1) BRITISH AIRWAYS v.
COURT OF APPEALS being no perfected contract of carriage existing between them as
G.R. NO. 92288, 09 February 1993, SECOND DIVISION
(Nocon, J.)
In dealing with the contract of common carriage of passengers, for
purpose of accuracy, there are two (2) aspects of the same,
namely: (a) the contract ‘to carry (at some future time),’ which
contract is consensual and is necessarily perfected by mere
consent (See Article 1356, Civil Code of the Philippines); and (b)
the ‘contract of carriage’ or ‘of common carriage’ itself which
should be considered as a real contract for not until the carrier is
actually used can the carrier be said to have already assumed the
obligation of a carrier. (Paras, Civil Code Annotated, Vol. V, p.429,
Eleventh Ed.)
FACTS
On February 15, 1981, private respondent First International
Trading and General Services Co., (FITG) a duly licensed
domestic recruitment and placement agency, received a telex
message from its principal ROLACO Engineering and Contracting
Services in Jeddah, Saudi Arabia to recruit Filipino contract
workers in behalf of said principal. During the early part of March
1981, said principal paid to the Jeddah branch of petitioner British
Airways, Inc. (BA) airfare tickets for 93 contract workers with
specific instruction to transport said workers to Jeddah on or
before March 30, 1981.
As soon as BA received a prepaid ticket advice from its Jeddah
branch to transport the 93 workers, FITG was immediately
informed by former that its principal ROLACO had forwarded 93
prepaid tickets. Thereafter, FITG instructed its travel agent, ADB
Travel and Tours, Inc., to book the 93 workers with BA but the latter
failed to fly said workers, thereby compelling FITG to borrow
money in the amount of P304,416.00 in order to purchase airline
tickets from the other airlines as evidenced by the cash vouchers
(Exhibits "B", "C" and "C-1 to C-7") for the 93 workers it had
recruited who must leave immediately since the visas of said
workers are valid only for 45 days and the Bureau of Employment
Services mandates, that contract workers must be sent to the
jobsite within a period of 30 days.
Sometime in the first week of June, 1981, FITG was again
informed by BA that it had received a prepaid ticket advice from
its Jeddah branch for the transportation of 27 contract workers.
Immediately, FITG instructed its travel agent to book the 27
contract workers with BA but the latter was only able to book and
confirm 16 seats on its June 9, 1981 flight. However, on the date
of the scheduled flight only 9 workers were able to board said flight
while the remaining 7 workers were rebooked to June 30, 1981
which bookings were again cancelled by BA without any prior
notice to either FITG or the workers. Thereafter, the 7 workers
were rebooked to the July 4, 1981 flight of BA with 6 more workers
booked for said flight. Unfortunately, the confirmed bookings of
the 13 workers were again cancelled and rebooked to July 7,
1981.
On July 6, 1981, FITG paid the travel tax of the said workers as
required by BA but when the receipt of the tax payments was
submitted, the latter informed FITG that it can only confirm the
seats of the 12 workers on its July 7, 1981 flight. However, the
confirmed seats of said workers were again cancelled without any
prior notice either to FITG or said workers. The 12 workers were
finally able to leave for Jeddah after FITG had bought tickets from
the other airlines.
As a result of these incidents, FITG sent a letter to BA demanding
compensation for the damages it had incurred by the latter's
repeated failure to transport its contract workers despite confirmed
bookings and payment of the corresponding travel taxes. It is the
contention of BA that FITG has no cause of action against it there
no ticket was ever issued to FITG’s contract workers and,
therefore, the obligation of BA to transport said contract workers
did not arise. Furthermore, FITG’s failure
to attach any ticket in the complaint further proved that it was
never a party to the alleged transaction. BA also contends that the
appellate court erred in awarding actual damages in the amount
of P308,016.00 to FITG since all expenses had already been
subsequently reimbursed by the latter's principal. The Trial Court
ruled in favor of FITG. CA affirmed.
ISSUES
1. Whether or not there was a perfected contract?
2. Whether or not FITG is entitled to the award of actual
damages?
RULING
1. YES.
There was a perfected contract. It was “a contract to carry”. FITG
had a valid cause of action for damages against BA. A cause of
action is an act or omission of one party in violation of the legal
right or rights of the other. BA’s repeated failures to transport
FITG’s workers in its flight despite confirmed booking of said
workers clearly constitutes breach of contract and bad faith on its
part. The appellate court correctly held that:
“In dealing with the contract of common carriage of passengers, for
purpose of accuracy, there are two (2) aspects of the same,
namely: (a) the contract ‘to carry (at some future time),’ which
contract is consensual and is necessarily perfected by mere
consent (See Article 1356, Civil Code of the Philippines); and (b)
the ‘contract of carriage’ or ‘of common carriage’ itself which
should be considered as a real contract for not until the carrier is
actually used can the carrier be said to have already assumed the
obligation of a carrier. (Paras, Civil Code Annotated, Vol. V, p.429,
Eleventh Ed.)
In the instant case, the contract 'to carry' is the one involved,
which is consensual and is perfected by the mere consent of the
parties. There is no dispute as to FITG’s consent to the said
contract 'to carry' its contract workers from Manila to Jeddah. BA’s
consent thereto, on the other hand, was manifested by its
acceptance of the PTA or prepaid ticket advice that ROLACO
Engineering has prepaid the airfares of FITG’s contract workers
advising BA that it must transport the contract workers on or
before the end of March, 1981 and the other batch in June, 1981.
Even if a PTA is merely an advice from the sponsors that an airline
is authorized to issue a ticket and thus no ticket was yet issued,
the fact remains that the passage had already been paid for by
the principal of FITG, and BA had accepted such payment. The
existence of this payment was never objected to nor questioned
by BA in the lower court. Thus, the cause or consideration which
is the fare paid for the passengers exists in this case.
The third essential requisite of a contract is an object certain. In
this contract 'to carry', such an object is the transport of the
passengers from the place of departure to the place of destination
as stated in the telex. Accordingly, there could be no more
pretensions as to the existence of an oral contract of carriage
imposing reciprocal obligations on both parties. In the case of
FITG, it has fully complied with the obligation, namely, the
payment of the fare and its willingness for its contract workers to
leave for their place of destination. On the other hand, the facts
clearly show that BA was remiss in its obligation to transport the
contract workers on their flight despite confirmation and bookings
made by FITG’s travelling agent.
Besides, BA knew very well that time was of the essence as the
prepaid ticket advice had specified the period of compliance
therewith, and with emphasis that it could only be used if the
passengers fly on BA. Under
the circumstances, BA should have refused acceptance of the
PTA from FITG's principal or to at least inform FITG that it could
not accommodate the contract workers.
While there is no dispute that ROLACO Engineering advanced the
payment for the airfares of the FITG's contract workers who were
recruited for ROLACO Engineering and the said contract workers
were the intended passengers in the aircraft of BA, the said
contract 'to carry' also involved FITG for as recruiter he had to see
to it that the contract workers should be transported to ROLACO
Engineering in Jeddah thru the BA’s transportation. For that
matter, the involvement of FITG in the said contract 'to carry' was
well demonstrated when BA upon receiving the PTA immediately
advised FITG thereof.”
1. NO.
Article 2199 of the Civil Code provides that: "Except as provided
by law or by stipulations, one is entitled to an adequate
compensation only for such pecuniary loss suffered by him as he
has duly proved. Such compensation is referred to as actual or
compensatory damages."
Furthermore, actual or compensatory damages cannot be
presumed, but must be duly proved, and proved with reasonable
degree of certainty. A court cannot rely on speculation, conjecture
or guesswork as to the fact and amount of damages, but must
depend upon competent proof that they have suffered and on
evidence of the actual amount thereof. Thus, while it may be true
that FITG was compelled to borrow money for the airfare tickets of
its contract workers when BA failed to transport said workers, the
reimbursements made by its principal to FITG failed to support the
latter's claim that it suffered actual damages as a result of BA's
failure to transport said workers. It is undisputed that FITG had
consistently admitted that its principal had reimbursed all its
expenses.
WHEREFORE, the assailed decision is hereby AFFIRMED with
the MODIFICATION that the award of actual damages be deleted
from said decision.
2) COMPAÑIA MARITIMA v. INSURANCE COMPANY OF
NORTH AMERICA
G.R. No. L-18965, 30 October 1964, (Bautista Angelo, J.)
Whenever the control and possession of goods passes to the
carrier and nothing remains to be done by the shipper, then it can
be said with certainty that the relation of shipper and carrier has
been established.
FACTS
Macleod and Company of the Philippines contracted by telephone
the services of the Compañia Maritima, a shipping corporation, for
the shipment of 2,645 bales of hemp from the former's Sasa
private pier at Davao City to Manila and for their subsequent
transhipment to Boston, Massachusetts, U.S.A. on board the S.S.
