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COURT OF APPEALS being no perfected contract of carriage existing between them as

G.R. NO. 92288, 09 February 1993, SECOND DIVISION no ticket was ever issued to FITG’s contract workers and,
(Nocon, J.) therefore, the obligation of BA to transport said contract workers
did not arise. Furthermore, FITG’s failure
In dealing with the contract of common carriage of passengers, for to attach any ticket in the complaint further proved that it was
purpose of accuracy, there are two (2) aspects of the same, never a party to the alleged transaction. BA also contends that the
namely: (a) the contract ‘to carry (at some future time),’ which appellate court erred in awarding actual damages in the amount
contract is consensual and is necessarily perfected by mere of P308,016.00 to FITG since all expenses had already been
consent (See Article 1356, Civil Code of the Philippines); and (b) subsequently reimbursed by the latter's principal. The Trial Court
the ‘contract of carriage’ or ‘of common carriage’ itself which ruled in favor of FITG. CA affirmed.
should be considered as a real contract for not until the carrier is ISSUES
actually used can the carrier be said to have already assumed the
obligation of a carrier. (Paras, Civil Code Annotated, Vol. V, p.429, 1. Whether or not there was a perfected contract?
Eleventh Ed.) 2. Whether or not FITG is entitled to the award of actual
FACTS damages?

On February 15, 1981, private respondent First International RULING

Trading and General Services Co., (FITG) a duly licensed
domestic recruitment and placement agency, received a telex 1. YES.
message from its principal ROLACO Engineering and Contracting
Services in Jeddah, Saudi Arabia to recruit Filipino contract There was a perfected contract. It was “a contract to carry”. FITG
workers in behalf of said principal. During the early part of March had a valid cause of action for damages against BA. A cause of
1981, said principal paid to the Jeddah branch of petitioner British action is an act or omission of one party in violation of the legal
Airways, Inc. (BA) airfare tickets for 93 contract workers with right or rights of the other. BA’s repeated failures to transport
specific instruction to transport said workers to Jeddah on or FITG’s workers in its flight despite confirmed booking of said
before March 30, 1981. workers clearly constitutes breach of contract and bad faith on its
As soon as BA received a prepaid ticket advice from its Jeddah part. The appellate court correctly held that:
branch to transport the 93 workers, FITG was immediately “In dealing with the contract of common carriage of passengers, for
informed by former that its principal ROLACO had forwarded 93 purpose of accuracy, there are two (2) aspects of the same,
prepaid tickets. Thereafter, FITG instructed its travel agent, ADB namely: (a) the contract ‘to carry (at some future time),’ which
Travel and Tours, Inc., to book the 93 workers with BA but the latter contract is consensual and is necessarily perfected by mere
failed to fly said workers, thereby compelling FITG to borrow consent (See Article 1356, Civil Code of the Philippines); and (b)
money in the amount of P304,416.00 in order to purchase airline the ‘contract of carriage’ or ‘of common carriage’ itself which
tickets from the other airlines as evidenced by the cash vouchers should be considered as a real contract for not until the carrier is
(Exhibits "B", "C" and "C-1 to C-7") for the 93 workers it had actually used can the carrier be said to have already assumed the
recruited who must leave immediately since the visas of said obligation of a carrier. (Paras, Civil Code Annotated, Vol. V, p.429,
workers are valid only for 45 days and the Bureau of Employment Eleventh Ed.)
Services mandates, that contract workers must be sent to the In the instant case, the contract 'to carry' is the one involved,
jobsite within a period of 30 days. which is consensual and is perfected by the mere consent of the
Sometime in the first week of June, 1981, FITG was again parties. There is no dispute as to FITG’s consent to the said
informed by BA that it had received a prepaid ticket advice from contract 'to carry' its contract workers from Manila to Jeddah. BA’s
its Jeddah branch for the transportation of 27 contract workers. consent thereto, on the other hand, was manifested by its
Immediately, FITG instructed its travel agent to book the 27 acceptance of the PTA or prepaid ticket advice that ROLACO
contract workers with BA but the latter was only able to book and Engineering has prepaid the airfares of FITG’s contract workers
confirm 16 seats on its June 9, 1981 flight. However, on the date advising BA that it must transport the contract workers on or
of the scheduled flight only 9 workers were able to board said flight before the end of March, 1981 and the other batch in June, 1981.
while the remaining 7 workers were rebooked to June 30, 1981 Even if a PTA is merely an advice from the sponsors that an airline
which bookings were again cancelled by BA without any prior is authorized to issue a ticket and thus no ticket was yet issued,
notice to either FITG or the workers. Thereafter, the 7 workers the fact remains that the passage had already been paid for by
were rebooked to the July 4, 1981 flight of BA with 6 more workers the principal of FITG, and BA had accepted such payment. The
booked for said flight. Unfortunately, the confirmed bookings of existence of this payment was never objected to nor questioned
the 13 workers were again cancelled and rebooked to July 7, by BA in the lower court. Thus, the cause or consideration which
1981. is the fare paid for the passengers exists in this case.
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 The third essential requisite of a contract is an object certain. In
submitted, the latter informed FITG that it can only confirm the this contract 'to carry', such an object is the transport of the
seats of the 12 workers on its July 7, 1981 flight. However, the passengers from the place of departure to the place of destination
confirmed seats of said workers were again cancelled without any as stated in the telex. Accordingly, there could be no more
prior notice either to FITG or said workers. The 12 workers were pretensions as to the existence of an oral contract of carriage
finally able to leave for Jeddah after FITG had bought tickets from imposing reciprocal obligations on both parties. In the case of
the other airlines. FITG, it has fully complied with the obligation, namely, the
As a result of these incidents, FITG sent a letter to BA demanding payment of the fare and its willingness for its contract workers to
compensation for the damages it had incurred by the latter's leave for their place of destination. On the other hand, the facts
repeated failure to transport its contract workers despite confirmed clearly show that BA was remiss in its obligation to transport the
bookings and payment of the corresponding travel taxes. It is the contract workers on their flight despite confirmation and bookings
contention of BA that FITG has no cause of action against it there made by FITG’s travelling agent.
Besides, BA knew very well that time was of the essence as the which the hemp was to be loaded. During the night, however, LCT
prepaid ticket advice had specified the period of compliance No. 1025 sank, resulting in the damage or loss of 1,162 bales of
therewith, and with emphasis that it could only be used if the hemp loaded therein. The damaged hemp was brought to Odell
passengers fly on BA. Under Plantation in Madaum, Davao, for cleaning, washing,
the circumstances, BA should have refused acceptance of the reconditioning, and redrying. After reclassification, the value of the
PTA from FITG's principal or to at least inform FITG that it could reconditioned hemp was reduced. Adding to this the sum of
not accommodate the contract workers. P8,863.30 for Macleod's expenses in checking, grading, rebating,
While there is no dispute that ROLACO Engineering advanced the and other fees for washing, cleaning and redrying in the amount
payment for the airfares of the FITG's contract workers who were of P19.610.00, the total loss adds up to P60,421.02.
recruited for ROLACO Engineering and the said contract workers All shipments of Macleod were insured with the Insurance
were the intended passengers in the aircraft of BA, the said Company of North America against all losses and damages.
contract 'to carry' also involved FITG for as recruiter he had to see Macleod filed a claim for the loss it suffered and the sum of
to it that the contract workers should be transported to ROLACO P64,018.55 was paid, which was noted down in a document which
Engineering in Jeddah thru the BA’s transportation. For that aside from being a receipt of the amount paid, was a subrogation
matter, the involvement of FITG in the said contract 'to carry' was agreement between Macleod and the insurance company
well demonstrated when BA upon receiving the PTA immediately wherein the former assigned to the latter its rights over the insured
advised FITG thereof.” and damaged cargo. Having failed to recover from the carrier, the
1. NO. insurance company instituted the present action. After trial, the
court a quo rendered judgment ordering the carrier to pay the
Article 2199 of the Civil Code provides that: "Except as provided insurance company the sum of P60,421.02, with legal interest
by law or by stipulations, one is entitled to an adequate thereon from the date of the filing of the complaint until fully paid,
compensation only for such pecuniary loss suffered by him as he and the costs. This judgment was affirmed by the Court of
has duly proved. Such compensation is referred to as actual or Appeals.
compensatory damages." ISSUES
Furthermore, actual or compensatory damages cannot be
presumed, but must be duly proved, and proved with reasonable 1. Whether or not there was a contract of carriage between the
degree of certainty. A court cannot rely on speculation, conjecture carrier and the shipper even if the loss occurred when the
or guesswork as to the fact and amount of damages, but must hemp was loaded on a barge owned by the carrier which was
depend upon competent proof that they have suffered and on loaded free of charge and was not actually loaded on the S.S.
evidence of the actual amount thereof. Thus, while it may be true Bowline Knot which would carry the hemp to Manila and no
that FITG was compelled to borrow money for the airfare tickets of bill of lading was issued therefore?
its contract workers when BA failed to transport said workers, the 2. Whether or not Insurance Company of North America can sue
reimbursements made by its principal to FITG failed to support the the carrier under its insurance contract as assignee of
latter's claim that it suffered actual damages as a result of BA's Macleod in spite of the fact that the liability of the carrier as
failure to transport said workers. It is undisputed that FITG had insurer is not recognized in this jurisdiction?
consistently admitted that its principal had reimbursed all its RULING
WHEREFORE, the assailed decision is hereby AFFIRMED with 1. YES.
the MODIFICATION that the award of actual damages be deleted
from said decision. 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
NORTH AMERICA entered into between the carrier and the shipper, for that
G.R. No. L-18965, 30 October 1964, (Bautista Angelo, J.) preparatory step is but part and parcel of said contract of carriage.
