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C.

OBLIGATIONS OF THE PARTIES AND DEFENSES


2. Defenses of Common Carriers
Presumption of Negligence to Absence or Presence of Contributory Negligence (See syllabus)
Diaz vs. CA, GR 149749, July 25, 2006
Facts: Petitioner Agapita Diaz operated a common carrier, a Tamaraw FX taxi plying the route of
Cagayan de Oro City to any point in Region 10. On July 20, 1996, petitioner's taxi, driven by one
Arman Retes, was moving at an excessive speed when it rammed into the rear portion of a Hino
cargo truck owned by private respondent Teodoro Lantoria and driven by private respondent
Rogelio Francisco. As a result, nine passengers of the taxi died including Sherly Moneo.
On August 13, 1996, the heirs of Sherly Moneo 4 filed with the Regional Trial Court of
Malaybalay City, Branch 10, 5 an action for breach of contract of carriage and damages 6 against
petitioner and her driver, Arman Retes.
On motion, 7 petitioner filed a third-party complaint against private respondents Teodorio
Lantoria and Rogelio Francisco. 8
The pre-trial conference was initially set on July 11, 1998 but was reset to July 30, 1998 for
petitioner and her counsel's failure to appear 9 despite due notice. Registry receipt number
04364 10 showed that notice had been sent to petitioner's counsel, Atty. Cipriano Lupeba. 11 On
scheduled date, petitioner and her counsel again failed to appear, prompting the court to allow
private respondents to present evidence ex parte. aDECHI
More than seven months after the conclusion 12 of private respondents' ex parte presentation of
evidence, petitioner filed a motion for leave to present evidence on her defense and third-party
complaint. 13 The trial court denied this. 14
On October 29, 1999, the trial court rendered a decision holding petitioner and Arman Retes
jointly and severally liable to pay private respondent heirs of Sherly Moneo P50,000 for her
death, P50,000 as moral damages, P20,000 as exemplary damages and P20,000 as attorney's
fees. 15
On appeal, the trial court's decision was affirmed by the Court of Appeals in the assailed May 30,
2001 decision. 16 The motion for reconsideration was denied. 17 Hence, this recourse.
Issues:
1. WON the Court of Appeals committed grave abuse of discretion in affirming the trial court's
decision denying petitioner's motion for leave to present evidence on her defense and third-party
complaint, and
2. WON the Court of Appeals committed grave abuse of discretion in affirming the trial court's
decision holding petitioner liable for breach of contract.
Held: Petition is DISMISSED.
First, Section 3, Rule 18 of the Rules of Court states that:
The notice of pre-trial shall be served on counsel, or on the party who has no counsel. The
counsel served with such notice is charged with the duty of notifying the party represented by
him.
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Petitioner was represented by Atty. Cipriano Lupeba to whom the notice was sent. 18 It was
incumbent on the latter to advise petitioner accordingly. His failure to do so constituted
negligence which bound petitioner. aEcHCD
Further, Sections 4 and 5 of Rule 18 read:
Sec. 4. Appearance of Parties. It shall be the duty of the parties and their counsel to appear at
the pre-trial. The non-appearance of the party may be excused only if a valid cause is shown
therefore or if a representative shall appear in his behalf fully authorized in writing to enter into
an amicable settlement, to submit to alternative modes of dispute resolution, and to enter into
stipulations or admissions of facts and of documents.
Sec. 5. Effect of failure to appear. The failure of the plaintiff to appear when so required
pursuant to the next preceding section shall be cause for the dismissal of the action. The
dismissal shall be with prejudice, unless otherwise ordered by the court. A similar failure on the
defendant shall be cause to allow the plaintiff to present his evidence ex parte and the court to
render judgment on the basis thereof.
Consequently, it was no error for the trial court to allow private respondents to present their
evidence ex parte when petitioner and her counsel failed to appear for the scheduled pre-trial
conference.
Second, "a common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for
all the circumstances." 19
In a contract of carriage, it is presumed that the common carrier is at fault or is negligent when a
passenger dies or is injured. In fact, there is even no need for the court to make an express
finding of fault or negligence on the part of the common carrier. This statutory presumption may
only be overcome by evidence that the carrier exercised extraordinary diligence. 20
In the case at bar, petitioner, as common carrier, failed to establish sufficient evidence to rebut
the presumption of negligence. The findings of the trial court, as affirmed by the Court of
Appeals, showed that the accident which led to the death of Sherly Moneo was caused by the
reckless speed and gross negligence of petitioner's driver who demonstrated no regard for the
safety of his passengers. 21 It was thus correct to hold petitioner guilty of breach of the contract
of carriage.
RCL of Singapore, et. Al vs. The Netherlands Insurance Co., GR 168151
Facts of the case:
On October 20, 1995, 405 cartons of Epoxy Molding Compound were consigned to be shipped
from Singapore to Manila for Temic Telefunken Microelectronics Philippines (Temic). U-Freight
Singapore PTE Ltd. (U-Freight Singapore), a forwarding agent based in Singapore, contracted the
services of Pacific Eagle Lines PTE. Ltd. (Pacific Eagle) to transport the subject cargo. The cargo
was packed, stored, and sealed by Pacific Eagle in its Refrigerated Container. As the cargo was
highly perishable, the inside of the container had to be kept at a temperature of 0 Celsius.
Pacific Eagle then loaded the refrigerated container on board the M/V Piya Bhum, a vessel owned
by RCL, with which Pacific Eagle had a slot charter agreement. RCL duly issued its own Bill of
Ladingin favor of Pacific Eagle. To insure the cargo against loss and damage, Netherlands
Insurance issued a Marine Open Policy in favor of Temic, to cover all losses/damages to the
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shipment. On October 25, 1995, the M/V Piya Bhum docked in Manila. After unloading the
refrigerated container, it was plugged to the power terminal of the pier to keep its temperature
constant. Fidel Rocha (Rocha), Vice-President for Operations of Marines Adjustment Corporation,
accompanied by two surveyors, conducted a protective survey of the cargo. They found that
based on the temperature chart, the temperature reading was constant from October 18, 1995 to
October 25, 1995 at 0 Celsius. However, at midnight of October 25, 1995 when the cargo had
already been unloaded from the ship the temperature fluctuated with a reading of 33 Celsius.
Rocha believed the fluctuation was caused by the burnt condenser fan motor of the refrigerated
container. On November 9, 1995, Temic received the shipment. It found the cargo completely
damaged. Temic filed a claim for cargo loss against Netherlands Insurance, with supporting
claims documents. The Netherlands Insurance paid Temic the sum ofP1,036,497.00 under the
terms of the Marine Open Policy. Temicthen executed a loss and subrogation receipt in favor of
Netherlands Insurance. Seven months from delivery of the cargo, Netherlands Insurance filed a
complaint for subrogation of insurance settlement with the Regional Trial Court, against the
unknown owner of M/V Piya Bhum and TMS Ship Agencies (TMS), the latter thought to be the
local agent of M/V Piya Bhums unknown owner Netherlands Insurance amended the complaint
on January 17, 1997 to implead EDSA Shipping, RCL, Eagle Liner Shipping Agencies, U-Freight
Singapore, and U-Ocean (Phils.), Inc. (U-Ocean), as additional defendants. A third amended
complaint was later made, impleading Pacific Eagle in substitution of Eagle Liner Shipping
Agencies. TMS filed its answer to the original complaint. RCL and EDSA Shipping filed their
answers with cross-claim and compulsory counterclaim to the second amended complaint. UOcean likewise filed an answer with compulsory counterclaim and cross-claim. During the
pendency of the case, U-Ocean, jointly with U-Freight Singapore, filed another answer with
compulsory counterclaim. Only Pacific Eagle and TMS filed their answers to the third amended
complaint. The defendants all disclaimed liability for the damage caused to the cargo, citing
several reasons why Netherland Insurances claims must be rejected. Specifically, RCL and EDSA
Shipping denied negligence in the transport of the cargo; they attributed any negligence that
may have caused the loss of the shipment to their co-defendants. They likewise asserted that no
valid subrogation exists, as the payment made by Netherlands Insurance to the consignee was
invalid. By way of affirmative defenses, RCL and EDSA Shipping averred that the Netherlands
Insurance has no cause of action, and is not the real party-in-interest, and that the claim is
barred by laches/prescription. After Netherlands Insurance had made its formal offer of evidence,
the defendants including RCL and EDSA Shipping sought leave of court to file their respective
motions to dismiss based on demurrer to evidence. RCL and EDSA Shipping, in their motion,
insisted that Netherlands Insurance had (1) failed to prove any valid subrogation, and (2) failed
to establish that any negligence on their part or that the loss was sustained while the cargo was
in their custody. On May 22, 2002, the trial court handed down an Order dismissing Civil Case No.
96-78612 on demurrer to evidence. The trial court ruled that while there was valid subrogation,
the defendants could not be held liable for the loss or damage, as their respective liabilities
ended at the time of the discharge of the cargo from the ship at the Port of Manila. Netherlands
Insurance seasonably appealed the order of dismissal to the CA.
On May 26, 2004, the CA disposed of the appeal as follows:
WHEREFORE, in view of the foregoing, the dismissal of the complaint against defendants
Regional Container Lines and Its local agent, EDSA Shipping Agency, is REVERSED and SET
ASIDE.
The dismissal of the complaint against the other defendants is AFFIRMED. Pursuant to Section 1,
Rule33 of the 1997 Rules of Civil Procedure, defendants Regional Container Lines and EDSA
Shipping Agency are deemed to have waived the right to present evidence.
ISSUE: WON the CA correctly held RCL and EDSA Shipping liable as common carriers under the
theory of presumption of negligence.
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RULING: The present case is governed by the following provisions of the Civil Code:
