMISSED and the decision of the Court of Appeals is hereby AFFIRMED. 1. YES 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 Cipriano was lease of the truck. 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.

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. 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. 2. NO 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. 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. 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, 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; xx (6) That the common carriers 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; xx NOTES: 1. She cited as evidence certain affidavits which referred to the contract as lease. These affidavits were made by Jesus Bascos and by petitioner herself and Cipriano and CIPTRADE did not object to the presentation of affidavits by petitioner where the transaction was referred to as a lease contract. Both the trial and appellate courts have dismissed them as self-serving and petitioner contests the conclusion. We are bound by the appellate courts factual conclusions. Yet, granting that the said evidence were not self-serving, 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. 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. 2. 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. FGU vs Sarmiento FACTS: G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on June 18, 1994, 30 units of Condura S.D. white refrigerators aboard its Isuzu truck driven by Lambert Eroles, to the Central Luzon Appliances in Dagupan City. While traversing the North Diversion Road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes. FGU, an insurer of the shipment, paid the value of the covered cargoes (P204,450.00) to Concepcion Industries, Inc.,. Being subrogee of CIIs rights & interests, FGU, in tur n, sought reimbursement from GPS. Since GPS failed to heed the claim, FGU filed a complaint for damages & breach of contract of carriage against GPS and Eroles with the RTC. In its answer, respondents asserted that GPS was only the exclusive hauler of CII since 1988, and it was not so engaged in business as a common carrier. Respondents further claimed that the cause of damage was purely accidental. GPS filed a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it was a common carrier. The RTC granted the motion to dismiss on April 30, 1996. It subsequently dismissed the complaint holding that GPS was not a common carrier defined under the law & existing jurisprudence. The subsequent motion for reconsideration having been denied, FGU

interposed an appeal to the CA. The CA rejected the FGUs appeal & ruled in favor of GPS. It also denied petitioners motion for reconsideration. ISSUES: 1. WON GPS may be considered a common carrier as defined under the law & existing jurisprudence. 2. WON GPS, either as a common carrier or a private carrier, may be presumed to have been negligent when the goods it undertook to transport safely were subsequently damaged while in its protective custody & possession. 3. Whether the doctrine of Res ipsa loquitur is applicable in the instant case. HELD: 1. The SC finds the conclusion of the RTC and the CA to be amply justified. GPS, being an exclusive contractor & hauler of Concepcion Industries, Inc., rendering/offering its services to no other individual or entity, cannot be considered a common carrier. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for hire or compensation, offering their services to the public, whether to the public in general or to a limited clientele in particular, but never on an exclusive basis. The true test of a common carrier is the carriage of passengers/goods, providing space for those who opt to avail themselves of its transportation service for a fee. Given accepted standards, GPS scarcely falls within the term common carrier. 2. GPS cannot escape from liability. In culpa contractual, the mere proof of the existence of the contract & the failure of its compliance justify, prima facie, a corresponding right of relief. The law will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost/suffered. The remedy serves to preserve the interests of the promisee that may include his: 1. Expectation interest interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed; 2. Reliance interest interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made; 3. Restitution interest interest in having restored to him any benefit that he has conferred on the other party. Agreements can accomplish little unless they are made the basis for action. The effect of every infraction is to create a new duty, or to make recompense to the one who has been injured by the failure of another to observe his contractual obligation unless he can

