Transportation law part 1

Transportation Law |1 msmhernandez
De Guzman vs CA G.R. No. L-47822 December 22, 1988 PEDRO DE GUZMAN, petitioner, vs. COURT OF APPEALS and ERNESTO CENDANA, respondents. Facts:  Respondent Ernesto Cendana, a junk dealer, He utilized two (2) six-wheeler trucks which he owned for hauling the material to Manila.  Sometime in November 1970, petitioner Pedro de Guzman a merchant and authorized dealer of General Milk Company (Philippines), Inc. in Urdaneta, Pangasinan, contracted with respondent for the hauling of 750 cartons of Liberty filled milk from a warehouse of General Milk in Makati, Rizal, to petitioner's establishment in Urdaneta on or before 4 December 1970.  Respondent loaded in Makati the merchandise on to his trucks: 150 cartons were loaded on a truck driven by respondent himself, while 600 cartons were placed on board the other truck which was driven by Manuel Estrada, respondent's driver and employee.  Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes never reached petitioner, since the truck which carried these boxes was hijacked somewhere along the MacArthur Highway in Paniqui, Tarlac, by armed men who took with them the truck, its driver, his helper and the cargo.  Petitioner commenced action against private respondent in the Court of First Instance of Pangasinan, demanding payment of P 22,150.00, the claimed value of the lost merchandise, plus damages and attorney's fees. Petitioner argued that private respondent, being a common carrier, and having failed to exercise the extraordinary diligence required of him by the law, should be held liable for the value of the undelivered goods.  The trial court rendered a Decision 1 finding private respondent to be a common carrier and holding him liable for the value of the undelivered goods (P 22,150.00) as well as for P 4,000.00 as damages and P 2,000.00 as attorney's fees.  On appeal before the Court of Appeals, respondent urged that the trial court had erred in considering him a common carrier; in finding that he had habitually offered trucking services to the public; in not exempting him from liability on the ground of force majeure; and in ordering him to pay damages and attorney's fees.  The Court of Appeals reversed the judgment of the trial court and held that respondent had been engaged in transporting return loads of freight "as a casual occupation — a sideline to his scrap iron business" and not as a common carrier. Petitioner came to this Court by way of a Petition for Review. Issue #1:  whether or not private respondent Ernesto Cendana may, under the facts earlier set forth, be properly characterized as a common carrier. Held: yes!  It appears to the Court that private respondent is properly characterized as a common carrier even though he merely "backhauled" goods for other merchants from Manila to Pangasinan, although such back-hauling was done on a periodic or occasional rather than regular or scheduled manner, and even though private respondent'sprincipal occupation was not the carriage of goods for others. There is no dispute that private respondent charged his customers a fee for hauling their goods; that fee frequently fell below commercial freight rates is not relevant here. Issue #2:  WON private respondent as a common carrier is liable. Held: no!  In these circumstances, we hold that the occurrence of the loss must reasonably be regarded as quite beyond the control of the common carrier and properly regarded as a fortuitous event. It is necessary to recall that even common carriers are not made absolute insurers against all risks of travel and of transport of goods, and are not held liable for acts or events which cannot be foreseen or are inevitable, provided that they shall have complied with the rigorous standard of extraordinary diligence.  We, therefore, agree with the result reached by the Court of Appeals that private respondent Cendana is not liable for the value of the undelivered merchandise which was lost because of an event entirely beyond private respondent's control. Note:  Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public.  No distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity (in local Idiom as "a sideline").  Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population. We think that Article 1733 deliberaom making such distinctions  A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers.  That liability arises the moment a person or firm acts as a common carrier, without regard to whether or not such carrier has also complied with the requirements of the applicable regulatory statute and implementing regulations and has been granted a certificate of public convenience or other franchise.  Article 1734 establishes the general rule that common carriers are responsible for the loss, destruction or deterioration of the goods which they carry, "unless the same is due to any of the following causes only: (1) Flood, storm, earthquake, lightning or other natural disaster or calamity; (2) Act of the public enemy in war, whether international or civil; (3) Act or omission of the shipper or owner of the goods; (4) The character-of the goods or defects in the packing or-in the containers; and (5) Order or act of competent public authority.  Common carriers, "by the nature of their business and for reasons of public policy" 2 are held to a very high degree of care and diligence ("extraordinary diligence") in the carriage of goods as well as of passengers. The specific import of extraordinary diligence in the care of goods transported by a common carrier is, according to Article 1733, "further expressed in Articles 1734,1735 and 1745, numbers 5, 6 and 7" of the Civil Code. A.F Sanchez Brokerage vs CA G.R. No. 147079 December 21, 2004 A.F. SANCHEZ BROKERAGE INC., petitioners, vs. THE HON. COURT OF APPEALS and FGU INSURANCE CORPORATION, respondents. Facts:  Wyeth-Pharma GMBH shipped on board an aircraft of KLM Royal Dutch Airlines at Dusseldorf, Germany for delivery to Manila in favor of the consignee, Wyeth-Suaco Laboratories, Inc.  Wyeth-Suaco insured the shipment against all risks with FGU Insurance.  In order to secure the release of the cargoes from the PSI and the Bureau of Customs, Wyeth-Suaco engaged the services of Sanchez

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Brokerage which had been its licensed broker since 1984.8 As its customs broker, Sanchez Brokerage calculates and pays the customs duties, taxes and storage fees for the cargo and thereafter delivers it to Wyeth-Suaco.  Wyeth-Suaco being a regular importer, the customs examiner did not inspect the cargoes13 which were thereupon stripped from the aluminum containers14 and loaded inside two transport vehicles hired by Sanchez Brokerage.  Wyeth-Suaco issued a Notice of Materials Rejection27 of 38 cartons of Femenal and 3 cartons of Nordiol on the ground that they were "delivered to Hizon Laboratories with heavy water damaged (sic) causing the cartons to sagged (sic) emitting a foul order and easily attracted flies."28  Wyeth-Suaco later demanded, by letter29 from Sanchez Brokerage the payment ofP191,384.25 representing the value of its loss arising from the damaged tablets.  As the Sanchez Brokerage refused to heed the demand, Wyeth-Suaco filed an insurance claim against FGU Insurance which paid Wyeth-Suaco the amount of P181,431.49 in settlement of its claim under Marine Risk Note Number 4995.  Wyeth-Suaco thus issued Subrogation Receipt30 in favor of FGU Insurance.  Hence, the filing by FGU Insurance of a complaint for damages before the Regional Trial Court of Makati City against the Sanchez Brokerage.  The trial court, by Decision34 of July 29, 1996, dismissed the complaint, holding that the Survey Report prepared by the Elite Surveyors is bereft of any evidentiary support and a mere product of pure guesswork.35  On appeal, the appellate court reversed the decision of the trial court, it holding that the Sanchez Brokerage engaged not only in the business of customs brokerage but also in the transportation and delivery of the cargo of its clients, hence, a common carrier within the context of Article 1732 of the New Civil Code.  Sanchez Brokerage’s Motion for Reconsideration having been denied by the appellate court’s Resolution of December 8, 2000 which was received by petitioner on January 5, 2001, it comes to this Court on petition for certiorari filed on March 6, 2001. Issue:  WON the Sanchez Brokerage engaged not only in the business of customs brokerage but also in the transportation and delivery of the cargo of its clients, hence, a common carrier within the context of Article 1732 of the New Civil Code. Held: yes!. The appellate court did not err in finding petitioner, a customs broker, to be also a common carrier, as defined under Article 1732 of the Civil Code.  Article 1732 does not distinguish between one whose principal business activity is the carrying of goods and one who does such carrying only as an ancillary activity.44 The contention, therefore, of petitioner that it is not a common carrier but a customs broker whose principal function is to prepare the correct customs declaration and proper shipping documents as required by law is bereft of merit. It suffices that petitioner undertakes to deliver the goods for pecuniary consideration.  In this light, petitioner as a common carrier is mandated to observe, under Article 173345 of the Civil Code, extraordinary diligence in the vigilance over the goods it transports according to all the circumstances of each case. In the event that the goods are lost, destroyed or deteriorated, it is presumed to have been at fault or to have acted negligently, unless it proves that it observed extraordinary diligence.  Since petitioner received all the cargoes in good order and condition at the time they were turned over by the PSI warehouseman, and upon their delivery to Hizon Laboratories, Inc. a portion thereof was found to be in bad order, it was incumbent on petitioner to prove that it exercised extraordinary diligence in the carriage of the goods. It did not, however. Hence, its presumed negligence under Article 1735 of the Civil Code remains unrebutted.  WHEREFORE, the August 10, 2000 Decision of the Court of Appeals is hereby AFFIRMED. Note:  The concept of "extra-ordinary diligence" was explained in Compania Maritima v. Court of Appeals:47 The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to it for sale, carriage and delivery. It requires common carriers to render service with the greatest skill and foresight and "to use all reasonable means to ascertain the nature and characteristics of goods tendered for shipment, and to exercise due care in the handling and stowage, including such methods as their nature requires."  paragraph No. 4 of Article 173455 of the Civil Code exempts a common carrier from liability if the loss or damage is due to the character of the goods or defects in the packing or in the containers, the rule is that if the improper packing is known to the carrier or his employees or is apparent upon ordinary observation, but he nevertheless accepts the same without protest or exception notwithstanding such condition, he is not relieved of liability for the resulting damage. First Philippine Industrial Corporation vs. CA G.R. No. 125948 December 29, 1998 FIRST PHILIPPINE INDUSTRIAL CORPORATION, petitioner, vs. COURT OF APPEALS, HONORABLE PATERNO V. TAC-AN, BATANGAS CITY and ADORACION C. ARELLANO, in her official capacity as City Treasurer of Batangas, respondents Facts:  Petitioner is a grantee of a pipeline concession under Republic Act No. 387, as amended, to contract, install and operate oil pipelines.  petitioner applied for a mayor's permit with the Office of the Mayor of Batangas City. However, before the mayor's permit could be issued, the respondent City Treasurer required petitioner to pay a local tax based on its gross receipts for the fiscal year 1993 pursuant to the Local Government Code 3  filed a letter-protest addressed to the respondent City Treasurer, the respondent City Treasurer denied the protest contending that petitioner cannot be considered engaged in transportation business, thus it cannot claim exemption under Section 133 (j) of the Local Government Code.  Petitioner filed with the Regional Trial Court of Batangas City a complaint 6 for tax refund with prayer for writ of preliminary injunction against respondents City of Batangas and Adoracion Arellano in her capacity as City Treasurer.  the trial court rendered a decision dismissing the complaint, Petitioner assailed the aforesaid decision before this Court via a petition for review. we referred the case to the respondent Court of Appeals for consideration and adjudication. the respondent court rendered a decision 11 affirming the trial court's dismissal of petitioner's complaint. Petitioner's motion for reconsideration was denied.  Hence, this petition. At first, the petition was denied due course in a Resolution dated November 11, 1996. 13 Petitioner moved for a reconsideration which was granted by this Court in a Resolution 14 of January 22, 1997. Thus, the petition was reinstated. Issue:  WON the petitioner is a common carrier or a transportation contractor hence exempted from local tax. Held: yes!.  Based on the definitions and requirements, there is no doubt that petitioner is a common carrier. It is engaged in the business of transporting or carrying goods, i.e. petroleum products, for hire as a public employment. It undertakes to carry for all persons indifferently, that is, to all persons who choose to employ its services, and transports the goods by land and for compensation. The fact that