ART. 1733. Common carriers, from the nature of their business and for reasons of public
policy,are bound to observe extraordinary diligence in the vigilance over the goods and for the
safety of the passengers transported by them according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734,
1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the
passengers is further set forth inarticles1755 and 1756. ART. 1734. Common carriers are
responsible for the loss, destruction, or deterioration of the goods, 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 of omission of the shipper or owner of the goods;
4) The character of the goods or defects in the packing or in the containers;
5) Order or act of competent public authority.
ART. 1735. In all cases other that those mentioned in Nos. 1, 2, 3, 4 and 5of the preceding article,
if the goods are lost, destroyed, or deteriorated, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they observed extraordinary diligence
as required by article 1733.
ART. 1736. The extraordinary responsibility of the common carrier lasts from the time the goods
are unconditionally placed in the possession of, and received by the carrier for transportation
until the sane are delivered, actually or constructively, by the carrier to the consignee, or to the
person who has a right to receive them, without prejudice to the provisions of articles 1738. ART.
1738. The extraordinary liability of the common carrier continues to be operative even during the
time the goods are stored in a warehouse of the carrier at the place of destination, until the
consignee has been advised of the arrival of the goods and has had reasonable opportunity
thereafter to remove them or otherwise dispose of them. ART. 1742. Even if the loss, destruction,
or deterioration of the goods should be caused by the character of the goods, or the faulty nature
of the packing or of the containers, the common carrier must exercise due diligence to forestall
or lessen the loss.
In the present case, RCL and EDSA Shipping disclaim any responsibility for the loss or damage to
the goods in question. They contend that the cause of the damage to the cargo was the
fluctuation of the temperature in the reefer van, which fluctuation occurred after the cargo had
already been discharged from the vessel; no fluctuation, they point out, arose when the cargo
was still on board M/V Piya Bhum. As the cause of the damage to the cargo occurred after the
same was already discharged from the vessel and was under the custody of the arrastre operator
(International Container Terminal Services, Inc. or ICTSI), RCL and EDSA Shipping posit that the
presumption of negligence provided in Article 1735 of the Civil Code should not apply.
xxxx
We do not find the arguments of RCL and EDSA Shipping meritorious.
A common carrier is presumed to have been negligent if it fails to prove that it exercised
extraordinary vigilance over the goods it transported. When the goods shipped are either lost or
arrived in damaged condition, a presumption arises against the carrier of its failure to observe
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that diligence, and there need not be an express finding of negligence to hold it liable. To
overcome the presumption of negligence, the common carrier must establish by adequate proof
that it exercised extraordinary diligence over the goods. It must do more than merely show that
some other party could be responsible for the damage. In the present case, RCL and EDSA
Shipping failed to prove that they did exercise that degree of diligence required by law over the
goods they transported. Indeed, there is sufficient evidence showing that the fluctuation of the
temperature in the refrigerated container van, as recorded in the temperature chart, occurred
after the cargo had been discharged from the vessel and was already under the custody of the
arrastre operator, ICTSI. This evidence, however, does not disprove that the condenser fan
which caused the fluctuation of the temperature in the refrigerated container was not damaged
while the cargo was being unloaded from the ship. It is settled in maritime law jurisprudence that
cargoes while being unloaded generally remain under the custody of the carrier; RCL and EDSA
Shipping failed to dispute this.
RCL and EDSA Shipping could have offered evidence before the trial court to show that the
damage to the condenser fan did not occur: (1) while the cargo was in transit; (2) while they
were in the act of discharging it from the vessel; or (3)while they were delivering it actually or
constructively to the consignee. They could have presented proof to show that they exercised
extraordinary care and diligence in the handling of the goods, but they opted to file a demurrer
to evidence. As the order granting their demurrer was reversed on appeal, the CA correctly ruled
that they are deemed to have waived their right to present evidence, and the presumption of
negligence must stand.
It is for this reason as well that we find RCL and EDSA Shippings claim that the loss or damage to
the cargo was caused by a defect in the packing or in the containers. To exculpate itself from
liability for the loss/damage to the cargo under any of the causes, the common carrier is
burdened to prove any of the causes in Article 1734 of the Civil Code claimed by it by a
preponderance of evidence. If the carrier succeeds, the burden of evidence is shifted to the
shipper to prove that the carrier is negligent. RCL and EDSA Shipping, however, failed to satisfy
this standard of evidence and in fact offered no evidence at all on this point; a reversal of a
dismissal based on a demurrer to evidence bars the defendant from presenting evidence
supporting its allegations.
MRR vs. Ballesteros, 16 SCRA 641
Facts: Private respondents here, plaintiffs below, were passengers on petitioner's bus, the driver
of which was Jose Anastacio. In Bayombong, Nueva Vizcaya, Anastacio stopped the bus and got
off to replace a defective spark plug. While he was thus engaged, one Dionisio Abello, an auditor
assigned to defendant company by the General Auditing Office, took the wheel and told the
driver to sit somewhere else. With Abello driving, the bus proceeded on its way, from time to
time stopping to pick up passengers. Anastacio tried twice to take the wheel back but Abello
would not relinquish it. Then, in the language of the trial court, "while the bus was negotiating
between Km. posts 328 and 329 (in Isabela) a freight truck . . . driven by Marcial Nocum . . .
bound for Manila, was also negotiating the same place; when these two vehicles were about to
meet at the bend of the road, Marcial Nocum, in trying to evade several holes on the right lane,
where his truck was running, swerved his truck towards the middle part of the road and in so
doing, the left front fender and left side of the freight truck smashed the left side of the bus
resulting in extensive damages to the body of the bus and injuries to seventeen of its
passengers, . . . including the plaintiffs herein."
In rejecting petitioner's contention that the negligence of Marcial Nocum could not be imputed to
it and relieved it from liability, the trial court found that Dionisio Abello "was likewise reckless
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when he was driving the bus at the rate of from 40 to 50 kilometers per hour on a bumpy road at
the moment of the collision."
Another defense put up by petitioner is that since Abello was not its employee it should not be
held responsible for his acts. This defense was correctly overruled by the trial court, considering
the provisions of Article 1763 of the Civil Code and section 48 (b) of the Motor Vehicle Law, which
respectively provide as follows:
ART. 1763. A common carrier is responsible for injuries suffered by a passenger on account of the
willful acts or negligence of other passengers or of strangers, if the common carrier's employees
through the exercise of the diligence of a good father of a family could have prevented or
stopped the act or omission.
Sec. 48(b). No professional chauffeur shall permit any unlicensed person to drive the motor
vehicle under his control, or permit a person, sitting beside him or in any other part of the car, to
interfere with him in the operation of the motor vehicle, by allowing said person to take hold of
the steering wheel, or in any other manner take part in the manipulation or control of the car.
It appears further, and so the trial court found, that there were negotiations between the parties
to compromise the case, as a result of which respondents herein, plaintiffs below, considerably
reduced their claims to the amounts subsequently awarded in the judgment; that petitioner had
in fact settled the claims of the other passengers who were also injured in the same accident and
even the claim for damages filed in another action by the owner of the freight truck; and that the
Government Corporate Counsel himself, who represents herein petitioner, rendered two separate
opinions (Op. No. 86, May 19, 1960; and Op. No. 99, series of 1961) wherein, after analyzing the
facts and the law applicable, he reached the conclusion that the acts of the bus personnel,
particularly "in allowing Mr. Abello to drive despite two occasions when the bus stopped and the
regular driver could have taken over, constitute reckless imprudence and wanton injurious
conduct on the part of the MRR employees." On the basis of those opinions, the Government
Corporate Counsel advised petitioner that the offer of the claimants was reasonable and should
be accepted. His advice, however, was not favorably acted upon, petitioner obviously preferring
to litigate.
Issues:
1. Whether or not Dionisio Abello acted with reckless negligence while driving petitioner's bus at
the time of the accident;
2. Whether or not petitioner may be held liable on account of such negligence, considering that
he was not its employee.
Held: The writ prayed for is denied, with costs against petitioner.
These are no longer justiciable questions which would justify our issuing the peremptory writ
prayed for. The first is a question of fact on which the affirmative finding of respondent court is
not reviewable by Us; and the second is one as to which there can be no possible doubt in view
of the provisions of the Civil Code and of the Motor Vehicle Law hereinbefore cited. There would
be no point in giving the appeal due course.
Doctrine: A common carrier is liable for injuries suffered by its passengers due to the willful acts
or negligence of other passengers or of strangers, if the common carrier's employees through
the exercise of the diligence of a good father of a family could have prevented or stopped the act
or omission.
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Bacarro vs, Castano, 118 SCRA 187


