MAERSK LINE, petitioner v.
COURT OF APPEALS AND EFREN only in case of loss, destruction or deterioration of the goods as
CASTILLO, respondent
FACTS: On November 12, 1976, private respondent ordered from Eli
Lilly. Inc. of Puerto Rico through its (Eli Lilly, Inc.'s) agent in the
Philippines, Elanco Products, 600,000 empty gelatin capsules for the
manufacture of his pharmaceutical products. The capsules were
placed in six (6) drums of 100,000 capsules each valued at US
$1,668.71. Through a Memorandum of Shipment (Exh. "B"; AC GR
CV No.10340, Folder of Exhibits, pp. 5-6), the shipper Eli Lilly, Inc. of
Puerto Rico advised private respondent as consignee that the
600,000 empty gelatin capsules in six (6) drums of 100,000 capsules
each, were already shipped on board MV "Anders Maerskline"
under Voyage No. 7703 for shipment to the Philippines via Oakland,
California. In said Memorandum, shipper Eli Lilly, Inc. specified the
date of arrival to be April 3, 1977.
For reasons unknown, said cargo of capsules were mishipped and
diverted to Richmond, Virginia, USA and then transported back
Oakland, Califorilia. The goods finally arrived in the Philippines on
June 10, 1977 or after two (2) months from the date specified in the
memorandum. As a consequence, private respondent as consignee
refused to take delivery of the goods on account of its failure to
arrive on time.
Private respondent alleging gross negligence and undue delay in the
delivery of the goods, filed an action before the court a quo for
rescission of contract with damages against petitioner and Eli Lilly,
Inc. as defendants.
Denying that it committed breach of contract, petitioner alleged in
its that answer that the subject shipment was transported in
accordance with the provisions of the covering bill of lading and
that its liability under the law on transportation of good attaches
provided for in Article 1734 of Civil Code.
Defendant Eli Lilly, Inc., on the other hand, filed its answer with
compulsory and cross-claim. In its cross-claim, it alleged that the
delay in the arrival of the the subject merchandise was due solely to
the gross negligence of petitioner Maersk Line.
Trial Court: dismissed the complaint against Eli Lilly, Inc.
Correspondingly, the latter withdraw its cross-claim against
petitioner in a joint motion dated December 3, 1979.
IN VIEW OF THE FOREGOING, this Court believe (sic) and so
hold (sic) that there was a breach in the performance of their
obligation by the defendant Maersk Line consisting of their
negligence to ship the 6 drums of empty Gelatin Capsules which
under their own memorandum shipment would arrive in the
Philippines on April 3, 1977 which under Art. 1170 of the New Civil
Code, they stood liable for damages.
CA: On appeal, respondent court rendered its decision dated August
1, 1990 affirming with modifications the lower court's decision as
follows:
WHEREFORE, the decision appealed from is affirmed with a
modification, and, as modified, the judgment in this case should
read as follows:
Judgment is hereby rendered ordering defendant-appellant Maersk
Line to pay plaintiff-appellee (1) compensatory damages of
P11,680.97 at 6% annual interest from filing of the complaint until
fully paid, (2) moral damages of P50,000.00, (3) exemplary damages
of P20,000,00, (3) attorney's fees, per appearance fees, and
litigation expenses of P30,000.00, (4) 30% of the total damages
awarded except item (3) above, and the costs of suit.
SO ORDERED.
The People then elevated its cause to the SC by way of instant
petition; hence this case.
ISSUE/S:
Whether or not respondent Castillo is entitled to damages resulting
from delay in the delivery of the shipment in the absence in the bill
of lading of a stipulation on the period of delivery. YES.
RULING:
Nonetheless, petitioner maintains that it cannot be held for
damages for the alleged delay in the delivery of the 600,000 empty
gelatin capsules since it acted in good faith and there was no special
contract under which the carrier undertook to deliver the shipment
on or before a specific date (Rollo, p. 103).
On the other hand, private respondent claims that during the period
before the specified date of arrival of the goods, he had made
several commitments and contract of adhesion. Therefore,
petitioner can be held liable for the damages suffered by private
respondent for the cancellation of the contracts he entered into.