The lighters were merely employed as the first step of the voyage,
Whenever the control and possession of goods passes to the but once that step was taken and the hemp delivered to the
carrier and nothing remains to be done by the shipper, then it can carrier's employees, the rights and obligations of the parties
be said with certainty that the relation of shipper and carrier has attached thereby subjecting them to the principles and usages of
been established. the maritime law. In other words, here we have a complete contract
FACTS of carriage the consummation of which has already begun: the
shipper delivering the cargo to the carrier, and the latter taking
Macleod and Company of the Philippines contracted by telephone possession thereof by placing it on a lighter manned by its
the services of the Compañia Maritima, a shipping corporation, for authorized employees, under which Macleod became entitled to
the shipment of 2,645 bales of hemp from the former's Sasa the privilege secured to him by law for its safe transportation and
private pier at Davao City to Manila and for their subsequent delivery, and the carrier to the full payment of its freight upon
transhipment to Boston, Massachusetts, U.S.A. on board the S.S. completion of the voyage.
Steel Navigator. This oral contract was later on confirmed by a The test as to whether the relation of shipper and carrier had been
formal and written booking issued by Macleod's branch office in established is, Had the control and possession of the cotton been
Sasa and handcarried to Compañia Maritima's branch office in completely surrendered by the shipper to the railroad company?
compliance with which the latter sent to Macleod's private wharf Whenever the control and possession of goods passes to the
LCT Nos. 1023 and 1025, manned each by a patron and an carrier and nothing remains to be done by the shipper, then it can
assistant patron which issued carrier’s receipts upon loading of the be said with certainty that the relation of shipper and carrier has
hemp. Thereafter, the two loaded barges left Macleod's wharf and been established.
proceeded to and moored at the government's marginal wharf in The liability of the carrier as common carrier begins with the actual
the same place to await the arrival of the S.S. Bowline Knot on 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. The Regional Trial Court of Manila adjudged KAL liable for
Even where it is provided by statute that liability commences with damages. KAL and Lapuz filed their respective motions for
the issuance of the bill of lading, actual delivery and acceptance are reconsideration, which were both denied for lack of merit.
sufficient to bind the carrier.
1. YES KAL argues that "the evidence of confirmation of a chance
passenger status is not through the entry of the name of a chance
The insurance company can recover from the carrier as assignee passenger in the passenger manifest nor the clearance from the
of the owner of the cargo for the insurance amount it paid to the Commission on Immigration and Deportation, because they are
latter under the insurance contract. And this is so because since merely means of facilitating the boarding of a chance passenger
the cargo that was damaged was insured with respondent in case his status is confirmed." In addition, Lapuz did not have
company and the latter paid the amount represented by the loss, any boarding pass to prove that he was allowed to board and to
it is but fair that it be given the right to recover from the party prove that his airline ticket was confirmed.
responsible for the loss. The instant case, therefore, is not one
between the insured and the insurer, but one between the shipper ISSUE: Whether Lapuz was a confirmed passenger, thus, making
and the carrier, because the insurance company merely stepped KAL breach their contract of carriage.
into the shoes of the shipper. And since the shipper has a direct RULING
cause of action against the carrier on account of the damage of YES.
the cargo, no valid reason is seen why such action cannot be The status of Lapuz as standby passenger was changed to that
asserted or availed of by the insurance company as a subrogee of a confirmed passenger when his name was entered in the
of the shipper. Nor can the carrier set up as a defense any defect passenger manifest of KAL. His clearance through immigration
in the insurance policy not only because it is not a privy to it but and customs clearly shows that he had indeed been confirmed as
also because it cannot avoid its liability to the shipper under the a passenger of KAL in that flight. KAL thus committed a breach of
contract of carriage which binds it to pay any loss that may be the contract of carriage between them when it failed to bring
caused to the cargo involved therein. Lapuz to his destination.
WHEREFORE, the decision appealed from is affirmed, with costs The SC has held that a contract to transport passengers is
against petitioner. different in kind and degree from any other contractual relation.
The business of the carrier is mainly with the traveling public. The
3) KOREAN AIRLINES CO., LTD. v. COURT OF APPEALS and contract of air carriage generates a relation attended with a public
JUANITO C. LAPUZ and JUANITO C. LAPUZ v. COURT OF duty. Passengers have the right to be treated by the carrier's
APPEALS and KOREAN AIRLINES CO., LTD. employees with kindness, respect, courtesy and due
G.R. No. 114061 and G.R. No. 113842, 03 August 1994, ( Cruz, consideration. They are entitled to be protected against
J.) personal
Entry of name in the passenger manifest of an airline and the misconduct, injurious language, indignities and abuses from such
clearance through immigration and customs are enough evidence employees. So it is that any discourteous conduct on the part of
to regard an individual as a confirmed passenger of that airline. The these employees toward a passenger gives the latter an action for
contract of air carriage generates a relation attended with a public damages against the carrier.
FACTS The breach of contract was aggravated in this case when, instead
Juanito C. Lapuz (Lapuz) was supposed to leave for work in of courteously informing Lapuz of his being a "wait-listed"
Jeddah, Saudi Arabia via Korean Airlines (KAL). He was "wait- passenger, a KAL officer rudely shouted "Down! Down!" while
listed," and could only be accommodated if any of the confirmed pointing at him, thus causing him embarrassment and public
passengers failed to show up. When two of such passengers did humiliation. The Court find that KAL acted in a wanton, fraudulent,
not appear, Lapuz and supervisor, Perico, were given the two reckless, oppressive or malevolent manner when it "bumped off"
unclaimed seats. Lapuz and in addition treated him rudely and arrogantly as a
"patay gutom na contract worker fighting Korean Air Lines," which
Lapuz alleged that he was allowed to check in at the check-in clearly shows malice and bad faith, thus, entitling Lapuz to moral
counter of KAL. He passed through the customs and immigration damages.
sections for routine check-up and was cleared for departure. WHEREFORE, the appealed judgment is AFFIRMED, but with
Together with the other passengers, he proceeded to the ramp of the modification that the legal interest on the damages awarded
the KAL aircraft for boarding. However, when he was at the stairs, to private respondent should commence from the date of the
a KAL officer pointed to him and shouted "Down! Down!" and decision of the trial court on November 14, 1990. The parties shall
further rudely described him as a "patay gutom na contract worker bear their own costs.
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 4) DANGWA TRANSPORTATION CO., INC. v. COURT OF
work in Saudi Arabia and lost his employment. APPEALS, G.R. No. 95582 October 7, 1991, REGALADO, J.
KAL, on the other hand, alleged Pan Pacific Recruiting Services
Inc. (Lapuz’ recruiting agency) coordinated with them for the The victim herein, by stepping and standing on the platform of the
departure of 30 contract workers, of whom only 21 were confirmed bus, is already considered a passenger and is entitled all the rights
and 9 were wait-listed passengers. The agent of Pan Pacific, and protection pertaining to such a contractual relation. Hence, it
Jimmie Joseph, after being informed that there was a possibility of has been held that the duty which the carrier passengers owes to
having one or two seats becoming available, gave priority to its patrons extends to persons boarding cars as well as to those
Perico. The other seat was won through lottery by Lapuz. alighting therefrom.
However, only one seat became available and so was given to
Perico. He alone was allowed to board. FACTS
It is not negligence per se, or as a matter of law, for one attempt
The heirs of Pedrito Cudiamat filed a complaint for damages to board a train or streetcar which is moving slowly. An ordinarily
against Dangwa Transportation for the death of Pedrito Cudiamat prudent person would have made the attempt board the moving
as a result of a vehicular accident. It was alleged that on said date, conveyance under the same or similar circumstances. The fact
that the victim Pedrito fell from the platform of the bus when it that passengers board and alight from slowly moving vehicle is a
suddenly accelerated forward and was run over by the rear right matter of common experience both the driver and conductor in this
tires of the vehicle. However, instead of bringing Pedrito case could not have been unaware of such an ordinary practice.
immediately to the nearest hospital, Lardizabal, the driver of the
bus, in utter bad faith and without regard to the welfare of the Common carriers, from the nature of their business and reasons
victim, first brought his other passengers and cargo to their of public policy, are bound to observe extraordinary diligence for
respective destinations before bringing said victim to the Lepanto the safety of the passengers transported by the according to all
Hospital where he expired. the circumstances of each case. A common carrier is bound to
carry the passengers safely as far as human care and foresight
On the other hand, Dangwa Transportation alleged that they had can provide, using the utmost diligence very cautious persons,
observed and continued to observe the extraordinary diligence with a due regard for all the circumstances.
required in the operation of the transportation company and the
supervision of the employees, even as they add that they are not It has also been repeatedly held that in an action based on a
absolute insurers of the safety of the public at large. Further, it was contract of carriage, the court need not make an express finding
alleged that it was the victim's own carelessness and negligence of fault or negligence on the part of the carrier in order to hold it
which gave rise to the subject incident, hence they prayed for the responsible to pay the damages sought by the passenger. By
dismissal of the complaint plus an award of damages in their favor contract of carriage, the carrier assumes the express obligation to
by way of a counterclaim. transport the passenger to his destination safely and observe
extraordinary diligence with a due regard for all the circumstances,
The trial court rendered a decision in favor of Dangwa and any injury that might be suffered by the passenger is right
Transportation. The heirs of Pedrito appealed to the Court of away attributable to the fault or negligence of the carrier. This is
Appeals (CA) which, in a decision set aside the decision of the an exception to the general rule that negligence must be proved,
lower court, and ordered Dangwa Transportation to pay the heirs and it is therefore incumbent upon the carrier to prove that it has
of Pedrito. Dangwa's motion for reconsideration was denied by exercised extraordinary diligence as prescribed in Articles 1733
the CA in its resolution. and 1755 of the Civil Code.