FACTS: Respondent Castano boarded a jeep driven by Petitioner Montefalcon who thereafter
drove it at around 40 kilometers per hour. While approaching Sumasap Bridge at the said speed,
a cargo truck coming from behind, blowing its horn to signal its intention to overtake the jeep.
The jeep, without changing its speed, gave way by swerving to the right, such that both vehicles
ran side by side for a distance of around 20 meters. Thereafter as the jeep was left behind, its
driver was unable to return it to its former lane and instead it obliquely or diagonally ran down an
inclined terrain towards the right until it fell into a ditch pinning down and crushing Castanos
right leg in the process.
Castano filed a case for damages against Rosita Bacarro, William Sevilla, and Felario
Montefalcon. Defendants alleged that the jeepney was sideswiped by the overtaking cargo truck.
After trial, the CFI of Misamis Oriental ordered Bacarro, et.al. to jointly and severally pay Castano.
It was affirmed by the CA upon appeal.
ISSUES:
1. Whether or not there was a contributory negligence on the part of the jeepney driver.
2. Whether or not extraordinary diligence is required of the jeepney driver.
3. Whether or not the sideswiping is a fortuitous event.
HELD:
1.) Yes. X x x. The fact is, petitioner-driver Montefalcon did not slacken his speed but instead
continued to run the jeep at about forty (40) kilometers per hour even at the time the overtaking
cargo truck was running side by side for about twenty (20) meters and at which time he even
shouted to the driver of the truck.
Thus, had Montefalcon slackened the speed of the jeep at the time the truck was overtaking it,
instead of running side by side with the cargo truck, there would have been no contact and
accident. He should have foreseen that at the speed he was running, the vehicles were getting
nearer the bridge and as the road was getting narrower the truck would be to close to the jeep
and would eventually sideswiped it. Otherwise stated, he should have slackened his jeep when
he swerved it to the right to give way to the truck because the two vehicles could not cross the
bridge at the same time.
2.) Yes. x x x [T]he fact is, there was a contract of carriage between the private respondent and
the herein petitioners in which case the Court of Appeals correctly applied Articles 1733, 1755
and 1766 of the Civil Code which require the exercise of extraordinary diligence on the part of
petitioner Montefalcon.
Indeed, the hazards of modern transportation demand extraordinary diligence. A common carrier
is vested with public interest. Under the new Civil Code, instead of being required to exercise
mere ordinary diligence a common carrier is exhorted to carry the passengers safely as far as
human care and foresight can provide "using the utmost diligence of very cautious persons."
(Article 1755). Once a passenger in the course of travel is injured, or does not reach his
destination safely, the carrier and driver are presumed to be at fault.
3.) The third assigned error of the petitioners would find fault upon respondent court in not
freeing petitioners from any liability, since the accident was due to a fortuitous event. But, We
repeat that the alleged fortuitous event in this case - the sideswiping of the jeepney by the cargo
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truck, was something which could have been avoided considering the narrowness of the
Sumasap Bridge which was not wide enough to admit two vehicles. As found by the Court of
Appeals, Montefalcon contributed to the occurrence of the mishap.
Caangco vs. Manila Railroad Co., GR 12191

