Module 2 Cases CONCEPTS IN TRANSPORTATION LAW Cases Goods/Passenger 1. EVERETT STEAMSHIP CORP. vs. CA Goods - vessel Facts/Problem Ruling: Shipper: Maruman Trading, Japan >>> The contract limiting the CC: Everett >>> Consignee: Hernandez liability is VALID. Goods: 3 crates of bus spare parts Problem: one crate was missing, Shipper wants to recover the entire value 2. MOF CO., INC. vs. SHIN YANG BROKERAGE CORP. Goods - vessel Defense: it can only be liable to what was stated in the contract. Shipper: Korean CO >>> CC: Hanjin >>> Consignee: Shin Yang Problem: Shin Yang – indicated liable for the freight and other charges Defense: It denied that it authorized the Korean co to ship on its behalf, denied that it got hold of the bill of lading covering the shipment nor demand the release of cargo. Is Shin Yang liable or bound by the stipulations on bill of lading even it is not a signatory thereof. No. Shin yang is not liable. Doctrine: A contract of adhesion is not void per se. The mere fact that the text was in fine print does not invalidate it. The law is clear that for a common carrier to be liable for the entire amount, such amount must be stipulated in the contract or bill of lading. A consignee, although not a signatory to the contract of carriage between the shipper and the carrier, becomes a party to the contract by reason of either a) the relationship of agency between the consignee and the shipper/ consignor; b) the unequivocal acceptance of the bill of lading delivered to the consignee, with full knowledge of its contents or c) availment of the stipulation pour autrui, i.e., when the consignee, a third person, demands before the carrier the fulfillment of the stipulation made by the consignor/shipper in the consignees favor, specifically the delivery of the goods�cargoes shipped. 3. 4. Dangwa Transportation Co. vs. CA KOREAN AIRLINES CO. vs. CA Passenger – Bus Passenger Airplane - The victim board in the (Dangwa) bus when it was at a full stop, - he was closing his umbrella at the platform of the bus when the bus made a sudden jerk movement. - After the premature acceleration, the victim fell from the platform and - was run over by rear right tire of the bus. Flight: Mnl to Saudi Arabia via Korean Airlines Dangwa is liable. There was negligence on its part or fault. The victim by stepping and standing on the platform of the bus is already considered a passenger. Lapuz was a passenger. - Problem: - Lapuz was wait listed, - when two passengers did not appear, the passenger was given the unclaimed seat. - He was allowed to check in - Passed through immigration sections - cleared for departure - when he was at the third or fourth rung of the stairs, a KAL officer pointed to him and shouted "Down! Down!" - His status as standby passenger was changed to that of a confirmed passenger when his name was entered in the passenger His clearance through immigration and customs clearly shows that he had indeed been confirmed as a passenger A public utility bus, once it stops, is in effect making a CONTINUOUS OFFER TO BUS RIDERS. - 5. CATHAY PACIFIC AIRWAYS vs. REYES, ET. AL Passenger – Airplane He was thus barred from taking the flight. Flight: Manila-Hongkong- Adelaide- Airline is liable. There was breach of contract. It was aggravated when KAL officer rudely shouted at him, causing embarrassment and humiliation Cathay is liable. Hongkong-Manila. Airline Cathay Problem: - One week before their flight, Reyes confirmed it But then on Adelaide, Wilfredo was informed by a staff from Cathay Pacific that the Reyeses did not confirm the reservations, and only one family member’s �Sixta� flight booking was confirmed. -when an airline issues a ticket to a passenger confirmed on a particular flight, on a certain date, a contract of carriage arises, and the passenger has every right to expect that he would fly on that flight and on that date. If he does not, then the carrier opens itself to a suit for breach of contract of carriage. Cathay and passenger – contact of carriage Contract of Services – contact of service A contract of carriage is defined as one whereby a certain person or association of persons obligate themselves to transport person, things, or news from one place to another for a fixed price. a contract of services = the object of the contract is arranging and facilitating the latter’s booking and ticketing. 6. LRTA vs. NAVIDAD Passenger – train - drunk passenger entered EDSA LRT station after purchasing a "token" - While Navidad was standing on the platform near the LRT tracks, sec guard approached him - misunderstanding between the two ensued that led to a fist fight. -Navidad later fell on the LRT tracks. - Navidad was struck by the moving train, and he was killed instantaneously. 7. RAMOS, ET. AL VS. CHINA SOUTHERN AIRLINES CO. LTD. Passenger – airplane Flight for 5 : Manila-Xiamen-Manila LRTA is liable for the death of Navidad in failing to exercise extraordinary diligence imposed upon a common carrier. The foundation of LRTA‘s 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. Airline is liable to moral and exemplary damages. Problem: Moral: - petitioners were prevented from taking their designated flight earlier that day an agent from Active Tours informed them that their airline company acted in bad faith in insolently bumping petitioners off the flight after they have completed all the A person who wants to board a train in a railway station must purchase a ticket and must present himself at the proper place in a proper manner to be transported. Such person must have a bona fide intention to use the facilities of the carrier, possess sufficient fare with which to pay for his passage and present himself to the carrier for transportation in the place and manner provided. �A contract of carriage arises when an airline issues a ticket to a passenger confirmed on a particular flight, on a certain date and the passenger has every right to expect that he would fly on that flight and on that date, otherwise, the carrier - bookings for CSA 1920H flight are confirmed refusal came after petitioners already checked in all their baggages and were given the corresponding claim stubs and after they had paid the terminal fee - pre-departure routine. Bad faith is evident when the ground personnel of the airline company unjustly and unreasonably refused to board petitioners to the plane which compelled them to rent a car and take the train to the nearest airport where they bought new sets of plane tickets from another airline that could fly them home. opens itself to a suit for breach of contract of carriage. Exemplary CSA is also liable for exemplary damages as it acted in a wantonly oppressive manner as succinctly discussed above against the petitioners. Exemplary damages which are awarded by way of example or correction for the public good, may be recovered in contractual obligations, as in this case, if defendant acted in wanton, fraudulent, reckless, oppressive or malevolent manner. 