show extenuating circumstances, like proof of his exercise of due diligence (normally that of the diligence of a good father of a family or, exceptionally by stipulation or by law such as in the case of common carriers, that of extraordinary diligence) or of the attendance of fortuitous event, to excuse him from his ensuing liability. A default on, or failure of compliance with, the obligation gives rise to a presumption of lack of care & corresponding liability on the part of the contractual obligor the burden being on him to establish otherwise. GPS has failed to do so. Eroles, on the other hand, may not be ordered to pay petitioner without concrete proof of his negligence/fault. The driver, not being a party to the contract of carriage between petitioners principal and defendant, may not be held liable under the agreement. A contract can only bind the parties who have entered into it or their successors who have assumed their personality/juridical position. Consonantly with the axiom res inter aliosactaaliisnequenocetprodest, such contract can neither favor nor prejudice a third person. Petitioners civil action against the driver can only be based on culpa aquiliana, which would require the claimant for damages to prove the defendants negligence/fault. 3. Res ipsa loquitur holds a defendant liable where the thing which caused the injury complained of is shown to be under the latters management and the accident is such that, in the ordinary course of things, cannot be expected to happen if those who have its management/control use proper care. In the absence of the defendants explanation, it affords reasonable evidence that the accident arose from want of care. It is not a rule of substantive law and does not create an independent ground of liability. Instead, it is regarded as a mode of proof, or a mere procedural convenience since it furnishes a substitute for, and relieves the plaintiff of, the burden of producing specific proof of negligence. The maxim simply places the burden of going forward with the proof on the defendant. However, resort to the doctrine may only be allowed when: (a) the event is of a kind which does not ordinarily occur in the absence of negligence; (b) other responsible causes are sufficiently eliminated by the evidence (includes the conduct of the plaintiff and third persons); and (c) the indicated negligence is within the scope of the defendants duty to the plaintiff. Thus, it is not applicable when an unexplained accident may be attributable to one of several causes, for some of which the defendant could not be responsible. Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists between the plaintiff and the defendant, for the inference of negligence arises from the circumstances and nature of the occurrence and not from the nature of the relation of the parties. Nevertheless,for the doctrine to apply, the requirement that responsible causes (other than those due to defendants conduct) must first be eliminated should be understood as being confined only to cases of pure (non-

contractual) tort since obviously the presumption of negligence in culpa contractual immediately attaches by a failure of the covenant or its tenor. On the other hand, while the truck driver, whose civil liability is predicated on culpa acquiliana, can be said to have been in control & management of the vehicle, it is not equally shown that the accident has been exclusively due to his negligence. If it were so, the negligence could allow res ipsa loquitur to properly work against him. However, clearly this is not the case. Planters Products vs. CA Facts: Planters Product Inc. purchased from Mitsubishi international corporation metric tons of Urea fertilizer, which the latter shipped aboard the cargo vessel M/V Sun Plum owned by private respondent Kyosei Kisen Kabushiki Kaisha. Prior to its voyage, a time charter-party on the vessel respondent entered into between Mitsubishi as shipper/charterer and KKKK as ship owner, in Tokyo, Japan. Before loading the fertilizer aboard the vessel, (4) of her holds were presumably inspected by the charterers representative and found fit to take a load of urea in bulk. After the Urea fertilizer was loaded in bulk by stevedores hired by and under the supervision of the shipper, the steel hatches were closed with heavy iron lids. Upon arrival of vessel at port, the petitioner unloaded the cargo pursuant to the terms and conditions of the charter-party. The hatches remained open throughout the duration of the discharge. Upon arrival at petitioners warehouse a survey conducted over the cargo revealed a shortage and the most of the fertilizer was contaminated with dirt. As such, Planters filed an action for damages. The defendant argued that the public policy governing common carriers do not apply to them because they have become private carriers by reason of the provisions of the charter-party. Issue: Whether or not the charter-party contract between the ship owner and the charterer transforms a common carrier into a private carrier? Held: A charter party may either her be time charter wherein the vessel is leased to the charterer, wherein the ship is leased to the charterer for a fixed period of time or voyage charter, wherein the ship is leased for a single voyage. In both cases, the charter party provides for the hire of the vessel only, either for a determinate time or for a single or consecutive voyage. It is therefor imperative that such common carrier shall remain as such, notwithstanding the charter of the whole or part of the vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a time-charter or voyage-charter. It is only when the charter includes both ship and its crew as in bareboat or demise that it becomes a private carrier. Undoubtedly, a shipowner in a time or voyage charter retains in possession and control of the ship, although her holds may be the property of the charterer.