Steel Navigator. This oral contract was later on confirmed by a
formal and written booking issued by Macleod's branch office in
Sasa and handcarried to Compañia Maritima's branch office in
compliance with which the latter sent to Macleod's private wharf
LCT Nos. 1023 and 1025, manned each by a patron and an
assistant patron which issued carrier’s receipts upon loading of the
hemp. Thereafter, the two loaded barges left Macleod's wharf and
proceeded to and moored at the government's marginal wharf in
the same place to await the arrival of the S.S. Bowline Knot on
which the hemp was to be loaded. During the night, however, LCT
No. 1025 sank, resulting in the damage or loss of 1,162 bales of
hemp loaded therein. The damaged hemp was brought to Odell
Plantation in Madaum, Davao, for cleaning, washing,
reconditioning, and redrying. After reclassification, the value of the
reconditioned hemp was reduced. Adding to this the sum of
P8,863.30 for Macleod's expenses in checking, grading, rebating,
and other fees for washing, cleaning and redrying in the amount
of P19.610.00, the total loss adds up to P60,421.02.
All shipments of Macleod were insured with the Insurance
Company of North America against all losses and damages.
Macleod filed a claim for the loss it suffered and the sum of
P64,018.55 was paid, which was noted down in a document which
aside from being a receipt of the amount paid, was a subrogation
agreement between Macleod and the insurance company
wherein the former assigned to the latter its rights over the insured
and damaged cargo. Having failed to recover from the carrier, the
insurance company instituted the present action. After trial, the
court a quo rendered judgment ordering the carrier to pay the
insurance company the sum of P60,421.02, with legal interest
thereon from the date of the filing of the complaint until fully paid,
and the costs. This judgment was affirmed by the Court of
Appeals.
ISSUES
1. Whether or not there was a contract of carriage between the
carrier and the shipper even if the loss occurred when the
hemp was loaded on a barge owned by the carrier which was
loaded free of charge and was not actually loaded on the S.S.
Bowline Knot which would carry the hemp to Manila and no
bill of lading was issued therefore?
2. Whether or not Insurance Company of North America can sue
the carrier under its insurance contract as assignee of
Macleod in spite of the fact that the liability of the carrier as
insurer is not recognized in this jurisdiction?
RULING
1. YES.
The fact that the carrier sent its lighters free of charge to take the
hemp from Macleod's wharf at Sasa preparatory to its loading onto
the ship Bowline Knot does not in any way impair the contract of
carriage already
entered into between the carrier and the shipper, for that
preparatory step is but part and parcel of said contract of carriage.
The lighters were merely employed as the first step of the voyage,
but once that step was taken and the hemp delivered to the
carrier's employees, the rights and obligations of the parties
attached thereby subjecting them to the principles and usages of
the maritime law. In other words, here we have a complete contract
of carriage the consummation of which has already begun: the
shipper delivering the cargo to the carrier, and the latter taking
possession thereof by placing it on a lighter manned by its
authorized employees, under which Macleod became entitled to
the privilege secured to him by law for its safe transportation and
delivery, and the carrier to the full payment of its freight upon
completion of the voyage.
The test as to whether the relation of shipper and carrier had been
established is, Had the control and possession of the cotton been
completely surrendered by the shipper to the railroad company?
Whenever the control and possession of goods passes to the
carrier and nothing remains to be done by the shipper, then it can
be said with certainty that the relation of shipper and carrier has
been established.
The liability of the carrier as common carrier begins with the actual
delivery of the goods for transportation, and not merely with the
formal execution of a receipt or bill of lading; the issuance of a bill
of lading is not necessary to complete delivery and acceptance.
Even where it is provided by statute that liability commences with
the issuance of the bill of lading, actual delivery and acceptance are
sufficient to bind the carrier.
1. YES
The insurance company can recover from the carrier as assignee
of the owner of the cargo for the insurance amount it paid to the
latter under the insurance contract. And this is so because since
the cargo that was damaged was insured with respondent
company and the latter paid the amount represented by the loss,
it is but fair that it be given the right to recover from the party
responsible for the loss. The instant case, therefore, is not one
between the insured and the insurer, but one between the shipper
and the carrier, because the insurance company merely stepped
into the shoes of the shipper. And since the shipper has a direct
cause of action against the carrier on account of the damage of
the cargo, no valid reason is seen why such action cannot be
asserted or availed of by the insurance company as a subrogee
of the shipper. Nor can the carrier set up as a defense any defect
in the insurance policy not only because it is not a privy to it but
also because it cannot avoid its liability to the shipper under the
contract of carriage which binds it to pay any loss that may be
caused to the cargo involved therein.
WHEREFORE, the decision appealed from is affirmed, with costs
against petitioner.
3) KOREAN AIRLINES CO., LTD. v. COURT OF APPEALS and
JUANITO C. LAPUZ and JUANITO C. LAPUZ v. COURT OF
APPEALS and KOREAN AIRLINES CO., LTD.
G.R. No. 114061 and G.R. No. 113842, 03 August 1994, ( Cruz,
J.)
Entry of name in the passenger manifest of an airline and the
clearance through immigration and customs are enough evidence
to regard an individual as a confirmed passenger of that airline. The
contract of air carriage generates a relation attended with a public
duty.
FACTS
Juanito C. Lapuz (Lapuz) was supposed to leave for work in
Jeddah, Saudi Arabia via Korean Airlines (KAL). He was "wait-
listed," and could only be accommodated if any of the confirmed
passengers failed to show up. When two of such passengers did
not appear, Lapuz and supervisor, Perico, were given the two
unclaimed seats.
Lapuz alleged that he was allowed to check in at the check-in
counter of KAL. He passed through the customs and immigration
sections for routine check-up and was cleared for departure.
Together with the other passengers, he proceeded to the ramp of
the KAL aircraft for boarding. However, when he was at the stairs,
a KAL officer pointed to him and shouted "Down! Down!" and
further rudely described him as a "patay gutom na contract worker
fighting Korean Air Lines." He was thus barred from taking the
flight. When he later asked for another booking, his ticket was
canceled by KAL. Consequently, he was unable to report for his
work in Saudi Arabia and lost his employment.
KAL, on the other hand, alleged Pan Pacific Recruiting Services
Inc. (Lapuz’ recruiting agency) coordinated with them for the
departure of 30 contract workers, of whom only 21 were confirmed
and 9 were wait-listed passengers. The agent of Pan Pacific,
Jimmie Joseph, after being informed that there was a possibility of
having one or two seats becoming available, gave priority to
Perico. The other seat was won through lottery by Lapuz.
However, only one seat became available and so was given to
Perico. He alone was allowed to board.
The Regional Trial Court of Manila adjudged KAL liable for
damages. KAL and Lapuz filed their respective motions for
reconsideration, which were both denied for lack of merit.
KAL argues that "the evidence of confirmation of a chance
passenger status is not through the entry of the name of a chance
passenger in the passenger manifest nor the clearance from the
Commission on Immigration and Deportation, because they are
merely means of facilitating the boarding of a chance passenger
in case his status is confirmed." In addition, Lapuz did not have
any boarding pass to prove that he was allowed to board and to
prove that his airline ticket was confirmed.
ISSUE: Whether Lapuz was a confirmed passenger, thus, making
KAL breach their contract of carriage.
RULING
YES.
The status of Lapuz as standby passenger was changed to that
of a confirmed passenger when his name was entered in the
passenger manifest of KAL. His clearance through immigration
and customs clearly shows that he had indeed been confirmed as
a passenger of KAL in that flight. KAL thus committed a breach of
the contract of carriage between them when it failed to bring
Lapuz to his destination.
The SC has held that a contract to transport passengers is
different in kind and degree from any other contractual relation.
The business of the carrier is mainly with the traveling public. The
contract of air carriage generates a relation attended with a public
duty. Passengers have the right to be treated by the carrier's
employees with kindness, respect, courtesy and due
consideration. They are entitled to be protected against
personal
misconduct, injurious language, indignities and abuses from such
employees. So it is that any discourteous conduct on the part of
these employees toward a passenger gives the latter an action for
damages against the carrier.
The breach of contract was aggravated in this case when, instead
of courteously informing Lapuz of his being a "wait-listed"
passenger, a KAL officer rudely shouted "Down! Down!" while
pointing at him, thus causing him embarrassment and public
humiliation. The Court find that KAL acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner when it "bumped off"
Lapuz and in addition treated him rudely and arrogantly as a
"patay gutom na contract worker fighting Korean Air Lines," which
clearly shows malice and bad faith, thus, entitling Lapuz to moral
damages.
WHEREFORE, the appealed judgment is AFFIRMED, but with
the modification that the legal interest on the damages awarded
to private respondent should commence from the date of the
decision of the trial court on November 14, 1990. The parties shall
bear their own costs.
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4) DANGWA TRANSPORTATION CO., INC. v. COURT OF
APPEALS, G.R. No. 95582 October 7, 1991, REGALADO, J.
The victim herein, by stepping and standing on the platform of the
bus, is already considered a passenger and is entitled all the rights
and protection pertaining to such a contractual relation. Hence, it
has been held that the duty which the carrier passengers owes to
its patrons extends to persons boarding cars as well as to those
alighting therefrom.
FACTS

The heirs of Pedrito Cudiamat filed a complaint for damages
against Dangwa Transportation for the death of Pedrito Cudiamat
as a result of a vehicular accident. It was alleged that on said date,
that the victim Pedrito fell from the platform of the bus when it
suddenly accelerated forward and was run over by the rear right
tires of the vehicle. However, instead of bringing Pedrito
immediately to the nearest hospital, Lardizabal, the driver of the
bus, in utter bad faith and without regard to the welfare of the
victim, first brought his other passengers and cargo to their
respective destinations before bringing said victim to the Lepanto
Hospital where he expired.