8. SPS. FERNANDO vs. NORTHWEST AIRLINES, INC. Passenger – airplane Problem: - ticket has been used and could not be considered as valid. Thus, Northwest committed a breach of contract "in failing to provide the spouses with the proper assistance to avoid any inconvenience" and that the actuations of Northwest in both In an action based on a breach of contract of carriage, the aggrieved party does not have to prove that the common carrier was at fault or was negligent. All that he has to - on the interrogation room he was asked subject incidents "fall short of humiliating questions for more than two hours. the utmost diligence of a very cautious person expected of it". prove is the existence of the contract and the fact of its nonperformance by the carrier. - 2nd incident: in the presence of the other passengers, Northwest personnel Linda Tang pulled the Fernandos out of the queue and asked for paper tickets (coupon type). COMMON CARRIAGE Cases 1. DE GUZMAN vs. CA Goods/Passenger Facts/Problem Ruling: Doctrine: Goods – trucksl Carrier Cendana: Brings scrap materials to manila, On the return trip to He is a common carrier. But he is not liable for the loss because hijacking was a fortuitous event. ART. 1732- definition of CC Pangasinan, respondent would load his vehicle with cargo which various merchants wanted delivered, charging fee lower than the commercial rates. The above article makes no distinction - Owner of goods: De guzman >>> CC: Cendana >>> consignee Goods: 750 cartos liberty milk Problem: Only 150 boxes were delivered because the truck carrying the boxes was hijacked along the way. - 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"). between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such Defense: He was not a CC. - 2. PLANTERS PRODUCTS, INC. vs. CA Goods: Fertilizer Shipper: Mitsubishi >>> CC: MV Sun Plum/ KKK >>> Consignee: PPI Prior to its voyage, a time charter-party on the vessel M/V "Sun Plum" pursuant to the Uniform General Charter was entered into between Mitsubishi as shipper/charterer and KKKK as ship owner, in Tokyo, Japan. Problem: revealed a shortage in the cargo of 106.726 M/T and that a portion of the Urea fertilizer approximating 18 M/T was contaminated with dirt. KKK is a CC. But it is not liable. When petitioner chartered the vessel M/V "Sun Plum", the ship captain, its officers and compliment were under the employ of the shipowner and therefore continued to be under its direct supervision and control. Hardly then can we charge the charterer, a stranger to the crew and to the ship, with the duty of caring for his cargo when the charterer did not have any control of the means in doing so. This is evident in the present case considering that the steering of the ship, the manning of the decks, the determination of the course of the voyage and other technical incidents of maritime navigation were all consigned service on an occasional, episodic or unscheduled basis. 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. It is only when the charter includes both the vessel and its crew, as in a bareboat or demise that a common carrier becomes private, at least insofar as the particular voyage covering the charter-party is concerned. 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; Charter parties are of two types: (a) contract of affreightment which involves the use of shipping space on vessels leased by the owner in to the officers and crew who were screened, chosen and hired by the shipowner. Indeed, we agree with respondent carrier that bulk shipment of highly soluble goods like fertilizer carries with it the risk of loss or damage. More so, with a variable weather condition prevalent during its unloading, as was the case at bar. This is a risk the shipper or the owner of the goods has to face. Clearly, respondent carrier has sufficiently proved the inherent character of the goods which makes it highly vulnerable to deterioration; as well as the inadequacy of its packaging which further contributed to the loss. On the other hand, no proof was adduced by the petitioner showing that the carrier was remise in the exercise of due diligence in order to minimize the loss or damage to the goods it carried. 3. BASCOS vs. CA Goods – vessel - (CIPTRADE) entered into a hauling contract with Jibfair CIPTRADE bound itself to haul JIBFAIR’s �,��� m/tons of soya bean meal BASCOS is a common carrier. part or as a whole, to carry goods for others; and, (b) charter by demise or bareboat charter, by the terms of which the whole vessel is let to the charterer with a transfer to him of its entire command and possession and consequent control over its navigation, including the master and the crew, who are his servants. The test to determine a common carrier is �whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his - CIPTRAD subcontracted with Bascos to transport and to deliver 400 sacks of soya bean meal from the Manila Port Area to Calamba, Laguna Problem: BASCOS failed to deliver the said cargo. 4. Fabre Jr. vs CA Passenger – school bus - - Fabre and wife owner of minibus used as a bus service for school children. They also accept arrangement with WWCF for the transpo of 33 memebers of Young Ad Ministry for a consideration. Problem: The usual route to Caba, La Union was through Carmen, Pangasinan. However, the bridge at Carmen was under repair, so that petitioner Cabil, who was unfamiliar with the area (it being his first trip to La Union), was forced to take a detour. r. The bus hit the left traffic steel brace and sign along the road and rammed the fence of one Jesus Escano, then turned over and landed on its left side, coming to a full stop only after a series of impacts. The bus came to rest off the road. A coconut tree which it had hit fell on it and smashed its front portion. Several passengers were injured. In this case, petitioner herself has made the admission that she was in the trucking business, offering her trucks to those with cargo to move. Judicial admissions are conclusive and no evidence is required to prove the same. Petitioners were a common carrier. And are liable. this case actually involves a contract of carriage. Petitioners, the Fabres, did not have to be engaged in the business of public transportation for the provisions of the Civil Code on common carriers to apply to them. Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave rise to the presumption that his employers, the Fabres, were themselves negligent in the selection and supervision of their employee. occupation rather than the quantity or extent of the business transacted.� Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former�s employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. 5. FIRST PHIL. INDUSTRIAL CORP. vs. CA FPIC is a grantee of a pipeline concession to contract, install and operate oil pipelines. Problem: The City of Batangas City Treasurer denied the protest contending that FPIC cannot be considered engaged in transportation business, thus it cannot claim exemption under the LGC. FPIC is a common carrier. The fact that FPIC has a limited clientele does not exclude it from the definition of a common carrier. As correctly pointed out by FPIC, the definition of "common carrier" in the 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. In fact, in the United States, oil pipe line operators are considered common carriers. FPIC is exempt from payment of local tax under the LGC. 6. LOADSTAR SHIPPING CO. vs. CA Goods – vessel Problem: vessel sank while it was on its way to Manila, along with its cargoes. LOADSTAR is a common carrier. Defense: Loadstar is not liable It is not necessary that the carrier be issued a certificate of public convenience, �A Pipeline concessionaire is a common carrier� Test for determining whether a party is a common carrier of goods: 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 4. The transportation must be for hire. ART. 1732- definition of CC The above article makes no distinction - between one whose principal business - because the ship sank due force majeure, caused by the typhoon. - It contended that the vessel is a private carrier and not a common carrier because it was not issued a certificate of public convenience, - it did not have a regular trip or schedule nor a fixed route, and there was only, one shipper. 7. CALVO vs. UCPB GEN. INSURANCE TERMINAL SERVICES, INC. Goods: vessel Petitioner Virgines Calvo is the owner of Transorient Container Terminal Services, Inc. (TCTSI), a sole proprietorship customs broker. Petitioner entered into a contract with San Miguel Corporation (SMC) for the transfer of 114 reels of semi- chemical fluting paper and 124 reels of kraft liner board from the Port Area in Manila 15 reels of the semi-chemical fluting paper were wet/stained/torn and 3 reels of kraft liner board were likewise torn. LOADSTAR was negligent. The limited liability should not be applied where there was negligence on the part of the vessel owner or agent. LOADSTAR was at fault or negligent in not maintaining a seaworthy vessel and in having allowed a vessel to sail despite knowledge of approaching typhoon. Petitioner is a common carrier. Petitioner is liable to the damage cargoes. There is greater reason for holding petitioner to be a common carrier because the transportation of goods is an integral part of her 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"). 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. 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. Same with number 6 8. ASIA LIGHTRAGE AND SHIPPING INC. vs. CA Goods – vessel The delivery was delayed due to the barge being suspended when a typhoon had had approached their destination. After a few days, a hole was found but was later on patched. The principal business of the petitioner is that of lightrage 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. One can be a common carrier even if its carrying of goods is done on an irregular manner and even with only limited clients. Problem ; goods delivered in bad condition. CC is liable. Defense: damage was due to improper and insufficient export packaging, discovered when the sealed containers were opened outside the PSI warehouse. damage was due to improper and insufficient export packaging, discovered when the sealed containers were opened outside the PSI warehouse. A common carrier is liable to the resulting damage to the goods if the improper packaging is known to the carrier or his employees or is apparent upon ordinary observation, but he nevertheless accepts the same without protest or exception. Upon reaching Sta. Mesa spillways, the barge again ran aground due to strong current. To avoid the complete sinking of the barge, a portion of the goods was transferred to other barges. The next day, the towing bits of the barge broke resulting to the barge sinking and the total loss of the remaining cargo 9. A.F. SANCHEZ BROKERAGE vs. CA Goods – vessel In the event that the goods are lost, destroyed or deteriorated, it is presumed to have been at fault or to have acted negligently, unless it proves that it observed extraordinary diligence. 10. PHIL� CHARTER ��� M�V �NATIONAL HONOR� Goods: vessel They inspected the hatches, checked the cargo and found it in apparent good condition. Claudio Cansino, the stevedore of the ICTSI, placed two sling cables on each end of Crate No. 1. No sling cable was fastened on the mid- portion of the crate. In Dauz’s experience, this was a normal procedure. As the crate was being hoisted from the vessel’s hatch, the mid -portion of the wooden flooring suddenly snapped in the air, about five feet high from the vessel’s twin deck, sending all its contents crashing down hard, resulting in extensive damage to the shipment. The case at bar falls under one of the exceptions mentioned in Article 1734 of the Civil Code, particularly number (4) thereof, i.e., the character of the goods or defects in the packing or in the containers. The trial court found that the breakage of the crate was not due to the fault or negligence of ICTSI, but to the inherent defect and weakness of the materials used in the fabrication of the said crate. The crate should have three solid and strong wooden batten placed side by side underneath or on the flooring of the crate to support the weight of its contents. However, in the case of the crate in dispute, although there were three wooden battens placed side by side on its flooring, the middle wooden batten, which carried substantial volume of the weight of the crate's contents, had a knot hole or "bukongbukong," which considerably affected, reduced and weakened its strength. It appears that the wooden batten used as support for the flooring was not made of good materials, which caused the The common carrier's 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 are either lost or arrive 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. middle portion thereof to give way when it was lifted. The shipper also failed to indicate signs to notify the stevedores that extra care should be employed in handling the shipment. 