First Philippine Industrial Corp. vs CA Facts: Petitioner is a grantee of a pipeline concession under R.A. No. 387, as amended, a contract, install and operate oil pipelines. The original pipeline concession was granted in 1967 and renewed by the Energy Regulatory Board in 1992. Sometime in January 1995, petitioner applied for a mayors permit with the Office of the Mayor of Batangas City. However, before the mayors permit could be is sued, the respondent City Treasurer required petitioner to pay a local tax based on its gross receipts for the fiscal year 1993 pursuant to the Local Government Code. The respondent City Treasure assessed a business tax on the petitioner amounting to P956,076.04 payable in four installments based on the gross receipts for products pumped at GPS-1 for the fiscal year 1993 which amounted to P181,681,151.00. in order not to hamper its operations, petitioner paid the tax under protest in the amount of P239, 019.01 for the first quarter of 1993. On June 15, 1994, petitioner filed with the RTC of Batangas City a complaint for tax refund with prayer for writ of preliminary injunction against respondents City of Batangas and Adoracion Arellano in her capacity as City Treasurer. In its complaint, petitioner alleged, inter alia, that: (1) the imposition and collection of the business tax on its gross receipts violates Sec. 133 of the Local Government Code; (2) the authority of cities to impose and collect a tax on the gross receipts of contractors and independent contractors under Sec. 141(e) and 151 does not include the authority to collect such taxes on transportation contractors for, as defined under Sec. 131(h), the term contractors excludes transportation contactors; and (3) the City Treasurer illegally and erroneously imposed and collected the said tax, thus meriting the immediate refund of the tax paid. Traversing the complaint, the respondents argued that petitioner cannot be exempt from taxes under Sec. 133 (J) of the Local Government Code as said exemption applied only to transportation contractors and persons engaged in the transportation by hire and common carriers by air land and water. Respondents assert that pipelines are not included in the term common carrier which refers solely to ordinary carriers as trucks, trains, ships and the like. Respondents further posit that the term common carrier under the said Code pertains to the mode or manner by which a product is delivered to its destination. Issue: Whether or not the petitioner is a common carrier so that in the affirmative, he is not liable to pay the carriers tax under the Local Government Code of 1991? Held: Petitioner is a common carrier. A common carrier may be defined, broadly, as one who holds himself out to the public as engaged in the business of transporting persons or property from place to place, for compensation, offering his services to the public generally. Article 1732 of the Civil Code defines a common carrier as any person, corporation, firm or association engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public.

The test for determining whether a party is a common carrier of goods is: 1. He must be engaged in the carrying of goods for others as a public employment, and must hold himself out as ready to engage in the transportation of goods or persons generally as a business and not as a casual occupation. 2. He must undertake to carry goods of the kind to which his business is confined; 3. He must undertake to carry by the method by which his business is conducted and over his established roads; and 4. The transportation must be for hire. SCHMITZ TRANSPORT & BROKERAGE CORPORATION VENTURE, INC., INDUSTRIAL INSURANCE COMPANY, LTD., v. TRANSPORT

A common carrier shall exercise extraordinary diligence to prevent and/or minize the loss or destruction of goods. FACTS: SYTCO Pte Ltd. Singapore shipped from the port of Ilyichevsk, Russia on board M/V Alexander Saveliev (a vessel of Russian registry and owned by respondent Black Sea) 545 hot rolled steel sheets. The vessel arrived at the port of Manila and the Philippine Ports Authority (PPA) assigned it a place of berth at the outside breakwater at the Manila South Harbor. Petitioner Schmitz Transport, engaged to secure the requisite clearances, to receive the cargoes from the shipside, and to deliver them to Little Giant Steelpipe Corporations warehouse at Cainta, Rizal. It likewise engaged the services of respondent Transport Venture Inc. (TVI) to send a barge and tugboat at shipside. The tugboat, after positioning the barge alongside the vessel, left and returned to the port terminal. Later on, arrastre operator commenced to unload 37 of the 545 coils from the vessel unto the barge. By noon the next day, during which the weather condition had become inclement due to an approaching storm, the unloading unto the barge of the 37 coils was accomplished. However, there was no tugboat that pulled the barge back to the pier. Eventually, because of the strong waves, the crew of the barge abandoned it and transferred to the vessel. The barge capsized, washing the 37 coils into the sea. Earnest efforts on the part of both the consignee Little Giant and Industrial Insurance to recover the lost cargoes proved futile. Industrial Insurance later filed a complaint against Schmitz Transport, TVI and Black Sea through its representative Inchcape (the defendants) before the RTC of Manila, for the recovery of the amount it paid to Little Giant plus adjustment fees, attorneys fees, and litigation expenses. Industrial Insurance won and the Schmitz et al.s motion for reconsideration is denied. In effect, Schmitz now filed charges against TVI et al. It asserts that in chartering the barge and tugboat of TVI, it was acting for its principal, consignee Little Giant, hence, the