Facts: On January 20, 1915, Cangco was riding the train of Manila Railroad Co (MRC). He
was an employee of the latter and he was given a pass so that he could ride the train for
free. When he was nearing his destination at about 7pm, he arose from his seat even though
the train was not at full stop. When he was about to alight from the train (which was still
slightly moving) he accidentally stepped on a sack of watermelons which he failed to notice
due to the fact that it was dim. This caused him to lose his balance at the door and he fell
and his arm was crushed by the train and he suffered other serious injuries. He was dragged
a few meters more as the train slowed down.
It was established that the employees of MRC were negligent in piling the sacks of
watermelons. MRC raised as a defense the fact that Cangco was also negligent as he failed
to exercise diligence in alighting from the train as he did not wait for it to stop.
ISSUE: Whether or not Manila Railroad Co is liable for damages.
HELD: Yes. Alighting from a moving train while it is slowing down is a common practice and
a lot of people are doing so every day without suffering injury. Cangco has the vigor and
agility of young manhood, and it was by no means so risky for him to get off while the train
was yet moving as the same act would have been in an aged or feeble person. He was also
ignorant of the fact that sacks of watermelons were there as there were no appropriate
warnings and the place was dimly lit.
The Court also elucidated on the distinction between the liability of employers under Article
2180 and their liability for breach of contract [of carriage]:

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NOTES: But, if the master has not been guilty of any negligence whatever in the selection
and direction of the servant, he is not liable for the acts of the latter, whatever done within
the scope of his employment or not, if the damage done by the servant does not amount to
a breach of the contract between the master and the person injured.
The liability arising from extra-contractual culpa is always based upon a voluntary act or
omission which, without willful intent, but by mere negligence or inattention, has caused
damage to another.
These two fields, figuratively speaking, concentric; that is to say, the mere fact that a person
is bound to another by contract does not relieve him from extra-contractual liability to such
person. When such a contractual relation exists the obligor may break the contract under
such conditions that the same act which constitutes the source of an extra-contractual
obligation had no contract existed between the parties.
Manresa: Whether negligence occurs an incident in the course of the performance of a
contractual undertaking or in itself the source of an extra-contractual undertaking obligation,
its essential characteristics are identical.
Vinculum Juris: (def) It means an obligation of law, or the right of the obligee to enforce a
civil matter in a court of law.
Isaac vs. AL Ammen Transportation Co., GR L-9671

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Facts: A. L. Ammen Transportation Co., Inc., hereinafter referred to as defendant, is a


corporation engaged in the business of transporting passengers by land for compensation in
the Bicol provinces and one of the lines it operates is the one connecting Legaspi City, Albay
with Naga City, Camarines Sur. One of the buses which defendant was operating is Bus No.
31. On May 31, 1951, plaintiff boarded said bus as a passenger paying the required fare from
Ligao, Albay bound for Pili, Camarines Sur, but before reaching his destination, the bus
collided with a motor vehicle of the pick-up type coming from the opposite direction, as a
result of which plaintiff's left arm was completely severed and the severed portion fell inside
the bus. Plaintiff was rushed to a hospital in Iriga, Camarines Sur where he was given blood
transfusion to save his life. After four days, he was transferred to another hospital in Tabaco,
Albay, where he underwent treatment for three months. He was moved later to the
Orthopedic Hospital where he was operated on and stayed there for another two months. For
these services, he incurred expenses amounting to P623.40, excluding medical fees which
were paid by defendant.
As an aftermath, plaintiff brought this action against defendant for damages alleging that the
collision which resulted in the loss of his left arm was mainly due to the gross incompetence
and recklessness of the driver of the bus operated by defendant and that defendant incurred
in culpa contractual arising from its non-compliance with its obligation to transport plaintiff
safely to his destination. Plaintiff prays for judgment against defendant as follows: (1) P5,000
as expenses for his medical treatment, and P3,000 as the cost of an artificial arm, or a total
of P8,000; (2) P6,000 representing loss of earning; (3) P75,000 for diminution of his earning
capacity; (4) P50,000 as moral damages; and (5) P10,000 as attorneys' fees and costs of
suit.
Defendant set up as special defense that the injury suffered by plaintiff was due entirely to
the fault or negligence of the driver of the pick-up car which collided with the bus driven by
its driver and to the contributory negligence of plaintiff himself. Defendant further claims
that the accident which resulted in the injury of plaintiff is one which defendant could not
foresee or, though foreseen, was inevitable.
The court after trial found that the collision occurred due to the negligence of the driver of
the pick-up car and not to that of the driver of the bus it appearing that the latter did
everything he could to avoid the same but that notwithstanding his efforts, he was not able
to avoid it. As a consequence, the court dismissed the complaint, with costs against plaintiff.
This is an appeal from said decision.
It appears that plaintiff boarded a bus of defendant as paying passenger from Ligao, Albay,
bound for Pili, Camarines Sur, but before reaching his destination, the bus collided with a
pick-up car which was coming from the opposite direction and, as a result, his left arm was
completely severed and fell inside the back part of the bus.

