CommRev Aquino Bar Q & A (Transportation Law, 1975â 2019) [4F1920]

Transportation Law Bar Exam Questions and Answers 1975-2019 Submitted to: Atty. Timoteo Aquino Professor Commercial Law Review San Beda University – Manila Submitted by: 4F AY 2019-2020 Page 1 of 191 TABLE OF CONTENTS Topics and Year GENERAL CONCEPTS Concept of Common Carriers 1975…………………………………………………………………………………... 1996…………………………………………………………………………………... 1996…………………………………………………………………………………... 2012…………………………………………………………………………………... 1996…………………………………………………………………………………... 1980…………………………………………………………………………………... 1987…………………………………………………………………………………... 2002…………………………………………………………………………………... Governing Laws 2013…………………………………………………………………………………... Extraordinary Diligence and Presumption of Negligence 1977…………………………………………………………………………………... 1982…………………………………………………………………………………... 1984…………………………………………………………………………………... 1988…………………………………………………………………………………... 1989…………………………………………………………………………………... 1989…………………………………………………………………………………... 1989…………………………………………………………………………………... 1990…………………………………………………………………………………... 2003…………………………………………………………………………………... 2009…………………………………………………………………………………... 2011…………………………………………………………………………………... 2012…………………………………………………………………………………... 2012…………………………………………………………………………………... 2015…………………………………………………………………………………... 2016…………………………………………………………………………………... 2017…………………………………………………………………………………... 2018…………………………………………………………………………………... Defenses of Common Carriers 1975…………………………………………………………………………………... 1978…………………………………………………………………………………... 1984…………………………………………………………………………………... 1987…………………………………………………………………………………... 1991…………………………………………………………………………………... 1994…………………………………………………………………………………... 1995…………………………………………………………………………………... 1996…………………………………………………………………………………... 2001…………………………………………………………………………………... Page Number 6 7 8 9 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 29 31 32 33 34 35 37 39 40 41 42 44 45 46 47 Page 2 of 191 2002…………………………………………………………………………………... 2009…………………………………………………………………………………... 2011…………………………………………………………………………………... Duration of Liability 1979…………………………………………………………………………………... 1979…………………………………………………………………………………... 1996…………………………………………………………………………………... 2008…………………………………………………………………………………... 2011…………………………………………………………………………………... 2011…………………………………………………………………………………... 2011…………………………………………………………………………………... Liability for Acts of Employees and Passengers 1986…………………………………………………………………………………... 1997…………………………………………………………………………………... 1997…………………………………………………………………………………... 2005…………………………………………………………………………………... 2011…………………………………………………………………………………... Stipulations Reducing Diligence or Limiting Liability 1978…………………………………………………………………………………... 1983…………………………………………………………………………………... 1983…………………………………………………………………………………... 1984…………………………………………………………………………………... 1985…………………………………………………………………………………... 1989…………………………………………………………………………………... Registered Owner Rule and Kabit System 1976…………………………………………………………………………………... 1979…………………………………………………………………………………... 1988…………………………………………………………………………………... 2012…………………………………………………………………………………... 2005…………………………………………………………………………………... 2005…………………………………………………………………………………... 2012…………………………………………………………………………………... Concurrent Causes of Action 1976…………………………………………………………………………………... 1986…………………………………………………………………………………... 2008…………………………………………………………………………………... 2013…………………………………………………………………………………... 1984…………………………………………………………………………………... Passenger's Baggages 1992…………………………………………………………………………………... 1998…………………………………………………………………………………... 1989…………………………………………………………………………………... 49 50 51 53 54 56 57 59 61 62 64 66 67 68 69 70 72 73 74 76 77 78 79 80 82 84 85 86 87 89 91 93 96 98 100 102 Page 3 of 191 MARITIME LAW General Concepts 1993…………………………………………………………………………………... Real and Hypothecary Nature of Maritime Law 1978…………………………………………………………………………………... 1982…………………………………………………………………………………... 1985…………………………………………………………………………………... 1985…………………………………………………………………………………... 1988…………………………………………………………………………………... 1989…………………………………………………………………………………... 1999…………………………………………………………………………………... 2000…………………………………………………………………………………... 2008…………………………………………………………………………………... 2011…………………………………………………………………………………... 2016…………………………………………………………………………………... Protest 1988…………………………………………………………………………………... 2007…………………………………………………………………………………... Collision 1987…………………………………………………………………………………... 1998…………………………………………………………………………………... 1980…………………………………………………………………………………... 1991…………………………………………………………………………………... 1995…………………………………………………………………………………... Persons Involved in Maritime Commerce 1984…………………………………………………………………………………... 1988…………………………………………………………………………………... 1981…………………………………………………………………………………... General Average vs. Particular Average 1982…………………………………………………………………………………... 2000…………………………………………………………………………………... 2009…………………………………………………………………………………... 2010…………………………………………………………………………………... 2015…………………………………………………………………………………... Charter Party 1981…………………………………………………………………………………... 1989…………………………………………………………………………………... 1989…………………………………………………………………………………... 1991…………………………………………………………………………………... 1991…………………………………………………………………………………... 2003…………………………………………………………………………………... 2017…………………………………………………………………………………... Bill of Lading 1975…………………………………………………………………………………... 1998…………………………………………………………………………………... 103 105 106 107 109 110 112 113 115 116 118 120 121 122 124 125 126 128 130 131 133 134 136 141 142 144 146 147 149 150 151 153 154 155 156 157 Page 4 of 191 Loans on Bottomry and Respondentia 1975…………………………………………………………………………………... 1980…………………………………………………………………………………... Procedure and Prescriptive Period of Claims 1978…………………………………………………………………………………... 1975…………………………………………………………………………………... 1975…………………………………………………………………………………... 1978…………………………………………………………………………………... 1984…………………………………………………………………………………... 1992…………………………………………………………………………………... 1995…………………………………………………………………………………... 2000…………………………………………………………………………………... 2010…………………………………………………………………………………... Salvage Law 1975…………………………………………………………………………………... 158 159 160 161 162 163 164 165 167 168 169 170 WARSAW CONVENTION Warsaw Convention 2012…………………………………………………………………………………... 1993…………………………………………………………………………………... 171 172 PUBLIC SERVICE ACT Public Service Act 1983…………………………………………………………………………………... 1992…………………………………………………………………………………... 1976…………………………………………………………………………………... 1993…………………………………………………………………………………... 1995…………………………………………………………………………………... 1981…………………………………………………………………………………... 1998…………………………………………………………………………………... 1979…………………………………………………………………………………... 1986…………………………………………………………………………………... 2003…………………………………………………………………………………... 1993…………………………………………………………………………………... 2000…………………………………………………………………………………... 1977…………………………………………………………………………………... 2011…………………………………………………………………………………... 173 175 176 177 179 180 181 182 183 184 185 187 188 190 *YEAR ASSIGNMENTS PER STUDENT 191 Page 5 of 191 A. GENERAL CONCEPT CONCEPT OF COMMON CARRIERS TOPIC: Common Carriers; Concept (1975) LMN, Inc. operates a beach resort in a secluded island off the coast of Puerto Princesa City, Palawan. It operates three (3) motorized boats to ferry its guests from the city proper to the island resort and vice-versa. During one rainy morning, the guests were informed that the ferry services for that day were cancelled due to a storm forecast. In order to appease the apparent dismay of most of the guests who will miss their flight back to Manila, the boat captain of one of LMN, Inc.'s motorized boats decided to push through with its trip back to the city. Shortly after the boat sailed, the storm hit and the winds and waves became stronger, causing engine trouble to the boat. Unfortunately, the boat capsized and sank, resulting in the death of one of the passengers, Mr. X. This prompted Mr. X's heirs to file a complaint for damages against LMN, Inc., which they alleged to be a common carrier. In its defense, LMN, Inc. maintained that it is not a common carrier because its boats are not available to the general public but only ferry resort guests and employees. May LMN, Inc. be considered a common carrier? Explain. ANSWER: Yes, LMN, Inc. is a common carrier. In the case of Cruz v. Sun Holidays, Inc. (G.R. No. 186312, June 29, 2010), the Supreme Court held that the ferry services of a beach resort are so intertwined with its main business as to be properly considered ancillary thereto. In this case, LMN, Inc. ferry services are ancillary to its beach resort. Therefore, LMN, Inc. is a common carrier. Page 6 of 191 Topic: Common Carrier; Definition of Common Carrier (1996) Define a common carrier. ANSWER: A common carrier is a person, corporation, firm or association engaged in the business of carrying or transporting passengers or goods or both, by land, water or air for compensation, offering its services to the public (Art. 1732, Civil Code). Page 7 of 191 Topic: Common Carrier; Carriage of Goods (1996) AM Trucking, a small company, operates two trucks for hire on a selective basis. It caters only to a few customers, and its trucks do not make regular or scheduled trips. It does not even have a certificate of public convenience. On one occasion, Reynaldo contracted AM to transport for a fee, 100 sacks of rice from Manila to Tarlac. However, AM failed to deliver the cargo, because its truck was hijacked when the driver stopped in Bulacan to visit his girlfriend. May Reynaldo hold AM liable as a common carrier? ANSWER: Yes. The law does not distinguish between one whose principal business activity is the carrying of persons or goods or both and anyone who does such carrying only as an ancillary activity. The law also avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled trips and one offering such service on an occasional, episodic or unscheduled basis. Lastly, the law refrains from making a distinction 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. (Pedro de Guzman v. CA, G.R. 47822, December 22, 1988) In this case, the facts that AM Trucking operates only two trucks for hire on a selective basis, caters only to a few customers, does not make regular or scheduled trips, and does not have a certificate of public convenience are of no moment. Thus, Reynaldo may hold AM Trucking liable as a common carrier. Page 8 of 191 Topic: General Principles; Perfection of Contract of Carriage (2012) X is a trader of school supplies in Calapan, Oriental Mindoro. To bring the school supplies to Calapan, it has to be transported by a vessel. Because there were so many passengers, the two (2) boxes of school supplies were loaded but the shipping company was not able to issue the Bill of Lading. So, on board, the Ship Captain issued instead a "shipping receipt" to X indicating the two (2) boxes of school supplies being part of the cargo of the vessel. Which phrase therefore, is the most accurate? a) the owner of the vessel is not liable because no bill of lading was issued to X hence, no contract of carriage was perfected. b) it is possible to have a contract of carriage of cargo even without a bill of lading, and the "shipping receipt" would be sufficient. c) the only acceptable document of title is a Bill of Lading. d) None of the above. ANSWER: b) it is possible to have a contract of carriage of cargo even without a bill of lading, and the "shipping receipt" would be sufficient. A contract is a meeting of minds between two persons whereby one agrees to give something or render some service to another for a consideration. There is no contract unless the following requisites concur: (1) consent of the contracting parties; (2) an object certain which is the subject of the contract; and (3) the cause of the obligation which is established. A contract of carriage is defined as one whereby a certain person or association of persons obligates themselves to transport persons, things, or goods from one place to another for a fixed price. Under Article 1732 of the Civil Code, this "persons, corporations, firms, or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public" is called a common carrier. (Spouses Jesus Fernando and Elizabeth S. Fernando v. Northwest Airlines, Inc., G.R. No. 212038, February 08, 2017) Page 9 of 191 Here, the elements of cause, object and consent is present hence a perfected contract of carriage is produced. Trader X and the shipping vessel voluntarily gave their consent to an agreement whose object is to transport the school supplies to Mindoro, and the cause is the payment of consideration made by Trader X. A Bill of Lading is only an evidence of the contract of carriage and is not indispensable for the perfection thereof. In conclusion, Option B is the correct answer. Page 10 of 191 Test of a Common Carrier Topic: Common Carrier; Test (1996) What is the test for determining whether or not one is a common carrier? ANSWER: The test for determining whether or not one is a common carrier is whether the person or entity, for some business purpose and with general or limited clientele, offers the service of carrying or transporting passengers or goods or both for compensation (Pedro de Guzman vs. CA, G. R. No. 47822, December 22, 1988). Page 11 of 191 Common carriers distinguished from private carrier Topic: Stipulation Exempting from Liability; Chartered Vessel; Transformation from Common Carrier to Private Carrier (1980) Tirso Molina charters a vessel owned and operated by Star Shipping Co., a common carrier, for the purpose of transporting two tractors to his logging concession. The crane operator of the shipping company somehow negligently puts the tractors in a place where they would tilt each other. During the trip, a strong wind hits the vessel, causing severe damage to the tractors. Tirso Molina sues the shipping company for damages. The latter cites a stipulation in the charter agreement exempting the company from liability from loss or damage arising from the negligence of its agents. Tirso Molina countered by stating that the aforementioned stipulation is against public policy and, therefore, null and void. Is the stipulation valid? Would you hold the shipping company liable? ANSWER: Yes, the stipulation in the charter party is valid, and Star Shipping Co. is not liable, provided that the charter is a demise or a bareboat charter. A bareboat or a demise charter must be distinguished from a contract of affreightment. In the former, the charterer becomes the owner of the voyage or service stipulated, and such charter party may transform a common carrier into a private carrier (Caltex [Phils.] v. Sulpicio Lines, G.R. No. 131166, September 30, 1999). On the other hand, in a contract of affreightment, the common carrier is not transformed into a private carrier (Coastwise Lighterage Corp. v. CA, G.R. No. 114167, July 12, 1995). In this case, the contention of Tirso Molina that the stipulation in question is null and void. Such stipulation exempting Star Shipping Co. from liability is allowed by law. Said company cannot be held liable in the event that the charter is one of bareboat or demise. Page 12 of 191 Topic: Common Carrier Distinguished from Private Carrier; Safety of Passengers (1987) During the elections last May, AB, a congressional candidate in Marinduque, chartered the helicopter owned by Lode Mining Corporation (LMC) for use in the election campaign. AB paid LMC the same rate normally charged by companies regularly engaged in the plane chartering business. In the charter agreement between LMC and AB, LMC expressly disclaimed any responsibility for the acts or omissions of its pilot or for the defective condition of the plane‟s engine. The helicopter crashed killing AB. Investigations disclosed that pilot error was the cause of the accident. LMC now consults you on its possible liability for AB‟s death in the light of the above findings. How would you reply to LMC‟s query? ANSWER: I would reply to LMC‟s query that it may not be held liable for the death of AB. The Court in the case of Planters Product, Inc. v. CA (G.R. No. 105090, September 15, 1993) explained that the distinction between a common carrier and a private carrier lies in the character of the business, such that if the undertaking is a single transaction, not a part of a general business or occupation, although involving the carriage of the goods for a fee, the person or corporation offering such service is a private carrier. Moreover, as opposed to a common carrier, a private carrier may validly enter into a stipulation that it is exempt from liability for the negligence of its agents or employees. In this case, LMC is a mining corporation whose helicopter was chartered by AB. LMC is not a common carrier as the facts were bereft of any showing that the chartering of the helicopter is part of its general business. As the facts show that it was merely a single transaction, then LMC is a private carrier. As aforestated, a private carrier such as LMC is allowed to enter into such stipulation provided in the charter agreement with AB that LMC is exempted from any responsibility for the acts or omissions of its pilot or for the defective condition of the plane‟s engine. The crash which killed AB in the case was found to be caused by pilot error. Therefore, LMC is not liable for the death of AB. Page 13 of 191 Topic: Common Carriers Distinguished from Private Carrier (2002) Name two (2) characteristics which differentiate a common carrier from a private carrier. ANSWER: Two (2) characteristics that differentiate a common carrier from a private carrier are: A. The distinction between a "common or public carrier" and a "private or special carrier" lies in the character of the business, such that if the undertaking is a single transaction, not a part of the general business or occupation, although involving the carriage of goods for a fee, the person or corporation offering such service is a private carrier. B. Article 1733 of the New Civil Code mandates that common carriers, by reason of the nature of their business, should observe extraordinary diligence in the vigilance over the goods they carry. In the case of private carriers, however, the exercise of ordinary diligence in the carriage of goods will suffice. (Planters Product, Inc. v. CA, G.R. No. 105090, September 15, 1993) Page 14 of 191 GOVERNING LAWS Topic: Governing Law (2013) Akiro of Tokyo, Japan sent various goods to his friend Juan in Cebu City, Philippines, through one of the vessels of Worth well Shippers, Inc., an American corporation. En route to Cebu City, the vessel had two stops, first in Hong Kong, and second, in Manila. While travelling from Tokyo to Hong Kong, the goods were damaged. What law will govern? (A) Japanese law (B) Hong Kong law (C) Chinese law (D) Philippine law (E) American law ANSWER: (D) Philippine law The Court in Eastern Shipping Lines, Inc. v. IAC, G.R. No. L-69044, May 29, 1987 provides that the law of the country to which the goods are to be transported governs the liability of the common carrier in case of their loss, destruction or deterioration. Applying the same, the goods are to be transported from Japan to Philippines regardless of whether the carrier had to make a stop-over in Hongkong. Thus, the Philippine law should apply. Page 15 of 191 EXTRAORDINARY DILIGENCE AND PRESUMPTION OF NEGLIGENCE Topic: Common Carrier; Liability for Culpa Contractual; Damages (1977) X, a businessman boarded a PANTRANCO bus bound for Dagupan City where he would meet Y, to arrange a business transaction. Somewhere in San Fernando, Pampanga, Z, the Deputy Sheriff of Pampanga, intercepted and seized the PANTRANCO but at the instance of W who had earlier obtained from the court a writ of attachment. As a result of the seizure by the Sheriff, X failed to reach Dagupan City where he was supposed to transact business. Feeling aggrieved by the loss of an otherwise juicy transaction, X sued PANTRANCO for breach of contract. Decide with reasons. ANSWER: I will decide the case in favor of X. Under Art. 2201 of the Civil Code, in contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. In this case, it is undeniable that there is a pre-existing contractual relation of carriage between X and the PANTRANCO Bus and that X failed to reach his destination in breach of the PANTRANCO Bus‟ obligation to transport him to the same. Also, it is notable that there was no fraud, bad faith, malice or wanton attitude on the part of the carrier. In this regard the loss of profits from the would-be business transaction is not only a natural and probable consequence of the breach, but also it could have been reasonably foreseen by the parties at the time X boarded the bus. At that time he was bound for Dagupan City to arrange a business transaction and it can very well assumed that the said transaction would be consummated and that he could have possibly gained from the said transaction. Therefore, the claim for damages will prosper and I will decide in favor of X. Page 16 of 191 Topic: Extraordinary Diligence; Presumption of Fault or Negligence; Exception (1982) In an action grounded on the contract of carriage, is there need for the court to make an express finding of fault or negligence on the part of the carrier in order to hold it liable for claims filed in behalf of the injured or deceased passengers? Explain. Is there any exception to any answer you may give on this question? ANSWER: Under Article 1755 and 1756 of the New Civil Code, in case of death or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed the utmost diligence of very cautious persons, with a due regard for all circumstances. Page 17 of 191 Topic: Common Carrier; Concept (1984) Mabuhay Lines, Inc. a common carrier, entered into a contract with Company X, whereby it agreed to furnish Company X, for a fixed amount, a bus for a company excursion on its anniversary day. It was agreed that Company X would have the use of the bus and its driver from 7:00 am to 7:00 pm on the stipulated date, and that the bus driver would be obliged to follow the instructions of the company‟s general manager as to the places to be visited. Company X agreed to bear the cost of the gasoline consumed. The transportation contract signed by Company X contained a stipulation that Mabuhay Lines, Inc. would be exempt from liability on account of acts or omissions of its employees. On the return trip from the excursion site, the bus had an accident and several employees of Company X were injured. State the liability, if any, of Mabuhay Lines, Inc. ANSWER: Mabuhay Lines Inc. may be made liable by the injured employees through a quasi-delict and not as a common carrier in a contract of carriage. Company X must prove the extent of liability if Mabuhay Lines, Inc. because the presumption of liability provided under the Civil Code does not apply here as Mabuhay Lines Inc. is acting not as a common carrier but as a private carrier. A common carrier becomes a private carrier when it undertakes to carry a special cargo or chartered to a special person only (Malayan Insurance Co., Inc. v. Philippines First Insurance Co., Inc. and Reputable Forwarder Services, Inc. G.R. No. 184300, July 11, 2012). Here, Company X was the sole client of Mabuhay Lines Inc. where the employee of the latter is obliged to obey the instructions of the former which means that Mabuhay Lines Inc. was acting as a private carrier herein. Thus, the presumption of fault or negligence in Article 1756 of the Civil Code does not apply nor does the prohibition of stipulating a limited liability in case of passenger death or injury in Articles 1759 and 1760 apply. Page 18 of 191 Topic: Common Carrier; Negligence; Damages (1988) What are the remedies if a passenger is injured or dies due to the negligence of a common carrier? ANSWER: Under the Art. 1735 of the Civil Code, in case of loss of effects of passengers or death or injuries to passengers, the common carrier is presumed to be at fault or have acted negligently unless it can prove that it has observed extraordinary diligence. Consequently, the carrier may be held liable for breach of obligation. In case of such breach, the carrier is liable for actual and compensatory damages that may be established including damages for loss of earning capacity; attorney‟s fees and exemplary damages may also be available. In the case of moral damages, the general rule is that moral damages are not recoverable in an action based on breach of contract. However, the exceptions are (1) if the passenger died and (2) if there is fraud, bad faith, or gross negligence. (Sps. Dionisio Estrada and Jovita R. Estrada v. Philippine Rabbit Bus Lines, Inc., G.R. No. 203902, July 19, 2017) Page 19 of 191 Topic: Extraordinary diligence in the vigilance over the goods (1989) X took the Benguet Bus from Baguio going to Manila. He deposited his maleta in the baggage compartment of the bus common to all passengers. He did not declare his baggage nor pay its charges contrary to the regulations of the bus company. When X got off, he could not find his baggage, which obviously was taken by another passenger. Determine the liability of the bus company. ANSWER: The bus company is liable for the loss of the maleta. Article 1733 of the New Civil Code provides that “common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods -xxx- according to all circumstances of the case”. The fact that the maleta was not declared nor the charges paid thereon is of no consequence as long as it was received by the carrier for transportation. In this case, the carrier is presumed negligent for the loss of X‟s baggage. Hence, it can be held liable. Page 20 of 191 Topic: Extraordinary Diligence in the Safety of Passengers (1989) X brought seven (7) sacks of palay to PNB. He paid its freight charges and was issued Way Bill No. 1. The cargo was loaded on the freight wagon of the train. Without any permission, X boarded the freight wagon and not the passenger coach. Shortly after the train started, it was derailed. The freight wagon fell on its side, killing X. There is no evidence that X bought a ticket or paid his fare at the same time that he paid the freight charges for his cargo. Is X a passenger of PNR? ANSWER: No. X is not a passenger. In the case of Vda de. Nueca v. Manila Railroad Co., (C.A. No. 31731-R, January 30, 1968), it is held that a passenger is one who travels by virtue of a contract, express or implied, with the carrier as to the payment of the fare, or that which is accepted as an equivalent. The relation of passenger and carrier commences when one puts himself in the care of the carrier, or directly under its control, with the bona fide intention of becoming a passenger, and is accepted as such by the carrier – as where he makes a contract for transportation and presents himself at the proper place and in a proper manner to be transported. Given such circumstances, X is not considered as a passenger as there was no evidence that he bought a ticket or paid his fare. Page 21 of 191 Topic: Diligence in the safety of passengers (1989) X, an 80-year old epileptic, boarded the S/S Tamaraw in Manila going to Mindoro. To disembark, the passengers have to walk thru a gang plank. While negotiating the gang plank, X slipped and fell into the waters. X was saved from drowning, brought to a hospital but after a month died from pneumonia. Except for X, all the passengers were able to walk thru the gang plank. What is the liability of the owner of the S/S Tamaraw? ANSWER: The owner of S/S Tamaraw is liable for the death of X in failing to exercise extraordinary diligence in the safety of passengers. Article 1755 of the New Civil Code provides that “[a] common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.” In this case, the carrier did not take the necessary precautions in ensuring the safety of passengers boarding and disembarking from the vessel. Article 1756 of the same code also provides that unless the contrary is shown, a common carrier is presumed to have been negligent in cases of death or injury to its passengers. Since X has not completely disembarked yet, the obligation of the shipowner to exercise utmost diligence still then subsisted and he can still be held liable. Thus, the owner of S/S Tamaraw is liable for the death of X. Page 22 of 191 Topic: Common Carrier; Presumption of Negligence (1990) Peter So hailed a taxicab owned and operated by Jimmy Cheng and driven by Hermie Cortez. Peter asked Cortez to take him to his office in Malate. On the way to Malate, the taxicab collided with a passenger jeepney, as a result of which Peter was injured, i.e., he fractured his left leg. Peter sued Jimmy for damages, based upon a contract of carriage, and Peter won. Jimmy wanted to challenge the decision before the Supreme Court on the ground that the trial court erred in not making an express finding as to whether or not Jimmy was responsible for the collision and, hence, civilly liable to Peter. He went to see you for advice. What will you tell him? Explain your answer. ANSWER: I will tell Jimmy not to challenge the decision of the court finding him liable for damages. Article 1755 of the New Civil Code provides that a common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all circumstances. Furthermore, Article 1756 of the same Code provides that in case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observe extraordinary diligence as prescribed in Articles 1733 and 1755. In this case, the court need not have to make an express finding that Jimmy was responsible for the collision because Article 1756 of the NCC makes an express presumption that in case a passenger was injured, the common carrier is presumed to be at fault or was negligent. It is upon Jimmy to Cheng to prove that the collision is a fortuitous event and that it exercised extraordinary diligence. Therefore, Jimmy Cheng‟s contention of the trial court‟s failure to make an express finding of his responsibility in the collision as a ground for an appeal will not stand. Page 23 of 191 Topic: Common Carrier; Breach of Contract; Damages (2003) Vivian Martin was booked by PAL, which acted as ticketing agent of Far East Airlines, for a round trip flight on the latter‟s aircraft, from Manila-Hongkong- Manila. The ticket was cut by an employee of PAL. The ticket showed that Vivian was scheduled to leave Manila at 5:30p.m. on 05 January 2002 aboard Far East‟s Flight F007. Vivian arrived at the NAIA an hour before the time scheduled in her ticket, but was told that Far East‟s Flight 007 had left at 12:10p.m. It turned out that the ticket was inadvertently cut and wrongly worded. PAL employees manning the airport‟s ground services nevertheless scheduled her to fly two hours later aboard their plane. She agreed and arrived in Hongkong safely. The aircraft used by Far East Airlines developed engine trouble, and did not make it to Hongkong but returned to Manila. Vivian sued both airlines, PAL and Far East, for damages because of her having unable to take the Far East flight. Could either or both airlines be held liable to Vivian? Why? ANSWER: Only Far East Airlines can be held liable to Vivian, on the ground of breach of contract of carriage. She cannot sue PAL because PAL is not a party to the contract. According to the case of Ramos v. China Southern Airlines Co. (G.R. No. 213418, September 21, 2016), 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 that does not happen, then the carrier opens itself to a suit for breach of contract of carriage. Moreover, in an action based on a breach of contract of carriage, the aggrieved party does not need to prove that the common carrier was at fault or negligent. All she has to prove is the existence of the contract and the fact of its non-performance due to the carrier‟s fault. In the case at bar, Vivian was not able to reach her destination because her ticket was inadvertently cut and wrongly worded by a PAL employee, and that the aircraft used by Far East Airlines developed an engine trouble. Because Vivian was not able to fly and reached her destination, a breach of contract of carriage arises and she can file an action based on a breach of contract of carriage without the need to prove that Far East Airlines was at fault or negligent. Therefore, Vivian can sue Far East Airlines for damages due to breach of contract of carriage. Page 24 of 191 Topic: Carriage of Passengers; Extraordinary Diligence (2009) One of the passenger buses owned by Continental Transit Corporation (CTC), plying its usual route, figured in a collision with another bus owned by Universal Transport, Inc. (UTI). Among those injured inside the CTC bus were: Romeo, a stow away; Samuel, a pickpocket then in the act of robbing his seatmate when the collision occurred; Teresita, the bus driver‟s mistress who usually accompanied the driver on his trips for free; and Uriel, holder of a free riding pass he won in a raffle held by CTC. A. Will a suit for breach of contract of carriage filed by Romeo, Samuel, Teresita, and Uriel against CTC prosper? Explain. B. Do Romeo, Samuel, Teresita, and Uriel have a cause of action for damages against UTI? Explain. ANSWER: A. As to Romeo, Samuel, and Teresita, no, the suit for breach of contract of carriage will not prosper. However, as to Uriel, yes, such suit will prosper. According to Art. 1733 of the Civil Code, common carriers are bound to exercise extraordinary diligence for the safety of passengers transported by them, according to all the circumstances of each case. A passenger is one who travels in a public conveyance by virtue of contract, express or implied, with the carrier as to the payment of fare or that which is accepted as an equivalent thereof. Furthermore, in the same case, the following were held to be not considered as passengers and are entitled to ordinary diligence only: 1. One who has not yet boarded any part of a vehicle regardless of whether or not he has purchased a ticket; 2. One who remains on a carrier for an unreasonable length of time after he has been afforded every safe opportunity to alight; 3. One who has boarded by fraud, stealth, or deceit; 4. One who attempts to board a moving vehicle, although he has a ticket, unless the attempt be with the knowledge and consent of the carrier; Page 25 of 191 5. One who has boarded a wrong vehicle, has been properly informed of such fact, and on alighting, is injured by the carrier; or 6. One who rides any part of the vehicle which is unsuitable or dangerous or which he knows is not designed or intended for passengers. (Vda de. Nueca v. Manila Railroad Co., C.A. No. 31731-R, January 30, 1968) Romeo cannot sue for breach of contract of carriage as he was stowaway who secured passage by fraud and was not a passenger. Likewise, Samuel and Teresita cannot sue for breach of contract of carriage. The element of payment of fare or an equivalent that is accepted by the public conveyance was absent. Samuel did not board the bus to be transported but to commit robbery. On the other hand, Teresita did not board the bus to be transported but to accompany the driver while he was performing his work. Finally, Uriel can sue for breach of contract for he was a passenger although he was being transported gratuitously, because he won a free riding pass in a raffle held by CTC, which is an equivalent of fare for carriage. Hence, only the suit for breach of contract of Uriel will prosper. B. Yes, Romeo, Samuel, Teresita and Uriel may sue UTI on the basis of quasi-delict. Under Art. 2176 of the Civil Code, when there is fault or negligence, one by his act or omission causes damage to another, without pre-existing contractual relation between the party at fault and the one suing, shall be obliged to pay for the damage done. In the present case, Romeo, Samuel, Teresita, and Uriel may allege that the collision was due to the negligence of driver of UTI. Hence, their cause of action is based on quasi-delict. Page 26 of 191 Topic: Extraordinary Diligence; Duration of Liability; Passengers (2011) P rode a Sentinel Liner bus going to Baguio from Manila. At a stop-over in Tarlac, the bus driver, the conductor, and the passengers disembarked for lunch. P decided, however, to remain in the bus, the door of which was not locked. At this point, V, a vendor, sneaked into the bus and offered P some refreshments. When P rudely declined, V attacked him, resulting in P suffering from bruises and contusions. Does he have cause to sue Sentinel Liner? A. Yes, since the carrier's crew did nothing to protect a passenger who remained in the bus during the stop-over. B. No, since the carrier's crew could not have foreseen the attack. C. Yes, since the bus is liable for anything that goes wrong in the course of a trip. D. No, since the attack on P took place when the bus was at a stop-over. ANSWER: A. Yes, since the carrier's crew did nothing to protect a passenger who remained in the bus during the stop-over. Article 1755 of the New Civil Code (NCC) provides that a common carrier is bound to carry the passengers 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. Also, Article 1735 of NCC provides that in case of loss of effects of death or injuries to passengers, the common carrier is presumed to be at fault or have acted negligently unless it can prove that it had observed extraordinary diligence in the vigilance thereof. The court need not make an express finding of fault or negligence of common carriers, the law imposes to common carriers strict liability, as long as it is shown that there exists a contract between the passenger and the common carrier and that the loss, deterioration, injury, or death took place during the existence of contract. In addition, the carrier is bound to exercise utmost diligence with respect to passengers the moment the person who purchases the ticket presents himself at the proper place and in a proper manner to be transported. Once created, the relationship will not ordinarily terminate until Page 27 of 191 the passenger has, after reaching his destination, safely alighted from the carrier‟s conveyance or has had a reasonable opportunity to leave the carrier‟s premises. In this case, the common carrier is bound to exercise an extraordinary diligence towards P since he is considered a passenger at the time he suffered bruises and contusions from V. The crew of the carrier must have secured the necessary precautions and safety of its passengers especially when the contract of carriage is not yet deemed terminated/completed since they were only on a stop-over. Therefore, the carrier is liable for breach of contract of carriage for the failure of the carrier‟s crew to exercise extraordinary diligence over its passenger during the existence of contract. Page 28 of 191 Topic: General Principles; Extraordinary Diligence of Common Carriers; Contributory Negligence (2012) X, while driving his Toyota Altis, tried to cross the railway tract of PNR along Blumetritt Avenida Ext., Manila. The train as it approached Blumentritt Avenida Ext., applied its horn as a warning to all the vehicles that might be crossing the railway tract, but there was really nobody manning the crossing. X was listening to his iPod touch, hence, he did not hear the sound of the horn of the train and so his car was hit by the train. As a result of the accident, X suffered some injuries and his car was totally destroyed as a result of the impact. Is PNR liable? a) PNR is not liable because X should have known that he was crossing a place designated as crossing for train, and therefore should have been more careful. b) PNR is liable because Railroad companies owe to the public a duty of exercising a reasonable degree of care to avoid injury to person and property at railroad crossings which means a flagman or a watchman should have been posted to warn the public at all times. c) PNR is not liable because it blew its horn when it was about to cross the railway along Blumentritt Avenida Ext. d) PNR is not liable because X was negligent, for listening to his iPod touch while driving. ANSWER: b) PNR is liable because Railroad companies owe to the public a duty of exercising a reasonable degree of care to avoid injury to person and property at railroad crossings which means a flagman or a watchman should have been posted to warn the public at all times. Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. Based on the statement of facts PNR is liable. As held in the case of PNR v. IAC (G.R. No. 70547 January 22, 1993). Page 29 of 191 A railroad is not required to have a gate (crossing bar) or a flagman, or to maintain signals at every intersection; only at such places reasonably necessary; what is considered reasonably necessary will depend on the amount of travel upon the road, the frequency with which trains pass over it and the view which could be obtained of trains as they approach the crossing, and other conditions. Here, since Avenida is a busy road PNR should have placed a gate (crossing bar) or a flagman, or to maintain signals at every intersection. However, the amount of damages will be equitably reduced due to the negligence of X. Article 1172. Responsibility arising from negligence in the performance of every kind of obligation is also demandable, but such liability may be regulated by the courts, according to the circumstances. X should have exercised the necessary diligence required in traversing the PNR track, he is negligent because he was playing music at a loud volume to the extent that X failed to hear the horn of the approaching train. Hence, the amount of damages to be paid by PNR will be equitably reduced due to the contributory negligence of X. In conclusion Option B is the correct answer. Page 30 of 191 Topic: General Principles; Extraordinary Diligence of Common Carriers; Liability for Acts of Employees (2012) The AAA Bus Company picks up passengers along EDSA. X, the conductor, while on board the bus, drew his gun and randomly shot the passengers inside. As a result, Y, a passenger, was shot and died instantly. Is AAA Bus Company liable? a) The bus company is not liable for as long as the bus company can show that when they hired X, they did the right selection process. b) The bus company cannot be held liable because what X did is not part of his responsibility. c) The bus company is liable because common carriers are liable for the negligence or willful act of its employees even though they acted beyond the scope of their responsibility. d) The bus company is not liable because there is no way that the bus company can anticipate the act of X. ANSWER: c) The bus company is liable because common carriers are liable for the negligence or willful act of its employees even though they acted beyond the scope of their responsibility. According to Art. 1759 of the Civil Code, common carriers are liable for the death of or injuries to passengers through the negligence or wilful acts of the former's employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees. Here, although employee X acted beyond his authority or in violation of the orders of the common carrier, the bus company is still liable by express mandate of the law. In conclusion Option C is the correct answer. Page 31 of 191 Topic: Extraordinary diligence (2015) Are common carriers liable for injuries to passengers even if they have observed ordinary diligence and care? Explain. ANSWER: Yes, common carriers are liable for injuries to passengers even if the carriers observed ordinary diligence. Article 1755 of the New Civil Code provides that a common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. Therefore, If the carriers observed only ordinary diligence they may be held liable for injuries because the obligation imposed upon them by law, is to exercise extraordinary diligence. Page 32 of 191 Topic: Presumption of Negligence (2016) A railroad track of the Philippine National Railway (PNR) is located near a busy intersection of Puyat Avenue and Osmena Highway. One afternoon, the intersection was heavily congested, as usual. Juan, the driver of a public utility jeepney (PUJ), drove onto the railroad tracks but could go no farther because of the heavy traffic at the intersection. After the jeepney stopped right on the railroad track, it was hit and overturned by a PNR train, resulting in the death of Kim, a passenger of the PUJ, and injuries to Juan and his other passengers. Juan, the injured passengers and Kim's family sued the PNR for damages for its negligence. It was established that the steel pole barrier before the track was broken, and that the PNR had the last clear chance of avoiding the accident. On the other hand, the PNR raised the defense that the track is for the exclusive use of the train and that motorists are aware that it is negligence per se to stop their vehicles on the tracks. Decide the case and explain. ANSWER: PNR may validly be held liable. The failure of the PNR to put a working and effective barrier, among others, is evidence of negligence and disregard of the safety of the public, even if there is no law or ordinance requiring it, because public safety demands that said devices or equipment be installed (PNR vs. Garcia, G.R. No. 169891, November 2, 2006). In the case at hand, PNR‟s negligence for its failure to provide working barriers and other safety equipment is the proximate cause of the injury. Thus, PNR is liable. Page 33 of 191 Topic: Extraordinary Diligence; Gratuitous Passenger (2017) Wisconsin Transportation Co., Inc. (WTC) owned and operated an inter-island deluxe bus service plying the Manila-Batangas-Mindoro route. Three friends, namely: Aurelio, Jerome, and Florencio rode on the same WTC bus from Manila bound for Mindoro. Aurelio purchased a ticket for himself. Jerome, being a boyhood friend of the bus driver, was allowed a free ride by agreeing to sit during the trip on a stool placed in the aisle. Florencio, already penniless after spending all of his money on beer the night before, just stole a ride in the bus by hiding in the on-board toilet of the bus. During the trip, the bus collided with another bus coming from the opposite direction. The three friends all suffered serious physical injuries. What are WTC‟s liabilities, if any, in favor of Aurelio, Jerome, and Florencio? Explain your answer. ANSWER: Insofar as Aurelio is concerned, WTC is liable for breach of contract of carriage. Art. 1756 of the Civil Code provides, in case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, while Art. 1759 provides that common carriers are liable for the death of or injuries to passengers through negligence or willful acts of the former‟s employees. Here, the collision which caused injuries to Aurelio is presumed to be due to the fault of WTC. Therefore, WTC is liable for Aurelio‟s injuries arising from the breach of its duty to exercise extraordinary diligence under the contract of carriage. As to Jerome, WTC is also liable for breach of contract of carriage, but such liability may be limited. Art. 1758 of the Civil Code states that when a passenger is carried gratuitously, a stipulation limiting the common carrier‟s liability for negligence is valid, but not for willful acts or gross negligence. Here, Jerome was allowed a free ride by the bus driver. Therefore, in the absence of stipulation, WTC‟s liability to Jerome is the same as owed to Aurelio. As to Florencio, WTC may be held liable for quasi-delict. Art. 2176 provides that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Here, there was no contract of carriage since Florencio is not a passenger as he secretly boarded the bus. However, WTC may be held liable if the driver was negligent. Therefore, WTC may be held liable to Florencio for quasi-delict if the driver acted negligently. Page 34 of 191 Topic: Extraordinary diligence; Protection of Passengers; Acts of Other Passengers/Strangers (2018) Ysidro, a paying passenger, was on board Bus No. 904 owned and operated by Yatco Transportation Company (“Yatco”). He boarded the bus at Munoz, Nueva Ecija with Manila as his final destination. He was seated on the first row, window seat on the left side of the bus. As the bus was negotiating the national highway in front of the public market of Gerona, Tarlac, the bus came to a full stop because of the traffic. The driver of the bus took this opportunity to check on the tires of the bus and to relieve himself. As he was alighting from the bus to do these, an unidentified man standing along the highway hurled a huge rock at the left side of the bus and hit Ysidro between his eyes. He lost consciousness and immediately the driver, with the conductor, drove the bus to bring him to the nearest hospital. He expired before the bus could reach the hospital. Ysidro‟s wife and children brought a civil action to collect damages from Yatco, alleging that, as a common carrier, it was required to exercise extraordinary diligence in ensuring the safety of its passengers. They contended that in case of injuries and/or death on the part of any of its passengers, the common carrier is presumed to be at fault. In its defense, Yatco alleged that it is not an absolute insurer of its passengers and that Ysidro‟s death was not due to any defect in the means of transport or method of transporting passengers, or the negligent acts of its employees. Since the accident was due to the fault of a stranger over whom the common carrier had no control, or of which it did not have any prior knowledge to be able to prevent it, the cause of Ysidro‟s death should be considered a fortuitous event and not the liability of the common carrier. (a) Is a common carrier presumed to be at fault whenever there is death or injury to its passengers, regardless of the cause of death or injury? (b) What kind of diligence is required of common carriers like Yatco for the protection of its passengers? (c) Will your answer be the same as your answer in (b) above, if the assailant was another paying passenger who boarded the bus and deliberately stabbed Ysidro to death? Page 35 of 191 ANSWER: (a) Yes, by express provision of law (Art. 1756 of the New Civil Code), in case of death or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they exercised extraordinary diligence. (b) As provided by the Article 1755 of the New Civil Code, a “common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of a very cautious person with a due regard for all the circumstances or simply put, with extraordinary diligence.” (c) No, my answer will be different. The Supreme Court ruled in the case of GV Florida Transport v. Heirs of Romeo Battung, Jr, (G.R. No. 208802, October 14, 2015), that a common carrier is responsible for death or injuries caused by wilful acts of other passengers or strangers, only if the common carrier‟s employees through the exercise of the diligence of a good father of a family could have prevented the act. Here, since the assailant was another paying passenger who boarded the bus and deliberately stabbed Ysidro to death without any showing that the employees of Yatco prevented the act makes the Yatco liable. Page 36 of 191 DEFENSES OF COMMON CARRIERS Topic: Defenses of Common Carrier; Fortuitous Event (1975) LMN, Inc. operates a beach resort in a secluded island off the coast of Puerto Princesa City, Palawan. It operates three (3) motorized boats to ferry its guests from the city proper to the island resort and vice-versa. During one rainy morning, the guests were informed that the ferry services for that day were cancelled due to a storm forecast. In order to appease the apparent dismay of most of the guests who will miss their flight back to Manila, the boat captain of one of LMN, Inc.'s motorized boats decided to push through with its trip back to the city. Shortly after the boat sailed, the storm hit and the winds and waves became stronger, causing engine trouble to the boat. Unfortunately, the boat capsized and sank, resulting in the death of one of the passengers, Mr. X. This prompted Mr. X's heirs to file a complaint for damages against LMN, Inc., which they alleged to be a common carrier. In its defense, LMN, Inc. maintained that it is not a common carrier because its boats are not available to the general public but only ferry resort guests and employees. Assuming LMN, Inc. is a common carrier, may it be absolved from liability on the ground of fortuitous event? Explain. ANSWER: No, LMN, Inc. cannot be absolved from liability on the ground of fortuitous event. In the case of Cruz v. Sun Holidays, Inc. (G.R. No. 186312, June 29, 2010) the Supreme Court held that 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. In this case, there was a weather forecast which should have prompted the common carrier to cancel the ferry services, which LMN, Inc. did. However, one of its boat captains decided to push through with its trip and under Article 1759 of the Civil Code, common carriers are liable though the negligence or willful acts of its employees, although such employees may Page 37 of 191 have acted beyond the scope of their authority or in violation of its orders. Therefore, LMN, Inc. cannot be absolved from liability. Page 38 of 191 Topic: Defect in the container and packaging (1978) Because of spillage of the rice during the trip from Davao to Manila due to the bad condition of the sacks, there was a shortage in the rice delivered by the Provident Lines Inc. to the consignee XYZ Import and Export Corporation. The carrier accepted the shipment, knowing that the sacks had holes and some had broken strings. When sued, Provident Lines, Inc. alleged that the loss was caused by the spillage of the rice on account of the defective condition of the sacks, at the time it received the shipment, and therefore, it cannot be held liable. Decide. Give reasons. ANSWER: Provident Lines Inc. is liable for the shortage. In Southern Lines, Inc. v. CA, G.R. No. L-16629, January 31, 1962, the Court held that if the fact of improper packing is known to the carrier or his servants, or apparent upon ordinary observation, but it accepts the goods notwithstanding such condition, it is not relieved of liability for loss or injury resulting therefrom. Applying the same in the situation at hand, Provident Lines was well aware that the rice sacks had holes and some had broken strings and as such it cannot escape liability by invoking that the loss was due to the character of the goods or defects in the packing or in the containers. Thus, Provident Lines Inc. is liable for the resulting shortage. Page 39 of 191 Topic: Defenses of Common Carriers, Defective Packaging (1984) Archipelago Lines, Inc., a carrier, accepted for shipment from Iloilo to Manila a cargo consisting of 800 sacks of rice, knowing that some sacks had big holes and others had their openings just loosely tied with strings. Due to spillage of the rice during the trip, there was shortage in the rice delivered by the carrier to the consignee. When sued, Archipelago Lines, Inc. interposed the defense that the carrier was not liable because the spillage was due to the defective condition of the sacks. As a judge, how would you rule on the liability of the carrier? Reasons. ANSWER: I would rule that the common carrier is liable for the spillage