We have carefully reviewed the decisions of respondent court and
the trial court and both of them show that, in finding petitioner
liable for damages for the delay in the delivery of goods, reliance
was made on the rule that contracts of adhesion are void.
In the case before us, we find that a delay in the delivery of the
goods spanning a period of two (2) months and seven (7) days falls
was beyond the realm of reasonableness. Described as gelatin
capsules for use in pharmaceutical products, subject shipment was
delivered to, and left in, the possession and custody of petitioner-
carrier for transport to Manila via Oakland, California. But through
petitioner's negligence was mishipped to Richmond, Virginia.
Petitioner's insitence that it cannot be held liable for the delay finds
no merit.
WHEREFORE, with the modification regarding the deletion of item 4
of respondent court`s decision, the appealed decision is hereby
AFFIRMED in all respects.
MAGELLAN MANUFACTURING MARKETING CORPORATION vs.
COURT OF APPEALS
FACTS: Magellan Manufacturers Marketing Corp. (MMMC) entered
into a contract with Choju Co. of Yokohama, Japan to export
136,000 anahaw fans for and in consideration of $23,220.00.
Through its president, James Cu, MMMC then contracted F.E.
Zuellig, a shipping agent to ship the anahaw fans through Orient
Overseas Container Lines, Inc., (OOCL) specifying that he needed an
on-board bill of lading and that transhipment is not allowed under
the letter of credit. appellant MMMC paid F.E. Zuellig the freight
charges and secured a copy of the bill of lading which was
presented to Allied Bank However, when appellant's president
James Cu, went back to the bank later, he was informed that the
payment was refused by the buyer allegedly because there was no
on-board bill of lading, and there was a transhipment of goods. As a
result of the refusal of the buyer to accept, upon appellant's
request, the anahaw fans were shipped back to Manila by appellees,
for which the latter demanded from appellant payment of
P246,043.43. Appellant abandoned the whole cargo and asked
appellees for damages.
ISSUE: WON MMMMC should be liable for P52k when it exercised
its option of Abandonment.
PETITIONERS CONTENTION: Private respondents be ordered to pay
whatever petitioner was not able to earn from Choju Co., Ltd.,
amounting to P1 74,150.00 and other damages like attorneys fees
since private respondents are to blame for the refusal of Choju Co.,
Ltd. to accept the Anahaw fans
RESPONDENTS CONTENTION: It alleged that the bill of lading clearly
shows that there will be a transhipment and that petitioner was
well aware that MV (Pacific) Despatcher was only up to Hongkong
where the subject cargo will be transferred to another vessel for
Japan. Private respondents also filed a counterclaim praying that
petitioner be ordered to pay freight charges from Japan to Manila
and the demurrages in Japan and Manila amounting to P298,150.93
TRIAL COURT: MMMMC cannot seek damages as it agreed to a
transshipment of the goods and is liable for demurrages amounting
to P298k incurred in Japan and Manila.
COURT OF APPEALS: MMMMC cannot seek damages as it agreed to
a transshipment of the goods and is liable for demurrages
amounting to P52k incurred in Japan. While the goods arrived in
Manila in October 1980, appellant was notified of said arrival only in
March 1981. No explanation was given for the delay in notifying
appellant.
SUPREME COURT: No. Private respondents belatedly informed
petitioner of the arrival of its goods in Manila and that if it wished to
take delivery of the cargo it would have to pay P52k. Private
respondents unequivocally offered petitioner the option of paying
the shipping and demurrage charges in order to take delivery of the
goods or of abandoning the same so that private respondents could
sell them at public auction and thereafter apply the proceeds in
payment of the shipping and other charges. There is no dispute that
private respondents expressly and on their own volition granted
petitioner an option with respect to the satisfaction of freightage
and demurrage charges. Having given such option, especially since it
was accepted by petitioner, private respondents are estopped from
reneging thereon. Petitioner, on its part, was well within its right to
exercise said option. Private respondents, in giving the option, and
petitioner, in exercising that option, are concluded by their
respective actions. To allow either of them to unilaterally back out
on the offer and on the exercise of the option would be to
countenance abuse of rights as an order of the day, doing violence
to the long entrenched principle of mutuality of contracts. By
analogy, this can also apply to maritime transportation. Further,
with much more reason can petitioner in the instant case properly
abandon the goods, not only because of the unreasonable delay in
its delivery but because of the option which was categorically
granted to and exercised by it as a means of settling its liability for
the cost and expenses of reshipment. And, said choice having been
duly communicated, the same is binding upon the parties on legal
and equitable considerations of estoppel.