11. LEA MER INDUSTRIES INC. vs. MALAYAN INSURANCE CO., INC. Goods: vessel Shipper: Ilian Silca mining >>> CC: Lea Mer Ind. >>> Consignee: Vulcan Industrial Problem: During the voyage, the vessel sank, resulting in the loss of the cargo. Lea mer is a common carrier. Petitioner is clearly a common carrier, because it offers to the public its business of transporting goods through its vessels. The finding of the RTC that petitioner became a private carrier when Vulcan chartered it is incorrect. Charter parties are classified as contracts of demise (or bareboat) and affreightment. The Contract in the present case was one of affreightment. Necessarily, petitioner was a common carrier, and the pertinent law governs the present factual circumstances Lea Mer is liable. First, petitioner presented no evidence that it had attempted �Common carriers are bound to observe extraordinary diligence in their vigilance over the goods entrusted to them, as required by the nature of their business and for reasons of public policy. Consequently, the law presumes that common carriers are at fault or negligent for any loss or damage to the goods that they transport.� to minimize or prevent the loss before, during or after the alleged fortuitous event. Second, the alleged fortuitous event was not the sole and proximate cause of the loss. There is a preponderance of evidence that the barge was not seaworthy when it sailed for Manila. Respondent was able to prove that, in the hull of the barge, there were holes that might have caused or aggravated the sinking. Because the presumption of negligence or fault applied to petitioner, it was incumbent upon it to show that there were no holes; or, if there were, that they did not aggravate the sinking. 12. LOADSTAR SHIPPING vs. PIONEER ASIA Goods; vessel Loadstar entered into a voyage-charter with Northern Mindanao Transport Company, Inc. for the carriage of 65,000 bags of cement Problem: However, at 4:31 in the morning, Captain Vicente C. Montera, master of M/V Weasel, ordered the vessel to be forced aground. Consequently, the entire shipment of cement was good as gone due to exposure to sea water. Petitioner thus failed to deliver the goods to the consignee in Manila. (1) Loadstar remains a common carrier. petitioner remains a common carrier notwithstanding the existence of the charter agreement with the Northern Mindanao Transport Company, Inc. since the said charter is limited to the ship only and Conformably, petitioner remains a common carrier notwithstanding the existence of the charter agreement with the Northern Mindanao Transport Company, Inc. since the said charter is limited to the ship only and does not involve both the vessel and its crew. Defense: at the time of the voyage the carriers voyagecharter with the shipper converted it into a private carrier. Thus, the presumption of negligence against common carriers could not apply. Petitioner further avers that the stipulation in the voyage-charter holding it free from liability is valid and binds the respondent 13. CEBU SALVAGE CORP. vs. PHIL. HOME ASSURANCE CORP. Goods: vessel Cebu Salvage Corporation and Maria Cristina Chemicals Industries, Entered into a voyage charter wherein Cebu Salvage Corporation was to load 1,100 metric tons of silica quartz on board the M/T Espiritu Santo at Ayungon, Negros Occidental for transport to and discharge at Tagoloan, Misamis Oriental Problem: M/T Espiritu Santo sank off the beach of Opol, Misamis Oriental, thus resulting in the total loss of the cargo does not involve both the vessel and its crew. Loadstar is liable. Records show that in the evening of June 24, 1984, the sea and weather conditions in the vicinity of Negros Occidental were calm. The records reveal that petitioner took a shortcut route, instead of the usual route, which exposed the voyage to unexpected hazard. Petitioner has only itself to blame for its misjudgment. YES. Cebu Salvage Corporation is liable for the loss of the cargo. CSC and MCCII entered into a voyage charter, also known as a contract of affreightment wherein the ship was leased for a single voyage for the conveyance of goods, in consideration of the payment of freight. �Common carriers are bound to observe extraordinary diligence over the goods they transport according to the circumstances of each case. In the event of loss of the goods, common carriers are responsible, unless they can prove that this was brought about by the causes specified in Article ���� of the Civil Code.� 14. SPS. CRUZ vs. SUN HOLIDAYS, INC. Beach resort with tour package Note: Beach resorts cannot be a common carrier; except in this case that they provided tourpackages Problem: death of their son Ruelito who perished with his wife Sun Holidays Inc. is a common carrier Shortly after the boat sailed on that day, it started to rain and as it moved farther away from Puerto Galera and into the open seas, the rain and wind got stronger. After getting hit by two big waves, M/B Coco Beach III capsized putting all passengers underwater and resulted to the death of 8 passengers, including petitioners’ son Ruelito and his wife. Its ferry services are so intertwined with its main business as to be properly considered ancillary thereto. The constancy of respondent's 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. The stay of Ruelito and his wife was by virtue of a tour package-contract with respondent that included transportation to and from the resort and the point of departure in Batangas. �The operator of a beach resort that accepts clients by virtue of tour package- contracts that included transportation to and from the Resort and the point of departure is considered a common carrier. Its ferry service is so intertwined with its main business as to be properly considered ancillary thereto.