On the other hand, Dangwa Transportation alleged that they had
observed and continued to observe the extraordinary diligence
required in the operation of the transportation company and the
supervision of the employees, even as they add that they are not
absolute insurers of the safety of the public at large. Further, it was
alleged that it was the victim's own carelessness and negligence
which gave rise to the subject incident, hence they prayed for the
dismissal of the complaint plus an award of damages in their favor
by way of a counterclaim.
The trial court rendered a decision in favor of Dangwa
Transportation. The heirs of Pedrito appealed to the Court of
Appeals (CA) which, in a decision set aside the decision of the
lower court, and ordered Dangwa Transportation to pay the heirs
of Pedrito. Dangwa's motion for reconsideration was denied by
the CA in its resolution.
ISSUE
Whether or not CA erred in reversing the decision of the trial court
and in finding petitioners negligent and liable for the damages
claimed.
RULING
NO.
The testimonies of the witnesses show that that the bus was at full
stop when the victim boarded the same. They further confirm the
conclusion that the victim fell from the platform of the bus when it
suddenly accelerated forward and was run over by the rear right
tires of the vehicle. Under such circumstances, it cannot be said
that the deceased was guilty of negligence.
The victim herein, by stepping and standing on the platform of the
bus, is already considered a passenger and is entitled all the
rights and protection pertaining to such a contractual relation.
Hence, it has been held that the duty which the carrier passengers
owes to its patrons extends to persons boarding cars as well as
to those alighting therefrom.
The contention of Dangwa that the driver and the conductor had
no knowledge that the victim would ride on the bus, since the latter
had supposedly not manifested his intention to board the same,
does not merit consideration. When the bus is not in motion there
is no necessity for a person who wants to ride the same to signal
his intention to board. A public utility bus, once it stops, is in effect
making a continuous offer to bus riders.
Hence, it becomes the duty of the driver and the conductor, every
time the bus stops, to do no act that would have the effect of
increasing the peril to a passenger while he was attempting to
board the same.
It is not negligence per se, or as a matter of law, for one attempt
to board a train or streetcar which is moving slowly. An ordinarily
prudent person would have made the attempt board the moving
conveyance under the same or similar circumstances. The fact
that passengers board and alight from slowly moving vehicle is a
matter of common experience both the driver and conductor in this
case could not have been unaware of such an ordinary practice.
Common carriers, from the nature of their business and reasons
of public policy, are bound to observe extraordinary diligence for
the safety of the passengers transported by the according to all
the circumstances of each case. A common carrier is bound to
carry the passengers safely as far as human care and foresight
can provide, using the utmost diligence very cautious persons,
with a due regard for all the circumstances.
It has also been repeatedly held that in an action based on a
contract of carriage, the court need not make an express finding
of fault or negligence on the part of the carrier in order to hold it
responsible to pay the damages sought by the passenger. By
contract of carriage, the carrier assumes the express obligation to
transport the passenger to his destination safely and observe
extraordinary diligence with a due regard for all the circumstances,
and any injury that might be suffered by the passenger is right
away attributable to the fault or negligence of the carrier. This is
an exception to the general rule that negligence must be proved,
and it is therefore incumbent upon the carrier to prove that it has
exercised extraordinary diligence as prescribed in Articles 1733
and 1755 of the Civil Code.
——————————————————
5) LRTA v. MARJORIE NAVIDAD
G.R. No. 145804, 06 February 2003, (Vitug, J.)
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 wilful acts of its employees or b) on 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 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.
FACTS
On 14 October 1993, about half an hour past seven o’clock in the
evening, Nicanor Navidad, then drunk, entered the EDSA LRT
station after purchasing a "token" (representing payment of the
fare). While Navidad was standing on the platform near the LRT
tracks, Junelito Escartin, the security guard assigned to the area
approached Navidad. A misunderstanding or an altercation
between the two apparently ensued that led to a fist fight. No
evidence, however, 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.
On 08 December 1994, the widow of Nicanor, herein respondent
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. LRTA and Roman
filed a counterclaim against Navidad and a cross-claim against
Escartin and Prudent. Prudent, in its answer, denied liability and
averred that it had exercised due diligence in the selection and
supervision of its security guards.
ISSUE
Whether the petitioners are liable for the death of Nicanor
Navidad.
RULING
A contract of carriage was deemed created 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 contractual relation.
The foundation of LRTA’s 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.
Should Prudent be made likewise liable? Regrettably for LRT, as
well as perhaps the surviving spouse and heirs of the late Nicanor
Navidad, this Court is concluded by the factual finding of the Court
of Appeals that "there is nothing to link (Prudent) to the death of
Nicanor (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 substantial justification in our
own review of the records of the case.
There being, similarly, no showing that petitioner Rodolfo Roman
himself is 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 not itself a juridical relation
between the latter and Roman; thus, Roman can be made liable
only for his own fault or negligence.
The award of nominal damages in addition to actual damages is
untenable. 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, and not for the
purpose of indemnifying the plaintiff for any loss suffered by him.
It is an established rule that nominal damages cannot co-exist
with compensatory damages.
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.
——————————————————
6) PEDRO DE GUZMAN vs. COURT OF APPEALS and
ERNESTO CENDANA
G.R. No. L-47822, December 22, 1988, J. Feliciano
"Article 1732 of the Civil Code makes no distinction between one
whose principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as an
ancillary activity."
Facts:
Respondent Ernesto Cendana is a junk dealer in Pangasinan. He
utilized two trucks which he owned for hauling the material to
Manila for resale. On the return trip to Pangasinan, respondent
would load his vehicles with cargo which various merchants
wanted delivered to differing establishments in Pangasinan. For
that service, respondent charged freight rates which were
commonly lower than regular commercial rates.
Pedro de Guzman a merchant and authorized dealer of General
Milk Company contracted with respondent for the hauling of 750
cartons of Liberty filled milk from a warehouse in Makati to
petitioner's establishment in Urdaneta on or before 4 December
1970. Only 150 boxes of Liberty filled milk were delivered to
petitioner since the truck which carried these boxes was hijacked
somewhere along the MacArthur Highway in Paniqui, Tarlac, by
armed men who took with them the truck, its driver, his helper and
the cargo.
Petitioner commenced action against private respondent in the
CFI of Pangasinan, demanding payment of the lost goods,
arguing that the latter failed to exercise extraordinary diligence
required of him by the law. Respondent denied that he was a
common carrier and argued that he could not be held responsible
for the value of the lost goods, such loss having been due to force
majeure.
CFI ruled in favor of petitioner De Guzman, finding respondent to
be a common carrier and liable to petitioner. CA reversed the
decision.
Issue:
Whether or not private respondent Ernesto Cendana may, under
the facts earlier set forth, be properly characterized as a common
carrier.
Held:
Yes. Private respondent is a common carrier. However, he could
not be held liable for the lost goods.
Article 1732 of the Civil Code makes no distinction between one
whose principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as an
ancillary activity. Article 1732 also carefully avoids making any
distinction between a person or enterprise offering transportation
service on a regular or scheduled basis and one offering such
service on an occasional, episodic or unscheduled basis. Neither
does Article 1732 distinguish between a carrier offering its
services to the "general public” and one who offers services or
solicits business only from a narrow segment of the general
population.
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:
“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,”
A certificate of public convenience is not a requisite for the
incurring of liability under the Civil Code provisions governing
common carriers.
Respondent is not liable for the lost goods within the purview of
articles 1734 and 1735. 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. The duty of extraordinary
diligence in the vigilance over goods is given additional
specification not only by Articles 1734 and 1735 but also by Article
1745.
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." In the instant case, armed men held up the
second truck owned by private respondent which carried
petitioner's cargo.
ACCORDINGLY, the Petition for Review on certiorari is hereby
DENIED and the Decision of the Court of Appeals dated 3 August
1977 is AFFIRMED. No pronouncement as to costs.
7) WESTWIND SHIPPING CORPORATION v. UCPB GENERAL
INSURANCE CO., INC. and ASIAN TERMINALS INC.
G. R. No. 200289, 25 November 2013, THIRD DIVISION
(Peralta, J.)
The extraordinary responsibility of the common carrier lasts from
the time the goods are unconditionally placed in the possession
of, and received by the carrier for transportation until the same are
delivered, actually or constructively, by the carrier to the
consignee, or to the person who has a right to receive them. In
the event that the goods are lost, destroyed or deteriorated, the
common carrier is presumed to have been at fault or to have acted
negligently unless it proves that it observed extraordinary
diligence.
FACTS
A shipment of 197 metal containers/skids of tin-free steel from
Japan was to be delivered by M/V Golden Harvest Voyage No. 66,
a vessel owned and operated by Westwind Shipping Corporation
(Westwind), to the consignee, San Miguel Corporation (SMC).
The carriage was loaded and received in good condition on board.
SMC insured the cargoes against all risks with UCPB General
Insurance Co., Inc. (UCPB).
The shipment arrived in Manila and was discharged in the custody
of the arrastre operator, Asian Terminals, Inc. (ATI). During the
unloading operation, however, six containers/skids sustained
dents and punctures from the forklift used by the stevedores in
centering and shuttling the containers/skids. The local ship agent
of the vessel issued two Bad Order Cargo Receipts. Orient Freight
International, Inc. (OFII), the customs broker of SMC, withdrew
from ATI the 197 containers/skids, including the six in damaged
condition, and delivered the same at SMC’s warehouse through
J.B. Limcaoco Trucking (JBL). It was discovered upon discharge
that additional nine containers/skids were also damaged due to
the forklift operations.