transportation contract was by and between Little Giant and TVI. The Court rendered a decision holding Schmitz and TVI liable. ISSUES: Whether or not the liability for the loss may attach to Black Sea, Schmitz and TVI HELD: TVIs failure to promptly provide a tugboat did not only increase the risk that might have been reasonably anticipated during the shipside operation, but was the proximate cause of the loss. A man of ordinary prudence would not leave a heavily loaded barge floating for a considerable number of hours, at such a precarious time, and in the open sea, knowing that the barge does not have any power of its own and is totally defenseless from the ravages of the sea. That it was nighttime and, therefore, the members of the crew of a tugboat would be charging overtime pay did not excuse TVI from calling for one such tugboat. As for Schmitz, for it to be relieved of liability, it should, following Article 1739 of the Civil Code, prove that it exercised due diligence to prevent or minimize the loss, before, during and after the occurrence of the storm in order that it may be exempted from liability for the loss of the goods. While Schmitz sent checkers and a supervisor on board the vessel to counter-check the operations of TVI, it failed to take all available and reasonable precautions to avoid the loss. After noting that TVI failed to arrange for the prompt towage of the barge despite the deteriorating sea conditions, it should have summoned the same or another tugboat to extend help, but it did not. The Court holds then that Schmitz and TVI are solidarily liable for the loss of the cargoes. As for Black Sea, its duty as a common carrier extended only from the time the goods were surrendered or unconditionally placed in its possession and received for transportation until they were delivered actually or constructively to consignee Little Giant Parties to a contract of carriage may, however, agree upon a definition of delivery that extends the services rendered by the carrier. In the case at bar, Bill of Lading No. 2 covering the shipment provides that delivery be made to the port of discharge or so near thereto as she may safely get, always afloat. The delivery of the goods to the consignee was not from pier to pier but from the shipside of M/V Alexander Saveliev and into barges, for which reason the consignee contracted the services of petitioner. Since Black Sea had constructively delivered the cargoes to Little Giant, through Schmitz, it had discharged its duty. In fine, no liability may thus attach to Black Sea.

A.F. SANCHEZ BROKERAGE INC., v. THE HON. COURT OF APPEALS and FGU INSURANCE CORPORATION A common carrier is liable to the resulting damage to the goods if the improper packaging is known to the carrier or his employees or is apparent upon ordinary observation, but he nevertheless accepts the same without protest or exception. FACTS: Respondent FGU Insurance Corporation (FGU) brought an action for reimbursement against petitioner A.F. Sanchez Brokerage Inc. (Sanchez Brokerage) to collect the amount paid by the former to Wyeth-Suaco Laboratories Inc. (Wyeth-Suaco) as insurance payment for the goods delivered in bad condition. A.F. Brokerage refused to admit liability for the damaged goods which it delivered from Philippines Skylanders, Inc. (PSI) to Wyeth-Suaco as it maintained that the damage was due to improper and insufficient export packaging, discovered when the sealed containers were opened outside the PSI warehouse. The Regional Trial Court of Makati dismissed the said complaint; however, the decision was subsequently reversed and set aside by the Court of Appeals, finding that Sanchez Brokerage is liable for the carriage of cargo as a common carrier by definition of the New Civil Code. ISSUE: Whether or not the FGU Insurance is liable for the delivery of the damaged goods HELD: As defined under Article 1732 of the Civil Code, common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both by land, water or air for compensation, offering their services to the public. It does not distinguish between one whose principal business activity is the carrying of goods and one who does such carrying only as an ancillary activity. The contention therefore of Sanchez Brokerage that it is not a common carrier but a customs broker whose principal function is to prepare the correct customs declaration and proper shipping documents as required by law is bereft of merit. It suffices that petitioner undertakes to deliver the goods for pecuniary consideration. In this light, Sanchez Brokerage as a common carrier is mandated to observe, under Article 1733 of the Civil Code, extraordinary diligence in the vigilance over the goods it transports according to all the circumstances of each case. In the event that the goods are lost, destroyed or deteriorated, it is presumed to have been at fault or to have acted negligently, unless it proves that it observed extraordinary diligence. The concept of extra-ordinary diligence was explained in CompaniaMaritima v. Court of Appeals. The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to or destruction of the goods entrusted to it for sale, carriage and

