G.R. No. L-47822 December 22, 1988 Article 1732.

Common carriers are persons, corporations, firms or

associations engaged in the business of carrying or transporting passengers
PEDRO DE GUZMAN, petitioner, 
or goods or both, by land, water, or air for compensation, offering their
vs.
services to the public. 
COURT OF APPEALS and ERNESTO CENDANA, respondents.
The above article makes no distinction between one whose principal business
SUMMARY: Cendana owned a junk shop in Pangasinan. With his two six- activity is the carrying of persons or goods or both, and one who does such
wheeler trucks, he used to bring his scrap materials to Manila and as a carrying only as an ancillary activity (in local Idiom as "a sideline").
sideline, loaded his vehicle with cargo from merchants on his way back to
Pangasinan for a fee lower than regular commercial rates. De Guzman Article 1732 also carefully avoids making any distinction between a person or
contracted Cendana to haul 750 cartons of Liberty Milk from Makati. Only enterprise offering transportation service on a regular or scheduled basis and
600 cartons reached Pangasinan because Cendana‖s truck was hijacked by one offering such service on an occasional, episodic or unscheduled basis.
armed men in Tarlac. De Guzman sued Cendana for the price of the milk and Neither does Article 1732 distinguish between a carrier offering its services to
damages. He said that as a common carrier, Cendana failed to exercise the "general public," i.e., the general community or population, and one who
extraordinary diligence. Cendana tried to evade liability by saying that he offers services or solicits business only from a narrow segment of the general
was not a common carrier and that he could not be liable for loss due to force population. We think that Article 1733 deliberaom making such distinctions. 
majeure. The lower court found that Cendana was a common carrier because
So understood, the concept of "common carrier" under Article 1732 may be seen
he had habitually offered trucking services to the public. The CA reversed
to coincide neatly with the notion of "public service," under the Public Service
and said that he was not a common carrier because the transport of goods
Act (Commonwealth Act No. 1416, as amended) which at least partially
was only his sideline and he had no certificate of public convenience. The SC
supplements the law on common carriers set forth in the Civil Code. Under
held that Cendana was a common carrier based on the definition in Art. 1732
Section 13, paragraph (b) of the Public Service Act, "public service" includes: 
of the Civil Code. As a common carrier, he had the duty to exercise
extraordinary diligence in the carriage of goods. However, the SC ruled that ... every person that now or hereafter may own, operate, manage, or control
Cendana was not remiss in this duty and that the robbery was a fortuitous in the Philippines, for hire or compensation, with general or limited
event. clientele, whether permanent, occasional or accidental, and done for
general business purposes, any common carrier, railroad, street railway,
DOCTRINE: traction railway, subway motor vehicle, either for freight or passenger, or
(1) One can be a common carrier even though the carriage of goods or both, with or without fixed route and whatever may be its classification,
persons is merely an ancillary activity or sideline. freight or carrier service of any class, express service, steamboat, or
(2) The liability of a common carrier arises from the moment a person or steamship line, pontines, ferries and water craft, engaged in the
firm acts as a common carrier, without regard to having been granted a transportation of passengers or freight or both, shipyard, marine repair shop,
certificate of public convenience or other franchise. wharf or dock, ice plant,
ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and
(3) Even common carriers are not made absolute insurers against all risks of
power, water supply and power petroleum, sewerage system, wire or
travel and transportation of goods. They are not liable for fortuitous events,
wireless communications systems, wire or wireless broadcasting stations
provided that they have complied with the rigorous standard of extraordinary
and other similar public services. ... (Emphasis supplied) 
diligence.
APPLICATION IN THE CASE
FACTS: Respondent Ernesto Cendana, a junk dealer, was engaged in buying It appears to the Court that private respondent is properly characterized as a
up used bottles and scrap metal in Pangasinan. Upon gathering sufficient common carrier even though he merely "back-hauled" goods for other merchants
quantities of such scrap material, respondent would bring such material to from Manila to Pangasinan, although such back-hauling was done on a periodic
Manila for resale. or occasional rather than regular or scheduled manner, and even though private
He utilized two (2) six-wheeler trucks which he owned for hauling the material respondent's principal  occupation was not the carriage of goods for others.
to Manila. On the return trip to Pangasinan, respondent would load his vehicles There is no dispute that private respondent charged his customers a fee for
with cargo which various merchants wanted delivered to differing hauling their goods; that fee frequently fell below commercial freight rates
establishments in Pangasinan. For that service, respondent charged freight is not relevant here. 
rates which were commonly lower than regular commercial rates. 
Sometime in November 1970, petitioner Pedro de Guzman a merchant and RE: The Court of Appeals referred to the fact that private respondent held no
authorized dealer of General Milk Company (Philippines), Inc. in Urdaneta, certificate of public convenience, and concluded he was not a common carrier.
Pangasinan, contracted with respondent for the hauling of 750 cartons of
Liberty filled milk from a warehouse of General Milk in Makati, Rizal, to COURT: This is palpable error. A certificate of public convenience is not a
petitioner's establishment in Urdaneta on or before 4 December 1970. requisite for the incurring of liability under the Civil Code provisions
governing common carriers.
Accordingly, on 1 December 1970, respondent loaded in Makati the
merchandise on to his trucks: 150 cartons were loaded on a truck driven by That liability arises the moment a person or firm acts as a common carrier,
respondent himself, while 600 cartons were placed on board the other truck without regard to whether or not such carrier has also complied with the
which was driven by Manuel Estrada, respondent's driver and employee.  requirements of the applicable regulatory statute and implementing regulations
and has been granted a certificate of public convenience or other franchise.
Only 150 boxes of Liberty filled milk were delivered to petitioner. The other
600 boxes never reached petitioner, since the truck which carried these To exempt private respondent from the liabilities of a common carrier because
boxes was hijacked somewhere along the MacArthur Highway in Paniqui, he has not secured the necessary certificate of public convenience, would be
Tarlac, by armed men who took with them the truck, its driver, his helper and offensive to sound public policy; that would be to reward private respondent
the cargo.  precisely for failing to comply with applicable statutory requirements.
On 6 January 1971, petitioner commenced action against private respondent The business of a common carrier impinges directly and intimately upon the
in the Court of First Instance of Pangasinan, demanding payment of P safety and well being and property of those members of the general community
22,150.00, the claimed value of the lost merchandise, plus damages and who happen to deal with such carrier. The law imposes duties and liabilities
attorney's fees. upon common carriers for the safety and protection of those who utilize their
services and the law cannot allow a common carrier to render such duties and
Petitioner argued: that private respondent, being a common carrier, and liabilities merely facultative by simply failing to obtain the necessary permits
having failed to exercise the extraordinary diligence required of him by the and authorizations. 
law, should be held liable for the value of the undelivered goods. 
In his Answer, private respondent denied that he was a common carrier
RE: the liability of private respondent as a common carrier. 
Private respondent argued: that he could not be held responsible for the value
of the lost goods, such loss having been due to force majeure.  COURT: NOT LIABLE.
RTC: finding private respondent to be a common carrier and holding him liable Common carriers, "by the nature of their business and for reasons of public
for the value of the undelivered goods (P 22,150.00) as well as for P 4,000.00 as policy" 2 are held to a very high degree of care and diligence ("extraordinary
damages and P 2,000.00 as attorney's fees.  diligence") in the carriage of goods as well as of passengers. The specific import
of extraordinary diligence in the care of goods transported by a common carrier
On appeal before the Court of Appeals, respondent urged that the trial court had is, according to Article 1733, "further expressed in Articles 1734,1735 and 1745,
erred in considering him a common carrier; in finding that he had habitually numbers 5, 6 and 7" of the Civil Code. 
offered trucking services to the public; in not exempting him from liability on
the ground of force majeure; and in ordering him to pay damages and attorney's Article 1734 establishes the general rule that common carriers are responsible
fees.  for the loss, destruction or deterioration of the goods which they carry,
"unless the same is due to any of the following causes only: 
CA: reversed RTC.
(1) Flood, storm, earthquake, lightning or other natural disaster or
- held that respondent had been engaged in transporting return loads of calamity;
freight "as a casual occupation — a sideline to his scrap iron (2) Act of the public enemy in war, whether international or civil;
business" and not as a common carrier (3) Act or omission of the shipper or owner of the goods;
ISSUE: whether or not private respondent Ernesto Cendana may, under (4) The character-of the goods or defects in the packing or-in the
the facts earlier set forth, be properly characterized as a common carrier containers; and
(5) Order or act of competent public authority. 
RULING: YES!
It is important to point out that the above list of causes of loss, destruction or
The Civil Code defines "common carriers" in the following terms:  deterioration which exempt the common carrier for responsibility therefor, is a
closed list. Causes falling outside the foregoing list, even if they appear to
constitute a species of force majeure fall within the scope of Article 1735, which
provides as follows: 
In all cases other than those mentioned in numbers 1, 2, 3, 4 and 5 of the
preceding article, if the goods are lost, destroyed or deteriorated, common
carriers are presumed to have been at fault or to have acted negligently,
unless they prove that they observed extraordinary diligence as required in
Article 1733. (Emphasis supplied) 
APPLICATION IN THE CASE
Applying the above-quoted Articles 1734 and 1735, we note firstly that the
specific cause alleged in the instant case — the hijacking of the carrier's truck
— does not fall within any of the five (5) categories of exempting causes
listed in Article 1734. It would follow, therefore, that the hijacking of the
carrier's vehicle must be dealt with under the provisions of Article 1735, in other
words, that the private respondent as common carrier is presumed to have
been at fault or to have acted negligently. This presumption, however, may
be overthrown by proof of extraordinary diligence on the part of private
respondent. 
Petitioner insists: that private respondent had not observed extraordinary
diligence in the care of petitioner's goods.
- Petitioner argues that in the circumstances of this case, private
respondent should have hired a security guard presumably to ride
with the truck carrying the 600 cartons of Liberty filled milk.
COURT: We do not believe, however, that in the instant case, the standard of
extraordinary diligence required private respondent to retain a security guard to
ride with the truck and to engage brigands in a firelight at the risk of his own life
and the lives of the driver and his helper. 
The precise issue that we address here relates to the specific requirements of the
duty of extraordinary diligence in the vigilance over the goods carried in the
specific context of hijacking or armed robbery. 
As noted earlier, the duty of extraordinary diligence in the vigilance over goods
is, under Article 1733, given additional specification not only by Articles 1734
and 1735 but also by Article 1745, numbers 4, 5 and 6, Article 1745 provides in
relevant part: 
Any of the following or similar stipulations shall be considered
unreasonable, unjust and contrary to public policy: 
xxx xxx xxx
(5) that the common carrier shall not be responsible for the acts or
omissions of his or its employees; 
(6) that the common carrier's liability for acts committed by thieves, or
of robbers who donot act with grave or irresistible threat, violence or
force, is dispensed with or diminished; and 
(7) that the common carrier shall not responsible for the loss,
destruction or deterioration of goods on account of the defective
condition of the car vehicle, ship, airplane or other equipment used in
the contract of carriage. (Emphasis supplied) 
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." 
APPLICATION IN THE CASE
In the instant case, armed men held up the second truck owned by private
respondent which carried petitioner's cargo.
The record shows that an information for robbery in band was filed in the Court
of First Instance of Tarlac, Branch 2, in Criminal Case No. 198 entitled "People
of the Philippines v. Felipe Boncorno, Napoleon Presno, Armando Mesina,
Oscar Oria and one John Doe." There, the accused were charged with willfully
and unlawfully taking and carrying away with them the second truck, driven by
Manuel Estrada and loaded with the 600 cartons of Liberty filled milk destined
for delivery at petitioner's store in Urdaneta, Pangasinan.
The decision of the trial court shows that the accused acted with grave, if not
irresistible, threat, violence or force.3 Three (3) of the five (5) hold-uppers were
armed with firearms. The robbers not only took away the truck and its cargo but
also kidnapped the driver and his helper, detaining them for several days and
later releasing them in another province (in Zambales). The hijacked truck was
subsequently found by the police in Quezon City. The Court of First Instance
convicted all the accused of robbery, though not of robbery in band.  4
In these circumstances, we hold that the occurrence of the loss must
reasonably be regarded as quite beyond the control of the common carrier
and properly regarded as a fortuitous event. It is necessary to recall that even
common carriers are not made absolute insurers against all risks of travel and of
transport of goods, and are not held liable for acts or events which cannot be
foreseen or are inevitable, provided that they shall have complied with the
rigorous standard of extraordinary diligence. 
We, therefore, agree with the result reached by the Court of Appeals that private
respondent Cendana is not liable for the value of the undelivered
merchandise which was lost because of an event entirely beyond private
respondent's control. 
PETITION DENIED.
G.R. No. 101503 September 15, 1993 variable, raining occasionally while the discharge was in progress.8 The
petitioner's warehouse was made of corrugated galvanized iron (GI) sheets, with
PLANTERS PRODUCTS, INC., petitioner, 
an opening at the front where the dump trucks entered and unloaded the fertilizer
vs.
on the warehouse floor. Tarpaulins and GI sheets were placed in-between and
COURT OF APPEALS, SORIAMONT STEAMSHIP AGENCIES AND
alongside the trucks to contain spillages of the ferilizer.9
KYOSEI KISEN KABUSHIKI KAISHA, respondents.
It took eleven (11) days for PPI to unload the cargo, from 5 July to 18 July
SUMMARY: Planters Products, Inc. purchased from Mitsubishi 1974 (except July 12th, 14th and 18th). 10A private marine and cargo
International Corporation 9,329.7069 metric tons of Urea 46% fertilizer, surveyor, Cargo Superintendents Company Inc. (CSCI), was hired by PPI
which the latter shipped aboard the cargo vessel M/V Sun Plum on June 16, to determine the "outturn" of the cargo shipped, by taking draft readings of
1974. Prior to its voyage, a time-charter party was entered into between the vessel prior to and after discharge. 11 The survey report submitted by CSCI
Mitsubishi as shipper, and Kyosei Kisen Kabushiki Kaisha as shipowner. to the consignee (PPI) dated 19 July 1974 revealed a shortage in the cargo of
Before loading the fertilizer aboard the vessel, four of her holds were 106.726 M/T and that a portion of the Urea fertilizer approximating 18 M/T
presumably inspected by the charterer‖s representative and found it fit to take was contaminated with dirt.
the load. After loading the cargo, the steel hatches were closed with heavy
iron lids, covered with 3 layers of tarpaulin then tied with steel bonds. It The same results were contained in a Certificate of Shortage/Damaged Cargo
remained sealed throughout the entire voyage. dated 18 July 1974 prepared by PPI which showed that the cargo delivered was
Upon arrival of the vessel, petitioner unloaded the cargo, which took 11 days. indeed short of 94.839 M/T and about 23 M/T were rendered unfit for
A private marine and cargo surveyor, Cargo Superintendents Company, Inc. commerce, having been polluted with sand, rust and 
(CSCI) was hired by petitioner to determine the outturn of the cargo shipped. dirt. 12
CSCI reported shortage of 106.726 metric tons, and contamination of 18
Respondent SSA explained that they were not able to respond to the
metric tons due to dirt. PPI sent a claim letter against Soriamont Steamship
consignee's claim for payment because, according to them, what they received
Agencies, the resident agent of KKKK. The request was denied, hence, PPI
filed an action for damages before the CFI Manila. The lower court sustained was just a request for shortlanded certificate and not a formal claim, and
the petitioner‖s claim, but such decision was reversed by the appellate court, that this "request" was denied by them because they "had nothing to do
which absolved the carrier from liability. The appellate court ruled that the with the discharge of the shipment." 14 
vessel was a private carrier and not a common carrier by reason of the charter
party. The SC dismissed the petition, saying that while the carrier remained a Hence, on 18 July 1975, PPI filed an action for damages with the Court of
common carrier, it had sufficiently overcome the presumption of negligence. First Instance of Manila.

DOCTRINE: [T]he term "common or public carrier" is defined in Art. 1732 Defendant carrier argued: that the strict public policy governing common
of the Civil Code. The definition extends to carriers either by land, air or carriers does not apply to them because they have become private carriers by
water which hold themselves out as ready to engage in carrying goods or reason of the provisions of the charter-party.
transporting passengers or both for compensation as a public employment
and not as a casual occupation. The distinction between a "common or public CFI: sustained the claim of the plaintiff against the defendant carrier for the
carrier" and a "private or special carrier" lies in the character of the business, value of the goods lost or damaged when it ruled thus: 15
such that if the undertaking is a single transaction, not a part of the general . . . Prescinding from the provision of the law that a common carrier is
business or occupation, although involving the carriage of goods for a fee, presumed negligent in case of loss or damage of the goods it contracts to
the person or corporation offering such service is a private carrier. transport, all that a shipper has to do in a suit to recover for loss or damage
Article 1733 of the New Civil Code mandates that common carriers, by is to show receipt by the carrier of the goods and to delivery by it of less
reason of the nature of their business, should observe extraordinary diligence than what it received. After that, the burden of proving that the loss or
in the vigilance over the goods they carry. In the case of private carriers, damage was due to any of the causes which exempt him from liability is
however, the exercise of ordinary diligence in the carriage of goods will shipted to the carrier, common or private he may be. Even if the provisions
suffice. Moreover, in the case of loss, destruction or deterioration of the of the charter-party aforequoted are deemed valid, and the defendants
goods, common carriers are presumed to have been at fault or to have acted considered private carriers, it was still incumbent upon them to prove that
negligently, and the burden of proving otherwise rests on them. 26 On the the shortage or contamination sustained by the cargo is attributable to the
contrary, no such presumption applies to private carriers, for whosoever fault or negligence on the part of the shipper or consignee in the loading,
alleges damage to or deterioration of the goods carried has the onus of stowing, trimming and discharge of the cargo. This they failed to do. By
proving that the cause was the negligence of the carrier. this omission, coupled with their failure to destroy the presumption of
negligence against them, the defendants are liable (emphasis supplied).