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petitioner has a limited clientele does not exclude it from the definition of a common carrier.  Under the Petroleum Act of the Philippines (Republic Act 387), petitioner is considered a "common carrier.” Republic Act 387 also regards petroleum operation as a public utility. The Bureau of Internal Revenue likewise considers the petitioner a "common carrier."  From the foregoing disquisition, there is no doubt that petitioner is a "common carrier" and, therefore, exempt from the business tax as provided for in Section 133 (j), of the Local Government Code,  It is clear that the legislative intent in excluding from the taxing power of the local government unit the imposition of business tax against common carriers is to prevent a duplication of the socalled "common carrier's tax."  Petitioner is already paying three (3%) percent common carrier's tax on its gross sales/earnings under the National Internal Revenue Code. 19 To tax petitioner again on its gross receipts in its transportation of petroleum business would defeat the purpose of the Local Government Code.  WHEREFORE, the petition is hereby GRANTED. Note:  The test for determining whether a party is a common carrier of goods is: 1. He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to engage in the transportation of goods for person generally as a business and not as a casual occupation; 2. He must undertake to carry goods of the kind to which his business is confined; 3. He must undertake to carry by the method by which his business is conducted and over his established roads; and 4. The transportation must be for hire. 15 National Steel Corporation vs. CA G.R. No. 112287 December 12, 1997 NATIONAL STEEL CORPORATION, petitioner, vs. COURT OF APPEALS AND VLASONS SHIPPING, INC., respondents. G.R. No. 112350 December 12, 1997 VLASONS SHIPPING, INC., petitioner, vs. COURT OF APPEALS AND NATIONAL STEEL CORPORATION, respondents Facts:  plaintiff National Steel Corporation (NSC) as Charterer and defendant Vlasons Shipping, Inc. (VSI) as Owner, entered into a Contract of Voyage Charter Hire whereby NSC hired VSI's vessel, the MV "VLASONS I" to make one (1) voyage to load steel products at Iligan City and discharge them at North Harbor, Manila.  plaintiff filed with the defendant its claim for damages suffered due to the downgrading of the damaged tinplates in the amount of P941,145.18.  Then plaintiff formally demanded payment of said claim but defendant VSI refused and failed to pay. Plaintiff filed its complaint against defendant beefore CFI, Rizal.  From the evidence presented by both parties, the trial court came out with the claim of the plaintiff that defendant violated the contract of carriage is not supported by evidence. The provisions of the Civil Code on common carriers pursuant to which there exists a presumption of negligence in case of loss or damage to the cargo are not applicable.  Appealing the RTC decision to the Court of Appeals, the Court of Appeals modified the decision of the trial court by reducing the demurrage from P88,000.00 to P44,000.00 and deleting the award of attorneys fees and expenses of litigation. NSC and VSI filed separate motions for reconsiderationthe appellate court denied both motions. Undaunted, NSC and VSI filed their respective petitions for review before this Court. On motion of VSI, the Court ordered on February 14, 1994 the consolidation of these petitions. Issue:  Whether or not the provisions of the Civil Code of the Philippines on common carriers pursuant to which there exist[s] a presumption of negligence against the common carrier in case of loss or damage to the cargo are applicable to a private carrier.

Held: no!  As correctly concluded by the Court of Appeals, the MV Vlasons I "was not a common but a private carrier." 14Consequently, the rights and obligations of VSI and NSC, including their respective liability for damage to the cargo, are determined primarily by stipulations in their contract of private carriage or charter party.  Because the MV Vlasons I was a private carrier, the shipowner's obligations are governed by the foregoing provisions of the Code of Commerce and not by the Civil Code which, as a general rule, places the prima facie presumption of negligence on a common carrier. It is a hornbook doctrine that:

In an action against a private carrier for loss of, or injury to, cargo, the burden is on the plaintiff to prove that the carrier was negligent or unseaworthy, and the fact that the goods were lost or damaged while in the carrier's custody does not put the burden of proof on the carrier.


two formidable truths.  First, both lower courts found that such damage was brought about during the unloading process when rain and seawater seeped through the cargo due to the fault or negligence of the stevedores employed by it.  Second, the agreement between the parties — the Contract of Voyage Charter Hire — placed the burden of proof for such loss or damage upon the shipper, not upon the shipowner. Such stipulation, while disadvantageous to NSC, is valid because the parties entered into a contract of private charter, not one of common carriage. Basic too is the doctrine that courts cannot relieve a parry from the effects of a private contract freely entered into, on the ground that it is allegedly one-sided or unfair to the plaintiff. The charter party is a normal commercial contract and its stipulations are agreed upon in consideration of many factors, not the least of which is the transport price which is determined not only by the actual costs but also by the risks and burdens assumed by the shipper in regard to possible loss or damage to the cargo. In recognition of such factors, the parties even stipulated that the shipper should insure the cargo to protect itself from the risks it undertook under the charter party. That NSC failed or neglected to protect itself with such insurance should not adversely affect VSI, which had nothing to do with such failure or neglect.

 WHEREFORE, premises considered, the instant consolidated petitions are hereby DENIED. The questioned Decision of the Court of Appeals is AFFIRMED with the MODIFICATION that the demurrage awarded to VSI is deleted. Note:  It has been held that the true test of a common carrier is the carriage of passengers or goods, provided it has space, for all who opt to avail themselves of its transportation service for a fee. 11 A carrier which does not qualify under the above test is deemed a private carrier.  "Generally, private carriage is undertaken by special agreement and the carrier does not hold himself out to carry goods for the general public.The most typical, although not the only form of private carriage, is the charter party, a maritime contract by which the charterer, a party other than the shipowner, obtains the use and service of all or some part of a ship for a period of time or a voyage or voyages.

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Bascos vs CA G.R. No. 101089. April 7, 1993. ESTRELLITA M. BASCOS, petitioners, vs. COURT OF APPEALS and RODOLFO A. CIPRIANO, respondents Facts:  Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE for short) entered into a hauling contract 2 with Jibfair Shipping Agency Corporation whereby the former bound itself to haul the latter's 2,000 m/tons of soya bean meal from Magallanes Drive, Del Pan, Manila to the warehouse of Purefoods Corporation in Calamba, Laguna.  To carry out its obligation, CIPTRADE, through Rodolfo Cipriano, subcontracted with Estrellita Bascos (petitioner) to transport and to deliver 400 sacks of soya bean meal worth P156,404.00 from the Manila Port Area to Calamba, Laguna at the rate of P50.00 per metric ton. Petitioner failed to deliver the said cargo.  As a consequence of that failure, Cipriano paid Jibfair Shipping Agency the amount of the lost goods in accordance with the contract.  Cipriano demanded reimbursement from petitioner but the latter refused to pay. Eventually, Cipriano filed a complaint for a sum of money and damages with writ of preliminary attachment 4 for breach of a contract of carriage.  the trial court rendered a decision favor of plaintiff and against defendant ordering the latter to pay the former.  Petitioner appealed to the Court of Appeals but respondent Court affirmed the trial court's judgment. Consequently, petitioner filed this petition. Issue #1:  WON private respondent is carriage of goods and not lease of cargo truck. Held: yes! We agree with the respondent Court in its finding that petitioner is a common carrier.  In this case, petitioner herself has made the admission that she was in the trucking business, offering her trucks to those with cargo to move. Judicial admissions are conclusive and no evidence is required to prove the same.  Regarding the affidavits presented by petitioner to the court, both the trial and appellate courts have dismissed them as self-serving and petitioner contests the conclusion. We are bound by the appellate court's factual conclusions. Yet, granting that the said evidence were not self-serving, the same were not sufficient to prove that the contract was one of lease. Issue #2: WON loss of the goods is due to force majeure. Held: no! We affirm the holding of the respondent court that the loss of the goods was not due to force majeure.  We are bound by the conclusion of the appellate court. In a petition for review on certiorari, We are not to determine the probative value of evidence but to resolve questions of law. Secondly, the affidavit of Jesus Bascos did not dwell on how the hijacking took place. Thirdly, while the affidavit of Juanito Morden, the truck helper in the hijacked truck, was presented as evidence in court, he himself was a witness as could be gleaned from the contents of the petition. Affidavits are not considered the best evidence if the affiants are available as witnesses. 25 The subsequent filing of the information for carnapping and robbery against the accused named in said affidavits did not necessarily mean that the contents of the affidavits were true because they were yet to be determined in the trial of the criminal cases.  The presumption of negligence was raised against petitioner. It was petitioner's burden to overcome it. Thus, contrary to her assertion, private respondent need not introduce any evidence to prove her negligence. Her own failure to adduce sufficient proof of extraordinary diligence made the presumption conclusive against her Note:  It must be understood that a contract is what the law defines it to be and not what it is called by the contracting parties. 15 Furthermore, petitioner presented no other proof of the existence of the contract of lease. He who alleges a fact has the burden of proving it.  Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods transported by them. 17 Accordingly, they are presumed to have been at fault or to have acted negligently if the goods are lost, destroyed or deteriorated. 18 There are very few instances when the presumption of negligence does not attach and these instances are enumerated in Article 1734. 19 In those cases where the presumption is applied, the common carrier must prove that it exercised extraordinary diligence in order to overcome the presumption  "Under Article 1745 (6), a common carrier is held responsible — and will not be allowed to divest or to diminish such responsibility — even for acts of strangers like thieves or robbers except where such thieves or robbers in fact acted with grave or irresistible threat, violence or force. We believe and so hold that the limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the goods are lost as a result of a robbery which is attended by "grave or irresistible threat, violence or force."

Planters Products, Inc vs. CA G.R. No. 101503 September 15, 1993 PLANTERS PRODUCTS, INC., petitioner, vs. COURT OF APPEALS, SORIAMONT STEAMSHIP AGENCIES AND KYOSEI KISEN KABUSHIKI KAISHA,respondents Facts:  Planters Products, Inc. (PPI), purchased from Mitsubishi International Corporation (MITSUBISHI) of New York, U.S.A., 9,329.7069 metric tons (M/T) of Urea 46% fertilizer which the latter shipped in bulk aboard the cargo vessel M/V "Sun Plum" owned by private respondent Kyosei Kisen Kabushiki Kaisha (KKKK) from Kenai, Alaska, U.S.A., to Poro Point, San Fernando, La Union, Philippines.  prior to its voyage, a time charter-party on the vessel M/V "Sun Plum" pursuant to the Uniform General Charter 2 was entered into between Mitsubishi as shipper/charterer and KKKK as shipowner, in Tokyo, Japan.  A private marine and cargo surveyor, Cargo Superintendents Company Inc. (CSCI), was hired by PPI to determine the "outturn" of the cargo shipped, by taking draft readings of the vessel prior to and after discharge. 11 The survey report submitted by CSCI to the consignee (PPI) revealed a shortage in the cargo of 106.726 M/T and that a portion of the Urea fertilizer approximating 18 M/T was contaminated with dirt.  PPI sent a claim letter to Soriamont Steamship Agencies (SSA), the resident agent of the carrier, KKKK, for P245,969.31 representing the cost of the alleged shortage in the goods shipped and the diminution in value of that portion said to have been contaminated with dirt.  PPI filed an action for damages with the Court of First Instance of Manila.The court a quo however sustained the claim of the plaintiff against the defendant carrier for the value of the goods lost or damaged.

