San Beda College of Law

Transportation Law Cases SY 2013-2014

Baliwag Transit Corp v. CA (Legal Standing)
FACTS:
A complaint for breach of contract of
carriage was filed by the passenger of legal age,
together with his parents, against Baliwag, who
suffered injuries during the travel. Alleging that the
passenger was the one at fault, Baliwag was able to
secure a quit claim from the passenger. The parents,
however, who paid for the hospital bills, opposed to
such quit claim, alleging that his son was totally
dependent on them for support when the accident
happened, and had not agreed to such quit claim.
ISSUE: W/N parents of a passenger
complaint against the common carrier?

may file

HELD: No. They lack legal standing, hence, in this

case, the release of claims was valid and had the effect
of a compromise agreement.
The contract of carriage was between the passenger
and the carrier. Since a contract may be violated only
by the parties thereto, as against each other, the real
party in interest must be the parties to the contract.
Every action must be brought in the name of the party
whose legal right has been invaded or infringed.
British Airways v. CA (Perfection)
FACTS: FITGS recruitment agency received a telefax
from its principal ROLACO Engineering & Contracting
Services in Saudi Arabia to recruit Filipinos in its behalf.
OLACO prepaid the tickets at the Saudi branch of
British Airways (BA). A prepaid ticket advice for 93
workers with an instruction to transport the workers to
Saudi before March 30, 1981 was then accepted by BA.
Thereafter, FITGS booked the workers, but BA failed to
fly the said workers when it cancelled the confirmed
bookings without prior notice. This happened more
than once, causing FITGS damages, hence, it filed a
complaint for breach of contract of carriage. Alleging
that there was no contract of carriage, BA petitions the
SC for review on certiorari to annul the CA decision,
which affirmed the RTC, holding BA liable.
ISSUE: W/N the absence of a plane ticket is indicative
of lack of perfected contract of carriage.
HELD: NO. In dealing with the contract of carriage,
there are two aspects, namely: (a) contract to carry
(at some future date), which is consensual and is
perfected by mere consent; and (b) contract of
common carriage itself, which is considered as a real
contract, for not until the carrier is used can the carrier
be said to have assumed the obligation of a carrier.
In this case, the contract to carry is the one involved.
As such, even if there was no actual ticket issued by
BA, its consent (first requisite of a contract) was
manifested by the acceptance of the prepaid ticket
advice. The object was to transport the workers, and
the consideration was the payment made by ROLACO
in the Saudi branch of BA, which it accepted.
LRTA v. Navidad (Passenger)

FACTS:
A drunk Navidad entered the EDSA LRT
station after buying his ticket. While on the platform,
Escartin, the security guard of Prudent Security Agency
assigned in that area, approached Navidad. Shortly
thereafter, a fist-fight broke, causing Navidad to fall on
the tracks. At the exact moment when Navidad fell, the
LRT train operated by Roman (Note: employee of the
MRT) which was approaching, fatally ran over Navidad.
The wife of Navidad filed a complaint for breach of
contract of carriage. When the case reached the CA, it
exonerated PRUDENT, but ruled that LRTA and Roman
was liable for damages, hence, this petition by LRTA,
alleging that it had overcome the presumption of
negligence because the act of Navidad was an act of
stranger that could not have been foreseen and that
Roman was an employee of MRT.
ISSUES:
1. W/N Navidad was a passenger;
2. W/N the fact that Roman was employed by
MRT is a defense.
3. W/N Roman is liable.
4. W/N PRUDENT is liable; if any, what is the
nature of its liability.
5. W/N LRTA is liable.
HELD: 1. Yes. A contract of carriage was deemed
created from the moment Navidad paid the fare at the
LRT station (presence of ticket) and entered the
premises of the latter, and was on the platform waiting
for the train, entitling Navidad to all the rights and
protection under a contractual relation. He was in the
place designated for boarding the train with the
intention of riding the same.
2. No. In the discharge of its obligation to
ensure the safety of passengers, a carrier may choose
to hire its own employees or avail itself of the services
of an outsider to undertake the task. In either case, the
common carrier is not relieved of its responsibilities
under the contract of carriage.
3. No. There is no proof that Roman is guilty of
any culpable act or omission. Moreover, the liability of
LRTA to Navidad is based on the contract of carriage,
and this juridical relation does not exist between
Roman and Navidad; thus, Roman can be made liable
only for his own fault or negligence.
4. No. There was no proof of negligence of its
employee-security guard Escartin. In case there had
been negligence, as an independent contractor, it
would be solidarily liable with the LRTA. Why? The basis
of liability of LRTA is the contract of carriage. However,
the contract itself can be breached by a tort, and when
the same act or omission causes the injury, one culpa
contractual and the other culpa aquilania (tort), Art.
2194 [The responsibility of two or more persons who
are liable for quasi-delict is solidary] can be applied.
5. Yes. 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.
LRTA failed to show satisfactory explanation as to how
the accident occurred, as such, the presumption would
be that it has been at fault.
De Guzman v. CA (Define Common Carrier; Force
Majeure; Hijacking)