Belgian Overseas Chartering vs. Philippine First Insurance CO.
FACTS:
CMC Trading A.G shipped on board the M/V Anangel Sky at
Hamburg, Germany, 242 coils of various Prime Cold Steel sheets
for transportation to Manila consigned to the Philippine Steel
Trading Corp. The vessel arrived at the port of Manila and within
the subsequent days, discharged the said cargo; Four (4) coils
are said to be in bad order BO tally sheet #154974. Finding the
four (4) coils in their damaged state to be unfit for the
intended purpose, the consignee Philippine Steel trading
Corporation declared the same as total loss. Despite receipt of
formal demand, defendants-appellees refused to submit to the
consignees claim. Consequently, plaintiff paid php503,086.50
and was subrogated to the latters rights and causes of action
against defendants. Subsequently, plaintiff instituted this
complaint for recovery of the amount paid by them, to the
consignee as insured. Impugning the propriety of the suit
exercised against due diligence and foresight required by law to
prevent any damage/loss to said shipment, and that their
liability, if there be any, should not exceed the limitations of
liability provided for in the bill of lading and other pertinent
laws.
ISSUE: Whether or not petitioners have overcome the
presumption of negligence of a common carrier
and condition. Normally, a request for bad order survey is
made in case there is an apparent or a presumed loss or
damage. d. The certificate of Analysis stated that, based on the
sample submitted and tested, the steel sheets found in bad
order were wet with fresh water. e. Petitioners in a letter
addressed to the Philippine Steel Coating Corporation and dated
October 12, 1990. Admitted that they were aware of the
condition of the four coils found in bad order and condition.

RULING: No. Well-settled is the rule that common carriers from Tabacalera Insurance Co. v North Front Shipping Services
the nature of their business and for reasons of public policy,
Facts: Respondent North Front Shipping Services was contracted to
are bound to observe extraordinary diligence and vigilance with
transfer about 20,000 sacks of corn grains estimated at Php 3.5M
respect to the safety of the goods and the passengers they
consigned to Republic Flour Mills Corporation in Manila. The vessel
transport. This strict requirement is justified by the fact that,
was inspected prior to actual loading of representatives of the
without a hand or a voice in the preparation of such contract,
shipper and was found to be fit to carry the merchandise. The cargo
the riding public enters into a contract of transportation with
was covered by tarpaulins and wooden boards. Upon arriving in
common carriers. Owing to this high degree of diligence
Manila, the consignee was advised of its arrival but it did not
required of them, common carrier, as a general rule, are
immediately commence the unloading process for no valid reason.
presumed to have been at fault or negligent if the goods they
When the cargo was finally unloaded after 20 days, it was found
transported deteriorated or got lost or destroyed. In the instant
that theres a shortage of 26 metric tons due to the molds and
case, petitioners failed to prove that they observed
deterioration of the goods. It was found that the cause of the
extraordinary diligence and precaution which the law requires a
deterioration was the contact of the grains with saltwater. Republic
common carrier to know and to follow to avoid damage to or
Flour then rejected the goods and demanded payment, which was
destruction of the goods entrusted to it for safe carriage and
paid for by the petitioner insurance company. Petitioner now files a
delivery. a. As stated in the bill of lading, petitioners received
claim for reimbursement against herein respondent. Petitioner
the subject shipment in good order and condition in Hamburg,
claims that the damages were due to the negligence of the shipping
Germany. b. Prior to the unloading of the cargo, an inspection
company. Shipping company refuted that it was never negligent as
report prepared and signed by the representatives of both
they were inspected before embarking and was found to be
parties showed the steel bands broken, the metal envelopes
seaworthy, and was issued a permit by the Coast Guard. The Trial
rust-stained and heavily buckled, and the contents thereof
Court dismissed the petition by insurance company and ruled that
exposed and rusty. c. Bad Order tally sheet number 154979
North Front exercised ordinary diligence in the care of goods, as
issued by Jardine Davies transport Services, Inc (the other
there was a charter party agreement between North Front and
petitioner), stated that the four (4) coils were in bad order
Republic Flour. Likewise, CA ruled that a common carrier has to
observe a higher degree of diligence, to which North Front has
satisfactorily complied with.