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Held: Wherefore, the decision appealed from is affirmed, with costs against appellant.
We believe that the law concerning the liability of a common carrier has now suffered a
substantial modification in view of the innovations introduced by the new Civil Code. These
innovations are the ones embodied in Articles 1733, 1755 and 1756 in so far as the relation
between a common carrier and its passengers is concerned, which, for ready reference, we
quote hereunder:
"ART. 1733. Common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence in the vigilance over the goods and for
the safety of the passengers transported by them according to all the circumstances of each
case.
"Such extraordinary diligence in the vigilance over the goods is further expressed in articles
1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of
the passengers is further set forth in articles 1755 and 1756..
"ART. 1755. A common carrier is bound to carry the passengers safely as far as human care
and foresight can provide, using the utmost diligence of very cautious persons, with a due
regard for all the circumstances."
"ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to
have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in articles 1733 and 1755."
The Code Commission, in justifying this extraordinary diligence required of a common
carrier, says the following:
"A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with due regard
for all circumstances. This extraordinary diligence required of common carriers is calculated
to protect the passengers from the tragic mishaps that frequently occur in connection with
rapid modern transportation. This high standard of care is imperatively demanded by the
preciousness of human life and by the consideration that every person must in every way be
safeguarded against all injury. (Report of the Code Commission, pr. 35-36)" (Padilla, Civil
Code of the Philippines, Vol. IV, 1956 ed., p. 197).
From the above legal provisions, we can make the following restatement of the principles
governing the liability of a common carrier: (1) the liability of a carrier is contractual and
arises upon breach of its obligation. There is breach if it fails to exert extraordinary diligence
according to all the circumstances of each case; (2) a carrier is obliged to carry its passenger
with the utmost diligence of a very cautious person, having due regard for all the
circumstances; (3) a carrier is presumed to be at fault or to have acted negligently in case of
death of, or injury to, passengers, it being its duty to prove that it exercised extraordinary
diligence; and (4) the carrier is not an insurer against all risks of travel.
The question that now arises is: Has defendant observed extraordinary diligence or the
utmost diligence of every cautious person, having due regard for all circumstances, in
avoiding the collision which resulted in the injury caused to the plaintiff?
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After examining the evidence in connection with how the collision occurred, the lower court
made the following finding:
The evidence would appear to support the above finding. Thus, it appears that Bus No. 31,
immediately prior to the collision, was running at a moderate speed because it had just stopped
at the school zone of Matacong, Polangui, Albay. The pick-up car was at full speed and was
running outside of its proper lane. The driver of the bus, upon seeing the manner in which the
pick-up was then running, swerved the bus to the very extreme right of the road until its front
and rear wheels have gone over the pile of stones or gravel situated on the rampart of the road.
Said driver could not move the bus farther right and run over a greater portion of the pile, the
peak of which was about 3 feet high, without endangering the safety of his passengers. And
notwithstanding all these efforts, the rear left side of the bus was hit by the pick-up car.
Of course, this finding is disputed by appellant who cannot see eye to eye with the evidence for
the appellee and insists that the collision took place because the driver of the bus was going at a
fast speed. He contends that, having seen that a car was coming from the opposite direction at a
distance which allows the use of moderate care and prudence to avoid an accident, and knowing
that on the side of the road along which he was going there was a pile of gravel, the driver of the
bus should have stopped and waited for the vehicle from the opposite direction to pass, and
should have proceeded only after the other vehicle had passed. In other words, according to
appellant, the act of the driver of the bus in squeezing his way through between the oncoming
pick-up and the pile of gravel under the circumstances was considered negligent.
But this matter is one of credibility and evaluation of the evidence. This is the function of the trial
court. The trial court has already spoken on this matter as we have pointed out above. This is
also a matter of appreciation of the situation on the part of the driver. While the position taken by
appellant appeals more to the sense of caution that one should observe in a given situation to
avoid an accident or mishap, such however can not always be expected from one who is placed
suddenly in a predicament where he is not given enough time to take the proper course of action
as he should under ordinary circumstances. One who is placed in such a predicament cannot
exercise such coolness or accuracy of judgment as is required of him under ordinary
circumstances and he cannot therefore be expected to observe the same judgment, care and
precaution as in the latter. For this reason, authorities abound where failure to observe the same
degree of care that as ordinary prudent man would exercise under ordinary circumstances when
confronted with a sudden emergency was held to be warranted and a justification to exempt the
carrier from liability. Thus, it was held that "where a carrier's employee is confronted with a
sudden emergency, the fact that he is obliged to act quickly and without a chance for
deliberation must be taken into account, and he is not held to the same degree of care that he
would otherwise be required to exercise in the absence of such emergency but must exercise
only such care as any ordinary prudent person would exercise under like circumstances and
conditions, and the failure on his part to exercise the best judgment the case renders possible
does not establish lack of care and skill on his part which renders the company, liable. . . ." (13 C.
J. S., 1412; 10 C. J., 970). Considering all the circumstances, we are persuaded to conclude that
the driver of the bus has done what a prudent man could have done to avoid the collision and in
our opinion this relieves appellee from liability under our law.
A circumstance which militates against the stand of appellant is the fact borne out by the
evidence that when he boarded the bus in question, he seated himself on the left side thereof
resting his left arm on the window sill but with his left elbow outside the window, this being his
position in the bus when the collision took place. It is for this reason that the collision resulted in
the severance of said left arm from the body of appellant thus doing him a great damage. It is
therefore apparent that appellant is guilty of contributory negligence. Had he not placed his left
arm on the window sill with a portion thereof protruding outside, perhaps the injury would have
been avoided as is the case with the other passengers. It is to be noted that appellant was the
only victim of the collision.
It is true that such contributory negligence cannot relieve appellee of its liability but will only
entitle it to a reduction of the amount of damage caused (Article 1762, new Civil Code).
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Doctrine:
1. PUBLIC UTILITIES; PRINCIPLES GOVERNING LIABILITY OF COMMON CARRIER. The following
are the principles governing the liability of a common carrier: (1) the liability of a carrier is
contractual and arises upon breach of its obligation. There is a breach if it fails to exert
extraordinary diligence according to all the circumstances of each case; (2) a carrier is obliged to
carry its passenger with the utmost diligence of a very cautious person, having due regard for all
circumstances; (3) a carrier is presumed to be at fault or to have acted negligently in case of
death of, or injury to, passengers, it being its duty to prove that it exercised extraordinary
diligence; and (4) the carrier is not an insurer against all risks of travel.
2. ID.; ID.; CONTRIBUTORY NEGLIGENCE OF PASSENGER MILITATES AGAINST HIS CLAIM; CASE AT
BAR. A circumstance which militates against the stand of appellant is the fact borne out by the
evidence that when he boarded the bus in question, he seated himself on the left side thereof
resting his left arm on the window sill but with his left elbow outside the window, this being his
position in the bus when the collision took place. It is for this reason that the collision resulted in
the severance of said left arm from the body of appellant thus doing him a great damage. It is
therefore apparent that appellant is guilty of contributory negligence.
Compania Maritima vs. CA, et. Al, GR L-31379
FACTS
- Private respondent Concepcion of Consolidated Construction had a contract with the Civil
Aeronautics Administration for the construction of the airport in Cagayan de Oro.
- Being a Manila-based contractor, Concepcion had to ship his construction equipment to CDO
City. Concepcion negotiated with petitioner Compania for the shipment of one (1) unit payloader.
A Bill of Lading was issued to him.
- The equipment was loaded aboard the MV. It arrived safely in CDO City. While the payloader
was about two (2) meters above the pier in the course of unloading, the swivel pin of the heel
block Hatch No. 2 gave way, causing the payloader to fall. The payloader was completely
damaged.
- Meanwhile, petitioner Compania shipped the payloader to Manila where it was weighed at the
SMC. Finding that the payloader weighed 7.5 tons and not 2.5 tons as declared in the Bill of
Lading, petitioner denied the claim for damages, contending that had Concepcion declared the
actual weight of the payloader, damage to the payloader could have been prevented.
- Concepcion filed an action for damages.
- CFI: dismissed; the proximate cause of the fall of the payloader was Concepcion's act or
omission in having misrepresented the weight of the payloader, which underdeclaration led the
Chief Officer of the vessel to use the heel block of hatch No. 2 (which only has a 5-ton capacity)
in unloading the payloader.
- CA reversed. Ordered Petitioner to pay Concepcion. But reduced the value of the payloader by
20% due to Concepcions contributory negligence.
ISSUE/S & HELD: WON the act of private respondent Concepcion in furnishing petitioner
Compaia Maritima with an inaccurate weight was the proximate cause of the damage, as would
absolutely exempt petitioner from liability for damages. NO.
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RATIONALE
- Petitioner argues: The loss, destruction, or deterioration of the goods was due to an act or
omission of the shipper or owner of the goods (Art. 1734).
- SC: Mere proof of delivery of the goods in good order to a common carrier, and of their arrival at
the place of destination in bad order, makes out prima facie case against the common carrier, so
that if no explanation is given as to how the loss, deterioration or destruction of the goods
occurred, the common carrier must be held responsible.
- The extraordinary diligence in the vigilance over goods requires common carriers to render
service with the greatest skill and foresight and "to use all reasonable means to ascertain the
nature and characteristic of goods tendered for shipment, and to exercise due care in the
handling and stowage.
- In the case at bar: Petitioner, upon the testimonies of its own crew, failed to take the necessary
and adequate precautions for avoiding damage to the payloader.
- CA found that petitioner used a 5-ton capacity lifting apparatus to lift and unload a visibly
heavy cargo like a payloader. There was laxity and carelessness of petitioner's crew in their
methods of ascertaining the weight of heavy cargoes offered for shipment before loading and
unloading them.
- The weight submitted by private respondent Concepcion was entered into the bill of lading by
petitioners company collector, without seeing the equipment to be shipped.
- Mr. Mariano Gupana, assistant traffic manager of petitioner, confirmed in his testimony that the
company never checked the information entered in the bill of lading.
- The Chief Officer took the bill of lading on its face value and presumed the same to be correct
by merely "seeing" it.
- Acknowledging that there was a "jumbo" in the MV Cebu (w/ a 20-25 ton capacity), The Chief
Officer chose not to use it. Extraordinary care and diligence compel the use of the "jumbo" lifting
apparatus as the most prudent course for petitioner.
- Art. 1741. If the shipper or owner merely contributed to the loss, destruction or deterioration of
the goods, the proximate cause thereof being the negligence of the common carrier, the latter
shall be liable in damages, which however, shall be equitably reduced.
- We find equitable the conclusion of the Court of Appeals reducing the recoverable amount of
damages by 20%. Decision AFFIMED.
Del Prado Vs. Manila Electric Co. GR 29462
Facts: Teodorico Florenciano, Meralcos motorman, was driving the companys street car along
Hidalgo Street. Plaintiff Ignacio Del Prado ran across the street to catch the car. The motorman
eased up but did not put the car into complete stop. Plaintiff was able to get hold of the rail and
step his left foot when the car accelerated. As a result, plaintiff slipped off and fell to the ground.
His foot was crushed by the wheel of the car. He filed a complaint for culpa contractual.
Issues:

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(1) Whether the motorman was negligent


(2) Whether Meralco is liable for breach of contract of carriage
(3) Whether there was contributory negligence on the part of the plaintiff
Held:
(1) We may observe at the outset that 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. Nevertheless, although the motorman of this car was not bound to stop to let the
plaintiff on, it was his duty to do no 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.
(2) The relation between a carrier of passengers for hire and its patrons is of a contractual
nature; and a failure on the part of the carrier to use due care in carrying its passengers safely is
a breach of duty (culpa contractual). 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.
Where liability arises from a mere tort (culpa aquiliana), not involving a breach of positive
obligation, an employer, or master, may exculpate himself by proving that he had exercised due
diligence to prevent the damage; whereas this defense is not available if the liability of the
master arises from a breach of contractual duty (culpa contractual). In the case before us the
company pleaded as a special defense that it had used all the diligence 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.
(3) 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 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. The negligence of the plaintiff was,
however, contributory to the accident and must be considered as a mitigating circumstance.
PNR vs. CA, et. Al, GR No. L-55347
Facts: On September 10, 1972, at about 9:00 o'clock in the evening, Winifredo Tupang, husband
of plaintiff Rosario Tupang, boarded 'Train No. 516 of appellant at Libmanan, Camarines Sur, as a
paying passenger bound for Manila. Due to some mechanical defect, the train stopped at
Sipocot, Camarines Sur, for repairs, taking some two hours before the train could resume its trip
to Manila. Unfortunately, upon passing Iyam Bridge at Lucena, Quezon, Winifredo Tupang fell off
the train resulting in his death.The train did not stop despite the alarm raised by the other
passengers that somebody fell from the train. Instead, the train conductor Perfecto Abrazado,
called the station agent at Candelaria, Quezon, and requested for verification of the information.
Police authorities of Lucena City were dispatched to the Iyam Bridge where they found the
lifeless body of Winifredo Tupang.