G.R. No. 145804, 06 February 2003, (Vitug, J.)
Whether or not CA erred in reversing the decision of the trial court
and in finding petitioners negligent and liable for the damages The law requires common carriers to carry passengers safely
claimed. using the utmost diligence of very cautious persons with due
regard for all circumstances. Such duty of a common carrier to
RULING 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
NO. premises and where they ought to be in pursuance to the contract
of carriage. The statutory provisions render a common carrier
The testimonies of the witnesses show that that the bus was at full liable for death of or injury to passengers (a) through the
stop when the victim boarded the same. They further confirm the negligence or wilful acts of its employees or b) on account of wilful
conclusion that the victim fell from the platform of the bus when it acts or negligence of other passengers or of strangers if the
suddenly accelerated forward and was run over by the rear right common carrier’s employees through the exercise of due
tires of the vehicle. Under such circumstances, it cannot be said diligence could have prevented or stopped the act or omission. In
that the deceased was guilty of negligence. 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
The victim herein, by stepping and standing on the platform of the passenger is relieved of the duty to still establish the fault or
bus, is already considered a passenger and is entitled all the negligence of the carrier or of its employees and the burden shifts
rights and protection pertaining to such a contractual relation. upon the carrier to prove that the injury is due to an unforeseen
Hence, it has been held that the duty which the carrier passengers event or to force majeure.
owes to its patrons extends to persons boarding cars as well as
to those alighting therefrom. FACTS
On 14 October 1993, about half an hour past seven o’clock in the
The contention of Dangwa that the driver and the conductor had evening, Nicanor Navidad, then drunk, entered the EDSA LRT
no knowledge that the victim would ride on the bus, since the latter station after purchasing a "token" (representing payment of the
had supposedly not manifested his intention to board the same, fare). While Navidad was standing on the platform near the LRT
does not merit consideration. When the bus is not in motion there tracks, Junelito Escartin, the security guard assigned to the area
is no necessity for a person who wants to ride the same to signal approached Navidad. A misunderstanding or an altercation
his intention to board. A public utility bus, once it stops, is in effect between the two apparently ensued that led to a fist fight. No
making a continuous offer to bus riders. evidence, however, was adduced to indicate how the fight started
Hence, it becomes the duty of the driver and the conductor, every or who, between the two, delivered the first blow or how Navidad
time the bus stops, to do no act that would have the effect of later fell on the LRT tracks. At the exact moment that Navidad fell,
increasing the peril to a passenger while he was attempting to an LRT train, operated by petitioner Rodolfo Roman, was coming
board the same. in. Navidad was struck by the moving train, and he was killed
On 08 December 1994, the widow of Nicanor, herein respondent "Article 1732 of the Civil Code makes no distinction between one
Marjorie Navidad, along with her children, filed a complaint for whose principal business activity is the carrying of persons or
damages against Junelito Escartin, Rodolfo Roman, the LRTA, goods or both, and one who does such carrying only as an
the Metro Transit Organization, Inc. (Metro Transit), and Prudent ancillary activity."
Security Agency for the death of her husband. LRTA and Roman Facts:
filed a counterclaim against Navidad and a cross-claim against Respondent Ernesto Cendana is a junk dealer in Pangasinan. He
Escartin and Prudent. Prudent, in its answer, denied liability and utilized two trucks which he owned for hauling the material to
averred that it had exercised due diligence in the selection and Manila for resale. On the return trip to Pangasinan, respondent
supervision of its security guards. would load his vehicles with cargo which various merchants
wanted delivered to differing establishments in Pangasinan. For
ISSUE that service, respondent charged freight rates which were
Whether the petitioners are liable for the death of Nicanor commonly lower than regular commercial rates.
Pedro de Guzman a merchant and authorized dealer of General
RULING Milk Company contracted with respondent for the hauling of 750
A contract of carriage was deemed created from the moment cartons of Liberty filled milk from a warehouse in Makati to
Navidad paid the fare at the LRT station and entered the premises petitioner's establishment in Urdaneta on or before 4 December
of the latter, entitling Navidad to all the rights and protection under 1970. Only 150 boxes of Liberty filled milk were delivered to
a contractual relation. petitioner since the truck which carried these boxes was hijacked
somewhere along the MacArthur Highway in Paniqui, Tarlac, by
The foundation of LRTA’s liability is the contract of carriage and armed men who took with them the truck, its driver, his helper and
its obligation to indemnify the victim arises from the breach of that the cargo.
contract by reason of its failure to exercise the high diligence
required of the common carrier. In the discharge of its Petitioner commenced action against private respondent in the
commitment to ensure the safety of passengers, a carrier may CFI of Pangasinan, demanding payment of the lost goods,
choose to hire its own employees or avail itself of the services of arguing that the latter failed to exercise extraordinary diligence
an outsider or an independent firm to undertake the task. In either required of him by the law. Respondent denied that he was a
case, the common carrier is not relieved of its responsibilities common carrier and argued that he could not be held responsible
under the contract of carriage. for the value of the lost goods, such loss having been due to force
Should Prudent be made likewise liable? Regrettably for LRT, as
well as perhaps the surviving spouse and heirs of the late Nicanor CFI ruled in favor of petitioner De Guzman, finding respondent to
Navidad, this Court is concluded by the factual finding of the Court be a common carrier and liable to petitioner. CA reversed the
of Appeals that "there is nothing to link (Prudent) to the death of decision.
Nicanor (Navidad), for the reason that the negligence of its
employee, Escartin, has not been duly proven x x x." This finding Issue:
of the appellate court is not without substantial justification in our Whether or not private respondent Ernesto Cendana may, under
own review of the records of the case. the facts earlier set forth, be properly characterized as a common
There being, similarly, no showing that petitioner Rodolfo Roman
himself is guilty of any culpable act or omission, he must also be Held:
absolved from liability. Needless to say, the contractual tie Yes. Private respondent is a common carrier. However, he could
between the LRT and Navidad is not itself a juridical relation not be held liable for the lost goods.
between the latter and Roman; thus, Roman can be made liable
only for his own fault or negligence. Article 1732 of the Civil Code makes no distinction between one
whose principal business activity is the carrying of persons or
The award of nominal damages in addition to actual damages is goods or both, and one who does such carrying only as an
untenable. Nominal damages are adjudicated in order that a right ancillary activity. Article 1732 also carefully avoids making any
of the plaintiff, which has been violated or invaded by the distinction between a person or enterprise offering transportation
defendant, may be vindicated or recognized, and not for the service on a regular or scheduled basis and one offering such
purpose of indemnifying the plaintiff for any loss suffered by him. service on an occasional, episodic or unscheduled basis. Neither
It is an established rule that nominal damages cannot co-exist does Article 1732 distinguish between a carrier offering its
with compensatory damages. services to the "general public” and one who offers services or
solicits business only from a narrow segment of the general
WHEREFORE, the assailed decision of the appellate court is population.
AFFIRMED with MODIFICATION but only in that (a) the award of
nominal damages is DELETED and (b) petitioner Rodolfo Roman So understood, the concept of "common carrier" under Article
is absolved from liability. No costs. 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
6) PEDRO DE GUZMAN vs. COURT OF APPEALS and or limited clientele, whether permanent, occasional or accidental,
ERNESTO CENDANA and done for general business purposes, any common carrier,”
G.R. No. L-47822, December 22, 1988, J. Feliciano
A certificate of public convenience is not a requisite for the condition, and delivered the same at SMC’s warehouse through
incurring of liability under the Civil Code provisions governing J.B. Limcaoco Trucking (JBL). It was discovered upon discharge
common carriers. that additional nine containers/skids were also damaged due to
the forklift operations.