notwithstanding the defective condition of the sacks. Article 1734 of the Civil Code provides that common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the causes listed, one of which is the character of the goods or defects in the packing or in the containers. However, this rule does not apply, if the fact of improper packing is known to the carrier or his servants, or apparent upon ordinary observation, but it accepts the goods notwithstanding, such condition, it is not relieved of liability for loss or injury resulting therefrom (Southern Lines, Inc. v. Court Of Appeals And City Of Iloilo, G.R. No. L-16629, January 31, 1962). Here, the common carrier clearly knew the defect in the sacks but nonetheless, it accepted the contract of carriage. Hence, it cannot disclaim liability on the basis of such defective packaging. Page 40 of 191 Topic: Defenses of Common Carriers (1987) Philip Mauricio shipped a box of cigarettes to a dealer in Naga City through Bicol Bus Company (BBC). When the bus reached Lucena City, the bus developed engine trouble. The driver brought the bus to a repair shop in Lucena where he was informed by the mechanic that an extensive repair was necessary, which would take at least 2 days. While the bus was in the repair shop, Typhoon Coring lashed Quezon Province. The cargoes inside the bus, including Mauricio‟s cigarettes, got wet and were totally spoiled. Mauricio sued BBC for damage to his cargoes. Decide. ANSWER: BBC is liable for damages to the cargoes lost by Mauricio. Article 1733 of the New Civil Code binds common carriers to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them. Article 1734(1) provides that the common carrier is not responsible for the loss, destruction, or deterioration of the goods caused by flood, storm, earthquake, lightning, or other natural disaster or calamity. In this case, BBC failed to observe extraordinary diligence in allowing the bus to go out when in fact it needed an extensive repair which should have been detected prior to allowing the bus to leave BBC‟s premises. Due to the delay in the carriage of the cargoes brought about by the need to bring the bus to the repair shop, the cargoes were damaged by the Typhoon Coring. The delay and absence of extraordinary diligence precludes BBC from being relieved from liability due to the typhoon. Therefore, BBC is liable for damages to the cargoes lost by Mauricio. Page 41 of 191 Topic: Common Carrier; Concept of Common Carrier; Hijacking; Grave Threat, Force, or Violence (1991) Alejandro Camaling of Alegria, Cebu, is engaged in buying copra, charcoal, firewood and used bottles and in reselling them in Cebu City. He uses two (2) big Isuzu trucks for the purpose; however he has no certificate of public convenience or franchise to do business as a common carrier. On the return trips to Alegria, he loads his trucks with various merchandise of other merchants in Alegria and the neighboring municipalities of Badian and Ginatilan. He charges them freight rates much lower than the regular rates. In one of the return trips, which left Cebu City at 8:30 P.M., one cargo truck was loaded with several boxes of sardines, valued at P100,000 belonging to one of his customers, Pedro Rabor. While passing the zigzag road between Carcar and Barili, Cebu, which is midway between Cebu City and Alegria, the truck was hijacked by three (3) armed men who took all the boxes of sardines and kidnapped the driver and his helper, releasing them in Cebu City only two (2) days later. Pedro Rabor sought to recover from Alejandro the value of the sardines. The latter contends that he is not liable therefor because he is not a common carrier under the Civil Code and, even granting for the sake of argument that he is, he is not liable for the occurrence of the loss as it was due to cause beyond his control. If you were the Judge, would you sustain the contention of Alejandro? ANSWER: If I were the judge, I will not sustain the contention of Alejandro that he is not a common carrier. However, I will sustain his contention that he is not liable for the loss of the goods. For Alejandro‟s contention that he is not a common carrier, Article 1732 of the New Civil Code provides that common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public. In the case of De Guzman v. Court of Appeals, G.R No. L-4782, December 22, 1988, the Court held that Article 1732 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 (sideline). Article 1732 also Page 42 of 191 carefully avoids making any distinction between a person or enterprise offering transportation service on a regular basis or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. A person or entity is a common carrier and has the obligations of the common carrier under the Civil Code even if he did not secure Certificate of Public Convenience. For Alejandro‟s contention that he is not liable for the loss of the goods, the Court in the abovementioned case ruled that the limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the goods are lost as a result of a robbery which is attended by “grave or irresistible threat, violence or force.” In this case, even if Alejandro‟s main business was buying and reselling of copra, charcoal, firewood and used bottles and the delivery of merchandise was only an ancillary activity and even if he has no certificate of public convenience or franchise to do business as a common carrier, he is still considered a common carrier under the provision of Article 1732 of the New Civil Code and based on the rules enunciated in the case of De Guzman v. Court of Appeals. Also, the hijacking made by three (3) armed men can be considered as a fortuitous event as it was attended by grave or irresistible threat, violence or force which exempts the carrier from liability. Therefore, Alejandro is considered as a common carrier but shall not be liable for the loss of the goods. Page 43 of 191 Topic: Defenses of Common Carriers; Fortuitous Events (1994) Marites, a paying bus passenger, was hit above her left eye by a stone hurled at the bus by an unidentified bystander as the bus was speeding through the National Highway. The bus owner‟s personnel lost no time in bringing Marites to the provincial hospital where she was confined and treated. Marites wants to sue the bus company for damages and seeks your advice whether she can legally hold the bus company liable. What will you advise her? ANSWER: Marites cannot legally hold the bus company liable. The following are requisites of a fortuitous event: (1) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will; (2) 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; (3) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (4) The obligor (debtor) must be free from any participation in or the aggravation of the injury resulting to the creditor. There is no showing that any such incident previously happened so as to impose an obligation on part of the personnel of the bus company to warn the passengers and to take the necessary precaution in order to prevent Marites‟ injury. Such hurling of a stone constitutes a fortuitous event in this case. (Pilapil vs. Court of Appeals and Alatco Transportation Company, Inc., G.R. No. 52159 December 22, 1989) Therefore, the bus company cannot be held liable. Page 44 of 191 Topic: Defenses of Common Carriers (1995) M. Dizon Trucking entered into hauling contract with Fairgoods Co whereby the former bound itself to haul the latter‟s 2000 sacks of soya bean meal from Manila Port Area to Calamba, Laguna. To carry out faithfully its obligation Dizon subcontracted with Enrico Reyes the delivery of 400 sacks of the Soya bean meal. Aside from the driver, three make employees of Reyes rode on the truck with the cargo. While the truck was on its way to Laguna two strangers suddenly stopped the truck and hijacked the cargo. Investigation by the police disclosed that one of the hijackers was armed with a bladed weapon while the other was unarmed. For failure to deliver the 400 sacks, Fairgoods sued Dizon for damages. Dizon in turn set up a third party complaint against Reyes which the latter registered on the ground that the loss was due to force majeure. Did the hijacking constitute force majeure to exculpate Reyes from any liability? ANSWER: No, the hijacking is not a force majeure. Article 1734(1) of the Civil Code provides that the common carrier is not responsible for the loss, destruction, or deterioration of the goods caused by flood, storm, earthquake, lightning, or other natural disaster or calamity. The Court in Servando vs. Philippine Steam Navigation (G.R. No. L-36481-2 October 23, 1982) provided for the requisites of a force majeure and one of which is that the cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will. Article 1735 of the Code provides that in all cases other than those Article 1734, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in Article 1733. In this case, the hijacking is not an unexpected occurrence and is not independent of human will. Moreover, hijacking of the carrier does not fall among the other exempting causes under Article 1734 of the New Civil Code. The presumption of fault or negligence provided under Article 1735 was not overcome by the carrier as there was no proof of extraordinary diligence on its part, particularly in the selection of its four male employees who are of greater number and strength as opposed to the hijackers who are only two and only one is armed with a bladed weapon. Therefore, the hijacking is not a force majeure. Page 45 of 191 Topic: Common Carrier; Carriage of Goods; Defenses (1996) AM Trucking, a small company, operates two trucks for hire on a selective basis. It caters only to a few customers, and its trucks do not make regular or scheduled trips. It does not even have a certificate of public convenience. On one occasion, Reynaldo contracted AM to transport for a fee, 100 sacks of rice from Manila to Tarlac. However, AM failed to deliver the cargo because its truck was hijacked when the driver stopped in Bulacan to visit his girlfriend. May AM set up the hijacking as a defense to defeat Reynaldo‟s claim? ANSWER: No. Under the law, hijacking may be set up as a defense if it was attended by the use of grave or irresistible threat, violence, or force. In this case, it would appear that the truck was left unattended by its driver and was taken while he was visiting his girlfriend. (Pedro de Guzman v. CA, G.R. 47822, December 22, 1988) Page 46 of 191 TOPIC: Defenses of Common Carriers; Discounted Ticket (2001) Suppose “A” was riding on an airplane of a common carrier when the accident happened and “A” suffered serious injuries. In an action by “A” against the common carrier, the latter claimed that (1) there was a stipulation in the ticket issued to “A” absolutely exempting the carrier from liability from the passenger‟s death or injuries and notices were posted by the common carrier dispensing with the extraordinary diligence of the carrier, and (2) “A” was given a discount on his plane fare thereby reducing the liability of the common carrier with respect to “A” in particular. A. Are those valid defenses? B. What are the defenses available to any common carrier to limit it from liability? ANSWER: A. No. They are not valid defenses. As to the defense that the stipulation limited the common carrier‟s liability, the same is not valid because Article 1757 of Civil Code provides that the responsibility of a common carrier for the safety of passengers as required in Articles 1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise. As to the defense of discount, the same is valid because Article 1758 of the Civil Code, which provides that the reduction of fare does not justify any limitation of the common carrier's liability. B. The following are defenses which would limit the common carrier‟s liability: ○ Fortuitous event provided that the disaster is the proximate and only cause of the loss, that the common carrier exercised due diligence to prevent or minimize the loss before during, or after the occurrence of the disaster, and that the common carrier has not negligently incurred in delay in the transport of the goods (Arts. 1739 and 1740 of the Civil Code); ○ Acts of public enemy provided that the same is the proximate and only cause of the loss, that there exists an actual state of war, and that the common carrier exercised Page 47 of 191 due diligence to prevent or minimize the loss before during, or after the act causing the loss, deterioration, or destruction of the goods (Art. 1739 of the Civil Code); ○ Negligence of the shipper or owner provided that if it is the proximate and only cause, the same shall be an absolute defense but if the negligence was contributory only, then, it shall only be a partial defense (Art. 1741 of the Civil Code); ○ Character of the goods or defects in the packaging or container provided that the common carrier exercised due diligence to forestall or lessen the loss even if the damage was caused by the inherent defect or character of the goods (Art. 1742 of the Civil Code); ○ Order or act of public authority provided that the public authority had the power to issue the order and that the order or act was lawful (Art. 1743 of the Civil Code); and ○ Exercise of extraordinary diligence. Page 48 of 191 Topic: Defenses of Common Carrier; Selection and Supervision of an Employee (2002) Why is the defense of due diligence in the selection and supervision of an employee not available to a common carrier? ANSWER: The defense of due diligence in the selection and supervision of an employee is not available to a common carrier because the degree of diligence required of a common carrier is not a diligence of a good father of a family but extraordinary diligence. Moreover, 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. However, the presumption of fault or negligence will not arise if the loss is due to any of the following causes: (1) flood, storm, earthquake, lightning, or other natural disaster or calamity; (2) an act of the public enemy in war, whether international or civil; (3) an act or omission of the shipper or owner of the goods; (4) the character of the goods or defects in the packing or the container; or (5) an order or act of competent public authority.22 This is a closed list. (Belgian Chartering and Shipping N.V. v. Phil First Insurance Co., Inc, G.R. No. 143133, June 5, 2002) Therefore, the defense of due diligence in the selection and supervision of an employee not among the defenses enumerated in the above exclusive list, it is not available to a common carrier in the exercise of extraordinary diligence. Page 49 of 191 Topic: Defenses of Common Carrier; Fortuitous Event; Selection and Supervision of Driver (2009) One of the passenger buses owned by Continental Transit Corporation (CTC), plying its usual route, figured in a collision with another bus owned by Universal Transport, Inc. (UTI). Among those injured inside the CTC bus were: Romeo, a stow away; Samuel, a pickpocket then in the act of robbing his seatmate when the collision occurred; Teresita, the bus driver‟s mistress who usually accompanied the driver on his trips for free; and Uriel, holder of a free riding pass he won in a raffle held by CTC. What, if any, are the valid defenses that CTC and UTI can raise in the respective actions against them? Explain. ANSWER: With respect to Romeo, Samuel and Teresita, since there was no pre-existing contractual relationship between them and CTC, CTC can raise the defense that it exercised the due diligence of a good father of a family in the selection and supervision of its driver, as provided by Art. 2180 of the Civil Code. As to Uriel, it can raise that under Art. 1755 of the same Code, it carried passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all circumstances. Since Uriel is carried gratuitously, under Art. 1758, if there is a stipulation that exempts it from liability for simple negligence, it may also be raised, but not for willful acts or gross negligence. CTC can also raise against all the plaintiffs the defense that the collision was due exclusively to the negligence of the driver of UTI, without concurrent negligence on the part of its own driver. Furthermore, this constitutes a fortuitous event interpreted as some extraordinary circumstance independent of the will of the obligor, or of his employees, is an essential element of a caso fortuito (Ampang v. Guinoo Transportation Company, G.R. No. L-5044, April 30, 1953). Finally, CTC must allege that such fortuitous event is the proximate and only cause of the loss or damage to any or all of the plaintiffs (Asia Lighterage and Shipping, Inc. v. CA, G.R. No. 147246, August 19, 2003). Similarly, since UTI had no pre-existing contractual relationship with any of the plaintiffs, it can raise the defense that it exercised due diligence in the selection and supervision of its driver and that the collision was due exclusively to the negligence of the driver of CTC. Page 50 of 191 Topic: Defenses of a Common Carrier in the Carriage of Passenger; Diligence in the Selection and Supervision of Employees (2011) B, while drunk, accepted a passenger in his taxicab. B then drove the taxi recklessly, and inevitably, it crashed into an electric post, resulting in serious physical injuries to the passengers. The latter then filed a suit for tort against B's operator, A, but A raised the defense of having exercised extraordinary diligence in the safety of the passenger. Is his defense tenable? A. Yes, as a common carrier can rebut the presumption of negligence by raising such a defense. B. No, as in tort actions, the proper defense is due diligence in the selection and supervision of the employee by the employer. C. No, as B, the common carrier's employee, was obviously negligent due to his intoxication. D. Yes, as a common carrier can invoke extraordinary diligence in the safety of passengers in tort cases. ANSWER: B. No, as in tort actions, the proper defense is due diligence in the selection and supervision of the employee by the employer. Generally, as provided in Article 1759 of the New Civil Code (NCC), the liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees. However, it was decided by the court that if the source of obligation is under Article 2176 of NCC or the cause of action based on quasi-delict or tort, the exercise of due care and diligence in the selection and supervision of employee is available as a defense. (Del Prado v. Manila Electric Co., G.R. No. 29462, March 7,1929) In this case, passenger P filed a case against B‟s operator for tort or quasi delict for the physical injuries obtained when he boarded the cab and crashed into an electric post. Applying the aforementioned provision and doctrine, the proper defense is that it exercised due diligence Page 51 of 191 in the selection and supervision of the employee by the operator, and not having exercised extraordinary diligence in the safety of the passenger. Page 52 of 191 DURATION OF LIABILITY Topic: Duration of Liability; Termination; carriage of Goods (1979) A, in Manila, shipped on board a vessel of B, chairs to be used in the restaurant of consignee C in Cebu. No date for delivery or indemnity for delay was stipulated. The chairs, however, were not claimed promptly by C and were shipped by mistake back to Manila, where it was discovered and re-shipped to Cebu. By the time the chairs arrived, the date of inauguration of the movie house passed by and it had to be postponed. C brings an action for damages against B, claiming loss of profits during the Christmas season when he expected the movie house to be opened. Decide the case with reasons. ANSWER: C may bring an action for damages against B for loss of profits since the obligation of the carrier to carry cargo includes the duty not to delay their transportation. Article 1736 of the New Civil Code (NCC) provides that in carriage of goods, the extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provision of Article 1738. It is also provided that the carrier shall deliver the goods within the time specified and agreed upon; however, in case there is no stipulation, the carrier is bound to deliver the goods within a reasonable time. Otherwise, it will incur delay and will be held liable for the breach of contract of carriage. In this case, an unreasonable delay has already set in for the failure of the carrier to deliver the goods within a reasonable time for which it will be intended to be used. The obligation of the carrier to carry cargo includes the duty not to delay their transportation, otherwise, it will be held liable for its delay in the shipment of cargo causing damages to the consignee. (Tan Liao v. American President Lines, G.R. No. L-7280, January 20, 1956) Page 53 of 191 Topic: Duration of Liability of the Common Carrier (1979) A, in Holland, shipped on board a vessel owned by B, 500 cases of canned milk to consignee C in Iloilo. Upon arrival, the vessel discharged the canned milk into the custody and possession of the arrastre operator appointed by the Bureau of Customs. In the Bill of Lading, it was stipulated that the vessel is no longer liable for the cargo upon its delivery to the hands of the customs authorities. The cargo checker of the arrastre found the cargo to be in good order. Upon delivery to the consignee, a marine surveyor found 20 cases of milk missing. C sued B for the value of the 20 missing cases on the ground that under the contract of carriage B was obliged to deliver the cargo safely to the consignee and that the stipulation limiting the liability of the carrier is contrary to morals and public policy. B disclaims liability for short delivery. Decide the dispute, with reasons. ANSWER: NO. Under Art. 1744 the stipulation absolutely exempting the common carrier for loss of the goods is contrary to public policy and is therefore void. The legal relationship between the consignee and the arrastre operator is akin to that of a depositor and warehouseman (Lua Kian v. Manila Railroad Co., 19 SCRA 5 [1967]). The relationship between the consignee and the common carrier is similar to that of the consignee and the arrastre operator (Northern Motors, Inc. v. Prince Line, et al., 107 Phil. 253 [1960]). Since it is the duty of the arrastre to take good care of the goods that are in its custody and to deliver them in good condition to the consignee, such responsibility also devolves upon the carrier. Both the arrastre and the carrier are therefore charged with and obligated to deliver the goods in good condition to the consignee (Fireman’s Fund Insurance Co. v. Metro Port Service, Inc. (Formerly E. Razon, Inc.), G.R. No. 83613, February 21, 1990). Further, under Art. 1736, the extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of Article 1738. Hence, before consignee C received the goods the obligation of the common carrier to observe extraordinary diligence remains. Page 54 of 191 In conclusion, in case of loss or damage to the goods to be shipped, both the arraste operator and B will be solidary liable to consignee C. Page 55 of 191 Topic: Common Carrier; Duration of Liability (1996) A bus of GL Transit on its way to Davao stopped to enable a passenger to alight. At that moment, Santiago, who had been waiting for a ride, boarded the bus. However, the bus driver failed to notice Santiago who was still standing on the bus platform, and stepped on the accelerator. Because of the sudden motion, Santiago slipped and fell down suffering serious injuries. May Santiago hold GL Transit liable for breach of contract of carriage? Explain. ANSWER: Yes. Under the law, a common carrier, once it stops, is in effect making a continuous offer to passengers. In this case, a public utility bus is in effect making a continuous offer to bus riders. It is the duty of common carriers of passengers to stop their conveyances for a reasonable length of time in order to afford passengers an opportunity to board and enter, and they are liable for injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their conveyances while they are doing so. It was the duty of the driver, when he stopped the bus, to do no act that would have the effect of increasing the peril to a passenger such as Santiago while he was attempting to board the same. When a busis not in motion there is no necessity for a person who wants to ride the same to signal his intention to board. Santiago, by stepping and standing on the platform of the bus, is already considered a passenger and is entitled to all the rights and protection pertaining to a contract of carriage. (Dangwa Trans Co. v. CA, G.R. 95582, 7 Oct. 1991) Thus, Santiago may hold GL Transit liable for breach of contract of carriage. Page 56 of 191 Topic: Duration of Liability; Extraordinary Diligence (2008) City Railways, Inc. (CRI) provides train services, for a fee, to commuters from Manila to Calamba, Laguna. Commuters are required to purchase tickets and then proceed to designated loading and unloading facilities to board the train. Ricardo Santos purchased a ticket for Calamba and entered the station. While waiting, he had an altercation with the security guard of CRI leading to a fistfight. Ricardo Santos fell on the railway just as a train was entering the station. Ricardo Santos was run over by the train. He died. In the action for damages filed by the heirs of Ricardo Santos, CRI interposed lack of cause of action, contending that the mishap occurred before Ricardo Santos boarded the train and that it was not guilty of negligence. Decide. ANSWER: No, the contention of CRI is not tenable. The pertinent provisions of the Civil Code provide: Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755. Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or wilful 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. Page 57 of 191 This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees. Extraordinary diligence is defined as the obligation to carry the passenger safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons with due regard to all the consequences. In case of death or injury to passengers, the common carrier is presumed negligent and the burden of proof of exercise of extraordinary diligence. The duty to exercise extraordinary diligence attaches from the moment the person who purchases the ticket from the carrier presents himself at the proper place and in a proper manner to be transported. In the given case, CRI is a common carrier and therefore had an obligation to exercise extraordinary diligence. This obligation attached from the moment Ricardo Santos purchased the ticket and entered the station. When Ricardo died while he was within the premises of CRI, the latter is presumed to be at fault. This is true even if Ricardo has not yet boarded the train, so long as he has presented himself to the carrier at the proper place and in a proper manner. Hence, CRI is liable to the heirs of Ricardo Santos. Page 58 of 191 Topic: Duration of Liability; Carriage of Goods (2011) S delivered 10 boxes of cellphones to Trek Bus Liner, for transport from Manila to Ilocos Sur on the following day, for which S paid the freightage. Meanwhile, the boxes were stored in the bus liner‟s bodega. That night, however, a robber broke into the bodega and stole S‟s boxes. S sues Trek Bus Liner for contractual breach but the latter argues that S has no cause of action based on such breach since the loss occurred while the goods awaited transport. Who is correct? A. The bus liner since the goods were not lost while being transported. B. S since the goods were unconditionally placed with T for transportation. C. S since the freightage for the goods had been paid. D. The bus liner since the loss was due to a fortuitous event. ANSWER: B. S since the goods were unconditionally placed with T for transportation. Articles 1736-1738 of the New Civil Code provides that in case of contract of carriage of goods, the duty to exercise extraordinary diligence starts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee or to the person, who has the right to receive them. It remains in full force and effect even when they are temporarily unloaded or stored in transit unless the shipper or owner had made use of the right of stoppage in transitu. Hence, it continues to be inoperative even during the time the goods are stored in a warehouse of the carrier at the place of destination until the consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them. In this case, the boxes of cellphones were unconditionally placed with Trek Bus Liner for transportation from Manila to Ilocos Sur and were stolen in the bus liner‟s bodega. It was not shown neither that the shipper or owner exercised its right of stoppage in transit. Page 59 of 191 Therefore, the Trek Bus Liner should be held liable for contractual breach since its duty to exercise extraordinary diligence remains in full force and effect even when they are temporarily unloaded or stored in transit unless the shipper or owner had made use of the right of stoppage in transitu. Page 60 of 191 Topic: Duration of Liability; Carriage of Goods (2011) The liability of a common carrier for the goods it transports begins from the time of A. conditional receipt. B. constructive receipt. C. actual receipt. D. either actual or constructive receipt. ANSWER: D. either actual or constructive receipt. Article 1736 of the New Civil Code (NCC) provides that the extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to have acted negligently, unless they prove that they observed extraordinary diligence as required in Article 1733. Hence, it is expressly provided for under the law. Page 61 of 191 Topic: Duration of Liability; Carriage of Passengers (2011) P, a sales girl in a flower shop at the Ayala Station of the Metro Rail Transit (MRT) bought two tokens or tickets, one for her ride to work and another for her ride home. She got to her flower shop where she usually worked from 8 a.m. to 5 p.m. At about 3 p.m., while P was attending to her duties at the flower shop, two crews of the MRT got into a fight near the flower shop, causing injuries to P in the process. Can P sue the MRT for contractual breach as she was within the MRT premises where she would shortly take her ride home? A. No, since the incident took place, not in an MRT train coach, but at the MRT station. B. No, since P had no intention to board an MRT train coach when the incident occurred. C. Yes, since she already had a ticket for her ride home and was in the MRTs premises at the time of the incident. D. Yes, since she bought a round trip ticket and MRT had a duty while she was at its station to keep her safe for her return trip. ANSWER: B. No, since P had no intention to board an MRT train coach when the incident occurred. The Article 1755 of the New Civil Code provides that the carrier is bound to exercise utmost diligence with respect to passengers the moment the person who purchases the ticket (or a token) from the carrier presents himself at the proper place and in proper manner to be transported. In the case of Jesusa Vda de Nueca, et al. v. The Manila Railroad Co. (CA-No. 31731, January 30,1968), the court ruled that 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. If he does not do so, he will not be considered a passenger and the carrier does not owe him extraordinary diligence. In this case, P is not a passenger of MRT because it had no intention to board the MRT train at the time when the incident occurred. The fact that P bought his ticket for the ride and in the place of LRT station will not matter because at the time of incident, he was there because his flower shop was located in the MRT station. Nowhere from the facts showed his intention to Page 62 of 191 board the train. Hence he is not considered as a passenger and the MRT Station is not liable to him. Page 63 of 191 LIABILITY FOR ACTS OF EMPLOYEES AND PASSENGERS Topic: Liability for acts of other passengers or strangers (1986) Pasahero, a paying passenger, boarded a Victory Liner bus bound for Olongapo. He chose a seat at the front near the bus driver. Pasahero told the bus driver that he had valuable items in his bag which he placed near his feet. Since he had not slept for 24 hours, he requested the driver to keep an eye on the bag should he doze off during the trip. (a) While Pasahero was asleep, another passenger took the bag away and alighted at Guagua, Pampanga. Is Victory Liner liable to Pasahero? Explain. (b) Supposing the two armed men staged a hold-up while the bus was speeding along the North Expressway. One of them pointed a gun at Pasahero and stole not only his bag but his wallet as well. Is Victory Liner liable to Pasahero? Explain. (c) There have been incidents of unknown persons throwing stones at passengers from the overpass in the North Expressway. While the bus was traversing the superhighway, a stone hurled from the Sto. Domingo overpass smashed the front windshield and hit Pasahero in the face. Pasahero lost an eye and suffered other injuries. Can Pasahero hold the bus company liable for damages? Explain. ANSWER: (a) Yes, Victory Liner is liable to Pasahero. Under the rule on Hand-Carried Baggage, baggage in transit which is in the personal custody of the passenger or his employee will be considered as necessary deposits. The common carrier shall be responsible for the baggage as depositaries, provided that notice was given to them or its employees, and the passenger too the necessary precaution, which the carrier has advised them to the relative care and vigilance of their baggage. The law requires the common carrier to observe the same diligence as the hotel keepers in case the baggage remains with the passenger; otherwise, extraordinary diligence must be exercised (Art 1754, NCC). In this case, Victory Liner is liable as a depositary or a hotel keeper for the loss caused by a stranger of the hand-carried bag, which is a necessary deposit. Therefore, Victory Liner is liable to Pasahero. Page 64 of 191 (b) No, Victory Liner is not liable to Pasahero. The act of a thief or robber, who entered the common carrier‟s vehicle, is deemed force majure if it is done with the use of arms or through irresistible force (Art 1754, NCC). The use of arms in staging a hold-up is force majure under the rule on necessary deposits. The liability of the common carrier for the loss of the belongings does not attach when the loss is due to a force majure. In this case, the two men who stole Pasahero‟s bag and wallet were armed; hence a force majure. Accordingly, Pasahero may not hold Victory Liner liable. (c) Yes. Pasahero can hold the bus company liable for damages because of its failure to exercise utmost diligence. Under Art. 1763, a common carrier is responsible for injuries suffered by a passenger on account of the willful acts or negligence of other passengers or of strangers, if the common carrier‟s employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission. Since in this case incident of stone-throwing had earlier been known, it behooved upon the common carrier to warn its passengers against seating themselves close to the windshield or to provide other precautionary measures for its passengers. Therefore, Pasahero can hold the bus company liable for damages. Page 65 of 191 Topic: Liability for acts of other passengers (1997) Antonio, a paying passenger, boarded a bus bound for Batangas City. He chose a seat at the front row, near the bus driver, and told the driver that he had valuable items in his handcarried bag which he then placed beside the driver‟s seat. Not having slept for 24 hours, he requested the driver to keep an eye on the bag should he doze off during the trip. While Antonio was asleep, another passenger took the bag away and alighted at Calamba, Laguna. Could the common carrier be held liable by Antonio for the loss? ANSWER: Yes. Ordinarily, the common carrier is not liable for acts of other passengers. However, in case of loss of effects of passengers or death or injuries to passengers, the common carrier is presumed to be at fault or have acted negligently unless it can prove that it had observed extraordinary diligence in the vigilance thereof. In this case, the passenger, Antonio, asked the driver to keep an eye on the bag which was placed beside the driver‟s seat. If the driver exercised due diligence, he could have prevented the loss of the bag. Therefore, the common carrier can be held liable by Antonio for the loss of the bag. Page 66 of 191 Topic: Extra-ordinary diligence; Liability of common carrier for the death and injuries of passengers (1997) In a court case involving claims for damages arising from death and injury of bus passengers, counsel for the operator files a demurrer to evidence arguing that the complaint should be dismissed because the plaintiffs did not submit and evidence that the operator or its employees were negligent. If you were the judge, would you dismiss the case? ANSWER: No. Article 1756 of the Civil Code provides that in case of death of or injuries to passengers, common carriers are presumed to have been at fault or have acted negligently, unless they prove that they have observed extraordinary diligence as prescribed in Articles 1733 and 1755. In the carriage of passengers, the failure of the common carrier to bring the passengers safely to their destination immediately raises the presumption that such failure is attributable to the carrier‟s fault or negligence. In this case, that fact that the death and injury of the bus passengers raises the presumption of fault or negligence on the part of the common carrier. The carrier must rebut such presumption, otherwise the conclusion can be properly made that the carrier failed to exercise extraordinary diligence as required by law. Page 67 of 191 Topic: Boundary System (2005) Baldo is a driver of Yellow Cab Company under the boundary system. While cruising along the South Expressway, Baldo‟s cab figured in a collision, killing his passenger, Pietro. The heirs of Pietro sued Yellow Cab Company for damages, but the latter refused to pay the heirs, insisting that it is not liable because Baldo is not its employee. Resolve with reasons. ANSWER: No, Yellow Cab‟s contention is incorrect. Yellow Cab Company shall be solidarily liable with Baldo for the death of Pietro. Baldo is an employee of Yellow Cab as stated under the concept of Boundary System. According to the case of Paguio Transport Corp vs. NLRC (GR No. 119500, August 28, 1999), Boundary System is when the driver is engaged to drive the owner‟s/ operator‟s unit and pays the latter a fee commonly called “boundary” for the use of the unit. Whatever the driver earns in excess of that amount is his income. The relationship between jeepney owners/operators and jeepney drivers and the like is employer-employee and not as lessor-lessee. Thus, the death of Pietro which is a breach of contract of carriage, makes both Yellow Cab and Baldo, solidarily liable. Page 68 of 191 Topic: Liability for Acts of Employees and Passengers (2011) In a contract of carriage, the common carrier is liable for the injury or death of a passenger resulting from its employee‟s fault although the latter acted beyond the scope of his authority. This is based on the A. rule that the carrier has an implied duty to transport the passenger safely. B. rule that the carrier has an express duty to transport the passenger safely C. Doctrine of Respondeat Superior. D. rule in culpa aquiliana. ANSWER: A. rule that the carrier has an implied duty to transport the passenger safely. Article 1759 of the New Civil Code (NCC) provides that common carriers are liable for the death or injuries to passengers through the negligence or willful acts of the former‟s employees although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. This liability does not cease upon proof that they exercised all the diligence of a good father of the family in the selection and suspension of their employees. Applying the rule that the carrier has an implied duty to transport the passenger safely, Article 1763 of the same code provides that a common carrier is responsible for the injuries suffered by a passenger on account of the willful acts or negligence of other passengers or of strangers, if the common carrier‟s employees through the exercise of the diligence of a good father of the family could have prevented or stopped the act. Hence, it is projected in the provisions of the code. Page 69 of 191 STIPULATIONS REDUCING DILIGENCE OR LIMITING LIABILITY Topic: Stipulations relative to liability of common carriers (1978) In the plane ticket stub of Air Manila Inc. (AMI), there appears a statement that the liability “if any loss or damage of checked baggage or for delay in the delivery thereof” of the AMI “is limited to its value and unless the passenger declares in advance a higher valuation and pays an additional charge therefore, the value shall be conclusively deemed not to exceed P100 for each ticket.” A passenger whose baggage was lost in transit from Manila to Cebu sued for a higher amount, i.e. P5,000. May AMI successfully claim that the above statement precludes the plaintiff from asking more than P100? Decide. Give reasons for your answer. ANSWER: No. AMI may not claim that the plaintiff was precluded from asking more than P100 for each ticket. Article 1750 of the New Civil Code provides that a contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon. And in the case of Shewaran vs. Philippine Airlines, G.R. No. L-20099. July 7, 1966, it was provided that the liability of a common carrier may by contract be limited to a fixed amount, but said agreement must be in writing and signed by the shipper or owner of the goods, besides the other requirements of the law. In this case, a passenger whose baggage was lost in transit from Manila to Cebu may sue for a higher amount because the agreement was not freely and fairly entered into. In the above cited case, the fact that the conditions are printed at the back of the ticket stub in letters so small that they are hard to read would not warrant the presumption that the appellee was aware of those conditions such that he had "fairly and freely agreed" to those conditions shall be similarly applied in this case. Furthermore, the agreement was not written and signed by the parties hence, is noncompliant with what the law and jurisprudence provide. Page 70 of 191 The passenger cannot be bound by the conditions of carriage found at the back of the ticket stub issued to him by AMI because the agreement was not compliant with the law. Page 71 of 191 Topic: Stipulation of facts in relation to liability (1983) A and his classmates take a bus from UP to Quiapo. On the way, another Quiapo bound bus tries to overtake them. A and his classmate dare the bus driver to run faster and race with the other bus. The driver takes their dare, to the delight of A and his friends who cheered him. On rounding the curve, the bus fails to slow down and the bus turns turtle, resulting in the death of A and injuries to other passengers. The bus carried the following sign: “Do not talk to the driver while the bus is on motion, otherwise the company will not assume any liability for any accident.” Explain briefly the extent of the liability, if any, of the bus company, giving the legal provisions and principle involved. ANSWER: The bus company is liable for damages to A‟s heir and to all the injured passengers. According to Article 1733 of the New Civil Code, common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. This liability cannot be eliminated or limited by stipulation of parties or by posting of notices or even if the employee acted beyond the scope of their authority or in violation of their order. Moreover, the fact that the bus carried such a particular sign does not excuse the company from assuming its responsibility in favor of the injured passenger. Hence, such posting or unilateral stipulation manifested by the bus company will not in any way relieve its responsibility. Page 72 of 191 Topic: Stipulations Limiting the Liability of Common Carrier (1983) A takes a plane from Manila bound for Cagayan de Oro via Cebu, where there was a change of planes. A arrived Cagayan de Oro safely, but to his dismay, his two suitcases were left behind in Cebu. The airline company assured him that the suitcases would come in the next flight, but they never did. A claims P1,000 damages for the loss of both suitcases, but the airline is willing to pay only P400 on the ground that the airline ticket stipulates that unless a higher value is declared, any claim for loss cannot exceed P200 for each piece of luggage. A had not declared a greater value, despite the fact that the clerk had called his attention to the stipulation in the ticket. Is A entitled to P1,000 or only P400? Explain. ANSWER: A is entitled to only P400. According to Article 1749 of the New Civil Code, a stipulation limiting a common carrier‟s liability to the value of the goods appearing in the bill of lading unless the shipper or owner declares a greater value, is binding. Moreover, Article 1754 of the same Code provides that provisions of Articles 1733 to 1753 shall apply to the passenger‟s baggage which is not in his personal custody or that of his employees. In the case at bar, stipulation in the airline ticket that unless a higher value is declared, any claim for loss cannot exceed P200 for each piece of luggage is binding between parties by virtue of Article 1749 of the New Civil Code. Moreover, despite the fact that the clerk had called A‟s attention to the stipulation in the ticket, A had not declared a greater value. Thus, A cannot claim lack of knowledge of the said limitation. Therefore, A cannot insist on claiming P1,000, and he is only entitled to P400. Page 73 of 191 Topic: Stipulations Limiting Liability (1984) Juan, a paying passenger, noted the stipulation at the back of the bus ticket stating that the liability of the bus company is limited to P1,000 in case of injuries to its passengers and P500 in case of loss or damage to baggage caused by the negligence or willful acts of its employees. Upon arrival at his destination, Juan got into an altercation with the ticket conductor, who pulled out a knife and inflicted several wounds on Juan. The bus driver intervened, heaping abusive language on Juan and completely destroying Juan‟s baggage which contained expensive goods worth P3,000. The hospital expenses for Juan would probably amount to at least P6,000. Give the extent of liability of the bus company, with reasons. ANSWER: The bus company‟s liability for the injuries inflicted upon Juan is at least P6,000, notwithstanding the stipulation limiting its liability, and only for P500, the amount stipulated in the bus ticket, as the damage and destruction to Juan‟s baggage. Arts. 1759 and 1760 of the New Civil Code provides that 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. The common carrier‟s responsibility cannot be eliminated or limited by stipulation, by posting of notices, by statements on the tickets or otherwise. The rule is different with respect to a stipulation limiting the carrier‟s liability for the loss, destruction or deterioration of goods shipped. Under Article 1750, Civil Code, a contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances and has been fairly and freely agreed upon. Page 74 of 191 Applying the above provisions, the stipulation found at the back of the bus ticket limiting the company‟s liability to P 1,000 in case of injuries is expressly prohibited by the Code. With respect to the injuries inflicted upon Juan, the bus company is liable to the entire costs amounting to at least P 6,000. With regard to the company‟s liability on the destroyed goods of Juan, the stipulation limiting the bus company‟s liability to P 500 is valid. Therefore, the rules on limiting a common carrier‟s liability differ depending on whether such stipulation refers to liability for injuries sustained by passengers or by goods. The former is invalid while the latter is valid, subject to requirements set forth by the code. Page 75 of 191 Topic: Limitation of liability (1985) Dona Buding checked in at the PAL counter of the Manila Domestic Airport on a flight to Bacolod. Noticing that Dona Buding had two big baggages being checked in, the counter clerk called her attention to the stipulation in the plane ticket and asked if she was going to make any declaration on the value of the same, but Dona Buding just looked at him and did not say anything. The plane arrived in Bacolod, but the two baggages could nowhere be found. PAL promised to deliver the two baggages the next day, but it never did. Dona Buding sued PAL, claiming P10,000 damages for the loss of the two baggages. PAL answered that it was liable only for P200 for the plane ticket clearly stipulated that: “That total liability of the carrier for lost or damaged baggage is limited to P100 per baggage, unless the passenger declares a higher valuation in excess of P100 but not in excess, however, of a total valuation of P1,000, and unless additional charges are paid pursuant to Carrier‟s Tariffs.” The trial court ruled in favor of PAL. Comment on the legality of the court‟s decision. ANSWER: The ruling of the trial court against Dona Buding is legal, being in accordance with the New Civil Code (NCC) on Common Carriers. Article 1749 of the NCC provides that a stipulation that the common carrier‟s liability is limited to the value of the goods appearing in the bill of lading is binding, unless the owner declares a greater value. In the case at bar, Dona Buding did not make any declaration as to the value of her two baggages, making her bound by the value stipulated in the plane ticket. Therefore, as the stipulation in the plane ticket is binding upon Dona Buding and PAL, the court‟s ruling is proper. Page 76 of 191 Topic: Stipulations limiting liability (1989) X shipped thru M/V Kalayaan, spare parts worth P500,000. The bill of lading limits the liability of the carrier to P500.00 and contains a notation indicating the amount of the letter of credit (i.e., P500,000) which X obtained from a bank to import the spare parts. The spare parts were not delivered to X so X sued the carrier for P500,000. Decide. ANSWER: The limit of liability stipulated in a bill of lading is subordinated to a declaration therein of the actual value of the goods. Article 1749 of the New Civil Code provides that “[a] stipulation that the common carrier‟s liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding. In this case, since the bill of lading contains a notation indicating the true value of the goods shipped supported by the letter of credit, X can sue the carrier on the basis of such true value, which is P500,000. Page 77 of 191 REGISTERED OWNER RULE Topic: Registered Owner Rule (1976) A is a registered owner of a truck for hire. He sold the truck to B and possession was immediately delivered to B who operated the same. The truck, however, remained registered in the name of A. While operating the truck, B‟s driver ran over a child who died thereafter. The heirs of the child sued A for damages. A‟s defense is that he cannot be held liable as he had already sold the truck to B and it was B‟s driver who was responsible for the accident. Decide with reasons. ANSWER: A‟s defense is unmeritorious. In Equitable Leasing Corp. vs. Suyom (G.R. No. 143360, September 2, 2002), the Court said that regardless of sales made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third persons are concerned; consequently it is directly and primarily responsible for the consequences of its operation. Here, despite the sale made to B, A remained the registered owner of the truck. Therefore, A can be held liable for damages. Page 78 of 191 Topic: Registered Owner Rule (1979) A was driving a jeepney registered in the name of B. The jeepney, while being driven negligently by A, hit and injured X, so X sued B for damages. The defense of B was that he sold the jeepney to C and that X should sue C. Rule on B‟s defense, with reasons. ANSWER: The defense of B is untenable assuming that the jeepney in question is a common carrier or a public utility. However, in case that the requisites of a common carrier is not present, and A was the driver of C, the actual owner, then it is C who is held liable to X. As held in the case of Equitable Leasing Corporation v. Lucita Suyon, et al., (G.R. No. 143360, September 5,2002), the registered owner of a vehicle is liable for any damages caused by the negligent operation of the vehicle although the same was already sold or conveyed to another person at the time of the accident. The registered owner is liable to the injured party subject to his right of recourse against the transferee or the buyer. Furthermore, as provided in article 2180 of the New Civil Code, the employer shall be liable for damages caused by his employee acting within the scope of his assigned task. In the present case, assuming that the jeepney complies with all the requisites of a common carrier, B, being the registered owner is liable to X. Hence in this case, B as the registered owner is liable to X, but C, in turn has a right of reimbursement against B. The latter, as registered owner/operator of record continues to be the operator of the vehicle as regards to the public and third persons. Page 79 of 191 Topic: Leased Vehicles; Liability of the Registered Owner (1988) Mr. Villa, a franchise holder and the registered owner of a truck for hire, entered into a lease contract with Mrs. Santos for the lease by the latter of said truck. The lease contract was not brought to the knowledge of the Land Transportation, Franchising, and Regulatory Board and was therefore not approved by the Land Transportation, Franchising, and Regulatory Board. One stormy night, the said truck which was speeding along EDSA, skidded and ran over X who died on the spot. The parents of X brought an action for damages against Mr. Villa for the death of their son. A. Will the action against Mr. Villa prosper? Reasons. B. What recourse, if any, does X have? ANSWER: A. Yes, the action will prosper. As held in the case of BA Finance Corporation v. Court of Appeals (215 SCRA 715, November 13, 1992), the person who is the registered owner of a vehicle is liable for any damages caused by the negligent operation of the vehicle although the same was already sold or conveyed to another person at the time of the accident. In this case, notwithstanding the lease agreement, Mr. Villa may be held liable even if the vehicle was leased to another person. However, such an instance is subject to his right of recourse against the transferee or the buyer. Hence, the action against Mr. Villa will prosper. B. The heirs of X may bring an action for tort against Mrs. Santos as the employer, and/or the driver of the vehicle. Under Article 2176 of the New Civil Code, whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Page 80 of 191 