Issue: Whether or not North Front Shipping Services is a common
carrier, and if it observed the due diligence required of it.
Ruling: Yes, North Front Shipping is a common carrier. It was
resolved by the courts that a common carrier does not cease to be
one by the mere presence of the charter party agreement. If in the
said contract of affreightment it was found that it was only a time
charter or a voyage charter, the vessel does not lose its status as a
common carrier. As such, North Front Shipping is required to
observe the extraordinary diligence in the vigilance over the goods
it transports. A common carrier is presumed to have been at fault or
to have acted negligently. As such, North Front, did not act with the
extraordinary diligence in the vigilance over the goods assigned to
it. It was stated by SC that the extraordinary diligence in the
vigilance over the goods is to avoid the damage or destruction of
the goods entrusted to the vessel. As such, it must be able to render
service with the greatest skill and foresight to use all reasonable
means to ascertain the nature and characteristics of goods tendered
for shipment. It was shown during trial that the vessel had rusty
bulkheads and wooden boards and tarpaulins that bore heavy
concentration of molds. However, the Court cannot attribute the
whole destruction alone to North Front as Republic Flour Mill was
guilty of contributory negligence, sentencing them to shoulder 40%
of the loss.
Benito Macam vs. Court of Appeals
FACTS: Petitioner is doing business as exporter of fresh fruits.
In one transaction, respondent Wallem (carrier) delivered the
shipment (3,500 boxes of watermelon covered by Bill of Lading
No. HKG 99012, and 1,611 boxes of fresh mangoes covered by
Bill of Lading No.HKG 99013.)directly to Great Prospect Company
(GPC) - the notify party, and not to Pakistan Bank, which is the
consignee bank and without the required bill of lading having
been surrendered. Subsequently, GPC failed to pay Pakistan
Bank such that the latter, still in possession of the original bills
of lading, refused to pay petitioner through, Solidbank. Since
Solidbank already prepaid petitioner the value of the shipment,
it demanded payment from respondent Wallem but was
refused. Petitioner was thus constrained to return the amount
involved to Solidbank, then demanded payment from Wallem
in writing, but to no avail.
Wallem submitted in evidence a telex dated 5 April 1989 as
basis for delivering the cargoes to GPC without the bills of
lading and bank guarantee. The telex instructed delivery of
various shipments to the respective consignees without need of
presenting the bill of lading and bank guarantee per the
respective shippers request since for prepaid shiptofrt charges
already fully paid. Macam, however, argued that, assuming
there was such an instruction, the consignee referred to was
Pakistan Bank and not GPC.
ISSUE: Whether the respondents liable to the petitioner for
releasing the goods to GPC without the bills of lading or bank
guarantee?
PETITIONERS CONTENTION: Petitioner sought collection of the
value of the shipment of P546,033.42 from respondents before
the Regional Trial Court of Manila, based on delivery of the
shipment to GPC without presentation of the bills of lading and
bank guarantee.
RESPONDENTS CONTENTION: Respondents contended that the
shipment was delivered to GPC without presentation of the bills
of lading and bank guarantee per request of petitioner himself
because the shipment consisted of perishable goods.
Respondents explained that it is a standard maritime practice,
when immediate delivery is of the essence, for the shipper to
request or instruct the carrier to deliver the goods to the
buyer upon arrival at the port of destination without requiring
presentation of the bill of lading as that usually takes time. As
proof thereof, respondents apprised the trial court that for the
duration of their two-year business relationship with petitioner
concerning similar shipments to GPC deliveries were effected
without presentation of the bills of lading.