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 On appeal, respondent Court of Appeals reversed the lower court and absolved the carrier from liability for the value of the cargo that was lost or damaged and that the cargo vessel M/V "Sun Plum" owned by private respondent KKKK was a private carrier and not a common carrier by reason of the time charterer-party.  Petitioner PPI appeals to us by way of a petition for review. Issue #1:  Whether a common carrier becomes a private carrier by reason of a charter-party. Held: no.  It is not disputed that respondent carrier, in the ordinary course of business, operates as a common carrier, transporting goods indiscriminately for all persons. When petitioner chartered the vessel M/V "Sun Plum", the ship captain, its officers and compliment were under the employ of the shipowner and therefore continued to be under its direct supervision and control. Hardly then can we charge the charterer, a stranger to the crew and to the ship, with the duty of caring for his cargo when the charterer did not have any control of the means in doing so. This is evident in the present case considering that the steering of the ship, the manning of the decks, the determination of the course of the voyage and other technical incidents of maritime navigation were all consigned to the officers and crew who were screened, chosen and hired by the shipowner. 27  It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the whole or portion of a vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a time-charter or voyage-charter. It is only when the charter includes both the vessel and its crew, as in a bareboat or demise that a common carrier becomes private, at least insofar as the particular voyage covering the charter-party is concerned. Indubitably, a shipowner in a time or voyage charter retains possession and control of the ship, although her holds may, for the moment, be the property of the charterer. Issue #2:  WON the shipowner in the instant case was able to prove that he had exercised that degree of diligence required of him under the law. Held: yes. Respondent carrier has sufficiently overcome, by clear and convincing proof, the prima facie presumption of negligence.  we agree with respondent carrier that bulk shipment of highly soluble goods like fertilizer carries with it the risk of loss or damage. More so, with a variable weather condition prevalent during its unloading, as was the case at bar. This is a risk the shipper or the owner of the goods has to face. Clearly, respondent carrier has sufficiently proved the inherent character of the goods which makes it highly vulnerable to deterioration; as well as the inadequacy of its packaging which further contributed to the loss. On the other hand, no proof was adduced by the petitioner showing that the carrier was remise in the exercise of due diligence in order to minimize the loss or damage to the goods it carried.  WHEREFORE, the petition is DISMISSED. The assailed decision of the Court of Appeals, which reversed the trial court, is AFFIRMED. Consequently, Civil Case No. 98623 of the then Court of the First Instance, now Regional Trial Court, of Manila should be, as it is hereby DISMISSED. Note:  A "charter-party" is defined as a contract by which an entireship, or some principal part thereof, is let by the owner to anotherperson for a specified time or use; 20 a contract of affreightment bywhich the owner of a ship or other vessel lets the whole or a part ofher to a merchant or other person for the conveyance of goods, on aparticular voyage, in consideration of the payment of freight; 21  Charter parties are of two types: (a) contract of affreightment which involves the use of shipping space on vessels leased by the owner in part or as a whole, to carry goods for others; and, (b) charter by demise or bareboat charter, by the terms of which the whole vessel is let to the charterer with a transfer to him of its entire command and possession and consequent control over its navigation, including the master and the crew, who are his servants.  Contract of affreightment may either be time charter, wherein the vessel is leased to the charterer for a fixed period of time, or voyage charter, wherein the ship is leased for a single voyage. 22 In both cases, the charter-party provides for the hire of vessel only, either for a determinate period of time or for a single or consecutive voyage, the shipowner to supply the ship's stores, pay for the wages of the master and the crew, and defray the expenses for the maintenance of the ship.  Upon the other hand, the term "common or public carrier" is defined in Art. 1732 of the Civil Code. 23 The definition extends to carriers either by land, air or water which hold themselves out as ready to engage in carrying goods or transporting passengers or both for compensation as a public employment and not as a casual occupation.  The distinction between a "common or public carrier" and a "private or special carrier" lies in the character of the business, such that if the undertaking is a single transaction, not a part of the general business or occupation, although involving the carriage of goods for a fee, the person or corporation offering such service is a private carrier.  Article 1733 of the New Civil Code mandates that common carriers, by reason of the nature of their business, should observe extraordinary diligence in the vigilance over the goods they carry. In the case of private carriers, however, the exercise of ordinary diligence in the carriage of goods will suffice. Moreover, in the case of loss, destruction or deterioration of the goods, common carriers are presumed to have been at fault or to have acted negligently, and the burden of proving otherwise rests on them. 26 On the contrary, no such presumption applies to private carriers, for whosoever alleges damage to or deterioration of the goods carried has the onus of proving that the cause was the negligence of the carrier.  Article 1734 of the New Civil Code provides that common carriers are not responsible for the loss, destruction or deterioration of the goods if caused by the charterer of the goods or defects in the packaging or in the containers.  The Code of Commerce also provides that all losses and deterioration which the goods may suffer during the transportation by reason of fortuitous event, force majeure, or the inherent defect of the goods, shall be for the account and risk of the shipper, and that proof of these accidents is incumbent upon the carrier. 37 The carrier, nonetheless, shall be liable for the loss and damage resulting from the preceding causes if it is proved, as against him, that they arose through his negligence or by reason of his having failed to take the precautions which usage has established among careful persons.

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Philippine American General Insurance Company vs. PKS Shipping Company G.R. No. 149038 April 9, 2003 PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY, petitioner, vs. PKS SHIPPING COMPANY, respondent. Facts:  Davao Union Marketing Corporation (DUMC) contracted the services of respondent PKS Shipping Company (PKS Shipping) for the shipment to Tacloban City of 75,000 bags of cement worth Three Million Three Hundred Seventy-Five Thousand Pesos (P3,375,000.00).  DUMC insured the goods for its full value with petitioner Philippine American General Insurance Company (Philamgen).  The goods were loaded aboard the dumb barge Limar I belonging to PKS Shipping. On the evening of 22 December 1988, about nine o’clock, while Limar I was being towed by respondent’s tugboat, MT Iron Eagle, the barge sank a couple of miles off the coast of Dumagasa Point, in Zamboanga del Sur, bringing down with it the entire cargo of 75,000 bags of cement.  DUMC filed a formal claim with Philamgen for the full amount of the insurance. Philamgen promptly made payment; it then sought reimbursement from PKS Shipping of the sum paid to DUMC but the shipping company refused to pay, prompting Philamgen to file suit against PKS Shipping with the Makati RTC.  The RTC dismissed the complaint after finding that the total loss of the cargo could have been caused either by a fortuitous event, in which case the ship owner was not liable, or through the negligence of the captain and crew of the vessel.  Philamgen interposed an appeal to the Court of Appeals which affirmed in toto the decision of the trial court. It then concluded that PKS Shipping, not being a common carrier, was not expected to observe the stringent extraordinary diligence required of common carriers in the care of goods. The appellate court, moreover, found that the loss of the goods was sufficiently established as having been due to fortuitous event, negating any liability on the part of PKS Shipping to the shipper. Issue:  Coastguard and the Coastwise Load Line Certificate would attest to the seaworthiness of Limar I and should strengthen the factual findings of the appellate court.  All given then, the appellate court did not err in its judgment absolving PKS Shipping from liability for the loss of the DUMC cargo.  WHEREFORE, the petition is DENIED Note:  Much of the distinction between a "common or public carrier" and a "private or special carrier" lies in the character of the business, such that if the undertaking is an isolated transaction, not a part of the business or occupation, and the carrier does not hold itself out to carry the goods for the general public or to a limited clientele, although involving the carriage of goods for a fee,3 the person or corporation providing such service could very well be just a private carrier. A typical case is that of a charter party which includes both the vessel and its crew, such as in a bareboat or demise, where the charterer obtains the use and service of all or some part of a ship for a period of time or a voyage or voyages4 and gets the control of the vessel and its crew. Asia Lighterage And Shipping Company Co. vs CA G.R. No. 147246 August 19, 2003 ASIA LIGHTERAGE AND SHIPPING, INC., petitioner, vs. COURT OF APPEALS and PRUDENTIAL GUARANTEE AND ASSURANCE, INC., respondents Facts:  3,150 metric tons of Better Western White Wheat in bulk, was shipped by Marubeni American Corporation of Portland, Oregon on board the vessel M/V NEO CYMBIDIUM V-26 for delivery to the consignee, General Milling Corporation in Manila,  The shipment was insured by the private respondent Prudential Guarantee and Assurance, Inc. against loss or damage for P14,621,771.75.  the carrying vessel arrived in Manila and the cargo was transferred to the custody of the petitioner Asia Lighterage and Shipping, Inc. The petitioner was contracted by the consignee as carrier to deliver the cargo to consignee's warehouse at Bo. Ugong, Pasig City.  900 metric tons of the shipment was loaded on barge PSTSI III, evidenced by Lighterage Receipt No. 03647 for delivery to consignee. The cargo did not reach its destination.  the transport of said cargo was suspended due to a warning of an incoming typhoon. the barge developed a list because of a hole it sustained after hitting an unseen protuberance underneath the water.  To avoid the complete sinking of the barge, a portion of the goods was transferred to three other barges. The next day, the towing bits of the barge broke. It sank completely, resulting in the total loss of the remaining cargo.  consignee sent a claim letter to the petitioner, and another letter to the private respondent for the value of the lost cargo.  the private respondent indemnified the consignee in the amount of P4,104,654.22.15Thereafter, as subrogee, it sought recovery of said amount from the petitioner, but to no avail.  the private respondent filed a complaint against the petitioner for recovery of the amount of indemnity, attorney's fees and cost of suit.16 Petitioner filed its answer with counterclaim.17  The Regional Trial Court ruled in favor of the private respondent.

WON PKS Shipping is a private carrier or a common carrier and it has observed the proper diligence. Held: PKS is a common carrier and absolved from liability for the loss of the DUMC cargo.  Contrary to the conclusion made by the appellate court, its factual findings indicate that PKS Shipping has engaged itself in the business of carrying goods for others, although for a limited clientele, undertaking to carry such goods for a fee. The regularity of its activities in this area indicates more than just a casual activity on its part.6 Neither can the concept of a common carrier change merely because individual contracts are executed or entered into with patrons of the carrier. Such restrictive interpretation would make it easy for a common carrier to escape liability by the simple expedient of entering into those distinct agreements with clients.  The appellate court ruled, gathered from the testimonies and sworn marine protests of the respective vessel masters of Limar I and MT Iron Eagle, that there was no way by which the barge’s or the tugboat’s crew could have prevented the sinking of Limar I. The vessel was suddenly tossed by waves of extraordinary height of six (6) to eight (8) feet and buffeted by strong winds of 1.5 knots resulting in the entry of water into the barge’s hatches. The official Certificate of Inspection of the barge issued by the Philippine

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 Petitioner appealed to the Court of Appeals insisting that it is not a common carrier. The appellate court affirmed the decision of the trial court with modification.  Petitioner's Motion for Reconsideration was likewise denied by the appellate court. Hence, this petition. Issue:   Upon petitioner’s return from Europe, she demanded from respondent the reimbursement of P61,421.70, representing the difference between the sum she paid for "Jewels of Europe" and the amount she owed respondent for the "British Pageant" tour. Despite several demands, respondent company refused to reimburse the amount, contending that the same was non-refundable.1  Petitioner was thus constrained to file a complaint against respondent for breach of contract of carriage and damages, and raffled to Branch 59 of the Regional Trial Court of Makati City.  The trial court held that respondent was negligent in erroneously advising petitioner of her departure date through its employee, Menor, who was not presented as witness to rebut petitioner’s testimony.  Respondent appealed to the Court of Appeals, which likewise found both parties to be at fault. However, the appellate court held that petitioner is more negligent than respondent.  Upon denial of her motion for reconsideration,7 petitioner filed the instant petition under Rule 45. Issue: 

Whether the petitioner is a common carrier; and, Assuming the petitioner is a common carrier, whether it exercised extraordinary diligence in its care and custody of the consignee's cargo Held: yes! Petitioner is a common carrier and is liable for the loss cargo.  In the case at bar, the principal business of the petitioner is that of lighterage and drayage22 and it offers its barges to the public for carrying or transporting goods by water for compensation. Petitioner is clearly a common carrier.  We therefore hold that petitioner is a common carrier whether its carrying of goods is done on an irregular rather than scheduled manner, and with an only limited clientele. A common carrier need not have fixed and publicly known routes. Neither does it have to maintain terminals or issue tickets.  Accordingly, the petitioner cannot invoke the occurrence of the typhoon as force majeure to escape liability for the loss sustained by the private respondent. Surely, meeting a typhoon head-on falls short of due diligence required from a common carrier. More importantly, the officers/employees themselves of petitioner admitted that when the towing bits of the vessel broke that caused its sinking and the total loss of the cargo upon reaching the Pasig River, it was no longer affected by the typhoon. The typhoon then is not the proximate cause of the loss of the cargo; a human factor, i.e., negligence had intervened. Note:  Same as in the case of De Guzman and Bascos. Likewise Article 1734 of the Civil Code that enumerates the instances when the presumption of negligence does not attach. Crisostomo vs. CA G.R. No. 138334 August 25, 2003 ESTELA L. CRISOSTOMO, Petitioner, vs. The Court of Appeals and CARAVAN TRAVEL & TOURS INTERNATIONAL, INC., Respondents Facts:  petitioner Estela L. Crisostomo contracted the services of respondent Caravan Travel and Tours International, Inc. to arrange and facilitate her booking, ticketing and accommodation in a tour dubbed "Jewels of Europe".  Petitioner was given a 5% discount on the amount, which included airfare, and the booking fee was also waived because petitioner’s niece, Meriam Menor, was respondent company’s ticketing manager.  Without checking her travel documents, petitioner went to NAIA to take the flight for the first leg of her journey from Manila to Hongkong. To petitioner’s dismay, she discovered that the flight she was supposed to take had already departed the previous day. She thus called up Menor to complain.  Subsequently, Menor prevailed upon petitioner to take another tour – the "British Pageant" – For this tour package, petitioner was asked anew to pay US$785.00 or P20,881.00. She gave respondent US$300 or P7,980.00 as partial payment.

WON respondent did not observe the standard of care required of a common carrier when it informed her wrongly of the flight schedule.