delivery. It requires common carriers to render service with the greatest skill and foresight and to use all reasonable means to ascertain the nature and characteristics of goods tendered for shipment and to exercise due care in the handling and storage including such methods as their nature requires. It was established that Sanchez Brokerage received the cargoes from the PSI warehouse in good order and condition and that upon delivery by petitioner some of the cargoes were found to be in bad order as noted in the Delivery Receipt and as indicated in the Survey and Destruction Report. While paragraph no. 4 of Article 1734 of the Civil Code exempts a common carrier from liability if the loss or damage is due to the character of the goods or defects in the packaging or in the containers, the rule is that if the improper packaging is known to the carrier or his employees or is apparent upon ordinary observation, but he nevertheless accepts the same without protest or exception notwithstanding such condition, he is not relieved of liability for the resulting damage. If the claim of Sanchez Brokerage that some of the cartons were already damaged upon delivery to it were true, then it should naturally have received the cargo under protest or with reservation duly noted on the receipt issued by PSI but it made no such protest or reservation. ESTELA L. CRISOSTOMO v. COURT OF APPEALS and CARAVAN TRAVEL AND TOURS INTERNATIONAL, INC. A travel agency is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier. Respondent did not undertake to transport petitioner from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Respondents services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours. It is in this sense that the contract between the parties in this case was an ordinary one for services and not one of carriage. Petitioner Estela L. Crisostomo contracted the services of respondent Caravan Travel and Tours International, Inc. to arrange and facilitate her booking, ticketing, and accommodation in a tour dubbed Jewels of Europe. A 5% discount on the total cost of P74,322.70 which included the airfare was given to the petitioner. The booking fee was also waived because petitioners niece, MeriamMenor, was respondents ticketing manager. On June 12, 1991, Menor went to her aunts residence to deliver petitioners travel documents and plane tickets. In return, petitioner gave the full payment for the package tour. Menor then told her to be at the NAIA on Saturday, June 15, 1991, two hours before her flight on board British Airways. Without checking her travel documents, petitioner went to NAIA and to her dismay, she discovered that the flight she was supposed to take had already departed the previous day. She learned that her plane ticket was for the flight scheduled on June 14, 1991. She called up Menor to complain

and Menor suggested upon petitioner to take another tour British Pageant. Petitioner was asked anew to pay US$785.00. Petitioner gave respondent US$300 as partial payment and commenced the trip. ISSUE: Whether or not respondent Caravan did not observe the standard of care required of a common carrier when it informed the petitioner wrongly of the flight schedule. HELD: The petition was denied for lack of merit. The decision of the Court of Appeals was affirmed. A common carrier is defined under Article 1732 of the Civil Code as persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water or air, for compensation, affecting their services to the public. It is obvious from the above definition that respondent is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier. Respondent did not undertake to transport petitioner from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Respondents services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours. It is in this sense that the contract between the parties in this case was an ordinary one for services and not one of carriage. The standard of care required of respondent is that of a good father of a family under Article 1173 of the Civil Code. This connotes reasonable care consistent with that which an ordinarily prudent person would have observed when confronted with a similar situation. It is clear that respondent performed its prestation under the contract as well as everything else that was essential to book petitioner for the tour. Had petitioner exercised due diligence in the conduct of her affairs, there would have been no reason for her to miss the flight. Needless to say, after the travel papers were delivered to petitioners, it became incumbent upon her to take ordinary care of her concerns. This undoubtedly would require that she at least read the documents in order to assure herself of the important details regarding the trip. BA FINANCE vs CA Facts: On 6 March 1983, an accident occurred involving BA Finance Corp.s Isuzu ten-wheeler truck thendriven by an employee of Lino Castro, Rogelio Villar y Amera, resulting in triple homicide with multiplephysical injuries with damage to property. Neither Lino Castro nor the driver was connected with BA FinanceCorp., as the truck was leased by BA Finance to Rock Component Philippines Onc.A criminal suit was filed against Villar. The trial court of Bulacan (Branch 6., RTC MalolosBulacan) foundVillar guilty beyond reasonable doubt of reckless imprudence resulting in triple homicide with multiplephysical injuries with damage to property on 16 February 1984.