FACTS: Planters Products, Inc. (PPI), purchased from Mitsubishi CA: reversed the lower court and absolved the carrier from liability for the
International Corporation (MITSUBISHI) of New York, U.S.A., 9,329.7069 value of the cargo that was lost or damaged.
metric tons (M/T) of Urea 46% fertilizer which the latter shipped in bulk on 16
June 1974 aboard the cargo vessel M/V "Sun Plum" owned by private - Relying on the 1968 case of Home Insurance Co.  v. American
respondent Kyosei Kisen Kabushiki Kaisha (KKKK) from Kenai, Alaska, Steamship Agencies, Inc.,17 the appellate court ruled that the cargo
U.S.A., to Poro Point, San Fernando, La Union, Philippines, as evidenced by vessel M/V "Sun Plum" owned by private respondent KKKK was a
Bill of Lading No. KP-1 signed by the master of the vessel and issued on the private carrier and not a common carrier by reason of the time
date of departure. charterer-party. Accordingly, the Civil Code provisions on common
On 17 May 1974, or prior to its voyage, a time charter-party on the vessel M/V carriers which set forth a presumption of negligence do not find
"Sun Plum" pursuant to the Uniform General Charter2 was entered into application in the case at bar. Thus —
between Mitsubishi as shipper/charterer and KKKK as shipowner, in . . . In the absence of such presumption, it was incumbent upon the plaintiff-
Tokyo, Japan.3 Riders to the aforesaid charter-party starting from par. 16 appellee to adduce sufficient evidence to prove the negligence of the defendant
to 40 were attached to the pre-printed agreement. Addenda Nos. 1, 2, 3 and 4 carrier  as alleged in its complaint. It is an old and well settled rule that if the
to the charter-party were also subsequently entered into on the 18th, 20th, 21st plaintiff, upon whom rests the burden of proving his cause of action, fails to
and 27th of May 1974, respectively. show in a satisfactory manner the facts upon which he bases his claim, the
Before loading the fertilizer aboard the vessel, four (4) of her holds4 were all defendant is under no obligation to prove his exception or defense
presumably inspected by the charterer's representative and found fit to take a (Moran, Commentaries on the Rules of Court, Volume 6, p. 2, citing Belen v.
load of urea in bulk pursuant to par. 16 of the charter-party which reads: Belen, 13 Phil. 202).

16. . . . At loading port, notice of readiness to be accomplished by certificate But, the record shows that the plaintiff-appellee dismally failed to prove the
from National Cargo Bureau inspector or substitute appointed by charterers basis of its cause of action, i.e. the alleged negligence of defendant carrier. It
for his account certifying the vessel's readiness to receive cargo spaces. The appears that the plaintiff was under the impression that it did not have to
vessel's hold to be properly swept, cleaned and dried at the vessel's expense establish defendant's negligence. Be that as it may, contrary to the trial court's
and the vessel to be presented clean for use in bulk to the satisfaction of the finding, the record of the instant case discloses ample evidence showing that
inspector before daytime commences. (emphasis supplied) defendant carrier was not negligent in performing its obligation . . . 18 (emphasis
supplied).
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, Petitioner PPI appeals to us by way of a petition for review assailing the decision
covered with three (3) layers of tarpaulin, then tied with steel bonds. The of the Court of Appeals.
hatches remained closed and tightly sealed throughout the entire voyage.5 PETITIONER ARGUES: Petitioner theorizes that the Home Insurance case
Upon arrival of the vessel at her port of call on 3 July 1974, the steel pontoon has no bearing on the present controversy because the issue raised therein is
hatches were opened with the use of the vessel's boom. Petitioner unloaded the validity of a stipulation in the charter-party delimiting the liability of the
the cargo from the holds into its steelbodied dump trucks which were parked shipowner for loss or damage to goods cause by want of due deligence on its
alongside the berth, using metal scoops attached to the ship, pursuant to the part or that of its manager to make the vessel seaworthy in all respects, and not
terms and conditions of the charter-partly (which provided for an F.I.O.S. whether the presumption of negligence provided under the Civil Code
clause).6 The hatches remained open throughout the duration of the applies only to common carriers and not to private carriers. 19
discharge.7 -  Petitioner further argues that since the possession and control of
Each time a dump truck was filled up, its load of Urea was covered with the vessel remain with the shipowner, absent any stipulation to
tarpaulin before it was transported to the consignee's warehouse located some the contrary, such shipowner should made liable for the
fifty (50) meters from the wharf. Midway to the warehouse, the trucks were negligence of the captain and crew.
made to pass through a weighing scale where they were individually weighed for - In fine, PPI faults the appellate court in not applying the
the purpose of ascertaining the net weight of the cargo. The port area was windy, presumption of negligence against respondent carrier, and instead
certain portions of the route to the warehouse were sandy and the weather was shifting the onus probandi on the shipper to show want of due
 deligence on the part of the carrier, when he was not even at hand law or that the loss, damage or deterioration of the cargo was due to fortuitous
to witness what transpired during the entire voyage. event, or some other circumstances inconsistent with its liability. 31
ISSUE: whether a common carrier becomes a private carrier by reason of a To our mind, respondent carrier has sufficiently overcome, by clear and
charter-party; in the negative, whether the shipowner in the instant case was able convincing proof, the prima facie presumption of negligence.
to prove that he had exercised that degree of diligence required of him under the
The master of the carrying vessel, Captain Lee Tae Bo, in his deposition taken
law.
on 19 April 1977 before the Philippine Consul and Legal Attache in the
RULING: NO, YES Philippine Embassy in Tokyo, Japan, testified that before the fertilizer was
loaded, the four (4) hatches of the vessel were cleaned, dried and fumigated.
A "charter-party" is defined as a contract by which an entire ship, or some
After completing the loading of the cargo in bulk in the ship's holds, the steel
principal part thereof, is let by the owner to another person for a specified time
pontoon hatches were closed and sealed with iron lids, then covered with three
or use; 20 a contract of affreightment by which the owner of a ship or other vessel
(3) layers of serviceable tarpaulins which were tied with steel bonds. The
lets the whole or a part of her to a merchant or other person for the conveyance
hatches remained close and tightly sealed while the ship was in transit as the
of goods, on a particular voyage, in consideration of the payment of
weight of the steel covers made it impossible for a person to open without the
freight; 21 Charter parties are of two types: (a) contract of affreightment which
use of the ship's boom. 32
involves the use of shipping space on vessels leased by the owner in part or as a
whole, to carry goods for others; and, (b) charter by demise or bareboat charter, It was also shown during the trial that the hull of the vessel was in good
by the terms of which the whole vessel is let to the charterer with a transfer to condition, foreclosing the possibility of spillage of the cargo into the sea or
him of its entire command and possession and consequent control over its seepage of water inside the hull of the vessel. 33 When M/V "Sun Plum" docked
navigation, including the master and the crew, who are his servants. Contract of at its berthing place, representatives of the consignee boarded, and in the
affreightment may either be time charter, wherein the vessel is leased to the presence of a representative of the shipowner, the foreman, the stevedores, and a
charterer for a fixed period of time, or voyage charter, wherein the ship is leased cargo surveyor representing CSCI, opened the hatches and inspected the
for a single voyage. 22 In both cases, the charter-party provides for the hire of condition of the hull of the vessel. The stevedores unloaded the cargo under the
vessel only, either for a determinate period of time or for a single or consecutive watchful eyes of the shipmates who were overseeing the whole operation on
voyage, the shipowner to supply the ship's stores, pay for the wages of the rotation basis. 34
master and the crew, and defray the expenses for the maintenance of the ship.
Verily, the presumption of negligence on the part of the respondent carrier
Upon the other hand, the term "common or public carrier" is defined in Art. has been efficaciously overcome by the showing of extraordinary zeal and
1732 of the Civil Code. 23 The definition extends to carriers either by land, air or assiduity exercised by the carrier in the care of the cargo. This was
water which hold themselves out as ready to engage in carrying goods or confirmed by respondent appellate court thus —
transporting passengers or both for compensation as a public employment and
. . . Be that as it may, contrary to the trial court's finding, the record of the
not as a casual occupation. The distinction between a "common or public
instant case discloses ample evidence showing that defendant carrier was
carrier" and a "private or special carrier" lies in the character of the
not negligent in performing its obligations. Particularly, the following
business, such that if the undertaking is a single transaction, not a part of the
testimonies of plaintiff-appellee's own witnesses clearly show absence of
general business or occupation, although involving the carriage of goods for a
negligence by the defendant carrier; that the hull of the vessel at the time of
fee, the person or corporation offering such service is a private carrier. 24
the discharge of the cargo was sealed and nobody could open the same
Article 1733 of the New Civil Code mandates that common carriers, by reason except in the presence of the owner of the cargo and the representatives of
of the nature of their business, should observe extraordinary diligence in the the vessel (TSN, 20 July 1977, p. 14); that the cover of the hatches was
vigilance over the goods they carry.25 made of steel and it was overlaid with tarpaulins, three layers of tarpaulins
and therefore their contents were protected from the weather (TSN, 5 April
 In the case of private carriers, however, the exercise of ordinary diligence in the
1978, p. 24); and, that to open these hatches, the seals would have to be
carriage of goods will suffice. Moreover, in the case of loss, destruction or
broken, all the seals were found to be intact (TSN, 20 July 1977, pp. 15-16)
deterioration of the goods, common carriers are presumed to have been at fault
(emphasis supplied).
or to have acted negligently, and the burden of proving otherwise rests on
them.26 On the contrary, no such presumption applies to private carriers, for The period during which private respondent was to observe the degree of
whosoever alleges damage to or deterioration of the goods carried has the onus diligence required of it as a public carrier began from the time the cargo was
of proving that the cause was the negligence of the carrier. unconditionally placed in its charge after the vessel's holds were duly inspected
and passed scrutiny by the shipper, up to and until the vessel reached its
APLLICATION IN THE CASE
destination and its hull was reexamined by the consignee, but prior to
It is not disputed that respondent carrier, in the ordinary course of business, unloading.
operates as a common carrier, transporting goods indiscriminately for all
This is clear from the limitation clause agreed upon by the parties in the
persons. When petitioner chartered the vessel M/V "Sun Plum", the ship captain,
Addendum to the standard "GENCON" time charter-party which provided for an
its officers and compliment were under the employ of the shipowner and
F.I.O.S., meaning, that the loading, stowing, trimming and discharge of the
therefore continued to be under its direct supervision and control. Hardly then
cargo was to be done by the charterer, free from all risk and expense to the
can we charge the charterer, a stranger to the crew and to the ship, with the duty
carrier. 35 Moreover, a shipowner is liable for damage to the cargo resulting
of caring for his cargo when the charterer did not have any control of the means
from improper stowage only when the stowing is done by stevedores
in doing so. This is evident in the present case considering that the steering
employed by him, and therefore under his control and supervision, not
of the ship, the manning of the decks, the determination of the course of the
when the same is done by the consignee or stevedores under the employ of
voyage and other technical incidents of maritime navigation were all
the latter. 36
consigned to the officers and crew who were screened, chosen and hired by
the shipowner. 27 Article 1734 of the New Civil Code provides that common carriers are not
responsible for the loss, destruction or deterioration of the goods if caused by the
It is therefore imperative that a public carrier shall remain as such,
charterer of the goods or defects in the packaging or in the containers. The Code
notwithstanding the charter of the whole or portion of a vessel by one or
of Commerce also provides that all losses and deterioration which the goods
more persons, provided the charter is limited to the ship only, as in the case
may suffer during the transportation by reason of fortuitous event,  force
of a time-charter or voyage-charter.
majeure, or the inherent defect of the goods, shall be for the account and risk of
It is only when the charter includes both the vessel and its crew, as in a the shipper, and that proof of these accidents is incumbent upon the
bareboat or demise that a common carrier becomes private, at least insofar carrier. 37 The carrier, nonetheless, shall be liable for the loss and damage
as the particular voyage covering the charter-party is concerned. Indubitably, a resulting from the preceding causes if it is proved, as against him, that they arose
shipowner in a time or voyage charter retains possession and control of the through his negligence or by reason of his having failed to take the precautions
ship, although her holds may, for the moment, be the property of the which usage has established among careful persons. 38
charterer. 28
Respondent carrier presented a witness who testified on the characteristics of
RE: reliance on the case of Home Insurance Co.  v.  American Steamship the fertilizer shipped and the expected risks of bulk shipping. Mr. Estanislao
Agencies, supra Chupungco, a chemical engineer working with Atlas Fertilizer, described Urea
as a chemical compound consisting mostly of ammonia and carbon monoxide
COURT: Respondent carrier's heavy reliance on the case of Home Insurance compounds which are used as fertilizer. Urea also contains 46% nitrogen and is
Co.  v. American Steamship Agencies, supra, is misplaced for the reason that the highly soluble in water. However, during storage, nitrogen and ammonia do not
meat of the controversy therein was the validity of a stipulation in the charter- normally evaporate even on a long voyage, provided that the temperature inside
party exempting the shipowners from liability for loss due to the negligence the hull does not exceed eighty (80) degrees centigrade. Mr. Chupungco further
of its agent, and not the effects of a special charter on common carriers. At added that in unloading fertilizer in bulk with the use of a clamped shell, losses
any rate, the rule in the United States that a ship chartered by a single shipper to due to spillage during such operation amounting to one percent (1%) against the
carry special cargo is not a common carrier, 29 does not find application in our bill of lading is deemed "normal" or "tolerable." The primary cause of these
jurisdiction, for we have observed that the growing concern for safety in the spillages is the clamped shell which does not seal very tightly. Also, the wind
transportation of passengers and /or carriage of goods by sea requires a more tends to blow away some of the materials during the unloading process.
exacting interpretation of admiralty laws, more particularly, the rules governing
common carriers. The dissipation of quantities of fertilizer, or its daterioration in value, is caused
either by an extremely high temperature in its place of storage, or when it comes
in contact with water. When Urea is drenched in water, either fresh or saline,
RE: BURDEN OF PROOF some of its particles dissolve. But the salvaged portion which is in liquid form
still remains potent and usable although no longer saleable in its original market
In an action for recovery of damages against a common carrier on the goods value.
shipped, the shipper or consignee should first prove the fact of shipment and
its consequent loss or damage while the same was in the possession, actual The probability of the cargo being damaged or getting mixed or contaminated
or constructive, of the carrier. Thereafter, the burden of proof shifts to with foreign particles was made greater by the fact that the fertilizer was
respondent to prove that he has exercised extraordinary diligence required by transported in "bulk," thereby exposing it to the inimical effects of the elements
and the grimy condition of the various pieces of equipment used in transporting
and hauling it.
The evidence of respondent carrier also showed that it was highly
improbable for sea water to seep into the vessel's holds during the voyage
since the hull of the vessel was in good condition and her hatches were
tightly closed and firmly sealed, making the M/V "Sun Plum" in all respects
seaworthy to carry the cargo she was chartered for. If there was loss or
contamination of the cargo, it was more likely to have occurred while the same
was being transported from the ship to the dump trucks and finally to the
consignee's warehouse. This may be gleaned from the testimony of the marine
and cargo surveyor of CSCI who supervised the unloading. He explained that the
18 M/T of alleged "bar order cargo" as contained in their report to PPI was just
an approximation or estimate made by them after the fertilizer was discharged
from the vessel and segregated from the rest of the cargo.
The Court notes that it was in the month of July when the vessel arrived port and
unloaded her cargo. It rained from time to time at the harbor area while the cargo
was being discharged according to the supply officer of PPI, who also testified
that it was windy at the waterfront and along the shoreline where the dump
trucks passed enroute to the consignee's warehouse.
Indeed, we agree with respondent carrier that bulk shipment of highly soluble
goods like fertilizer carries with it the risk of loss or damage. More so, with a
variable weather condition prevalent during its unloading, as was the case at bar.
This is a risk the shipper or the owner of the goods has to face.
Clearly, respondent carrier has sufficiently proved the inherent character
of the goods which makes it highly vulnerable to deterioration; as well as
the inadequacy of its packaging which further contributed to the loss. On
the other hand, no proof was adduced by the petitioner showing that the
carrier was remise in the exercise of due diligence in order to minimize the
loss or damage to the goods it carried.
PETITION DISMISSED.
G.R. No. 125948 December 29, 1998 (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
FIRST PHILIPPINE INDUSTRIAL CORPORATION, petitioner, 
include the authority to collect such taxes on transportation contractors for, as
vs.
defined under Sec. 131 (h), the term "contractors" excludes transportation
COURT OF APPEALS, HONORABLE PATERNO V. TAC-AN,
contractors; and,
BATANGAS CITY and ADORACION C. ARELLANO, in her official
capacity as City Treasurer of Batangas, respondents. (3) the City Treasurer illegally and erroneously imposed and collected the said
tax, thus meriting the immediate refund of the tax paid.7
SUMMARY: FPIC, a grantee of a pipeline concession under Petroleum Act,
to contract, install and operate oil pipelines, applied for a mayor's permit. RESPONDENT ARGUE: petitioner cannot be exempt from taxes under
However, before the mayor's permit could be issued, the City Treasurer Section 133 (j) of the Local Government Code as said exemption applies only to
required FPIC to pay a local tax based on its gross receipts pursuant to the "transportation contractors and persons engaged in the transportation by hire and
Local Government Code. In order not to hamper its operations, FPIC paid the common carriers by air, land and water."
tax under protest. FPIC claims exemption by virtue of it being a common
- assert that pipelines are not included in the term "common carrier"
carrier. City Treasurer, RTC and CA all ruled that FPIC is not a common
which refers solely to ordinary carriers such as trucks, trains, ships
carrier thus should be subject to the local tax imposed. SC reversed and ruled
and the like. Respondents further posit that the term "common
that FPIC is a common carrier because it passed the test (see doctrine). Thus,
carrier" under the said code pertains to the mode or manner by which
it is exempt from local tax which is intended to avoid double taxation since it
a product is delivered to its destination.8
already paid tax imposed by NIRC.
RTC: dismissing the complaint.
DOCTRINE: A "common carrier" may be defined, broadly, as one who
holds himself out to the public as engaged in the business of transporting . . . Plaintiff is either a contractor or other independent contractor.
persons or property from place to place, for compensation, offering his . . . the exemption to tax claimed by the plaintiff has become unclear. It is a
services to the public generally. rule that tax exemptions are to be strictly construed against the taxpayer, taxes
Article 1732 of the Civil Code defines a "common carrier" as "any person, being the lifeblood of the government. Exemption may therefore be granted only
corporation, firm or association engaged in the business of carrying or by clear and unequivocal provisions of law
transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public." Plaintiff claims that it is a grantee of a pipeline concession under Republic Act
387. (Exhibit A) whose concession was lately renewed by the Energy Regulatory
The test for determining whether a party is a common carrier of goods Board (Exhibit B). Yet neither said law nor the deed of concession grant any tax
is: exemption upon the plaintiff.
 He must be engaged in the business of carrying goods for others Even the Local Government Code imposes a tax on franchise holders under
as a public employment, and must hold himself out as ready to Sec. 137 of the Local Tax Code. Such being the situation obtained in this
engage in the transportation of goods for person generally as a case (exemption being unclear and equivocal) resort to distinctions or other
business and not as a casual occupation; considerations may be of help:
 He must undertake to carry goods of the kind to which his
business is confined; 1. That the exemption granted under Sec. 133 (j) encompasses
only common carriers so as not to overburden the riding public or
 He must undertake to carry by the method by which his business
commuters with taxes.  Plaintiff  is not a common carrier, but a
is conducted and over his established roads; and
special carrier extending its services and facilities to a single
 The transportation must be for hire. specific or "special customer" under a "special contract."
2. The Local Tax Code of 1992 was basically enacted to give more
FACTS: Petitioner is a grantee of a pipeline concession under Republic Act and effective local autonomy to local governments than the
No. 387, as amended, to contract, install and operate oil pipelines. The original previous enactments, to make them economically and financially
pipeline concession was granted in 19671 and renewed by the Energy Regulatory viable to serve the people and discharge their functions with a
Board in 1992. 2 concomitant obligation to accept certain devolution of powers, . . .