Respondent is not liable for the lost goods within the purview of Almost a year after, SMC filed a claim against UCPB, Westwind,
articles 1734 and 1735. The hijacking of the carrier's truck does ATI, and OFII to recover the amount corresponding to the
not fall within any of the five (5) categories of exempting causes damaged 15 containers/skids. SMC signed a subrogation receipt
listed in Article 1734. It would follow, therefore, that the hijacking when it received payment from UCPB. Thereafter, in the exercise
of the carrier's vehicle must be dealt with under the provisions of of its right of subrogation, UCPB instituted a complaint for
Article 1735, in other words, that the private respondent as damages against Westwind, ATI, and OFII.
common carrier is presumed to have been at fault or to have acted
negligently. This presumption, however, may be overthrown by The Regional Trial Court dismissed UCPB’s complaint and the
proof of extraordinary diligence. The duty of extraordinary counterclaims of Westwind, ATI, and OFII. The RTC opined that
diligence in the vigilance over goods is given additional the claim against ATI already prescribed and Westwind and OFII
specification not only by Articles 1734 and 1735 but also by Article should be absolved from any liability. On appeal by UCPB, the CA
1745. reversed and set aside the trial court except as regards prescription
in favor of ATI. The appellate court ruled that Westwind is
Under Article 1745 (6) above, a common carrier is held responsible for the six damaged containers/skids at the time of its
responsible — and will not be allowed to divest or to diminish such unloading. The CA also considered that OFII is liable for the
responsibility — even for acts of strangers like thieves or robbers, additional nine damaged containers/skids. Only Westwind filed a
except where such thieves or robbers in fact acted "with grave or Motion for Reconsideration which the CA denied. Hence, this
irresistible threat, violence or force." We believe and so hold that petition.
the limits of the duty of extraordinary diligence in the vigilance over ISSUE
the goods carried are reached where the goods are lost as a result
of a robbery which is attended by "grave or irresistible threat, 1. Whether or not Westwind, and not ATI, should be responsible
violence or force." In the instant case, armed men held up the for the damage or loss incurred by the shipment during its
second truck owned by private respondent which carried unloading.
petitioner's cargo. 2. Whether or not OFII, although a customs broker, should be
ACCORDINGLY, the Petition for Review on certiorari is hereby liable as a common carrier.
DENIED and the Decision of the Court of Appeals dated 3 August
1977 is AFFIRMED. No pronouncement as to costs. 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
7) WESTWIND SHIPPING CORPORATION v. UCPB GENERAL lasts from the time the goods are unconditionally placed in the
INSURANCE CO., INC. and ASIAN TERMINALS INC. possession of, and received by the carrier for transportation
G. R. No. 200289, 25 November 2013, THIRD DIVISION until the same are delivered, actually or constructively, by the
(Peralta, J.) carrier to the consignee, or to the person who has a right to
receive them. In this case, since the discharging of the
The extraordinary responsibility of the common carrier lasts from containers/skids, which were covered by only one bill of lading,
the time the goods are unconditionally placed in the possession had not yet been completed at the time the damage occurred,
of, and received by the carrier for transportation until the same are there is no reason to imply that there was already delivery,
delivered, actually or constructively, by the carrier to the actual or constructive, of the cargoes to ATI.
consignee, or to the person who has a right to receive them. In
the event that the goods are lost, destroyed or deteriorated, the The legal relationship between the consignee and the arrastre
common carrier is presumed to have been at fault or to have acted operator is akin to that of a depositor and warehouseman. The
negligently unless it proves that it observed extraordinary relationship between the consignee and the common carrier is
diligence. similar to that of the consignee and the arrastre operator. Both the
ARRASTRE and the CARRIER are charged with and obligated to
FACTS deliver the goods in good condition to the consignee.
A shipment of 197 metal containers/skids of tin-free steel from Nevertheless, the arrastre operator and the carrier are not always
Japan was to be delivered by M/V Golden Harvest Voyage No. 66, and necessarily solidarily liable as the facts of a case may vary
a vessel owned and operated by Westwind Shipping Corporation the rule. The precise question is which entity had custody of the
(Westwind), to the consignee, San Miguel Corporation (SMC). shipment during its unloading from the vessel? The subject
The carriage was loaded and received in good condition on board. cargoes were still in the custody of Westwind. The carrier still has
SMC insured the cargoes against all risks with UCPB General in it the responsibility to guard and preserve the goods, a duty
Insurance Co., Inc. (UCPB). incident to its having the goods transported. The bill of lading
covering the subject shipment likewise stipulates that the carrier’s
The shipment arrived in Manila and was discharged in the custody liability for loss or damage to the goods ceases after its discharge
of the arrastre operator, Asian Terminals, Inc. (ATI). During the from the vessel. Therefore, the cargoes while being unloaded
unloading operation, however, six containers/skids sustained generally remain under the custody of the carrier.
dents and punctures from the forklift used by the stevedores in
centering and shuttling the containers/skids. The local ship agent 2. YES. The contention of OFII that it is not a common carrier,
of the vessel issued two Bad Order Cargo Receipts. Orient Freight but only a customs broker whose participation is limited to
International, Inc. (OFII), the customs broker of SMC, withdrew facilitating withdrawal of the shipment in the custody of ATI i.e.
from ATI the 197 containers/skids, including the six in damaged to prepare the correct customs declaration and proper
shipping documents as required by law is untenable. A the voyage. M/B Coco Beach III was not filled to capacity and had
customs broker has been regarded as a common carrier, as sufficient life jackets for its passengers.
defined under Article 1732 of the Civil Code, because
transportation of goods is an integral part of its business. The RTC dismissed the complaint. CA denied the appeal holding that
aforementioned article does not distinguish between one Sun is a private carrier which is only required to observe ordinary
whose principal business activity is the carrying of goods and diligence and that the proximate cause of the incident was a
one who does such carrying only as an ancillary activity. It fortuitous event.
suffices that petitioner undertakes to deliver the goods for
pecuniary consideration ISSUE
Whether M/B Coco Beach III breached a contract of carriage
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 HELD
forwarding, which includes the delivery of the shipment to the Respondent is a common carrier. Its ferry services are so
consignee. Thus, for undertaking the transport of cargoes from intertwined with its business as to be properly considered ancillary
ATI to SMC’s warehouse in Calamba, Laguna, OFII is considered thereto. The constancy of respondent’s ferry services in its resort
a common carrier. The latter cannot excuse itself from liability by operations is underscored by its having its own Coco Beach
insisting that JBL undertook the delivery of the cargoes to SMC’s boats. And the tour packages it offers, which include the ferry
warehouse. As long as a person or corporation holds itself to the services, may be availed of by anyone who can afford to pay the
public for the purpose of transporting goods as a business, it is same. These services are thus available to the public.
already considered a common carrier regardless of whether it
owns the vehicle to be used or has to actually hire one. In the De Guzman case, Article 1732 of the Civil Code defining
Under Article 1735 of the Civil Code, in the event that the goods “common carriers” has deliberately refrained from making
are lost, destroyed or deteriorated, it is presumed to have been at distinctions on whether the carrying of persons or goods is the
fault or to have acted negligently unless it proves that it observed carrier’s principal business, whether it is offered on a regular
extraordinary diligence. In the case at bar it was established that basis, or whether it is offered to the general public.
except for the six containers/skids already damaged OFII
received the cargoes from ATI in good order and condition; and Under the Civil Code, common carriers, from the nature of their
that upon its delivery to SMC additional nine containers/skids business and for reasons of public policy, are bound to observe
were found to be in bad order. Instead of merely excusing itself extraordinary diligence for the safety of the passengers
from liability by putting the blame to ATI and SMC it is incumbent transported by them, according to all the circumstances of each
upon OFII to prove that it actively took care of the goods by case. They are bound to carry the passengers safely as far as
exercising extraordinary diligence in the carriage thereof. It failed human care and foresight can provide, using the utmost diligence
to do so. Hence its presumed negligence under Article 1735 of of very cautious persons, with due regard for all the
the Civil Code remains unrebutted. circumstances.

WHEREFORE, premises considered the petitions of Westwind When a passenger dies or is injured in the discharge of a contract
and OFII in G.R. Nos. 200289 and 200314 respectively are of carriage, it is presumed that the common carrier is at fault or
DENIED. The September 13 2011 Decision and January 19 2012 negligent. In fact, there is even no need for the court to make an
Resolution of the Court of Appeals in CA-G.R. CV No. 86752 express finding of fault or negligence on the part of the common
which reversed and set aside the January 27 2006 Decision of the carrier. This statutory presumption may only be overcome by
Manila City Regional Trial Court Branch 30 are AFFIRMED. evidence that the carrier exercised extraordinary diligence.
8) SPOUSES CRUZ VS. SUN HOLIDAYS, INC. ——————————————————
FACTS G.R. No. 157917, August 29, 2012 (BERSAMIN, J.)