A suit for damages was filed by Carlos Ocampo, et.al., the injured in the accident against driver Villar and BAFinance, inasmuch as the truck was registered in the name of the latter. On 13 October 1988, the trial courtrendered a decision (1) ordering Rock Component Philippines Inc., BA Finance and Rogelio Villar y Amare jointly and severally to pay (a) Carlos Ocampo P121,650.00, (b) MoisesOcampo P298,500.00, (c) NicolasCruz P154,740.00, and (d) InocencioTurla, Sr..48,000.00; (2) dismissing the case against Lino Castro; (3)dismissing the third-party complaint against Stronghold; (4) dismissing all the counterclaims of Villar and BAFinance and Stronghold; and (5) ordering Rock to reimburse BA Finance the total amount of P622,890.00which the latter is adjudged to pay to Ocampo, et. al. The Court of Appeals affirmed the appealed disposition in toto through Justice Rasul, with Justices De Pano,Jr. and Imperial concurring, on practically the same grounds arrived at by the court a quo. Efforts exertedtowards re-evaluation of the adverse judgment were futile. Hence, the petition for review on certiorari. The Supreme Court dismissed the petition, and affirmed the decision under review, with out specialpronouncement as to costs. 1.Registered owner of CPC liable to public for injuries or damages suffered by passengers orthird persons; Basis of doctrine The registered owner of a certificate of public convenience is liable to the public for the injuries ordamages suffered by passengers or third persons caused by the operation of said vehicle, even though thesame had been transferred to a third person. The principle upon which this doctrine is based is that in dealingwith vehicles registered under the Public Service Law, the public has the right to assume or presume that theregistered owner is the actual owner thereof, for it would be difficult for the public to enforce the actions thatthey may have for injuries caused to them by the vehicles being negligently operated if the public should berequired to prove who the actual owner is. 2.Doctrine does not imply that registered owner cannot recover By the doctrine, however, it is not implied that the registered owner may not recover whateveramount he had paid by virtue of his liability to third persons from the person to whom he had actually sold,assigned or conveyed the vehicle. 3.Registered owner of vehicle primarily responsible to public and third persons Under the same principle the registered owner of any vehicle, even if not used for a public service,should primarily be responsible to the public or to third persons for injuries caused the latter while the vehicleis being driven on the highways or streets. There is a presumption that the owner of the guilty vehicle as he is the registered owner in the Motor Vehicles Office. 4.Revised Motor Vehicles Law; No vehicle used in public highway unless properly registered The Revised Motor vehicles Law (Act 3992, as amended) provides that no vehicle may be used oroperated upon any public highway unless the same is properly registered. It has been stated that the system oflicensing and the requirement that each machine must carry a registration number, conspicuously displayed, isone of the precautions taken to reduce the danger of injury to pedestrians and other travellers from thecareless management of automobiles, and to furnish a means of ascertaining the

