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1. FIRST PHILIPPINE INDUSTRIAL VS.

CA

PIPELINE OPERATORS AS COMMON CARRIER

Whether pipeline operators are common carriers so that in affirmative it is not


liable to pay carriers tax under the LGC.

Held:

The tests to determine whether a party is a common carrier, the following


factors are:

1. He must be engaged in the business of carrying of goods to others as a


public employment, and he must hold himself out as ready to engage in
transportation of goods for persons as general business and not as casual
occupation;
2. He must undertake to carry goods of the kind for 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.

Thus, in applying the said test, based on the foregoing factors, an entity
engaged in the carrying of petroleum products over its pipelines network for hire
as a public employment is deemed to be a common carrier because it
undertakes to carry for all persons indifferently, that is, to all persons who choose
to employ its services, and transport the goods by land and for compensation.
The fact that is has limited clientele does not exclude it from the definition of a
common carrier.
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2. SCHMITZ TRANSPORT & BROKERAGE VS. TRANSPORT VENTURE

BROKER-AGENT AS COMMON CARRIER

Whether petitioner cannot be held liable for the obligation of a carrier and that
any negligence committed by it was deemed the negligence of the principal.

Held:

Petitioner is a common carrier for it undertook to transport the cargoes


from the shipside of M/V Alexander to the consignees warehouse in Cainta,
Rizal. It held that as long as a person or corporation hold itself to the public for
the purpose of transporting goods as a business, it is already considered as a
common carrier, regardless if it owns the vehicle to be used or has to hire one. It
suffices that petitioner undertakes to deliver the goods for pecuniary
consideration. True, petitioner was the broker-agent of Little Giant in securing
the release of the cargoes. In effecting the transportation of the cargoes from
the shipside and into Little Giants warehouse, however, petitioner was
discharging its own personal obligation under a contract of carriage.
3. AF SANCHEZ BROKERAGE INC. VS. CA

BROKERAGE FIRM AS COMMON CARRIER

Whether petitioner, acting as the brokerage firm, is considered a common


carrier and shall be liable for the obligations of a common carrier.

Held:

Brokerage firm is also considered a common carrier and for which, the
delivery of the merchandise in bad condition raises the presumption of
negligence. Article 1732 does not distinguish between one whose principal
business activity is the carrying of goods and one who does such carrying only
as an ancillary activity. The rule is that if the improper packing is known to the
carrier or his employees or is apparent upon ordinary observation, but the
common carrier, nevertheless, accepts the same without protest or exception,
he is not relieved of liability for the resulting damage.
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4. CRISOSTOMO VS. CA

TRAVEL AGENT NOT A COMMON CARRIER

Whether respondent is a common carrier bound to observe the extraordinary


diligence in the fulfilment of its obligation, thus, liable for the damages suffered
by the petitioner.

Held:

It is obvious that respondent, as a travel agent, is not a common carrier


since it does not undertake to transport petitioner or a person from one place to
another since its covenant with its customers is simply to make travel
arrangements in their behalf, which includes the procuring of tickets and
facilitating travel permits or visas, as well as booking customers for tours. A travel
agent is bound to observe the due diligence of good father of a family and not
the extraordinary diligence imposed on common carriers.
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5. DE GUZMAN VS. CA

HIGHWAY ROBBERY/HIJACK NOT A FORTUITOUS EVENT, EXCEPT ATTENDED BY


IRRESISTIBLE THREAT, FORCE AND VIOLENCE

Whether private respondent as back-haulers be properly characterized as a


common carrier.

Whether highway robbery is considered a fortuitous event.


Held:

Article 1732 of the Civil Code makes no distinction between one whose
principal business activity is the carrying of persons or goods or both, and one
who does such carrying only as an ancillary activity, nor does it make distinctions
between one who offers the service to the general public or a narrow segment
of the general population. Therefore, one who back-hauled goods for other
merchants from Manila to Pangasinan, even when such activity was only
periodical or occasional and was not its principal line of business would be
subject to the responsibilities and obligations of a common carrier. It appears to
the Court that private respondent is properly characterized as a common
carrier even though he merely back-hauled goods for other merchants and
although such back-hauling was done on a periodic or occasional manner, and
even through private respondents principal occupation was not the carriage of
goods for others. As regards the issue of exercise of extraordinary diligence, the
court held that the occurrence of the loss must reasonably be regarded as quite
beyond the control of the common carrier and properly regarded as a
fortuitous event. The private respondent cannot be held liable for the value of
the undelivered merchandise which was lost because of an event entirely
beyond the private respondents control.
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6. PERENA VS. ZARATE

COMMON CARRIERS BOUND TO EXERCISE EXTRAORDINARY DILIGENCE

Whether petitioners operate as common carrier and that they are bound to
exercise extraordinary diligence in case of death of a passenger.