FACTS:
Junk dealer Cendana buys scrap metal
in Pangasinan and resells the same in Manila. He uses
two (2) six-wheelers. On his return trip to Pangasinan,
he would load his trucks with cargoes for Pangasinan
merchants. For this service, he charges freight rates
lower than commercial ones. In one transaction with De
Guzman, involving 750 boxes of milk, Pangasinan
bound, Cendana was hijacked. Only 150 boxes were
delivered to De Guzman. He filed a complaint for
breach of contract of carriage against Cendana for
failure to exercise EOD, who in its defense, argued that
he was not a common carrier, and as such, not
required to exercise EOD. Even if he was, hi-jacking is a
force majeure, hence, he should not be liable.
ISSUES:
1. W/N Cendana is a common carrier,
despite having no certificate of public conveyance
2. W/N hi-jacking is a force majeure
HELD: 1. Yes. 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.
The article makes no distinction between one
whose principal business activity is the carrying of
persons or goods or both, and one who does such
carrying only as an ancillary activity (in local Idiom as
"a sideline"). It 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 it
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. Lastly, a certificate of public conveyance is
not a requisite for the incurring of liability under the
common carrier provisions of the Civil Code.
2. It depends. If the robbers are armed, and
acted with grave or irresistible threat, violence or
force, then yes, it is a force majeure. The limits of the
duty of EOD in the vigilance over the goods carried are
reached where the goods are lost as a result of a
robbery that is attended by grave or irresistible threat,
violence or force. In this case, the robbers not only
took away the cargo, but also kidnapped the driver and
its helper, detaining them for several days. As such, it
was beyond the control of Cendana as a common
carrier. Note that common carriers are not absolute
insurers against all risks of travel and transport of
goods, and cannot be held liable for force majeure.
Spouses Cruz v. Sun Holidays Inc. (Fortuitous
event; tried to use natural calamity to escape
liability to death of passenger)
FACTS: Spouses Cruz filed a complaint for damages for
breach of contract of carriage, arising from the deaths
of their son and his wife, on board M/B Coco Beach III,
that capsized en route to Batangas from Puerto Galera,
Oriental Mindoro, for negligently braving the storm,
where the newlywed stayed at Coco Beach Island
Resort owned by Sun Holidays (SHI). SHI denied being
a common carrier because M/B Coco Beach III was used
to ferry its resort guests and crew members only, and
that the storm was a force majeure. When the case