identity of persons violatingthe laws and ordinances, regulating the speed and operation of machines upon the highways. Not only arevehicles to be registered and that no motor vehicles are to be used or operated without being properlyregistered for the current year, but that dealers in motor vehicles shall furnish the Motor Vehicles Office areport showing the name and address of each purchaser of motor vehicle during the previous month and themanufacturers serial number and motor number. (Section 5[c], Act 3992, as amended). 5.Registration required, not as an operative act in which ownership is transferred in vehicles butpermit use of vehicle in highways Registration is required not to make said registration the operative act by which ownership in vehiclesis transferred, as in land registration cases, because the administrative proceeding of registration does not bearany essential relation to the contract of sale between the parties (Chinchilla vs. Rafael and Verdaguer, 39 Phil.888), but to permit the use and operation of the vehicle upon any public highway (section 5 [a], Act 3992, asamended). 6.Main of motor vehicle registration The main aim of motor vehicle registration is to identify the owner so that if any accident happens, orthat any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixedon a definite individual, the registered owner. Instances are numerous where vehicles running on publichighways caused accidents or injuries to pedestrians or other vehicles without positive identification of theowner or drivers, or with very scant means of identification. It is to forestall these circumstances, soinconvenient or prejudicial to the public, that the motor vehicle registration is primarily ordained, in theinterest of the determination of persons responsible for damages or injuries caused on public highways. 7.Court cannot entertain registrants defense to avoid liability, as it will thwart the purpose of thestatute; Registered not allowed to prove vehicles ownership. One of the principal purposes of motor vehicles legislation is identification of the vehicle and of theoperator, in case of accident; and another is that the knowledge that means of detection are always availablemay act as a deterrent from lax observance of the law and of the rules of conservative and safe operation.Whatever purpose there may be in these statutes, it is subordinate at the last to the primary purpose ofrendering it certain that the violator of the law or of the rules of safety shall not escape because of lack ofmeans to discover him. The purpose of the statute is thwarted, and the displayed number becomes a snareand delusion, if an individual or corporation should be allowed to pace a middleman between them and thepublic, and escape liability by the manner in which they recompense their servants. A victim of recklessnesson the public highways is usually without means to discover or identify the person actually causing the injuryor damage. He has no means other than by a recourse to the registration in the Motor Vehicles Office todetermine who is the owner. The protection that the law aims to extend to him would become illusory werethe registered owner given the opportunity to escape liability by disproving his ownership. If the policy of thelaw is to be enforced and carried out, the registered owner should not be allowed to prove the contrary to theprejudice of the person injured, that is, to prove that a third person or another has become the owner, so thathe may thereby be relieved of the responsibility to the injured person.

8.Policy and application of law not harsh The above policy and application of the law may appear quite harsh and would seem to conflict withtruth and justice; but actually is not. A registered owner who has already sold or transferred a vehicle has therecourse to a third-party complaint, in the same action brought against him to recover for the damage or injurydone, against the vendee or transferee of the vehicle. The inconvenience of the suit is no justification forrelieving him of liability; said inconvenience is the price he pays for failure to comply with the registrationthat the law demands and requires. 9.Cases of Duavit vs. CA and Duquillo vs. Bayot not applicable The rulings in Duavit vs. Court of Appeals and in Duquillo vs. Bayot is legally unpalatable for thepurpose of the present discourse. The vehicles adverted to in the two cases shared a common thread, in thatthe jeep and the truck were driven in reckless fashion without the consent or knowledge of the respectiveowners. In the case of Duavit vs. CA, the Court was cognizant of the inculpatory testimony spewed bySabiniano when he admitted that he took the jeep from the garage of Duavit without the consent or authorityof the latter. In the Duquillo case, the defendant therein cannot be held liable for anything because ofcircumstances which indicated that the truck was driven without the consent or knowledge of the owner Ma. Luisa Benedicto v. IAC, Greenhills Wood Industries Co., Inc. Feliciano, J. od Industries - bound itself to sell and deliver to Blue Star Mahogany, Inc. 100,000 board feet of sawn lumber with the understanding that an initial delivery would be made. en, the driver of a cargo truck, to transport its sawn lumber to the consignee Blue Star in Valenzuela, Bulacan; this cargo truck was registered in the name of Ma. Luisa Benedicto, the proprietor of Macoven Trucking, a business enterprise engaged in hauling freight

lumber on board the subject cargo truck had not yet arrived in Valenzuela, Bulacan; because of the delay in delivery Blue Star was constrained to look for other suppliers

recovery of the value of the lost sawn lumber plus damages against Benedicto f carriage, the subject truck having been earlier sold by her to Benjamin Tee; but the truck had remained registered in her name because Tee have not yet fully paid the amount of the truck; be that as it may, Tee had been operating the said truck in Central Luzon from that and Licuden was Tees employee and not hers ISSUE: WON Benedicto, being the registered owner of the carrier, should be held liable for the value of the undelivered or lost sawn lumber HELD: Yes. The registered owner liable for consequences flowing from the operations of the carrier, even though the specific vehicle involved may already have been transferred to another person. This doctrine rests upon the principle that in dealing with vehicles