RULING:
TRIAL COURT: Ordered respondents to pay, jointly and
severally, the value of the shipment plus attorneys fees in
favour of petitioner Macam.
COURT OF APPEALS: Ruling otherwise, the CA set aside the
decision of the trial court and dismissed the complaint together
with the counterclaims. It alleged that as established by
previous similar transactions between the parties, shipped
cargoes were sometimes actually delivered not to the
consignee but to notify party GPC without need of the bills of
lading or bank guarantee. Moreover, the bills of lading were
viewed by respondent court to have been properly superseded
by the telex instruction to effect the delivery to GPC.
SUPREME COURT ruling in favour of the Respondents, since
the subject shipment consisted of perishable goods and
Solidbank pre-paid the full amount of the value thereof, it is
not hard to believe the claim of respondent Wallem that
petitioner indeed requested the release of the goods to GPC
without presentation of the bills of lading and bank guarantee.
Respondent Court analyzed the telex of petitioner in its entirety
and correctly arrived at the conclusion that the Consignee
referred to was not Pakistan Bank but GPC. Petitioner also
failed to substantiate his claim that he returned to Solidbank
the full amount of the value of the cargoes. In view of
petitioners utter failure to establish the liability of respondents
over the cargoes, no reversible error was committed by
respondent court in ruling against him. The petition was
denied. The Court emphasizes that the extraordinary
responsibility of the common carriers lasts until actual or
constructive delivery of the cargoes to the consignee or to the
person who has a right to receive them. Pakistan Bank was
indicated in the bills of lading as consignee whereas Great
Prospect Company (GPC) was the notify party. However, in the
export invoices GPC was clearly named as buyer/importer.
Petitioner also referred to GPC as such in his demand letter to
respondent Wallem and in his complaint before the trial court.
This premise draws the Court to conclude that the delivery of
the cargoes to GPC as buyer/importer which, conformably with
Art. 1736 had, other than the consignee, the right to receive
them was proper.
LU DO & LU YM CORPORATION vs. I. V. BINAMIRA
FACTS: Delta Photo Supply Company of New York shipped on board
the M/S "FERNSIDE", six cases of films and/or photographic supplies
consigned to the order of respondent I. V. Binamira. Upon arrival at
the port of Cebu, said shipment was brought in the custody of
arrastre operator Visayan Cebu Terminal Company, Inc. which
recorded the good order cargo and bad order cargo. Consequently,
petitioner, as agent of the carrier, hired the Cebu Stevedoring
Company Inc. (CSCI) to unload its cargo. CSCI also recorded good
order cargo from the bad one. The shipment in question was not
included in the report of bad order cargo of both checkers,
indicating that it was discharged from the ship in good order and
condition.
However, when respondent claimed said supplies from the arrastre
operator, he discovered that the cases showed signs of pilferage.
The surveyors (R. J. del Pan & Company, Inc) hired by respondent
examined the cases and made a physical count of their contents in
the presence of representatives of petitioner, respondent and the
stevedoring company. The finding of the surveyors showed that
some films and photographic supplies were missing valued at
P324.63.
ISSUE: WON carrier is responsible for the loss considering that the
same occurred after the shipment was discharged from the ship and
placed in the possession and custody of the customs authorities.
HELD: NO. While delivery of the cargo to the consignee, or to the
person who has a right to receive them", contemplated in Article
1736, because in such case the goods are still in the hands of the
Government and the owner cannot exercise dominion over them,
we believe however that the parties may agree to limit the liability
of the carrier considering that the goods have still to through the
inspection of the customs authorities before they are actually
turned over to the consignee. This is a situation where we may say
that the carrier losses control of the goods because of a custom
regulation and it is unfair that it be made responsible for what may
happen during the interregnum. And this is precisely what was done
by the parties herein. In the bill of lading that was issued covering
the shipment in question, both the carrier and the consignee have
stipulated to limit the responsibility of the carrier for the loss or
damage that may be caused to the goods before they are actually
delivered.