reached the CA, it ruled that SHI was a private carrier

only, that the same was not bound to exercise EOD,
and that the proximate cause of the accident was a
squall, a fortuitous event.
ISSUES:
1. W/N SHI is a common carrier
2. W/N the squall is a fortuitous event
3. When may a fortuitous event be used as a
defense?
4. W/N SHI is liable
HELD: 1. Yes, following the De Guzman Doctrine. Its
ferry services are so intertwined with its main business
as to be properly considered a sideline. And the tour
packages it offers, which includes the ferry services,
may be availed of by anyone who can afford to pay the
same, thus making it available to the public. As a
common carrier, SHI was bound to exercise EOD that it
failed to do.
2. No. It fails to qualify the term. The elements 1
of a fortuitous event are:
(a) The cause2 of the unforeseen and
unexpected occurrence3, or the failure of debtors to
comply with their obligations must have been
independent of human will;
(b) The event must be impossible to foresee, or
if foreseeable, impossible to avoid;4
(c) The occurrence must have been such as to
render it impossible for the debtors to fulfill their
obligation in a normal manner; and
(d) The debtor must have been free from any
participation in the aggravation of the resulting injury
to the creditor
3. If loss is caused by a fortuitous event, to
fully free a common carrier from any liability, the
fortuitous event must have been the proximate 5 and
only cause of the loss. And it should have exercised
due diligence to prevent or minimize the loss before,
during, and after the occurrence of the fortuitous
event.
4. Yes6. A squall is to be expected in a stormy
weather. When the incident happened, PAGASA has
issued public weather forecasts of tropical depressions

1 In American Legal System, these elements would be in

parallel to Direct Causation, which is a minority test in
determining the proximate cause of the loss. The main thrust
of Direct Causation is that there are no intervening causes
between an act and the resulting harm. An intervening cause
has several requisites: it must (1) be independent of the
original act, (2) be voluntary human act or an abnormal
natural event, and (3) occur in time between the original act
and the harm.

2 Basically it is the original act, in this case, the act of God.

3 That specific occurrence being used as a defense by the
carrier, in this case, the squall.

4 When it becomes foreseeable, the fortuitous event

becomes a force majeure --- and the only exception now is
that no one can stop a force majeure hence, impossible to
avoid.

5 Proximate cause is the cause that which, in a natural and

continuous sequence of events, unbroken by any new
independent cause, produces an event and without which, the
event would not have occurred. It is, in common sense, the
legally culpable/blameworthy cause of the lossNote: Proximate
cause has a different meaning in torts and insurance. In torts,
the question is why was there an injury? In insurance, the
question to be asked is how did the injury occur?

which would affect Mindoro. Further, evidence showed

that M/B Coco Beach III suffered engine failure before it
capsized and sank, therefore, was not free from human
intervention.7
Asia Lighterage and Shipping Inc. v. CA (Force
Majeure; tried to use natural calamity to escape
liability to loss of goods)
FACTS: Marubeni American Corp. shipped certain tons
of white wheat from Portland, Oregon to Manila, to be
delivered to consignee Gen. Milling Corp (GMC). When
the carrying vessel arrived in Manila, the cargo was
transferred to Asia Lighterages (ALSI) custody, as it
was contracted by GMC as a carrier to deliver the cargo
to its warehouse in Pasig City. The first shipment was
suspended due to a typhoon, and ALSI initially sought
shelter. During this time, it met an accident and
suffered a hole in the barge, which was patched with
clay and cement to refloat it. On its second attempt to
ship the cargo, the barge ran aground due to strong
current. ALSI transferred some cargoes to newly rented
barges, but unfortunately, the towing bits broke, which
caused the sinking of cargoes. When sued for
damages, ALSI argued that it is only a private carrier
because it has no fixed route, no terminals, no tickets,
& does not hold its services to the general public.
Further, it alleges that the loss was caused by
ISSUE: 1. W/N ALSI is liable as a common carrier
2. W/N the typhoon as a force majeure, is the
proximate cause of the loss to exempt ALSI
HELD: 1. Yes, following De Guzman Doctrine. ALSI is a
common carrier whether its carrying of goods is done
on an irregular basis, and with only limited clientele. A
common carrier also need not have any fixed route nor
does it have to maintain terminals or issue tickets.
2. No. ALSI cannot invoke the typhoon as a
force majeure to escape liability for the loss. It failed to
prove that it has exercised due diligence before 8,
during and after the occurrence of the typhoon to
prevent or minimize the loss.9 Surely, meeting a