So, consistent with this policy even franchise grantees are taxed
Sometime in January 1995, petitioner applied for a mayor's permit with the (Sec. 137) and contractors are also taxed under Sec. 143 (e) and
Office of the Mayor of Batangas City. However, before the mayor's permit 151 of the Code.9
could be issued, the respondent City Treasurer required petitioner to pay a
local tax based on its gross receipts for the fiscal year 1993 pursuant to the CA: affirming the trial court's dismissal of petitioner's complaint. Petitioner's
Local Government Code3. motion for reconsideration was denied on July 18, 1996. 12

The respondent City Treasurer assessed a business tax on the petitioner Petitioner claims: that the respondent Court of Appeals erred in holding that (1)
amounting to P956,076.04 payable in four installments based on the gross the petitioner is not a common carrier or a transportation contractor, and (2) the
receipts for products pumped at GPS-1 for the fiscal year 1993 which amounted exemption sought for by petitioner is not clear under the law.
to P181,681,151.00. In order not to hamper its operations, petitioner paid the ISSUE: WON FPIC is a common carrier.
tax under protest in the amount of P239,019.01 for the first quarter of 1993.
COURT: YES! There is merit in the petition.
On January 20, 1994, petitioner filed a letter-protest addressed to the
respondent City Treasurer, the pertinent portion of which reads: 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
Please note that our Company (FPIC) is a pipeline operator with a government concession place to place, for compensation, offering his services to the public generally.
granted under the Petroleum Act. It is engaged in the business of transporting petroleum Art. 1732 of the Civil Code defines a "common carrier" as "any person,
products from the Batangas refineries, via pipeline, to Sucat and JTF Pandacan Terminals.
As such, our Company is exempt from paying tax on gross receipts under Section 133 of the
corporation, firm or association engaged in the business of carrying or
Local Government Code of 1991 . . . . transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public."
Moreover, Transportation contractors are not included in the enumeration of contractors
under Section 131, Paragraph (h) of the Local Government Code. Therefore, the authority to The test for determining whether a party is a common carrier of goods is:
impose tax "on contractors and other independent contractors" under Section 143, Paragraph
(e) of the Local Government Code does not include the power to levy on transportation 1. He must be engaged in the business of carrying goods for others
contractors. as a public employment, and must hold himself out as ready to
engage in the transportation of goods for person generally as a
The imposition and assessment cannot be categorized as a mere fee authorized under
Section 147 of the Local Government Code. The said section limits the imposition of fees
business and not as a casual occupation;
and charges on business to such amounts as may be commensurate to the cost of regulation, 2. He must undertake to carry goods of the kind to which his
inspection, and licensing. Hence, assuming arguendo that FPIC is liable for the license fee,
business is confined;
the imposition thereof based on gross receipts is violative of the aforecited provision. The
amount of P956,076.04 (P239,019.01 per quarter) is not commensurate to the cost of 3. He must undertake to carry by the method by which his business
regulation, inspection and licensing. The fee is already a revenue raising measure, and not a is conducted and over his established roads; and
mere regulatory imposition.4
4. The transportation must be for hire. 15
Based on the above definitions and requirements, there is no doubt that
On March 8, 1994, the respondent City Treasurer denied the protest. petitioner is a common carrier. It is engaged in the business of transporting
or carrying goods,  i.e. petroleum products, for hire as a public employment.
RESPONDENT CONTENTION: that petitioner cannot be considered engaged It undertakes to carry for all persons indifferently, that is, to all persons
in transportation business, thus it cannot claim exemption under Section 133 (j) who choose to employ its services, and transports the goods by land and for
of the Local Government Code.5 compensation.
On June 15, 1994, petitioner filed with the Regional Trial Court of Batangas The fact that petitioner has a limited clientele does not exclude it from the
City a complaint6 for tax refund with prayer for writ of preliminary injunction definition of a common carrier. In De Guzman vs. Court of Appeals  16we ruled
against respondents City of Batangas and Adoracion Arellano in her capacity as that:
City Treasurer.
The above article (Art. 1732, Civil Code) makes no distinction between
PETITIONER ALLEGE: one whose principal business activity is the carrying of persons or
(1) the imposition and collection of the business tax on its gross receipts violates goods or both, and one who does such carrying only as an ancillary
Section 133 of the Local Government Code; activity (in local idiom, as a "sideline"). Article 1732 . . . 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 1877 deliberately refrained from
making such distinctions.
So understood, the concept of "common carrier" under Article 1732
may be seen to coincide neatly with the notion of "public service,"
under the Public Service Act (Commonwealth Act No. 1416, as
amended) which at least partially supplements the law on common
carriers set forth in the Civil Code. Under Section 13, paragraph (b) of
the Public Service Act, "public service" includes:
every person that now or hereafter may own, operate. manage, or
control in the Philippines, for hire or compensation, with general or
limited clientele, whether permanent, occasional or accidental, and
done for general business purposes, any common carrier, railroad,
street railway, traction railway, subway motor vehicle, either for
freight or passenger, or both, with or without fixed route and
whatever may be its classification, freight or carrier service of any
class, express service, steamboat, or steamship line, pontines,
ferries and water craft, engaged in the transportation of  passengers
or freight or both, shipyard, marine repair shop, wharf or dock, ice
plant, ice-refrigeration plant, canal, irrigation system gas, electric
light heat and power, water supply andpower petroleum, sewerage
system, wire or wireless communications systems, wire or wireless
broadcasting stations and other similar public services. (Emphasis
Supplied)
RE: respondent's argument that the term "common carrier" as used in Section
133 (j) of the Local Government Code refers only to common carriers
transporting goods and passengers through moving vehicles or vessels either by
land, sea or water,
COURT: erroneous.
As correctly pointed out by petitioner, the definition of "common carriers" in the
Civil Code makes no distinction as to the means of transporting, as long as it
is by land, water or air. It does not provide that the transportation of the
passengers or goods should be by motor vehicle. In fact, in the United States,
oil pipe line operators are considered common carriers. 17
Under the Petroleum Act of the Philippines (Republic Act 387), petitioner is
considered a "common carrier." Thus, Article 86 thereof provides that:
Art. 86. Pipe line concessionaire as common carrier. — A pipe line
shall have the preferential right to utilize installations for the
transportation of petroleum owned by him, but is obligated to utilize the
remaining transportation capacity pro rata for the transportation of such
other petroleum as may be offered by others for transport, and to charge
without discrimination such rates as may have been approved by the
Secretary of Agriculture and Natural Resources.
Republic Act 387 also regards petroleum operation as a public utility. Pertinent
portion of Article 7 thereof provides:
that everything relating to the exploration for and exploitation of
petroleum . . . and everything relating to the manufacture, refining,
storage, or transportation by special methods of petroleum, is hereby
declared to be a public utility. (Emphasis Supplied)
The Bureau of Internal Revenue likewise considers the petitioner a "common
carrier." In BIR Ruling No. 069-83, it declared:
. . . since [petitioner] is a pipeline concessionaire that is engaged only in
transporting petroleum products, it is considered a common carrier
under Republic Act No. 387 . . . . Such being the case, it is not subject
to withholding tax prescribed by Revenue Regulations No. 13-78, as
amended.
From the foregoing disquisition, there is no doubt that petitioner is a
"common carrier" and, therefore, exempt from the business tax as
provided for in Section 133 (j), of the Local Government Code, to wit:
Sec. 133. Common Limitations on the Taxing Powers of Local
Government Units. — Unless otherwise provided herein, the exercise of
the taxing powers of provinces, cities, municipalities,
x x x          x x x
(j) Taxes on the gross receipts of transportation contractors and
persons engaged in the transportation of passengers or freight
by hire and common carriers by air, land or water, except as
provided in this Code.
(see full case for deliberations)
It is clear that the legislative intent in excluding from the taxing power of the
local government unit the imposition of business tax against common carriers is
to prevent a duplication of the so-called "common carrier's tax."
Petitioner is already paying three (3%) percent common carrier's tax on its
gross sales/earnings under the National Internal Revenue Code. 19 To tax
petitioner again on its gross receipts in its transportation of petroleum
business would defeat the purpose of the Local Government Code.
PETITION GRANTED.
G.R. No. 138334               August 25, 2003 - However, the appellate court held that petitioner is more negligent
than respondent because as a lawyer and well-traveled person, she
ESTELA L. CRISOSTOMO, Petitioner, 
should have known better than to simply rely on what was told to her.
vs.
This being so, she is not entitled to any form of damages. Petitioner
The Court of Appeals and CARAVAN TRAVEL & TOURS
also forfeited her right to the "Jewels of Europe" tour and must
INTERNATIONAL, INC., Respondents.
therefore pay respondent the balance of the price for the "British
Common carrier; does not include travel agency— Pageant" tour.
Object of contract with travel agency: service of arranging and facilitating PETITIONER CONTENTION: respondent did not observe the standard of
client‖s booking, ticketing and accommodation in the package tour; care required of a common carrier when it informed her wrongly of the flight
Object of contract of carriage: transportation of passengers or goods; schedule.
Standard of care for travel agencies: diligence of a good father of a family; - She could not be deemed more negligent than respondent since the
latter is required by law to exercise extraordinary diligence in the
FACTS: In May 1991, petitioner Estela L. Crisostomo contracted the fulfillment of its obligation. If she were negligent at all, the same is
services of respondent Caravan Travel and Tours International, Inc. to merely contributory and not the proximate cause of the damage she
arrange and facilitate her booking, ticketing and accommodation in a tour suffered. Her loss could only be attributed to respondent as it was
dubbed "Jewels of Europe". The package tour included the countries of England, the direct consequence of its employee’s gross negligence.
Holland, Germany, Austria, Liechstenstein, Switzerland and France at a total
cost of P74,322.70. Petitioner was given a 5% discount on the amount, which COURT: Petitioner’s contention has no merit.
included airfare, and the booking fee was also waived because petitioner’s niece, By definition, a contract of carriage or transportation is one whereby a
Meriam Menor, was respondent company’s ticketing manager. certain person or association of persons obligate themselves to transport persons,
Pursuant to said contract, Menor went to her aunt’s residence on June 12, things, or news from one place to another for a fixed price.9 Such person or
1991 – a Wednesday – to deliver petitioner’s travel documents and plane association of persons are regarded as carriers and are classified as private or
tickets. Petitioner, in turn, gave Menor the full payment for the package tour. special carriers and common or public carriers.10 A common carrier is defined
Menor then told her to be at the Ninoy Aquino International Airport (NAIA) on under Article 1732 of the Civil Code as persons, corporations, firms or
Saturday, two hours before her flight on board British Airways. 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
Without checking her travel documents, petitioner went to NAIA on the public.
Saturday, June 15, 1991, to take the flight for the first leg of her journey from
Manila to Hongkong. To petitioner’s dismay, she discovered that the flight It is obvious from the above definition that respondent is not an entity engaged
she was supposed to take had already departed the previous day. She in the business of transporting either passengers or goods and is therefore,
learned that her plane ticket was for the flight scheduled on June 14, 1991. She neither a private nor a common carrier. Respondent did not undertake to
thus called up Menor to complain. transport petitioner from one place to another since its covenant with its
customers is simply to make travel arrangements in their behalf. Respondent’s
Subsequently, Menor prevailed upon petitioner to take another tour – the services as a travel agency include procuring tickets and facilitating travel
"British Pageant" – which included England, Scotland and Wales in its itinerary. permits or visas as well as booking customers for tours.
For this tour package, petitioner was asked anew to pay US$785.00 or
P20,881.00 (at the then prevailing exchange rate of P26.60). She gave While petitioner concededly bought her plane ticket through the efforts of
respondent US$300 or P7,980.00 as partial payment and commenced the trip respondent company, this does not mean that the latter ipso facto is a common
in July 1991. carrier. At most, respondent acted merely as an agent of the airline, with
whom petitioner ultimately contracted for her carriage to Europe.
Upon petitioner’s return from Europe, she demanded from respondent the Respondent’s obligation to petitioner in this regard was simply to see to it
reimbursement of P61,421.70, representing the difference between the sum she that petitioner was properly booked with the airline for the appointed date
paid for "Jewels of Europe" and the amount she owed respondent for the "British and time. Her transport to the place of destination, meanwhile, pertained
Pageant" tour. directly to the airline.
Despite several demands, respondent company refused to reimburse the The object of petitioner’s contractual relation with respondent is the latter’s
amount, contending that the same was non-refundable.1  service of arranging and facilitating petitioner’s booking, ticketing and
Petitioner was thus constrained to file a complaint against respondent for accommodation in the package tour. In contrast, the object of a contract of
breach of contract of carriage and damages, which was docketed as Civil carriage is the transportation of passengers or goods. It is in this sense that
Case No. 92-133 and raffled to Branch 59 of the Regional Trial Court of Makati the contract between the parties in this case was an ordinary one for services and
City. not one of carriage. Petitioner’s submission is premised on a wrong assumption.

Petitioner alleged: that her failure to join "Jewels of Europe" was due to The nature of the contractual relation between petitioner and respondent is
respondent’s fault since it did not clearly indicate the departure date on the plane determinative of the degree of care required in the performance of the latter’s
ticket. obligation under the contract. For reasons of public policy, a common carrier in
a contract of carriage is bound by law to carry passengers as far as human care
- Respondent was also negligent in informing her of the wrong flight and foresight can provide using the utmost diligence of very cautious persons
schedule through its employee Menor. She insisted that the "British and with due regard for all the circumstances.11 As earlier stated, however,
Pageant" was merely a substitute for the "Jewels of Europe" tour, respondent is not a common carrier but a travel agency. It is thus not bound
such that the cost of the former should be properly set-off against the under the law to observe extraordinary diligence in the performance of its
sum paid for the latter. obligation, as petitioner claims.
For its part, respondent company, through its Operations Manager, Concepcion Since the contract between the parties is an ordinary one for services, the
Chipeco, denied responsibility for petitioner’s failure to join the first tour. standard of care required of respondent is that of a good father of a family
Chipeco insisted that petitioner was informed of the correct departure date, under Article 1173 of the Civil Code.12 This connotes reasonable care
which was clearly and legibly printed on the plane ticket. The travel documents consistent with that which an ordinarily prudent person would have observed
were given to petitioner two days ahead of the scheduled trip. Petitioner had when confronted with a similar situation. The test to determine whether
only herself to blame for missing the flight, as she did not bother to read or negligence attended the performance of an obligation is: did the defendant in
confirm her flight schedule as printed on the ticket. doing the alleged negligent act use that reasonable care and caution which an
Respondent explained that it can no longer reimburse the amount paid for ordinarily prudent person would have used in the same situation? If not, then he
"Jewels of Europe", considering that the same had already been remitted to its is guilty of negligence.13 
principal in Singapore, Lotus Travel Ltd., which had already billed the same APPLICATION IN THE CASE
even if petitioner did not join the tour. Lotus’ European tour organizer, Insight
International Tours Ltd., determines the cost of a package tour based on a In the case at bar, the lower court found Menor negligent when she
minimum number of projected participants. For this reason, it is accepted allegedly informed petitioner of the wrong day of departure. Petitioner’s
industry practice to disallow refund for individuals who failed to take a booked testimony was accepted as indubitable evidence of Menor’s alleged
tour.3  negligent act since respondent did not call Menor to the witness stand to
refute the allegation. The lower court applied the presumption under Rule
Lastly, respondent maintained that the "British Pageant" was not a substitute for 131, Section 3 (e)14 of the Rules of Court that evidence willfully suppressed
the package tour that petitioner missed. This tour was independently procured by would be adverse if produced and thus considered petitioner’s
petitioner after realizing that she made a mistake in missing her flight for uncontradicted testimony to be sufficient proof of her claim.
"Jewels of Europe". Petitioner was allowed to make a partial payment of only
US$300.00 for the second tour because her niece was then an employee of the RE: , respondent has consistently denied that Menor was negligent and
travel agency. Consequently, respondent prayed that petitioner be ordered to pay maintains that petitioner’s assertion is belied by the evidence on record. The date
the balance of P12,901.00 for the "British Pageant" package tour. and time of departure was legibly written on the plane ticket and the travel
papers were delivered two days in advance precisely so that petitioner could
RTC: held that respondent was negligent in erroneously advising petitioner of prepare for the trip. It performed all its obligations to enable petitioner to join the
her departure date through its employee, Menor, who was not presented as tour and exercised due diligence in its dealings with the latter.
witness to rebut petitioner’s testimony. However, petitioner should have verified
the exact date and time of departure by looking at her ticket and should have COURT: We agree with respondent.
simply not relied on Menor’s verbal representation. Respondent’s failure to present Menor as witness to rebut petitioner’s testimony
- declared that petitioner was guilty of contributory negligence and could not give rise to an inference unfavorable to the former. Menor was already
accordingly, deducted 10% from the amount being claimed as refund. working in France at the time of the filing of the complaint,15 thereby making it
physically impossible for respondent to present her as a witness. Then too, even
CA: found both parties to be at fault. if it were possible for respondent to secure Menor’s testimony, the presumption
under Rule 131, Section 3(e) would still not apply. The opportunity and
possibility for obtaining Menor’s testimony belonged to both parties,
considering that Menor was not just respondent’s employee, but also petitioner’s
niece. It was thus error for the lower court to invoke the presumption that
respondent willfully suppressed evidence under Rule 131, Section 3(e). Said
presumption would logically be inoperative if the evidence is not intentionally
omitted but is simply unavailable, or when the same could have been obtained
by both parties.16 
In sum, we do not agree with the finding of the lower court that Menor’s
negligence concurred with the negligence of petitioner and resultantly
caused damage to the latter.
Menor’s negligence was not sufficiently proved, considering that the only
evidence presented on this score was petitioner’s uncorroborated narration of the
events. It is well-settled that the party alleging a fact has the burden of proving it
and a mere allegation cannot take the place of evidence.17 If the plaintiff, upon
whom rests the burden of proving his cause of action, fails to show in a
satisfactory manner facts upon which he bases his claim, the defendant is under
no obligation to prove his exception or defense.18 
Contrary to petitioner’s claim, the evidence on record shows that respondent
exercised due diligence in performing its obligations under the contract and
followed standard procedure in rendering its services to petitioner. As
correctly observed by the lower court, the plane ticket19 issued to petitioner
clearly reflected the departure date and time, contrary to petitioner’s contention.
The travel documents, consisting of the tour itinerary, vouchers and instructions,
were likewise delivered to petitioner two days prior to the trip. Respondent also
properly booked petitioner for the tour, prepared the necessary documents and
procured the plane tickets. It arranged petitioner’s hotel accommodation as well
as food, land transfers and sightseeing excursions, in accordance with its avowed
undertaking.
Therefore, 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 petitioner, 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.