Held: no!  It is obvious from the definition that respondent is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier. Respondent did not undertake to transport petitioner from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Respondent’s services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours.  The nature of the contractual relation between petitioner and respondent is determinative of the degree of care required in the performance of the latter’s obligation under the contract. For reasons of public policy, a common carrier in a contract of carriage is bound by law to carry passengers as far as human care and foresight can provide using the utmost diligence of very cautious persons and with due regard for all the circumstances.11 As earlier stated, however, respondent is not a common carrier but a travel agency. It is thus not bound under the law to observe extraordinary diligence in the performance of its obligation, as petitioner claims. Issue: WON respondent company performed its duty diligently and did not commit any contractual breach. Held: yes! Evidence on record shows that respondent company performed its duty diligently and did not commit any contractual breach. Hence, petitioner cannot recover and must bear her own damage.  The evidence on record shows that respondent exercised due diligence in performing its obligations under the contract and followed standard procedure in rendering its services to petitioner. As correctly observed by the lower court, the plane ticket19 issued to petitioner clearly reflected the departure date and time, contrary to petitioner’s contention. The travel documents, consisting of the tour itinerary, vouchers and instructions, were likewise delivered to petitioner two days prior to the trip. Respondent also properly booked petitioner for the tour, prepared the necessary documents and procured the plane tickets. It arranged petitioner’s hotel accommodation as well as food, land transfers and sightseeing excursions, in accordance with its avowed undertaking 

Transportation Law |8 msmhernandez
Note:  When the contract between the parties is an ordinary one for services, the standard of care required of respondent is that of a good father of a family under Article 1173 of the Civil Code.12 This connotes reasonable care consistent with that which an ordinarily prudent person would have observed when confronted with a similar situation.  The test to determine whether negligence attended the performance of an obligation is: did the defendant in doing the alleged negligent act use that reasonable care and caution which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of negligence. Fabre vs. CA G.R. No. 111127 July 26, 1996 MR. & MRS. ENGRACIO FABRE, JR. and PORFIRIO CABIL, petitioners, vs. COURT OF APPEALS, THE WORD FOR THE WORLD CHRISTIAN FELLOWSHIP, INC., AMYLINE ANTONIO, JOHN RICHARDS, GONZALO GONZALES, VICENTE V. QUE, JR., ICLI CORDOVA, ARLENE GOJOCCO, ALBERTO ROXAS CORDERO, RICHARD BAUTISTA, JOCELYN GARCIA, YOLANDA CORDOVA, NOEL ROQUE, EDWARD TAN, ERNESTO NARCISO, ENRIQUETA LOCSIN, FRANCIS NORMAN O. LOPES, JULIUS CAESAR, GARCIA, ROSARIO MA. V. ORTIZ, MARIETTA C. CLAVO, ELVIE SENIEL, ROSARIO MARA-MARA, TERESITA REGALA, MELINDA TORRES, MARELLA MIJARES, JOSEFA CABATINGAN, MARA NADOC, DIANE MAYO, TESS PLATA, MAYETTE JOCSON, ARLENE Y. MORTIZ, LIZA MAYO, CARLOS RANARIO, ROSAMARIA T. RADOC and BERNADETTE FERRER, respondents Facts:  Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model Mazda minibus. They used the bus principally in connection with a bus service for school children which they operated in Manila. The couple had a driver, Porfirio J. Cabil, whom they hired.  private respondent Word for the World Christian Fellowship Inc. (WWCF) arranged with petitioners for the transportation of 33 members of its Young Adults Ministry from Manila to La Union and back in consideration of which private respondent paid petitioners the amount of P3,000.00.  petitioner Cabil came upon a sharp curve on the highway, running on a south to east direction, which he described as "siete." The road was slippery because it was raining, causing the bus, which was running at the speed of 50 kilometers per hour, to skid to the left road shoulder.  Several passengers were injured. Private respondent Amyline Antonio was thrown on the floor of the bus and pinned down by a wooden seat which came down by a wooden seat which came off after being unscrewed. It took three persons to safely remove her from this portion. She was in great pain and could not move.  Amyline Antonio, who was seriously injured, brought this case in the RTC of Makati, Metro Manila. the Court hereby renders judgment against defendants Mr. & Mrs. Engracio Fabre, Jr. and Porfirio Cabil y Jamil pursuant to articles 2176 and 2180 of the Civil Code of the Philippines and said defendants are ordered to pay jointly and severally to the plaintiffs  The Court of Appeals affirmed the decision of the trial court with respect to Amyline Antonio but dismissed it with respect to the other plaintiffs on the ground that they failed to prove their respective claims. The Court of Appeals modified the award of damages. The Court of Appeals sustained the trial court's finding that petitioner Cabil failed to exercise due care and precaution in the operation of his vehicle considering the time and the place of the accident. The Court of Appeals held that the Fabres were themselves presumptively negligent. Hence, this petition Issue:  Whether or not petitioners were liable for the injuries suffered by private respondents.

Held: yes!  this case actually involves a contract of carriage. Petitioners, the Fabres, did not have to be engaged in the business of public transportation for the provisions of the Civil Code on common carriers to apply to them.  As common carriers, the Fabres were found to exercise "extraordinary diligence" for the safe transportation of the passengers to their destination. This duty of care is not excused by proof that they exercise the diligence of a good father of the family in the selection and supervision of their employee. As Art. 1759 of the Code provides:

Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former's employees although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers.
 This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees.  The same circumstances detailed above, supporting the finding of the trial court and of the appellate court that petitioners are liable under Arts. 2176 and 2180 for quasi delict, fully justify findings them guilty of breach of contract of carriage under Arts. 1733, 1755 and 1759 of the Civil Code.  WHEREFORE, the decision of the Court of Appeals is AFFIRMED with MODIFICATION as to award of damages. Petitioners are ORDERED to PAY jointly and severally the private respondent Amyline Antonio Note:  Due diligence in selection of employees is not satisfied by finding that the applicant possessed a professional driver's license. The employer should also examine the applicant for his qualifications, experience and record of service. 5 Due diligence in supervision, on the other hand, requires the formulation of rules and regulations for the guidance of employees and issuance of proper instructions as well as actual implementation and monitoring of consistent compliance with the rules.  [A] person who hires a public automobile and gives the driver directions as to the place to which he wishes to be conveyed, but exercises no other control over the conduct of the driver, is not responsible for acts of negligence of the latter or prevented from recovering for injuries suffered from a collision between the automobile and a train, caused by the negligence or the automobile driver.

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Loadstar shipping vs. CA G.R. No. 131621 September 28, 1999 LOADSTAR SHIPPING CO., INC., petitioner, vs. COURT OF APPEALS and THE MANILA INSURANCE CO., INC., respondents Facts:  LOADSTAR received on board its M/V "Cherokee" (hereafter, the vessel) the goods for shipment. The goods, amounting to P6,067,178, were insured for the same amount with MIC. The vessel, in turn, was insured by Prudential Guarantee & Assurance, Inc. (hereafter PGAI) for P4 million.  on its way to Manila from the port of Nasipit, Agusan del Norte, the vessel, along with its cargo, sank off Limasawa Island. As a result of the total loss of its shipment, the consignee made a claim with LOADSTAR which, however, ignored the same. As the insurer, MIC paid P6,075,000 to the insured in full settlement of its claim, and the latter executed a subrogation receipt therefor.  MIC filed a complaint against LOADSTAR and PGAI, alleging that the sinking of the vessel was due to the fault and negligence of LOADSTAR and its employees. It also prayed that PGAI be ordered to pay the insurance proceeds from the loss the vessel directly to MIC, said amount to be deducted from MIC's claim from LOADSTAR.  the court a quo rendered judgment in favor of MIC, prompting LOADSTAR to elevate the matter to the court of Appeals, which, however, agreed with the trial court and affirmed its decision in toto. Issue:  Held: no. we do not agree.  In the first place, the cases relied on by LOADSTAR involved a limitation on the carrier's liability to an amount fixed in the bill of lading which the parties may enter into, provided that the same was freely and fairly agreed upon (Articles 1749-1750). On the other hand, the stipulation in the case at bar effectively reduces the common carrier's liability for the loss or destruction of the goods to a degree less than extraordinary (Articles 1744 and 1745), that is, the carrier is not liable for any loss or damage to shipments made at "owner's risk." Such stipulation is obviously null and void for being contrary to public policy."  WHEREFORE, the instant petition is DENIED and the challenged decision of 30 January 1997 of the Court of Appeals in CA-G.R. CV No. 36401 is AFFIRMED. Note:  Court held that a common carrier transporting special cargo or chartering the vessel to a special person becomes a private carrier that is not subject to the provisions of the Civil Code. Any stipulation in the charter party absolving the owner from liability for loss due to the negligence of its agent is void only if the strict policy governing common carriers is upheld. Such policy has no force where the public at is not involved. (Home Insurance doctrine)  The doctrine of limited liability does not apply where there was negligence on the part of the vessel owner or agent. 17 LOADSTAR was at fault or negligent in not maintaining a

seaworthy vessel and in having allowed its vessel to sail despite knowledge of an approaching typhoon. In any event, it did not sink because of any storm that may be deemed asforce majeure, inasmuch as the wind condition in the performance of its duties, LOADSTAR cannot hide behind the "limited liability" doctrine to escape responsibility for the loss of the vessel and its cargo
 Three kinds of stipulations have often been made in a bill of lading. The first one exempting the carrier from any and all liability for loss or damage occasioned by its own negligence. The second is one providing for an unqualified limitation of such liability to an agreed valuation. And the third is one limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of. freight. According to an almost uniform weight of authority, the first and second kinds of stipulations are invalid as being contrary to public policy, but the third is valid and enforceable. Since the stipulation in question is null and void, it

WON Is the M/V "Cherokee" a private or a common carrier and did LOADSTAR observe due and/or ordinary diligence in these premises, Held: yes M/V "Cherokee” is a common carrier and was not seaworthy when it embarked on its voyage  we hold that LOADSTAR is a common carrier. It is not necessary that the carrier be issued a certificate of public convenience, and this public character is not altered by the fact that the carriage of the goods in question was periodic, occasional, episodic or unscheduled.  Under the facts and circumstances obtaining in this case, LOADSTAR fits the definition of a common carrier under Article 1732 of the Civil Code. In the case of De Guzman v. Court of Appeals, 15 the Court juxtaposed the statutory definition of "common carriers" with the peculiar circumstances of that case.  we find that the M/V "Cherokee" was not seaworthy when it embarked on its voyage on 19 November 1984. The vessel was not even sufficiently manned at the time.  "For a vessel to be seaworthy, it must be adequately equipped for the voyage and manned with a sufficient number of competent officers and crew. The failure of a common carrier to maintain in seaworthy condition its vessel involved in a contract of carriage is a clear breach of its duty prescribed in Article 1755 of the Civil Code." Issue: 

follows that when MIC paid the shipper, it was subrogated to all the rights which the latter has against the common carrier, LOADSTAR.
 the Civil Code nor the Code of Commerce states a specific prescriptive period on the matter, the Carriage of Goods by Sea Act (COGSA) — which provides for a one-year period of limitation on claims for loss of, or damage to, cargoes sustained during transit — may be applied suppletorily to the case at bar. This one-year prescriptive period also applies to the insurer of the goods. 22 In this case, the period for filing the action for recovery has not yet elapsed. Moreover, a stipulation reducing the one-year period is null and void; 23 it must, accordingly, be struck down.

WON right of the assured in case of loss or damage to the goods is limited or restricted by the provisions in the bills of lading, a suit by the insurer as subrogee is necessarily subject to the same limitations and restrictions.