6 Carriers liability rests upon his negligence, or failure to

exercise EOD. In cases of death or injury to passengers, he is
presumed negligent, and because of this presumption that the
doctrine of proximate cause in its usual sense is inapplicable
to a contract of carriage. Generally, the claimant must prove
causation to establish his case. As an exception, in contracts
of carriage, all the claimant must prove is the existence of the
contract, and the consequent breach thereof. In effect, the
roles have switched. It is now the defendant carrier who must
use the doctrine of proximate cause to prove his diligence.In
cases of losses of goods, proximate cause is used as a
defense by the carrier by proving that the loss cannot be
traced to any of his acts except that of the proximate cause,
which excusable causes are enumerated exclusively in Art.
1734: (1) act of God; (2) act of public enemy; (3) act of
shipper/owner of goods; (4) inherent vice of goods; (5) act of
public authority.

7 The original act, in relation to direct causation, would be the

act of God, the storm/squall, and applying the direct causation
rule, there is in this case, an intervening cause.

8 ALSI vessel suffered a hole. Patching it up with clay and

cement is only a provisional remedy.

9 Art. 1739. In order that the common carrier may be

exempted from responsibility, the natural disaster must have

typhoon head-on falls short of due diligence required

from a common carrier. More importantly, 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.
First Phil. Industrial Corp. v. CA (Law makes no
distinction as to means of transporting goods)
FACTS: FPIC is a grantee of a pipeline concession
under RA No. 387, as amended, to contract, install and
operate oil pipelines back in 1967, and renewed in
1992 by the ERB. In 1995, it applied for a mayors
permit in Batangas City. However, it was opposed by
the City Treasurer, alleging that FPIC is required to pay
local tax based on the gross receipts for products
pumped for the fiscal year 1993. FPIC paid under
protest. It sent a letter-protest, informing the City
Treasurer that it is involved in a business of
transporting oil products from Batangas refineries, via
pipeline, to Sucat and Pandacan terminals, and is
exempted from taxes on gross receipts under the Local
Government Code. The City Treasurer denied the
protest contending that FPIC cannot be engaged in the
transportation business, as such, cannot be exempt
from local tax.
ISSUE: W/N a pipeline concessionaire
categorized as a common carrier

may

be

HELD: Yes. The definition10 of "common carriers" in

Article 1732 of Civil Code makes no distinction as to
the means of transporting, as long as it is by land,
water or air. It does not provide that the transportation
of the passengers or goods should be by motor vehicle.
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.
Based
on
the
above
definitions
and
requirements, 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. Moreover, R.A. No. 387 also regards
pipeline concessionaire as common carrier and the
petroleum operation as public utility. Lastly, the reason
why transportation business is excluded from the
taxing powers of LGUs is that common carriers are
already paying common carriers tax as imposed by
the NIRC. This tax imposition should not be duplicated.
been the proximate and only cause of the loss.

10 Article 1732 of the Civil Code defines a "common carrier"

as "any person, corporation, firm or association engaged in
the business of carrying or transporting passengers or goods
or both, by land, water, or air, for compensation, offering their
services to the public."

Planters Products Inc. v. CA (Charter Party)