Held:

A common carrier is required to observe extraordinary diligence and is


presumed to be at fault or have acted negligently in case of loss of the effects
of passengers, or the death or injuries to passengers.

Applying these considerations to the case before us, there is no question


that the Pereas as the operators of a school bus service were: (a) engaged in
transporting passengers generally as a business, not just as a casual occupation;
(b) undertaking to carry passengers over established roads by the method by
which the business was conducted; and (c) transporting students for a fee.
Despite catering to a limited clientle, the Pereas operated as a common
carrier because they held themselves out as a ready transportation
indiscriminately to the students of a particular school living within or near where
they operated the service and for a fee.

The common carriers standard of care and vigilance as to the safety of


the passengers is defined by law. Given the nature of the business and for
reasons of public policy, the common carrier is 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. Article
1755 of the Civil Code specifies that the common carrier should "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." To successfully fend off liability in an action upon the death or
injury to a passenger, the common carrier must prove his or its observance of
that extraordinary diligence; otherwise, the legal presumption that he or it was
at fault or acted negligently would stand. No device, whether by stipulation,
posting of notices, statements on tickets, or otherwise, may dispense with or
lessen the responsibility of the common carrier as defined under Article 1755 of
the Civil Code.

As earlier stated, the Pereas, acting as a common carrier, were already


presumed to be negligent at the time of the accident because death had
occurred to their passenger.25 The presumption of negligence, being a
presumption of law, laid the burden of evidence on their shoulders to establish
that they had not been negligent. It was the law no less that required them to
prove their observance of extraordinary diligence in seeing to the safe and
secure carriage of the passengers to their destination. Until they did so in a
credible manner, they stood to be held legally responsible for the death of
Aaron and thus to be held liable for all the natural consequences of such death.

There is no question that the Pereas did not overturn the presumption of
their negligence by credible evidence. Their defense of having observed the
diligence of a good father of a family in the selection and supervision of their
driver was not legally sufficient. According to Article 1759 of the Civil Code, their
liability as a common carrier did not cease upon proof that they exercised all
the diligence of a good father of a family in the selection and supervision of
their employee. This was the reason why the RTC treated this defense of the
Pereas as inappropriate in this action for breach of contract of carriage.
_____________________________________________________________________________

7. LOADSTAR SHIPPING CO. INC. VS. PIONEER ASIA INSURANCE

WHEN CHARTER PARTY CONVERTED INTO PRIVATE CARRIER

Whether petitioner is a private carrier when it entered into a voyage-charter,


thus, it is required to exercise merely ordinary diligence and not the
extraordinary diligence of a common carrier.

Held:

Petitioner remains a common carrier notwithstanding the existence of the


charter agreement since the said charter limited to the ship only and does not
involve both the vessel and its crew.

As a common carrier, petitioner is required to observe extraordinary


diligence in the vigilance over the goods it transports. When the goods place in
its care are lost, petitioner is presumed to have been at fault or have acted
negligently. Petitioner therefore has the burden of proving that it observed
extraordinary diligence in order to avoid responsibility for the lost cargo.

Article 1734 enumerates the instances when a carrier might be exempt


from liability over the loss of the goods. These are:
1. Flood, storm, earthquake, lightning, or other natural calamities or disasters;
2. Act of the public enemy in war, whether international or civil;
3. Act or omission of the shipper or owner of the goods;
4. Character of the goods or defects in the packing or in the container; and
5. Orders or acts of a competent public authority.
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8. ASIA LIGHTERAGE AND SHIPPING, INC. VS. CA

LIGHTERAGE AND DRAYAGE AS A COMMON CARRIER

Whether petitioner is a common carrier when its principal business is that of


lighterage and drayage.