registered under the Public Service Law, the public has the right to assume that the registered owner is the actual or lawful owner thereof It would be very difficult and often impossible as a practical matter, for members of the general public to enforce the rights of action that they may have for injuries inflicted by the vehicles being negligently operated if they should be required to prove who the actual owner is. Greenhills is not required to go beyond the vehicles certificate of registration to ascertain the owner of the carrier. EQUITABLE LEASING CORP. v SUYOM On July 17, 1994, a Fuso Road Tractor driven by Raul Tutor rammed into the house cum store of Myrna Tamayo found in Tondo. A portion of the house was destroyed. Several people died: 1) Tamayos son, Reniel; 2) Felix Oledans daughter, Felmarie; and 3) LucitaSuyoms 2 sons. Tutor was convicted of reckless imprudence resulting in multiple homicide and multiple physical injuries. The lTO showed that the registered owner was EQUITUABE LEASIBG CORP. /leased to Edwin Lim. Respondents Tamayo, Oledan and Suyom filed a compliant for damages against EQUITABLE, Tutor, and Ecatine Corp. TC then dropped Tutor, Ecatine and Lim since theyve gone MIA. Equitable contends: vehicle had been sold to Ecatine and that it was no longer in possession and in control of said vehicle at the time of the accident. Not having employed Tutor, it could not have supervised hum. RTC: ordered EQUITABLE to pay damages and attorneys fees CA: EQUITABLE was still legally considered as the owner/operator of the tractor even if the vehicle was subject to a Deed of Sale in favor of Ecatine since the Cert. of Registration on fie with the LTO still remained in EQUITABLEs name. In order that a transfer of ownership of a motor vehicle can bind 3rd persons, it MUST be duly recorded with the LTO; HENCE, this petition. ISSUE: W/N EQUITABLE was liable for damages suffered by respondents in action for quasi-delict for the negligent acts of Tutor, who was not its employee? HELD: YES. Petition denied and the assailed Decision affirmed. Since the Lease Agreement[between petitioner and Edwin Lim stipulated that it is the intention of the parties to enter into a FINANCE LEASE AGREEMENT., ownership of the subject tractor was to be registered in the name of EQUITABLE, until the value of the vehicle has been fully paid by Edwin Lim. After a few months, Lim completed the payments to cover the full price of the tractor; thus, a Deed of Sale over the tractor was executed by petitioner in favor of Ecatine represented by Edwin Lim. However, the Deed was not registered with the LTO. EQUITABLE is liable for the deaths and the injuries complained of, because it was the registered owner of the tractor at the time of the accident. The Court has consistently ruled that, regardless of sales made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third persons are concerned; consequently, it is directly and primarily responsible for the consequences of its operation. In contemplation of law, the owner/operator of record is the employer of the driver, the actual operator and employer being considered as merely its agent. The same principle applies even if the registered owner of any vehicle does not use it for public service. Since Equitable remained the registered owner of the tractor, it could not escape primary liability for the deaths and the injuries arising from the negligence of the driver.[42]

The finance-lease agreement between Equitable on the one hand and Lim orEcatine on the other has already been superseded by the sale. The main aim of motor vehicle registration is to identify the owner so that if any accident happens, or that any damage or injury is caused by the vehicle on the public highways, responsibility therefor can be fixed on a definite individual, the registered owner. Instances are numerous where vehicles running on public highways caused accidents or injuries to pedestrians or other vehicles without positive identification of the owner or drivers, or with very scant means of identification. It is to forestall these circumstances, so inconvenient or prejudicial to the public, that the motor vehicle registration is primarily ordained, in the interest of the determination of persons responsible for damages or injuries caused on public highways True, the LTO Certificate of Registration, dated 5/31/91, qualifies the name of the registered owner as EQUITABLE LEASING CORPORATION/Leased to Edwin Lim. But the lease agreement between Equitable and Lim has been overtaken by the Deed of Sale on December 9, 1992, between petitioner and Ecatine. While this Deed does not affect respondents in this quasi delict suit, it definitely binds petitioner because, unlike them, it is a party to it. We must stress that the failure of Equitable and/or Ecatine to register the sale with the LTO should not prejudice respondents, who have the legal right to rely on the legal principle that the registered vehicle owner is liable for the damages caused by the negligence of the driver. Petitioner cannot hide behind its allegation that Tutor was the employee of Ecatine. This will effectively prevent respondents from recovering their losses on the basis of the inaction or fault of petitioner in failing to register the sale. The non-registration is the fault of petitioner, which should thus face the legal consequences thereof.