FACTS: PPI purchased from MITSUBISHI Intl. Corp. NY,
USA certain metric tons of Urea Fertilizer that the latter
shipped aboard the M/V Sun Plum (owned by KKKK but
time-chartered by MITSUBISHI) from Alaska, USA to
Poro Point, San Fernando, La Union Philippines. After
loading the Urea Fertilizer by stevedores hired and
supervised by MITSUBISHI, the steel hatches were
closed with heavy iron lids, covered with 3 layers of
tarpaulin, then tied with steel bonds. The hatches
remained tightly sealed throughout the voyage. Upon
arrival at the port of call, the conditions of the
unloading were: windy condition in the port area, sandy
route to the warehouse which was 50m away,
occasional raining, and it took 11 days to finish the
discharge. The survey report by the cargo surveyor
revealed a shortage, and some portion thereof are unfit
for commerce, as having polluted by sand, rust and
dirt. Subsequently, PPI filed a complaint for damages
for breach of contract of carriage. KKKK argued that it
had become a private carrier by the time charter party
and as such, not duty bound to exercise EOD.
ISSUES:
1. W/N a charter party between a ship
owner and a charterer transform a common carrier into
a private one as to negate the Civil Code presumption
of negligence in case of loss or damage to cargo
2. Was the carrier negligent?
HELD: 1. It depends. A charter party is basically a
lease contract involving the vessel. It is generally
categorized into:
(a) contract of affreightment, which involves the lease
of shipping space on vessels (hire of vessel space
only, in whole or in part), and is subcategorized as
either:
(i) time charter, a lease for a certain period ; or
(ii) voyage charter, a lease for a single or
consecutive voyages; and
(b) charter by demise or bareboat charter, which
involves the leasing of the whole vessel, including the
master and crew, who becomes the charterers
servants.
In the case at bar, MITSUBISHI entered into a
Time Charter Party, wherein the ship captain and its
crew remained under the employ, direct supervision
and control of the ship owner KKKK. It is therefore
imperative that a common carrier shall remain as such,
notwithstanding the charter of the whole or portion of
the vessel by one or more persons, provided that the
charter is limited to the vessel only.
2. No.11 The 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.

11 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.

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.
Fabre v. CA (Alternative Causes of Action; Tort
concept that the negligence of employee gives
rise to presumption of negligence of employee in
the S&S of employees; Due diligence in the S*S
of employees)
FACTS: The spouses Fabre are owners of a school bus.
It is driven by Cabil, who was hired after trying him out
for two weeks. His job was to take school children to
and from their school within Manila. A client, WWCF,
hired their services, for the transportation of its
members from Manila to La Union. On the way to La
Union, the usual route was through Carmen,
Pangasinan. However, the bridge was under repair,
hence, Cabil was forced to take a detour through
Lingayen, Pangasinan. Around 11:30 pm, driving 50kph
in a dark and unfamiliar area, Cabil came upon a sharp
curve, and because the road was slippery because of
the rain, the bus skid to the left road shoulder, crashing
into a fenced property, then turning over sideways.
Several passengers were hurt, but it was a certain Ms.
Antonio who was severely injured, who subsequently
became paralyzed from the waist down. Antonio filed a
complaint for damages. The RTC and CA found the
Spouses and its driver jointly and severally liable,
hence, this petition.
ISSUES:
1. W/N the carrier may be sued by its
passenger for tortious negligence of its employee
2. W/N the owner and its driver should be held
jointly and severally liable (solidary)
3. W/N the defense of due diligence in the
selection and supervision of employees is availing in a
contract of carriage (not actually an issue the SC
answered but might as well learn this now)
4. How is due diligence in the selection of
employees satisfied?
5. How is due diligence in the supervision of
employees satisfied?
HELD: 1. Yes. Although the relation between a
passenger and carrier is contractual in origin,
nevertheless, the act that breaks the contract may also
be a tort. Hence, a negligent act that breaches the
contract may give rise to a liability based on contract
as well as quasi delict under Art. 2176. This is known as
alternative causes of action - - - the carrier may be
sued on either causes of action. The only limit is that
the plaintiff is not allowed to recover twice for the
same injury. (see PCI Leasing v. UPCB)
2. Yes, in accordance with the Principle of
Vicarious Liability (Theory of Presumed Negligence). If
the cause of action based on quasi-delict is used, the
Fabres and its driver Cabil are solidarily liable. Pursuant
to Articles 2176 and 218012 of the Civil Code, the