In the present scenario, X is merely a bystander, there is no contractual relation between the parties, therefore constituting a quasi-delict. As to the nature of the liabilities, Mrs. Santos and the driver are solidarily liable, unless the former proves that she observed all the diligence of a good father of a family to prevent the damage. Accordingly, the driver may also be held criminally liable. Page 81 of 191 Topic: Registered Owner Rule; Boundary System (2012) X owns a fleet of taxicabs. He operates it through what is known as boundary system. Y drives one of such taxicabs and pays X a fixed amount of Php1 ,000 daily under the boundary system. This means that anything above Php1 ,000 would be the earnings of Y. Y, driving recklessly, hit an old lady crossing the street. Which statement is most accurate? a) X as the owner is exempt from liability because he was not the one driving. b) X as the owner is exempt from liability because precisely the arrangement is one under the "boundary system" c) X will not be exempt from liability because he remains to be the registered owner and the boundary system will not allow the circumvention of the law to avoid liability. d) Y is the only one liable because he drove recklessly. ANSWER: (C) X will not be exempt from liability because he remains to be the registered owner and the boundary system will not allow the circumvention of the law to avoid liability In the case of Equitable Leasing Corporation v Lucita Suyon (G.R No. 143360, Sept 5, 2002), it was discussed that the person who is the registered owner of a vehicle is liable for any damages caused by the negligent driver although the same is already sold or conveyed to another person at the time of the accident. Additionally, as opined in the case of Martinez v. NLRC (G.R. No. 117495, May 29, 1997). Furthermore, under the Civil Code Art. 1759, common carriers are liable for the death of or injuries to passengers through the negligence or wilful 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. The relationship between jeepney owners/operators on one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of lessor-lessee. Here, despite the boundary system X is still the registered owner of the vehicle and is therefore liable in case of damage caused by the negligence of Y. By reason of the boundary agreement driver Y is the employee of owner X, hence the latter is liable for the damage caused by the negligence of Y his employee. Page 82 of 191 In conclusion Option C is the correct answer. Page 83 of 191 KABIT SYSTEM Topic: Kabit System (2005) Discuss the “kabit system” in land transportation and its legal consequences. ANSWER: According to the case of Abelardo Lim et. al vs. Court of Appeals (GR No. 125817; January 16, 2002), the kabit system is an arrangement whereby a person who has been granted a certificate of public convenience allows other persons who own motor vehicles to operate under such license, for a fee or percentage of such earnings. Although the parties to such agreement are not outright penalized by law, the kabit system is invariably recognized as being contrary to public policy and therefore, void and inexistent under Article 1409 of the New Civil Code. Page 84 of 191 Topic: Kabit System; Agent of the Registered Owner (2005) Procopio continued offering the jeepney for public transport services, he did not have registration of the vehicle transferred in his name. Neither did he secure for himself a certificate of public convenience for its operation. Thus, per the records of the LTFRB, Enteng remained its registered owner and operator. One day, while the jeepney was traveling southbound, it collided with a ten-wheeler truck owned by Emmanuel. The driver of the truck admitted responsibility for the accident, explaining that the truck lost its brakes. Procorpio sued Emmanuel for damages, but the latter moved to dismiss the case on the ground that Procorpio is not a real party in interest since he is not the registered owner of the jeepney. Resolve the motion with reasons. ANSWER: The motion to dismiss should be denied because Procorpio is the real owner of the jeepney which means he is the real party in interest. Under Section 2, Rule 3 of the Rules of Court, a real party in interest is the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. In the case at bar, Procorpio as the owner of the jeepney stands to be benefited or injured by the judgment in the said case, thus, he is the real party in interest. However although Procorpio falls under the Kabit System, as stated in the jurisprudence, the legal restriction as regards the Kabit system does not apply in this case because the public at large is not deceived nor involved. Thus, the motion should be denied. Page 85 of 191 Topic: Registered Owner Rule; Kabit System (2012) X owns a passenger jeepney covered by Certificate of Public Convenience. He allowed Y to use its Certificate of Convenience for a consideration. Y therefore was operating the passenger jeepney under the same Certificate of Public Convenience (Kabit System) under the name of X. The passenger jeepney met an accident. Who will be liable? a) Y, the one actually operating the jeepney, will be liable to the injured party. b) X will be the one liable to the injured party despite the fact that it is Y who is actually operating the jeepney, because while the Kabit System is tolerated, the public should not be inconvenienced by the arrangement. c) X will not be held liable if he can prove that he is not the owner anymore. d) Public Policy dictates that the real owner, even not the registered one, will be held liable. ANSWER: (B) X will be the one liable to the injured party despite the fact that it is Y who is actually operating the jeepney, because while the Kabit System is tolerated, the public should not be inconvenienced by the arrangement. Under the “Registered Owner” rule is applicable whenever the persons involved are engaged in what is known as the “Kabit System”. The “kabit system” is an arrangement whereby a person who has been granted a certificate of convenience allows other persons who own motor vehicles to operate them under his own license, sometimes for a fee or percentage of earnings (Abelardo Lim v CA, G.R No. 125817, Jan 16, 2002). Here owner X will still be liable for the accident because he is the registered owner, this is without prejudice to his right to collect from operator Y the party ultimately liable. In conclusion Option B is the correct answer. Page 86 of 191 CONCURRENT CAUSES OF ACTION Driver and Third Persons Topic: Basis of Cause of Action (1976) While docking his vessel, “Taurus”, the master, through negligence, damaged the wharf and the merchandise loaded on the deck. The owner of the wharf and the damaged merchandise sued the owner of the vessel and the master of the vessel for the damage. Questions: (1) What is the basis of the liability of the owner of the vessel with respect to the damage to the wharf? (2) What is the basis of the liability of the owner of the vessel with respect to the damage to the merchandise? (3) Does the defense of exercise of diligence of a good father of a family lie? Reason. ANSWERS: 1. The basis of the liability of the shipowner with respect to the damaged wharf is tort. Under Article 2176 of the New Civil Code, whoever by act of omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties is called a quasidelict. In this case, there was damage due to negligence without any pre-existing contractual relations between the parties. Thus, Article 2176 of the Civil Code shall apply. 2. The owner‟s liability is based on the breach of its duty to exercise extraordinary diligence. Page 87 of 191 Article 1733 of the Civil Code provides in part that common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported by them. In relation thereto, Article 1170 provides in part that those who in the performance of their obligations are guilty of negligence are liable for damages. Here, the damage was caused by the negligence of the master of the vessel. Thus, there is a failure of the common carrier to exercise extraordinary diligence as required in the contract of carriage. Therefore, the owner of the vessel is liable for its failure to exercise extraordinary diligence in the vigilance over the merchandise. 3. No, the defense of exercise of the diligence of a good father of a family will not lie. Article 1733 of the Civil Code provides that common carriers are required to exercise extraordinary diligence. Moreover, the Court held in Kapalaran Bus Line vs. Coronado (G.R. No. 85331, August 25, 1989) that extraordinary diligence is required not only to the passengers or owners of cargo but also to third persons. In this case, the exercise of the diligence of a good father of a family is insufficient as what is required for common carriers is to exercise extraordinary diligence. Therefore, the defense will not lie in the case filed by the owner of the wharf and by the owner of the merchandise. Page 88 of 191 Topic: Concurrence of third persons (1986) The vessel M/V Sweet Perceptions, commanded by Kapitan, its captain, was unloading goods at a private wharf in Naval, Leyte, when the ship bumped the wharf of the pier causing it to collapse into the sea. It turned out that Kapitan failed to drop the vessel‟s bow anchors and to fasten the vessel properly to the pier. The vessel was pushed by the combined action of the currents in the Biliran Island Strait and the usual southwest monsoon winds of the season. As a result, Pantalan, the owner of the wharf, lost not only the wharf but also the goods that had just been unloaded on the pier pending delivery to him. Pantalan sued both the owner of the M/V Sweet Perceptions and Kapitan for the loss of the cargoes and the destruction of the wharf of the pier. The vessel‟s owner, who is in Manila, states that he exercised due diligence in the selection and supervision of Kapitan. Can the vessel‟s owner and Kapitan be held liable for the loss of the wharf and the cargoes? Explain. ANSWER: The vessel‟s owner may be held liable for the loss of the wharf and the cargoes, while Kapitan may be held liable for the wharf. Article 1735 of the New Civil Code provides that in all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in article 1733. On the other hand, Article 2176 of the same Code provides that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasidelict and is governed by the provisions of this Chapter. Further, Article 2180, paragraphs 4 and 8 provides that the owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions. However, the responsibility treated in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. Page 89 of 191 In this case, the fact that the cargoes were destroyed gives rise to the presumption that the vessel‟s owner, being the common carrier, has been at fault, or to have acted negligently. Hence, it shall be held liable for the loss of Pantalan‟s cargo. On the other hand, the vessel‟s owner may be held liable for the loss of the wharf on the basis of quasi-delict. However, its liability over the loss of the wharf is subject to the defense that it observed diligence of a good father of a family to prevent damage, which includes the selection and supervision of its employees. In such a case, Kapitan will already be liable over the loss of the wharf. Therefore, the vessel‟s owner may be held liable for the loss of the wharf based on quasi-delict and the cargoes based on breach of contract of carriage, while Kapitan may be held liable for the wharf, if the vessel‟s owner will be able to prove that it exercised due diligence in the selection and supervision of its employees. Page 90 of 191 Topic: Basis of Cause of Action (2008) Nelson owned and controlled Sonnel Construction Company. Acting for the company, Nelson contracted the construction of a building. Without first installing a protective net atop the sidewalks adjoining the construction site, the company proceeded with the construction work. One day a heavy piece of lumber fell from the building. It smashed a taxicab which at that time had gone off road and onto the sidewalk in order to avoid the traffic. The taxicab passenger died as a result. Could the heirs hold the taxicab owner and driver liable? Explain. ANSWER: Yes, the heirs may hold the taxicab owner and the driver liable. As to the taxicab owner, the pertinent provisions of the Civil Code are as follows: Art. 2180. Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry. Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755. Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former's employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and supervision of their employees. As to the taxicab owner, the heirs have two causes of action: one based on his vicarious liability as the employer and the other is based on contractual breach of the contract of carriage. In the first, the negligence of the driver gives rise to the presumption of negligence of the taxicab owner as its employer. In the second, there is a contract of carriage between the taxicab owner Page 91 of 191 and its passenger and the breach thereof by the former gives rise to the presumption that it failed to exercise extraordinary diligence. The heirs also have two causes of action against the driver. The first is based on criminal liability, as they may hold the driver criminally liable for reckless imprudence resulting in homicide. In the second, the heirs may likewise sue the driver for damages based on quasidelict. Thus, the heirs can hold the taxicab owner and taxi driver liable. Page 92 of 191 Topic: Concurrent Cause of Action (2013) Fil-Asia Air Flight 916 was on a scheduled passenger flight from Manila when it crashed as it landed at the Cagayan de Oro airport; the pilot miscalculated the plane's approach and undershot the runway. Of the 150 people on board, ten (10) passengers died at the crash scene. Of the ten who died, one was a passenger who managed to leave the plane but was run over by an ambulance coming to the rescue. Another was an airline employee who hitched a free ride to Cagayan de Oro and who was not in the passenger manifest. It appears from the Civil Aeronautics Authority investigation that the co-pilot who had control of the plane's landing had less than the required flying and landing time experience, and should not have been in control of the plane at the time. He was allowed to fly as a co-pilot because of the scarcity of pilots - Philippine pilots have been recruited by foreign airlines under vastly improved flying terms and wages so that newer and less trained pilots are being locally deployed. The main pilot, on the other hand, had a very high level of blood alcohol at the time of the crash. You are part of the team that the victims hired to handle the case for them as a group. In your case conference, the following questions came up: A. Explain the causes of action legally possible under the given facts against the airline and the pilots; whom will you specifically implead in these causes of action? (5%) B. How will you handle the cases of the passenger run over by the ambulance and the airline employee allowed to hitch a free ride to Cagayan de Oro? (3%) ANSWERS: (A) As the counsel of the victim, I will file a claim based on breach of contract of carriage against the airline and quasi-delict against the pilot. As against Fil-Asia, Civil Code states that common carriers include persons, corporations, firms or associations engaged in the business of carrying or transporting Page 93 of 191 passengers or goods, or both, by land, water, or air, for compensation, offering their services to the public. Common Carriers are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. Further, in case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence. Here, the mere fact that there is death, the presumption that the common carrier is negligent arises and the liability attaches. Hence, the airline company is liable for breach of contract of carriage. As against the pilots, the Civil Code likewise states that whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict. Here, the pilots are a stranger to the contract of carriage and as such it cannot be held liable for breach of contract. The pilots are however liable for quasi-delict since the plane crash occurred by their fault or negligence. Thus, the airline company is liable for breach of contract of carriage and the pilot is liable under quasi-delict. (B) As against the passenger ran over by the ambulance, I will file a claim for quasi-delict against the ambulance driver and his employer, and file a breach of contract of carriage against the airline company. As stated earlier, whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Moreover, under Article 2180 of the New Civil Code, employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry. In the case at hand, the ambulance through the exercise of ordinary diligence required under the circumstance could have avoided the accident, Page 94 of 191 knowing that there happened a plane crash, and that passengers-victims. In line with Article 2180, the employer of the ambulance driver is liable for vicarious liability. Nonetheless, the airline company is still liable for breach of contract of carriage by failing to safely deliver the passenger to the place of destination. The New Civil Code states that the common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. Here, the airline company falls short of the precaution required of common carriers by hiring irresponsible and inexperienced pilots and exposing the life of passengers under threat. As against the Airline employee who was allowed to hitch a free ride, the airline company should be held liable. In Lara v. Valencia, G.R. No. L-9907, June 30 1958, wherein an owner of a vehicle allowed the free ride of a person, the rule is established by the weight of authority is that the owner or operator of an automobile owes the duty to an invited guest to exercise reasonable care in its operation, and not unreasonably to expose him to danger and injury by increasing the hazard of travel. This rule, as frequently stated by the courts, is that an owner of an automobile owes a guest the duty to exercise ordinary or reasonable care to avoid injuring him. It is only required to observe ordinary care, and is not in duty bound to exercise extraordinary diligence as required of a common carrier by our law. Applying the same, the airline company failed to exercise even the diligence of a good father of a family by failing to hire competent pilots and failing to supervise the conduct of its pilots during the performance of their function. Thus, the airline company is liable for failing to observe ordinary diligence required of the circumstances. Page 95 of 191 Joint and Several Liability Topic: Joint and Several Liability; Liability of an Agent with Respect to the Principal (1984) X Mining Co. shipped a cargo of machineries on board the S/S Good Ship which was chartered by the Able Shipping Co., a foreign corporation represented in the Philippines by its agent, Best Lines, Inc. When the goods were delivered to the consignee, Y Corporation, they were found to have sustained losses. The insurer, Sunshine Insurance Co., paid for the losses, thereby subrogating itself to the rights of X Mining Company or Y Corporation vis-à-vis the shipping company and the shipping agent. Upon arrival of the S/S Good Ship in Manila, Best Lines, Inc. took charge of the following: (a) unloading of the cargo and issuing of cargo receipts in its own name for the purpose of evidencing the condition and discharge of the cargo from the vessel to the arrastre operator and/or unto the barge lighters; (b) filing and processing of claims against the vessel S/S Good Ship for damages/ losses sustained by the cargo. When Sunshine Insurance Co. sued both Able Shipping Co. and Best Lines, Inc. the latter contended that it was a disclosed agent and could not therefore be held liable, despite the insolvency of Able Shipping Co. Rule on the contention of Best Lines, Inc., with reasons. ANSWER: Best Lines, Inc., as ship agent, is liable solidarily with its principal, Able Shipping Co., for the amount of the losses damages sustained by the goods. The Code of Commerce provides that the ship agent shall be liable for indemnities in favor of third persons which arise from the conduct of the captain in the care of the goods which the vessel carried. The Supreme Court has held in Yu Biao Suntua & Co. v. Ossorio (43 Phil. 51) that the doctrine having reference to the relation between principal and agents cannot be applied in the case of ship agents and ship owners. Page 96 of 191 On the basis of the activities performed by Best Lines, Inc. upon the arrival of the S/S Good Ship in Manila, it is clear that Best Lines, Inc. is the entity that represents the vessel in the port of Manila and hence is a ship agent within the meaning and context of Article 586 of the Code of Commerce: “the person who represents the vessel in the port in which she happens to be.” Considering the peculiar relationship of the parties, Best Lines, Inc. cannot be considered as a “mere agent” of a disclosed principal under the civil law on agency as distinguished from a ship agent within the context of the Code of Commerce. Moreover, the insolvency of Able Shipping Co. has no bearing insofar as the liability of Best Lines, Inc. is concerned. The law does not make the liability of the ship agent dependent upon the solvency or insolvency of the ship owner. Therefore, both Best Lines, Inc. and Able Shipping Co., are liable solidarily and the liability of one is independent of that of the other. Page 97 of 191 PASSENGERS BAGGAGES Topic: Liability of common carrier in overland transportation and air transportation for failure to inspect passenger’s baggage (1992) Marino was a passenger on a train. Another passenger, Juancho, had taken a gallon of gasoline placed in a plastic bag into the same coach where Marino was riding. The gasoline ignited and exploded causing injury to Marino who filed a civil suit for damages against the railway company claiming that Juancho should have been subjected to inspection by its conductor. The railway company disclaimed liability resulting from the explosion contending that it was unaware of the contents of the plastic bag invoking the right of Juancho to privacy. a.) Should the railway company be liable for damages? b.) If it were an airline company involved, would your answer be the same? ANSWERS: A. No, the railway company cannot be held liable for damages. Under the Code of Commerce, a carrier may only inquire on the nature of the passenger‟s baggage but not search or inspect its contents, particularly those carried by the passengers. In this case, the railway company has no obligation to inspect Juancho‟s baggage. Hence, it cannot be held liable for damages. B. No, my answer will not be the same. The exception to the general stated above is with regard to aircrafts. Under R.A. No. 6235, aircraft companies which operate as public utilities or operators which are for hire are authorized to open and investigate suspicious packages and cargoes in the presence of the owner or shipper or his authorized representatives if present. Page 98 of 191 Therefore, if it was an airline company, it can be held liable for damages by Marino. Page 99 of 191 Topic: Baggage not in the custody of the carrier (1998) X took a plane from Manila bound for Davao via Cebu City where there was a change of planes. X arrived in Davao safely but to his dismay, his two suitcases were left behind in Cebu. The airline company assured X that the suitcases would come in the next flight but they never did. X claimed P2,000.00 for the loss of both suitcases, but the airline was willing to pay only P500.00 because the airline ticket stipulated that unless a higher value was declared, any claim for loss cannot exceed P250.00 for each piece of luggage. X however reasoned out that he did not sign the stipulation and in fact had not even read it. X did not declare a greater value despite the fact that the clerk had called his attention to the stipulation in the ticket. Decide the case. ANSWER: X is only entitled to P500.00 or P250.00 for each of the two suitcases that were lost by the airline. Arts. 1733 to 1753 of the New Civil Code shall apply to the passenger‟s baggage is not in his personal custody or in that of his employees. Thus, under Art. 1749 of the same, a stipulation that the common carrier‟s liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding. Further, the contract of carriage is a real contract where consent is of the contracting parties are manifested by the fact that the passenger boards the ship and the shipper consents or accepts him in the ship for transportation (Filipina Peralta de Guerrero vs. Madrigal Shipping Co., Inc., GR No. L12951, November 17, 1959). Lastly, bills of lading are contracts of adhesion which are not entirely prohibited. One who adheres to the contract is in reality free to reject it in its entirety, if he adheres, he gives his consent (Maersk Line vs. Court of Appeals, GR No. 94761, May 17, 1993). In this case, X‟s act of boarding the plane and the airline‟s concurrent act of accepting him as a passenger already perfected the contract of carriage between them even if X did not sign the ticket evidencing the contract. Further, the fact that the clerk already called X‟s attention as to the extent of the airline‟s liability on each luggage already gave X the opportunity to reject Page 100 of 191 the same, but he did not do so and still proceeded in boarding the plane. Since X did not declare a higher value for his luggage, he is thus bound by the ticket stipulation that the airline is only liable to the extent of P250.00 for each luggage. Therefore, X is only entitled to P500.00 or P250.00 for each of the two suitcases that were lost by the airline due to absence of any declaration of a higher value for the suitcases. Page 101 of 191 Baggage in the custody of the passengers or their employee Topic: Loss of hand-carried luggages (1989) X boarded an airconditioned Pantranco Bus bound for Baguio. X was given notice that the carrier is not liable for baggage brought in by passengers. X kept in his custody his attache case containing $10,000.00. In Tarlac, all the passengers, including X, were told to get off and take their lunch, the cost of which is included in the ticket. X left his attache case on his seat as the door of the bus was locked. After lunch and when X returned to the bus, he discovered that his attache case was missing. A vendor said that a man picked the lock of the door, entered the bus and ran away with the attache case. What, if any, is the liability of the carrier? ANSWER: The carrier is liable to X for the loss of his attache case. Under Article 1754 of the New Civil Code, hand-carried luggages of passengers are governed by the rules on necessary deposit. Under Article 2000 of the same code, the responsibility of the depositary shall, among other cases, include the loss of property of the guest caused by strangers but not that which may proceed from force majeure. Article 2001 considers an act of theft not one of force majeure unless done with the use of arms or through an irresistible force. Given such circumstances, since X lost his baggage through theft without the use of arms and irresistible force. Thus, the carrier can be held liable. Page 102 of 191 B. MARITIME LAW GENERAL CONCEPTS Topic: Transshipment (1993) JRT, Inc. entered into a contract with C. Co. of Japan to export anahaw fans valued at $23,000. As payment thereof, a letter of credit was issued to JR, Inc. by the buyer. The letter of credit required the issuance of an on-board bill of lading and prohibited the transhipment. The President of JRT, Inc. then contracted a shipping agent to ship the anahaw fans through O Containers Lines, specifying the requirements of the letter of credit. However, the bill of lading issued by the shipping lines bore the notation “received for shipment” and contained an entry indicating transhipment in Hong Kong. The President of JRT, Inc. personally received and signed the bill of lading and despite the entries, he delivered the corresponding check in payment of the freight. The shipment was delivered at the port of discharge but the buyer refused to accept the anahaw fans because there was no on-board bill of lading, and there was transhipment since the goods were transferred in Hong Kong from MV Pacific, the feeder vessel, to MV Oriental, a mother vessel. The same cannot be considered transhipment because both vessels belong to the same shipping company. 