The negligence of the obligor in the performance of the obligation renders him
liable for damages for the resulting loss suffered by the obligee. Fault or
negligence of the obligor consists in his failure to exercise due care and
prudence in the performance of the obligation as the nature of the obligation so
demands.20 There is no fixed standard of diligence applicable to each and every
contractual obligation and each case must be determined upon its particular
facts. The degree of diligence required depends on the circumstances of the
specific obligation and whether one has been negligent is a question of fact that
is to be determined after taking into account the particulars of each case.21 
The lower court declared that respondent’s employee was negligent. This factual
finding, however, is not supported by the evidence on record. While factual
findings below are generally conclusive upon this court, the rule is subject to
certain exceptions, as when the trial court overlooked, misunderstood, or
misapplied some facts or circumstances of weight and substance which will
affect the result of the case.22 
In the case at bar, the evidence on record shows that respondent company
performed its duty diligently and did not commit any contractual breach.
Hence, petitioner cannot recover and must bear her own damage.
PETITION DENIED.
G.R. No. L-12191             October 14, 1918 himself had failed to use due caution in alighting from the coach and
was therefore precluded form recovering.
JOSE CANGCO, plaintiff-appellant, 
vs. ISSUE: WON Cangco is entitled for damages
MANILA RAILROAD CO., defendant-appellee.
RULING: YES!
SUMMARY: Cangco was an employee of Manila Railroad who went to its It can not be doubted that the employees of the railroad company were guilty of
office everyday using the company‖s trains. He uses a pass given by the negligence in piling these sacks on the platform in the manner above stated; that
company which entitled him to ride upon the company's trains free of charge. their presence caused the plaintiff to fall as he alighted from the train; and that
One day, he alighted while the train was still on its way to a stop. He they therefore constituted an effective legal cause of the injuries sustained by the
accidentally stepped on a sack of melons piled on the platform causing him plaintiff. It necessarily follows that the defendant company is liable for the
to fall under the moving train. As a result, his arm was amputated up to the damage thereby occasioned unless recovery is barred by the plaintiff's own
shoulder. He is claiming damages from the company. The SC awarded him contributory negligence.
damages finding that the liability of Manila Railroad was direct and
It is important to note that the foundation of the legal liability of the defendant is
immediate based on the breach of contract of carriage. It also held that
the contract of carriage, and that the obligation to respond for the damage which
Cangco was not guilty of contributory negligence in alighting while the train
plaintiff has suffered arises, if at all, from the breach of that contract by reason
was slowly moving to a stop.
of the failure of defendant to exercise due care in its performance. That is to say,
DOCTRINE: (nature and basis of liability of common carriers) its liability is direct and immediate, differing essentially, in legal viewpoint from
Liability of Masters under Art 2180 (1903 in OCC) that presumptive responsibility for the negligence of its servants, imposed by
The liability of masters and employers for the negligent acts or omissions of article 1903 of the Civil Code, which can be rebutted by proof of the exercise of
their servants or agents, when such acts or omissions cause damages which due care in their selection and supervision. Article 1903 of the Civil Code is not
amount to the breach of a contact, is not based upon a mere presumption of applicable to obligations arising ex contractu, but only to extra-contractual
the master's negligence in their selection or control, and proof of exercise of obligations — or to use the technical form of expression, that article relates only
the utmost diligence and care in this regard does not relieve the master of his to culpa aquiliana and not to culpa contractual.
liability for the breach of his contract.
In commenting upon article 1093 Manresa clearly points out the difference
The contract of carriage carried with it, by implication, the duty to carry him between "culpa, substantive and independent, which of itself constitutes the
in safety and to provide safe means of entering and leaving its trains. That source of an obligation between persons not formerly connected by any legal tie"
duty, being contractual, was direct and immediate, and its non-performance and culpa considered as an accident in the performance of an obligation already
could not be excused by proof that the fault was morally imputable to existing . . . ."
defendant's servants.
In the Rakes case (supra) the decision of this court was made to rest squarely
upon the proposition that article 1903 of the Civil Code is not applicable to acts
FACTS: At the time of the occurrence which gave rise to this litigation the of negligence which constitute the breach of a contract.
plaintiff, Jose Cangco, was in the employment of Manila Railroad Company
in the capacity of clerk, with a monthly wage of P25. He lived in the pueblo of Upon this point the Court said:
San Mateo, in the province of Rizal, which is located upon the line of the The acts to which these articles [1902 and 1903 of the Civil Code] are
defendant railroad company; and in coming daily by train to the company's applicable are understood to be those not growing out of pre-existing duties
office in the city of Manila where he worked, he used a pass, supplied by the of the parties to one another. But where relations already formed give rise to
company, which entitled him to ride upon the company's trains free of charge. duties, whether springing from contract or quasi-contract, then breaches of
Upon the occasion in question, January 20, 1915, the plaintiff arose from his those duties are subject to article 1101, 1103, and 1104 of the same code.
seat in the second class-car where he was riding and, making, his exit (Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359 at 365.)
through the door, took his position upon the steps of the coach, seizing the
upright guardrail with his right hand for support. This distinction is of the utmost importance. The liability, which, under the
Spanish law, is, in certain cases imposed upon employers with respect to
On the side of the train where passengers alight at the San Mateo station there is damages occasioned by the negligence of their employees to persons to whom
a cement platform which begins to rise with a moderate gradient some distance they are not bound by contract, is not based, as in the English Common Law,
away from the company's office and extends along in front of said office for a upon the principle of respondeat superior — if it were, the master would be
distance sufficient to cover the length of several coaches. As the train slowed liable in every case and unconditionally — but upon the principle announced in
down another passenger, named Emilio Zuñiga, also an employee of the article 1902 of the Civil Code, which imposes upon all persons who by their
railroad company, got off the same car, alighting safely at the point where fault or negligence, do injury to another, the obligation of making good the
the platform begins to rise from the level of the ground. When the train had damage caused. One who places a powerful automobile in the hands of a servant
proceeded a little farther the plaintiff Jose Cangco stepped off also, but one whom he knows to be ignorant of the method of managing such a vehicle, is
or both of his feet came in contact with a sack of watermelons with the himself guilty of an act of negligence which makes him liable for all the
result that his feet slipped from under him and he fell violently on the consequences of his imprudence. The obligation to make good the damage arises
platform. His body at once rolled from the platform and was drawn under the at the very instant that the unskillful servant, while acting within the scope of his
moving car, where his right arm was badly crushed and lacerated. It appears employment causes the injury. The liability of the master is personal and
that after the plaintiff alighted from the train the car moved forward possibly six direct. But, if the master has not been guilty of any negligence whatever in
meters before it came to a full stop. the selection and direction of the servant, he is not liable for the acts of the
The accident occurred between 7 and 8 o'clock on a dark night, and as the latter, whatever done within the scope of his employment or not, if the
railroad station was lighted dimly by a single light located some distance away, damage done by the servant does not amount to a breach of the contract
objects on the platform where the accident occurred were difficult to discern between the master and the person injured.
especially to a person emerging from a lighted car. It is not accurate to say that proof of diligence and care in the selection and
The explanation of the presence of a sack of melons on the platform where the control of the servant relieves the master from liability for the latter's acts
plaintiff alighted is found in the fact that it was the customary season for — on the contrary, that proof shows that the responsibility has never existed. As
harvesting these melons and a large lot had been brought to the station for the Manresa says (vol. 8, p. 68) the liability arising from extra-
shipment to the market. They were contained in numerous sacks which has been contractual culpa is always based upon a voluntary act or omission which,
piled on the platform in a row one upon another. The testimony shows that this without willful intent, but by mere negligence or inattention, has caused
row of sacks was so placed of melons and the edge of platform; and it is clear damage to another. A master who exercises all possible care in the selection of
that the fall of the plaintiff was due to the fact that his foot alighted upon his servant, taking into consideration the qualifications they should possess for
one of these melons at the moment he stepped upon the platform. His the discharge of the duties which it is his purpose to confide to them, and directs
statement that he failed to see these objects in the darkness is readily to be them with equal diligence, thereby performs his duty to third persons to whom
credited. he is bound by no contractual ties, and he incurs no liability whatever if, by
reason of the negligence of his servants, even within the scope of their
The plaintiff was drawn from under the car in an unconscious condition, and it employment, such third person suffer damage.
appeared that the injuries which he had received were very serious. He was
therefore brought at once to a certain hospital in the city of Manila where an True it is that under article 1903 of the Civil Code the law creates
examination was made and his arm was amputated. The result of this operation a presumption that he has been negligent in the selection or direction of his
was unsatisfactory, and the plaintiff was then carried to another hospital where a servant, but the presumption is rebuttable and yield to proof of due care and
second operation was performed and the member was again amputated higher up diligence in this respect.
near the shoulder. It appears in evidence that the plaintiff expended the sum of The supreme court of Porto Rico, in interpreting identical provisions, as found in
P790.25 in the form of medical and surgical fees and for other expenses in the Porto Rico Code, has held that these articles are applicable to cases of extra-
connection with the process of his curation. contractual culpa exclusively. (Carmona vs. Cuesta, 20 Porto Rico Reports,
Upon August 31, 1915, he instituted this proceeding in the Court of First 215.)
Instance of the city of Manila to recover damages of the defendant company, This distinction was again made patent by this Court in its decision in the case of
founding his action upon the negligence of the servants and employees of the Bahia vs. Litonjua and Leynes, (30 Phil. rep., 624), which was an action brought
defendant in placing the sacks of melons upon the platform and leaving them so upon the theory of the extra-contractual liability of the defendant to respond for
placed as to be a menace to the security of passenger alighting from the the damage caused by the carelessness of his employee while acting within the
company's trains. scope of his employment. The Court, after citing the last paragraph of article
CFI: in favor of defendant company. 1903 of the Civil Code, said:
- although negligence was attributable to the defendant by reason of From this article two things are apparent: (1) That when an injury is caused
the fact that the sacks of melons were so placed as to obstruct by the negligence of a servant or employee there instantly arises a
passengers passing to and from the cars, nevertheless, the plaintiff presumption of law that there was negligence on the part of the master or
employer either in selection of the servant or employee, or in supervision
 over him after the selection, or both; and (2) that that presumption is juris necessity only act through agents or servants, and it would no doubt be true in
tantum and not juris et de jure, and consequently, may be rebutted. It most instances that reasonable care had been taken in selection and direction of
follows necessarily that if the employer shows to the satisfaction of the such servants. If one delivers securities to a banking corporation as collateral,
court that in selection and supervision he has exercised the care and and they are lost by reason of the negligence of some clerk employed by the
diligence of a good father of a family, the presumption is overcome and he bank, would it be just and reasonable to permit the bank to relieve itself of
is relieved from liability. liability for the breach of its contract to return the collateral upon the payment of
the debt by proving that due care had been exercised in the selection and
This theory bases the responsibility of the master ultimately on
direction of the clerk?
his own negligence and not on that of his servant. This is the notable
peculiarity of the Spanish law of negligence. It is, of course, in striking This distinction between culpa aquiliana, as the source of an obligation,
contrast to the American doctrine that, in relations with strangers, the and culpa contractual as a mere incident to the performance of a contract has
negligence of the servant in conclusively the negligence of the master. frequently been recognized by the supreme court of Spain. (Sentencias  of June
27, 1894; November 20, 1896; and December 13, 1896.) In the decisions of
The opinion there expressed by this Court, to the effect that in case of extra-
November 20, 1896, it appeared that plaintiff's action arose ex contractu, but that
contractual culpa based upon negligence, it is necessary that there shall have
defendant sought to avail himself of the provisions of article 1902 of the Civil
been some fault attributable to the defendant personally, and that the last
Code as a defense. The Spanish Supreme Court rejected defendant's contention,
paragraph of article 1903 merely establishes a rebuttable presumption, is in
saying:
complete accord with the authoritative opinion of Manresa, who says (vol. 12, p.
611) that the liability created by article 1903 is imposed by reason of the breach These are not cases of injury caused, without any pre-existing obligation, by
of the duties inherent in the special relations of authority or superiority existing fault or negligence, such as those to which article 1902 of the Civil Code
between the person called upon to repair the damage and the one who, by his act relates, but of damages caused by the defendant's failure to carry out the
or omission, was the cause of it. undertakings imposed by the contracts . . . .
On the other hand, the liability of masters and employers for the negligent acts A brief review of the earlier decision of this court involving the liability of
or omissions of their servants or agents, when such acts or omissions cause employers for damage done by the negligent acts of their servants will show that
damages which amount to the breach of a contact, is not based upon a mere in no case has the court ever decided that the negligence of the defendant's
presumption of the master's negligence in their selection or control, and servants has been held to constitute a defense to an action for damages for
proof of exercise of the utmost diligence and care in this regard does not breach of contract.
relieve the master of his liability for the breach of his contract.
In the case of Johnson vs. David (5 Phil. Rep., 663), the court held that the
Every legal obligation must of necessity be extra-contractual or contractual. owner of a carriage was not liable for the damages caused by the negligence of
Extra-contractual obligation has its source in the breach or omission of those his driver. In that case the court commented on the fact that no evidence had
mutual duties which civilized society imposes upon it members, or which arise been adduced in the trial court that the defendant had been negligent in the
from these relations, other than contractual, of certain members of society to employment of the driver, or that he had any knowledge of his lack of skill or
others, generally embraced in the concept of status. The legal rights of each carefulness.
member of society constitute the measure of the corresponding legal duties,
In the case of Baer Senior & Co's Successors vs. Compania Maritima (6
mainly negative in character, which the existence of those rights imposes upon
Phil. Rep., 215), the plaintiff sued the defendant for damages caused by the loss
all other members of society. The breach of these general duties whether due to
of a barge belonging to plaintiff which was allowed to get adrift by the
willful intent or to mere inattention, if productive of injury, give rise to an
negligence of defendant's servants in the course of the performance of a contract
obligation to indemnify the injured party. The fundamental distinction
of towage. The court held, citing Manresa (vol. 8, pp. 29, 69) that if the
between obligations of this character and those which arise from contract,
"obligation of the defendant grew out of a contract made between it and the
rests upon the fact that in cases of non-contractual obligation it is the
plaintiff . . . we do not think that the provisions of articles 1902 and 1903 are
wrongful or negligent act or omission itself which creates the vinculum juris,
applicable to the case."
whereas in contractual relations the vinculum exists independently of the
breach of the voluntary duty assumed by the parties when entering into the In the case of Chapman vs. Underwood (27 Phil. Rep., 374), plaintiff sued the
contractual relation. defendant to recover damages for the personal injuries caused by the negligence
of defendant's chauffeur while driving defendant's automobile in which
With respect to extra-contractual obligation arising from negligence, whether of
defendant was riding at the time. The court found that the damages were caused
act or omission, it is competent for the legislature to elect — and our Legislature
by the negligence of the driver of the automobile, but held that the master was
has so elected — whom such an obligation is imposed is morally culpable, or, on
not liable, although he was present at the time, saying:
the contrary, for reasons of public policy, to extend that liability, without regard
to the lack of moral culpability, so as to include responsibility for the negligence . . . unless the negligent acts of the driver are continued for a length of time
of those person who acts or mission are imputable, by a legal fiction, to others as to give the owner a reasonable opportunity to observe them and to direct
who are in a position to exercise an absolute or limited control over them. The the driver to desist therefrom. . . . The act complained of must be continued
legislature which adopted our Civil Code has elected to limit extra-contractual in the presence of the owner for such length of time that the owner by his
liability — with certain well-defined exceptions — to cases in which moral acquiescence, makes the driver's acts his own.
culpability can be directly imputed to the persons to be charged. This moral
responsibility may consist in having failed to exercise due care in the selection In the case of Yamada vs. Manila Railroad Co. and Bachrach Garage &
and control of one's agents or servants, or in the control of persons who, by Taxicab Co. (33 Phil. Rep., 8), it is true that the court rested its conclusion as to
reason of their status, occupy a position of dependency with respect to the the liability of the defendant upon article 1903, although the facts disclosed that
person made liable for their conduct. the injury complaint of by plaintiff constituted a breach of the duty to him
arising out of the contract of transportation. The express ground of the decision
The position of a natural or juridical person who has undertaken by contract to in this case was that article 1903, in dealing with the liability of a master for the
render service to another, is wholly different from that to which article 1903 negligent acts of his servants "makes the distinction between private individuals
relates. When the sources of the obligation upon which plaintiff's cause of action and public enterprise;" that as to the latter the law creates a rebuttable
depends is a negligent act or omission, the burden of proof rests upon plaintiff to presumption of negligence in the selection or direction of servants; and that in
prove the negligence — if he does not his action fails. But when the facts the particular case the presumption of negligence had not been overcome. 
averred show a contractual undertaking by defendant for the benefit of plaintiff,
and it is alleged that plaintiff has failed or refused to perform the contract, it is It is evident, therefore that in its decision Yamada case, the court treated
not necessary for plaintiff to specify in his pleadings whether the breach of the plaintiff's action as though founded in tort rather than as based upon the breach
contract is due to willful fault or to negligence on the part of the defendant, or of of the contract of carriage, and an examination of the pleadings and of the briefs
his servants or agents. Proof of the contract and of its nonperformance is shows that the questions of law were in fact discussed upon this theory. Viewed
sufficient prima facie  to warrant a recovery. from the standpoint of the defendant the practical result must have been the same
in any event. The proof disclosed beyond doubt that the defendant's servant was
As a general rule . . . it is logical that in case of extra-contractual culpa, a grossly negligent and that his negligence was the proximate cause of plaintiff's
suing creditor should assume the burden of proof of its existence, as the injury. It also affirmatively appeared that defendant had been guilty of
only fact upon which his action is based; while on the contrary, in a case of negligence in its failure to exercise proper discretion in the direction of the
negligence which presupposes the existence of a contractual obligation, if servant. Defendant was, therefore, liable for the injury suffered by plaintiff,
the creditor shows that it exists and that it has been broken, it is not whether the breach of the duty were to be regarded as constituting culpa
necessary for him to prove negligence. (Manresa, vol. 8, p. 71 [1907 ed., p. aquiliana  or culpa contractual. As Manresa points out (vol. 8, pp. 29 and 69)
76]). whether negligence occurs an incident in the course of the performance of a
contractual undertaking or its itself the source of an extra-contractual
As it is not necessary for the plaintiff in an action for the breach of a contract to
undertaking obligation, its essential characteristics are identical. There is always
show that the breach was due to the negligent conduct of defendant or of his
an act or omission productive of damage due to carelessness or inattention on the
servants, even though such be in fact the actual cause of the breach, it is obvious
part of the defendant. Consequently, when the court holds that a defendant is
that proof on the part of defendant that the negligence or omission of his
liable in damages for having failed to exercise due care, either directly, or in
servants or agents caused the breach of the contract would not constitute a
failing to exercise proper care in the selection and direction of his servants, the
defense to the action. If the negligence of servants or agents could be invoked as
practical result is identical in either case. Therefore, it follows that it is not to be
a means of discharging the liability arising from contract, the anomalous result
inferred, because the court held in the Yamada case that defendant was liable for
would be that person acting through the medium of agents or servants in the
the damages negligently caused by its servants to a person to whom it was bound
performance of their contracts, would be in a better position than those acting in
by contract, and made reference to the fact that the defendant was negligent in
person. If one delivers a valuable watch to watchmaker who contract to repair it,
the selection and control of its servants, that in such a case the court would have
and the bailee, by a personal negligent act causes its destruction, he is
held that it would have been a good defense to the action, if presented squarely
unquestionably liable. Would it be logical to free him from his liability for the
upon the theory of the breach of the contract, for defendant to have proved that it
breach of his contract, which involves the duty to exercise due care in the
did in fact exercise care in the selection and control of the servant.
preservation of the watch, if he shows that it was his servant whose negligence
caused the injury? If such a theory could be accepted, juridical persons would The true explanation of such cases is to be found by directing the attention to the
enjoy practically complete immunity from damages arising from the breach of relative spheres of contractual and extra-contractual obligations. The field of
their contracts if caused by negligent acts as such juridical persons can of non- contractual obligation is much more broader than that of contractual
obligations, comprising, as it does, the whole extent of juridical human relations. wearing apparel obstructs the free movement of the limbs. Again, it may be
These two fields, figuratively speaking, concentric; that is to say, the mere fact noted that the place was perfectly familiar to the plaintiff as it was his daily
that a person is bound to another by contract does not relieve him from extra- custom to get on and of the train at this station. There could, therefore, be no
contractual liability to such person. When such a contractual relation exists the uncertainty in his mind with regard either to the length of the step which he was
obligor may break the contract under such conditions that the same act which required to take or the character of the platform where he was alighting. Our
constitutes the source of an extra-contractual obligation had no contract existed conclusion is that the conduct of the plaintiff in undertaking to alight while
between the parties. the train was yet slightly under way was not characterized by imprudence
and that therefore he was not guilty of contributory negligence.