12 Art. 2180. The obligation imposed by Art. 2176 is

demandable not only for ones own acts or omissions, but also

drivers negligence gave rise to the presumption that

his employers were themselves negligent in the
selection and supervision of their employee.
3. No. If the cause of action is based on the breach of
contract of carriage alone, the Fabres are still liable.
Article 1759 provides that the liability of carriers for
death or injuries of its passengers because of the
negligence or willful acts of its employees does not
cease upon proof that they exercised all the diligence
of a good father in the selection and supervision of
their employees.
4. On top of the professional license, the
employee must examine the applicant for his
qualifications, experience, and record of service, all of
which is with respect to the present undertaking, i.e.,
the long trip to La Union.
5. Due diligence in the supervision of
employees require the formulation of rules and
regulations for the guidance of employees, issuance of
proper
instructions,
actual
implementation
&
monitoring of consistent compliance with the rules, and
penalty for violation (last one is according to Atty.
Yebra).
Bascos v. CA (Test of CC; the complained
undertaking as part of the main business; Force
Majeure; Hijacking)
FACTS:
CIPTRADE bound itself to transport
certain metric tons of soya bean meal owned by Jibfair
Shipping Agency, from Manila to Laguna. To carry its
obligation, CIPTRADE subcontracted Bascos, who failed
to deliver a part of the cargo because of hijacking,
causing CIPTRADE to pay Jibfair the amount of the
goods lost. It demanded reimbursement from Bascos,
but she denied any liability, alleging that their contract
involved only the lease of the cargo trucks, hence,
CIPTRADE filed a complaint for sum of money and
damages.
ISSUES:
1. W/N Bascos is a common carrier,
notwithstanding the lease agreement between her and
CIPTRADE
2. W/N the hijacking is a force majeure
HELD: 1. Yes. The test to determine whether a person
is a common carrier is whether the given undertaking 13
is part of the business engaged by the carrier which he
has held out to the public as his occupation, rather
than the quantity or extent of the business transacted.
Bascos operated a trucking business under the name
A.M. Bascos Trucking, offering her trucks to those with
cargo to move. Further, following the De Guzman
Doctrine, the defense of Bascos that the lease contract
she makes was offered to a select group of people only
must necessarily fail. Most importantly, it must be
understood that a contract is what the law defines it to
be and not what is called by the contracting parties.
2. In De Guzman v. CA, the SC held that
hijacking, not being included in Art. 1734 14 must be

for those of persons for whom one is responsibe. Xxx

Employers shall be liable for the damages caused by their
employees xxx.

13 The one being questioned, the failed transportation of

goods.

dealt with under Art. 1735. 15 For a hijacking to be a

force majeure, it must be attended with grave or
irresistible threat, force, or violence. To overcome the
presumption created by Art. 1735, Bascos presented
affidavits, which were unsatisfactory according to the
SC. Hence, the presumption lies, and Bascos is
appropriately held liable.
FGU Insurance Corp. v. Sarmiento Trucking Corp.
(Private carrier is also presumed negligent but
only for lack of ordinary diligence)
FACTS: GPS Trucking had a contract to deliver several
Condura Refrigerators from Concepcion Industries in
Alabang, to Central Luzon Appliances in Dagupan. On
its way, along Tarlac, it collided with an unidentified
truck, damaging the cargoes. Consequently, FGU
Insurance paid the insurance proceeds to Concepcion.
As its subrogee, it sought reimbursement from GPS. For
failure to reimburse, FGU filed a complaint for damages
and breach of contract of carriage. GPS answered that
it is the exclusive hauler of Concepcion and further
claimed that the cause of the damage was a fortuitous
event. It filed with leave of Court a motion to dismiss
by way of demurrer to evidence16, which the RTC
granted. On rejecting the appeal of FGU, CA held that
there must be proof that GPS is a common carrier
before the presumption of negligence would come into
operation.
ISSUE:W/N a carrier, be it common or private, may be
presumed to have been negligent in case of loss,
destruction or deterioration of goods, while the same
were in its possession
HELD: Yes. Notwithstanding GPS being a private
carrier, it cannot escape liability. In a culpa
contractual/breach of contract, upon which the action
of FGU as a subrogee rests, the mere proof of the
existence of the contract and the failure of its
compliance justify, prima facie, a corresponding right of
relief. For failure to deliver the goods to its destination,

14 The 5 exclusive exempting circumstances: 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: (1) [act of God]; (2) act of public enemy in war;
(3) act or omission of shipper or owner of the goods; (4)
[inherent vice]; (5) act or order of competent public authority.
In this provision, only due diligence is required from a
common carrier, but the burden of proof still rets on him.