� Defense: Respondent denied being a common carrier, alleging that its boats are not available to the general public as they only ferry resort guests and crew members. 15. UNSWORTH TRANSPORT INTERNATIONAL (PHILS.), INC. VS. CA FREIGHT BROKER Goods: vessel 27 drums of various materials for pharmaceutical manufacturing delivered by SSPC to UTI. 1st survey: in good condition the term freight forwarder" refers to a firm holding itself out to the general public (other than as a pipeline, rail, motor, or water carrier) to provide transportation of property for A freight forwarders liability is limited to damages arising from its own negligence, including negligence in choosing the carrier; however, where the forwarder contracts to deliver goods to their destination instead of merely arranging for The arrastre Jardine Davies Transport Services, Inc. (Jardine) issued a gate pass which stated that 22 drums Raw Materials for Pharmaceutical Mfg. were loaded on a truck. 2nd survey; 1-p/bag torn on side contents partly spilled 1-s/drum #7 punctured and retaped on bottom side content lacking 5-drums shortship/short delivery compensation and, in the ordinary course of its business their transportation, it becomes liable as a common carrier for loss or damage to goods. It is undisputed that UTI issued a bill of lading in favor of Unilab. Pursuant thereto, petitioner undertook to transport, ship, and deliver the 27 drums of raw materials for pharmaceutical manufacturing to the consignee. Undoubtedly, UTI is liable as a common carrier. Whether or not UTI is a common carrier? 16. SPS. PERENA vs SPS. ZARATE School Bus Perenã s were owners of a van being used for private school transport. Nicolas and Teresita Zarate contracted Teodoro and Nanette Perenã to transport their (Zarate’s) son, Aaron, to and from the school The Perenã s are common carriers. They are not merely private carriers. Private transport for schools are common carriers. Problem: the driver, Alfaro decided to take a short cut in order to avoid traffic. The usual short cut was a railroad crossing. Alfaro saw that the barandilla (the pole used to block vehicles crossing the railway) was up. He then tried to overtake a bus. However, there was in fact an oncoming train but Alfaro no longer saw the train as his view was already blocked by the bus he was trying to overtake. The bus was able to cross unscathed but the van’s rear end was hit. The Perenã s, 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. During the collision, Aaron, was thrown off the van. His body hit the railroad tracks and his head was severed. It turns out that Alfaro was not able to hear the train honking from 50 meters away before the collision because the van’s stereo was playing loudly. the Pereñas 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. Defense: Perenã s invoked that as private carriers they were not negligent in selecting Alfaro as their driver as they made sure that he had a driver’s license and that he was not involved in any accident Observance of Extraordinary Diligence - The operator of a school bus service is a common carrier in the eyes of the law. He is bound to observe extraordinary diligence in the conduct of his business. He is presumed to be negligent when death occurs to a passeng prior to his being hired. In short, they observed the diligence of a good father in selecting their employee. Thus, they are liable. Being a common carrier, what is required of the Perenã s is not mere diligence of a good father. What is specifically required from them by law is extraordinary diligence 17. WESTWIND SHIPPING CORP. VS. UCPB GENERAL INSURANCE CO., INC., ET AL Goods vessel During the unloading operation, however, six containers/skids sustained dents and punctures from the forklift used by the stevedores of Ocean Terminal Services, Inc. (OTSI) in centering and shuttling the containers/skid. As a consequence, the local ship agent of the vessel Baliwag Shipping Agency, Inc., issued two Bad Order Cargo Receipt. Orient Freight International, Inc. (OFII), the customs broker of SMC, withdrew from ATI the 197 containers/skids, including the six in damaged condition. It was discovered upon discharge that additional nine containers/skids due to the forklift operations; thus, making the total number of 15 containers/skids in bad order. Defense: As for OFII, it maintains that it is not a common carrier, but only a customs broker whose participation is limited to facilitating withdrawal of the shipment in the custody of ATI by overseeing and documenting the turnover. OFII is a common carrier A customs broker has been regarded as a common carrier because transportation of goods is an integral part of its business OFII is a common carrier is buttressed by the testimony of its own witness, Mr. Loveric Panganiban Cueto, that part of the services it offers to clients is cargo forwarding, which includes the delivery of the shipment to the consignee. 18. FEDERAL PHOENIX ASSURANCE CO., LTD. VS. FORTUNE SEA CARRIER, INC. Goods – vessel Fortune Sea agreed to lease its vessel MV Ricky Rey to Northern Mindanao Transport. The time charter party agreement contained that it shall be leased for 90 days (extended for another 90) to carry bags of cement to different ports. Upon its arrival, the stevedores noticed smokes from the cargo haul; 60 bales of abaca were damaged. Defense: Fortune Sea alleged that it was acting as a private carrier at the time. The agreement provided that MV Ricky Rey shall be under the orders and complete control of Northern Transport. Whether Fortune Sea was converted into a private carrier by virtue of the charter party agreement 19. TORRES-MADRID BROKERAGE, INC. VS. FEB MITSUI MARINE INSURANCE CO., INC., ET AL Goods – vessel Shipper: Sony >>> CC: Torres-Madrid >>> Consignee: Binan TMBI subcontracted BMT Trucking services since it did not own any delivery truck which Sony did not object to the arrangement. Problem: 4 trucks left BMT’s garage but only 1 arrived at the warehouse. One truck was found abandoned. Both the driver and the shipment were missing. TMBI filed a complaint