Almost a year after, SMC filed a claim against UCPB, Westwind,
ATI, and OFII to recover the amount corresponding to the
damaged 15 containers/skids. SMC signed a subrogation receipt
when it received payment from UCPB. Thereafter, in the exercise
of its right of subrogation, UCPB instituted a complaint for
damages against Westwind, ATI, and OFII.
The Regional Trial Court dismissed UCPB’s complaint and the
counterclaims of Westwind, ATI, and OFII. The RTC opined that
the claim against ATI already prescribed and Westwind and OFII
should be absolved from any liability. On appeal by UCPB, the CA
reversed and set aside the trial court except as regards prescription
in favor of ATI. The appellate court ruled that Westwind is
responsible for the six damaged containers/skids at the time of its
unloading. The CA also considered that OFII is liable for the
additional nine damaged containers/skids. Only Westwind filed a
Motion for Reconsideration which the CA denied. Hence, this
petition.
ISSUE
1. Whether or not Westwind, and not ATI, should be responsible
for the damage or loss incurred by the shipment during its
unloading.
2. Whether or not OFII, although a customs broker, should be
liable as a common carrier.
RULING
1. YES. Under Article 1734 of the Civil Code, common carriers
are responsible for the loss, destruction, or deterioration of the
goods. The extraordinary responsibility of the common carrier
lasts from the time the goods are unconditionally placed in the
possession of, and received by the carrier for transportation
until the same are delivered, actually or constructively, by the
carrier to the consignee, or to the person who has a right to
receive them. In this case, since the discharging of the
containers/skids, which were covered by only one bill of lading,
had not yet been completed at the time the damage occurred,
there is no reason to imply that there was already delivery,
actual or constructive, of the cargoes to ATI.
The legal relationship between the consignee and the arrastre
operator is akin to that of a depositor and warehouseman. The
relationship between the consignee and the common carrier is
similar to that of the consignee and the arrastre operator. Both the
ARRASTRE and the CARRIER are charged with and obligated to
deliver the goods in good condition to the consignee.
Nevertheless, the arrastre operator and the carrier are not always
and necessarily solidarily liable as the facts of a case may vary
the rule. The precise question is which entity had custody of the
shipment during its unloading from the vessel? The subject
cargoes were still in the custody of Westwind. The carrier still has
in it the responsibility to guard and preserve the goods, a duty
incident to its having the goods transported. The bill of lading
covering the subject shipment likewise stipulates that the carrier’s
liability for loss or damage to the goods ceases after its discharge
from the vessel. Therefore, the cargoes while being unloaded
generally remain under the custody of the carrier.
2. YES. The contention of OFII that it is not a common carrier,
but only a customs broker whose participation is limited to
facilitating withdrawal of the shipment in the custody of ATI i.e.
to prepare the correct customs declaration and proper
 shipping documents as required by law is untenable. A
customs broker has been regarded as a common carrier, as
defined under Article 1732 of the Civil Code, because
transportation of goods is an integral part of its business. The
aforementioned article does not distinguish between one
whose principal business activity is the carrying of goods and
one who does such carrying only as an ancillary activity. It
suffices that petitioner undertakes to deliver the goods for
pecuniary consideration
That OFII is a common carrier is buttressed by the testimony of
its own witness, that part of the services it offers to clients is cargo
forwarding, which includes the delivery of the shipment to the
consignee. Thus, for undertaking the transport of cargoes from
ATI to SMC’s warehouse in Calamba, Laguna, OFII is considered
a common carrier. The latter cannot excuse itself from liability by
insisting that JBL undertook the delivery of the cargoes to SMC’s
warehouse. As long as a person or corporation holds itself to the
public for the purpose of transporting goods as a business, it is
already considered a common carrier regardless of whether it
owns the vehicle to be used or has to actually hire one.
Under Article 1735 of the Civil Code, in the event that the goods
are lost, destroyed or deteriorated, it is presumed to have been at
fault or to have acted negligently unless it proves that it observed
extraordinary diligence. In the case at bar it was established that
except for the six containers/skids already damaged OFII
received the cargoes from ATI in good order and condition; and
that upon its delivery to SMC additional nine containers/skids
were found to be in bad order. Instead of merely excusing itself
from liability by putting the blame to ATI and SMC it is incumbent
upon OFII to prove that it actively took care of the goods by
exercising extraordinary diligence in the carriage thereof. It failed
to do so. Hence its presumed negligence under Article 1735 of
the Civil Code remains unrebutted.
WHEREFORE, premises considered the petitions of Westwind
and OFII in G.R. Nos. 200289 and 200314 respectively are
DENIED. The September 13 2011 Decision and January 19 2012
Resolution of the Court of Appeals in CA-G.R. CV No. 86752
which reversed and set aside the January 27 2006 Decision of the
Manila City Regional Trial Court Branch 30 are AFFIRMED.
——————————————————
8) SPOUSES CRUZ VS. SUN HOLIDAYS, INC.
GR No. 186312
29 June 2010
FACTS
Spouses Cruz files a complaint for damages against Sun Holidays
arising from the death of their son who perished with his wife on
board the boat M/B Coco Beach III that capsized en route
Batangas from Puerto Galera where the couple had stayed at
Coco Beach Island Resort owned and operated by respondent.
Their stay was by virtue of a tour package-contract with
respondent that included transportation to and from the Resort
and the point of departure in Batangas. Eight of the passengers,
including petitioners’ son and his wife, died during the accident.
Sun denied any responsibility for the incident which it considered
to be a fortuitous event. Petitioners allege that as a common
carrier, Sun was negligent in allowing the boat to sail despite the
storm warning bulletins issued by PAGASA. Respondent denied
being a common carrier, alleging that its boats are not available
to the public but are only used as ferry resort carrier. It also
claimed to have exercised the utmost diligence in ensuring the
safety of its passengers, and that contrary to petitioners’
allegation, there was no storm as the Coast Guard in fact cleared
the voyage. M/B Coco Beach III was not filled to capacity and had
sufficient life jackets for its passengers.
RTC dismissed the complaint. CA denied the appeal holding that
Sun is a private carrier which is only required to observe ordinary
diligence and that the proximate cause of the incident was a
fortuitous event.
ISSUE
Whether M/B Coco Beach III breached a contract of carriage
HELD
Respondent is a common carrier. Its ferry services are so
intertwined with its business as to be properly considered ancillary
thereto. The constancy of respondent’s ferry services in its resort
operations is underscored by its having its own Coco Beach
boats. And the tour packages it offers, which include the ferry
services, may be availed of by anyone who can afford to pay the
same. These services are thus available to the public.
In the De Guzman case, Article 1732 of the Civil Code defining
“common carriers” has deliberately refrained from making
distinctions on whether the carrying of persons or goods is the
carrier’s principal business, whether it is offered on a regular
basis, or whether it is offered to the general public.
Under the Civil Code, common carriers, from the nature of their
business and for reasons of public policy, are bound to observe
extraordinary diligence for the safety of the passengers
transported by them, according to all the circumstances of each
case. They are bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence
of very cautious persons, with due regard for all the
circumstances.
When a passenger dies or is injured in the discharge of a contract
of carriage, it is presumed that the common carrier is at fault or
negligent. In fact, there is even no need for the court to make an
express finding of fault or negligence on the part of the common
carrier. This statutory presumption may only be overcome by
evidence that the carrier exercised extraordinary diligence.
——————————————————
9) SPOUSES TEODORO and NANETTE PERENA v.
SPOUSES TERESITA NICOLAS and L. ZARATE, PHILIPPINE
NATIONAL RAILWAY AND THE COURT OF APPEALS
G.R. No. 157917, August 29, 2012 (BERSAMIN, J.)
The operator of a. school bus service is a common carrier in the
eyes of the law. He is bound to observe extraordinary diligence in
the conduct of his business. He is presumed to be negligent when
death occurs to a passenger. His liability may include indemnity
for loss of earning capacity even if the deceased passenger may
only be an unemployed high school student at the time of the
accident.
FACTS
Spouses Teodero and Nanette Pereña (The Pereñas) were
engaged in the business of transporting students from their
respective residences in Parañaque City to Don Bosco School in
Makati City, and back. In their business, the Pereñas used a van
which had the capacity to transport 14 students at a time, two of
whom would be seated in the front beside the driver, and the
others in the rear, with six students on either side. They employed
Clemente Alfaro (Alfaro) as driver of the van.
Spouses Teresita Nicolas and L. Zarate (The Zarates) contracted
the Pereñas to transport their son Aaron to and from Don Bosco.
One day, following the normal schedule of the bus route, the van
picked Aaron up from the Zarates’ residence. The van, with its air-
conditioning unit turned on and the stereo playing loudly,
ultimately carried all the 14 student riders on their way to Don
Bosco. Considering that the students were due at Don Bosco by
7:15 a.m., and that they were already running late because of the
heavy vehicular traffic on the highway, the driver Alfaro took the
van to an alternate route at about 6:45 a.m. by traversing the
narrow path underneath the Magallanes Interchange that was
then commonly used by Makati-bound vehicles as a short cut into
Makati. At the time, the narrow path was marked by piles of
construction materials and parked passenger jeepneys, and the
railroad crossing in the narrow path had no railroad warning signs,
or watchmen, or other responsible persons manning the crossing.