15 Art. 1735. In all cases other than those mentioned in [Art.

1734], 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
EOD as required in Art. 1733. This provision specifically
requires the exercise of EOD, as the mere loss etc. gives rise
to the presumption. Accordingly, we have to look into Art.
1745 which deals with void stipulations, among others, xxx (6)
that the common carriers liability for acts committed by
thieves, or of robbers who do not act with grave or irresistible
threat, violence or force, [cannot be] dispensed with or
diminished for being contrary to public policy.

16 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. Thus, GPS 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.

this fact gives rise to the presumption of negligence

(albeit a lower degree, i.e., due diligence only, since its
nature as a private carrier), the burden is on the part of
the carrier to prove otherwise.
Crisostomo v. CA (Travel Agency is not a carrier)
FACTS: Atty. 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.
Menor, Caravans ticketing manager and the niece of
Crisostomo, delivered to the latter her travel
documents and plane tickets and paid around
Php75,000.00. Menor then told her to be at the NAIA on
Saturday, two hours before her flight on board British
Airways. Without checking her travel documents,
petitioner went to NAIA on Saturday, only to discover
that the flight she was supposed to take had already
departed the previous day. Subsequently, she was
rebooked for another tour, the British Pageant, which
was around Php21,000.00. On Atty. Crisostomos
return, she sought reimbursement from Caravan for the
difference of the two tour packages. The latter
declined, which led to Crisostomos filing an action for
breach of contract of carriage and damages against
Caravan.
ISSUES:
1. W/N a travel agency is a common
carrier
2. W/N Caravan was negligent
HELD: 1. No. The contract between a travel agency is
an ordinary contract of service and not a contract of
carriage. Caravan Travel and Tours International is not
an entity engaged in the business of transportation. It
did not undertake to transport Crisostomo from one
place to another since its covenant with its customers
is simply to make travel arrangements in their behalf.
Its services as a travel agency include procuring
tickets and facilitating travel permits or visas as well as
booking customers for tours.
2. No. The nature of the contractual relation is
determinative of the degree of care required in the
performance of each of the parties obligations. Since
the contract in this case is an ordinary one for services,
the standard of care required of Caravan is that of a
good father of a family under Article 1173 of the Civil
Code. The evidence on record shows that Caravan
exercised due diligence in performing its obligations
under the contract17 and followed standard procedure
in rendering its services to Crisostomo.
Erezo v. Jepte (Registered Owner Rule for quasidelicts)

FACTS: Jepte is the registered owner of the truck which

was involved in an accident, fatally injuring Erezo.
Garcia drove the truck when the accident happened.
He pleaded guilty for reckless negligence resulting to
homicide. Since the amount of the judgment could not
be enforced against him, the son of Erezo brought the
civil action against Jepte. However, Jepte claims that
the truck may be registered in his name, but the same
actually belonged to Port Brokerage, the company he
acts as a broker for.
ISSUES:
1. W/N the registered owner should be
made liable despite the fact that he is not the actual
owner
2. W/N the registered owner should be allowed
to prove in trial who the actual owner is
HELD: 1. Yes. The registered owner is primarily
responsible for the damage caused, subject to his right
to be indemnified by the actual owner of the amount
he may be required to pay. This, notwithstanding, that
the vehicle is private. This is because the aim of the
motor vehicle registration is to identify the owner so
that if any accident happens, or that any damage or
injury is caused by the vehicles on the public highways,
responsibility therefore can be fixed on a definite
individual, the registered owner.
2. No, as it would be easy for him, by collusion
with others or otherwise, to escape said responsibility
and transfer the same to an indefinite person, or to one
who possesses no property with which to respond
financially for the damage or injury done.
Note: The following instances render the registered
owner rule inapplicable:
(1) If the vehicle was taken from his garage
without his knowledge and consent;
(2) If the registered owner who leased the vehicle
to another operator, registers the lease
contract with the LTO (annotation in the COR to
bind third parties);
(3) If a financial lease18 is registered with LTO;
(4) If a third party complaint is filed by the
registered owner, in cases where he is made
liable despite the transfer of vehicle.
Santos v. Sibug (Registered Owner Rule is
applicable in a Kabit19 system; But the actual
owner STILL has a right to prove ownership by
filing a third-party complaint)
FACTS: Santos was the owner of a passenger jeep. He
had no certificate of public convenience (CPC), so he
made an arrangement with Vidad who had a CPC,