It therefore appears clear that the carrier does not assume liability
for any loss or damage to the goods once they have been "taken
into the custody of customs or other authorities", or when they
have been delivered at ship's tackle. These stipulations are clear.
They have been adopted precisely to mitigate the responsibility of
the carrier considering the present law on the matter, and we find
nothing therein that is contrary to morals or public policy that may
justify their nullification. We are therefore persuaded to conclude
that the carrier is not responsible for the loss in question, it
appearing that the same happened after the shipment had been
delivered to the customs authorities.
REPUBLIC OF THE PHILIPPINES vs. LORENZO SHIPPING
CORPORATION
FACTS: On June 5, 1987, the Republic of the Philippines, through the
Department of Health (DOH), and the Cooperative for American
Relief Everywhere, Inc. (CARE) signed an agreement wherein CARE
would acquire from the United States government donations of
non-fat dried milk and other food products from January 1, 1987 to
December 31, 1989. In turn, the Philippines would transport and
distribute the donated commodities to the intended beneficiaries in
the country. The government entered into a contract of carriage of
goods with herein petitioner National Trucking and Forwarding
Corporation (NTFC). Thus, the latter shipped 4,868 bags of non-fat
dried milk through herein respondent Lorenzo Shipping Corporation
(LSC) from September to December 1988. The consignee named in
the bills of lading issued by the respondent was Abdurahman Jama,
petitioner's branch supervisor in Zamboanga City.
On reaching the port of Zamboanga City, respondent's agent, Efren
Ruste Shipping Agency, unloaded the 4,868 bags of non-fat dried
milk and delivered the goods to petitioner's warehouse. Before each
delivery, two delivery checkers of Efren Ruste Shipping Agency,
requested Abdurahman to surrender the original bills of lading, but
the latter merely presented certified true copies thereof. More so,
they asked Abdurahman to sign the delivery receipts. However, at
times when Abdurahman had to attend to other business before a
delivery was completed, he instructed his subordinates to sign the
delivery receipts for him.
Petitioner allegedly did not receive the subject goods. The
respondent explained that the cargo had already been delivered to
Abdurahman Jama. The petitioner then decided to investigate the
loss of the goods. But before the investigation was over,
Abdurahman Jama resigned as branch supervisor of petitioner. The
government through the DOH, CARE, and NTFC filed an action for
breach of contract of carriage, against respondent with the RTC of
Manila. The Trial Court ruled in favor of respondent which was
affirmed by the Court of Appeals.
PETITIONERS CONTENTION: Respondent failed to exercise the
extraordinary diligence required of common carriers. Respondent is
presumed negligent and liable for failure to abide by the terms and
conditions of the bills of lading.
RESPONDENTS CONTENTION: Prior to releasing the goods to
Abdurahman, Rogelio and Ismael required the surrender of the
original bills of lading, and in their absence, the certified true copies
showing that Abdurahman was indeed the consignee of the goods.
In addition, they required Abdurahman or his designated
subordinates to sign the delivery receipts upon completion of each
delivery.
ISSUE: WON Respondent is presumed to be at fault or negligent as
common carrier for the loss or deterioration of the goods?
HELD: YES. Article 1733 of the Civil Code demands that a common
carrier observe extraordinary diligence over the goods transported
by it. Extraordinary diligence is that extreme measure of care and
caution which persons of unusual prudence and circumspection use
for securing and preserving their own property or rights. This
exacting standard imposed on common carriers in a contract of
carriage of goods is intended to tilt the scales in favor of the shipper
who is at the mercy of the common carrier once the goods have
been lodged for shipment. Hence, in case of loss of goods in transit,
the common carrier is presumed under the law to have been at
fault or negligent. However, the presumption of fault or
negligence, may be overturned by competent evidence showing
that the common carrier has observed extraordinary diligence over
the goods.
In the instant case, the respondent adequately proved that it
exercised extraordinary diligence. Although the original bills of
lading remained with petitioner, respondent's agents demanded
from Abdurahman the certified true copies of the bills of lading.