for “hijacking”. Whether or not TMBI is liable for the loss of goods Yes. The charter party agreement converted Fortune Sea into a private carrier. It has been settled in various jurisprudence that the nature of a contract is not dependent on the assigned name of the parties. The decisive factor being the intention of the parties evident on the contract or other conducts. In the case, although it was denominated as a time charter party agreement, it includes not only the vessel but also its crew thereby making Northern Transport the owner pro hac vice of the vessel during the whole period of the voyage. It assumes all operational control as evidenced by the master of the vessel being under Northern Transport’s command. Yes. TMBI is liable for the loss of goods TMBI failed to successfully establish that it had acted with extraordinary diligence and TMBI’s current theory that hijacking was attended by force is untenable. However, TMBI and BMT cannot be solidarily liable as TMBI’s liability did not stem from a quasi-delict but from its breach of contract or culpa contractual while Mitsui’s action against BMT could only A common carrier to be absolved of its liability for a resulting loss: 1. 2. If it proves that it exercised extraordinary diligence in transporting and safekeeping the goods; If it stipulated with the shipper or owner of the goods to limit its liability for the loss, destruction or deterioration of the goods to a degree less rise from quasi-delict or culpa aquiliana. than extraordinary diligence. In this case, TMBI entered another contract of carriage with BMT which failed to prove that it observed extraordinary diligence in the performance of its obligation to TMBI. So, TMBI is liable to Mitsui. In turn, TMBI is entitled to reimbursement from BMT due to the latter’s own breach of contract with TMBI. Private Carriers Cases HOME INSURANCE COMPANY VS. AMERICAN STEAMSHIP AGENCIES, INC. AND LUZON STEVEDORING CORPORATION Private Goods/Passenger Facts/Problem Ruling: Doctrine: -When the cargo was delivered to consignee Is the stipulation in the charter party of the owner’s nonliability valid as to absolve the American Steamship Agencies from liability for los A common carrier undertaking to carry a special cargo or chartered to a special person only, becomes a private carrier. As a private carrier, a stipulation exempting the owner from the liability for the negligence of its agent is not against public policy, and is deemed valid.� SMB, there were shortages Defense of American Steamship: It denied the liability by alleging that under the provisions of the Charter party referred to in the Bills of Lading, the charterer, not the shipowner, was responsible for any loss or damage of the cargo. Furthermore, it claimed to have exercised due diligence in stowing the goods and that as a mere forwarding agent, it was not responsible for losses or damages to the cargo. YES. NATIONAL STEEL CORP. vs. CA Private NSC hired MV Vlasons I, a private vessel owned by VSI. They entered into a contract of affreightment or contract of voyage charter hire wherein the contract states that NSC hired VSI's vessel to make one voyage to load steel products at Iligan City and discharge them at North Harbor, Manila Problem: nearly all the skids of tinplates and hot rolled sheets were allegedly found to be wet and rusty. MV Vlasons was seaworthy. - - underwent drydocking in Cebu and was thoroughly inspected by the Philippine Coast Guard; subject voyage was the vessel's first voyage after the drydocking . In fact, the Philippine Coast Guard Station in Cebu cleared it as seaworthy, fitted and equipped; it met all requirements for trading as cargo vessel. But it was not liable. -the damage was brought about the unloading process when rain and seawater seeped through the cargo due to the fault or negligence of the stevedores employed by it. - Also, the agreement between the parties — the Contract of Voyage Charter Hire — placed the burden of proof for such loss or damage upon the shipper, not upon the shipowner. The stipulation, while disadvantageous to NSC, is valid because the parties entered into a contract of private charter, not one of common carriage. Verily, the extent of VSI's responsibility and liability over NSC's cargo are determined primarily by the stipulations in the contract of carriage or charter party and the Code of Commerce. In the instant case, the burden of proof lies on the part of NSC and not the VSI. VALENZUELA HARDWOOD AND INDUSTRIAL SUPPLY, INC. VS. CA Private Problem: vessel M/V Seven Ambassador sank on 25 January 1984 resulting in the loss of the plaintiffs insured logs. WON the stipulation in the charter party executed between the petitioner and the private respondent exempting the latter from liability for the loss of petitioners logs arising from the negligence of its (Seven Brothers) captain valid? Validity of Stipulation is Lis Mota no dispute between the parties that the proximate cause of the sinking of M/V Seven Ambassadors resulting in the loss of its cargo was the snapping of the iron chains and the subsequent rolling of the logs to the portside due to the negligence of the captain in stowing and securing the logs on board the vessel and not due to fortuitous event. Likewise undisputed is the status of Private Respondent Seven Brothers as a private The stipulation in the charter party absolving the owner from liability for loss due to the negligence of its agent would be void only if the strict public policy governing common carriers is applied. Such policy has no force where the public at large is not involved, as in this case of a ship totally chartered for the use of a single party.