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As shown by the autopsy report, Winifredo Tupang died of cardio-respiratory failure due to
massive cerebral hemorrhage due to traumatic injury [Exhibits B and C, Folder of
Exhibits],Tupang was later buried in the public cemetery of Lucena City by the local police
authorities. [Rollo, pp. 91-92]
Upon complaint filed by the deceased's widow, Rosario Tupang, the then Court of First Instance of
Rizal, after trial, held the petitioner PNR liable for damages for breach of contract of carriage and
ordered "to pay the plaintiff the sum of P12,000,00 for the death of Winifredo Tupang, plus
P20,000.00 for loss of his earning capacity and the further sum of P10,000.00 as moral damages,
and P2,000.00 as attorney's fees, and costs. 1
On appeal, the Appellate Court sustained the holding of the trial court that the PNR did not
exercise the utmost diligence required by law of a common carrier. It further increased the
amount adjudicated by the trial court by ordering PNR to pay the plaintiff an additional sum of
P5,000.00 as exemplary damages.
Moving for reconsideration of the above decision, the PNR raised for the first time, as a defense,
the doctrine of state immunity from suit. It alleged that it is a mere agency of the Philippine
government without distinct or separate personality of its own, and that its funds are
governmental in character and, therefore, not subject to garnishment or execution. The motion
was denied; the respondent court ruled that the ground advanced could not be raised for the first
time on appeal.
Hence, this petition for review.
Issue: WON there was a contributory negligence on the part of Tupang.
Held: Yes.
PNR has the obligation to transport its passengers to their destinations and to observe
extraordinary diligence in doing so. Death or any injury suffered by any of its passengers gives
rise to the performance of its obligation under the contract of carriage. PNR failed to overthrow
such presumption of negligence with clear and convincing evidence, inasmuch as PNR does not
deny: (1) that the train boarded by the deceased Tupang was so overcrowded that he and many
other passengers had no choice but to sit on the open platforms between the coaches of the
train; (2) that the train did not even slow down when it approached the Iyam Bridge which was
under repair at the time; (3) that neither did the train stop, despite the alarm raised by the other
passengers that a person had fallen off the train at Iyam Bridge.
While PNR failed to exercise extraordinary diligence as required by law, it appears that the
deceased was chargeable with contributory negligence. Since he opted to sit on the open
platform between the coaches of the train, he should have held tightly and tenaciously on the
upright metal bar found on the side of the said train. Such contributory negligence, while not
exempting the PNR from liability, nevertheless justified the deletion of the amount adjudicated as
moral damages.
The SC modified the decision of the appellate court by eliminating there from the amounts of
P10000 and P5000 adjudicated as moral and exemplary damages, respectively, without costs.
Tabacalera Insurance Co, et. Al. vs. North Front Shipping Services, Inc., GR 119197
Facts: On 2 August 1990, 20,234 sacks of corn grains valued at P3,500,640.00 were shipped on
board North Front 777, a vessel owned by North Front Shipping Services, Inc. The cargo was
consigned to Republic Flour Mills Corporation in Manila under Bill of Lading No. 001 1 and insured
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with the herein mentioned insurance companies. The vessel was inspected prior to actual loading
by representatives of the shipper and was found fit to carry the merchandise. The cargo was
covered with tarpaulins and wooden boards. The hatches were sealed and could only be opened
by representatives of Republic Flour Mills Corporation.
The vessel left Cagayan de Oro City on 2 August 1990 and arrived Manila on 16 August 1990.
Republic Flour Mills Corporation was advised of its arrival but it did not immediately commence
the unloading operations. There were days when unloading had to be stopped due to variable
weather conditions and sometimes for no apparent reason at all. When the cargo was eventually
unloaded there was a shortage of 26.333 metric tons. The remaining merchandise was already
moldy, rancid and deteriorating. The unloading operations were completed on 5 September 1990
or twenty (20) days after the arrival of the barge at the wharf of Republic Flour Mills Corporation
in Pasig City.
Precision Analytical Service, Inc., was hired to examine the corn grains and determine the cause
of deterioration. A Certificate of Analysis was issued indicating that the corn grains had 18.56%
moisture content and the wetting was due to contact with salt water. The mold growth was only
incipient and not sufficient to make the corn grains toxic and unfit for consumption. In fact the
mold growth could still be arrested by drying.
Republic Flour Mills Corporation rejected the entire cargo and formally demanded from North
Front Shipping Services, Inc., payment for the damages suffered by it. The demands however
were unheeded. The insurance companies were perforce obliged to pay Republic Flour Mills
Corporation P2,189,433.40
By virtue of the payment made by the insurance companies they were subrogated to the rights
of Republic Flour Mills Corporation. Thusly, they lodged a complaint for damages against North
Front Shipping Services, Inc., claiming that the loss was exclusively attributable to the fault and
negligence of the carrier. The Marine Cargo Adjusters hired by the insurance companies
conducted a survey and found cracks in the bodega of the barge and heavy concentration of
molds on the tarpaulins and wooden boards. They did not notice any seals in the hatches. The
tarpaulins were not brand new as there were patches on them, contrary to the claim of North
Front Shipping Services, Inc., thus making it possible for water to seep in. They also discovered
that the bulkhead of the barge was rusty.
North Front Shipping Service, Inc., averred in refutation that it could not be made culpable for the
loss and deterioration of the cargo as it was never negligent. Captain Solomon Villanueva,
master of the vessel, reiterated that the barge was inspected prior to the actual loading and was
found adequate and seaworthy. In addition, they were issued a permit to sail by the Coast Guard.
The tarpaulins were doubled and brand new and the hatches were properly sealed. They did not
encounter big waves hence it was not possible for water to seep in. He further averred that the
corn grains were farm wet and not properly dried when loaded.
The court below dismissed the complaint and ruled that the contract entered into between North
Front Shipping Service, Inc., and Republic Flour Mills Corporation was a charter-party agreement.
As such, only ordinary diligence in the care of goods was required of North Front Shipping
Services, Inc. The inspection of the barge by the shipper and the representatives of the shipping
company before actual loading, coupled with the Permit to Sail issued by the Coast Guard,
sufficed to meet the degree of diligence required of the carrier.
On the other hand, the Court of Appeals ruled that as a common carrier required to observe a
higher degree of diligence North Front 777 satisfactorily complied with all the requirements

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hence was issued a Permit to Sail after proper inspection. Consequently, the complaint was
dismissed and the motion for reconsideration rejected.
Held: WHEREFORE, the Decision of the Court of Appeals of 22 December 1994 and its Resolution
of 16 February 1995 are REVERSED and SET ASIDE. Respondent North Front Shipping Services,
Inc., is ordered to pay petitioners Tabacalera Insurance Co., Prudential Guarantee & Assurance,
Inc., and New Zealand Insurance Co. Ltd., P1,313,660.00 which is 60% of the amount paid by the
insurance companies to Republic Flour Mills Corporation, plus interest at the rate of 12% per
annum from the time this judgment becomes final until full payment.
On the other hand, the Court of Appeals ruled that as a common carrier required to observe a
higher degree of diligence North Front 777 satisfactorily complied with all the requirements
hence was issued a Permit to Sail after proper inspection. Consequently, the complaint was
dismissed and the motion for reconsideration rejected.
The charter-party agreement between North Front Shipping Services, Inc., and Republic Flour
Mills Corporation did not in any way convert the common carrier into a private carrier. We have
already resolved this issue with finality in Planters Products, Inc. v. Court of Appeals 2 thus
A 'charter-party' is defined as a contract by which an entire ship, or some principal part thereof,
is let by the owner to another person for a specified time or use; a contract of affreightment by
which the owner of a ship or other vessel lets the whole or a part of her to a merchant or other
person for the conveyance of goods, on a particular voyage, in consideration of the payment of
freight . . . 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. In both cases, the charter-party provides for the hire of the vessel only, either for a
determinate period of time or for a single or consecutive voyage, the ship owner to supply the
ship's store, pay for the wages of the master of 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. 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 . . .
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 (emphasis supplied).
North Front Shipping Services, Inc., is a corporation engaged in the business of transporting
cargo and offers its services indiscriminately to the public. It is without doubt a common carrier.
As such it is required to observe extraordinary diligence in its vigilance over the goods it
transports. 3 When goods placed in its care are lost or damaged, the carrier is presumed to have
been at fault or to have acted negligently. 4 North Front Shipping Services Inc., therefore has the
burden of proving that it observed extraordinary diligence in order to avoid responsibility for the
lost cargo.