At about the time the van was to traverse the railroad crossing,
Philippine National Railways (PNR) Commuter No. 302 (train),
operated by Jhonny Alano (Alano), was in the vicinity of the
Magallanes Interchange travelling northbound. As the train neared
the railroad crossing, Alfaro drove the van eastward across the
railroad tracks, closely tailing a large passenger bus. His view of
the oncoming train was blocked because he overtook the
passenger bus on its left side. The train blew its horn to warn
motorists of its approach. When the train was about 50 meters
away from the passenger bus and the van, Alano applied the
ordinary brakes of the train. He applied the emergency brakes
only when he saw that a collision was imminent. The passenger
bus successfully crossed the railroad tracks, but the van driven by
Alfaro did not. The train hit the rear end of the van, and the impact
threw nine of the 12 students in the rear, including Aaron, out of
the van. Aaron landed in the path of the train, which dragged his
body and severed his head, instantaneously killing him. Alano fled
the scene on board the train, and did not wait for the police
investigator to arrive.
The Zarates commenced an action for damages against Alfaro,
the Pereñas, PNR and Alano for the death of their son. The
Zarates’ claim against the Pereñas was upon breach of the
contract of carriage for the safe transport of Aaron; but that
against PNR was based on quasi-delict under Article 2176, Civil
Code.
In their defense, the Pereñas adduced evidence to show that they
had exercised the diligence of a good father of the family in the
selection and supervision of Alfaro, by making sure that Alfaro had
been issued a driver’s license and had not been involved in any
vehicular accident prior to the collision; that their own son had
taken the van daily; and that Teodoro Pereña had sometimes
accompanied Alfaro in the van’s trips transporting the students to
school.
The Regional Trial Court (RTC) found the Pereñas and the PNR
negligent. The Court of Appeals (CA) affirmed the findings.
ISSUE
Whether or not Alfaro, as the driver of the van, the Pereñas, being
the employer of Alfaro and PNR are jointly and severally liable for
damages?
HELD
YES, the parties are liable.
The Pereñas’ defense of employing the ordinary diligence of a
good father of a family is untenable. The Supreme Court
discussed that a common carrier is required to observe
extraordinary diligence, and is presumed to be at fault or to have
acted negligently in case of the loss of the effects of passengers,
or the death or injuries to passengers. The true test for a common
carrier is whether the undertaking is a part of the activity engaged
in by the carrier that he has held out to the general public as his
business or occupation.
Applying these considerations to the case at bar, there is no
question that the Pereñas as the operators of a school bus service
were: (a) engaged in transporting passengers generally as a
business, not just as a casual occupation; (b) undertaking to carry
passengers over established roads by the method by which the
business was conducted; and (c) transporting students for a fee.
Despite catering to a limited clientèle, the Pereñas operated as a
common carrier because they held themselves out as a ready
transportation indiscriminately to the students of a particular
school living within or near where they operated the service and
for a fee.
In the case at bar, the Pereñas, acting as a common carrier, were
already presumed to be negligent at the time of the accident
because death had occurred to their passenger. The presumption
of negligence, being a presumption of law, laid the burden of
evidence on their shoulders to establish that they had not been
negligent. However, the Pereñas did not overturn the presumption
of their negligence by credible evidence. Their defense of having
observed the diligence of a good father of a family in the selection
and supervision of their driver was not legally sufficient.
The Supreme Court also ruled that both the RTC and CA’s
decision of granting the Zarates indemnity for loss of Aaron’s
earning capacity as proper. The Supreme Court discussed that
both lower courts took into consideration that Aaron, while only a
high school student, had been enrolled in one of the reputable
schools in the Philippines and that he had been a normal and
able-bodied child prior to his death. The basis for the computation
of Aaron’s earning capacity was not what he would have become
or what he would have wanted to be if not for his untimely death,
but the minimum wage in effect at the time of his death. Moreover,
the RTC’s computation of Aaron’s life expectancy rate was not
reckoned from his age of 15 years at the time of his death, but on
21 years, his age when he would have graduated from college.
Hence, the Supreme Court finds the considerations taken into
account by the lower courts to be reasonable and fully warranted.
WHEREFORE, the Supreme Court denies the petition for review
on certiorari; affirms the decision promulgated on November 13,
2002; and orders the petitioners (the Peranas) to pay the costs of
suit.
——————————————————
10) FIRST PHILIPPINE INDUSTRIAL CORPORATION v.
COURT OF APPEALS
G.R. No. 125948, 29 December 1998, (Martinez, J)
A "common carrier" is any person, corporation, firm or association
engaged in the business of carrying or transporting passengers
or goods or both, by land, water, or air, for compensation, offering
their services to the public. The 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.
FACTS
Petitioner is a grantee of a pipeline concession under Republic Act
No. 387, to contract, install and operate oil pipelines. The latter
applied for a mayor's permit. However, before the permit 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 Local Government Code (LGC). The respondent
assessed a business tax on the petitioner for products pumped at
GPS-1 for the fiscal year 1993. Petitioner paid the tax under
protest.
Petitioner filed a letter-protest addressed to the respondent
stating that it is engaged in the business of transporting petroleum
products from the Batangas refineries, via pipeline, to Sucat and
JTF Pandacan Terminals. As such, their Company is exempt from
paying tax on gross receipts under Section 133 of the LGC.
Moreover, “transportation contractors” are not included in the
enumeration of contractors under Section 131, Paragraph (h) of
the LGC. Therefore, the authority to impose tax 'on contractors
and other independent contractors' under Section 143, Paragraph
(e) of the LGC does not include the power to levy on transportation
contractors. The respondent denied the protest contending that
petitioner cannot be considered engaged in transportation
business, thus it cannot claim tax exemption.
Petitioner filed for a tax refund against respondents alleging that
it is a transportation contractor, hence exempt from taxes.
Respondents argued that petitioner cannot be exempt since it
applies only to "transportation contractors and persons engaged
in the transportation by hire and common carriers by air, land and
water." Respondents assert that pipelines are not included in the
term "common carrier" which refers solely to ordinary carriers
such as trucks, trains, ships and the like. Respondents further
posit that the term "common carrier" under the said code pertains
to the mode or manner by which a product is delivered to its
destination.
The trial court dismissed the complaint ruling that the exemption
encompasses only common carriers so as not to overburden the
riding public or commuters with taxes. Plaintiff is not a common
carrier, but a special carrier extending its services and facilities to
a single specific or "special customer" under a "special contract."
ISSUE
Whether or not petitioner is a common carrier.
RULING
YES. Article 1732 of the Civil Code defines a "common carrier" as
"any person,
corporation, firm or association engaged in the business of
carrying or transporting passengers or goods or both, by land,
water, or air, for compensation, offering their services to the
public.”
The test for determining whether a party is a common carrier of
goods is:
1. He must be engaged in the business of carrying goods for
others as a public employment, and must hold himself out as
ready to engage in the transportation of goods for person
generally as a business and not as a casual occupation;
2. He must undertake to carry goods of the kind to which his
business is confined;
3. He must undertake to carry by the method by which his
business is conducted and over his established roads; and
4. The transportation must be for hire.
Petitioner is a common carrier engaged in the business of
transporting or carrying goods, i.e. petroleum products, for hire as
a public employment. It undertakes to carry for all persons
indifferently, that is, to all persons who choose to employ its
services, and transports the goods by land and for compensation.
The fact that petitioner has a limited clientele does not exclude it
from the definition of a common carrier.
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,' and one who offers services or solicits business only from
a narrow segment of the general population. 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.
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.
Article 86 of the Petroleum Act of the Philippines (Republic Act 387)
provides: "Pipe line concessionaire as a 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.” Article 7 thereof also 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.”
——————————————————
11) PHILAM INSURANCE COMPANY, INC. V. HEUNG-A
SHIPPING CORPORATION
G.R. No. 187701, 23 July 2014, FIRST DIVISION (Reyes, J.)
In a contract of affreightment, the voyage remains under the
responsibility of the carrier and it is answerable for the loss of
goods received for transportation. The charterer is free from
liability to third persons in respect of the ship.
FACTS
Novartis Consumer Health Philippines Inc. (NOVARTIS) imported
from Jinsuk Trading Co. Ltd. (JINSUK) in South Korea, 19 pallets
of 200 rolls of Ovaltine Power 18 Glaminated plastic packaging
material. In order to ship, JINSUK engaged the services of Protop
Shipping Corporation (PROTOP), a freight forwarder. PROTOP
shipped the cargo through DONGNAMA Shipping Co. Ltd.
(DONGNAMA) which in turn loaded the same on M/V Heung-A
Bangkok V-019, owned and operated by Heung-A Shipping
Corporation (HEUNG-A), pursuant to a ‘slot charter arrangement’
whereby a space in the latter’s vessel was reserved for the
exclusive use of the former.
NOVARTIS insured the shipment with Philam Insurance
Company Inc. (PHILAM)
The shipment reached NOVARTIS, and upon inspection, the
boxes of the shipment were wet and damp. The shipment is
entirely damaged and was found out that the damage was caused
by salt water. NOVARTIS rejected the shipment and filed an
insurance claim with PHILAM and the latter was subrogated to all
the rights and claims of NOVARTIS. PHILAM filed a complaint for
damages against the parties to the shipment. HEUNG- A denied
liability by arguing that he is not the carrier in so far as NOVARTIS
is concerned and asserted that its only obligation was to provide
DONGNAMA a space on board his ship.