� carrier when it contracted to transport the cargo of Petitioner Valenzuela. Ina contract of private carriage, the parties may validly stipulate that responsibility for the cargo rests solely on the charterer, exempting the shipowner from liability for loss of or damage to the cargo caused even by the negligence of the ship captain. Pursuant to Article 1306 of the Civil Code, such stipulation is valid because it is freely entered into by the parties and the same is not contrary to law, morals, good customs, public order, or public policy. Indeed, their contract of private carriage is not even a contract of adhesion. We stress that in a contract of private carriage, the parties may freely stipulate their duties and obligations which perforce would be binding on them. Distinction from towage, arrastre, stevedoring. And contract of services Cases Goods/Passenger Facts/Problem Ruling: Marina Port Services v. Countercorp Trading PTE., Ltd. shipped from MPSI is not liable for the loss of the Goods – vessel American Homes Singapore to the Philippines 10 container vans of bags of flour. Flour soft wheat flour with seals intact on board the vessel M/V Uni Fortune. Upon arrival at the Manila South Harbor on September 25, 1989, agents of the Bureau of MPSI was able to prove delivery of the shipment to MSC in good and Doctrine: MPSI cannot just the same be held liable for the missing bags of flour since the consigned goods were shipped under "Shipper's Load and Count" arrangement. "This means that the shipper was solely responsible for the Customs officially broke the seals, opened the container vans, and examined the shipment for tax evaluation in the presence of MSC's broker and checker. Thereafter, the customs inspector closed the container vans and refastened them with safety wire seals. MPSI then placed the said container vans in a back-to-back arrangement at the delivery area of the harbor's container yard where they were watched over by the security guards of MPSI and of the Philippine Ports Authorit MSC's representative, AD's Customs Services (ACS), took out five container vans for delivery to MSC. At the compound's exit, MPSI issued to ACS the corresponding gate passes for the vans indicating its turnover of the subject shipment to MSC. complete condition and with locks and seals intact. Even in the light of Article 1981, no presumption of fault on the part of MPSI arises since it was not sufficiently shown that the container vans were re-opened or that their locks and seals were broken for the second time. loading of the container, while the carrier was oblivious to the contents of the shipment. Protection against pilferage of the shipment was the consignee's lookout. At any rate, the goods were shipped under "Shipper's Load and Count" arrangement. Thus, protection against pilferage of the subject shipment was the consignees lookout. Problem: However, upon receipt of the container vans at its warehouse, MSC discovered substantial shortages in the number of bags of flour delivered. Hence, it filed a formal claim for loss with MPSI. CRISOSTOMO vs. CA Passenger – airplane Travel agency – not a cc Flight: England, Holland, Germany, Austria, Liechstenstein, Switzerland and Franc Problem: o petitioner’s dismay, she discovered that the flight she was supposed to take had already departed the previous day. It is obvious from the above definition that respondent is not an entity engaged in the business of transporting either passengers or goods and is therefore, neither a private nor a common carrier. Respondent did not undertake to transport petitioner from one place to another since its covenant with its customers is simply to make travel arrangements in their behalf. Respondent’s services as a travel agency include procuring tickets and facilitating travel permits or visas as well as booking customers for tours. While petitioner concededly bought her plane ticket through the efforts of respondent company, this does not mean that the latter ipso facto is a common carrier. At most, respondent acted merely as an agent of the airline, with whom petitioner ultimately contracted for her carriage to Europe. Respondent’s obligation to petitioner in this regard was simply to see to it that petitioner was properly booked with the airline for the appointed date and time. Her . he evidence on record shows that respondent exercised due diligence in performing its obligations under the contract and followed standard procedure in rendering its services to petitioner. As correctly observed by the lower court, the plane ticket issued to petitioner clearly reflected the departure date and time, contrary to petitioner’s contention. The travel documents, consisting of the tour itinerary, vouchers and instructions, were likewise delivered to petitioner two days prior to the trip. Respondent also properly booked petitioner for the tour, prepared the necessary documents and procured the plane tickets. It arranged petitioner’s hotel accommodation as well as food, land transfers and sightseeing excursions, in accordance with its avowed ASIAN TERMINALS, INC. vs. ALLIED GUARANTEE INSURANCE CO., INC. transport to the place of destination, meanwhile, pertained directly to the airline Since the relationship of an arrastre operator and a consignee is akin to that between a warehouseman and a depositor, then, in instances when the consignee claims any loss, the burden of proof is on the arrastre operator to show that it complied with the obligation to deliver the goods and that the losses were not due to its negligence or that of its employees. A mere sign-off from the customs broker's representative that he had received the subject shipment "in good order and condition without exception" would not absolve the arrastre from liability, simply because the representative's signature merely signifies that said person thereby frees the arrastre from any liability for loss or damage to the cargo so withdrawn while the same was in the custody of such representative to whom the cargo was released, but it does not foreclose the remedy or right of the consignee (or its subrogee) to prove that any loss or damage to the subject shipment occurred while the same was under the custody, control and possession of the arrastre operator. REGISTERED OWNER RULE AND KABIT SYSTEM Cases LIM, ET AL vs. CA, ET AL Goods/Passenger Facts/Problem - Gonzales bought an Isuzu passenger jeepney from Gomercino Vallarta, a holder of a certificate of public convenience for the operation of public utility vehicle. Problem: While the jeep was running northbound along the North diversion road somewhere in Meycauayan, Bulacan, it collided with a tenwheeler-truck owned by peti, The said truck collided with a Ferroza and the jeepney owned by Gonzales. im offered P20,000 for the repairs of the jeepney. However, Gonzales insisted that the jeepney be replaced with a new one or that Lim pay the amount of P236,000. Since they were not able to come to terms as to the compensation, Gonzales filed the complaint for damages against Lim. Defense: Lim set up the defense that Gonzales was not