Held:

Article 1732 of the Civil Code makes no distinction between one whose
principal business activity is the carrying of persons or goods or both, and one
who does such carrying only as an ancillary activity. The law did not also
distinguish between 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. Further, the law does not distinguish
between a carrier offering its services to the general public, and one who offers
services or solicits business only from a narrow segment of the general
population.

In the case at bar, the principal business of the petitioner is that of


lighterage and drayage, and it offers its barges to the public for carrying or
transporting goods by water for compensation. Petitioner is clearly a common
carrier.

Common carriers are bound to observe extraordinary diligence in the


vigilance over the goods transported by them. They are presumed to have
been at fault or to have acted negligently if the goods are lost, destroyed or
deteriorated. To overcome the presumption of negligence in the care of loss,
destruction and deterioration of the goods, the common carrier must prove that
it exercised extraordinary diligence.
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7. DSR-SENATOR LINES AND C.F. SHARP AND CO. INC. VS. FEDERAL PHOENIX
ASSURANCE CO.

FIRE NOT A FORTUITOUS EVENT

Whether fire is a fortuitous event which exempts a carrier from liability for loss or
destruction of the cargo.
Held:

Article 1734 specifically provides that common carriers are responsible for
the loss, destruction or deterioration of the goods, unless the same is due to the
following causes:

1. Flood, storm, earthquake, lightning, or other natural calamities or


disasters;
2. Act of the public enemy in war, whether international or civil;
3. Act or omission of the shipper or owner of the goods;
4. Character of the goods or defects in the packing or in the container; and
5. Orders or acts of a competent public authority.

Fire is not one of those enumerated under the above provision which
exempts a carrier from liability for loss or destruction of the cargo. Since the
period of fire is not comprehended within the exceptions in Article 1734, then
the common carrier shall be presumed to have been at fault or to have acted
negligently, unless it proves that it has observed the extraordinary diligence
required by law.

Even if fire were to be considered a natural disaster within the purview of


Article 1734, it is required under Article 1739 of the Code that the natural disaster
must have been the proximate and only cause of the loss, and that the carrier
has exercised due diligence to prevent or minimize the loss before, during or
after the occurrence of the disaster.

A common carriers duty to observe the requisite diligence in the


shipment of goods lasts from the time the articles are surrendered to or
unconditionally placed in the possession of, and received by, the carrier for
transportation until delivered to or until the lapse of a reasonable time for their
acceptance by the person entitled to receive them. When the goods shipped
either are lost or arrived in damaged condition, a presumption arises against the
carrier of its failure to observe that diligence, and there need not be an express
finding of negligence to hold it liable.
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8. SPS. CRUZ VS. SUN HOLIDAYS INC.

TOUR PACKAGES BY RESORTS AS COMMON CARRIER

Whether respondent is a common carrier since by its tour package, the


transporting of its guests is an integral part of its resort business.

Held:

Respondent is a common carrier. Its ferry services are so intertwined with


its main business as to be properly considered ancillary thereto. The constancy
of respondents ferry services in its resort operations is underscored by its having
its own Coco Beach boats. And the tour packages it offers, which include the
ferry services, may be availed of by anyone who can afford to pay the same.
These services are thus available to the public.
Under the Civil Code, common carriers, from the nature of their business
and for reasons of public policy, are bound to observe extraordinary diligence
for the safety of the passengers transported by them, according to all the
circumstances of each case. They are bound to carry the passengers safely as
far as human care and foresight can provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances.

When a passenger dies or is injured in the discharge of a contract of


carriage, it is presumed that the common carrier is at fault or negligent. In fact,
there is even no need for the court to make an express finding of fault or
negligence on the part of the common carrier. This statutory presumption may
only be overcome by evidence that the carrier exercised extraordinary
diligence.

The elements of a fortuitous event are: (a) the cause of the unforeseen
and unexpected occurrence, must have been independent of human will; (b)
the event constituted the caso fortuito must have been impossible to foresee or,
if foreseeable, impossible to avoid; (c) the occurrence must have been such as
to render it impossible for the debtors to fulfil their obligation in a normal manner;
and (d) the obligor must have been free from any participation in the
aggravation of the resulting injury to the creditor.