The trial court ruled declaring HEUNG-A as the common carrier
and held it liable. The ruling was affirmed by the appellate court.
ISSUE
Whether or not HEUNG-A is the common carrier that should be
liable to the damage sustained by the package while on transit.
HELD
YES, HEUNG-A is the common carrier. HEUNG-A’s slot charter
arrangement with DONGNAMA is a charter party arrangement.
A charter party is a contract whereby an entire ship or some
principal part thereof, is let by the owner to another person for a
specified time or use. It has two types. First it could be a contract
of affreightment whereby the use of shipping space on vessels
were leased in part or as a whole, to carry goods for others. The
charter-party provides for the hire of vessel only, either for a
definite period of time (time charter) of for a single or consecutive
voyage (voyage charter). The shipowner supplies the ship’s
stores, pay for the wages of the master and the crew, and defray
the expenses for the maintenance of the ship. The voyage remains
under the responsibility of the carrier and it is answerable for the
loss of goods received for transportation. The charterer is free
from liability to third persons in respect to the ship.
Second, charter by demise or bareboat charter under which the
whole vessel is let to the charterer with a transfer to him of its entire
command and possession and consequent control over its
navigation, including the master and the crew, who are his
servants. The charterer mans the vessel with his own people and
becomes, in
effect, the owner for the voyage or service stipulated and hence
liable for damages or loss sustained by the goods transported.
Clearly, the ‘slot charter arrangement’ between HEUNG-A and
DONGNAMA, where the latter is reserved a space in the vessel
is a contract of affreightment. The arrangement did not divest
HEUNG-A its character as the common carrier nor relieve it of any
accountability for the shipment.
As a common carrier, it is presumed to have been at fault or
negligent if the goods they transported deteriorated or got lost or
destroyed, unless they prove that they exercise extraordinary
diligence in transporting the same. HEUNG-A failed to rebut this
prima facie presumption; hence, it is answerable for the damages
incurred by the goods received for transportation.
WHEREFORE, all the foregoing considered, the Decision dated
January 30, 2009 of the Court of Appeals in CA-G.R. CV No.
89482 is hereby AFFIRMED with MODIFICATION in that the
interest rate on the award of US$8,500.00 shall be six percent
(6%) per annum from the date of finality of this judgment until fully
paid.
——————————————————
12) CARGOLIFT SHIPPING, INC. vs. L. ACUARIO
MARKETING CORP. and SKYLAND BROKERAGE, INC
G.R. No. 146426. June 27, 2006
FACTS:
Respondent L. Acuario Marketing Corp., ("Acuario") and
respondent Skyland Brokerage, Inc., ("Skyland") entered into a
time charter agreement whereby Acuario leased to Skyland its L.
Acuario II barge for use by the latter in transporting electrical posts
from Manila to Limay, Bataan. At the same time, Skyland also
entered into a separate contract with petitioner Cargolift, for the
latter’s tugboats to tow the aforesaid barge.
After the whole operation was concluded, the barge was brought
to Acuario’s shipyard where it was allegedly discovered by that
the barge was listing due to a leak in its hull. It was informed by
the skipper of the tugboat that the damage was sustained in
Bataan. It was learned later the due to strong winds and large
waves, the barge repeatedly hit its hull on the wall, thus prompting
the barge patron to alert the tugboat captain of the M/T Count to
tow the barge farther out to sea. However, the tugboat failed to
pull the barge to a safer distance due to engine malfunction,
thereby causing the barge to sustain a hole in its hull.
Acuario spent the total sum of P97,021.20 for the repairs, and,
pursuant to the contract, sought reimbursement from Skyland,
failing which, it filed a suit before the RTC which was granted. On
appeal, it was affirmed by the CA. Skyland, in turn, filed a third-
party complaint against petitioner alleging that it was responsible
for the damage sustained by the barge.
ISSUE:
Whether or not petitioner should be held liable.
HELD:Yes.
Thus, in the performance of its contractual obligation to Skyland,
petitioner was required to observe the due diligence of a good
father of the family. This much was held in the old but still relevant
case of Baer Senior & Co.’s Successors v. La Compania Maritima
where the Court explained that a tug and its owners must observe
ordinary diligence in the performance of its obligation under a
contract of towage. 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.
In the case at bar, the exercise of ordinary prudence by petitioner
means ensuring that its tugboat is free of mechanical problems.
While adverse weather has always been a real threat to maritime
commerce, the least that petitioner could have done was to
ensure that the M/T Count or any of its other tugboats would be
able to secure the barge at all times during the engagement. This
is especially true when considered with the fact that Acuario’s
barge was wholly dependent upon petitioner’s tugboat for
propulsion. The barge was not equipped with any engine and
needed a tugboat for maneuvering.
Needless to say, if petitioner only subjected the M/T Count to a
more rigid check-up or inspection, the engine malfunction could
have been discovered or avoided. The M/T Count was exclusively
controlled by petitioner and the latter had the duty to see to it that
the tugboat was in good running condition. There is simply no
basis for petitioner’s assertion that Skyland contractually
assumed the risk of any engine trouble that the tugboat may
encounter. Skyland merely procured petitioner’s towing service
but in no way assumed any such risk.
——————————————————
13) SUMMA INSURANCE CORPORATION v. COURT OF
APPEALS and METRO PORT SERVICE, INC.
G.R. No. 84680, February 5, 1996, (Panganiban, J.)
The Supreme Court said in E. Razon Inc. vs. Court of Appeals:
Indeed, the provision in the management contract regarding the
declaration of the actual invoice value before the arrival of the
goods must be understood to mean a declaration before the
arrival of the goods in the custody of the arrastre operator,
whether it be done long before the landing of the shipment at port,
or immediately before turn-over thereof to the arrastre operators
custody. What is essential is knowledge beforehand of the extent
of the risk to be undertaken by the arrastre operator, as
determined by the value of the property committed to its care that
it may define its responsibility for loss or damage to such cargo
and to ascertain compensation commensurate to such risk
assumed.
In the same case, the Supreme Court added that the advance
notice of the actual invoice of the goods entrusted to the arrastre
operator is for the purpose of determining its liability, that it may
obtain compensation commensurable to the risk it assumes, (and)
not for the purpose of determining the degree of care or diligence
it must exercise as a depository or warehouseman since the
arrastre operator should not discriminate between cargoes of
substantial and small values, nor exercise care and caution only
for the handling of goods announced to it beforehand to be of
sizeable value, for that would be spurning the public service
nature of its business.
FACTS
On November 22, 1981, the S/S Galleon Sapphire, a vessel
owned by the National Galleon Shipping Corporation (NGSC),
arrived at Pier 3, South Harbor, Manila, carrying a shipment
consigned to the order of Caterpillar Far East Ltd. with Semirara
Coal Corporation (Semirara) as notify party. The shipment,
including a bundle of PC 8 U blades, was covered by marine
insurance under Certificate No. 82/012-FEZ issued by petitioner
and Bill of Lading No. SF/MLA 1014. The shipment was
discharged from the vessel to the custody of Metro Port Service,
Inc. (MPSI), formerly known as E. Razon, Inc., the exclusive
arrastre operator at the South Harbor. Accordingly, three good-
order cargo receipts were issued by NGSC, duly signed by the
ships checker and a representative of private respondent.
On February 24, 1982, the forwarder, Sterling International
Brokerage Corporation, withdrew the shipment from the pier and
loaded it on the barge Semirara 8104. When Semirara inspected
the shipment at its warehouse, it discovered that the bundle of
PC8U blades was missing. Thus, MPSI issued a shortlanded
certificate stating that the bundle of PC8U blades was already
missing when it received the shipment from the NGSC vessel.
Semirara then filed with petitioner, private respondent and NGSC
its claim for P280,969.68, the alleged value of the lost bundle.
On September 29, 1982, Summa Insurance Corporation (SIC)
paid Semirara the invoice value of the lost shipment. Semirara
thereafter executed a release of claim and subrogation receipt.
Consequently, SIC filed its claims with NGSC and MPSI but it was
unsuccessful.
SIC then filed a complaint with the Regional Trial Court, Branch
XXIV, Manila, against NGSC and MPSI for collection of a sum of
money, damages and attorneys fees.
On August 2, 1984, the trial court rendered a decision absolving
NGSC from any liability but finding MPSI liable to SIC in the sum
of P20,000.00, with costs of suit. In resolving the issue as to who
had custody of the shipment when it was lost, the trial court relied
more on the good-order cargo receipts issued by NGSC than on
the short-landed certificate issued by private respondent. The trial
court held:
As between the aforementioned two documentary exhibits, the
Court is more inclined to give credence to the cargo receipts. Said
cargo receipts were signed by a checker of defendant NGSC and
a representative of Metro Port. It is safe to presume that the cargo
receipts accurately describe the quantity and condition of the
shipment when it was discharged from the vessel. Metro Ports
representative would not have signed the cargo receipts if only 4
packages were discharged from the vessel and given to the
possession and custody of the arrastre operator. Having been
signed by its representative, the Metro Port is bound by the
contents of the cargo receipts.