The contract of defendant to transport plaintiff carried with it, by
implication, the duty to carry him in safety and to provide safe means of The evidence shows that the plaintiff, at the time of the accident, was earning
entering and leaving its trains (civil code, article 1258). That duty, being P25 a month as a copyist clerk, and that the injuries he has suffered have
contractual, was direct and immediate, and its non-performance could not permanently disabled him from continuing that employment. Defendant has not
be excused by proof that the fault was morally imputable to defendant's shown that any other gainful occupation is open to plaintiff. His expectancy of
servants. life, according to the standard mortality tables, is approximately thirty-three
years. We are of the opinion that a fair compensation for the damage suffered by
The railroad company's defense involves the assumption that even granting that
him for his permanent disability is the sum of P2,500, and that he is also entitled
the negligent conduct of its servants in placing an obstruction upon the platform
to recover of defendant the additional sum of P790.25 for medical attention,
was a breach of its contractual obligation to maintain safe means of approaching
hospital services, and other incidental expenditures connected with the treatment
and leaving its trains, the direct and proximate cause of the injury suffered
of his injuries.
by plaintiff was his own contributory negligence in failing to wait until the
train had come to a complete stop before alighting. Under the doctrine of
comparative negligence announced in the Rakes case (supra), if the accident
IN FAVOR OF PLAINTIFF.
was caused by plaintiff's own negligence, no liability is imposed upon
defendant's negligence and plaintiff's negligence merely contributed to his
injury, the damages should be apportioned. It is, therefore, important to ascertain
if defendant was in fact guilty of negligence.
It may be admitted that had plaintiff waited until the train had come to a full stop
before alighting, the particular injury suffered by him could not have occurred.
Defendant contends: it is negligence per se for a passenger to alight from a
moving train.
COURT: We are not disposed to subscribe to this doctrine in its absolute
form. We are of the opinion that this proposition is too badly stated and is at
variance with the experience of every-day life. In this particular instance, that the
train was barely moving when plaintiff alighted is shown conclusively by the
fact that it came to stop within six meters from the place where he stepped from
it. Thousands of person alight from trains under these conditions every day of
the year, and sustain no injury where the company has kept its platform free
from dangerous obstructions. There is no reason to believe that plaintiff would
have suffered any injury whatever in alighting as he did had it not been for
defendant's negligent failure to perform its duty to provide a safe alighting place.
We are of the opinion that the correct doctrine relating to this subject is that
expressed in Thompson's work on Negligence (vol. 3, sec. 3010) as follows:
The test by which to determine whether the passenger has been guilty of
negligence in attempting to alight from a moving railway train, is that of
ordinary or reasonable care. It is to be considered whether an ordinarily
prudent person, of the age, sex and condition of the passenger, would have
acted as the passenger acted under the circumstances disclosed by the
evidence. This care has been defined to be, not the care which may or
should be used by the prudent man generally, but the care which a man of
ordinary prudence would use under similar circumstances, to avoid injury."
(Thompson, Commentaries on Negligence, vol. 3, sec. 3010.)
Or, it we prefer to adopt the mode of exposition used by this court in
Picart vs. Smith (37 Phil. rep., 809), we may say that the test is this; Was there
anything in the circumstances surrounding the plaintiff at the time he alighted
from the train which would have admonished a person of average prudence that
to get off the train under the conditions then existing was dangerous? If so, the
plaintiff should have desisted from alighting; and his failure so to desist was
contributory negligence.
As the case now before us presents itself, the only fact from which a conclusion
can be drawn to the effect that plaintiff was guilty of contributory negligence is
that he stepped off the car without being able to discern clearly the condition of
the platform and while the train was yet slowly moving. In considering the
situation thus presented, it should not be overlooked that the plaintiff was, as
we find, ignorant of the fact that the obstruction which was caused by the
sacks of melons piled on the platform existed; and as the defendant was
bound by reason of its duty as a public carrier to afford to its passengers
facilities for safe egress from its trains, the plaintiff had a right to assume,
in the absence of some circumstance to warn him to the contrary, that the
platform was clear. The place, as we have already stated, was dark, or dimly
lighted, and this also is proof of a failure upon the part of the defendant in the
performance of a duty owing by it to the plaintiff; for if it were by any
possibility concede that it had right to pile these sacks in the path of alighting
passengers, the placing of them adequately so that their presence would be
revealed.
RE: CONTRIBUTORY NEGLIGENCE
As pertinent to the question of contributory negligence on the part of the plaintiff
in this case the following circumstances are to be noted: The company's platform
was constructed upon a level higher than that of the roadbed and the surrounding
ground. The distance from the steps of the car to the spot where the alighting
passenger would place his feet on the platform was thus reduced, thereby
decreasing the risk incident to stepping off. The nature of the platform,
constructed as it was of cement material, also assured to the passenger a stable
and even surface on which to alight. Furthermore, the plaintiff was possessed of
the vigor and agility of young manhood, and it was by no means so risky for him
to get off while the train was yet moving as the same act would have been in an
aged or feeble person. In determining the question of contributory negligence in
performing such act — that is to say, whether the passenger acted prudently or
recklessly — the age, sex, and physical condition of the passenger are
circumstances necessarily affecting the safety of the passenger, and should be
considered. Women, it has been observed, as a general rule are less capable than
men of alighting with safety under such conditions, as the nature of their
G.R. No. L-12163             March 4, 1959 the required approval is still valid and binding between the parties
(Montoya vs. Ignacio, supra). The phrase "in the ordinary course of its business"
PAZ FORES, petitioner, 
found in the other proviso" or to prevent the sale, alienation, or lease by any
vs.
public service of any of its property". As correctly observed by the lower court,
IRENEO MIRANDA, respondent.
could not have been intended to include the sale of the vehicle itself, but at most
may refer only to such property that may be conceivably disposed or by the
SUMMARY: Miranda was a passenger of the jeepney which, because of carrier in the ordinary course of its business, like junked equipment or
excessive speed, hit the bridge wall of the Sta. Mesa bridge. Miranda was spare parts.
injured. The driver of the jeepney pleaded guilty to the charge of serious
physical injuries through reckless imprudence. Aside from actual damages, The case of Indalecio de Torres vs. Vicente Ona (63 Phil., 594, 597) is
the CA awarded moral damages to Miranda. The SC deleted this award on enlightening; and there, it was held:
the ground that it is not recoverable in damage actions predicated on a breach Under the law, the Public Service Commission has not only general
of the contract of transportation. supervision and regulation of, but also full jurisdiction and control over all
DOCTRINE: The action for breach of contract imposes on the defendant public utilities including the property, equipment and facilities used, and the
carrier a presumption of liability upon mere proof of injury to the passenger; property rights and franchise enjoyed by every individual and company
the latter is relieved from the duty to establish the fault of the carrier, or of engaged i the performance of a public service in the sense this phrase is used
his employees, and the burden is placed on the carrier to prove that it was in the Public Service Act or Act No. 3108). By virtue of the provisions of
due to an unforeseen event or to force majeure. Moreover, the carrier, unlike said Act, motor vehicles used in the performance of a service, as the
in suits for quasi-delict, may not escape liability by proving that it has transportation of freight from one point to another, have to this date been
exercised due diligence in the selection and supervision of its employees considered — and they cannot but be so considered-public service property;
(Art. 1759, NCC). and, by reason of its own nature, a TH truck, which means that the operator
thereof places it at the disposal of anybody who is willing to pay a rental of
FACTS: Respondent was one of the passengers on a jeepney driven by its use, when he desires to transfer or carry his effects, merchandise or any
Eugenio Luga. While the vehicle was descending the Sta. Mesa bridge at an other cargo from one place to another, is necessarily a public service
excessive rate of speed, the driver lost control thereof, causing it to swerve property. (Emphasis supplied) 
and to his the bridge wall. Of course, this court has held in the case of Bachrach Motor co. vs. Zamboanga
The accident occurred on the morning of March 22, 1953. Five of the passengers Transportation Co., 52 Phil., 244, that there may be a nunc pro
were injured, including the respondent who suffered a fracture of the upper tunc authorization which has the effect of having the approval retroact to the
right humerus. He was taken to the National Orthopedic Hospital for treatment, date of the transfer; but such outcome cannot prejudice rights intervening in the
and later was subjected to a series of operations; the first on May 23, 1953, when meantime. It appears that no such approval was given by the Commission before
wire loops were wound around the broken bones and screwed into place; a the accident occurred. 
second, effected to insert a metal splint, and a third one to remove such splint. At RE: DAMAGES
the time of the trial, it appears that respondent had not yet recovered the use of
his right arm. The P10,000 actual damages awarded by the Court of First Instance of Manila
were reduced by the Court of Appeals to only P2,000, on the ground that a
The driver was charged with serious physical injuries through reckless review of the records failed to disclose a sufficient basis for the trial court's
imprudence, and upon interposing a plea of guilty was sentenced accordingly. appraisal, since the only evidence presented on this point consisted of
PETITIONER CONTENTION: that on March 21, 1953, or one day before the respondent's bare statement that his expenses and loss of income amounted to
accident happened, she allegedly sold the passenger jeep that was involved P20,000. On the other hand, "it cannot be denied," the lower court said, "that
therein to a certain Carmen Sackerman. appellee (respondent) did incur expenses"' It is well to note further that
respondent was a painter by profession and a professor of Fine Arts, so that the
"Is the approval of the Public Service Commission necessary for the sale of amount of P2,000 awarded cannot be said to be excessive (see Arts. 2224 and
a public service vehicle even without conveying therewith the authority to 2225, Civil Code of the Philippines).
operate the same?" Assuming the dubious sale to be a fact, the court of
Appeals answered the query in the affirmative The attorney's fees in the sum of P3,000 also awarded to the respondent are
assailed on the ground that the Court of First Instance did not provided for the
COURT: The ruling should be upheld. same, and since no appeal was interposed by said respondent, it was allegedly
Section 20 of the Public Service Act (Commonwealth Act No. 146) provides: error for the Court of Appeals to award them motu proprio. Petitioner fails
to note that attorney's fees are included in the concept of actual damages
Sec. 20. Subject to established limitations and exceptions and saving under the Civil Code and may be awarded whenever the court deems it is
provisions to the contrary, it shall be unlawful for any public service or for just and equitable (Art. 2208, Civil Code of the Philippines). We see no reason
the owner, lessee or operator thereof, without the previous approval and to alter these awards. 
authority of the Commission previously had — 
Anent the moral damages ordered to be paid to the respondent, the same must
xxx     xxx     xxx be discarded. We have repeatedly ruled that moral damages are not
recoverable in damage actions predicted on a breach of the contract of
(g) To sell, alienate, mortgage, encumber or lease its property, franchises,
transportation, in view of Articles 2219 and 2220 of the new Civil Code,
certificates, privileges, or rights, or any part thereof; or merge or consolidate
which provide as follows:
its property, franchises, privileges or rights, or any part thereof, with those
of any other public service. The approval herein required shall be given, Art. 2219. Moral damages may be recovered in the following and analogous
after notice to the public and after hearing the persons interested at a public cases:
hearing, if it be shown that there are just and reasonable grounds for making
the mortgage or encumbrance, for liabilities of more than one year maturity, (1) A criminal offense resulting in physical injuries; 
or the sale, alienation, lease, merger, or consolidation to be approved and (2) Quasi-delicts causing physical injuries;
that the same are not detrimental to the public interest, and in case of a sale,
the date on which the same is to be consummated shall be fixed in the order xxx     xxx     xxx
of approval: Provided, however, That nothing herein contained shall be Art. 2220. Willful injury to property may be a legal ground for awarding
construed to prevent the transaction from being negotiated or completed moral damages if the court should find that, under circumstances, such
before its approval or to prevent the sale, alienation, or lease by any public damages are justify due. The same rule applies to breaches of contract
service of any of its property in the ordinary course of its business. where the defendant acted fraudulently or in bad faith.
Interpreting the effects of this particular provision of law, we have held in the By contrasting the provisions of these two article it immediately becomes
recent cases of Montoya vs. Ignacio, *50 Off. Gaz. No. 1, p. 108; Timbol vs. apparent that: 
Osias, et al., G. R. No. L-7547, April 30, 1955, and Medina vs. Cresencia, 99
Phil., 506; 52 Off. Gaz. No. 10, p. 4606, that a transfer contemplated by the (a) In case of breach of contract (including one of transportation) proof of bad
law, if made without the requisite approval of the Public Service faith or fraud (dolus), i.e., wanton or deliberately injurious conduct, is essential
Commission, is not effective and binding in so far as the responsibility of the to justify an award of moral damages; and 
grantee under the franchise in relation to the public is concerned. (b) That a breach of contract can not be considered included in the descriptive
Petitioner assails: the applicability of these rulings to the instant case, term "analogous cases" used in Art. 2219; not only because Art. 2220
contending that in those cases, the operator did not convey, by lease or by specifically provides for the damages that are caused by contractual breach, but
sale, the vehicle independently of his rights under the franchise. because the definition of quasi-delict in Art. 2176 of the Code
expressly excludes the cases where there is a "preexisting contractual relation
COURT: This line of reasoning does not find support in the law. The between the parties."
provisions of the statute are clear and prohibit the sale, alienation, lease, or
encumbrance of the property, franchise, certificate, privileges or rights, or any Art. 2176. Whoever by act or omission causes damage to another, there
part thereof of the owner or operator of the public service Commission. The law being fault or negligence, is obliged to pay for the damage dome. Such fault
was designed primarily for the protection of the public interest; and until or negligence, if there is no pre-existing contractual relation between the
the approval of the public Service Commission is obtained the vehicle is, in parties, is called a quasi-delict and is governed by the provisions of this
contemplation of law, still under the service of the owner or operator Chapter.
standing in the records of the Commission which the public has a right to The exception to the basic rule of damages now under consideration is a mishap
rely upon. resulting in the death of a passenger, in which case Article 1764 makes the
RE: PROVISO common carrier expressly subject to the rule of Art. 2206, that entitles the
deceased passenger to "demand moral damages for mental anguish by
COURT: The proviso  contained in the aforequoted law, to the effect that reason of the death of the deceased"
nothing therein shall be construed "to prevent the transaction from being
negotiated or complete before its approval", means only that the sale without
But the exceptional rule of Art. 1764 makes it all the more evident that where
the injured passenger does not die, moral damages are not recoverable
unless it is proved that the carrier was guilty of malice or bad faith.
We think it is clear that the mere carelessness of the carrier's driver does not per
se constitute of justify an inference of malice or bad faith on the part of the
carrier; and in the case at bar there is no other evidence of such malice to
support the award of moral damages by the Court of Appeals. To award
moral damages for breach of contract, therefore, without proof of bad faith
or malice on the part of the defendant, as required by Art. 220, would be to
violate the clear provisions of the law, and constitute unwarranted judicial
legislation. 
The action for breach of contract imposes on the defendant carrier a
presumption of liability upon mere proof of injury to the passenger; that
latter is relieved from the duty to established the fault of the carrier, or of
his employees, and the burden is placed on the carrier to prove that it was
due to an unforseen event or to force majeure. Moreover, the carrier, unlike
in suits for quasi-delict, may not escape liability by proving that it has
exercised due diligence in the selection and supervision of its employees
(Art. 1759, new civil code).
The difference in conditions, defenses and proof, as well as the codal concept
of quasi-delict  as essentially extracontractual negligence, compel us to
differentiate between action ex contractu, and actions quasi ex delicto, and
prevent us from viewing the action for breach of contract as simultaneously
embodying an action on tort. Neither can this action be taken as one to enforce
on employee's liability under Art. 103 of the Revised Penal Code, since the
responsibility is not alleged to be subsidiary, nor is there on record any averment
or proof that the driver of appellant was insolvent. In fact, he is not even made a
party to the suit.
RE: that a carrier's violation of its engagement to safety transport the passenger
involves a breach of the passenger's confidence, and therefore should be
regarded as a breach of contract in bad faith, justifying recovery of moral
damages under Art. 2220.
COURT: This theory is untenable, for under it the carrier would always be
deemed in bad faith, in every case its obligation to the passenger is infringed,
and it would be never accountable for simple negligence; while under the law
(Art. 1756). the presumption is that common carriers acted negligently (and not
maliciously), and Art. 1762 speaks of negligence of the common carrier.
ART. 1756. In case of death of or injuries to passengers, common carriers
are presumed to have been at fault or to have acted negligently, unless they
prove that they observed extraordinary diligence as prescribed in article
1733 and 1755.
ART. 1762. The contributory negligence of the passenger does not bar
recovery of damages for his death or injuries, if the proximate cause thereof
is the negligence of the common carrier, but the amount of damages shall be
equitably reduced.
The distinction between fraud, bad faith or malice in the sense of deliberate or
wanton wrong doing and negligence (as mere carelessness) is too fundamental in
our law to be ignored (Arts. 1170-1172); their consequences being clearly
differentiated by the Code. 