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FGU insurance Corp. vs GP Sarmiento Trucking Corporation G.R. No. 141910 August 6, 2002 FGU INSURANCE CORPORATION, petitioner, vs. G.P. SARMIENTO TRUCKING CORPORATION and LAMBERT M. EROLES, respondents Facts:  G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver thirty (30) units of Condura S.D. white refrigerators aboard one of its Isuzu truck, driven by Lambert Eroles, from the plant site of Concepcion Industries, Inc., along South Superhighway in Alabang, Metro Manila, to the Central Luzon Appliances in Dagupan City.  While the truck was traversing the north diversion road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes.  FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the value of the covered cargoes in the sum of P204,450.00.  FGU, in turn, being the subrogee of the rights and interests of Concepcion Industries, Inc., sought reimbursement of the amount it had paid to the latter from GPS.  Since the trucking company failed to heed the claim, FGU filed a complaint for damages and breach of contract of carriage against GPS and its driver Lambert Eroles with the Regional Trial Court, Branch 66, of Makati City.  The trial court, granted the motion to dismiss. plaintiff did not present any single evidence that would prove that defendant is a common carrier. The subsequent motion for reconsideration having been denied,3 plaintiff interposed an appeal to the Court of Appeal.  The Court of Appeals rejected the appeal of petitioner and ruled in favor of GPS. Petitioner's motion for reconsideration was likewise denied;6 hence, the instant petition. Issue:  petitioner. The driver, not being a party to the contract of carriage between petitioner’s principal and defendant, may not be held liable under the agreement. A contract can only bind the parties who have entered into it or their successors who have assumed their personality or their juridical position.17 Consonantly with the axiom res inter alios acta aliis neque nocet prodest, such contract can neither favor nor prejudice a third person. Petitioner’s civil action against the driver can only be based on culpa aquiliana, which, unlike culpa contractual, would require the claimant for damages to prove negligence or fault on the part of the defendant.  If a demurrer to evidence is granted but on appeal the order of dismissal is reversed, the movant shall be deemed to have waived the right to present evidence.24 Thus, respondent corporation may no longer offer proof to establish that it has exercised due care in transporting the cargoes of the assured so as to still warrant a remand of the case to the trial court. Note:  The law, recognizing the obligatory force of contracts,12 will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof.13 A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered.  The effect of every infraction is to create a new duty, that is, to make recompense to the one who has been injured by the failure of another to observe his contractual obligation16 unless he can show extenuating circumstances, like proof of his exercise of due diligence (normally that of the diligence of a good father of a family or, exceptionally by stipulation or by law such as in the case of common carriers, that of extraordinary diligence) or of the attendance of fortuitous event, to excuse him from his ensuing liability.  Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists between the plaintiff and the defendant, for the inference of negligence arises from the circumstances and nature of the occurrence and not from the nature of the relation of the parties.23 Nevertheless, the requirement that responsible causes other than those due to defendant’s conduct must first be eliminated, for the doctrine to apply, should be understood as being confined only to cases of pure (non-contractual) tort since obviously the presumption of negligence in culpa contractual, as previously so pointed out, immediately attaches by a failure of the covenant or its tenor. In the case of the truck driver, whose liability

Whether respondent GPS, is a common carrier and liable against FGU.

Held: yes!  the Court finds the conclusion of the trial court and the Court of Appeals to be amply justified. GPS, being an exclusive contractor and hauler of Concepcion Industries, Inc., rendering or offering its services to no other individual or entity, cannot be considered a common carrier. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for hire or compensation, offering their services to the public,8 whether to the public in general or to a limited clientele in particular, but never on an exclusive basis.9 The true test of a common carrier is the carriage of passengers or goods, providing space for those who opt to avail themselves of its transportation service for a fee.10 Given accepted standards, GPS scarcely falls within the term "common carrier."  Respondent trucking corporation recognizes the existence of a contract of carriage between it and petitioner’s assured, and admits that the cargoes it has assumed to deliver have been lost or damaged while in its custody. In such a situation, a default on, or failure of compliance with, the obligation – in this case, the delivery of the goods in its custody to the place of destination - gives rise to a presumption of lack of care and corresponding liability on the part of the contractual obligor the burden being on him to establish otherwise. GPS has failed to do so.  Respondent driver, on the other hand, without concrete proof of his negligence or fault, may not himself be ordered to pay

in a civil action is predicated on culpa acquiliana, while he admittedly can be said to have been in control and management of the vehicle which figured in the accident, it is not equally shown, however, that the accident could have been exclusively due to his negligence, a matter that can allow, forthwith, res ipsa loquitur to work against him.

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Baritua vs. Mercader G.R. No. 136048 January 23, 2001 JOSE BARITUA and JB LINE, petitioners, vs. NIMFA DIVINA MERCADER in her capacity and as guardian of DARWIN, GIOVANNI, RODEL and DENNIS, all surnamed MERCADER; LEONIDA Vda. de MERCADER on her behalf and on behalf of her minor child MARY JOY MERCADER; SHIRLEY MERCADER DELA CRUZ; MARIA THERESA MERCADER-GARCIA; DANILO MERCADER; JOSE DANTE MERCADER; JOSEFINA MERCADER, respondents Facts:  late Dominador Mercader is a [b]usinessman mainly engaged in the buy and sell of dry good, he boarded [petitioners'] bus at [petitioners'] Manila Station/terminal, bound for Brgy. Rawis, Laoang Northern Samar as a paying passenger.  late Dominador Mercader was not able to reach his destination considering that on March 17, 1983 at Beily (Bugco) Bridge, Barangay Roxas, Mondragon, Northern Samar, while he was on board [petitioners'] bus, said bus fell into the river as a result of which the late Dominador Mercader died.  The accident happened because [petitioners'] driver negligently and recklessly operated the bus at a fast speed in wanton disregard of traffic rules and regulations and the prevailing conditions then existing that caused [the] bus to fall into the river  Complaint was filed against JB Lines, Inc. [Petitioner JB Lines, Inc.] and judgment is for [herein respondents] and against [herein petitioners], ordering the latter to pay the former.  the Court of Appeals affirmed the trial court's award of monetary damages in favor of respondents, except the amount of Dominador Mercader's lost earnings, which it reduced to P798,000.  It held that petitioners failed to rebut the presumption that in the event a passenger died or was injured, the carrier had acted negligently. Petitioners, it added, presented no sufficient proof that they had exercised extraordinary diligence. Hence, this Petition. Issue:  whether the CA disregarded petitioners' procedural rights. Held: no.  We sustain the ruling of the CA that petitioners failed to prove that they had observed extraordinary diligence. First, petitioners did not present evidence on the skill or expertise of the driver of Bus No. 142 or the condition of that vehicle at the time of the incident. Second, the bus was overloaded at the time. In fact, several individuals were standing when the incident occurred.21 Third, the bus was overspeeding. Its conductor testified that it had overtaken several buses before it reached the Bugko Bailey Bridge.22 Moreover, prior to crossing the bridge, it had accelerated and maintained its speed towards the bridge.23  We therefore believe that there is no reason to overturn the assailed CA Decision, which affirmed that of the RTC. It is a wellsettled rule that the trial court's factual findings, when affirmed by the appellate court, are conclusive and binding, if they are not tainted with arbitrariness or oversight of some fact or circumstance of significance and influence.24 As clearly discussed above, petitioners have not presented sufficient ground to warrant a deviation from this rule.  Finally, we cannot fault the appellate court in its computation of the damages and lost earnings, since it effectively computed only net earnings in accordance with existing jurisprudence.  WHEREFORE, the Petition is hereby DENIED, and the assailed Decision AFFIRMED Note:  Manchester Development Corporation v. CA,8 held that "[t]he court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the court, much less the payment of the docket fee based on the amounts sought in the amended pleading. x x x."  Generally, the jurisdiction of a court is determined by the statute in force at the commencement of the action,9unless such statute provides for its retroactive application.10 Once the jurisdiction of a court attaches, it continues until the case is finally terminated.11 The trial court cannot be ousted therefrom by subsequent happenings or events, although of a character that would have prevented jurisdiction from attaching in the first instance.12  The Manchester ruling, which became final in 1987, has no retroactive application and cannot be invoked in the subject Complaint filed in 1984.  It must be noted that a common carrier, by the nature of its business and for reasons of public policy, is bound to carry passengers safely as far as human care and foresight can provide. It is supposed to do so by using the utmost diligence of very cautious persons, with due regard for all the circunistances.19 In case of death or injuries to passengers, it is presumed to have been at fault or to have acted negligently, unless it proves that it observed extraordinary diligence as prescribed in Articles 1733 and 175520 of the Civil Code.

China airline vs. Chiok G.R. No. 152122 July 30, 2003 CHINA AIRLINES, petitioner, vs. DANIEL CHIOK, respondent Facts:  Daniel Chiok (hereafter referred to as Chiok) purchased from China Airlines, Ltd. (CAL for brevity) airline passenger ticket for air transportation covering Manila-Taipei-Hongkong-Manila. Said ticket was exclusively endorseable to Philippine Airlines, Ltd. (PAL for brevity).  Before Chiok his trip, the trips covered by the ticket were prescheduled and confirmed by the former. When petitioner arrived in Taipei, he went to CAL to confirm his Hong Kong- Manila trip on board PAL. The CA office attached a yellow sticker indicating the status was OK.  When Chiok reached Hong Kong, he then went to PAL office to confirm his flight back to Manila. The PAL also confirmed the status of his ticket and attached a ticket indicating a status OK.  Chiok proceeded to Hong Kong airport for his trip to Manila. However, upon reaching the PAL counter, he was told that the flight to Manila was cancelled due to typhoon. He was informed that all confirmed flight ticket holders of PAL were automatically booked for the next flight the following day.  The next day, Chiok was not able to board the plane because his name did not appear on the computer as passenger for the said flight to Manila.  Chiok as plaintiff, filed a Complaint for damages, against PAL and CAL, as defendants, with Branch 31, Regional Trial Court, National Capital Judicial Region, Manila.  "He alleged therein that despite several confirmations of his flight, defendant PAL refused to accommodate him in Flight No. 307, for which reason he lost the business option aforementioned.

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 The Regional Trial Court (RTC) of Manila held CAL and PAL jointly and severally liable to respondent.  The two carriers appealed the RTC Decision to the CA. Affirming the RTC, the Court of Appeals debunked petitioner’s claim that it had merely acted as an issuing agent for the ticket covering the Hong Kong-Manila leg of respondent’s journey. Only the appeal of CAL11 remains in this Court. Issue:  whether CAL is liable for damages. Held: yes.  It is significant to note that the contract of air transportation was between petitioner and respondent, with the former endorsing to PAL the Hong Kong-to-Manila segment of the journey. Such contract of carriage has always been treated in this jurisdiction as a single operation. This jurisprudential rule is supported by the Warsaw Convention,22 to which the Philippines is a party, and by the existing practices of the International Air Transport Association (IATA)  Likewise, as the principal in the contract of carriage, the petitioner in British Airways v. Court of Appeals26 was held liable, even when the breach of contract had occurred, not on its own flight, but on that of another airline. The Decision followed our ruling in Lufthansa German Airlines v. Court of Appeals,27 in which we had held that the obligation of the ticket-issuing airline remained and did not cease, regardless of the fact that another airline had undertaken to carry the passengers to one of their destinations.  In the instant case, following the jurisprudence cited above, PAL acted as the carrying agent of CAL. In the same way that we ruled against British Airways and Lufthansa in the aforementioned cases, we also rule that CAL cannot evade liability to respondent, even though it may have been only a ticket issuer for the Hong Kong-Manila sector.  WHEREFORE, the Petition is DENIED. Note:  Article 1, Section 3 of the Warsaw Convention states: Refinery Corporation for transportation and delivery to the bulk depot in Bacolod City of Caltex Phils., Inc. (Caltex), pursuant to a Contract of Afreightment.  The shipment was insured by respondent AHAC against all risks.  The discharging of the diesel oil started at about 1:30 PM of the same day. However, at about 10:30 PM, the discharging had to be stopped on account of the discovery that the port bow mooring of the vessel was intentionally cut or stolen by unknown persons. Because there was nothing holding it, the vessel drifted westward, dragged and stretched the flexible rubber hose attached to the riser, broke the elbow into pieces, severed completely the rubber hose connected to the tanker from the main delivery line at sea bed level and ultimately caused the diesel oil to spill into the sea. To avoid further spillage, the vessel’s crew tried water flushing to clear the line of the diesel oil but to no avail.  As a result of spillage and backflow of diesel oil, Caltex sought recovery of the loss from Delsan, but the latter refused to pay. As insurer, AHAC paid Caltex the sum of P479,262.57 for spillage.  AHAC, as Caltex’s subrogee, instituted against Delsan before the Manila RTC, Branch 9, for loss caused by the spillage. It likewise prayed that it be indemnified for damages suffered.  the trial court rendered its decision 2 in favor of AHAC holding Delsan liable for the loss of the cargo for its negligence in its duty as a common carrier.  In time, Delsan appealed to the CA, In the herein challenged decision, 3 the CA affirmed the findings of the trial court. In so ruling, the CA declared that Delsan failed to exercise the extraordinary diligence of a good father of a family in the handling of its cargo.  Delsan is now before the Court raising substantially the same issues proffered before the CA. Issue:  WON the loss due to backflow occurred when the diesel oil was already completely delivered to Caltex.