On the other hand, the Metro Ports shortlanded certificate could
not be given much weight considering that, as correctly argued by
counsel for defendant NGSC, it was issued by Metro Port alone
and was not countersigned by the representatives of the shipping
company and the consignee. Besides, the certificate was
prepared by Atty. Servillano V. Dolina, Second Deputy General
Manager of Metro Port, and there is no proof on record that he
was present at the time the subject shipment was unloaded from
the vessel and received by the arrastre operator. Moreover,
the shortlanded certificate bears the date of March 15, 1982, more
than three months after the discharge of the cargo from the
carrying vessel.
Neither could the Court give probative value to the marine report
. The attending surveyor who attended the unloading of the
shipment did not take the witness stand to testify on said report.
Although Transnational Adjustment Co.s general manager,
Mariano C. Remorin, was presented as a witness, his testimony
is not competent because he was not present at the time of the
discharge of the cargo.
Under the foregoing considerations, the Court finds that the 1
bundle of PC8U blade in question was not lost while the cargo was
in the custody of the carrying vessel. Considering that the missing
bundle was discharged from the vessel unto the custody of
defendant arrastre operator and considering further that the
consignee did not receive this cargo from the arrastre operator, it
is safe to conclude from these facts that said missing cargo was
lost while same was in the possession and control of defendant
Metro Port. Defendant Metro Port has not introduced competent
evidence to prove that the loss was not due to its fault or
negligence.Consequently, only the Metro Port must answer for the
value of the missing cargo. Defendant NGSC is absolved of any
liability for such loss.
On appeal, the Court of Appeals modified the decision of the trial
court and reduced MPSI’s liability to P3,500.00.
ISSUE/S
1. Whether or not an arrastre operator is legally liable for the
loss of a shipment in its custody
2. If so liable, what is the extent of its liability

RULING
1. YES, since it has been established that the shipment was
lost while in the custody of MPSI, the Supreme Court
found MPSI liable for the loss. This is an issue of fact
determined by the trial court and respondent Court of Appeals,
which is not reviewable in a petition under Rule 45 of the Rules
of Court.
SIC was subrogated to the rights of the consignee. The
relationship therefore between the consignee and the arrastre
operator must be examined. This relationship is much akin to that
existing between the consignee or owner of shipped goods and
the common carrier, or that between a depositor and a
warehouseman. In the performance of its obligations, an arrastre
operator should observe the same degree of diligence as that
required of a common carrier and a warehouseman as enunciated
under Article 1733 of the Civil Code and Section 3(b) of the
Warehouse Receipts Law, respectively. Being the custodian of
the goods discharged from a vessel, an
arrastre operator’s duty is to take good care of the goods and to
turn them over to the party entitled to their possession.
1. The basis of extent of liability is the Management Contract.
In the performance of its job, an arrastre operator is bound by
the management contract it had executed with the Bureau of
Customs. However, a management contract, which is a sort of
a stipulation pour autrui within the meaning of Article 1311 of
the Civil Code, is also binding on a consignee because it is
incorporated in the gate pass and delivery receipt which must
be presented by the consignee before delivery can be effected
to it. The insurer, as successor-in-interest of the consignee, is
likewise bound by the management contract. Indeed, upon
taking delivery of the cargo, a consignee (and necessarily its
successor-in- interest) tacitly accepts the provisions of the
management contract, including those which are intended to
limit the liability of one of the contracting parties, the arrastre
operator.
However, a consignee who does not avail of the services of the
arrastre operator is not bound by the management contract. Such
an exception to the rule does not obtain here as the consignee did
in fact accept delivery of the cargo from the arrastre operator.
Section 1, Article VI of the Management Contract between MPSI
and the Bureau of Customs provides:
1. Responsibility and Liability for Losses and Damages - The
CONTRACTOR shall, at its own expense handle all merchandise
in the piers and other designated places and at its own expense
perform all work undertaken by it hereunder diligently and in a
skillful workmanlike and efficient manner; that the CONTRACTOR
shall be solely responsible as an independent CONTRACTOR,
and hereby agrees to accept liability and to promptly pay to the
steamship company, consignee, consignor or other interested
party or parties for the loss, damage, or non-delivery of cargoes to
the extent of the actual invoice value of each package which in no
case shall be more than Three Thousand Five Hundred Pesos
(P3,500.00) for each package unless the value of the importation
is otherwise specified or manifested or communicated in writing
together with the invoice value and supported by a certified
packing list to the CONTRACTOR by the interested party or
parties before the discharge of the goods, as well as all damage
that may be suffered on account of loss, damage, or destruction
of any merchandise while in custody or under the control of the
CONTRACTOR in any pier, shed, warehouse, facility or other
designated place under the supervision of the BUREAU, x x x
Interpreting a similar provision in the management contract
between MPSI’s predecessor, E. Razon, Inc. and the Bureau of
Customs, the Court said in E. Razon Inc. vs. Court of Appeals:
Indeed, the provision in the management contract regarding
the declaration of the actual invoice value before the arrival
of the goods must be understood to mean a declaration
before the arrival of the goods in the custody of the arrastre
operator, whether it be done long before the landing of the
shipment at port, or immediately before turn- over thereof to
the arrastre operators custody. What is essential is
knowledge beforehand of the extent of the risk to be
undertaken by the arrastre operator, as determined by the
value of the property committed to its care that it may define
its responsibility for loss or damage to such cargo and to
ascertain compensation commensurate to such risk
assumed x x x.
In the abovementioned case, the Supreme Court added that the
advance notice of the actual invoice of the goods entrusted
to the arrastre operator is for the purpose of determining its
liability, that it may obtain compensation commensurable to
the risk it assumes, and not for the purpose of determining
the degree of care or diligence it must exercise as a
depository or warehouseman since the arrastre operator
should not discriminate between cargoes of substantial and
small values, nor exercise care and caution only for the
handling of goods announced to it beforehand to be of
sizeable value, for that would be spurning the public service
nature of its business.
In case at bar, no evidence was offered by SIC proving the
amount of arrastre fees paid to MPSI so as to put the latter on
notice of the value of the cargo. While SIC alleged that prior to the
loss of the package, its value had been relayed to MPSI through
the documents the latter had processed, SIC does not
categorically state that among the submitted documents were the
pro forma invoice value and the certified packing list. Neither does
SIC pretend that these two documents were prerequisites to the
issuance of a permit to deliver or were attachments thereto. Even
the permit to deliver, upon which petitioner anchors its arguments,
may not be considered by the Supreme Court because it was not
identified and formally offered in evidence. On the other hand, on
top of its denial that it had received the invoice value and the
packing list before the discharge of the shipment, MPSI was able
to prove that it was apprised of the value of the cargo only after
its discharge from the vessel, ironically through SIC’s claim for the
lost package to which were attached the invoice and packing list.
Thus, SIC failed to convince the Supreme Court that the
requirement of the management contract had been complied with
to entitle it to recover the actual invoice value of the lost shipment.
WHEREFORE, the petition for review on certiorari is DENIED and
the decision of the Court of Appeals is AFFIRMED. Costs against
petitioner SIC.
14) EREZO VS JEPTE
G.R. No. L-9605, 30 September 1957, EN BANC (Labrador, J.)
The registered owner of a motor vehicle is primarily responsible
for the damage caused to the vehicle of the plaintiff-appellee but
the registered owner has a right to be indemnified by the real or
actual owner of the
amount that he may be required to pay as damage for the injury
caused to the plaintiff-appellant.
FACTS
Aguedo Jepte is the registered owner of a six by six truck. On
August, 9, 1949, while the same was being driven by Rodolfo
Espino y Garcia, it collided with a taxicab. As the truck went off the
street, it hit Ernesto Erezo and another, and the former suffered
injuries, as a result of which he died. The driver was prosecuted for
homicide through reckless negligence where he pleaded guilty
and was sentenced to suffer imprisonment and to pay the heirs of
Ernesto Erezo the sum of P3,000. As the amount of the judgment
could not be enforced against him, Gaudioso Erezo (Father of
Ernesto Erezo) brought this action against the registered owner
of the truck, Aguedo Jepte.
Aguedo Jepte does not deny at the time of the fatal accident the
cargo truck driven by Rodolfo Espino y Garcia was registered in
his name. He, however, claims that the vehicle belonged to the
Port Brokerage, of which he was the broker at the time of the
accident. He explained, and his explanation was corroborated by
Policarpio Franco, the manager of the corporation, that the trucks
of the corporation were registered in his name as a convenient
arrangement so as to enable the corporation to pay the
registration fee with his backpay as a pre-war government
employee. Franco, however, admitted that the arrangement was
not known to the Motor Vehicle Office.
The trial court held that as Aguedo Jepte represented himself to
be the owner of the truck and the Motor Vehicle Office, relying on
his representation, registered the vehicles in his name, the
Government and all persons affected by the representation had
the right to rely on his declaration of ownership and registration.
It, therefore, held that Aguedo Jepte is liable because he cannot
be permitted to repudiate his own declaration
ISSUE
Whether or not Jepte is liable for the injuries occasioned to Erezo
because of the negligence of the driver even if the Jepte was no
longer the owner of the vehicle at the time of the damage because
he had previously sold it to another.
RULING
The judgment appealed from is hereby affirmed, with costs
against defendant-appellant
YES.