ART. 2201. In contracts and quasi-contracts, the damages for which the
obligor who acted in good faith is liable shall be those that are the natural
and probable consequences of the breach of the obligation, and which the
parties have foreseen or could have reasonably foreseen at the time the
obligation was constituted. 
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably attributed to the non-
performance of the obligation.
It is to be presumed, in the absence of statutory provision to the contrary, that
this difference was in the mind of the lawmakers when in Art. 2220 they limited
recovery of moral damages to breaches of contract in bad faith. It is true that
negligence may be occasionally so gross as to amount to malice; but that fact
must be shown in evidence, and a carrier's bad faith is not to be lightly inferred
from a mere finding that the contract was breached through negligence of the
carrier's employees.
In view of the foregoing considerations, the decision of the Court of Appeals
is modified by eliminating the award of P5,000.00 by way of moral damages.
(Court of Appeals Resolution of May 5, 1957). In all other respects, the
judgment is affirmed. No costs in this instance. So ordered.
G.R. No. 145804             February 6, 2003 governing the liability of a common carrier for death of or injury to its
passengers, provides:
LIGHT RAIL TRANSIT AUTHORITY & RODOLFO
ROMAN, petitioners,  "Article 1755. A common carrier is bound to carry the passengers safely as far as
vs. human care and foresight can provide, using the utmost diligence of very
MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD & cautious persons, with a due regard for all the circumstances.
PRUDENT SECURITY AGENCY, respondents
"Article 1756. In case of death of or injuries to passengers, common carriers are
SUMMARY: While standing on the platform near the LRT tracks, after presumed to have been at fault or to have acted negligently, unless they prove
buying a token, an altercation ensued between Navidad and Escartin, the that they observed extraordinary diligence as prescribed in articles 1733 and
security guard in the area. As such, Navidad fell into the tracks and was 1755."
struck by a moving train operated by Roman, killing him instantaneously.
"Article 1759. Common carriers are liable for the death of or injuries to
The RTC held Escartin and Prudent Security Agency liable. The CA
passengers through the negligence or willful acts of the former’s employees,
reversed, holding LRTA and Roman liable. The SC held LRTA liable, ruling
although such employees may have acted beyond the scope of their authority or
that LRTA had the obligation to keep Navidad safe within its premises.
in violation of the orders of the common carriers.
DOCTRINE: The law requires common carriers to carry passengers safely
"This liability of the common carriers does not cease upon proof that they
using the utmost diligence of very cautious persons with due regard for all
exercised all the diligence of a good father of a family in the selection and
circumstances, not only during the course of the trip but for so long as the
supervision of their employees."
passengers are within its premises and where they ought to be in pursuance to
the contract of carriage. "Article 1763. A common carrier is responsible for injuries suffered by a
passenger on account of the willful acts or negligence of other passengers or of
FACTS: On 14 October 1993, about half an hour past seven o’clock in the strangers, if the common carrier’s employees through the exercise of the
evening, Nicanor Navidad, then drunk, entered the EDSA LRT station after diligence of a good father of a family could have prevented or stopped the act or
purchasing a "token" (representing payment of the fare). omission."
While Navidad was standing on the platform near the LRT tracks, Junelito The law requires common carriers to carry passengers safely using the
Escartin, the security guard assigned to the area approached Navidad. A utmost diligence of very cautious persons with due regard for all
misunderstanding or an altercation between the two apparently ensued that circumstances.5 Such duty of a common carrier to provide safety to its
led to a fist fight. passengers so obligates it not only during the course of the trip but for so
long as the passengers are within its premises and where they ought to be in
No evidence, however, was adduced to indicate how the fight started or who, pursuance to the contract of carriage.6 
between the two, delivered the first blow or how Navidad later fell on the LRT
tracks. At the exact moment that Navidad fell, an LRT train, operated by The statutory provisions render a common carrier liable for death of or injury to
petitioner Rodolfo Roman, was coming in. Navidad was struck by the moving passengers (a) through the negligence or wilful acts of its employees or b) on
train, and he was killed instantaneously. account of wilful acts or negligence of other passengers or of strangers if the
common carrier’s employees through the exercise of due diligence could have
On 08 December 1994, the widow of Nicanor, herein respondent Marjorie prevented or stopped the act or omission.7 
Navidad, along with her children, filed a complaint for damages against
Junelito Escartin, Rodolfo Roman, the LRTA, the Metro Transit Organization, In case of such death or injury, a carrier is presumed to have been at fault or
Inc. (Metro Transit), and Prudent for the death of her husband. been negligent, and8 by simple proof of injury, the passenger is relieved of the
duty to still establish the fault or negligence of the carrier or of its employees
LRTA and Roman filed a counterclaim against Navidad and a cross-claim and the burden shifts upon the carrier to prove that the injury is due to an
against Escartin and Prudent. unforeseen event or to force majeure.9 In the absence of satisfactory explanation
Prudent averred: denied liability and averred that it had exercised due by the carrier on how the accident occurred, which petitioners, according to the
diligence in the selection and supervision of its security guards. appellate court, have failed to show, the presumption would be that it has been at
fault,10 an exception from the general rule that negligence must be proved.11 
The LRTA and Roman presented their evidence while Prudent and Escartin,
instead of presenting evidence, filed a demurrer contending that Navidad had The foundation of LRTA’s liability is the contract of carriage and its
failed to prove that Escartin was negligent in his assigned task. obligation to indemnify the victim arises from the breach of that contract by
reason of its failure to exercise the high diligence required of the common
RTC: in favor of the plaintiffs and against the defendants Prudent Security and carrier. In the discharge of its commitment to ensure the safety of passengers, a
Junelito Escartin. carrier may choose to hire its own employees or avail itself of the services of an
CA: exonerating Prudent from any liability for the death of Nicanor Navidad outsider or an independent firm to undertake the task. In either case, the common
and, instead, holding the LRTA and Roman jointly and severally. carrier is not relieved of its responsibilities under the contract of carriage.

- while the deceased might not have then as yet boarded the train, a RE: PRUDENT LIABILITY
contract of carriage theretofore had already existed when the victim Should Prudent be made likewise liable? If at all, that liability could only be
entered the place where passengers were supposed to be after paying for tort under the provisions of Article 217612 and related provisions, in
the fare and getting the corresponding token therefor. conjunction with Article 2180,13 of the Civil Code. The premise, however, for
- In exempting Prudent from liability, the court stressed that there was the employer’s liability is negligence or fault on the part of the employee. Once
nothing to link the security agency to the death of Navidad. It said such fault is established, the employer can then be made liable on the basis of
that Navidad failed to show that Escartin inflicted fist blows upon the the presumption juris tantum that the employer failed to exercise diligentissimi
victim and the evidence merely established the fact of death of patris families in the selection and supervision of its employees. The liability is
Navidad by reason of his having been hit by the train owned and primary and can only be negated by showing due diligence in the selection
managed by the LRTA and operated at the time by Roman. and supervision of the employee, a factual matter that has not been shown.

- faulted petitioners for their failure to present expert evidence to Absent such a showing, one might ask further, how then must the liability of the
establish the fact that the application of emergency brakes could not common carrier, on the one hand, and an independent contractor, on the other
have stopped the train. hand, be described? It would be solidary. A contractual obligation can be
breached by tort and when the same act or omission causes the injury, one
PETITIONER CONTENTION: appellate court ignored the evidence and the resulting in culpa contractual and the other in culpa aquiliana, Article 2194 14 of
factual findings of the trial court by holding them liable on the basis of a the Civil Code can well apply.15 In fine, a liability for tort may arise even under a
sweeping conclusion that the presumption of negligence on the part of a contract, where tort is that which breaches the contract. 16 Stated differently, when
common carrier was not overcome. an act which constitutes a breach of contract would have itself constituted the
- insist that Escartin’s assault upon Navidad, which caused the latter to source of a quasi-delictual liability had no contract existed between the parties,
fall on the tracks, was an act of a stranger that could not have been the contract can be said to have been breached by tort, thereby allowing the rules
foreseen or prevented on tort to apply.17 

- the appellate court’s conclusion on the existence of an employer- Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the
employee relationship between Roman and LRTA lacked basis late Nicanor Navidad, this Court is concluded by the factual finding of the Court
because Roman himself had testified being an employee of Metro of Appeals that "there is nothing to link (Prudent) to the death of Nicanor
Transit and not of the LRTA. (Navidad), for the reason that the negligence of its employee, Escartin, has
not been duly proven x x x." This finding of the appellate court is not without
RESPONDENT CONTENTION: a contract of carriage was deemed created substantial justification in our own review of the records of the case.
from the moment Navidad paid the fare at the LRT station and entered the
premises of the latter, entitling Navidad to all the rights and protection under a There being, similarly, no showing that petitioner Rodolfo Roman himself is
contractual relation. guilty of any culpable act or omission, he must also be absolved from
liability. Needless to say, the contractual tie between the LRT and Navidad is
- the appellate court had correctly held LRTA and Roman liable for the not itself a juridical relation between the latter and Roman; thus, Roman can be
death of Navidad in failing to exercise extraordinary diligence made liable only for his own fault or negligence.
imposed upon a common carrier.
RE: DAMAGES
ISSUE: WON LRTA is liable
The award of nominal damages in addition to actual damages is untenable.
RULING: YES! Nominal damages are adjudicated in order that a right of the plaintiff, which
has been violated or invaded by the defendant, may be vindicated or recognized,
Law and jurisprudence dictate that a common carrier, both from the nature of its
and not for the purpose of indemnifying the plaintiff for any loss suffered by
business and for reasons of public policy, is burdened with the duty of exercising
him.18 It is an established rule that nominal damages cannot co-exist with
utmost diligence in ensuring the safety of passengers. 4 The Civil Code,
compensatory damages.19 
WHEREFORE, the assailed decision of the appellate court is AFFIRMED with
MODIFICATION but only in that (a) the award of nominal damages is
DELETED and (b) petitioner Rodolfo Roman is absolved from liability. No
costs.
G.R. No. L-6092             March 8, 1912 the storm which drove it upon the shore; that the defendant company, with the
greatest possible diligence, gathered up the said shipwrecked goods that had
TAN CHIONG SIAN, plaintiff-appellee, 
been shipped by the Chinaman, Ong Bieng Sip, but, owing to the damage they
vs.
had suffered, it was impossible to preserve them, so, after having offered to
INCHAUSTI AND CO., defendant-appellant.
deliver them to him, the defendant proceeded, in the presence of a notary, to sell
them at public auction and realized from the sale thereof P1,693.67, the
SUMMARY: Ong Bien Sip contracted Inchausti to ship goods to be brought reasonable value of the same in the condition in which they were after they had
to Catarman, Samar. It was alleged that the goods belong to Tan Chiong been gathered up and salved from the wreck of the lorcha Pilar; that the
Sian(the one who brought the complaint). Inchausti has no direct trip from expenses occasioned by such salvage and sale of the said goods amounted to
Manila to Catarman so it has to bring the goods to Gubat, Sorsogon to be P151.35, which were paid by the defendant party; that the latter offered to the
transferred to a lorcha(a kind of vessel without a motor of its own) which Chinese shipper, the plaintiff, the amount realized from the sale of the said
will bring the goods to Catarman, Samar. While they were in Gubat, and merchandise, less P151.35, the amount of the expenses, and the sum of P250, the
after the merchandise were already inside the lorcha, a storm came. The amount of the freight stipulated, and is still willing to pay such products of the
lorcha was brought ashore wrecked and the goods cannot be delivered said sale to the aforementioned Ong Bieng Sip or to any other person who
anymore. SC ruled that the patron and crew of the lorcha acted without should establish his subrogation to the rights of the Chinaman, Ong Bieng Sip,
negligence and that the cause of the loss is force majeure. Inchausti was not with respect to the said amount; that, as his client's second special defense, the
held liable. defendant company alleged that one of the conditions of the shipping contract
DOCTRINE: The general rule established in the first of the foregoing executed between it and the Chinaman, Ong Bieng Sip, relative to the
articles is that the loss of the vessel and of its cargo, as the result of transportation of the said merchandise, was that the said firm should not be held
shipwreck, shall fall upon the respective owners thereof, save for the liable for more than P25 for any bundle or package, unless the value of its
exceptions specified in the second of the said articles(If the wreck or contents should be stated in the bill of lading, and that the shipper, Chinaman,
stranding should arise through the malice, negligence, or lack of skill of the Ong Bieng Sip, did not state in the bill of lading the value of any of the bundles
captain, or because the vessel put to sea insufficiently repaired and supplied, or packages in which the goods shipped by him were packed. Counsel for the
in which case the owner or the freighters may demand indemnity of the defendant company, therefore, prayed the court to absolve his client from the
captain for the damages caused to the vessel or cargo by the accident). complaint, with costs against the plaintiff. 
LC: in favor of the plaintiff, Tan Chiong Sian or Tan Chinto, against the
FACTS: On January 11, 1909, the Chinaman, Tan Chiong Sian or Tan defendant Inchausti and Co., for the sum of P14,642.63, with interest at the rate
Chinto, filed a written complaint, which was amended on the 28th of the same of 6 per cent per annum from January 11, 1909, and for the costs of the trial.
month and again amended on October 27 of the same year, against the said firm,
wherein he alleged, among other things, as a cause of action: That, on or about ISSUE: whether the defendant is liable for the loss of the merchandise and
November 25, 1908, the plaintiff delivered to the defendant 205 bundles or for failure to deliver the same at the place of destination, or whether he is
cases of general merchandise belonging to him, which Inchausti & Co., relieved from responsibility on the ground of force majeure. 
upon receiving, bound themselves to deliver in the pueblo of Catarman, RULING: NO; YES
Province of Samar, to the Chinaman, Ong Bieng Sip, and in consideration of the
obligations contracted by the defendant party, the plaintiff obligated himself to Article 1601 of the Civil Code prescribes: 
pay to the latter the sum of P250 Philippine currency, which payment should be Carriers of goods by land or by water shall be subject with regard to the
made upon the delivery of the said merchandise in the said pueblo Catarman; keeping and preservation of the things entrusted to them, to the same
but that the defendant company neither carried nor delivered the obligations as determined for innkeepers by articles 1783 and 1784. 
aforementioned merchandise to the said Ong Bieng Sip, in Catarman, but
unjustly and negligently failed to do so, with the result that the said The provisions of this article shall be understood without prejudice to what
merchandise was almost totally lost; that, had the defendant party complied is prescribed by the Code of Commerce with regard to transportation by sea
well and faithfully with its obligation, according to the agreement made, the and land.
merchandise concerned would have a value of P20,000 in the said pueblo of Article 1602 reads: 
Catarman on the date when it should have been delivered there, wherefore the
defendant party owed the plaintiff the said sum of P20,000, which it had not paid Carriers are also liable for the loss of and damage to the things which they
him, or any part thereof, notwithstanding the many demands of the plaintiff; receive, unless they prove that the loss or damage arose from a fortuitous
therefore the latter prayed for judgment against the defendant for the said event or  force majeure.
sum, together with legal interest thereon from November 25, 1908, and the
The articles aforecited are as follows: 
costs of the suit. 
ART. 1783. The depositum of goods made by travelers in inns or hostelries
Counsel for the defendant company, in his answer, set forth, that he admitted
shall also be considered a necessary one. The keepers of inns and hostelries
the allegations of paragraphs 1 and 2 of the complaint, amended for the
are liable for them as such bailees, provided that notice thereof may have
second time, and denied those paragraphs 3, 4, 5, 6 and 7 of the same.
been given to them or to their employees, and that the travelers on their part
As his first special defense, he alleged that on or about November 28, 1908, his take the precautions which said innkeepers or their substitutes may have
client, the said firm, received in Manila from Ong Bieng Sip 205 bundles, bales, advised them concerning the care and vigilance of said goods. 
or cases of merchandise to be placed on board the steamer Sorsogon, belonging
ART. 1784. The liability referred to in the preceding article shall include
to the defendant, for shipment to the port of Gubat, Province of Sorsogon, to be
damages to the goods of the travelers caused the servants or employees of
in the said port transshipped into another of the defendant's vessels for
the keepers for inns or hostelries as well as by strangers, but not those
transportation to the port of Catarman, Samar, and delivered to the aforesaid
arising from robbery or which may be caused by any other case of force
Chinaman, Ong Bieng Sip; that the defendant company, upon receiving the said
majeure.
merchandise from the latter, Ong Bieng Sip, and on its entering into a contract of
maritime transportation with him did not know and was not notified that the Article 361 of the Code of Commerce provides: 
plaintiff, Tan Chiong Sian, had any interest whatever in the said merchandise
and had made with the plaintiff no contract relative to the transportation of such Merchandise shall be transported at the risk and venture of the shipper,
goods, for, on receiving the latter from the said Ong Bieng Sip, for unless the contrary was expressly stipulated. 
transportation, there were made out and delivered to him three bills of lading, Therefore, all damages and impairment suffered by the goods in
Nos. 38, 39 and 76, which contained a list of the goods received and, printed on transportation, by reason of accident, force majeure, or by virtue of the
the back thereof were the terms of the maritime transportation contract entered nature or defect of the articles, shall be for the account and risk of the
into by and between the plaintiff and the defendant company, copies of which shipper. 
bills of lading and contract, marked as Exhibits A, B, and C, are of record,
attached to and made an integral part of the said answer; that Ong Bieng Sip The proof of these accidents in incumbent on the carrier. 
accepted the said bills of lading and the contract extended on the backs thereof; ART. 362. The carrier, however, shall be liable for the losses and damages
that the merchandise mentioned was put on board the steamer Sorsogon and arising from the causes mentioned in the foregoing article if it is proved that
carried to the port of Gubat, Province of Sorsogon, where this vessel they occurred on account of his negligence or because he did not take the
arrived on November 28, 1908, on which date the lorcha Pilar, into which precautions usually adopted by careful persons, unless the shipper
the said merchandise was to be transshipped for carriage to Catarman, was committed fraud in the bill of lading, stating that the goods were of a class
not at Gubat, and therefore the goods had to be unloaded and stored in the or quality different from what they really were. 
defendant company's warehouses at Gubat; that, on the 4th of December of
the same year, the lorcha Pilar arrived at Gubat and, after the termination of If, notwithstanding the precaution referred to in this article, the goods
certain necessary work, the goods received from Chinaman, Ong Bieng Sip, transported run the risk of being lost on account of the nature or by reason
were taken aboard the same, together with other merchandise belonging to the of an unavoidable accident, without there being time for the owners of the
defendant party, for the purpose of transportation to the port of Catarman; that, same to dispose thereof, the carrier shall proceed to their sale, placing them
before the said lorcha could leave for its destination, a strong wind arose for this purpose at the disposal of the judicial authority or of the officials
which in the course of the day increased in force until, early in the morning determined by special provisions. 