"Transportation to be performed by several successive air carriers shall be deemed, for the purposes of this Convention, to be one undivided transportation, if it has been regarded by the parties as a single operation, whether it has been agreed upon under the form of a single contract or of a series of contracts, and it shall not lose its international character merely because one contract or a series of contracts is to be performed entirely within a territory subject to the sovereignty, suzerainty, mandate, or authority of the same High Contracting Party."23
 Article 15 of IATA-Recommended Practice similarly provides:

"Carriage to be performed by several successive carriers under one ticket, or under a ticket and any conjunction ticket issued therewith, is regarded as a single operation."
 A common carrier has a peculiar relationship with and an exacting responsibility to its passengers. For reasons of public interest and policy, the ticket-issuing airline acts as principal in a contract of carriage and is thus liable for the acts and the omissions of any errant carrier to which it may have endorsed any sector of the entire, continuous trip. Delsan vs. American Home Assurance G.R. No. 149019 August 15, 2006 DELSAN TRANSPORT LINES, INC., Petitioner, vs. AMERICAN HOME ASSURANCE CORPORATION, Respondent. Facts:  Delsan received on board MT Larusan a shipment consisting of 1,986.627 k/l Automotive Diesel Oil (diesel oil) at the Bataan

Held: no.  It had been settled that the subject cargo was still in the custody of Delsan because the discharging thereof has not yet been finished when the backflow occurred. Since the discharging of the cargo into the depot has not yet been completed at the time of the spillage when the backflow occurred, there is no reason to imply that there was actual delivery of the cargo to the consignee.  Delsan is straining the issue by insisting that when the diesel oil entered into the tank of Caltex on shore, there was legally, at that moment, a complete delivery thereof to Caltex.  The discharging of oil products to Caltex Bulk Depot has not yet been finished, Delsan still has the duty to guard and to preserve the cargo. The carrier still has in it the responsibility to guard and preserve the goods, a duty incident to its having the goods transported.  All told, Delsan, being a common carrier, should have exercised extraordinary diligence in the performance of its duties. Consequently, it is obliged to prove that the damage to its cargo was caused by one of the excepted causes if it were to seek exemption from responsibility. 11 Having failed to do so, Delsan must bear the consequences.  WHEREFORE, petition is DENIED and the assailed decision of the CA is AFFIRMED in toto. Note:  the extraordinary responsibility of common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by, the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to a person who has the right to receive them.

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Singapore vs. Fernandez G.R. No. 142305 December 10, 2003 SINGAPORE AIRLINES LIMITED, petitioner, vs. ANDION FERNANDEZ, respondent. Facts:  Andion Fernandez is an acclaimed soprano here in the Philippines and abroad. At the time of the incident, an airline passage ticket was purchased from petitioner Singapore Airlines which would transport her to Manila from Frankfurt, Germany.  the respondent telephoned her mother to inform the latter that she missed the connecting flight. The respondent was able to contact a family friend who picked her up from the airport for her overnight stay in Singapore.  As a result of this incident, the respondent’s performance before the Royal Family of Malaysia was below par. Because of the rude and unkind treatment she received from the petitioner’s personnel in Singapore, the respondent was engulfed with fear, anxiety, humiliation and embarrassment causing her to suffer mental fatigue and skin rashes. She was thereby compelled to seek immediate medical attention upon her return to Manila for "acute urticaria."  RTC rendered a decision with the following dispositive portion: ACCORDINGLY and as prayed for, defendant Singapore Airlines is ordered to pay herein plaintiff Andion H. Fernandez.  The petitioner appealed the decision to the Court of Appeals. CA promulgated the assailed decision finding no reversible error in the appealed decision of the trial court.  Forthwith, the petitioner filed the instant petition for review. Issue:  common carrier was at fault or was negligent. All that is necessary to prove is the existence of the contract and the fact of its nonperformance by the carrier.  When a passenger contracts for a specific flight, he has a purpose in making that choice which must be respected. This choice, once exercised, must not be impaired by a breach on the part of the airline without the latter incurring any liability.25 For petitioner’s failure to bring the respondent to her destination, as scheduled, we find the petitioner clearly liable for the breach of its contract of carriage with the respondent.  Bad faith means a breach of known duty through some motive of interest or ill will. Self-enrichment or fraternal interest, and not personal ill will, may well have been the motive; but it is malice nevertheless.  Article 2232 of the Civil Code provides that in a contractual or quasi-contractual relationship, exemplary damages may be awarded only if the defendant had acted in a "wanton, fraudulent, reckless, oppressive or malevolent manner." In this case, petitioner’s employees acted in a wanton, oppressive or malevolent manner.

British Airways vs. CA G.R. No. 92288 February 9, 1993 BRITISH AIRWAYS, INC., petitioner, vs. THE HON. COURT OF APPEALS, Twelfth Division, and FIRST INTERNATIONAL TRADING AND GENERAL SERVICES, respondents Facts:  Private respondent First International Trading and General Services Co., a duly licensed domestic recruitment and placement agency, received a telex message from its principal ROLACO Engineering and Contracting Services in Jeddah, Saudi Arabia to recruit Filipino contract workers in behalf of said principal. 4  During the early part of March 1981, said principal paid to the Jeddah branch of petitioner British Airways, Inc. airfare tickets for 93 contract workers with specific instruction to transport said workers to Jeddah.  Sometime in the first week of June, 1981, private respondent was again informed by the petitioner that it had received a prepaid ticket advice from its Jeddah branch for the transportation of 27 contract workers. Immediatety, private respondent instructed its travel agent to book the 27 contract workers with the petitioner but the latter was only able to book and confirm 16 seats, However, on the date of the scheduled flight only 9 workers were able to board said flight while the remaining 7 workers were rebooked which bookings were again cancelled by the petitioner without any prior notice to either private respondent or the workers.  private respondent paid the travel tax of the said workers as required by the petitioner but when the receipt of the tax payments was submitted, the latter informed private respondent that it can only confirm the seats of the 12 workers However, the confirmed seats of said workers were again cancelled without any prior notice either to the private respondent or said workers.  As a result of these incidents, private respondent sent a letter to petitioner demanding compensation for the damages it had incurred by the latter's repeated failure to transport its contract workers despite confirmed bookings and payment of the corresponding travel taxes.  After due trial, the trial court rendered its decision, Ordering the defendant to pay the plaintiff.  petitioner appealed said decision to respondent appellate court after the trial court denied its Motion for Reconsideration

WON that awarded damages to respondent for the alleged failure of the petitioner to exercise extraordinary diligence Held: yes. We are convinced that the petitioner acted in bad faith.  Since the petitioner did not transport the respondent as covenanted by it on said terms, the petitioner clearly breached its contract of carriage with the respondent. The respondent had every right to sue the petitioner for this breach. The defense that the delay was due to fortuitous events and beyond petitioner’s control is unavailing.  in the instant case, petitioner was not without recourse to enable it to fulfill its obligation to transport the respondent safely as scheduled as far as human care and foresight can provide to her destination. Tagged as a premiere airline as it claims to be and with the complexities of air travel, it was certainly well-equipped to be able to foresee and deal with such situation. The petitioner’s indifference and negligence by its absence and insensitivity was exposed by the trial court.  The petitioner’s diligence in communicating to its passengers the consequences of the delay in their flights was wanting.  WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals is AFFIRMED. Note:  When an airline issues a ticket to a passenger, confirmed for a particular flight on a certain date, a contract of carriage arises. The passenger then has every right to expect that he be transported on that flight and on that date. If he does not, then the carrier opens itself to a suit for a breach of contract of carriage.19  The contract of air carriage is a peculiar one. Imbued with public interest, the law requires common carriers to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons with due regard for all the circumstances.20 In an action for breach of contract of carriage, the aggrieved party does not have to prove that the

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 Respondent appellate court affirmed the decision of the trial court. Petitioner filed a Motion for Reconsideration which was also denied. Hence, this petition. Issue:  be considered as a real contract for not until the carrier is actually used can the carrier be said to have already assumed the obligation of a carrier. (Paras, Civil Code Annotated, Vol. V, p. 429, Eleventh Ed.)  Actual or compensatory damages cannot be presumed, but must be duly proved, and proved with reasonable degree of certainty. A court cannot rely on speculation, conjecture or guesswork as to the fact and amount of damages, but must depend upon competent proof that they have suffered and on evidence of the actual amount thereof. Ganzon vs. CA G.R. No. L-48757 May 30, 1988 MAURO GANZON, petitioner, vs. COURT OF APPEALS and GELACIO E. TUMAMBING, respondents. Facts:  Gelacio Tumambing contracted the services of Mauro B. Ganzon to haul 305 tons of scrap iron from Mariveles, Bataan, to the port of Manila on board the lighter LCT "Batman"  Pursuant to that agreement, Mauro B. Ganzon sent his lighter "Batman" to Mariveles where it docked in three feet of water.  Gelacio Tumambing delivered the scrap iron to defendant Filomeno Niza, captain of the lighter, for loading which was actually begun on the same date by the crew of the lighter under the captain's supervision. When about half of the scrap iron was already loaded, Mayor Jose Advincula of Mariveles, Bataan, arrived and demanded P5,000.00 from Gelacio Tumambing.  After sometime, the loading of the scrap iron was resumed. But on December 4, 1956, Acting Mayor Basilio Rub, accompanied by three policemen, ordered captain Filomeno Niza and his crew to dump the scrap iron where the lighter was docked. The rest was brought to the compound of NASSCO. Later on Acting Mayor Rub issued a receipt stating that the Municipality of Mariveles had taken custody of the scrap iron.  The private respondent instituted in the Court of First Instance of Manila 1 an action against the petitioner for damages based on culpa contractual.  the respondent Court rendered a decision, the dispositive portion of which states: WHEREFORE, the decision appealed from is hereby reversed and set aside and a new one entered ordering defendant-appellee Mauro Ganzon to pay plaintiff-appellant Gelacio E. Tumambimg.  In this petition for review on certiorari. Issue: 

WON that private respondent has no cause of action against it there being no perfected contract of carriage existing between them as no ticket was ever issued to private respondent's contract workers and, therefore, the obligation of the petitioner to transport said contract workers did not arise. Held: no. Private respondent had a valid cause of action for damages against petitioner.  In the instant case, the contract "to carry" is the one involved which is consensual and is perfected by the mere consent of the parties.  There is no dispute as to the appellee's consent to the said contract "to carry" its contract workers from Manila to Jeddah. The appellant's consent thereto, on the other hand, was manifested by its acceptance of the PTA or prepaid ticket advice that ROLACO Engineering has prepaid the airfares of the appellee's contract workers advising the appellant that it must transport the contract workers on or before the end of March, 1981 and the other batch in June, 1981.  Even if a PTA is merely an advice from the sponsors that an airline is authorized to issue a ticket and thus no ticket was yet issued, the fact remains that the passage had already been paid for by the principal of the appellee, and the appellant had accepted such payment. The existence of this payment was never objected to nor questioned by the appellant in the lower court. Thus, the cause or consideration which is the fare paid for the passengers exists in this case.  The third essential requisite of a contract is an object certain. In this contract "to carry", such an object is the transport of the passengers from the place of departure to the place of destination as stated in the telex.  Accordingly, there could be no more pretensions as to the existence of an oral contract of carriage imposing reciprocal obligations on both parties.  In the case of appellee, it has fully complied with the obligation, namely, the payment of the fare and its willingness for its contract workers to leave for their place of destination.  On the other hand, the facts clearly show that appellant was remiss in its obligation to transport the contract workers on their flight despite confirmation and bookings made by appellee's travelling agent.  WHEREFORE, the assailed decision is hereby AFFIRMED with the MODIFICATION that the award of actual damages be deleted from said decision Note:  A cause of action is an act or omission of one party in violation of the legal right or rights of the other. 9 Petitioner's repeated failures to transport private respondent's workers in its flight despite confirmed booking of said workers clearly constitutes breach of contract and bad faith on its part. In resolving petitioner's theory that private respondent has no cause of action in the instant case, the appellate court correctly held that: In dealing with the contract of common carriage of passengers for purpose of accuracy, there are two (2) aspects of the same, namely: (a) the contract "to carry (at some future time)," which contract is consensual and is necessarily perfected by mere consent (See Article 1356, Civil Code of the Philippines), and (b) the contract "of carriage" or "of common carriage" itself which should

WON that Petitioner is exempt from any liability because the loss of the scraps was due mainly to the intervention of the municipal officials of Mariveles which constitutes a caso fortuito. Held: no. We cannot sustain the theory of caso fortuito.  Now the petitioner is changing his theory to caso fortuito. Such a change of theory on appeal we cannot, however, allow. In any case, the intervention of the municipal officials was not In any case, of a character that would render impossible the fulfillment by the carrier of its obligation. The petitioner was not duty bound to obey the illegal order to dump into the sea the scrap iron. Moreover, there is absence of sufficient proof that the issuance of the same order was attended with such force or intimidation as to completely overpower the will of the petitioner's employees. The mere difficulty in the fullfilment of the obligation is not considered force majeure. We agree with the private respondent that the scraps could have

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been properly unloaded at the shore or at the NASSCO compound, so that after the dispute with the local officials concerned was settled, the scraps could then be delivered in accordance with the contract of carriage.  WHEREFORE, the petition is DENIED; the assailed decision of the Court of Appeals is hereby AFFIRMED. Note:  There is no incompatibility between the Civil Code provisions on common carriers and Articles 361 8 and 362 9 of the Code of Commerce which were the basis for this Court's ruling in Government of the Philippine Islands vs. Ynchausti & Co.10 and which the petitioner invokes in tills petition. For Art. 1735 of the Civil Code, conversely stated, means that the shipper will suffer the losses and deterioration arising from the causes enumerated in Art. 1734; and in these instances, the burden of proving that damages were caused by the fault or negligence of the carrier rests upon him. However, the carrier must first establish that the loss or deterioration was occasioned by one of the excepted causes or was due to an unforeseen event or to force majeure. Be that as it may, insofar as Art. 362 appears to require of the carrier only ordinary diligence, the same is .deemed to have been modified by Art. 1733 of the Civil Code  Court of Appeals ruled that: ... In the second place, before the appellee Ganzon could be absolved from responsibility on the ground that he was ordered by competent public authority to unload the scrap iron, it must be shown that Acting Mayor Basilio Rub had the power to issue the disputed order, or that it was lawful, or that it was issued under legal process of authority. The appellee failed to establish this. Indeed, no authority or power of the acting mayor to issue such an order was given in evidence. Neither has it been shown that the cargo of scrap iron belonged to the Municipality of Mariveles. Issue:  WON "that the standby passenger status of private respondent Lapuz was changed to a confirmed status when his name was entered into the passenger manifest.