They also asked the latter and in his absence, his designated
subordinates, to sign the cargo delivery receipts. the surrender of
the original bill of lading is not a condition precedent for a common
carrier to be discharged of its contractual obligation. If surrender of
the original bill of lading is not possible, acknowledgment of the
delivery by signing the delivery receipt suffices. This is what
respondent did.
Light Rail Transit Authority & Rodolfo Roman v. Marjorie Navidad
& Prudent Security Agency
FACTS: On 14 October 1993, about 7:30 in the evening, Nicanor
Navidad, then drunk, entered the EDSA LRT station after purchasing
a token. While Navidad was standing on the platform near the LRT
tracks, the assigned security guard Junelito Escartin approached
Navidad. A misunderstanding between them was apparently ensued
that led to a fist fight. No evidence was adduced to indicate how the
fight started or who, 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 petitioner Rodolfo Roman,
was coming in. Navidad was struck by the moving train, and he was
killed instantaneously.
 The widow of Nicanor, Marjorie Navidad, along with her
children, filed a complaint for damages against Junelito Escartin,
Rodolfo Roman, the LRTA, the Metro Transit Organization, Inc.
(Metro Transit), and Prudent Security Agency for the death of her
husband. Prudent Security Agency denied liability and averred that
it had exercised due diligence in the selection and supervision of its
security guards. The LRTA and Roman presented their evidence
while Prudent and Escartin filed a demurrer contending that
Navidad had failed to prove that Escartin was negligent in his
assigned task.
The RTC Pasig ruled against Prudent Security Agency and
Junelito Escartin ordering them to pay for actual and moral
damages, the attorneys fees and cost of suit, and dismissed the
complaint against LRTA and Roman for lack of merit
Prudent appealed to the Court of Appeals and the court
modified the lower courts decision by exonerating Prudent from
any liability for the death of Nicanor Navidad and, instead, holding
the LRTA and Roman jointly and severally liable.
ISSUE: Is the LRTA liable for the death of Nicanor Navidad?
RULING: Yes, LRTA is liable.The law requires common carriers to
carry passengers safely using the utmost diligence of very cautious
persons with due regard for all circumstances. Such duty of a
common carrier to provide safety to its 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
pursuance to the contract of carriage. The statutory provisions
render a common carrier liable for death of or injury to passengers
(a) through the negligence or willful acts of its employees or b) on
account of willful acts or negligence of other passengers or of
strangers if the common carriers employees through the exercise of
due diligence could have prevented or stopped the act or omission.
In case of such death or injury, a carrier is presumed to have been at
fault or been negligent, and 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 and the burden shifts upon the carrier to
prove that the injury is due to an unforeseen event or to force
majeure.
The foundation of LRTAs liability is the contract of carriage and
its 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 carrier. In the discharge of its commitment
to ensure the safety of passengers, a carrier may choose to hire its
own employees or avail itself of the services of an outsider or an
independent firm to undertake the task. In either case, the common
carrier is not relieved of its responsibilities under the contract of
carriage.
ABOITIZ SHIPPING CORPORATION, vs HON. COURT OF APPEALS,
Facts: On May 11, 1975, Anacleto Viana boarded the vessel M/V
Antonia, owned by defendant, at the port at San Jose, Occidental
Mindoro, bound for Manila, having purchased a ticket (No. 117392)
in the sum of P23.10. On May 12, 1975, said vessel arrived at Pier 4,
North Harbor, Manila, and the passengers therein disembarked, a
gangplank having been provided connecting the side of the vessel to
the pier. Instead of using said gangplank Anacleto Viana
disembarked on the third deck which was on the level with the pier.
After said vessel had landed, the Pioneer Stevedoring Corporation
took over the exclusive control of the cargoes loaded on said vessel
pursuant to the Memorandum of Agreement dated July 26, 1975
between the third party defendant Pioneer Stevedoring Corporation
and defendant Aboitiz Shipping Corporation.