18 A financial lease is a mode of extending credit through a

17 Due Diligence - the plane ticket issued to petitioner
clearly reflected the departure date and time, contrary to
petitioners 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 petitioners hotel accommodation as well as food,
land transfers and sightseeing excursions, in accordance with
its avowed undertaking.

non-cancellable lease contract, under which the lessor

(creditor) purchases or acquires, at the instance of the lessee
(debtor) xxx motor vehicle and other movable or immovable
property, in consideration of a periodic payment by the lessee
of a fixed amount sufficient to amortize at least 70% of the
purchase price or acquisition cost, for not less than 2 years,
during which the lessee has the right to hold and use the
leased property, but with no obligation to purchase the leased
property at the end of the financial lease contract.

19 The law enjoins the kabit system to enforce the policy of

the registered owner rule, that is, to identify the person upon
whom responsibility may be fixed in case of an accident with
the end view of protecting the riding public.

fictitiously selling his jeep to Vidad, so that he could

operate under the latters CPC. Subsequently, when a
PUJ operated by Vidad hit herein claimant Sibug, the
latter filed a complaint for damages. To satisfy Sibugs
claim, the CFI Branch XVII attached the property of
Vidad, and the Sheriff levied the jeep of Santos and
scheduled its public auction. Santos presented a thirdparty claim with the Sheriff, alleging actual ownership
of the jeep levied upon. Subsequently, CFI Branch X
ruled that Santos was the actual owner, and granted
the injunctive relief sought by the latter. On appeal, the
CA ruled that Santos cannot prove his ownership
because it would run contrary to the registered owner
rule, hence, the separate action filed by Santos which
Branch X granted, is an interference of another courts
judicial process. Hence, this petition.
ISSUES:
1. W/N a third-party claimants petition
for a writ of injunction against a decision of another
court of concurrent jurisdiction is an encroachment of
the latter courts jurisdiction
2. W/N a third-party claimant has a right to
vindicate his claim the vehicle levied upon through a
separate action
HELD: 1. No. Generally, no court has authority to
interfere with a decree of another court of concurrent
jurisdiction having equal power to grant the injunctive
relief. The exception is that when the sheriff seizes a
strangers property, thereby acting beyond his
authority, the writ of injunction is not an interference of
the writ of execution issued by another court. Under
that writ, the sheriff can only attach the property of the
judgment debtor.
2. Yes. Under section 17 of Rule 39 of the Rules
of Court, a third person who claims property levied
upon on execution may vindicate such claim by action.

A judgment rendered in his favor - declaring him to be

the owner of the property - would not constitute
interference with the powers or processes of the court
which rendered the judgment to enforce which the
execution was levied. By action, as stated in the
Rule, what is meant is a separate and independent
action.
Note: Technically, this case involves no strangers
property, as it was registered under Vidads name, the
judgment debtor under Branch XVII decision. However,
permanently enjoining the auction sale is in
consonance with justice, as the CA and SC held.
Lita Enterprises Inc. v. CA
FACTS:
ISSUE:
HELD:
PCI Leasing and Finance Inc. v. CA
FACTS:
ISSUE:
HELD: For damage or injuries arising out of negligence
in the operation of a motor vehicle, the registered
owner may be held civilly liable with the negligent
driver either 1) subsidiarily, if the aggrieved party
seeks relief based on a delict or crime under Articles
100 and 103 of the Revised Penal Code; or 2) solidarily,
if the complainant seeks relief based on a quasi-delict
under Articles 2176 and 2180 of the Civil Code. It is the
option of the plaintiff whether to waive completely the
filing of the civil action, or institute it with the criminal
action, or file it separately or independently of a
criminal action; his only limitation is that he cannot
recover damages twice for the same act or omission of
the defendant.