1.) Was there transhipment? Explain. 2.) JRT, Inc. further argued that assuming there was transhipment, it cannot be deemed to have agreed thereto even if it signed the bill of lading containing such entry because it has made known to the shipping lines from the start that transhipment was prohibited under the letter of credit and that, therefore, it had no intention to allow transhipment of the subject cargo. Is the argument tenable? Reason. ANSWER: 1. Yes, there was transhipment. Page 103 of 191 As provided in the case of Magellan vs. Court of Appeals (G.R. No. 95529, August 22, 1991) transhipment is the act of taking cargo out of one ship and loading it in another. It is immaterial whether or not the same person, firm or entity owns the 2 vessels. Applying the doctrine in the aforementioned case, there was still transhipment in this case even if both MV Pacific and MV Oriental belonged to the same shipping company. Thus, there was transhipment. 2. No, the argument is untenable. As provided in the case of Magellan vs. Court of Appeals (G.R. No. 95529, August 22, 1991) a person is bound by the terms of the bill of lading upon accepting the same. In this case, JRT, Inc. is bound by the terms of the bill of lading when it accepted the bill of lading with knowledge of its contents which included transshipment in Hong Kong. Acceptance under such circumstances makes the bill of lading a binding contract. Hence, the argument of JRT, Inc. is untenable. Page 104 of 191 REAL AND HYPOTHECARY NATURE OF MARITIME LAW Limited Liability Topic: Limited liability of the ship owner (1978) Pablo Esparadon, a duly-licensed ship captain of the M/V Don Jose was drunk while he was on duty as such, and while M/V Don Jose was sailing from Manila to the Visayas. As a consequence thereof, the M/V Don Jose rammed another vessel near Corregidor, causing both vessels to sink completely and thus become total losses. The cargo owners of both sunken vessels sued the owner of the M/V Don Jose for their losses. Is the shipowner of M/V Don Jose liable? Explain your answer. ANSWER: No, the ship owner of M/V Don Jose is not liable. Failure on the part of the carrier to provide competent captain and crew should be distinguished from the negligence of the said captain and crew, because the latter is covered by the Limited Liability Rule. As held in the case of Urrutia & Co. v. Baco River Plantation Co., (G.R. No. 7675. March 25, 1913) if the negligence of the captain and crew can be traced to the fact that they are really incompetent, the Limited Liability Rule cannot be invoked because the shipowner may be deemed negligent. The civil liability of the ship owner of a vessel, in maritime collision which is caused by the fault of the captain, as in this problem because he is being drunk, is merely co-existent with his interest in the vessel, M/V Don Jose, such that the total loss thereof, results in the extinction of such liability. Thus, the total loss of M/V Don Jose resulted in the extinction of the liability of the ship owner. Page 105 of 191 Topic: Limited Liability Rule (1982) Explain the limited liability rule or the so called real or hypothecary nature of maritime law. ANSWER: In the case of Aboitiz Shipping Corp v. General Fire and Life Assurance Corp., (G.R No. 100446, January 21, 1993) the real and hypothecary nature of maritime law simply means that the liability of the carrier in connection with the losses related to maritime contracts is confined to the vessel, which stands as guaranty for their settlement. Page 106 of 191 Topic: Limited Liability Rule (1985) A. What is the “limited liability rule” in maritime law, otherwise known as the “real or hypothecary nature of maritime law?” Explain. B. What are the exceptions to the said rule? Explain. ANSWER: A. In maritime law, the vessel is used as a security in contracting obligations. As discussed in Aboitiz Shipping Corporation v. General Accident Fire and Life Assurance Corp. (GR No. 100446, January 21, 1993), the “real and hypothecary nature of maritime law” means that the liability of the carrier in connection with losses related to maritime contracts is confined to the vessel, which is hypothecated for such obligations or which stands as the guaranty for their settlement. It has its origin by reason of the conditions and risks attending maritime trade in its earliest years when such trade was replete with innumerable and unknown hazards since vessels had to go through largely uncharted waters to ply their trade. It was designed to offset such adverse conditions and to encourage people and entities to venture into maritime commerce despite the risks and the prohibitive cost of shipbuilding. Thus, the liability of the vessel owner and agent arising from the operation of such vessel were confined to the vessel itself, its equipment, freight, and insurance, if any, which limitation served to induce capitalists into effectively wagering their resources against the consideration of the large profits attainable in the trade. B. The exceptions to the limited liability rule are: 1. When the injury to or death of a passenger is due either to the fault of the shipowner, or to the concurring negligence of the shipowner and the captain (Yangco v. Laserna; G.R. No. L-47447-47449, October 29, 1941); 2. When the vessel is insured, to the extent of the insurance proceeds (Chua Yek Hong v. IAC; G.R. No. 74811, September 30, 1988); 3. In Workmen‟s Compensation claims (Abueg v. San Diego; G.R. No L-773, December 17, 1946); Page 107 of 191 4. If the carrier failed to overcome the presumption of negligence (Aboitiz Shipping v. New India Insurance; 488 SCRA 563 [2006]); 5. Claim for death benefits under POEA-SEC (Phil-Nippon Kyoei v. Gudelosao; GR. No. 181375, July 13, 2016); 6. If the claim is not maritime; and 7. When there is no abandonment. Page 108 of 191 Topic: Liability of the common carrier (1985) Archipelago Lines., a carrier, accepted for shipment from Iloilo to Manila a cargo consisting of 800 sacks of rice, knowing that some sacks had big holes and others had their openings just loosely tied with the strings. Due to spillage of the rice during the trip, there was shortage in the rice delivered by the carrier to the consignee. When sued, Archipelago Lines. Inc interposed the defense that the carrier was not liable because the spillage was due to the defective condition of the sacks. As a judge, how would you rule on the liability of the carrier? Reasons. ANSWER: As a judge, I would rule that the Archipelago Lines, Inc., the carrier, is liable for the shortage in the rice delivered to the consignee. It is well-established in the case of Southern Lines, Inc. v. CA (G.R No. L-16629, January 31, 1962), that if the fact of improper packing is known to the carrier or its servants, or apparent upon ordinary observant, but the carrier accepts the goods notwithstanding such condition, it is not relieved of liability for loss or injury resulting therefrom. In the present case, Archipelago Lines knew from the outset the defective packing of the sacks of rice, yet it still accepted the cargoes. Hence, Archipelago Lines, Inc is liable for the shortage. Page 109 of 191 Topic: Limited Liability Rule; Maritime Protest (1988) Captain Hook, the ship captain of M.V. Peter Pan, overloaded the M.V. Peter Pan, as a consequence of which the vessel sank in the middle of the Sulu Sea, and nothing whatsoever was recovered. The owners of the cargo and the heirs of the three passengers of the vessel filed an action for damages in the amount of P500,000 against Mr. Wendy, the owner. A. Will the action prosper? Reasons. B. Explain a maritime protest. When and where should it be filed? ANSWER: A. No, the action will not prosper. The exclusively real and hypothecary nature of maritime law operates to limit the liability of the ship owner to the value of the vessel, earned freightage, and proceeds of the insurance, if any. „NO VESSEL, NO LIABILITY‟ expresses in a nutshell the limited liability rule. (Monarch Insurance Co. vs. Court of Appeals, G.R. No. 92735, June 8, 2000). In this case, “nothing whatsoever of the ship was recovered”, therefore, the limited liability rule applies. The total destruction of the vessel extinguishes maritime lien, as there is no longer any res to which it can attach. However, the recognized exceptions, based on jurisprudence, are the following: (1) when the injury to or death of a passenger is due either to the fault of the ship owner, or to the concurring negligence of the ship owner and the captain; (2) when the vessel is insured (to the extent of the insurance proceeds); and (3) in workmen‟s compensation claims. Hence, absent any showing of the abovementioned exceptions, the action will not prosper. B. A maritime protest is the written statement by the master of a vessel or any authorized officer, attested by a proper officer or a notary, to the effect that damages has been suffered by the ship. Page 110 of 191 Protest is required under the Code of Commerce in the following cases: (1) When the vessel makes an arrival under stress (Article 612); (2) Where the vessel is shipwrecked (Articles 612, 624, 843); (3) Where the vessel has gone through a hurricane or the captain believes that the cargo has suffered damages or averages (Article 624); (4) Maritime collisions (Article 835). Page 111 of 191 Topic: Limited Liability (1989) X, a rich trader boarded the M/V Cebu, a small vessel with a value of P3M and owned by Y, plying the route Cotabato to Pagadian City. X had in his possession a diamond worth P5M. The vessel had a capacity of 40 passengers. Near Pagadian, the vessel met squally weather and was hit by six food waves every three seconds. Soon, water entered the engine room and the hull of the vessel. The patron of the vessel ordered the distribution of life belts to the passengers. He told them the vessel was sinking and for them to take care of themselves. The vessel turned out to be overloaded by 20 passengers and had no sufficient life belts. X failed to get a life belt and died when the vessel totally sunk. The heirs of X sued Y for P10M damages. Y raised the defense of limited liability. Decide. ANSWER: Y cannot raise the defense of limited liability. In the case of Chua vs IAC (G.R. No. 74811, September 30, 1988), the doctrine of limited liability does not apply when death or injury or damage sustained is attributable to the fault or negligence of the ship owner or ship agent or to the concurring fault or negligence of the ship owner or ship agent and the captain of the vessel. In this case, the ship owner was guilty of such fault or negligence in not making certain that the passenger vessel is not overloaded, as well as and is having failed to provide sufficient life belts on board the vessel. Hence, Y can be held liable. Page 112 of 191 Topic: Limited Liability Rule (1999) Thinking that the impending typhoon was still 24 hours away, MV Pioneer left port to sail for Leyte. That was a miscalculation of the typhoon signals by both the shipowner and the captain as the typhoon came earlier and overtook the vessel. The vessel sank and a number of passengers disappeared with it. Relatives of the missing passengers claimed damages against the shipowner. The ship owner set up the defense that under the doctrine of limited liability, his liability was co-extensive with his interest in the vessel. As the vessel was totally lost, his liability had also been extinguished. A. How will you advise the claimants? Discuss the doctrine of limited liability in maritime law. B. Assuming that the vessel was insured, may the claimants go after the insurance proceeds? ANSWER: A. I will advise the claimants to dispute the defense of limited liability by the shipowner. Under the doctrine of limited liability in maritime law, the liability of the shipowner arising from the operation of a ship is confined to the vessel, equipment, and freight, or insurance, if any, so that if the ship owner abandons the ship, equipment, and freight, his liability is extinguished. However, as ruled in Yangco v. Laserna (G.R. No. L-47447-47449, October 29, 1941), the doctrine of limited liability does not apply when the injury to or death of a passenger is due either to the fault of the ship owner, or to the concurring negligence of the shipowner and the captain. In this case, it is evident that the miscalculation of the typhoon signals amounts to concurring negligence of the ship owner and the captain. As the situation falls under the exception on the limited liability rule, such defense does not hold water. Therefore, I will advise the claimants to dispute the defense and argue that the limited liability rule has no application. Page 113 of 191 B. Yes, the claimants may go after the proceeds of the insurance covering the vessel. As discussed in Aboitiz Shipping Corporation v. General Accident Fire and Life Assurance Corp. (GR No. 100446, January 21, 1993), there is a need to collate all claims preparatory to their satisfaction from the insurance proceeds on the vessel and its pending freightage at the time of its loss. No claimant can be given precedence over the others by the simple expedience of having completed its action earlier than the rest. Thus, execution of judgment in earlier completed cases, even those already final and executory must be stayed pending completion of all cases occasioned by the subject sinking. Then and only then can all such claims be simultaneously settled, either completely or pro-rata should the insurance proceeds and freightage be not enough to satisfy all claims. Assuming that the vessel is insured, all claims must first be collated before the same may be satisfied either completely or pro-rata. Therefore, it follows that the claimants may go after the proceeds of the insurance covering the vessel. Page 114 of 191 Topic: Limited Liability Rule (2000) MV Mariposa, one of five passenger ships owned by Marina Navigation Co, sank off the coast of Mindoro while en route to Iloilo City. More than 200 passengers perished in the disaster. Evidence showed that the ship captain ignored typhoon bulletins issued by Pag-asa during the 24-hour period immediately prior to the vessel„s departure from Manila. The bulletins warned all types of sea crafts to avoid the typhoon„s expected path near Mindoro. To make matters worse, he took more load than was allowed for the ship„s rated capacity. Sued for damages by the victim„s surviving relatives, Marina Nav Co contended 1) that its liability, if any, had been extinguished with the sinking of MV Mariposa; and 2) that assuming it had not been so extinguished, such liability should be limited to the loss of the cargo. Are these contentions meritorious in the context of applicable provisions of the Code of Commerce? ANSWER: Yes, the contentions of Marina Nav Co., are meritorious. Article 587 of the Code of Commerce provides that the agent shall also be civilly liable for the indemnities in favor of third persons which arise from the conduct of the captain in the care of the goods which the vessel carried; but he may exempt himself therefrom by abandoning the vessel with all her equipment and the freight he may have earned during the voyage. In this case, the captain of MV Mariposa is guilty of negligence in ignoring the typhoon bulletins issued by PAGASA and in overloading the vessel. But only the captain of the vessel MV Mariposa is guilty of negligence. The ship owner is not. And when the captain is solely guilty of negligence that resulted in the total loss of the vessel without the participation of the shipowner, the latter can invoke the doctrine of limited liability. Thus, the contentions of Marina Nav. Co are meritorious. Page 115 of 191 Topic: Limited Liability Rule (2008) On October 30, 2007, M/V Pacific, a Philippine registered vessel owned by Cebu Shipping Company (CSC), sank on her voyage from Hong Kong to Manila. Empire Assurance Company (Empire) is the insurer of the lost cargoes loaded on board the vessel which were consigned to Debenhams Company. After it indemnified Debenhams, Empire as subrogee filed an action for damages against CSC. 1. Assume that the vessel was seaworthy. Before departing, the vessel was advised by the Japanese Meteorological Center that it was safe to travel to its destination. But while at sea, the vessel received a report of a typhoon moving within its general path. To avoid the typhoon, the vessel changed its course. However, it was still at the fringe of the typhoon when it was repeatedly hit by huge waves, foundered and eventually sank. The captain and the crew were saved except three (3) who perished. Is CSC liable to Empire? What principle of maritime law is applicable? Explain. 2. Assume the vessel was not seaworthy as in fact its hull had leaked, causing flooding in the vessel. Will your answer be the same? Explain 3. Assume the facts in question (b). Can the heirs of the three (3) crew members who perished recover from CSC? Explain fully. ANSWER: 1. No, CSC is not liable to Empire. The principle of maritime law applicable is the Doctrine of Limited Liability. Under this rule, the exclusively real and hypothecary nature of maritime law operates to limit the liability of the ship owner to the value of the vessel, earned freightage and proceeds of insurance if any. "NO VESSEL, NO LIABILITY." expresses in a nutshell the rule (Monarch Ins. Co. v CA, GR. No. 92735, June 8, 2000). Total destruction or sinking of the vessel extinguishes the maritime lien as there is no longer any res to which it can attach. Page 116 of 191 This doctrine is applicable in the case because the ship sank and was totally lost. The exception that the carrier failed to overcome the presumption of negligence is not applicable because the ship was seaworthy. Also, the loss is due to a typhoon -- a fortuitous event, which falls under the exempting circumstances when the carrier can avoid liability. Thus, CSC cannot be held liable. 2. No, my answer will not be the same. One of the exceptions when limited liability does not apply is when the carrier fails to overcome the presumption of negligence, as held in the case of Monarch Ins. Co. v CA (GR. No. 92735, June 8, 2000). Such presumption is only rebutted when the carrier establishes that the vessel is seaworthy. In this case, the vessel is not seaworthy because of the leaking hull. Absent this requirement of seaworthiness of the vessel, CSC has failed to overcome the presumption of negligence. Therefore, the Doctrine of Limited Liability is inapplicable and CSC is liable for the loss. 3. Yes, the heirs of the three (3) crewmembers who perished can recover from CSC. Another exception to the applicability of the Limited Liability Rule is Workmen's Compensation. It is important to note that the heirs cannot go after CSC directly since their claim based on workmen's compensation would have to be filed with the Social Security System. After payment by SSS of claims, it is subrogated to the rights of the heirs and is thus entitled to collect from CSC. Page 117 of 191 Topic: Maritime Law; Real and Hypothecary Nature; Limited Liability Rule (2011) A cargo ship of X Shipping, Co. ran aground off the coast of Cebu during a storm and lost all its cargo amounting to Php50 Million. The ship itself suffered damages estimated at Php80 Million. The cargo owners filed a suit against X Shipping but it invoked the doctrine of limited liability since its vessel suffered an Php80 Million damage, more than the collective value of all lost cargo. Is X Shipping correct? A. Yes, since under that doctrine, the value of the lost cargo and the damage to the ship can be set-off. B. No, since each cargo owner has a separate and individual claim for damages. C. Yes, since the extent of the ship‟s damage was greater than that of the value of the lost cargo. D. No, since X Shipping neither incurred a total loss nor abandoned its ship. ANSWER: D. No, since X Shipping neither incurred a total loss nor abandoned its ship. The Doctrine of Limited Liability provides that the exclusively real and hypothecary nature of maritime law operates to limit the liability of the shipowner to the value of the vessel, earned freightage, and proceeds of the insurance, if any. As a general rule, the liability of the ship agent is limited to the amount of interest in said vessel, such that, where the vessel is entirely lost, the obligation is extinguished. (Aboitiz Shipping Crop. V. Gen. Accident Fire and Life Assurance Crop., 217 SCRA 359 [1933]). However, there are certain exceptions and these are the following: a.) Claim under Workmen‟s Compensation; b.) collision between two negligent vessels; c.) expenses for repair and provisioning of the ship before its loss; d.) in case there is no total loss and the vessel is not abandoned; e.) the vessel is insured; and Page 118 of 191 f.) the injury or death to a passenger is due to either to the fault of the ship owner or to the concurring negligence of the ship owner and the captain. As provided, the contention of X Shipping is incorrect because the situation falls under one of the exceptions enumerated above, that in case there is no total loss and that the vessel is not abandoned. It can be seen from this case that X Shipping did not really incur a total loss nor have shown that it abandoned its ship. X Shipping did not show any proof as to its contentions. Hence, X shipping is not correct. Page 119 of 191 Topic: Limited Liability Rule; Contributory Negligence (2016) Nautica Shipping Lines (Nautica) bought a second hand passenger ship from Japan. It modified the design of the bulkhead of the deck of the ship to accommodate more passengers. The ship sank with its passengers in Tablas Strait due to heavy rains brought by the monsoon. The heirs of the passengers sued Nautica for its liability as a common carrier based on the reconfiguration of the bulkhead which may have compromised the stability of the ship. Nautica raised the defense that the monsoon is a fortuitous event and, at most, its liability is prescribed by the Limited Liability Rule. Decide with reasons. (5%) ANSWER: Nautica is liable and the Limited Liability Rule will not apply. As held by the Supreme Court in the case of Philippine General Insurance Company vs. CA (G.R. No. 116940, 11 June 1997), the rule is to the effect that the right of abandonment of vessels, as a legal limitation of a ship owner's liability under the Limited Liability Rule, does not apply to cases where the injury or average was occasioned by the ship owner's own fault. In the case at hand, the ship-owner is guilty of contributory negligence when it reconfigured the bulkhead of the deck of the ship to accommodate more passengers, which made the vessel unseaworthy. Thus, Nautica is liable and the Limited Liability Rule shall not apply Page 120 of 191 PROTEST Topic: Limited Liability Rule; Maritime Protest (1988) Captain Hook, the ship captain of M.V. Peter Pan, overloaded the M.V. Peter Pan, as a consequence of which the vessel sank in the middle of the Sulu Sea, and nothing whatsoever was recovered. The owners of the cargo and the heirs of the three passengers of the vessel filed an action for damages in the amount of P500,000 against Mr. Wendy, the owner. A. Will the action prosper? Reasons. B. Explain a maritime protest. When and where should it be filed? ANSWER: A. No, the action will not prosper. The exclusively real and hypothecary nature of maritime law operates to limit the liability of the shipowner to the value of the vessel, earned freightage, and proceeds of the insurance, if any. „NO VESSEL, NO LIABILITY‟ expresses in a nutshell the limited liability rule. (Monarch Insurance Co. vs. Court of Appeals, G.R. No. 92735, June 8, 2000). In this case, “nothing whatsoever of the ship was recovered”, therefore, the limited liability rule applies. The total destruction of the vessel extinguishes maritime lien, as there is no longer any res to which it can attach. However, the recognized exceptions, based on jurisprudence, are the following: (1) when the injury to or death of a passenger is due either to the fault of the shipowner, or to the concurring negligence of the shipowner and the captain; (2) when the vessel is insured (to the extent of the insurance proceeds); and (3) in workmen‟s compensation claims. Absent any showing of the abovementioned exceptions, the action will not prosper. B. A maritime protest is the written statement by the master of a vessel or any authorized officer, attested by proper officer or a notary, to the effect that damages has been suffered by the ship. Protest is required under the Code of Commerce in the following cases: (1) When the vessel makes an arrival under stress (Article 612); (2) Where the vessel is shipwrecked (Articles 612, 624, 843); (3) Where the vessel has gone through a hurricane or the captain believes that the cargo has suffered damages or averages (Article 624); (4) Maritime collisions (Article 835). Page 121 of 191 Topic: Maritime Protest (2007) Two vessels figured in a collision along the Straits of Guimaras resulting in considerable loss of cargo. The damaged vessels were safely conducted to the Port of Iloilo. Passenger A failed to file a maritime protest. B, a non - passenger but a shipper who suffered damage to his cargo, likewise did not file a maritime protest at all. A. What is a maritime protest? B. Can A and B successfully maintain an action to recover losses and damages arising from the collision? Reason Briefly. ANSWER: A. Maritime Protest as provided in Article 835 of the Code of Commerce, is a declaration on oath by the master, of the circumstances attending the damage or loss of his vessel within 24 hours after collision, intended to show that the loss accrued by the perils of the sea, and conducting with the protestation against any liability of the owner to the freighters. It‟s used and design is to authenticate the facts and circumstances of a loss to the insurer and all concerned. It is required when the vessel makes an arrival under stress or where the vessel is shipwrecked or where the vessel has gone through a hurricane or the captain believe that the cargo has suffered damages or averages or in maritime collision. B. A is now barred from recovering losses and damages suffered due to the