Spouses Cruz files a complaint for damages against Sun Holidays
arising from the death of their son who perished with his wife on The operator of a. school bus service is a common carrier in the
board the boat M/B Coco Beach III that capsized en route eyes of the law. He is bound to observe extraordinary diligence in
Batangas from Puerto Galera where the couple had stayed at the conduct of his business. He is presumed to be negligent when
Coco Beach Island Resort owned and operated by respondent. death occurs to a passenger. His liability may include indemnity
Their stay was by virtue of a tour package-contract with for loss of earning capacity even if the deceased passenger may
respondent that included transportation to and from the Resort only be an unemployed high school student at the time of the
and the point of departure in Batangas. Eight of the passengers, accident.
including petitioners’ son and his wife, died during the accident. FACTS
Sun denied any responsibility for the incident which it considered Spouses Teodero and Nanette Pereña (The Pereñas) were
to be a fortuitous event. Petitioners allege that as a common engaged in the business of transporting students from their
carrier, Sun was negligent in allowing the boat to sail despite the respective residences in Parañaque City to Don Bosco School in
storm warning bulletins issued by PAGASA. Respondent denied Makati City, and back. In their business, the Pereñas used a van
being a common carrier, alleging that its boats are not available which had the capacity to transport 14 students at a time, two of
to the public but are only used as ferry resort carrier. It also whom would be seated in the front beside the driver, and the
claimed to have exercised the utmost diligence in ensuring the others in the rear, with six students on either side. They employed
safety of its passengers, and that contrary to petitioners’ Clemente Alfaro (Alfaro) as driver of the van.
allegation, there was no storm as the Coast Guard in fact cleared 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 in by the carrier that he has held out to the general public as his
picked Aaron up from the Zarates’ residence. The van, with its air- business or occupation.
conditioning unit turned on and the stereo playing loudly,
ultimately carried all the 14 student riders on their way to Don Applying these considerations to the case at bar, there is no
Bosco. Considering that the students were due at Don Bosco by question that the Pereñas as the operators of a school bus service
7:15 a.m., and that they were already running late because of the were: (a) engaged in transporting passengers generally as a
heavy vehicular traffic on the highway, the driver Alfaro took the business, not just as a casual occupation; (b) undertaking to carry
van to an alternate route at about 6:45 a.m. by traversing the passengers over established roads by the method by which the
narrow path underneath the Magallanes Interchange that was business was conducted; and (c) transporting students for a fee.
then commonly used by Makati-bound vehicles as a short cut into Despite catering to a limited clientèle, the Pereñas operated as a
Makati. At the time, the narrow path was marked by piles of common carrier because they held themselves out as a ready
construction materials and parked passenger jeepneys, and the transportation indiscriminately to the students of a particular
railroad crossing in the narrow path had no railroad warning signs, school living within or near where they operated the service and
or watchmen, or other responsible persons manning the crossing. for a fee.
At about the time the van was to traverse the railroad crossing,
Philippine National Railways (PNR) Commuter No. 302 (train), In the case at bar, the Pereñas, acting as a common carrier, were
operated by Jhonny Alano (Alano), was in the vicinity of the already presumed to be negligent at the time of the accident
Magallanes Interchange travelling northbound. As the train neared because death had occurred to their passenger. The presumption
the railroad crossing, Alfaro drove the van eastward across the of negligence, being a presumption of law, laid the burden of
railroad tracks, closely tailing a large passenger bus. His view of evidence on their shoulders to establish that they had not been
the oncoming train was blocked because he overtook the negligent. However, the Pereñas did not overturn the presumption
passenger bus on its left side. The train blew its horn to warn of their negligence by credible evidence. Their defense of having
motorists of its approach. When the train was about 50 meters observed the diligence of a good father of a family in the selection
away from the passenger bus and the van, Alano applied the and supervision of their driver was not legally sufficient.
ordinary brakes of the train. He applied the emergency brakes
only when he saw that a collision was imminent. The passenger The Supreme Court also ruled that both the RTC and CA’s
bus successfully crossed the railroad tracks, but the van driven by decision of granting the Zarates indemnity for loss of Aaron’s
Alfaro did not. The train hit the rear end of the van, and the impact earning capacity as proper. The Supreme Court discussed that
threw nine of the 12 students in the rear, including Aaron, out of both lower courts took into consideration that Aaron, while only a
the van. Aaron landed in the path of the train, which dragged his high school student, had been enrolled in one of the reputable
body and severed his head, instantaneously killing him. Alano fled schools in the Philippines and that he had been a normal and
the scene on board the train, and did not wait for the police able-bodied child prior to his death. The basis for the computation
investigator to arrive. of Aaron’s earning capacity was not what he would have become
The Zarates commenced an action for damages against Alfaro, or what he would have wanted to be if not for his untimely death,
the Pereñas, PNR and Alano for the death of their son. The but the minimum wage in effect at the time of his death. Moreover,
Zarates’ claim against the Pereñas was upon breach of the the RTC’s computation of Aaron’s life expectancy rate was not
contract of carriage for the safe transport of Aaron; but that reckoned from his age of 15 years at the time of his death, but on
against PNR was based on quasi-delict under Article 2176, Civil 21 years, his age when he would have graduated from college.
Code. Hence, the Supreme Court finds the considerations taken into
In their defense, the Pereñas adduced evidence to show that they account by the lower courts to be reasonable and fully warranted.
had exercised the diligence of a good father of the family in the
selection and supervision of Alfaro, by making sure that Alfaro had WHEREFORE, the Supreme Court denies the petition for review
been issued a driver’s license and had not been involved in any on certiorari; affirms the decision promulgated on November 13,
vehicular accident prior to the collision; that their own son had 2002; and orders the petitioners (the Peranas) to pay the costs of
taken the van daily; and that Teodoro Pereña had sometimes suit.
accompanied Alfaro in the van’s trips transporting the students to
school. ——————————————————
The Regional Trial Court (RTC) found the Pereñas and the PNR 10) FIRST PHILIPPINE INDUSTRIAL CORPORATION v.
negligent. The Court of Appeals (CA) affirmed the findings. COURT OF APPEALS
G.R. No. 125948, 29 December 1998, (Martinez, J)
Whether or not Alfaro, as the driver of the van, the Pereñas, being A "common carrier" is any person, corporation, firm or association
the employer of Alfaro and PNR are jointly and severally liable for engaged in the business of carrying or transporting passengers
damages? or goods or both, by land, water, or air, for compensation, offering
their services to the public. The Civil Code makes no distinction
HELD 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
YES, the parties are liable. or goods should be by motor vehicle.

The Pereñas’ defense of employing the ordinary diligence of a FACTS

good father of a family is untenable. The Supreme Court
discussed that a common carrier is required to observe Petitioner is a grantee of a pipeline concession under Republic Act
extraordinary diligence, and is presumed to be at fault or to have No. 387, to contract, install and operate oil pipelines. The latter
acted negligently in case of the loss of the effects of passengers, applied for a mayor's permit. However, before the permit could be
or the death or injuries to passengers. The true test for a common issued, the respondent City Treasurer required petitioner to pay a
carrier is whether the undertaking is a part of the activity engaged local tax based on its gross receipts for the fiscal year 1993
pursuant to the Local Government Code (LGC). The respondent services, and transports the goods by land and for compensation.
assessed a business tax on the petitioner for products pumped at The fact that petitioner has a limited clientele does not exclude it
GPS-1 for the fiscal year 1993. Petitioner paid the tax under from the definition of a common carrier.
Article 1732 avoids making any distinction between a person or
Petitioner filed a letter-protest addressed to the respondent enterprise offering transportation service on a regular or
stating that it is engaged in the business of transporting petroleum scheduled basis and one offering such service on an occasional,
products from the Batangas refineries, via pipeline, to Sucat and episodic or unscheduled basis. Neither does Article 1732
JTF Pandacan Terminals. As such, their Company is exempt from distinguish between a carrier offering its services to the 'general
paying tax on gross receipts under Section 133 of the LGC. public,' and one who offers services or solicits business only from
Moreover, “transportation contractors” are not included in the a narrow segment of the general population. The concept of
enumeration of contractors under Section 131, Paragraph (h) of 'common carrier' under Article 1732 may be seen to coincide
the LGC. Therefore, the authority to impose tax 'on contractors neatly with the notion of 'public service,' under the Public Service
and other independent contractors' under Section 143, Paragraph Act (Commonwealth Act No. 1416, as amended), which at least
(e) of the LGC does not include the power to levy on transportation partially supplements the law on common carriers set forth in the
contractors. The respondent denied the protest contending that Civil Code.
petitioner cannot be considered engaged in transportation
business, thus it cannot claim tax exemption. The Civil Code makes no distinction as to the means of
transporting, as long as it is by land, water or air.
Petitioner filed for a tax refund against respondents alleging that It does not provide that the transportation of the passengers or
it is a transportation contractor, hence exempt from taxes. goods should be by motor vehicle.
Respondents argued that petitioner cannot be exempt since it
applies only to "transportation contractors and persons engaged Article 86 of the Petroleum Act of the Philippines (Republic Act 387)
in the transportation by hire and common carriers by air, land and provides: "Pipe line concessionaire as a common carrier. - A
water." Respondents assert that pipelines are not included in the pipe line shall have the preferential right to utilize installations for
term "common carrier" which refers solely to ordinary carriers the transportation of petroleum owned by him, but is obligated to
such as trucks, trains, ships and the like. Respondents further utilize the remaining transportation capacity pro rata for the
posit that the term "common carrier" under the said code pertains transportation of such other petroleum as may be offered by
to the mode or manner by which a product is delivered to its others for transport, and to charge without discrimination such
destination. rates as may have been approved by the Secretary of Agriculture
and Natural Resources.” Article 7 thereof also provides: "that
The trial court dismissed the complaint ruling that the exemption everything relating to the exploration for and exploitation of
encompasses only common carriers so as not to overburden the petroleum and everything relating to the manufacture, refining,
riding public or commuters with taxes. Plaintiff is not a common storage, or transportation by special methods of petroleum, is
carrier, but a special carrier extending its services and facilities to hereby declared to be a public utility.”
a single specific or "special customer" under a "special contract." ——————————————————
G.R. No. 187701, 23 July 2014, FIRST DIVISION (Reyes, J.)
Whether or not petitioner is a common carrier.