To fully free a common carrier from any liability, the fortuitous event must
have been the proximate 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.
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9. G.V. FLORIDA TRANSPORT VS. HEIRS OF BATTUNG

EXTENT OF LIABILITY OF COMMON CARRIER

Whether a common carrier is liable for the death of its passenger arising from
culpa contractual when the death was beyond the control of the common
carrier.

Held:

While the law requires the highest degree of diligence from common
carriers in the safe transport of their passengers and creates a presumption of
negligence against them, it does not, however, make the carrier an insurer of
the absolute safety of its passengers.

Where, as in the instant case, the injury sustained by the petitioner was in
no way due to any defect in the means of transport or in the method of
transporting or to the negligent or wilful acts of the common carrier or its
employees, and therefore involving no issue of negligence in its duty to provide
safe and suitable care as well as competent employees, with the injury arising
wholly from causes created by strangers over which the carrier had no control
or even knowledge or could have not prevented, the presumption is rebutted
and the carrier is not and ought not to be held liable. To rule otherwise would
make the common carrier the insurer of the absolute safety of its passengers
which is not the intention of the lawmakers.
_____________________________________________________________________________

10. FEDERAL PHOENIX ASSURANCE VS. FORTUNE SEA CARRIER

WHEN A CHARTER PARTY CONVERTED INTO PRIVATE CARRIER

Whether Fortune Sea was converted into a private carrier by virtue of the time
charter party agreement it entered with Northern Transport.

Held:

In determining the nature of a contract, courts are not bond by the title or
name given by the parties. The decisive factor in evaluating an agreement to
the intention of the parties, as shown, not necessarily by the terminology used in
the contract but by their conduct, words, actions and deeds prior to, during and
immediately after executing the agreement.

Conformably, M/V Ricky Rey was converted into a private carrier


notwithstanding the existence of the Time Charter Party agreement with
Northern Transport since the said agreement was not limited to the ship only but
extends even to the control of its crew. Despite the denomination as Time
Charter by the parties, their agreement undoubtedly reflected that their
intention was to enter into a Bareboat Charter agreement.

Moreover, although the master and crew of the vessel were those of the
shipowner, records show that at the time of the execution of the charter party,
Fortune Sea had completely relinquished possession, command and navigation
of M/V Ricky Rey to Northern Transport.
_____________________________________________________________________________

11. METRO MANILA TRANSIT CORPORATION VS. CUEVAS

REGISTERED OWNER RULE

Whether petitioner was liable for the injuries sustained by the respondents
despite the provision in the agreement to sell that shielded it from liability.

Held:

In view of the MMTCs admission in its pleadings that it had remained the
registered owner of the bus at the time of the incident, it could not escape
liability for the personal injuries and property damage suffered by the Cuevases.
This is because of the registered-owner rule, whereby the registered owner of the
motor vehicle involved in a vehicular accident could be held liable for the
consequences. The registered-owner rule has remained good in law in this
jurisdiction considering its impeccable and timeless rationale.

It is well settled that in case of motor vehicle mishaps, the registered-


owner of the motor vehicle is considered as the employer or the torteasor-driver,
and is made primarily liable for the tort committed by the latter.
12. WILLIAM TIU VS. PEDRO ARRIESGADO

DOCTRINE OF LAST CLEAR CHANCE

Whether petitioner failed to overcome the presumption of negligence against


him as one engaged in the business of common carriage.

Whether the Doctrine of Last Clear Chance is applicable in the instant case.

Held:

It is undisputed that the respondent and his wife were not safely
transported to the destination agreed upon. In actions for breach of contract,
only the existence of such contract, and the fact that the obligor, in this case
the common carrier, failed to transport his passenger safely to his destination are
the matters that need to be proved. X x x Upon the happening of the accident,
the presumption of negligence at once arises, and it becomes the duty of a
common carrier to prove that he observed extraordinary diligence in the care
of his passengers. While evidence may be submitted to overcome such
presumption of negligence, it must be shown that the carrier observed the
required extraordinary diligence, which means that the carrier must show the
utmost diligence of a very cautious persons as far as human care and foresight
can provide, or that the accident was caused by fortuitous event. As correctly
found by the trial court, petitioner Tiu failed to conclusively rebut such
presumption. The negligence of petitioner Laspias as the driver of the passenger
bus is, thus, binding against petitioner Tiu, as the owner of the passenger bus
engaged in a common carrier.