North Front Shipping Services, Inc., proved that the vessel was inspected prior to actual loading
by representatives of the shipper and was found fit to take a load of corn grains. They were also
issued Permit to Sail by the Coast Guard. The master of the vessel testified that the corn grains
were farm wet when loaded. However, this testimony was disproved by the clean bill of lading
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issued by North Front Shipping Services, Inc., which did not contain a notation that the corn
grains were wet and improperly dried. Having been in the service since 1968, the master of the
vessel would have known at the outset that corn grains that were farm wet and not properly
dried would eventually deteriorate when stored in sealed and hot compartments as in hatches of
a ship. Equipped with this knowledge, the master of the vessel and his crew should have
undertaken precautionary measures to avoid or lessen the cargo's possible deterioration as they
were presumed knowledgeable about the nature of such cargo. But none of such measures was
taken.
In Compania Maritima v. Court of Appeals 5 we ruled
. . . Mere proof of delivery of the goods in good order to a common carrier, and of their arrival at
the place of destination in bad order, makes out prima facie case against the common carrier, so
that if no explanation is given as to how the loss, deterioration or destruction of the goods
occurred, the common carrier must be held responsible. Otherwise stated, it is incumbent upon
the common carrier to prove that the loss, deterioration or destruction was due to accident or
some other circumstances inconsistent with its liability. . . .
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 safe 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.' (emphasis
supplied).
In fine, we find that the carrier failed to observe the required extraordinary diligence in the
vigilance over the goods placed in its care. The proofs presented by North Front Shipping
Services, Inc., were insufficient to rebut the prima facie presumption of private respondent's
negligence, more so if we consider the evidence adduced by petitioners.
It is not denied by the insurance companies that the vessel was indeed inspected before actual
loading and that North Front 777 was issued a Permit to Sail. They proved the fact of shipment
and its consequent loss or damage while in the actual possession of the carrier. Notably, the
carrier failed to volunteer any explanation why there was spoilage and how it occurred. On the
other hand, it was shown during the trial that the vessel had rusty bulkheads and the wooden
boards and tarpaulins bore heavy concentration of molds. The tarpaulins used were not new,
contrary to the claim of North Front Shipping Services, Inc., as there were already several
patches on them, hence, making it highly probable for water to enter.
Laboratory analysis revealed that the corn grains were contaminated with salt water. North Front
Shipping Services, Inc., failed to rebut all these arguments. It did not even endeavor to establish
that the loss, destruction or deterioration of the goods was due to the following: (a) flood, storm,
earthquake, lightning, or other natural disaster or calamity; (b) act of the public enemy in war,
whether international or civil; (c) act or omission of the shipper or owner of the goods; (d) the
character of the goods or defects in the packing or in the containers; (e) order or act of
competent public authority. 6 This is a closed list. If the cause of destruction, loss or deterioration
is other than the enumerated circumstances, then the carrier is rightly liable therefor. cdrep
However, we cannot attribute the destruction, loss or deterioration of the cargo solely to the
carrier. We find the consignee Republic Flour Mills Corporation guilty of contributory negligence.
It was seasonably notified of the arrival of the barge but did not immediately start the unloading
operations. No explanation was proffered by the consignee as to why there was a delay of six (6)
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days. Had the unloading been commenced immediately the loss could have been completely
avoided or at least minimized. As testified to by the chemist who analyzed the corn samples, the
mold growth was only at its incipient stage and could still be arrested by drying. The corn grains
were not yet toxic or unfit for consumption. For its contributory negligence, Republic Flour Mills
Corporation should share at least 40% of the loss.
Doctrines:
1. COMMERCIAL LAW; COMMON CARRIERS; REQUIRED TO OBSERVE EXTRAORDINARY DILIGENCE
IN THEIR VIGILANCE OVER THE GOODS THEY TRANSPORT; HAVE THE BURDEN OF PROVING THAT
THEY OBSERVED EXTRAORDINARY DILIGENCE IN ORDER TO AVOID RESPONSIBILITY FOR LOST
CARGO. North Front Shipping Services, Inc., is a corporation engaged in the business of
transporting cargo and offers its services indiscriminately to the public. It is without doubt a
common carrier. As such it is required to observe extraordinary diligence in its vigilance over the
goods it transports. When goods placed in its care are lost or damaged, the carrier is presumed
to have been at fault or to have acted negligently. North Front Shipping Services, Inc., therefore
has the burden of proving that it observed extraordinary diligence in order to avoid responsibility
for the lost cargo.
2. ID.; ID.; ID.; ID.; THE MASTER OF THE VESSEL AND HIS CREW SHOULD HAVE UNDERTAKEN
PRECAUTIONARY MEASURES TO AVOID OR LESSEN THE CARGO'S POSSIBLE DETERIORATION AS
THEY WERE PRESUMED KNOWLEDGEABLE ABOUT THE NATURE OF SUCH CARGO; CASE AT BAR. North Front Shipping Services. Inc., proved that the vessel was inspected prior to actual loading
by representatives of the shipper and was found fit to take a load of corn grains. They were also
issued Permit to Sail by the Coast Guard. The master of the vessel testified that the corn grains
were farm wet when loaded. However, this testimony was disproved by the clean bill of lading
issued by North Front Shipping Services, Inc., which did not contain a notation that the corn
grains were wet and improperly dried. Having been in the service since 1968, the master of the
vessel would have known at the outset that corn grains that were farm wet and not properly
dried would eventually deteriorate when stored in sealed and hot compartments as in hatches of
a ship. Equipped with this knowledge, the master of the vessel and his crew should have
undertaken precautionary measures to avoid or lessen the cargo's possible deterioration as they
were presumed knowledgeable about the nature of such cargo. But none of such measures was
taken.
3. ID.; ID.; ID.; ID.; CONSIGNEE OF CARGO FOUND GUILTY OF CONTRIBUTORY NEGLIGENCE; CASE
AT BAR. We cannot attribute the destruction, loss or deterioration of the cargo solely to the
carrier. We find the consignee Republic Flour Mills Corporation guilty of contributory negligence.
It was seasonably notified of the arrival of the barge but did not immediately start the unloading
operations. No explanation was proffered by the consignee as to why there was a delay of six (6)
days. Had the unloading been commenced immediately the loss could have been completely
avoided or at least minimized. As testified to by the chemist who analyzed the corn samples, the
mold growth was only at its incipient stage and could still be arrested by drying. The corn grains
were not yet toxic or unfit for consumption. For its contributory negligence, Republic Flour Mills
corporation should share at least 40% of the loss.

TranspoLaw CaseDigest (Lacking of letter C)- SY 2015-2016 MKI

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