In a contract of affreightment, the voyage remains under the
RULING responsibility of the carrier and it is answerable for the loss of
goods received for transportation. The charterer is free from
YES. Article 1732 of the Civil Code defines a "common carrier" as liability to third persons in respect of the ship.
"any person,
corporation, firm or association engaged in the business of FACTS
carrying or transporting passengers or goods or both, by land,
water, or air, for compensation, offering their services to the Novartis Consumer Health Philippines Inc. (NOVARTIS) imported
public.” from Jinsuk Trading Co. Ltd. (JINSUK) in South Korea, 19 pallets
of 200 rolls of Ovaltine Power 18 Glaminated plastic packaging
The test for determining whether a party is a common carrier of material. In order to ship, JINSUK engaged the services of Protop
goods is: Shipping Corporation (PROTOP), a freight forwarder. PROTOP
1. He must be engaged in the business of carrying goods for shipped the cargo through DONGNAMA Shipping Co. Ltd.
others as a public employment, and must hold himself out as (DONGNAMA) which in turn loaded the same on M/V Heung-A
ready to engage in the transportation of goods for person Bangkok V-019, owned and operated by Heung-A Shipping
generally as a business and not as a casual occupation; Corporation (HEUNG-A), pursuant to a ‘slot charter arrangement’
2. He must undertake to carry goods of the kind to which his whereby a space in the latter’s vessel was reserved for the
business is confined; exclusive use of the former.
3. He must undertake to carry by the method by which his
business is conducted and over his established roads; and NOVARTIS insured the shipment with Philam Insurance
4. The transportation must be for hire. Company Inc. (PHILAM)

Petitioner is a common carrier engaged in the business of The shipment reached NOVARTIS, and upon inspection, the
transporting or carrying goods, i.e. petroleum products, for hire as boxes of the shipment were wet and damp. The shipment is
a public employment. It undertakes to carry for all persons entirely damaged and was found out that the damage was caused
indifferently, that is, to all persons who choose to employ its by salt water. NOVARTIS rejected the shipment and filed an
insurance claim with PHILAM and the latter was subrogated to all 12) CARGOLIFT SHIPPING, INC. vs. L. ACUARIO
the rights and claims of NOVARTIS. PHILAM filed a complaint for MARKETING CORP. and SKYLAND BROKERAGE, INC
damages against the parties to the shipment. HEUNG- A denied G.R. No. 146426. June 27, 2006
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 FACTS:
DONGNAMA a space on board his ship. Respondent L. Acuario Marketing Corp., ("Acuario") and
respondent Skyland Brokerage, Inc., ("Skyland") entered into a
The trial court ruled declaring HEUNG-A as the common carrier time charter agreement whereby Acuario leased to Skyland its L.
and held it liable. The ruling was affirmed by the appellate court. Acuario II barge for use by the latter in transporting electrical posts
from Manila to Limay, Bataan. At the same time, Skyland also
ISSUE entered into a separate contract with petitioner Cargolift, for the
latter’s tugboats to tow the aforesaid barge.
Whether or not HEUNG-A is the common carrier that should be
liable to the damage sustained by the package while on transit. After the whole operation was concluded, the barge was brought
to Acuario’s shipyard where it was allegedly discovered by that
HELD 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
YES, HEUNG-A is the common carrier. HEUNG-A’s slot charter Bataan. It was learned later the due to strong winds and large
arrangement with DONGNAMA is a charter party arrangement. 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
A charter party is a contract whereby an entire ship or some tow the barge farther out to sea. However, the tugboat failed to
principal part thereof, is let by the owner to another person for a pull the barge to a safer distance due to engine malfunction,
specified time or use. It has two types. First it could be a contract thereby causing the barge to sustain a hole in its hull.
of affreightment whereby the use of shipping space on vessels
were leased in part or as a whole, to carry goods for others. The Acuario spent the total sum of P97,021.20 for the repairs, and,
charter-party provides for the hire of vessel only, either for a pursuant to the contract, sought reimbursement from Skyland,
definite period of time (time charter) of for a single or consecutive failing which, it filed a suit before the RTC which was granted. On
voyage (voyage charter). The shipowner supplies the ship’s appeal, it was affirmed by the CA. Skyland, in turn, filed a third-
stores, pay for the wages of the master and the crew, and defray party complaint against petitioner alleging that it was responsible
the expenses for the maintenance of the ship. The voyage remains for the damage sustained by the barge.
under the responsibility of the carrier and it is answerable for the
loss of goods received for transportation. The charterer is free ISSUE:
from liability to third persons in respect to the ship. Whether or not petitioner should be held liable.

Second, charter by demise or bareboat charter under which the HELD:Yes.

whole vessel is let to the charterer with a transfer to him of its entire Thus, in the performance of its contractual obligation to Skyland,
command and possession and consequent control over its petitioner was required to observe the due diligence of a good
navigation, including the master and the crew, who are his father of the family. This much was held in the old but still relevant
servants. The charterer mans the vessel with his own people and case of Baer Senior & Co.’s Successors v. La Compania Maritima
becomes, in where the Court explained that a tug and its owners must observe
effect, the owner for the voyage or service stipulated and hence ordinary diligence in the performance of its obligation under a
liable for damages or loss sustained by the goods transported. contract of towage. The negligence of the obligor in the
performance of the obligation renders him liable for damages for
Clearly, the ‘slot charter arrangement’ between HEUNG-A and the resulting loss suffered by the obligee. Fault or negligence of
DONGNAMA, where the latter is reserved a space in the vessel the obligor consists in his failure to exercise due care and
is a contract of affreightment. The arrangement did not divest prudence in the performance of the obligation as the nature of the
HEUNG-A its character as the common carrier nor relieve it of any obligation so demands.
accountability for the shipment.
In the case at bar, the exercise of ordinary prudence by petitioner
As a common carrier, it is presumed to have been at fault or means ensuring that its tugboat is free of mechanical problems.
negligent if the goods they transported deteriorated or got lost or While adverse weather has always been a real threat to maritime
destroyed, unless they prove that they exercise extraordinary commerce, the least that petitioner could have done was to
diligence in transporting the same. HEUNG-A failed to rebut this ensure that the M/T Count or any of its other tugboats would be
prima facie presumption; hence, it is answerable for the damages able to secure the barge at all times during the engagement. This
incurred by the goods received for transportation. is especially true when considered with the fact that Acuario’s
barge was wholly dependent upon petitioner’s tugboat for
WHEREFORE, all the foregoing considered, the Decision dated propulsion. The barge was not equipped with any engine and
January 30, 2009 of the Court of Appeals in CA-G.R. CV No. needed a tugboat for maneuvering.
89482 is hereby AFFIRMED with MODIFICATION in that the
interest rate on the award of US$8,500.00 shall be six percent Needless to say, if petitioner only subjected the M/T Count to a
(6%) per annum from the date of finality of this judgment until fully more rigid check-up or inspection, the engine malfunction could
paid. 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. 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.
APPEALS and METRO PORT SERVICE, INC. On August 2, 1984, the trial court rendered a decision absolving
G.R. No. 84680, February 5, 1996, (Panganiban, J.) 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
The Supreme Court said in E. Razon Inc. vs. Court of Appeals: 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
Indeed, the provision in the management contract regarding the the short-landed certificate issued by private respondent. The trial
declaration of the actual invoice value before the arrival of the court held:
goods must be understood to mean a declaration before the As between the aforementioned two documentary exhibits, the
arrival of the goods in the custody of the arrastre operator, Court is more inclined to give credence to the cargo receipts. Said
whether it be done long before the landing of the shipment at port, cargo receipts were signed by a checker of defendant NGSC and
or immediately before turn-over thereof to the arrastre operators a representative of Metro Port. It is safe to presume that the cargo
custody. What is essential is knowledge beforehand of the extent receipts accurately describe the quantity and condition of the
of the risk to be undertaken by the arrastre operator, as shipment when it was discharged from the vessel. Metro Ports
determined by the value of the property committed to its care that representative would not have signed the cargo receipts if only 4
it may define its responsibility for loss or damage to such cargo packages were discharged from the vessel and given to the
and to ascertain compensation commensurate to such risk possession and custody of the arrastre operator. Having been
assumed. signed by its representative, the Metro Port is bound by the
contents of the cargo receipts.
In the same case, the Supreme Court added that the advance
notice of the actual invoice of the goods entrusted to the arrastre On the other hand, the Metro Ports shortlanded certificate could
operator is for the purpose of determining its liability, that it may not be given much weight considering that, as correctly argued by
obtain compensation commensurable to the risk it assumes, (and) counsel for defendant NGSC, it was issued by Metro Port alone
not for the purpose of determining the degree of care or diligence and was not countersigned by the representatives of the shipping
it must exercise as a depository or warehouseman since the company and the consignee. Besides, the certificate was
arrastre operator should not discriminate between cargoes of prepared by Atty. Servillano V. Dolina, Second Deputy General
substantial and small values, nor exercise care and caution only Manager of Metro Port, and there is no proof on record that he
for the handling of goods announced to it beforehand to be of was present at the time the subject shipment was unloaded from
sizeable value, for that would be spurning the public service the vessel and received by the arrastre operator. Moreover,
nature of its business. the shortlanded certificate bears the date of March 15, 1982, more
than three months after the discharge of the cargo from the
FACTS carrying vessel.