Contrary to petitioners contention, the principle of last clear chance in


inapplicable in the instant case, as it only applies in a suit between the owners
and drivers of two colliding vehicles. It does not arise where a passenger
demands responsibility from the carrier to enforce its contractual obligations, for
it would be inequitable to exempt the negligence driver and its owner on the
ground that the other driver was likewise guilty of negligence.

Doctrine of Last Clear Chance a negligent plaintiff can nonetheless recover if


he is able to show that the defendant had the last opportunity to avoid the
accident.
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13. VALENZUELA VS. CA

CONTRIBUTORY NEGLIGENCE AND EMERGENCY RULE

Whether respondent Lis contention that petitioner was likewise guilty of


contributory negligence in parking her car which entire area is a no parking
zone.

Held:

1. Contributory negligence is a conduct on the part of the injured party,


contributing as a legal cause to the harm he has suffered, which falls below the
standard to which he is required to conform for his own protection. Based on
the foregoing definition, the standard or act to which, according to petitioner Li,
Valenzuela ought to have conformed for her own protection was not to park at
all at any point of Aurora Boulevard, a no parking zone. We cannot agree.

Courts have traditionally been compelled to recognize that an actor who


is confronted with an emergency is not to be held up to the standard of
conduct normally applied to an individual who is in no such situation. The law
takes stock of impulses of humanity when placed in threatening or dangerous
situations and does not require the same standard of thoughtful and reflective
care from persons confronted by unusual and oftentimes threatening
conditions.

Under the emergency rule, an individual who suddenly finds himself in a


situation of danger and is required to act without much time to consider the
best means that may be adopted to avoid the impending danger, is not guilty
of negligence if he fails to undertake what subsequently and upon reflection
may appear to be a better solution, unless the emergency was brought by his
own negligence.

Obviously in the case at bench, the only negligence ascribable was the
negligence of Li on the night of the accident. Negligence, as it is commonly
understood is conduct which creates an undue risk of harm to others. It is the
failure to observe that degree of care, precaution, and vigilance which the
circumstances justly demand, whereby such other person suffers injury.

2. We agree with the respondent court that the relationship in question is not
based on the principle of respondeat superior, which holds the master liable for
acts of the servant, but that of pater familias, in which the liability ultimately falls
upon the employer, for his failure to exercise the diligence of a good father of
the family in the selection and supervision of his employees. It is up to this point,
however, that our agreement with the respondent court ends. Utilizing
the bonus pater familias standard expressed in Article 2180 of the Civil Code, we
are of the opinion that Alexander Commercial, Inc. is jointly and solidarily liable
for the damage caused by the accident of June 24, 1990.

The employers primary liability under the concept of pater


familias embodied by Art. 2180 (in relation to Art. 2176) of the Civil Code is quasi-
delictual or tortious in character. His liability is relieved on a showing that he
exercised the diligence of a good father of the family in the selection and
supervision of its employees. Once evidence is introduced showing that the
employer exercised the required amount of care in selecting its employees, half
of the employers burden is overcome. The question of
diligent supervision, however, depends on the circumstances of employment.

Ordinarily, evidence demonstrating that the employer has exercised diligent


supervision of its employee during the performance of the latters assigned
tasks would be enough to relieve him of the liability imposed by Article 2180 in
relation to Article 2176 of the Civil Code. The employer is not expected to
exercise supervision over either the employees private activities or during the
performance of tasks either unsanctioned by the former or unrelated to the
employees tasks. The case at bench presents a situation of a different
character, involving a practice utilized by large companies with either their
employees of managerial rank or their representatives.
In fine, Alexander Commercial, Inc. has not demonstrated, to our
satisfaction, that it exercised the care and diligence of a good father of the
family in entrusting its company car to Li. No allegations were made as to
whether or not the company took the steps necessary to determine or ascertain
the driving proficiency and history of Li, to whom it gave full and unlimited use of
a company car. Not having been able to overcome the burden of
demonstrating that it should be absolved of liability for entrusting its company
car to Li, said company, based on the principle of bonus pater familias, ought to
be jointly and severally liable with the former for the injuries sustained by Ma.
Lourdes Valenzuela during the accident.
______________________________________________________________________________

14. LIGHT RAIL TRANSIT AUTHORITY VS. NAVIDAD

DURATION OF LIABILITY FOR PASSENGERS

Whether the CA correctly held LRTA and Roman liable for the death of Navidad
in failing to exercise extraordinary diligence imposed upon a common carrier.