of the following day, the lorcha was dragged and driven, by the force of the ART. 363. With the exception of the cases prescribed in the second
storm, upon the shore, despite the means employed by the crew to avoid the paragraph of article 361, the carrier shall be obliged to deliver the goods
accident, and notwithstanding the five anchors that held the craft, which transported in the same condition in which, according to the bill of lading,
was thus wrecked and completely destroyed and the merchandise with they were at the time of their receipt, without any detriment or impairment,
which it was laden, including the 205 bundles or packages taken aboard for and should he not do so, he shall be obliged to pay the value of the goods
the said Chinaman, was scattered on the shore; that, on the occasion, not delivered at the point where they should have been and at the time the
the lorcha Pilar was in good condition, provided with all the proper and delivery should have taken place. 
necessary equipment and accessories and carried a crew of sufficient
number in command of a skillful patron or master, wherefore the wreck of
the said craft was solely due to the irresistible force of the elements and of
 If part of the goods transported should be delivered the consignee may Due importance must be given to the testimony of the weather observer, Antonio
refuse to receive them, when he proves that he can not make use thereof Rocha, that the notice received from the Manila Observatory on the afternoon of
without the others. December 4, with regard to a storm travelling from the east of the Pelew Islands
toward the northwest, was not made known to the people of Gubat and that
On November 25, 1908, Inchausti & Co. received in Manila from the Chinaman,
he merely left a memorandum notice on the desk of the station, intending to
Ong Bieng Sip, 205 bundles, bales or cases of goods to be conveyed by the
give explanations thereof to any person who should request them of him. So
steamer Sorsogon to the port of Gubat, Province of Sorsogon, where they were
the notice of the storm sent by the Manila Observatory was only known to the
to be transshipped to another vessel belonging to the defendant company and by
said observer, and he did not apprise the public of the approach of the storm
the latter transported to the pueblo of Catarman, Island of Samar, there to be
until he received another notice from Manila at 20 minutes past 8 o'clock on
delivered to the Chinese shipper with whom the defendant party made the
Saturday morning, December 5. Then he made a public announcement and
shipping contract. To this end three bills of lading were executed, Nos. 38, 39,
advised the authorities of the storm that was coming. 
and 76, copies of which, marked as Exhibits A, B, and C, are found on pages 13,
14, and 15 of the record.  The patron of the lorcha Pilar is charged with gross negligence for not
having endeavored to remove his craft to a safe place in the Sabang River,
The steamer Sorsogon, which carried the goods, arrived at the port of Gubat on
about half a mile from where it was anchored. 
the 28th of that month and as the lorcha Pilar, to which the merchandise was to
be transshipped for its transportation to Catarman, was not yet there, the cargo In order to find out whether there was or was not such negligence on the part of
was unloaded and stored in the defendant company's warehouses at that port.  the patron, it becomes necessary to determine, first, whether the lorcha, on the
morning of December 5, could be moved by its own power and without being
Several days later, the lorcha just mentioned arrived at Gubat and, after the
towed by any steamboat, since it had no steam engine of its own; second,
cargo it carried had been unloaded, the merchandise belonging to the Chinaman,
whether the lorcha, on account of its draft and the shallowness of the mouth of
Ong Bieng Sip, together with other goods owned by the defendant Inchausti &
the said river, could have entered the latter before the storm broke. 
Co., was taken aboard to be transported to Catarman; but on December 5, 1908,
before the Pilar could leave for its destination, towed by the launch Texas, there The patron, Mariano Gadvilao, stated under oath that the weather during the
arose and, as a result of the strong wind and heavy sea, the lorcha was driven night of December 4 was not threatening and he did not believe there would be a
upon the shore and wrecked, and its cargo, including the Chinese shipper's 205 storm; that he knew the Sabang River; and that the lorcha Pilar, when loaded,
packages of goods, scattered on the beach. Laborers or workmen of the could not enter as there was not sufficient water in its channel; that, according to
defendant company, by its order, then proceeded to gather up the plaintiff's an official chart of the port of Gubat, the bar of the Sabang River was covered by
merchandise and, as it was impossible to preserve it after it was salved from the only a foot and a half of water at ordinary low tide and the lorcha Pilar, when
wreck of the lorcha, it was sold at public auction before a notary for the sum of loaded, drew 6 feet and a half; that aside from the fact that the condition of the
P1,693.67.  sea would not have permitted the lorcha to take shelter in the said river, even
could it have relied upon the assistance of a towboat, at half past 8 o'clock in the
The contract entered into between the Chinese shipper, Ong Bieng Sip, and the
morning the tide was still low; there was but little water in the river and still less
firm of Inchausti & Co., provided that transportation should be furnished from
over the bar. 
Manila to Catarman, although the merchandise taken aboard the
steamer Sorsogon was to be transshipped at Gubat to another vessel which was It was proven by the said official chart of the port of Gubat, that the depth of
to convey it from that port to Catarman; it was not stipulated in the said contract water over the bar or entrance of the Sabang River is only one foot and a half at
that the Sorsogon should convey the goods to their final destination, nor that the ordinary low tide; that the rise and fall of the tide is about 4_«_ feet, the highest
vessel into which they were to be transshipped, should be a steamer. The tide being at 2 o'clock in the afternoon of every day; and at that hour, on the 5th
shipper, Ong Bieng Sip, therefore assented to these arrangements and made no of December, the hurricane had already made its appearance and the wind was
protest when his 205 packages of merchandise were unloaded from the ship and, blowing with all its fury and raising great waves. 
on account of the absence of the lorcha Pilar, stored in the warehouses at Gubat
The lorcha Pilar, loaded as it had been from the afternoon of December 4, even
nor did he offer any objection to the lading of his merchandise on to
though it could have been moved by means of poles, without being towed,
this lorcha as soon as it arrived and was prepared to receive cargo; moreover, he
evidently could not have entered the Sabang River on the morning of the 5th,
knew that to reach the port of Catarman with promptness and dispatch,
when the wind began to increase and the sea to become rough, on account of the
the lorcha had to be towed by some vessel like the launch Texas, which the
low tide, the shallowness of the channel, and the boat's draft. 
defendant company had been steadily using for similar operations in those
waters.  The facts stated in the foregoing paragraph were proved by the said chart
which was exhibited in evidence and not rejected or assailed by the plaintiff.
Hence the shipper, Ong Bieng Sip, made no protest or objection to the
They were also supported by the sworn testimony of the patron of the lorcha,
methods adopted by the agents of the defendant for the transportation of
unrebutted by any oral evidence on the part of the plaintiff such as might
his gods to the port of their destination, and the record does not show that
disprove the certainty of the facts related, and, according to section 275 of the
in Gubat the defendant possessed any other means for the conveyance and
Code of Civil Procedure, the natural phenomenon of the tides, mentioned in the
transportation of merchandise, at least for Catarman, than the lorcha Pilar,
official hydrographic map, Exhibit 7, which is prima facie  evidence on the
towed by said launch and exposed during its passage to all sorts of accidents and
subject, of the hours of its occurrence and of the conditions and circumstances of
perils from the nature and seafaring qualities of a lorcha, from the circumstances
the port of Gubat, shall be judicially recognized without the introduction of
then present and the winds prevailing on the Pacific Ocean during the months of
proof, unless the facts to the contrary be proven, which was not done by the
November and December. 
plaintiff, nor was it proven that between the hours of 10 and 11 o'clock of the
It is to be noted that a lorcha is not easily managed or steered when the morning of December 5, 1908, there did not prevail a state of low tide in the port
traveling, for, out at sea, it can only be moved by wind and sails; and along the of Gubat. 
coast near the shore and in the estuaries where it customarily travels, it can only
The oral evidence adduced by the plaintiff with respect to the depth of the
move by poling. For this reason, in order to arrive at the pueblo of Catarman
Sabang River, was unable to overcome that introduced by the defendant,
with promptness and dispatch, the lorcha was usually towed by the
especially the said chart. According to section 320 of the Code of Civil
launch Texas. 
Procedure, such a chart is prima facie evidence of particulars of general
The record does not show that, from the afternoon of the 4th of December, 1908, notoriety and interest, such as the existence of shoals of varying depths in the bar
until the morning of the following day, the 5th, the  patron  or master of and mouth of the Sabang River and which obstruct the entrance into the same;
the lorcha which was anchored in the cove of Gubat, received any notice from the distance, length, and number of the said shoals, with other details apparently
the captain of the steamer Ton Yek, also anchored near by, of the near approach well known to the patron of the lorcha Pilar, to judge from his testimony. 
of a storm. The said captain, Juan Domingo Alberdi, makes no reference in
Vessels of considerable draft, larger than the said lorcha, might have entered the
his sworn testimony of having given any such notice to the patron of
Sabang River some seven or nine years before, according to the testimony of the
the lorcha, nor did the latter, Mariano Gadvilao, testify that he received
Chinaman, Antonio B. Yap Cunco, though he did not state whether they did so
such notice from the captain of the Ton Yek or from the person in charge of
at high tide; but, since 1901, or previous years, until 1908, changes may have
the Government observatory. Gadvilao, the patron, testified that only between
taken place in the bed of the river, its mouth and its bar. More shoals may have
10 and 11 o'clock of Saturday morning, the 5th of December, was he informed
formed or those in existence may have increased in extent by the constant action
by Inchausti & Co.'s agent in Gubat that a baguio was approaching; that
of the sea. This is the reason why the patron, Gadvilao, who was acquainted
thereupon, on account of the condition of the sea, he dropped the four anchors
with the conditions of the port and cove of Gubat, positively declared that
that the lorcha had on board and immediately went ashore to get another anchor
the lorcha Pilar could not, on account of her draft, enter the Sabang River, on
and a new cable in order more securely to hold the boat in view of the predicted
account of low water. 
storm. This testimony was corroborated by the said representative, Melchor
Muñoz. So the lorcha, when the storm broke upon it, was held fast by five The patron of the lorcha, after stating (p.58) that at Gubat or in its vicinity there
anchors and was, as testified by the defendant without contradiction or evidence is no port that affords shelter, affirmed that it was impossible to hoist the sails or
to the contrary, well found and provided with all proper and necessary weigh the anchors on the morning of the 5th of December, owing to the force of
equipment and had a sufficient crew for its management and preservation.  the wind and because the boat would immediately have been dragged or driven
upon the shoals; that furthermore the lorcha was anchored in a channel some
The  patron of the lorcha testified specifically that at Gubat or in its immediate
300 brazas wide, but, notwithstanding this width, the Pilar was, for want of
vicinity there is no port whatever adequate for the shelter and refuge of vessels
motive power, unable to move without being exposed to be dashed against the
in cases of danger, and that, even though there were, on being advised between
coast by the strong wind and the heavy sea then prevailing. The testimony of this
10 and 11 o'clock of the morning of the 5th, of the approach of a storm from the
witness was neither impugned nor offset by any evidence whatever; he was
eastern Pacific, it would have been impossible to spread any sails or weigh
a patron of long years of service and of much practice in seafaring, especially in
anchor on the lorcha without being dragged or driven against the reefs by the
the port of Gubat and its vicinity, who had commanded or been intrusted with
force of the wind. As the craft was not provided with steam or other motive
the command of other crafts similar to the lorcha Pilar and his testimony was
power, it would not have been possible for it to change its anchorage, nor move
absolutely uncontradicted. 
from the place where it lay, even several hours before the notice was received by
its patron. A lorcha can not be compared with a steamer which does not need The patron Gadvilao, being cognizant of the duties imposed upon him by rules
the help or assistance of any other vessel in its movements.  14 and 15 of article 612, and others, of the Code of Commerce, remained with
sailors, during the time the hurricane was raging, on board the lorcha from the
morning of December 5 until early the following morning, the 6th, without
abandoning the boat, notwithstanding the imminent peril to which he was measures which they deemed necessary and proper in order to save
exposed, and kept to his post until after the wreck and the lorcha had been the lorcha and its cargo from the impending danger; accordingly, the patron, as
dashed against the rocks. Then he solicited help from the captain of the soon as he was informed that a storm was approaching, proceeded to clear the
steamer Ton Yek, and, thanks to the relief afforded by a small boat sent by the boat of all gear which might offer resistance to the wind, dropped the four
latter officer, Gadvilao with his crew succeeded in reaching land and anchors he had, and even procured an extra anchor from the land, together with a
immediately reported the occurrence to the representative of Inchausti & Co. and new cable, and cast it into the water, thereby adding, in so far as possible, to the
to the public official from whom he obtained the document of protest, Exhibit 1. stability and security of the craft, in anticipation of what might occur, as
By such procedure, he showed that, as a patron skilled in the exercise of his presaged by the violence of the wind and the heavy sea; and Inchausti &
vocation, he performed the duties imposed by law in cases of shipwreck brought Company's agent furnished the articles requested by the patron of the lorcha for
about by force majeure.  the purpose of preventing the loss of the boat; thus did they all display all the
diligence and care such as might have been employed by anyone in similar
Treating of shipwrecks, article 840 of the Code of Commerce prescribes: 
circumstances, especially the patron who was responsible for the lorcha under
The losses and damages suffered by a vessel and her cargo by reason of his charge; nor is it possible to believe that the latter failed to adopt all the
shipwreck or standing shall be individually for the account of the owners, measures that were necessary to save his own life and those of the crew and to
the part of the wreck which may be saved belonging to them in the same free himself from the imminent peril of shipwreck. 
proportion.
In view of the fact that the lorcha Pilar had no means of changing its anchorage,
And Article 841 of the same code reads:  even supposing that there was a better one, and was unable to accept help from
any steamer that might have towed it to another point, as wherever it might have
If the wreck or stranding should arise through the malice, negligence, or anchored, it would continually have been exposed to the lashing of the waves
lack of skill of the captain, or because the vessel put to sea insufficiently and to the fury of the hurricane, for the port of Gubat is a cove or open roadstead
repaired and supplied, the owner or the freighters may demand indemnity of with no shelter whatever from the winds that sweep over it from the Pacific
the captain for the damages caused to the vessel or cargo by the accident, in Ocean, and in view of the circumstances that it was impossible for the
accordance with the provisions contained in articles 610, 612, 614, and 621. said lorcha, loaded as it then was, to have entered the Sabang River, even though
The general rule established in the first of the foregoing articles is that the there had been a steamer to tow it, not only because of an insufficient depth of
loss of the vessel and of its cargo, as the result of shipwreck, shall fall upon water in its channel, but also on account of the very high bar at the entrance of
the respective owners thereof, save for the exceptions specified in the second the said river, it is incontrovertible that the stranding and wreck of
of the said articles.  the lorcha Pilar was due to a fortuitous event or to force majeureand not to the
fault and negligence of the defendant company and its agents or of the patron,
These legal provisions are in harmony with those of articles 361 and 362 of Mariano Gadvilao, inasmuch as the record discloses it to have been duly proved
the Code of Commerce, and are applicable whenever it is proved that the that the latter, in difficult situation in which unfortunately the boat under his
loss of, or damage to, the goods was the result of a fortuitous event or charge was placed, took all the precautions that any diligent man should have
of force majeure; but the carrier shall be liable for the loss or the damage taken whose duty it was to save the boat and its cargo, and, by the instinct of
arising from the causes aforementioned, if it shall have been proven that self-preservation, his own life and those of the crew of the lorcha; therefore,
they occurred through his own fault or negligence or by his failure to take considering the conduct of the patron of the lorcha and that of the defendant's
the same precautions usually adopted by diligent and careful persons.  agent in Gubat, during the time of the occurrence of the disaster, the defendant
In the contract made and entered into by and between the owner of the company has not incurred any liability whatever for the loss of the goods, the
goods and the defendant, no term was fixed within which the said value of which is demanded by the plaintiff; it must, besides, be taken into
merchandise should be delivered to the former at Catarman, nor was it account that the defendant itself also lost goods of its own and the lorcha too. 
proved that there was any delay in loading the goods and transporting them From the moment that it is held that the loss of the said  lorcha was due
to their destination. From the 28th of November, when the to force majeure, a fortuitous event, with no conclusive proof or negligence
steamer Sorsogon arrived at Gubat and landed the said goods belonging to Ong or of the failure to take the precautions such as diligent and careful persons
Bieng Sip to await the lorcha Pilarwhich was to convey them to Catarman, as usually adopt to avoid the loss of the boat and its cargo, it is neither just nor
agreed upon, no vessel carrying merchandise made the voyage from Gubat to the proper to attribute the loss or damage of the goods in question to any fault,
said pueblo of the Island of Samar, and with Ong Bieng Sip's merchandise there carelessness, or negligence on the part of the defendant company and its
were also to be shipped goods belonging to the defendant company, which goods agents and, especially, the patron of the lorcha Pilar. 
were actually taken on board the said lorcha and suffered the same damage as
those belonging to the Chinaman. So that there was no negligence, Moreover, it is to be noted that, subsequent to the wreck, the defendant
abandonment, or delay in the shipment of Ong Bieng Sip's merchandise, and all company's agent took all the requisite measures for the salvage of such of the
that was done by the carrier, Inchausti & Co., was what it regularly and usually goods as could be recovered after the accident, which he did with the knowledge
did in the transportation by sea from Manila to Catarman of all classes of of the shipper, Ong Bieng Sip, and, in effecting their sale, he endeavored to
merchandise. No attempt has been made to prove that any course other than the secure all possible advantage to the Chinese shipper; in all these proceedings, as
foregoing was pursued by that firm on this occasion; therefore the defendant shown by the record, he acted in obedience to the law. 
party is not liable for the damage occasioned as a result of the wreck or stranding From all the foregoing it is concluded that the defendant is not liable for the
of the lorcha Pilar because of the hurricane that overtook this craft while it was loss and damage of the goods shipped on the lorcha Pilar by the Chinaman,
anchored in the port of Gubat, on December 5, 1908, ready to be conveyed to Ong Bieng Sip, inasmuch as such loss and damage were the result of a
that of Catarman.  fortuitous event or force majeure, and there was no negligence or lack of
It is a fact not disputed, and admitted by the plaintiff, that care and diligence on the part of the defendant company or its agents. 
the lorcha Pilar was stranded and wrecked on the coast of Gubat during the
night of the 5th or early in the morning of the 6th of December, 1908, as a
result of a violent storm that came from the Pacific Ocean, and, IN FAVOR OF DEFENDANTS.
consequently, it is a proven fact that the loss or damage of the goods
shipped on the said lorcha was due to the force majeure which caused the
wreck of the said craft. 
According to the aforecited article 361 of the Code of Commerce, merchandise
shall be transported at the risk and venture of the shipper, unless the contrary be
expressly stipulated. No such stipulation appears of record, therefore, all
damages and impairment suffered by the goods in transportation, by reason of
accident, force majeure, or by virtue of the nature or defect of the articles, are for
the account and risk of the shipper. 
A final clause of this same article adds that the burden of proof of these
accidents is upon the carrier; the trial record fully discloses that the loss and
damage of the goods shipped by the Chinaman, Ong Bieng Sip, was due to the
stranding and wreck of the lorcha Pilar in the heavy storm or hurricane
aforementioned; this the plaintiff did not deny, and admitted that it took place
between the afternoon of the 5th and early in the morning of the 6th of
December, 1908, so it is evident that the defendant is exempt from the obligation
imposed by the law to prove the occurrence of the said storm, hurricane, or
cyclone in the port of Gubat, and, therefore, if said goods were lost or damaged
and could not be delivered in Catarman, it was due to a fortuitous event and a
superior, irresistible natural force, or force majeure, which completely disabled
the lorcha intended for their transportation to the said port of the Island of
Samar. 