collision. As required in Article 836 of the Code of Commerce, maritime protest shall be filed in case of damages in so far as the damages caused to persons or to the cargo are concerned, but the absence of a protest cannot prejudice the persons interested who were not on board or were not in a condition to make known their wishes. In this case, A the passenger, is required to file a maritime protest since being a passenger of the vessel at the time of the collision, was expected to know the circumstances of the collision and it is incumbent upon A according to Article 836 in connection with Article 835 to file a protest within 24 hours after the collision. Thus, A cannot successfully maintain an action to recover losses and damages. With respect to B, he can recover the losses and damages suffered. As provided in Article 836 of the Code of Commerce, persons who are not on board the vessel or are not in the Page 122 of 191 condition to make their own wishes shall not be prejudiced by their failure to file a maritime protest. In this scenario, B, the shipper, can successfully recover since he wasn‟t there when the collision happened and he is not privy to the circumstances of the collision. Thus, B can still recover the damages suffered as a result of the collision. Page 123 of 191 COLLISION Doctrine of Inscrutable Fault Topic: Collisions; Doctrine of Inscrutable Fault (1987) There was a severe typhoon when the vessel M/V Fortuna collided with M/V Suerte. It is conceded that the typhoon was a major cause of the collision, although there was a strong possibility that it could have avoided if the captain of M/V Fortuna was not asleep at the time of the collision. Who should bear the damages to the vessels and their cargoes? ANSWER: Each should bear the the damages to the vessel, and both shall be solidarily liable for the damages to the cargoes. Article 828 of the Code of Commerce provides that if it cannot be determined which vessel is at fault, each vessel shall suffer its own losses and both shall be solidarily liable for losses or damages on the cargoes. Also, under the Doctrine of Inscrutable Fault, where fault is established but it cannot be determined which of the two vessels were at fault, both shall be deemed to have been at fault. In the case, the presence of a typhoon in the area had in fact warranted a greater degree of alertness on their part. However, it cannot be determined with certainty which among M/V Fortuna and M/V Suerte is at fault. The Doctrine of Inscrutable Fault and Article 828 of the Code of Commerce shall apply to this case. Therefore, M/V Fortuna and M/V Suerte should each bear the the damages to the vessel, and both shall be solidarily liable for the damages to the cargoes. Page 124 of 191 Topic: Doctrine of Inscrutable Fault (1998) A severe typhoon was raging when the vessel SS Masdaam collided with M/V Princess. It is conceded that the typhoon was the major cause of the collision, although there was a very strong possibility that it could have been avoided if the captain of the SS Masdaam was not drunk and the captain of the M/V Princess was not asleep at the time of collision. Who should bear the damages to the vessels and their cargoes? ANSWER: Both vessels shall bear their own damages while both shall be solidarily liable for their cargoes. Art. 826 and 827 of the Code of Commerce provides that if a vessel should collide with another, through the fault, negligence, or lack of skill of the captain, sailing, mate, or any other member of the complement, the owner of the vessel at fault shall indemnify the losses ad damages suffered, after an expert appraisal. If both vessels may be blamed for the collision, each one shall suffer its own damages, and both shall be solidarily responsible for the losses and damages suffered by their cargoes. In this case, the captain of SS Masdaam was drunk while the captain of M/V Princess was asleep during the raging typhoon. Both are negligent acts in managing their respective vessels during a time of danger. As such, both vessels are to be blamed for the collision. Accordingly, each vessel shall suffer their own damages and be solidarily liable for the losses of the cargoes which both of them carries. Therefore, both vessels shall bear their own damages while both shall be solidarily liable for their cargoes as expressly provided in Art. 827 of the Code of Commerce. Page 125 of 191 Rules on Collision of Vessels Topic: Collision of Vessels; Last Clear Chance and Contributory Negligence (1980) Vessel “U” and “V” collided with each other causing damage to both vessels. Vessel “U” had the last clear chance to avoid the collision but failed to do so. 1. Is the doctrine of last clear chance in tort applicable to collisions of vessels at sea under the Code of Commerce? Which vessel should shoulder liability for the damage suffered by both vessels and by the cargo? 2. Assume that the negligence of the captain of vessel “U” was the proximate cause of collision, while the negligence of the captain of vessel “V” was merely contributory. To which vessel should the collision be deemed imputable? ANSWER: 1. No, the doctrine of last clear chance in tort is not applicable in the case at bar. In the case of C.B. Williams vs. Yangco (GR No. 8325, March 10, 1914), the Supreme Court held that the doctrine of last clear chance is inapplicable to collision of vessels at sea under the Code of Commerce, and the case will be considered as if the collision is imputable to both vessels. Thus, each one of the vessels shall suffer her own damage, and both shall be solidarily liable for the damages occasioned to their cargoes. Hence, both vessel U and vessel V should shoulder their own loss. 2. The collision shall be deemed imputable to both vessels. As held in the case of Gov’t of the P.I. v. Phil. Steamship Co. Inc (GR No. 18957, January 16, 1923), the “doctrine of contributory negligence” in tort is inapplicable to collisions of vessels at sea under the Code of Commerce and the case will be deemed as if the collision is imputable to both vessels. Page 126 of 191 Thus, both vessels shall be liable for the collision despite the contributory negligence of vessel V. Page 127 of 191 Topic: Maritime Law; Rules on Collision (1991) In a collision between M/T Manila, a tanker and M/V Don Claro, an inter-island vessel, M/V Don Claro sank and many of its passengers drowned and died. All its cargoes were lost. The collision occurred at nighttime, but the sea was calm, the weather fair and visibly good. Prior to the collision and while still four (4) nautical miles apart, M/V Don Claro already sighted M/T Manila on its radar screen. As for speed, M/V Don Claro was twice as fast as M/T Manila. At the time of the collision, M/T Manila failed to follow Rule 19 of the International Rules of the Road which requires two (2) vessels meeting head on to change their course by each vessel steering to starboard (right) so that each vessel may pass on the port side (left) of the other. M/T Manila signaled that it would turn to port side and steered accordingly, thus resulting in the collision. M/V Don Claro‟s captain was off-duty and was having a drink at the ship‟s bar at the time of the collision. a) Who would you hold liable for the collision? b) If M/V Don Claro was at fault, may the heirs of the passengers who died and the owners of the cargoes recover damages from the owner of said vessel? ANSWER: a) Both vessels can be held liable for the collision. Article 827 of the Code of Commerce which governs liabilities of shipowners and ship agents in collision provides that if both vessels may be blamed for the collision, each one shall suffer its own damages, and both shall be solidarily responsible for the losses and damages suffered by their cargoes. Furthermore, as held in the case of Williams v. Yanco, G.R No. L8325, March 10, 1914, that if both vessels may be blamed for the collision, each one must suffer its own damage and the owner of neither one can recover from the other in an action for damages to his vessel. In this case, both M/T Manila and M/V Don Claro were at fault. M/T Manila failed to follow Rule 19 of the International Rules of the Road while M/V Don Claro‟s captain was negligent in failing to command the vessel. Both vessels being guilty of negligence, Article 827 Page 128 of 191 of the Code of Commerce provides that both shall be solidarily responsible for the losses and damages suffered. In addition, due to the express provision of Article 827 of the said Code, the doctrine of last clear chance and rule on contributory negligence cannot be applied in collision cases. Therefore, both vessels can be held liable for the death of the passengers and damage to the goods and neither of them can invoke the doctrine of last clear chance or contributory negligence. b) Yes, but subject to the doctrine of Limited Liability Rule. Article 837 of the Code of Commerce provides that the civil liability incurred by the shipowners in the cases prescribed in this section [collision] shall be understood as limited to the value of the vessel with all her appurtenances and freightage earned during the voyage. Also, as held in the case of Yangco v. Laserna G.R No. L-47447 October 29, 1941, if the shipowner or agent may in any way be held liable at all for injury to or death of passengers arising from the negligence of the captain in cases of collisions or shipwrecks, his liability is merely co-extensive with his interest in the vessel such that a total loss thereof results in its extinction. The exclusively real and hypothecary nature of maritime law operates to limit such liability to the value of the vessel. In this case, M/V Don Claro was at fault which entitles the heirs of the passengers who died, and the owners of the cargoes recover damages but due to the real and hypothecary nature of maritime law, such liability is limited to the value of the vessel. Therefore, the owner of the vessel shall be liable for the death of the passengers as well as the cargoes damaged due to the collision subject to the limited liability rule. Page 129 of 191 Topic: Rules on Collision of Vessels (1995) 1. Two vessels coming from opposite directions collided with each other due to fault imputable to both. What are the liabilities of the two vessels with respect to the damage caused to them and their cargoes? Explain. 2. If it cannot be determined which of the vessels was at fault resulting in the collision, which party should bear the damage caused to the vessels and the cargoes? Explain. 3. Which party should bear the damage to the vessels and the cargoes if the cause of the collision was a fortuitous event? Explain. ANSWER: 1. Each vessel should bear the damages to the vessel, and both vessels shall be solidarily liable for the damages to the cargoes. Article 827 of the Code of Commerce provides that if both vessels may be blamed for the collision, each one shall suffer its own damages, and both shall be solidarily responsible for the losses and damages suffered by their cargoes. 2. Each vessel should bear the damages to the vessel, and both vessels shall be solidarily liable for the damages to the cargoes. Article 828 of the Code of Commerce provides that if it cannot be determined which vessel is at fault, each vessel shall suffer its own losses and both shall be solidarily liable for losses or damages on the cargoes. Also, under the Doctrine of Inscrutable Fault, where fault is established but it cannot be determined which of the two vessels were at fault, both shall be deemed to have been at fault. 3. Each vessel and its cargo shall be liable for its own damage. Article 830 of the Code of Commerce provides that if a vessel should collide with another through fortuitous event or force majeure, each vessel and its cargo shall be liable for its own damage. Page 130 of 191 PERSONS INVOLVED IN MARITIME COMMERCE Topic: Joint and Seceral Liability; Liability of an Agent with Respect to the Principal (1984) X Mining Co. shipped a cargo of machineries on board the S/S Good Ship which was chartered by the Able Shipping Co., a foreign corporation represented in the Philippines by its agent, Best Lines, Inc. When the goods were delivered to the consignee, Y Corporation, they were found to have sustained losses. The insurer, Sunshine Insurance Co., paid for the losses, thereby subrogating itself to the rights of X Mining Company or Y Corporation vis-à-vis the shipping company and the shipping agent. Upon arrival of the S/S Good Ship in Manila, Best Lines, Inc. took charge of the following: (a) unloading of the cargo and issuing of cargo receipts in its own name for the purpose of evidencing the condition and discharge of the cargo from the vessel to the arrastre operator and/or unto the barge lighters; (b) filing and processing of claims against the vessel S/S Good Ship for damages/ losses sustained by the cargo. When Sunshine Insurance Co. sued both Able Shipping Co. and and Best Lines, Inc. the latter contended that it was a disclosed agent and could not therefore be held liable, despite the insolvency of Able Shipping Co. Rule on the contention of Best Lines, Inc., with reasons. ANSWER: Best Lines, Inc., as ship agent, is liable solidarily with its principal, Able Shipping Co., for the amount of the losses damages sustained by the goods. The Code of Commerce provides that the ship agent shall be liable for indemnities in favor of third persons which arise from the conduct of the captain in the care of the goods which the vessel carried. The Supreme Court has held that the doctrine having reference to the relation between principal and agents cannot be applied in the case of ship agents and ship owners. (Yu Biao Suntua & Co. v. Ossorio, 43 Phil. 51) Page 131 of 191 On the basis of the activities performed by Best Lines, Inc. upon the arrival of the S/S Good Ship in Manila, it is clear that Best Lines, Inc. is the entity that represents the vessel in the port of Manila and hence is a ship agent within the meaning and context of Article 586 of the Code of Commerce: “the person who represents the vessel in the port in which she happens to be.” Considering the peculiar relationship of the parties, Best Lines, Inc. cannot be considered as a “mere agent” of a disclosed principal under the civil law on agency as distinguished from a ship agent within the context of the Code of Commerce. Moreover, the insolvency of Able Shipping Co. has no bearing insofar as he liability of Best Lines, Inc. is concerned. The law does not make the liability of the ship agent dependent upon the solvency or insolvency of the ship owner. (Switzerland General Insurance Co., Ltd. V. Ramirez, 96 SCRA 297 1980) Therefore, both Best Lines, Inc. and Able Shipping Co., are liable solidarily and the liability of one is independent of that of the other. Page 132 of 191 Topic: Persons Involved In Maritime Commerce (1988) The goods imported from the United States were unloaded by the carrier in Manila. While in the custody of the arrastre operator, part of the shipment worth P1,000 was lost. Does the case involve admiralty and maritime commerce so that the action for short delivery has to be filed in the Court of First Instance regardless of the amount? Reasons. ANSWER: No, the matter does not involve admiralty or maritime commerce which relate only to incidents occurring during the sea voyage. Likewise, persons involved in maritime commerce are the following: (1) shipowners and ship agents; (2) captains and masters of the vessel; (3) officers and crew of the vessel; and (4) supercargoes. Even assuming that the case involves an admiralty and maritime case, under B.P. 129, jurisdiction also lies with the Metropolitan, MTC and MCTC where the demand or claim does not exceed Php 300,000.00, or in Metro Manila, where such demand or claim does not exceed Php 400,000.00. Page 133 of 191 Ship Agents Topic: Ship Agents (1981) “S” shipped goods from Australia on board a foreign vessel owned and operated by “X”, a shipping company, based in Australia and represented in the Philippines by “R”. The goods were consigned to “T” of Manila and insured by “U” against all risks. Upon arrival in Manila Bay, the goods were discharged from the vessel to a lighter owned by the Bay Brokerage Co. When delivered to and received by “T”, the goods were found to have sustained losses or damages. Evidence disclosed that the damage occurred while the goods were in the custody of the carrier. The insurance company paid the amount of the loss but sought reimbursement from “X” and/or “R”. “R” disclaimed any liability alleging that he is a mere agent of “X”, and having acted as agent of a disclosed principal is, therefore, not liable. a) Can the insurance company recover from “R”? Reasons. b) What is the liability, if any, of Bay Brokerage Co.? Explain. ANSWER: A. Yes, the insurance company can recover from “R”. Art. 586 of the Code of Commerce states that “The owner of a vessel and the agent shall be civilly liable for the acts of the captain and for the obligations contracted by the latter to repair, equip, and provision the vessel, provided the creditor proves that the amount claimed was invested therein. By agent is understood the person entrusted with the provisioning of a vessel, or who represents her in the port in which she happens to be.” A ship agent “R” under the Code of Commerce is liable solidarily with X, its principal in an amount representing the value of the good lost or damaged. Page 134 of 191 B. The Bay Brokerage Co. is not liable. The evidence disclosed that the damage occurred while the goods were yet in the custody of the carrier, before that goods were discharged from the vessel to a lighter owned by the Bay Brokerage Co. Page 135 of 191 GENERAL AVERAGE VS PARTICULAR AVERAGE Topic: General Average, Jettison, Salvage and Deviation (1982) The vessel “General Mascardo” was loaded with 5,000 tons of gold and copper concentrates by Syndicated Ores, Inc. (the charterer) for delivery to the U.S. The master of the vessel issued the corresponding bill of lading which contained a prohibition against the loading of dangerous cargo per se or cargo which may become dangerous and make the voyage unsafe. The master has had 10 years of experience as captain, but this was his first experience with cargo of gold and copper concentrates. The cargo was loaded, stowed and trimmed at the sole risk and expense of Syndicated Ore, Inc. While en route to its destination, the vessel met a typhoon and because of the heavy stress, the shifting boards or compartments constructed by Syndicated broke, causing the cargo of ore concentrates to shift. Since the vessel was listing on its side to almost 14° for several hours, the master, in the hope of saving the vessel, decided to jettison some of the cargo belonging to other shippers. At this point, a powerful tugboat offered to help in maneuvering the vessel, which the master accepted on no-cure no pay basis. To save the vessel and the remaining cargo, the master, after consulting with his officers, deviated to Japan, the nearest port, instead of proceeding to the U.S. Thereafter, the cargo of gold and copper concentrates were examined by international surveyors who declare that the moisture content of said concentrates was beyond transportable limit and the same was much higher than as certified by Syndicated. The master and the shipowner, after declaring that the cargo was of dangerous nature and condition, unloaded the cargo in Japan, abandoned the voyage and informed the cargo owners to transship their cargo at their own cost and expense. The master and the shipowner also slapped a lien on said cargo for freight up to Japan as well as other expenses. a) Was there a general average situation? Did the vessel have the right to jettison other cargo, hire salvors and deviate the vessel to Japan? b) Assuming Syndicated Ores, Inc. refused general average, may the vessel declare the cargo as dangerous, unload the same, store the cargo in Japan and abandon the voyage, at the same time slapping a lien on cargo for freightage, expenses for unloading, expenses for jettison, salvage and/or general average? c) Does Syndictaed Ores, Inc. have the right to insist that the vessel carry the cargo to the U.S. per bill of lading, or that the shipowner hire a substitute vessel to complete the contracted Page 136 of 191 voyage in accordance with the “extraordinary diligence” required or common carriers in the carriage of goods? ANSWER: a) As to general average: Yes, the facts presented a case for general average for the requisites of a general average are present. In the case of A. Magsaysay Inc. vs. Agan (G.R. No. L-6393, January 31, 1935), the Supreme Court laid down the requisites for general average, namely: (1) there must be a common danger; (2) for the common safety part of the vessel or of the cargo or both is sacrificed deliberately; (3) from the expenses or damages caused follows the successful saving of the vessel and cargo; and (4) the expenses or damages should have been incurred or inflicted after taking proper legal steps and authority. With respect to the first requisite, the facts showed that the vessel met a typhoon and under heavy stress that the listing on its side to almost 14° for several hours indicated that the vessel and the cargo were in imminent danger or danger which might “rationally sought to be certain and imminent”. As to the second requisite, the expenses in question were incurred for the common safety of vessel and cargo, since they, were in imminent peril. It is the deliverance from an immediate, impending peril, by a common sacrifice, that constitutes the essence of general average. With respect to the third requisite, it can be gleaned that the sacrifice was successful as it benefited both the vessel and the cargo. As to the final requisite, the master took proper legal steps and authority in order to save the vessel. Hence, there is a general average situation. As to Jettison: Yes, since the requisites of a general average were present, the captain had the right to jettison other cargoes in order to save the vessel and the cargo. As to hiring of salvors: No, because the requisites of a valid salvage claim were not present. Page 137 of 191 In Barrios vs. Go Thong Company (G.R. No. L-17192, March 30, 1963), the Supreme Court laid down three elements which must be established in order for a salvage claim to be valid, namely: 1) there must be a marine peril; 2) the service is voluntarily rendered and is not required as an existing duty or from a special contract; and 3) there must be success in whole or in part or that the service contributed to such success. Additionally, Section 1 of the Salvage Law makes clear the requirement that 4) the vessel is shipwrecked or beyond the control of the crew or shall have been abandoned. In this case, the second requisite was not complied with because in consenting the offer to tow the vessel and acceptance by the master of the service on no-cure no pay basis, the master impliedly entered into a juridical relation of “towage” with the owner of the tugboat. Further, the salvor, under the Salvage Law, must have no relation, contractual or otherwise, upon the ship in distress. The second requisite not having been complied with, there is no valid salvage claim in this case. As to deviation: The deviation of the vessel to Japan is proper. Under the Insurance Code, deviation is proper when made in good faith, and upon reasonable grounds of belief in its necessity to avoid a peril. In this case, the deviation was made in good faith after the master consulted with his officers. Further, there were reasonable grounds to believe that such deviation would save the vessel and cargo from further peril. Hence, the deviation is proper. b) No, the vessel cannot declare the cargo as dangerous, unload the same, store the cargo in Japan and abandon the voyage, at the same time slapping a lien on cargo for freightage, expenses for unloading, expenses for jettison, salvage and/or general average unless there is compliance with Article 851 of the Code of Commerce. Page 138 of 191 Article 851 of the said Code authorizes the captain to proceed privately, upon the agreement of the parties interested, in the adjustment, liquidation, and distribution of the gross average, and for this purpose, it is his duty to call, within forty hours following the arrival of the vessel at the port, the persons interested in order that they may decide whether the adjustment or liquidation of the gross average is to be made by experts and liquidators appointed by themselves, in which case this shall be done should the persons interested agree, and said article also provides that should an agreement not be possible, the captain shall apply to the judge or court of competent jurisdiction, who shall be the one in the port where the proceedings are to be held in accordance with the Code of Commerce, or to the consul of the Philippines, should there be one, and otherwise to the local authorities when they are to be held in a foreign port. In this case, the captain is required to initiate the proceedings for the adjustment, liquidation, and distribution of any gross average and thereafter to proceed only against Syndicated Ores, Inc. for the latter‟s contribution to the gross average and other expenses. Under the said Code, the captain is not given the discretion to declare the cargo as dangerous, unload the same, store the cargo in Japan and abandon the voyage. Hence, the vessel cannot declare the cargo as dangerous, unload the same, store the cargo in Japan and abandon the voyage, at the same time slapping a lien on cargo for freightage, expenses for unloading, expenses for jettison, salvage and/or general average. c) Yes, Syndicated Ores, Inc. have the right to insist that the shipowner hire a substitute vessel to complete the contracted voyage in accordance with the “extraordinary diligence” required or common carriers in the carriage of goods. Under Article 657 of the Code of Commerce, if during the voyage the vessel should be rendered unseaworthy, the captain shall be obliged to charter at his expense another one in good condition to carry the cargo to its destination. If the captain, through indolence or malice, should not furnish a vessel to take the cargo to its destination, the shippers may charter one at the expense of the captain/shipowner. If the captain, notwithstanding his efforts, should not find a vessel to charter, he shall deposit the cargo at the disposal of the shippers, to whom he shall communicate the facts on the first opportunity the freight being regulated in such cases by the distance covered by the vessel, with no right to any indemnification whatsoever. Page 139 of 191 In this case, if the vessel should be rendered unseaworthy, Syndicated Ores, Inc. have no right to insist that the vessel “General Mascardo” carry the cargo to the US. However, Syndicated Ores, Inc. can still insist that the shipowner hire a substitute vessel as the captain has the obligation to charter at his expense another vessel to carry the cargo to its destination. If the captain fails to comply with his obligation by reason of indolence or malice, Syndicated Ores Inc. may charter one at the expense of the captain/shipowner. Hence, Syndicated Ores, Inc. have the right to insist that the shipowner hire a substitute vessel to complete the contracted voyage. Page 140 of 191 Topic: General Average Loss (2000) MV SuperFast, a passenger-cargo vessel