Held:

The law requires common carriers to carry passengers safely using the
utmost diligence of very cautious persons with due regard for all circumstances.
Such duty of a common carrier to provide safety to its passengers so obligates it
not only during the course of the trip but for so long as the passengers are within
its premises and where they ought to be in pursuance to the contract of
carriage. The statutory provisions render a common carrier liable for death of or
injury to passengers (a) through the negligence or wilful acts of its
employees or b) on account of wilful acts or negligence of other passengers or
of strangers if the common carriers employees through the exercise of due
diligence could have prevented or stopped the act or omission. In case of such
death or injury, a carrier is presumed to have been at fault or been negligent,
and by simple proof of injury, the passenger is relieved of the duty to still
establish the fault or negligence of the carrier or of its employees and the
burden shifts upon the carrier to prove that the injury is due to an unforeseen
event or to force majeure. In the absence of satisfactory explanation by the
carrier on how the accident occurred, which petitioners, according to the
appellate court, have failed to show, the presumption would be that it has been
at fault, an exception from the general rule that negligence must be proved.

The foundation of LRTAs liability is the contract of carriage and its obligation
to indemnify the victim arises from the breach of that contract by reason of its
failure to exercise the high diligence required of the common carrier. In the
discharge of its commitment to ensure the safety of passengers, a carrier may
choose to hire its own employees or avail itself of the services of an outsider or
an independent firm to undertake the task. In either case, the common carrier is
not relieved of its responsibilities under the contract of carriage.

Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the
late Nicanor Navidad, this Court is concluded by the factual finding of the Court
of Appeals that there is nothing to link (Prudent) to the death of Nicanor
(Navidad), for the reason that the negligence of its employee, Escartin, has not
been duly proven x x x. This finding of the appellate court is not without
substantial justification in our own review of the records of the case.

There being, similarly, no showing that petitioner Rodolfo Roman himself is


guilty of any culpable act or omission, he must also be absolved from
liability. Needless to say, the contractual tie between the LRT and Navidad is not
itself a juridical relation between the latter and Roman; thus, Roman can be
made liable only for his own fault or negligence.
__________________________________________________________________________

15. YOBIDO VS. CA

FIRE NOT A FORTUITOUS EVENT

Whether petitioner should be exempt from liability because the tire blow-out was
not more than a fortuitous even that could not have been forseen.

Held:

A fortuitous event is possessed of the following characteristics: (a) the


cause of the unforeseen and unexpected occurrence, or the failure of the
debtor to comply with his obligations, must be independent of human will; (b) it
must be impossible to foresee the event which constitutes the caso fortuito, or if
it can be foreseen, it must be impossible to avoid; (c) the occurrence must be
such as to render it impossible for the debtor to fulfill his obligation in a normal
manner; and (d) the obligor must be free from any participation in the
aggravation of the injury resulting to the creditor. As Article 1174 provides, no
person shall be responsible for a fortuitous event which could not be foreseen, or
which, though foreseen, was inevitable. In other words, there must be an entire
exclusion of human agency from the cause of injury or loss.

Under the circumstances of this case, the explosion of the new tire may
not be considered a fortuitous event. There are human factors involved in the
situation. The fact that the tire was new did not imply that it was entirely free
from manufacturing defects or that it was properly mounted on the vehicle.
Neither may the fact that the tire bought and used in the vehicle is of a brand
name noted for quality, resulting in the conclusion that it could not explode
within five days use.

Be that as it may, it is settled that an accident caused either by defects in


the automobile or through the negligence of its driver is not a caso fortuito that
would exempt the carrier from liability for damages.