Held: yes.  The status of Lapuz as standby passenger was changed to that of a confirmed passenger when his name was entered in the passenger manifest of KAL for its Flight No. KE 903. His clearance through immigration and customs clearly shows that he had indeed been confirmed as a passenger of KAL in that flight. KAL thus committed a breach of the contract of carriage between them when it failed to bring Lapuz to his destination.  The evidence presented by Lapuz shows that he had indeed checked in at the departure counter, passed through customs and immigration, boarded the shuttle bus and proceeded to the ramp of KAL's aircraft. In fact, his baggage had already been loaded in KAL's aircraft, to be flown with him to Jeddah. The contract of carriage between him and KAL had already been perfected when he was summarily and insolently prevented from boarding the aircraft.  WHEREFORE, the appealed judgment is AFFIRMED. Note:  This Court has held that a contract to transport passengers is different in kind and degree from any other contractual relation. 3 The business of the carrier is mainly with the traveling public. It invites people to avail themselves of the comforts and advantages it offers. The contract of air carriage generates a relation attended with a public duty. Passengers have the right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. 4 So it is that any discourteous conduct on the part of these employees toward a passenger gives the latter an action for damages against the carrier.  This is still another case of the maltreatment of our overseas contract workers, this time by the airline supposed to bring the passenger to his foreign assignment. Our OCW's sacrifice much in seeking employment abroad, where they are deprived of the company of their loved ones, the direct protection of our laws, and the comfort of our own native culture and way of life. This Court shall exert every effort to vindicate their rights when they are abused and shall accord them the commensurate reparation of their injuries consistent with their dignity and worth as members of the working class. Dangwa vs. CA G.R. No. 95582 October 7, 1991 DANGWA TRANSPORTATION CO., INC. and THEODORE LARDIZABAL y MALECDAN, petitioners, vs. COURT OF APPEALS, INOCENCIA CUDIAMAT, EMILIA CUDIAMAT BANDOY, FERNANDO CUDLAMAT, MARRIETA CUDIAMAT, NORMA CUDIAMAT, DANTE CUDIAMAT, SAMUEL CUDIAMAT and LIGAYA CUDIAMAT, all Heirs of the late Pedrito Cudiamat represented by Inocencia Cudiamat, respondents Facts:  On May 13, 1985, private respondents filed a complaint 1 for damages against petitioners for the death of Pedrito Cudiamat as a result of a vehicular accident which occurred on March 25, 1985 at Marivic, Sapid, Mankayan, Benguet.  Among others, it was alleged that on said date, while petitioner Theodore M. Lardizabal was driving a passenger bus

Korean Airways vs. CA G.R. No. 114061 August 3, 1994 KOREAN AIRLINES CO., LTD., petitioner, vs. COURT OF APPEALS and JUANITO C. LAPUZ, respondents Facts:  Juanito C. Lapuz, an automotive electrician, was contracted for employment in Jeddah, Saudi Arabia, for a period of one year through Pan Pacific Overseas Recruiting Services, Inc.  Lapuz was supposed to leave on November 8, 1980, via Korean Airlines. Initially, he was "wait-listed," which meant that he could only be accommodated if any of the confirmed passengers failed to show up at the airport before departure. When two of such passengers did not appear, Lapuz and another person by the name of Perico were given the two unclaimed seats.  After trial, the Regional Trial Court of Manila, Branch 30, 1 adjudged KAL liable for damages.  On appeal, this decision was modified by the Court of Appeals.  KAL and Lapuz filed their respective motions for reconsideration, which were both denied for lack of merit. Hence, the present petitions for review which have been consolidated because of the identity of the parties and the similarity of the issues.

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belonging to petitioner corporation in a reckless and imprudent manner and without due regard to traffic rules and regulations and safety to persons and property, it ran over its passenger, Pedrito Cudiamat. However, instead of bringing Pedrito immediately to the nearest hospital, the said driver, in utter bad faith and without regard to the welfare of the victim, first brought his other passengers and cargo to their respective destinations before banging said victim to the Lepanto Hospital where he expired.  On the other hand, petitioners alleged that they had observed and continued to observe the extraordinary diligence required in the operation of the transportation company and the supervision of the employees, even as they add that they are not absolute insurers of the safety of the public at large.  Further, it was alleged that it was the victim's own carelessness and negligence which gave rise to the subject incident, hence they prayed for the dismissal of the complaint plus an award of damages in their favor by way of a counterclaim.  the trial court rendered a decision, effectively in favor of petitioners.  Not satisfied therewith, private respondents appealed to the Court of Appeals which, in a decision, set aside the decision of the lower court, and ordered petitioners to pay private respondents.  Petitioners' motion for reconsideration was denied by the Court of Appeals. hence this petition. Issue:  moving conveyance under the same or similar circumstances. The fact that passengers board and alight from slowly moving vehicle is a matter of common experience both the driver and conductor in this case could not have been unaware of such an ordinary practice.  The victim herein, by stepping and standing on the platform of the bus, is already considered a passenger and is entitled all the rights and protection pertaining to such a contractual relation. Hence, it has been held that the duty which the carrier passengers owes to its patrons extends to persons boarding cars as well as to those alighting therefrom. 15  It has also been repeatedly held that in an action based on a contract of carriage, the court need not make an express finding of fault or negligence on the part of the carrier in order to hold it responsible to pay the damages sought by the passenger. By contract of carriage, the carrier assumes the express obligation to transport the passenger to his destination safely and observe extraordinary diligence with a due regard for all the circumstances, and any injury that might be suffered by the passenger is right away attributable to the fault or negligence of the carrier. This is an exception to the general rule that negligence must be proved, and it is therefore incumbent upon the carrier to prove that it has exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code. Del Prado vs. Manila Electric co. WON petitioners negligent and liable for the damages claimed. G.R. No. L-29462 March 7, 1929 IGNACIO DEL PRADO, plaintiff-appellee, vs. MANILA ELECTRIC CO., defendant-appellant. Facts:  the Manila Electric Company, is engaged in operating street cars in the City for the conveyance of passengers;  one Teodorico Florenciano, as appellant's motorman, was in charge of car No. 74 running from east to west on R. Hidalgo Street, the scene of the accident being at a point near the intersection of said street and Mendoza Street.  After the car had stopped at its appointed place for taking on and letting off passengers, just east of the intersection, it resumed its course at a moderate speed under the guidance of the motorman.  The car had proceeded only a short distance, however, when the plaintiff, Ignacio del Prado, ran across the street to catch the car, his approach being made from the left.  The car was of the kind having entrance and exist at either end, and the movement of the plaintiff was so timed that he arrived at the front entrance of the car at the moment when the car was passing.  This action was instituted in the Court of First Instance of Manila by Ignacio del Prado to recover damages in the amount of P50,000 for personal injuries alleged to have been caused by the negligence of te defendant, the Manila Electric Company, in the operation of one of its street cars in the City of Manila. Upon hearing the cause the trial court awarded to the plaintiff the sum of P10,000, as damages, with costs of suit, and the defendant appealed. Issue: 

Held: yes.  The foregoing testimonies show that the place of the accident and the place where one of the passengers alighted were both between Bunkhouses 53 and 54, hence the finding of the Court of Appeals that the bus was at full stop when the victim boarded the same is correct. They further confirm the conclusion that the victim fell from the platform of the bus when it suddenly accelerated forward and was run over by the rear right tires of the vehicle, as shown by the physical evidence on where he was thereafter found in relation to the bus when it stopped. Under such circumstances, it cannot be said that the deceased was guilty of negligence.  The contention of petitioners that the driver and the conductor had no knowledge that the victim would ride on the bus, since the latter had supposedly not manifested his intention to board the same, does not merit consideration. When the bus is not in motion there is no necessity for a person who wants to ride the same to signal his intention to board. A public utility bus, once it stops, is in effect making a continuous offer to bus riders. Hence, it becomes the duty of the driver and the conductor, every time the bus stops, to do no act that would have the effect of increasing the peril to a passenger while he was attempting to board the same. The premature acceleration of the bus in this case was a breach of such.  Moreover, the circumstances under which the driver and the conductor failed to bring the gravely injured victim immediately to the hospital for medical treatment is a patent and incontrovertible proof of their negligence. It defies understanding and can even be stigmatized as callous indifference. The evidence shows that after the accident the bus could have forthwith turned at Bunk 56 and thence to the hospital, but its driver instead opted to first proceed to Bunk 70 to allow a passenger to alight and to deliver a refrigerator, despite the serious condition of the victim. Note:  It is not negligence per se, or as a matter of law, for one attempt to board a train or streetcar which is moving slowly. An ordinarily prudent person would have made the attempt board the

WON there is no obligation on the part of a street railway company to stop its cars to let on intending passengers at other points than those appointed for stoppage hence no liability. Held: no. there is still liability on the part of the motorman.  With respect to the legal aspects of the case we may observe at the outset that there is no obligation on the part of a street railway

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company to stop its cars to let on intending passengers at other points than those appointed for stoppage. In fact it would be impossible to operate a system of street cars if a company engage in this business were required to stop any and everywhere to take on people who were too indolent, or who imagine themselves to be in too great a hurry, to go to the proper places for boarding the cars. Nevertheless, although the motorman of this car was not bound to stop to let the plaintiff on, it was his duty to do act that would have the effect of increasing the plaintiff's peril while he was attempting to board the car. The premature acceleration of the car was, in our opinion, a breach of this duty.  As to the contributory negligence of the plaintiff, we are of the opinion that it should be treated, as in Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil., 359), as a mitigating circumstance under article 1103 of the Civil Code. It is obvious that the plaintiff's negligence in attempting to board the moving car was not the proximate cause of the injury. The direct and proximate cause of the injury was the act of appellant's motorman in putting on the power prematurely.  Again, the situation before us is one where the negligent act of the company's servant succeeded the negligent act of the plaintiff, and the negligence of the company must be considered the proximate cause of the injury. The rule here applicable seems to be analogous to, if not identical with that which is sometimes referred to as the doctrine of "the last clear chance." In accordance with this defense is not available if the liability of the master arises from a breach of contrauctual duty (culpa contractual). In the case bfore us the company pleaded as a special defense that it had used all the deligence of a good father of a family to prevent the damage suffered by the plaintiff; and to establish this contention the company introduced testimony showing that due care had been used in training and instructing the motorman in charge of this car in his art. But this proof is irrelevant in view of the fact that the liability involved was derived from a breach of obligation under article 1101 of the Civil Code and related provisions.  Another practical difference between liability for negligence arising under 1902 of the Civil Code and liability arising from negligence in the performance of a positive duty, under article 1101 and related provisions of the Civil Code, is that, in dealing with the latter form of negligence, the court is given a discretion to mitigate liability according to the circumstances of the case (art 1103). No such general discretion is given by the Code in dealing with liability arising under article 1902; although possibly the same end is reached by courts in dealing with the latter form of liability because of the latitude of the considerations pertinent to cases arising under this article. Aboitiz shipping corp. vs CA G.R. No. 84458 November 6, 1989 ABOITIZ SHIPPING CORPORATION, petitioner, vs. HON. COURT OF APPEALS, ELEVENTH DIVISION, LUCILA C. VIANA, SPS. ANTONIO VIANA and GORGONIA VIANA, and PIONEER STEVEDORING CORPORATION, respondents Facts:  Anacleto Viana boarded the vessel M/V Antonia, owned by defendant, at the port at San Jose, Occidental Mindoro, bound for Manila, having purchased a ticket.  vessel arrived at Pier 4, North Harbor, Manila, and the passengers therein disembarked, a gangplank having been provided connecting the side of the vessel to the pier.  After said vessel had landed, the Pioneer Stevedoring Corporation took over the exclusive control of the cargoes loaded on said vessel between the third party defendant Pioneer Stevedoring Corporation and defendant Aboitiz Shipping Corporation.  The crane owned by the third party defendant and operated by its crane operator Alejo Figueroa was placed alongside the vessel and one (1) hour after the passengers of said vessel had disembarked, it started operation by unloading the cargoes from said vessel.  While the crane was being operated, Anacleto Viana who had already disembarked from said vessel obviously remembering that some of his cargoes were still loaded in the vessel, went back to the vessel, and it was while he was pointing to the crew of the said vessel to the place where his cargoes were loaded that the crane hit him, pinning him between the side of the vessel and the crane. He was thereafter brought to the hospital where he later expired three (3) days thereafter.  Private respondents Vianas filed a complaint 3 for damages against petitioner corporation (Aboitiz, for brevity) for breach of contract of carriage.  In a decision rendered by the trial court, 7 Aboitiz was ordered to pay the Vianas for damages incurred, and Pioneer was ordered to reimburse Aboitiz for whatever amount the latter paid the Vianas.  Both Aboitiz and Pioneer filed separate motions for reconsideration, In an order the trial court absolved Pioneer from liability for failure of the Vianas and Aboitiz to preponderantly