In synthesis, the Court held that the registered owner, Aguedo
Jepte, primarily responsible for the damage caused to the vehicle
of Erezo, but he has a right to be indemnified by the real or actual
owner of the amount that he may be required to pay as damage
for the injury caused to Erezo.
Registered owner of a certificate of public convenience is liable to
the public for the injuries or damages suffered by passengers or
third persons caused by the operation of said vehicle, even
though the same had been transferred to a third person at the time
of the accident.
The Revised Motor Vehicle Law provides that no vehicle may be
used or operated upon any public highway unless the same is
properly registered. It has been stated that the system of licensing
and the requirement that each machine must carry a registration
number, conspicuously displayed, is one of the precautions taken
to reduce the danger of injury to pedestrians and other travelers
from the careless management of automobiles, and to furnish a
means of ascertaining the identity of persons violating the laws
and ordinances, regulating the speed and operation of machines
upon the highways. Not only are vehicles to be registered and that
no motor vehicles are to be used or operated without being
properly registered for the current year, but that dealers in motor
vehicles shall furnish the Motor Vehicles Office a report showing
the name and address of each purchaser of motor vehicle during
the previous month and the manufacturer's serial number and
motor number
Registration is required not to make said registration the operative
act by which ownership in vehicles is transferred, as in land
registration cases, because the administrative proceeding of
registration does not bear any essential relation to the contract of
sale between the parties, but to permit the use and operation of
the vehicle upon any public. The main aim of motor vehicle
registration is to identify the owner so that if any accident
happens, or that any damage or injury is caused by the vehicles
on the public highways, responsibility therefore can be fixed on a
definite individual, the registered owner.
Moreover, the law does not allow the registered owner to prove
who the actual owner is; the law, with its aim and policy in mind,
does not relieve him directly of the responsibility that the law fixes
and places upon him as an incident or consequence of
registration. Were the registered owner allowed to evade
responsibility by proving who the supposed transferee or owner
is, it would be easy for him by collusion with others or otherwise,
to escape said responsibility and transfer the same to an indefinite
person, or to one who possesses no property with which to
respond financially for the damage or injury done.
15) DUAVIT V. CA
G.R. No. 82318, 18 May 1989, (GUTIERREZ, JR., J.)
An owner of a vehicle cannot be held liable for an accident
involving the said vehicle if the same was driven without his
consent or knowledge and by a person not employed by him.
FACTS
Antonio Sarmiento, Sr. and Virgilio Catuar were aboard a jeep
owned by Ruperto Catuar. Virgilio Catuar was driving the said jeep
and was running moderately at 20 to 35 kilometers per hour.
Suddenly, another jeep driven by Oscar Sabiniano hit and
bumped Catuar’s jeep on the portion near the left rear wheel, and
as a result of the impact, Catuar’s jeep fell on its right and skidded
by about 30 yards. Consequently, Catuar’s jeep was damaged,
particularly the windshield, the differential, the part near the left
rear wheel and the top cover of the jeep. Catuar was thrown to
the middle of the road, his wrist was broken and he sustained
contusions on the head. Likewise Sarmiento, Sr. was trapped
inside the fallen jeep, and one of his legs was fractured.
Catuar and Sarmiento filed a civil case both against Oscar
Sabiniano as driver, and against Gualberto Duavit as owner of the
jeep for the damage to the jeep and medical expenses for the
injuries they have suffered. Duavit, admitted ownership of the jeep
but claimed that he has not employed Sabiniano. Sabiniano
admitted that he took the jeep from the garage of Duavit without the
latter’s consent or authority. But, in an attempt to exculpate himself
from liability, Sabiniano makes it appear that he was taking all
necessary precaution while driving and the accident occurred due
to the negligence of Catuar. Sabiniano claims that it was Catuar’s
vehicle which hit and bumped their jeep.
The trial court found Sabiniano negligent in driving the vehicle but
found no employer-employee relationship between him and the
Duavit. But the Court of Appeals (CA) held Duavit jointly and
severally liable with Sabiniano relying on Erezo v. Jepte and
Vargas v. Langcay. CA ruled that the registered owner is the
employer of the driver in contemplation of law. It is a conclusive
presumption of fact and law, and is not subject to rebuttal of proof
to the contrary. Hence a petition to annul the decision of the CA
was filed by Duavit before the Supreme Court.
ISSUE
Whether or not the owner of a private vehicle which figured in an
accident can be held liable under Art. 2180 of the Civil Code when
it was neither driven by an employee of the owner nor taken with
the consent of the latter.
RULING
NO. As early as in 1939, The Court has ruled that an owner of a
vehicle cannot be held liable for an accident involving the said
vehicle if the same was driven without his consent or knowledge
and by a person not employed by him. Thus, in Duquillo v. Bayot
the Court said that registered owner cannot be held liable for
anything for at the time of the accident, the driver was not an
employee of the registered owner, nor did he have anything to do
with the latter's business. Moreover, the use of the defendant's
truck in the circumstances indicated was done without her consent
or knowledge.
In this case, Duavit does not deny ownership of the vehicle
involved in tire mishap but completely denies having employed the
driver Sabiniano or even having authorized the latter to drive his
jeep. The jeep was virtually stolen from the petitioner's garage. To
hold, therefore, the Duavit liable for the accident caused by the
negligence of Sabiniano who was neither his driver nor employee
would be absurd as it would be like holding liable the owner of a
stolen vehicle for an accident caused by the person who stole
such vehicle. In this regard, the Court cannot ignore the many
cases of vehicles forcibly taken from their owners at gunpoint or
stolen from garages and
parking areas and the instances of service station attendants or
mechanics of auto repair shops using, without the owner's
consent, vehicles entrusted to them for servicing or repair.
WHEREFORE, the petition is GRANTED and the decision and
resolution appealed from are hereby ANNULLED and SET
ASIDE. The decision of the Regional Trial Court of Laguna, 8th
Judicial District, Branch 6 REINSTATED.
16) BA FINANCE CORPORATION v. COURT OF APPEALS,
REGIONAL
G.R. No. 98275, 13 November 1992, THIRD DIVISION (Melo,
J.)
The registered owner is liable to the public for the injuries or
damages suffered by passengers or third persons caused by the
operation of said vehicle, even though the same had been
transferred to a third person.
An accident occurred involving BA Finance Corporation’s (BA
Finance) Isuzu ten-wheeler truck driven by an employee of Lino
Castro, Rogelio Villar y Amera (Amera). The lower court
ascertained after trial that Amare, was at fault when the mishap
occurred, and was found guilty beyond reasonable doubt of
reckless imprudence resulting in triple homicide with multiple
physical injuries with damage to property. Also, BA Finance was
adjudged liable for damages because the truck was registered in
its name during the incident. On the other hand, Rock Component
Philippines, Inc. was ordered to reimburse BA Finance for any
amount that the latter may be adjudged liable to, as expressly
stipulated in the contract of lease between them. Moreover, the
trial court applied Article 2194 of the new Civil Code on solidary
accountability of joint tortfeasors insofar as the liability of the
driver, BA Finance and Rock Component Philippines was
concerned.
The Court of Appeals affirmed the appealed disposition in toto. On
the question of whether petitioner can be held responsible to the
victims albeit the truck was leased to Rock Component
Philippines when the incident occurred, the appellate court
answered in the affirmative on the basis of the jurisprudential
dogmas.
Hence, a petition for review on certiorari was filed before the
Supreme Court by the BA Finance with regard its responsibility
for damages on the accident occurred.
ISSUE
Whether or not BA Finance can be held responsible to the victims
albeit the truck was leased to Rock Component Philippines when
the incident occurred.
RULING
YES, BA finance can be held responsible to the victims.
In the previous decisions by the Court, the registered owner of a
certificate of public convenience is liable to the public for the
injuries or damages suffered by passengers or third persons
caused by the operation of said vehicle, even though the same
had been transferred to a third person. The principle upon which
the doctrine is based is that in dealing with vehicles registered
under the Public Service Law, the public has the right to assume
or presume that the registered owner is the actual owner thereof,
for it would be difficult for the public to enforce the actions that they
may have for injuries caused to them by the vehicles being
negligently operated if the public should be required to prove who
the actual owner is. However, the Court does not imply by this
doctrine, that the registered owner may not recover whatever
amount he had paid by virtue of his liability to third persons from
the person to whom he had actually sold, assigned or conveyed
the vehicle.
The Revised Motor Vehicles Law (Act No. 3992, as amended)
provides that no vehicle may be used or operated upon any public
highway unless the same is properly registered. The main aim of
motor vehicle registration is to identify the owner so that if any
accident happens, or that any damage or injury is caused by the
vehicle on the public highways, responsibility therefor can be fixed
on a definite individual, the registered owner.
In synthesis, the Court hold that the registered owner, is primarily
responsible for the damage caused to the vehicle, but he has a
right to be indemnified by the real or actual owner of the amount
that he may be required to pay as damage for the injury caused.
Applying the foregoing in solving the circumstance, where the
vehicle had been alienated or sold to another, there is no
exception against utilizing the same rationale to the antecedents
of this case where the subject vehicle was merely leased by BA
Finance to Rock Component Philippines, Inc., with BA Finance
retaining ownership over the vehicle.
WHEREFORE, the petition is hereby DISMISSED and decision
under review AFFIRMED without special pronouncement as to
costs.