Moreover, a common carrier may not be absolved from liability in case


of force majeure or fortuitous event alone. The common carrier must still prove
that it was not negligent in causing the death or injury resulting from an
accident.

While it may be true that the tire that blew-up was still good because the
grooves of the tire were still visible, this fact alone does not make the explosion
of the tire a fortuitous event. No evidence was presented to show that the
accident was due to adverse road conditions or that precautions were taken by
the jeepney driver to compensate for any conditions liable to cause accidents.
The sudden blowing-up, therefore, could have been caused by too much air
pressure injected into the tire coupled by the fact that the jeepney was
overloaded and speeding at the time of the accident.
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16. SULPICIO LINES VS. FIRST LEPANTO-TAISHO INSURANCE

VIGILANCE OVER GOODS

Whether petitioner is liable for the breach of contract of carriage (vigilance over
goods)9

Held:

A common carrier is bound to transport its cargo and its passengers safely
"as far as human care and foresight can provide, using the utmost diligence of a
very cautious person, with due regard to all circumstances.[14] 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 the
damage to, or destruction of, the goods entrusted to it for safe carriage and
delivery.[15] It 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, including such methods as their nature requires.

Under Articles 1735[17] and 1752[18] of the Civil Code, common carriers are
presumed to have been at fault or to have acted negligently in case the goods
transported by them are lost, destroyed or had deteriorated. To overcome the
presumption of liability for loss, destruction or deterioration of goods under
Article 1735, the common carrier must prove that they observed extraordinary
diligence as required in Article 1733[19] of the Civil Code.

Petitioner-carrier miserably failed to adduce any shred of evidence of the


required extraordinary diligence to overcome the presumption that it was
negligent in transporting the cargo.
__________________________________________________________________________

17. PHILAM INSURANCE VS. HEUNG-A SHIPPING CORP.

APPLICABILITY OF COGSA

Whether the shipment sustained damage while in the possession and custody of
Heung-A and if so, whether Heung-As liability can be limited to US$500 per
package pursuant to the COGSA.

Held:

A charter party has been defined as a contract by which an entire ship, or


some principal part thereof, is let by the owner to another person for specified
them 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.
A charter party has two types. First, it could be a contract of
affreightment whereby the use of shipping space on vessels is leased in part as a
whole or as a whole, to carry goods for others. The charter party provides for
the hire of vessel only, either for a determinate period of time (time-charter) or
for a single or consecutive voyage (voyage charter). The shipowner supplies
the ships stores, pay for the wages of the master and the crew, and defray the
expenses for the maintenance of the ship. The voyage remains under the
responsibility of the carrier and it is answerable for the loss of goods received for
transportation. The charterer is free from liability to third persons in respect of the
ship.

Second, charter by demise or bareboat charter under which the whole


vessel is let to the charterer with a transfer to him of its entire command and
possession and consequent control over its navigation, including the mamster
and the crew, who are his servants. The charterer mans the vessel with is own
people and becomes, in effect, the owner for the voyage or service stipulated
and hence liable for damages or loss sustained by the goods transported.

Clearly then, despite its contract of affreightment with DONGNAMA,


HEUNG-A remained responsible as the carrier, hence, answerable for the
damages incurred by the goods received for transportation. "[C]ommon
carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence and vigilance with respect to the
safety of the goods and the passengers they transport. Thus, common carriers
are required to render service with the greatest skill and foresight and to use all
reasonable means to ascertain the nature and characteristics of the goods
tendered for shipment, and toexercise due care in the handling and stowage,
including such methods as their nature requires.

Common carriers, as a general rule, are presumed to have been at fault


or negligent if the goods they transported deteriorated or got lost or destroyed.
That is, unless they prove that they exercised extraordinary diligence in
transporting the goods. In order to avoid responsibility for any loss or damage,
therefore, they have the burden of proving that they observed such
diligence."42 Further, under Article 1742 of the Civil Code, even if the loss,
destruction, or deterioration of the goods should be caused by the faulty nature
of the containers, the common carrier must exercise due diligence to forestall or
lessen the loss.

Here, HEUNG-A failed to rebut this prima facie presumption when it failed
to give adequate explanation as to how the shipment inside the container van
was handled, stored and preserved to forestall or prevent any damage or loss
while the same was in its possession, custody and control.

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