The crane owned by the third party defendant and operated by its
crane operator Alejo Figueroa was placed alongside the vessel and
one (1) hour after the passengers of said vessel had disembarked, it
started operation by unloading the cargoes from said vessel. While
the crane was being operated, Anacleto Viana who had already
disembarked from said vessel obviously remembering that some of
his cargoes were still loaded in the vessel, went back to the vessel,
and it was while he was pointing to the crew of the said vessel to
the place where his cargoes were loaded that the crane hit him,
pinning him between the side of the vessel and the crane. He was
thereafter brought to the hospital where he later expired three (3)
days thereafter, on May 15, 1975, the cause of his death according
to the Death Certificate being "hypostatic pneumonia secondary to
traumatic fracture of the pubic bone lacerating the urinary bladder".
For his hospitalization, medical, burial and other miscellaneous
expenses, Anacleto's wife, herein plaintiff, spent a total of
P9,800.00.
Private respondents Vianas filed a complaint for damages against
petitioner corporation (Aboitiz, for brevity) for breach of contract of
carriage.
Thereafter, Aboitiz, as third-party plaintiff, filed a third-party
complaint against Pioneer imputing liability thereto for Anacleto
Viana's death as having been allegedly caused by the negligence of
the crane operator who was an employee of Pioneer under its
exclusive control and supervision.
Pioneer, in its answer to the third-party complaint, raised the
defenses that Aboitiz had no cause of action against Pioneer
considering that Aboitiz is being sued by the Vianas for breach of
contract of carriage to which Pioneer is not a party; that Pioneer
had observed the diligence of a good father of a family both in the
selection and supervision of its employees as well as in the
prevention of damage or injury to anyone including the victim
Anacleto Viana; that Anacleto Viana's gross negligence was the
direct and proximate cause of his death; and that the filing of the
third-party complaint was premature by reason of the pendency of
the criminal case for homicide through reckless imprudence filed
against the crane operator, Alejo Figueroa.
In a decision rendered on April 17, 1980 by the trial court, Aboitiz
was ordered to pay the Vianas for damages incurred, and Pioneer
was ordered to reimburse Aboitiz for whatever amount the latter
paid the Vianas.
Both Aboitiz and Pioneer filed separate motions for reconsideration
wherein they similarly raised the trial court's failure to declare that
Anacleto Viana acted with gross negligence despite the
overwhelming evidence presented in support thereof.
In an order dated October 27, 1982, the trial court absolved Pioneer
from liability for failure of the Vianas and Aboitiz to preponderantly
establish a case of negligence against the crane operator which the
court a quo ruled is never presumed, aside from the fact that the
memorandum of agreement supposedly refers only to Pioneer's
liability in case of loss or damage to goods handled by it but not in
the case of personal injuries, and, finally that Aboitiz cannot
properly invoke the fellow-servant rule simply because its liability
stems from a breach of contract of carriage. CA affirmed the trial
courts order holding Aboitiz liable.
Issue: Whether or not petitioner is still responsible as a carrier to
Viana after the latter had already disembarked the vessel.
Held: Yes. The rule is that the relation of carrier and passenger
continues until the passenger has been landed at the port of
destination and has left the vessel owner's dock or premises. Once
created, the relationship will not ordinarily terminate until the
passenger has, after reaching his destination, safely alighted from
the carrier's conveyance or had a reasonable opportunity to leave
the carrier's premises. All persons who remain on the premises a
reasonable time after leaving the conveyance are to be deemed
passengers, and what is a reasonable time or a reasonable delay
within this rule is to be determined from all the circumstances, and
includes a reasonable time to see after his baggage and prepare for
his departure. The carrier-passenger relationship is not terminated
merely by the fact that the person transported has been carried to
his destination if, for example, such person remains in the carrier's
premises to claim his baggage.

The primary factor to be considered is the existence of a reasonable

cause as will justify the presence of the victim on or near the
petitioner's vessel. We believe there exists such a justifiable cause.
When the accident occurred, the victim was in the act of unloading
his cargoes, which he had every right to do, from petitioner's vessel.
As earlier stated, a carrier is duty bound not only to bring its
passengers safely to their destination but also to afford them a
reasonable time to claim their baggage.