doctrine, the contributory negligence of the party injured will not defeat the action if it be shown that the defendant might, by the exercise of reasonable care and prudence, have avoided the consequences of the negligence of the injured party (20 R. C. L., p.
139; Carr vs. Interurban Ry. Co., 185 Iowa, 872; 171 N. W., 167). The negligence of the plaintiff was, however, contributory to the accident and must be considered as a mitigating circumstance.  It being understood, therefore, that the appealed judgment is modified by reducing the recovery to the sum of P2,500, the judgment, as thus modified, is affirmed. Note:  The relation between a carrier of passengers for hire and its patrons is of a contractual nature; and in failure on the part of the carrier to use due care in carrying its passengers safely is a breach of duty (culpa contructual) under articles 1101, 1103 and 1104 of the Civil Code. Furthermore, the duty that the carrier of passengers owes to its patrons extends to persons boarding the cars as well as to those alighting therefrom. The case of Cangco vs. Manila Railroad Co. (38 Phil., 768), supplies an instance of the violation of this duty with respect to a passenger who was getting off of a train. In that case the plaintiff stepped off of a moving train, while it was slowing down in a station, and at the time when it was too dark for him to see clearly where he was putting his feet. The employees of the company had carelessly left watermelons on the platform at the place where the plaintiff alighted, with the result that his feet slipped and he fell under the car, where his right arm badly injured. This court held that the railroad company was liable for breach positive duty (culpa contractual), and the plaintiff was awarded damages in the amount of P2,500 for the loss of his arm. In the opinion in that case the distinction is clearly drawn between a liability for negligence arising from breach of contructual duty and that arising articles 1902 and 1903 of the Civil Code (culpa aquiliana).  The distiction between these two sorts of negligence is important in this jurisdiction, for the reason that where liability arises from a mere tort (culpa aquiliana), not involving a breach of positive obligation, an employer, or master, may exculpate himself, under the last paragraph of article 1903 of the Civil Code, by providing that he had exercised due degligence to prevent the damage; whereas this

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establish a case of negligence against the crane operator which the court a quo ruled is never presumed, aside from the fact that the memorandum of agreement supposedly refers only to Pioneer's liability in case of loss or damage to goods handled by it but not in the case of personal injuries, and, finally that Aboitiz cannot properly invoke the fellow-servant rule simply because its liability stems from a breach of contract of carriage.  Not satisfied with the modified judgment of the trial court, Aboitiz appealed the same to respondent Court of Appeals which affirmed the findings of of the trial court except as to the amount of damages awarded to the Vianas. Hence, this petition. Issue:  Note:  Where a passenger dies or is injured, the common carrier is presumed to have been at fault or to have acted negligently. 17 This gives rise to an action for breach of contract of carriage where all that is required of plaintiff is to prove the existence of the contract of carriage and its non-performance by the carrier, that is, the failure of the carrier to carry the passenger safely to his destination, 18 which, in the instant case, necessarily includes its failure to safeguard its passenger with extraordinary diligence while such relation subsists.  The presumption is, therefore, established by law that in case of a passenger's death or injury the operator of the vessel was at fault or negligent, having failed to exercise extraordinary diligence, and it is incumbent upon it to rebut the same. This is in consonance with the avowed policy of the State to afford full protection to the passengers of common carriers which can be carried out only by imposing a stringent statutory obligation upon the latter. Concomitantly, this Court has likewise adopted a rigid posture in the application of the law by exacting the highest degree of care and diligence from common carriers, bearing utmost in mind the welfare of the passengers who often become hapless victims of indifferent and profit-oriented carriers. We cannot in reason deny that petitioner failed to rebut the presumption against it. Under the facts obtaining in the present case, it cannot be gainsaid that petitioner had inadequately complied with the required degree of diligence to prevent the accident from happening. La Mallorca vs. CA G.R. No. L-20761 July 27, 1966 LA MALLORCA, petitioner, vs. HONORABLE COURT OF APPEALS, MARIANO BELTRAN, ET AL., respondents. Facts:  plaintiffs, husband and wife, together with their minor daughters boarded the Pambusco Bus, owned and operated by the defendant, at San Fernando, Pampanga, bound for Anao, Mexico, Pampanga.  After about an hour's trip, the bus reached Anao whereat it stopped to allow the passengers bound therefor, the father returned to the bus to get one of his baggages which was not unloaded when they alighted from the bus.  Racquel, the child that she was, must have followed the father. However, although the father was still on the running board of the bus waiting for the conductor to hand him the bag or bayong, the bus started to run, so that even he (the father) had to jump down from the moving vehicle. It was at this instance that the child, who must be near the bus, was run over and killed.  For the death of their said child, the plaintiffs commenced the present suit against the defendant seeking to recover from the latter.  On the basis of these facts, the trial court found defendant liable for breach of contract of carriage.  On appeal to the Court of Appeals, La Mallorca claimed that there could not be a breach of contract in the case, for the reason that when the child met her death, she was no longer a passenger of the bus involved in the incident and, therefore, the contract of carriage had already terminated.  Although the Court of Appeals sustained this theory, it nevertheless found the defendant-appellant guilty of quasi-delict and held the latter liable for damages, for the negligence of its driver, in accordance with Article 2180 of the Civil Code. In its brief before us.

WON that since one (1) hour had already elapsed from the time Anacleto Viana disembarked from the vessel and that he was given more than ample opportunity to unload his cargoes prior to the operation of the crane, his presence on the vessel was no longer reasonable e and he consequently ceased to be a passenger.

Held: no.  It is apparent from the foregoing that what prompted the Court to rule as it did in said case is the fact of the passenger's reasonable presence within the carrier's premises. That reasonableness of time should be made to depend on the attending circumstances of the case, such as the kind of common carrier, the nature of its business, the customs of the place, and so forth, and therefore precludes a consideration of the time element per se without taking into account such other factors. It is thus of no moment whether in the cited case of La Mallorcathere was no appreciable interregnum for the passenger therein to leave the carrier's premises whereas in the case at bar, an interval of one (1) hour had elapsed before the victim met the accident. The primary factor to be considered is the existence of a reasonable cause as will justify the presence of the victim on or near the petitioner's vessel. We believe there exists such a justifiable cause.  even if he had already disembarked an hour earlier, his presence in petitioner's premises was not without cause. The victim had to claim his baggage which was possible only one (1) hour after the vessel arrived since it was admittedly standard procedure in the case of petitioner's vessels that the unloading operations shall start only after that time. Consequently, under the foregoing circumstances, the victim Anacleto Viana is still deemed a passenger of said carrier at the time of his tragic death.  present contention that the death of the passenger was due to the negligence of the crane operator cannot be sustained both on grounds, of estoppel and for lack of evidence on its present theory. Even in its answer filed in the court below it readily alleged that Pioneer had taken the necessary safeguards insofar as its unloading operations were concerned, a fact which appears to have been accepted by the plaintiff therein by not impleading Pioneer as a defendant, and likewise inceptively by Aboitiz by filing its third-party complaint only after ten (10) months from the institution of the suit against it. Parenthetically, Pioneer is not within the ambit of the rule on extraordinary diligence required of, and the corresponding presumption of negligence foisted on, common carriers like Aboitiz. This, of course, does not detract from what we have said that no negligence can be imputed to Pioneer but, that on the contrary, the failure of Aboitiz to exercise extraordinary diligence for the safety of its passenger is the rationale for our finding on its liability.  WHEREFORE, the petition is DENIED and the judgment appealed from is hereby AFFIRMED in toto.

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Issue:  WON La Mallorca liable for quasi-delict, considering that respondents complaint was one for breach of contract.  is clearly an allegation for quasi-delict. The inclusion of this averment for quasi-delict, while incompatible with the other claim under the contract of carriage, is permissible under Section 2 of Rule 8 of the New Rules of Court, which allows a plaintiff to allege causes of action in the alternative, be they compatible with each other or not, to the end that the real matter in controversy may be resolved and determined.

Held: yes.  In the circumstances, it cannot be claimed that the carrier's agent had exercised the "utmost diligence" of a "very cautions person" required by Article 1755 of the Civil Code to be observed by a common carrier in the discharge of its obligation to transport safely its passengers. In the first place, the driver, although stopping the bus, nevertheless did not put off the engine. Secondly, he started to run the bus even before the bus conductor gave him the signal to go and while the latter was still unloading part of the baggages of the passengers Mariano Beltran and family. The presence of said passengers near the bus was not unreasonable and they are, therefore, to be considered still as passengers of the carrier, entitled to the protection under their contract of carriage.  But even assuming arguendo that the contract of carriage has already terminated, herein petitioner can be held liable for the negligence of its driver.  The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was predicated when it was alleged in the complaint that "the death of Raquel Beltran, plaintiffs' daughter, was caused by the negligence and want of exercise of the utmost diligence of a very cautious person on the part of the defendants and their agent." This allegation was also proved when it was established during the trial that the driver, even before receiving the proper signal from the conductor, and while there were still persons on the running board of the bus and near it, started to run off the vehicle. The presentation of proof of the negligence of its employee gave rise to the presumption that the defendant employer did not exercise the diligence of a good father of the family in the selection and supervision of its employees. And this presumption, as the Court of Appeals found, petitioner had failed to overcome. Consequently, petitioner must be adjudged peculiarily liable for the death of the child Raquel Beltran.  Wherefore, the decision of the Court of Appeals is hereby modified by sentencing, the petitioner to pay to the respondents Mariano Beltran. Note:  It has been recognized as a rule that the relation of carrier and passenger does not cease at the moment the passenger alights from the carrier's vehicle at a place selected by the carrier at the point of destination, but continues until the passenger has had a reasonable time or a reasonable opportunity to leave the carrier's premises. And, what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. Thus, a person who, after alighting from a train, walks along the station platform is considered still a passenger.2 So also, where a passenger has alighted at his destination and is proceeding by the usual way to leave the company's premises, but before actually doing so is halted by the report that his brother, a fellow passenger, has been shot, and he in good faith and without intent of engaging in the difficulty, returns to relieve his brother, he is deemed reasonably and necessarily delayed and thus continues to be a passenger entitled as such to the protection of the railroad and company and its agents.  The Court of Appeals, pursuant to Article 2180 of the Civil Code. Paragraph 7 of the complaint, which reads — That aside from the aforesaid breach of contract, the death of Raquel Beltran, plaintiffs' daughter, was caused by the negligence and want of exercise of the utmost diligence of a very cautious person on the part of the defendants and their agent, necessary to transport plaintiffs and their daughter safely as far as human care and foresight can provide in the operation of their vehicle.