a real party in interest to file a claim against him, as he is not the registered owner of the vehicle, Ruling: WON the new owner of a passenger jeepney who continued to operate the same under the so-called kabit system and in the course thereof met an accident has the legal personality to bring the action for damages against the erring vehicle. YES. In the present case it is at once apparent that the evil sought to be prevented in enjoining the kabit system does not exist. First, neither of the parties to the pernicious kabit system is being held liable for damages. Second, the case arose from the negligence of another vehicle in using the public road to whom no representation, or misrepresentation, as regards the ownership and operation of the passenger jeepney was made and to whom no such representation, or misrepresentation, was necessary. Thus it cannot be said that private respondent Doctrine: The owner of a passenger jeepney who operates under a kabit system is not precluded from filing a case for damages if the public at large is not deceived, much less involved. Gonzales and the registered owner of the jeepney were in estoppel for leading the public to believe that the jeepney belonged to the registered owner. Third, the riding public was not bothered nor inconvenienced at the very least by the illegal arrangement. On the contrary, it was private respondent himself who had been wronged and was seeking compensation for the damage done to him. Certainly, it would be the height of inequity to deny him his right. FEB LEASING AND FINANCE CORP. (NOW BPI LEASING CORP.) VS. SPS. BAYLON, ET AL Problem: Loretta V. Baylon, daughter of the respondent spouses was hit by an Isuzu oil tanker The oil tanker was registered in the name of petitioner FEB Leasing and Financing Corp at the time of the accident. The oil tanker was leased to BG Hauler, Inc. and was being driven by the latter’s driver, Manuel Y. Estilloso. WON the FEB Leasing and Finance Corp as the registered owner remains liable for loss, damage, or injury caused by the vehicle notwithstanding an exemption provision in the financial lease contract. Yes, in accordance with the law on compulsory motor vehicle registration, the court has consistently ruled that, with respect to the public and third persons, the registered owner of a motor vehicle is directly and primarily responsible for �The registered owner of a vehicle is directly and primarily responsible for the consequences of its operation regardless of who the actual vehicle owner might be.� the consequences of its operation regardless of who the actual vehicle owner might be. Well-settled is the rule that the registered owner of the vehicle is liable for quasi-delicts resulting from its use. Thus, even if the vehicle has already been sold leased, or transferred to another person at the time the vehicle figured in an accident, the registered vehicle owner would still be liable for damages caused by the accident. The policy behind the rule is to enable the victim to find redress by the expedient recourse of identifying the registered vehicle owner in the records of LT FILCAR TRANSPORT SERVICES VS. ESPINAS Problem: n. He was already in the middle of the intersection when another car, traversing President Quirino Street and going to Roxas Boulevard, suddenly hit and bumped his car. As a result of the impact, Espinas' car turned clockwise. The other car escaped from the scene of the incident, but Espinas was able to get its plate number. Yes. The set-up may be inconvenient for the registered owner of the motor vehicle, but the inconvenience cannot outweigh the more important public policy being advanced by the law in this case which is the protection of innocent persons who may be victims of reckless In so far as third persons are concerned, the registered owner of the motor vehicle is the employer of the negligent driver, and the actual employer is considered merely as an agent of such owner. Whether there is an employer-employee relationship between the , Espinas learned that the owner of the other car, with plate number UCF-545, is Filcar. drivers and irresponsible motor vehicle owners. WON Filcar, as registered owner of the motor vehicle which figured in an accident, may be held liable for the damages caused to Espinas METRO MANILA TRANSIT CORP. vs. CUEVAS Metro Manila Transit Corporation �MMTC� and Mina’s Transit Corporation �Mina’s Transit) entered into an agreement to sell whereby the latter bought several bus units from the former at a stipulated price. They agreed that MMTC would retain the ownership of the buses until certain conditions were met, but in the meantime Mina’s Transit could operate the buses within Metro Manila. Problem: one of the buses subject of the agreement to sell hit and damaged a Honda Motorcycle owned by Reynaldo and driven by Junnel. Whether or not MMTC is liable considering that it was not the actual operator and employer of the bus driver YES. In view of MMTC’s 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. Ma� MMTC �eco�e� f�om Mina�� T�an�i� ��he ac��al em�lo�e� of �he negligen� driver)? YES. Although the registeredowner rule might seem to be unjust towards MMTC, the law did not leave it without any remedy or recourse. According registered owner and the driver is irrelevant in determining the liability of the registered owner who the law holds primarily and directly responsible for any accident, injury or death caused by the operation of the vehicle in the streets and highways. �The registered owner of a motor vehicle whose operation causes injury to another is legally liable to the latter. But it is error not to allow the registered owner to recover reimbursement from the actual and present owner by way of its cross- claim.� to Filcar Transport Services v. Espinas, MMTC could recover from Mina’s Transit, the actual employer of the negligent driver, under the principle of unjust enrichment, by means of a cross-claim seeking reimbursement of all the amounts that it could be required to pay as damages arising from the driver’s negligence. A cross-claim is a claim by one party against a coparty arising out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim therein, and may include a claim that the party against whom it is asserted is or may be liable to the crossclaimant for all or part of a claim asserted in the action against the cross-claimant.