On November 22, 1981, the S/S Galleon Sapphire, a vessel Neither could the Court give probative value to the marine report
owned by the National Galleon Shipping Corporation (NGSC), . The attending surveyor who attended the unloading of the
arrived at Pier 3, South Harbor, Manila, carrying a shipment shipment did not take the witness stand to testify on said report.
consigned to the order of Caterpillar Far East Ltd. with Semirara Although Transnational Adjustment Co.s general manager,
Coal Corporation (Semirara) as notify party. The shipment, Mariano C. Remorin, was presented as a witness, his testimony
including a bundle of PC 8 U blades, was covered by marine is not competent because he was not present at the time of the
insurance under Certificate No. 82/012-FEZ issued by petitioner discharge of the cargo.
and Bill of Lading No. SF/MLA 1014. The shipment was
discharged from the vessel to the custody of Metro Port Service, Under the foregoing considerations, the Court finds that the 1
Inc. (MPSI), formerly known as E. Razon, Inc., the exclusive bundle of PC8U blade in question was not lost while the cargo was
arrastre operator at the South Harbor. Accordingly, three good- in the custody of the carrying vessel. Considering that the missing
order cargo receipts were issued by NGSC, duly signed by the bundle was discharged from the vessel unto the custody of
ships checker and a representative of private respondent. defendant arrastre operator and considering further that the
consignee did not receive this cargo from the arrastre operator, it
On February 24, 1982, the forwarder, Sterling International is safe to conclude from these facts that said missing cargo was
Brokerage Corporation, withdrew the shipment from the pier and lost while same was in the possession and control of defendant
loaded it on the barge Semirara 8104. When Semirara inspected Metro Port. Defendant Metro Port has not introduced competent
the shipment at its warehouse, it discovered that the bundle of evidence to prove that the loss was not due to its fault or
PC8U blades was missing. Thus, MPSI issued a shortlanded negligence.Consequently, only the Metro Port must answer for the
certificate stating that the bundle of PC8U blades was already value of the missing cargo. Defendant NGSC is absolved of any
missing when it received the shipment from the NGSC vessel. liability for such loss.
Semirara then filed with petitioner, private respondent and NGSC
its claim for P280,969.68, the alleged value of the lost bundle. On appeal, the Court of Appeals modified the decision of the trial
court and reduced MPSI’s liability to P3,500.00.
On September 29, 1982, Summa Insurance Corporation (SIC)
paid Semirara the invoice value of the lost shipment. Semirara ISSUE/S
thereafter executed a release of claim and subrogation receipt. 1. Whether or not an arrastre operator is legally liable for the
Consequently, SIC filed its claims with NGSC and MPSI but it was loss of a shipment in its custody
unsuccessful. 2. If so liable, what is the extent of its liability
CONTRACTOR in any pier, shed, warehouse, facility or other
RULING designated place under the supervision of the BUREAU, x x x

1. YES, since it has been established that the shipment was Interpreting a similar provision in the management contract
lost while in the custody of MPSI, the Supreme Court between MPSI’s predecessor, E. Razon, Inc. and the Bureau of
found MPSI liable for the loss. This is an issue of fact Customs, the Court said in E. Razon Inc. vs. Court of Appeals:
determined by the trial court and respondent Court of Appeals,
which is not reviewable in a petition under Rule 45 of the Rules Indeed, the provision in the management contract regarding
of Court. the declaration of the actual invoice value before the arrival
of the goods must be understood to mean a declaration
SIC was subrogated to the rights of the consignee. The before the arrival of the goods in the custody of the arrastre
relationship therefore between the consignee and the arrastre operator, whether it be done long before the landing of the
operator must be examined. This relationship is much akin to that shipment at port, or immediately before turn- over thereof to
existing between the consignee or owner of shipped goods and the arrastre operators custody. What is essential is
the common carrier, or that between a depositor and a knowledge beforehand of the extent of the risk to be
warehouseman. In the performance of its obligations, an arrastre undertaken by the arrastre operator, as determined by the
operator should observe the same degree of diligence as that value of the property committed to its care that it may define
required of a common carrier and a warehouseman as enunciated its responsibility for loss or damage to such cargo and to
under Article 1733 of the Civil Code and Section 3(b) of the ascertain compensation commensurate to such risk
Warehouse Receipts Law, respectively. Being the custodian of assumed x x x.
the goods discharged from a vessel, an
arrastre operator’s duty is to take good care of the goods and to In the abovementioned case, the Supreme Court added that the
turn them over to the party entitled to their possession. advance notice of the actual invoice of the goods entrusted
to the arrastre operator is for the purpose of determining its
1. The basis of extent of liability is the Management Contract. liability, that it may obtain compensation commensurable to
In the performance of its job, an arrastre operator is bound by the risk it assumes, and not for the purpose of determining
the management contract it had executed with the Bureau of the degree of care or diligence it must exercise as a
Customs. However, a management contract, which is a sort of depository or warehouseman since the arrastre operator
a stipulation pour autrui within the meaning of Article 1311 of should not discriminate between cargoes of substantial and
the Civil Code, is also binding on a consignee because it is small values, nor exercise care and caution only for the
incorporated in the gate pass and delivery receipt which must handling of goods announced to it beforehand to be of
be presented by the consignee before delivery can be effected sizeable value, for that would be spurning the public service
to it. The insurer, as successor-in-interest of the consignee, is nature of its business.
likewise bound by the management contract. Indeed, upon In case at bar, no evidence was offered by SIC proving the
taking delivery of the cargo, a consignee (and necessarily its amount of arrastre fees paid to MPSI so as to put the latter on
successor-in- interest) tacitly accepts the provisions of the notice of the value of the cargo. While SIC alleged that prior to the
management contract, including those which are intended to loss of the package, its value had been relayed to MPSI through
limit the liability of one of the contracting parties, the arrastre the documents the latter had processed, SIC does not
operator. categorically state that among the submitted documents were the
pro forma invoice value and the certified packing list. Neither does
However, a consignee who does not avail of the services of the SIC pretend that these two documents were prerequisites to the
arrastre operator is not bound by the management contract. Such issuance of a permit to deliver or were attachments thereto. Even
an exception to the rule does not obtain here as the consignee did the permit to deliver, upon which petitioner anchors its arguments,
in fact accept delivery of the cargo from the arrastre operator. may not be considered by the Supreme Court because it was not
identified and formally offered in evidence. On the other hand, on
Section 1, Article VI of the Management Contract between MPSI top of its denial that it had received the invoice value and the
and the Bureau of Customs provides: packing list before the discharge of the shipment, MPSI was able
1. Responsibility and Liability for Losses and Damages - The to prove that it was apprised of the value of the cargo only after
CONTRACTOR shall, at its own expense handle all merchandise its discharge from the vessel, ironically through SIC’s claim for the
in the piers and other designated places and at its own expense lost package to which were attached the invoice and packing list.
perform all work undertaken by it hereunder diligently and in a Thus, SIC failed to convince the Supreme Court that the
skillful workmanlike and efficient manner; that the CONTRACTOR requirement of the management contract had been complied with
shall be solely responsible as an independent CONTRACTOR, to entitle it to recover the actual invoice value of the lost shipment.
and hereby agrees to accept liability and to promptly pay to the
steamship company, consignee, consignor or other interested WHEREFORE, the petition for review on certiorari is DENIED and
party or parties for the loss, damage, or non-delivery of cargoes to the decision of the Court of Appeals is AFFIRMED. Costs against
the extent of the actual invoice value of each package which in no petitioner SIC.
case shall be more than Three Thousand Five Hundred Pesos
(P3,500.00) for each package unless the value of the importation 14) EREZO VS JEPTE
is otherwise specified or manifested or communicated in writing G.R. No. L-9605, 30 September 1957, EN BANC (Labrador, J.)
together with the invoice value and supported by a certified
packing list to the CONTRACTOR by the interested party or The registered owner of a motor vehicle is primarily responsible
parties before the discharge of the goods, as well as all damage for the damage caused to the vehicle of the plaintiff-appellee but
that may be suffered on account of loss, damage, or destruction the registered owner has a right to be indemnified by the real or
of any merchandise while in custody or under the control of the actual owner of the
amount that he may be required to pay as damage for the injury number, conspicuously displayed, is one of the precautions taken
caused to the plaintiff-appellant. to reduce the danger of injury to pedestrians and other travelers
from the careless management of automobiles, and to furnish a
FACTS means of ascertaining the identity of persons violating the laws
and ordinances, regulating the speed and operation of machines
Aguedo Jepte is the registered owner of a six by six truck. On upon the highways. Not only are vehicles to be registered and that
August, 9, 1949, while the same was being driven by Rodolfo no motor vehicles are to be used or operated without being
Espino y Garcia, it collided with a taxicab. As the truck went off the properly registered for the current year, but that dealers in motor
street, it hit Ernesto Erezo and another, and the former suffered vehicles shall furnish the Motor Vehicles Office a report showing
injuries, as a result of which he died. The driver was prosecuted for the name and address of each purchaser of motor vehicle during
homicide through reckless negligence where he pleaded guilty the previous month and the manufacturer's serial number and
and was sentenced to suffer imprisonment and to pay the heirs of motor number
Ernesto Erezo the sum of P3,000. As the amount of the judgment
could not be enforced against him, Gaudioso Erezo (Father of Registration is required not to make said registration the operative
Ernesto Erezo) brought this action against the registered owner act by which ownership in vehicles is transferred, as in land
of the truck, Aguedo Jepte. registration cases, because the administrative proceeding of
registration does not bear any essential relation to the contract of
Aguedo Jepte does not deny at the time of the fatal accident the sale between the parties, but to permit the use and operation of
cargo truck driven by Rodolfo Espino y Garcia was registered in the vehicle upon any public. The main aim of motor vehicle
his name. He, however, claims that the vehicle belonged to the registration is to identify the owner so that if any accident
Port Brokerage, of which he was the broker at the time of the happens, or that any damage or injury is caused by the vehicles
accident. He explained, and his explanation was corroborated by on the public highways, responsibility therefore can be fixed on a
Policarpio Franco, the manager of the corporation, that the trucks definite individual, the registered owner.