The record bears no proof that the said loss or damage caused by the
stranding or wreck of the lorcha Pilar as a result of the storm mentioned,
occurred through carelessness or negligence on the part of the defendant
company, its agents or the patron of the said lorcha, or because they did not
take the precautions usually adopted by careful and diligent persons, as
required by article 362 of the Code of Commerce; the defendant company, as
well as its agents and the patron of the lorcha, had a natural interest in
preserving the craft and its own goods laden therein — an interest equal to that
of the Chinese shipper in preserving his own which were on board the
ship lorcha — and, in fact, the defendant, his agents and the patron did take the
G.R. No. L-69044 May 29, 1987 TC: in favor of NISSHIN and DOWA in the amounts of US $46,583.00 and US
$11,385.00, respectively, with legal interest, plus attorney's fees of P5,000.00
EASTERN SHIPPING LINES, INC., petitioner, 
and costs.
vs.
INTERMEDIATE APPELLATE COURT and DEVELOPMENT CA: affirmed with modification the Trial Court's judgment by decreasing the
INSURANCE & SURETY CORPORATION, respondents.  amount recoverable by DOWA to US $1,000.00 because of $500 per package
limitation of liability under the COGSA. 
No. 71478 May 29, 1987
Hence, this Petition for Review on certiorari by Petitioner Carrier. 
EASTERN SHIPPING LINES, INC., petitioner, 
vs. COURT: Both Petitions were initially denied for lack of merit.
THE NISSHIN FIRE
PETITIONER CLAIMS: it is not the operator of the M/S Asiatica but merely a
charterer thereof.
SUMMARY: M/S ASIATICA (vessel operated by Eastern Shipping Lines)
caught fire and sank. The insurers paid the consignees and is now suing COURT: WE REJECT. We note that in G.R. No. 69044, Petitioner Carrier
Eastern Shipping for the amount. TC, CA and SC favored the insurers. The stated in its Petition: 
main contention of Eastern Shipping was that it was not liable because fire
There are about 22 cases of the "ASIATICA" pending in various courts
was a fortuitous event. SC ruled otherwise.
where various plaintiffs are represented by various counsel representing
DOCTRINE: Fire may not be considered a natural disaster or calamity. This various consignees or insurance companies. The common defendant in these
must be so as it arises almost invariably from some act of man or by human cases is petitioner herein, being the operator of said vessel. ... 1
means. It does not fall within the category of an act of God unless caused by
Petitioner Carrier should be held bound to said admission. As a general rule, the
lightning or by other natural disaster or calamity. It may even be caused by
facts alleged in a party's pleading are deemed admissions of that party and
the actual fault or privity of the carrier.
binding upon it. 2 And an admission in one pleading in one action may be
As the peril of fire is not comprehended within the exceptions in Article received in evidence against the pleader or his successor-in-interest on the trial
1734, Article 1735 of the Civil Code provides that in all cases other than of another action to which he is a party, in favor of a party to the latter action.
those mentioned in Article 1734, the common carrier shall be presumed to
ISSUE: WON Eastern is liable? YES!
have been at fault or to have acted negligently, unless it proves that it has
observed the extraordinary diligence required by law. Hence, the burden then (1) which law should govern — the Civil Code provisions on Common
was upon Eastern Shipping to prove that it had exercised extraordinary carriers or the Carriage of Goods by Sea Act? and
diligence required by law.
(2) who has the burden of proof to show negligence of the carrier? 
FACTS: These two cases, both for the recovery of the value of cargo insurance,
arose from the same incident, the sinking of the M/S ASIATICA when it caught
RULING:
fire, resulting in the total loss of ship and cargo. 
On the Law Applicable 
In G.R. No. 69044
The law of the country to which the goods are to be transported governs the
Sometime in or prior to June, 1977, the M/S ASIATICA, a vessel operated by
liability of the common carrier in case of their loss, destruction or
petitioner Eastern Shipping Lines, Inc., (referred to hereinafter as Petitioner
deterioration. 4 As the cargoes in question were transported from Japan to the
Carrier) loaded at Kobe, Japan for transportation to Manila, 5,000 pieces of
Philippines, the liability of Petitioner Carrier is governed primarily by the
calorized lance pipes in 28 packages valued at P256,039.00 consigned to
Civil Code. 5 However, in all matters not regulated by said Code, the rights and
Philippine Blooming Mills Co., Inc., and 7 cases of spare parts valued at
obligations of common carrier shall be governed by the Code of Commerce and
P92,361.75, consigned to Central Textile Mills, Inc. Both sets of goods were
by special laws. 6 Thus, the Carriage of Goods by Sea Act, a special law, is
insured against marine risk for their stated value with respondent
suppletory to the provisions of the Civil Code. 7
Development Insurance and Surety Corporation. 
On the Burden of Proof 
In G.R. No. 71478:
Under the Civil Code, common carriers, from the nature of their business and
During the same period, the same vessel took on board 128 cartons of garment
for reasons of public policy, are bound to observe extraordinary diligence in
fabrics and accessories, in two (2) containers, consigned to Mariveles Apparel
the vigilance over goods, according to all the circumstances of each
Corporation, and two cases of surveying instruments consigned to Aman
case. 8Common carriers are responsible for the loss, destruction, or deterioration
Enterprises and General Merchandise. The 128 cartons were insured for
of the goods unless the same is due to any of the following causes only: 
their stated value by respondent Nisshin Fire & Marine Insurance Co., for
US $46,583.00, and the 2 cases by respondent Dowa Fire & Marine Insurance (1) Flood, storm, earthquake, lightning or other natural disaster or calamity; 
Co., Ltd., for US $11,385.00. 
xxx xxx xxx 9
Enroute for Kobe, Japan, to Manila, the vessel caught fire and sank,
resulting in the total loss of ship and cargo. The respective respondent Petitioner Carrier claims: that the loss of the vessel by fire exempts it from
Insurers paid the corresponding marine insurance values to the consignees liability under the phrase "natural disaster or calamity. "
concerned and were thus subrogated unto the rights of the latter as the COURT: However, we are of the opinion that fire may not be considered a
insured.  natural disaster or calamity. This must be so as it arises almost invariably
G.R. NO. 69044  from some act of man or by human means. 10 It does not fall within the
category of an act of God unless caused by lightning 11 or by other natural
On May 11, 1978, respondent Development Insurance & Surety Corporation disaster or calamity. 12 It may even be caused by the actual fault or privity of the
(Development Insurance, for short), having been subrogated unto the rights of carrier. 13 
the two insured companies, filed suit against petitioner Carrier for the
recovery of the amounts it had paid to the insured before the then Court of First Article 1680 of the Civil Code, which considers fire as an extraordinary
instance of Manila, Branch XXX (Civil Case No. 6087).  fortuitous event refers to leases of rural lands where a reduction of the rent is
allowed when more than one-half of the fruits have been lost due to such event,
Petitioner-Carrier denied liability. considering that the law adopts a protection policy towards agriculture. 14
PETITIONER CONTENTION: the loss was due to an extraordinary fortuitous As the peril of the fire is not comprehended within the exception in Article
event, hence, it is not liable under the law.  1734, supra, Article 1735 of the Civil Code provides that all cases than those
mention in Article 1734, the common carrier shall be presumed to have
TC: in favor of Development Insurance in the amounts of P256,039.00 and
been at fault or to have acted negligently, unless it proves that it has
P92,361.75, respectively, with legal interest, plus P35,000.00 as attorney's fees
observed the extraordinary deligence required by law.
and costs.
In this case, the respective Insurers. as subrogees of the cargo shippers,
CA: affirmed RTC.
have proven that the transported goods have been lost. Petitioner Carrier has
Petitioner Carrier is now before us on a Petition for Review on Certiorari.  also proved that the loss was caused by fire.
G.R. NO. 71478 The burden then is upon Petitioner Carrier to proved that it has exercised
the extraordinary diligence required by law. In this regard, the Trial Court,
On June 16, 1978, respondents Nisshin Fire & Marine Insurance Co. NISSHIN concurred in by the Appellate Court, made the following Finding of fact: 
for short), and Dowa Fire & Marine Insurance Co., Ltd. (DOWA, for brevity), as
subrogees of the insured, filed suit against Petitioner Carrier for the recovery The cargoes in question were, according to the witnesses defendant placed
of the insured value of the cargo lost with the then Court of First Instance of in hatches No, 2 and 3 cf the vessel, Boatswain Ernesto Pastrana noticed
Manila, Branch 11 (Civil Case No. 116151), imputing unseaworthiness of the that smoke was coming out from hatch No. 2 and hatch No. 3; that where
ship and non-observance of extraordinary diligence by petitioner Carrier.  the smoke was noticed, the fire was already big; that the fire must have
started twenty-four 24) our the same was noticed; that carbon dioxide was
Petitioner Carrier denied liability. ordered released and the crew was ordered to open the hatch covers of No, 2
PETITIONER CONTENTION: the fire which caused the sinking of the ship tor commencement of fire fighting by sea water: that all of these effort were
is an exempting circumstance under Section 4(2) (b) of the Carriage of Goods by not enough to control the fire. 
Sea Act (COGSA); and Pursuant to Article 1733, common carriers are bound to extraordinary
- that when the loss of fire is established, the burden of proving diligence in the vigilance over the goods. The evidence of the defendant did
negligence of the vessel is shifted to the cargo shipper.  not show that extraordinary vigilance was observed by the vessel to prevent
the occurrence of fire at hatches numbers 2 and 3. Defendant's evidence did
not likewise show he amount of diligence made by the crew, on orders, in
 the care of the cargoes. What appears is that after the cargoes were stored in We find no reversible error. The 128 cartons and not the two (2) containers
the hatches, no regular inspection was made as to their condition during the should be considered as the shipping unit. 
voyage. Consequently, the crew could not have even explain what could
RE: BILL OF LADING
have caused the fire. The defendant, in the Court's mind, failed to
satisfactorily show that extraordinary vigilance and care had been made by COURT: In this case, the Bill of Lading (Exhibit "A") disclosed the following
the crew to prevent the occurrence of the fire. The defendant, as a common data: 
carrier, is liable to the consignees for said lack of deligence required of it
under Article 1733 of the Civil Code. 15 2 Containers 

Having failed to discharge the burden of proving that it had exercised the (128) Cartons) 
extraordinary diligence required by law, Petitioner Carrier cannot escape Men's Garments Fabrics and Accessories Freight Prepaid 
liability for the loss of the cargo. 
Say: Two (2) Containers Only.
And even if fire were to be considered a "natural disaster" within the meaning
of Article 1734 of the Civil Code, it is required under Article 1739 of the same Considering, therefore, that the Bill of Lading clearly disclosed the contents of
Code that the "natural disaster" must have been the "proximate and only the containers, the number of cartons or units, as well as the nature of the goods,
cause of the loss," and that the carrier has "exercised due diligence to and applying the ruling in the Mitsui  and Eurygenes cases it is clear that the
prevent or minimize the loss before, during or after the occurrence of the 128 cartons, not the two (2) containers should be considered as the shipping
disaster. " This Petitioner Carrier has also failed to establish satisfactorily.  unit subject to the $500 limitation of liability. 

Nor may Petitioner Carrier seek refuge from liability under the Carriage of True, the evidence does not disclose whether the containers involved herein were
Goods by Sea Act, It is provided therein that:  carrier-furnished or not. Usually, however, containers are provided by the
carrier. 19 In this case, the probability is that they were so furnished for
Sec. 4(2). Neither the carrier nor the ship shall be responsible for loss or Petitioner Carrier was at liberty to pack and carry the goods in containers if they
damage arising or resulting from  were not so packed. Thus, at the dorsal side of the Bill of Lading (Exhibit "A")
(b) Fire, unless caused by the actual fault or privity of the carrier.  appears the following stipulation in fine print: 

xxx xxx xxx 11. (Use of Container) Where the goods receipt of which is acknowledged
on the face of this Bill of Lading are not already packed into container(s) at
In this case, both the Trial Court and the Appellate Court, in effect, found, as a the time of receipt, the Carrier shall be at liberty to pack and carry them in
fact, that there was "actual fault" of the carrier shown by "lack of any type of container(s). 
diligence" in that "when the smoke was noticed, the fire was already big;
that the fire must have started twenty-four (24) hours before the same was The foregoing would explain the use of the estimate "Say: Two (2) Containers
noticed; " and that "after the cargoes were stored in the hatches, no regular Only" in the Bill of Lading, meaning that the goods could probably fit in two (2)
inspection was made as to their condition during the voyage." containers only. It cannot mean that the shipper had furnished the containers for
if so, "Two (2) Containers" appearing as the first entry would have sufficed. and
NOT THAT IMPORTANT if there is any ambiguity in the Bill of Lading, it is a cardinal principle in the
construction of contracts that the interpretation of obscure words or stipulations
The foregoing suffices to show that the circumstances under which the fire
in a contract shall not favor the party who caused the obscurity. 20 This applies
originated and spread are such as to show that Petitioner Carrier or its servants
with even greater force in a contract of adhesion where a contract is already
were negligent in connection therewith. Consequently, the complete defense
prepared and the other party merely adheres to it, like the Bill of Lading in
afforded by the COGSA when loss results from fire is unavailing to Petitioner
this case, which is draw. up by the carrier.
Carrier. 
On Alleged Denial of Opportunity to Present Deposition of Its Witnesses: (in
On the US $500 Per Package Limitation: 
G.R. No. 69044 only) 
Petitioner Carrier avers that its liability if any, should not exceed US $500 per
Petitioner Carrier claims: that the Trial Court did not give it sufficient time to
package as provided in section 4(5) of the COGSA.
take the depositions of its witnesses in Japan by written interrogatories. 
Article 1749 of the New Civil Code also allows the limitations of liability in this
COURT: We do not agree. petitioner Carrier was given- full opportunity to
wise: 
present its evidence but it failed to do so. On this point, the Trial Court found: 
Art. 1749. A stipulation that the common carrier's liability as limited to the
xxx xxx xxx
value of the goods appearing in the bill of lading, unless the shipper or
owner declares a greater value, is binding. Indeed, since after November 6, 1978, to August 27, 1979, not to mention
the time from June 27, 1978, when its answer was prepared and filed in
It is to be noted that the Civil Code does not of itself limit the liability of the
Court, until September 26, 1978, when the pre-trial conference was
common carrier to a fixed amount per package although the Code expressly
conducted for the last time, the defendant had more than nine months to
permits a stipulation limiting such liability. Thus, the COGSA which is
prepare its evidence. Its belated notice to take deposition on written
suppletory to the provisions of the Civil Code, steps in and supplements the
interrogatories of its witnesses in Japan, served upon the plaintiff on August
Code by establishing a statutory provision limiting the carrier's liability in the
25th, just two days before the hearing set for August 27th, knowing fully
absence of a declaration of a higher value of the goods by the shipper in the bill
well that it was its undertaking on July 11 the that the deposition of the
of lading. The provisions of the Carriage of Goods by.Sea Act on limited
witnesses would be dispensed with if by next time it had not yet been
liability are as much a part of a bill of lading as though physically in it and as
obtained, only proves the lack of merit of the defendant's motion for
much a part thereof as though placed therein by agreement of the parties. 16
postponement, for which reason it deserves no sympathy from the Court in
In G.R. No. 69044, there is no stipulation in the respective Bills of Lading that regard. The defendant has told the Court since February 16, 1979, that it
(Exhibits "C-2" and "I-3") 1 7 limiting the carrier's liability for the loss or was going to take the deposition of its witnesses in Japan. Why did it take
destruction of the goods. Nor is there a declaration of a higher value of the until August 25, 1979, or more than six months, to prepare its written
goods. Hence, Petitioner Carrier's liability should not exceed US $500 per interrogatories. Only the defendant itself is to blame for its failure to adduce
package, or its peso equivalent, at the time of payment of the value of the goods evidence in support of its defenses. 
lost, but in no case "more than the amount of damage actually sustained." 
xxx xxx xxx 22
The actual total loss for the 5,000 pieces of calorized lance pipes was P256,039
Petitioner Carrier was afforded ample time to present its side of the
(Exhibit "C"), which was exactly the amount of the insurance coverage by
case. 23 It cannot complain now that it was denied due process when the
Development Insurance (Exhibit "A"), and the amount affirmed to be paid by
Trial Court rendered its Decision on the basis of the evidence adduced.
respondent Court. The goods were shipped in 28 packages (Exhibit "C-2")
What due process abhors is absolute lack of opportunity to be heard.
Multiplying 28 packages by $500 would result in a product of $14,000 which, at
the current exchange rate of P20.44 to US $1, would be P286,160, or "more than On the Award of Attorney's Fees: 
the amount of damage actually sustained." Consequently, the aforestated amount
of P256,039 should be upheld.  COURT: Courts being vested with discretion in fixing the amount of attorney's
fees, it is believed that the amount of P5,000.00 would be more reasonable in
With respect to the seven (7) cases of spare parts (Exhibit "I-3"), their actual G.R. No. 69044. The award of P5,000.00 in G.R. No. 71478 is affirmed. 
value was P92,361.75 (Exhibit "I"), which is likewise the insured value of the
cargo (Exhibit "H") and amount was affirmed to be paid by respondent Court.
however, multiplying seven (7) cases by $500 per package at the present WHEREFORE, 1) in G.R. No. 69044, the judgment is modified in that petitioner
prevailing rate of P20.44 to US $1 (US $3,500 x P20.44) would yield P71,540 Eastern Shipping Lines shall pay the Development Insurance and Surety
only, which is the amount that should be paid by Petitioner Carrier for those Corporation the amount of P256,039 for the twenty-eight (28) packages
spare parts, and not P92,361.75.  F5interest at the legal rate from the date of the filing of the complaint on June
In G.R. No. 71478, in so far as the two (2) cases of surveying instruments are 13, 1978, plus P5,000 as attorney's fees, and the costs. 
concerned, the amount awarded to DOWA which was already reduced to $1,000 2) In G.R.No.71478,the judgment is hereby affirmed. 
by the Appellate Court following the statutory $500 liability per package, is in
order. 
In respect of the shipment of 128 cartons of garment fabrics in two (2)
containers and insured with NISSHIN, the Appellate Court also limited
Petitioner Carrier's liability to $500 per package and affirmed the award of
$46,583 to NISSHIN. it multiplied 128 cartons (considered as COGSA
packages) by $500 to arrive at the figure of $64,000, and explained that "since
this amount is more than the insured value of the goods, that is $46,583, the
Trial Court was correct in awarding said amount only for the 128 cartons, which
amount is less than the maximum limitation of the carrier's liability."