of the corporation were registered in his name as a convenient
arrangement so as to enable the corporation to pay the Moreover, the law does not allow the registered owner to prove
registration fee with his backpay as a pre-war government who the actual owner is; the law, with its aim and policy in mind,
employee. Franco, however, admitted that the arrangement was does not relieve him directly of the responsibility that the law fixes
not known to the Motor Vehicle Office. and places upon him as an incident or consequence of
registration. Were the registered owner allowed to evade
The trial court held that as Aguedo Jepte represented himself to responsibility by proving who the supposed transferee or owner
be the owner of the truck and the Motor Vehicle Office, relying on is, it would be easy for him by collusion with others or otherwise,
his representation, registered the vehicles in his name, the to escape said responsibility and transfer the same to an indefinite
Government and all persons affected by the representation had person, or to one who possesses no property with which to
the right to rely on his declaration of ownership and registration. respond financially for the damage or injury done.
It, therefore, held that Aguedo Jepte is liable because he cannot
be permitted to repudiate his own declaration 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
Whether or not Jepte is liable for the injuries occasioned to Erezo involving the said vehicle if the same was driven without his
because of the negligence of the driver even if the Jepte was no consent or knowledge and by a person not employed by him.
longer the owner of the vehicle at the time of the damage because
he had previously sold it to another. FACTS

RULING Antonio Sarmiento, Sr. and Virgilio Catuar were aboard a jeep
owned by Ruperto Catuar. Virgilio Catuar was driving the said jeep
The judgment appealed from is hereby affirmed, with costs and was running moderately at 20 to 35 kilometers per hour.
against defendant-appellant Suddenly, another jeep driven by Oscar Sabiniano hit and
bumped Catuar’s jeep on the portion near the left rear wheel, and
YES. 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,
In synthesis, the Court held that the registered owner, Aguedo particularly the windshield, the differential, the part near the left
Jepte, primarily responsible for the damage caused to the vehicle rear wheel and the top cover of the jeep. Catuar was thrown to
of Erezo, but he has a right to be indemnified by the real or actual the middle of the road, his wrist was broken and he sustained
owner of the amount that he may be required to pay as damage contusions on the head. Likewise Sarmiento, Sr. was trapped
for the injury caused to Erezo. inside the fallen jeep, and one of his legs was fractured.

Registered owner of a certificate of public convenience is liable to Catuar and Sarmiento filed a civil case both against Oscar
the public for the injuries or damages suffered by passengers or Sabiniano as driver, and against Gualberto Duavit as owner of the
third persons caused by the operation of said vehicle, even jeep for the damage to the jeep and medical expenses for the
though the same had been transferred to a third person at the time injuries they have suffered. Duavit, admitted ownership of the jeep
of the accident. but claimed that he has not employed Sabiniano. Sabiniano
The Revised Motor Vehicle Law provides that no vehicle may be admitted that he took the jeep from the garage of Duavit without the
used or operated upon any public highway unless the same is latter’s consent or authority. But, in an attempt to exculpate himself
properly registered. It has been stated that the system of licensing from liability, Sabiniano makes it appear that he was taking all
and the requirement that each machine must carry a registration necessary precaution while driving and the accident occurred due
to the negligence of Catuar. Sabiniano claims that it was Catuar’s ascertained after trial that Amare, was at fault when the mishap
vehicle which hit and bumped their jeep. occurred, and was found guilty beyond reasonable doubt of
reckless imprudence resulting in triple homicide with multiple
The trial court found Sabiniano negligent in driving the vehicle but physical injuries with damage to property. Also, BA Finance was
found no employer-employee relationship between him and the adjudged liable for damages because the truck was registered in
Duavit. But the Court of Appeals (CA) held Duavit jointly and its name during the incident. On the other hand, Rock Component
severally liable with Sabiniano relying on Erezo v. Jepte and Philippines, Inc. was ordered to reimburse BA Finance for any
Vargas v. Langcay. CA ruled that the registered owner is the amount that the latter may be adjudged liable to, as expressly
employer of the driver in contemplation of law. It is a conclusive stipulated in the contract of lease between them. Moreover, the
presumption of fact and law, and is not subject to rebuttal of proof trial court applied Article 2194 of the new Civil Code on solidary
to the contrary. Hence a petition to annul the decision of the CA accountability of joint tortfeasors insofar as the liability of the
was filed by Duavit before the Supreme Court. driver, BA Finance and Rock Component Philippines was
The Court of Appeals affirmed the appealed disposition in toto. On
Whether or not the owner of a private vehicle which figured in an the question of whether petitioner can be held responsible to the
accident can be held liable under Art. 2180 of the Civil Code when victims albeit the truck was leased to Rock Component
it was neither driven by an employee of the owner nor taken with Philippines when the incident occurred, the appellate court
the consent of the latter. answered in the affirmative on the basis of the jurisprudential
Hence, a petition for review on certiorari was filed before the
NO. As early as in 1939, The Court has ruled that an owner of a Supreme Court by the BA Finance with regard its responsibility
vehicle cannot be held liable for an accident involving the said for damages on the accident occurred.
vehicle if the same was driven without his consent or knowledge
and by a person not employed by him. Thus, in Duquillo v. Bayot ISSUE
the Court said that registered owner cannot be held liable for
anything for at the time of the accident, the driver was not an Whether or not BA Finance can be held responsible to the victims
employee of the registered owner, nor did he have anything to do albeit the truck was leased to Rock Component Philippines when
with the latter's business. Moreover, the use of the defendant's the incident occurred.
truck in the circumstances indicated was done without her consent
or knowledge. RULING

In this case, Duavit does not deny ownership of the vehicle YES, BA finance can be held responsible to the victims.
involved in tire mishap but completely denies having employed the
driver Sabiniano or even having authorized the latter to drive his In the previous decisions by the Court, the registered owner of a
jeep. The jeep was virtually stolen from the petitioner's garage. To certificate of public convenience is liable to the public for the
hold, therefore, the Duavit liable for the accident caused by the injuries or damages suffered by passengers or third persons
negligence of Sabiniano who was neither his driver nor employee caused by the operation of said vehicle, even though the same
would be absurd as it would be like holding liable the owner of a had been transferred to a third person. The principle upon which
stolen vehicle for an accident caused by the person who stole the doctrine is based is that in dealing with vehicles registered
such vehicle. In this regard, the Court cannot ignore the many under the Public Service Law, the public has the right to assume
cases of vehicles forcibly taken from their owners at gunpoint or or presume that the registered owner is the actual owner thereof,
stolen from garages and for it would be difficult for the public to enforce the actions that they
parking areas and the instances of service station attendants or may have for injuries caused to them by the vehicles being
mechanics of auto repair shops using, without the owner's negligently operated if the public should be required to prove who
consent, vehicles entrusted to them for servicing or repair. the actual owner is. However, the Court does not imply by this
doctrine, that the registered owner may not recover whatever
WHEREFORE, the petition is GRANTED and the decision and amount he had paid by virtue of his liability to third persons from
resolution appealed from are hereby ANNULLED and SET the person to whom he had actually sold, assigned or conveyed
ASIDE. The decision of the Regional Trial Court of Laguna, 8th the vehicle.
Judicial District, Branch 6 REINSTATED. The Revised Motor Vehicles Law (Act No. 3992, as amended)
provides that no vehicle may be used or operated upon any public
16) BA FINANCE CORPORATION v. COURT OF APPEALS, highway unless the same is properly registered. The main aim of
REGIONAL motor vehicle registration is to identify the owner so that if any
G.R. No. 98275, 13 November 1992, THIRD DIVISION (Melo, accident happens, or that any damage or injury is caused by the
J.) vehicle on the public highways, responsibility therefor can be fixed
on a definite individual, the registered owner.
The registered owner is liable to the public for the injuries or In synthesis, the Court hold that the registered owner, is primarily
damages suffered by passengers or third persons caused by the responsible for the damage caused to the vehicle, but he has a
operation of said vehicle, even though the same had been right to be indemnified by the real or actual owner of the amount
transferred to a third person. that he may be required to pay as damage for the injury caused.
Applying the foregoing in solving the circumstance, where the
An accident occurred involving BA Finance Corporation’s (BA vehicle had been alienated or sold to another, there is no
Finance) Isuzu ten-wheeler truck driven by an employee of Lino exception against utilizing the same rationale to the antecedents
Castro, Rogelio Villar y Amera (Amera). The lower court 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