owned by SF Shipping Company plying the inter-island routes, was on its way to Zamboanga City from the Manila port when it accidentally, and without fault or negligence of anyone on the ship, hit a huge floating object. The accident caused damage to the vessel and loss of an accompanying crated cargo of passenger PR. In order to lighten the vessel and save it from sinking and in order to avoid risk of damage to or loss of the rest of the shipped items (none of which was located on the deck), some had to be jettisoned. SF Shipping had the vessel repaired at its port of destination. SF Shipping thereafter filed a complaint demanding all the other cargo owners to share in the total repair costs incurred by the company and in the value of the lost and jettisoned cargoes. In answer to the complaint, the shippers„ sole contention was that, under the Code of Commerce, each damaged party should bear its or his own damage and those that did not suffer any loss or damage were not obligated to make any contribution in favor of those who did. Is the shippers„ contention valid? Explain. ANSWER: No. The shippers„ contention is not valid. The Supreme Court in the case of Philippine Home Assurance Corp. v. CA defines General Average Loss as including the damages and expenses which are deliberately caused by the master of the vessel or upon his authority, in order to save the vessel, her cargo, or both at the same time from real or known risk. It must be borne equally by all of the interests concerned in the venture. Herein, the owners of the cargo jettisoned, to save the vessel from sinking and to save the rest of the cargoes, are entitled to contribution. The jettisoning of said cargoes constitute general average loss which entitles the owners thereof to contribution from the owner of the vessel and also from the owners of the cargoes saved. Moreover, SF Shipping is not entitled to contribution/ reimbursement for the costs of repairs on the vessel from the shippers. Thus, the shippers„ contention is not valid. Page 141 of 191 Topic: General Average; Carriage of Goods; Liability (2009) Global Transport Services, Inc. (GTSI) operates a fleet of cargo vessels plying interisland routes. One of its vessels, MV Dona Juana, left the port of Manila for Cebu laden with, among other goods, 10,000 television sets consigned to Romualdo, a TV retailer in Cebu. When the vessel was about ten nautical miles away from Manila, the ship captain heard on the radio that a typhoon which, as announced by PAG-ASA, was on its way out of the country, had suddenly veered back into Philippine territory. The captain realized that MV Dona Juana would traverse the storm‟s path, but decided to proceed with the voyage. True enough, the vessel sailed into the storm. The captain ordered the jettison of the 10,000 television sets, along with some other cargo, in order to lighten the vessel and make it easier to steer the vessel out of the path of the typhoon. Eventually, the vessel, with its crew intact, arrived safely in Cebu. a. Will you characterize the jettison of Romualdo‟s TV sets as an average? If so, what kind of an average, and why? If not, why not? (3%) b. Against whom does Romualdo have a cause of action for indemnity of his lost TV sets? Explain. ANSWER: a. Yes, such jettison is an average characterized as general or gross. The SC held in the case of Philippine Home Assurance Corp. v. CA (G.R. No. 106999 June 20, 1996), as a rule, general or gross averages include all damages and expenses which are deliberately caused in order to save the vessel, its cargo, or both at the same time, from a real and known risk. Furthermore, Art. 811 of the Code of Commerce provides that general averages include, among others, the good jettisoned to lighten the vessel, whether they belong to the vessel, to the cargo, or to the crew, and the damage suffered through said act by goods which are kept on board. The jettison of Romualdo‟s TV sets resulted in a general average, which was intended to lighten the vessel and to eventually save it and its crew. Page 142 of 191 b. Romualdo has a cause of action for his lost TV sets against the GTSI and the owners of the cargoes saved by the jettison. General average loss must be borne equally by all of the interests concerned in the venture (Aquino, Reviewer on Commercial Law, p. 155). In this case, parties who have such interests are the shipowner and the owners of the cargoes. The jettison of the TV sets resulted in a general average loss, entitling Romualdo to indemnity for the lost TV sets against GTSI and cargoes saved. Page 143 of 191 Topic: General Average and Particular Average (2010) An importer of Christmas toys loaded 100 boxes of Santa Claus talking dolls aboard a ship in Korea bound for Manila. With the intention of smuggling one-half of his cargo, he took a bill of lading for only 50 boxes. On the voyage to Manila, 50 boxes were jettisoned to save the more precious cargo. 1. Is the importer entitled to receive any indemnity for average? Explain. 2. What are the types of averages in marine commerce? ANSWERS: 1. No, the importer is not entitled to receive any indemnity for average. Article 816 of the Code of Commerce provides that, “In order that the goods jettisoned may be included in the gross average and the owners thereof be entitled to indemnity, it shall be necessary in so far as the cargo is concerned that their existence on board be proven by means of the bill of lading; and with regard to those belonging to the vessel, by means of the inventory made up before the departure”. In the present case, the existence of the cargo on board was not proven by the bill of lading due to the intent of the importer to smuggle hence only 50 boxes were declared. Therefore, the importer will not be entitled to receive indemnity for damages. 2. The two types of averages in marine insurance are General Average and Particular Average. Simple or Particular Averages shall be, as a general rule, all the expenses and damages caused to the vessel or to her cargo which have not redounded to the benefit and common profit of all the persons interested in the vessel and her cargo (Article 809, Code of Commerce). Page 144 of 191 General or gross averages shall be, as a general rule, all the damages and expenses which are deliberately caused in order to save the vessel, her cargo, or both at the same time, from a real and known risk (Article 811, Code of Commerce). Page 145 of 191 Topic: General Average (2015) What is a "Jason clause" in a charter party? ANSWER: The Jason clause derives its name from The Jason (225 US 32 [1912]) decided by the US Supreme Court under the Harter Act. By the Jason clause, a shipowner (provided he had exercised due diligence to make the ship seaworthy and properly manned, equipped and supplied) could claim a general average contribution from cargo, even where the damage was caused by faulty navigation of the vessel, provided that the bill of lading excluded liability for such faults. This clause is exhibited in the case Eastboard Navigation, Ltd. vs. Ysmael, G.R. No. L-9090, September 10, 1957. Page 146 of 191 CHARTER PARTY Topic: Charter Party (1981) “C” Company shipped 20,000 bags of soy beans through the S/S Melon, owned and operated by “X” Shipping Lines, consigned to the Toyo Factory and insured by the Surety Insurance Co., against all risks. “C” Company hired the entire vessel, with the option to go north or south, loading, stowing and discharging at its risk and expense. The owner and shipper agreed on a stipulation exempting the owner from liability for the negligence of its agents. When the cargo was delivered to the consignee, there were shortages amounting to P10,500. The insurance company paid for the damage and sought reimbursement from the “X” Shipping Lines as carrier. Is the carrier liable? Select the correct answer from the following and explain. The carrier is: (A) Liable, because the stipulation exempting its owner from liability for the negligence of its agent is against public policy, hence, void. (B) Liable, because in case of loss, destruction or deterioration of goods, common carriers are presumed at fault under Art. 1735 of the Civil Code. (C) Not liable because it exercised due diligence in stowing the goods. (D) Not liable because it is not a common carrier and the parties to a contract, as such, may enter into a stipulation exempting the owner from liability for the negligence of its agents. ANSWER: D. The carrier is not liable because it is not a common carrier and the parties to a contract, as such, may enter into a stipulation exempting the owner from liability for the negligence of its agents. As explained in Planters Products, Inc. v Court of Appeals (G.R No. 101503, September 15, 1993), “It is only when the charter includes both the vessel and its crew, as in a bareboat or Page 147 of 191 demise that a common carrier becomes private, at least insofar as the particular voyage covering the charter-party is concerned.” 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 ship owner from liability for the negligence of its agents is not against public policy and is deemed valid. Page 148 of 191 Topic: Bareboat Charter (1989) X owns the ship M/V Aguinaldo. He bareboat chartered the ship to Y who appointed all its crew members from the captain down to its last official. Y then transported a shipment of 10,000 bags of sugar belonging to Z. Thru the negligence of the ship captain, half of the sugar was damaged due to sea water. Since Y is bankrupt, Z sued the captain and X. Will the suit succeed? ANSWER: The action would prosper against the ship captain whose negligence caused the damage but not against X. In the case of Planters Products, Inc. v. CA, the Court held that a Bareboat Charter takes place when the whole vessel is let to the charterer which transfers to him its entire command and possession and consequent control over its navigation, including the aster and crew who are his servants. The charterer is treated as owner pro hac vice of the vessel. In such case, a common carrier becomes a private carrier.( Planters Products, Inc. v. CA, G.R. No. 101503, September 15, 1993) Given such circumstances, X was merely a lessor of the vessel and was neither a party to the contract for the shipment of the goods nor an employer of the ship. Hence, the suit against him will not prosper. Page 149 of 191 Topic: Shipowner’s liability to charterer (1989) X chartered the ship of Y to transport his logs from Zamboanga to Manila. In the course of their voyage, the ship met a storm and had to dock in Cebu for three days. Z, the captain of the ship borrowed P20,000 from X on the pretext that he would need the money for the repair of the ship. Z misappropriated the money and converted it to his own benefit. What is the liability of Y, if any? ANSWER: None. Under Art. 586 of the Code of Commerce, a shipowner would only be liable for contracts made by the captain (a) when duly authorized or (b) even when unauthorized, for ship repairs or for equipping or provisioning the vessel when the proceeds are invested therein. Since the loan by the captain from X does not fall under any of the foregoing cases, the amount borrowed shall be considered a personal liability of Z, the captain and Y, the shipowner cannot thus be held liable. Page 150 of 191 Topic: Maritime Law; Charter Party; Rescission (1991) The Saad Developing Corp. enters into a voyage charter with the XYZ Shipping Corp. over the latter‟s vessel, the M/V Lady Love. Before the Saad Development Corp. cpuld load it, XYZ Corp. sold M/V Lady Love to Oslob Maritime Corp., which decided to load it for its own account. a) May XYZ Shpping Corp. validly ask for the rescission of the charter party? If so, can Saad Development Corp., recover damages? To what extent? b) If the Oslob Maritime Corp. did not load it for its own account, is it bound by the charter party? ANSWER: a) Yes, XYZ Shipping Corporation can ask for rescission of the charter party. Saad Development Corporation can recover damages to extent of its losses. Article 689 of the Code of Commerce provides that at the request of the person from whom the vessel is chartered the charter party may be rescinded: (2) If the person from whom the vessel was chartered should sell it before the charterer has begun to load it, and the purchaser should load it for his own account. In such case, the vendor shall indemnify the charterer from the losses he may suffer. In this case, the vessel chartered by XYZ was sold before it has loaded the vessel and the buyer Oslob Maritime Corp. loads it for its own account which falls under the instance provided under Article 689 of the Code of Commerce. Furthermore, Saad can recover damages as provided under the said provision but only to the extent of the losses it incurred. Therefore, XYZ Shipping Corporation can validly ask for rescission of the charter party while the Saad Development Corporation can recover damages to extent of its losses. b) Yes, Oslob Maritime is bound by the charter party. Article 689 of the Code of Commerce provides that at the request of the person from whom the vessel is chartered the charter party may be rescinded: (2) If the person from whom the vessel was chartered should sell it before the charterer has begun to load it, and the Page 151 of 191 purchaser should load it for his own account. In such case, the vendor shall indemnify the charterer from the losses he may suffer. If the new owner of the vessel should not load for his own account, the charter party shall be respected, and the vendor shall indemnify the purchaser if the former did not inform him of the charter pending at the time of the making of the sale. In this case, the Oslob Maritime Corp. did not load it for its own account, thus Article 689 of the Code of Commerce will apply which binds Oslob Maritime Corp. to the charter party but subject to indemnification from the vendor if it failed to inform the former of the charter pending at the time of the sale. Therefore, Oslob Maritime is bound by the charter party. Page 152 of 191 Topic: Maritime Law; Charter Party; Owner pro hac vice of the vessel (1991) Explain the meaning of “owner pro hac vice of the vessel.” In what kind of charter party does this obtain? ANSWER: The Court in the case of Litonjua Shipping Company v. National Seamans Board, G.R No. 51910, August 10, 1989, explained that in a demise or bare boat charter, the charterer is treated as the owner pro hac vice of the vessel, the charterer assuming in large measure the customary rights and liabilities of the shipowner in relation to third persons who have dealt with him or with the vessel. In such case, the Master of the vessel is the agent of the charterer and not of the shipowner. The charterer or owner pro hac vice, and not the general owner of the vessel, is held liable for the expenses of the voyage including the wages of the seamen. Page 153 of 191 Topic: Maritime Law; Bareboat (2003) For the transportation of its cargo from the Port of Manila to the Port of Kobe, Japan, Osawa & Co., chartered bareboat” M/V Ilog of Karagatan Corporation. M/V Ilog met a sea accident resulting in the loss of the cargo and the death of some of the seamen manning the vessel. Who should bear the loss of the cargo and the death of the seamen? Why? ANSWER: Osawa & Co. should bear the loss of the cargo and the death of the seamen. According to jurisprudence, in a charter by Demise or Bareboat, the whole vessel is let to the charterer which transfers to him its entire command and possession and consequent control over its navigation, including its masters and crew who are his servants. The charterer is treated as owner pro hac vice of the vessel and hence, the charterer will generally be liable as if it were the owner of the vessel. Moreover, the bareboat charterer assumes the liabilities of the ship owner in relation to third persons. Accordingly, it is the charterer and not the ship owner who is liable to the seamen manning the vessel. In the car at bar, Osawa & Co. chartered bareboat M/V Ilog of Karagatan Corporation. Because of the bareboat charter, Osawa & Co. is deemed to be the owner pro hac vice of M/V Ilog. Thus, Osawa & Co. is liable to the loss of the cargo and the death of the seamen. Therefore, Osawa & Co. should bear the loss and not Karagatan Corporation. Page 154 of 191 Topic: Charter Party (2017) Onassis Shipping, Inc. (Onassis) operated passenger vessels and cargo trucks, and offered its services to the general public. In line with its vision and mission to protect the environment, Go-Green Asia (Go-Green), an NGO affiliated with Greenpeace, entered into a contract with Onassis whereby Go-Green would operate with its own crew the M/V Dolphin, an ocean-going passenger vessel of Onassis. While on its way to Palawan carrying Go-Green‟s invited guests who were international and local observers desirous of checking certain environmental concerns in the area, the M/V Dolphin encountered high waves and strong winds caused by a typhoon in the West Philippine Sea. The rough seas led to serious physical injuries to some of the guests. Discuss the liabilities of Onassis and Go-Green to the passengers of the M/V Dolphin. Explain briefly your answer. ANSWER: Onassis is not liable for the injuries of the passengers while Go-Green is liable. As held in Puromines, Inc. v. CA (G.R. No. 91228, March 22, 1993), under the demise or bareboat charter, the charterer will generally be regarded as the owner for the voyage or service stipulated. The charterer mans the vessel with his own people and becomes the owner pro hac vice, subject to liability to others for damages caused by negligence. Moreover, the charterer assumes the customary rights and liabilities of the shipowner in relation to third persons dealing with him or with the vessel. Here, there was a bareboat charter as Go-Green, the charterer, was the one who operated the vessel with its own crew. Therefore, the passengers may go after Go-Green who is liable as the owner pro hac vice under the demise or bareboat charter. Page 155 of 191 BILL OF LADING Topic: Bill of Lading (1975) If a shipper, without changing the place of delivery changes the consignment or consignee of the goods (after said goods had been delivered to the carrier), under what condition will the carrier be required to comply with the new orders of the shipper? ANSWER: Under Article 360 of the Code of Commerce, the shipper is allowed to change the consignee without changing the destination provided that the shipper returns the bill of lading to the carrier and a new one is issued and all expenses for the change are paid by the shipper. Page 156 of 191 Topic: Definition; Functions of Bill of Lading (1998) 1. What do you understand by a “bill of lading”? 2. Explain the two-fold character of a “bill of lading”. ANSWER: 1. A bill of lading is a written acknowledgment of receipt of goods and agreement to transport them to a specific place to a person named or to his order. (Compania Maritima vs. Insurance Company of North America, GR No. L-18965, October 30, 1964) 2. The two-fold character of a bill of lading according to Telengtan Bros. & Sons, Inc. vs. Court of Appeals (GR No.110581, September 21, 1994) are: (1) it is a receipt of goods to be transported; and, (2) it is an evidence of the contract of carriage of cargo. Page 157 of 191 LOANS ON BOTTOMRY AND RESPONDENTIA TOPIC: Loans of Bottomry (1975) Under what conditions, if any, may a ship captain borrow on bottomry for his own transactions? ANSWER: Under Section 617 of the Code of Commerce, the captain may borrow on bottomry for his own transactions on the portion of the vessel he owns, provided no money has been previously borrowed on the whole vessel, and there is no other lien or obligation chargeable against the vessel. He must state his interest in the vessel. Page 158 of 191 TOPIC: Loans on Bottomry; Usury Law (1980) “S”, a shipowner, secure a loan on bottomry for P1 Million from “T” for the repair of a vessel, payable 120 days after date (estimated time for the return voyage), and as security for its repayment mortgages the keel and bottom of the vessel. In addition to the usual terms and conditions for this type of loan, “T”, because of the risk of losing his money, imposes an interest rate of 30% to which “S” reluctantly agrees. Could “S” later on question the validity of the interest rate of 30% as being violative of the Usury Law? ANSWER: No, S cannot later on question the validity of the interest rate of 30% as being violative of the Usury Law. To constitute usury, it is essential that the principal sum be repayable absolutely. Thus, usury statute has no application to loans on bottomry and the perils of marine navigation have been always considered sufficient to take bottomry or respondentia loans outside the ambit of the usury law. (Lloyd v. Scott, 4 Pet. 205, 7 L. Ed. 833; Laughlin v. Irwin, 262 Ill. App. 40; Webb on usury, p.47). Moreover, Usury Law is now legally non-existent pursuant to CB Circular 905. Hence, in the present case, S cannot assail anymore the validity of such interest rate. Page 159 of 191 PROCEDURE AND PRESCRIPTIVE PERIOD FOR CLAIMS Topic: Prescriptive Period for filing claims in court (1978) Akiro of Tokyo, Japan sent various goods to his friend Juan in Cebu City, Philippines, through one of the vessels of Worth well Shippers, Inc., an American corporation. En route to Cebu City, the vessel had two stops, first in Hong Kong, and second, in Manila. Assuming Philippine law to be applicable and Juan fails to file a claim with the carrier, may he still commence an action to recover damages with the court? (1%) (A) No, the failure to file a claim with the carrier is a condition precedent for recovery. (B) Yes, provided he files the complaint within 10 years from delivery. (C) Yes, provided he files the complaint within 10 years from discovery of the damage. (D) Yes, provided he files the complaint within 1 year from delivery. (E) Yes, provided he files the complaint within 1 year from discovery of the damage. ANSWER: (D) Yes, provided he files the complaint within 1 year from delivery. Under the Carriage of Goods by Sea Act, in any event, the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided, that, if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been delivered. Applying the same, Juan‟s cause of action starts to run 1 year from the date of delivery or the date when it should have been delivered regardless of notice of loss or damage given to the carrier or shipper. Therefore, Juan can still file a complaint. Page 160 of 191 Carriage of Goods by Sea Act (COGSA) Topic: COGSA: Change in the consignee of good (1975) If a shipper, without changing the place of delivery changes the consignment or consignee of the goods (after said goods had been delivered to the carrier), under what condition will the carrier be required to comply with the new orders of the shipper? ANSWER: After the goods have been delivered to the carrier, and the shipper should change the consignee of the goods, without changing their destination, the carrier shall comply with the new order provided the shipper returns to the carrier the bill of lading, and a new one is issued showing the novation of the contract. Section 3 of Carriage of Goods by Sea Act provides that after receiving the goods into his carrier, the master or agent of the carrier shall, on demand of the shipper, issue to the shipper a bill of lading. In this case, when the shipper changed the consignment or consignee of the goods and the carrier received the goods, the shipper must surrender the old bill of lading and new bill of lading must be issued by the carrier which novated the original contract. Page 161 of 191 Prescriptive Period by COGSA Topic: Notice under COGSA (1975) Under the provisions of Section 3 of the Carriage of Goods by Sea Act (COGSA), notice must be given of loss or damage to the goods. Within what period must notice be given, if the loss or damage is not apparent? Does the term “loss” in this Act cover delivery to the wrong person? Explain. ANSWER: Under Sec. 3(6) of the Carriage of Goods by Sea Act (COGSA), if the loss or damage is not apparent, the notice must be given within three (3) days of the delivery. No, the term “loss” does not cover delivery to the wrong person. In the case of Ang v. American Steamship Agencies, Inc. (G.R. No. L-22491), the Supreme Court held that delivery to a wrong person is different from loss and the special need for the short period of limitation in cases of loss or damage caused by maritime perils does not obtain. Therefore, if the damage is not apparent, the notice must be given within three (3) days and that delivery to a wrong person is different from loss under the provision of COGSA. Page 162 of 191 Topic: Prescriptive period under the COGSA (1978) The plaintiff, as subrogee of the consignee, sued the defendant, a contractor and operator of arrastre service in the port of Manila, for its failure to deliver one case of merchandise consisting of electronic spare parts shipped from Europe which it received from the carrier. The action was brought within the period of 4 years, but after the lapse of 1 year, from the date the goods should have been delivered. Invoking the provisions of the Carriage of Goods by Sea Act, the lower court dismissed the complaint on the ground that it was filed after 1 year from the time that the cause of action accrued. Was the lower court justified in dismissing the complaint? Why? ANSWER: No, the lower court is not correct. The Carriage of Goods by Sea Act (COGSA) outlines the liability of carriers (shippers and the shipowners) as regards the contract of carriage from foreign ports to any Philippine ports. The 1-year prescriptive period under the COGSA refers to the cause of action against the carrier and not against the arrastre operator. In here, the lower court dismiss the action invoking the provisions of COGSA against the arrastre operator. In fact, the one-year period within which to file against the carrier starts after delivery of the goods to the arrastre operator and not to the consignee. Therefore, the lower court erred dismissing the claim and in applying the 1-year period to the arrastre operator. Page 163 of 191 Topic: Period to file claim for damaged goods (1984) X shipped several boxes of goods from Manila to Cebu on board a vessel owned by Mabuhay Lines, Inc., the consignee, several boxes externally appeared to have been damaged. The proprietor of Y Dry Goods, Inc. paid the freight charges upon receipt of the goods. However, when the boxes were opened 2 days later, it was discovered that the contents of all the boxes had been damaged. The proprietor of Y Dry Goods, Inc. seeks your advice on whether he may proceed against the carrier for damages. State your answers with reasons. ANSWERS: He may proceed against the carrier for damages but only for those articles or goods which were known to be damaged upon the opening of the boxes but as to those boxes which were externally damaged, he is already barred from claiming damages. Article 366 of the Code of Commerce provides that within 24 hours following the receipt of the merchandise a claim may be made against the carrier on account of damage or average found upon opening the packages, provided that the indications of the damage or average giving rise to the claim cannot be ascertained from the exterior of said packages, in which case said claim shall only be admitted at the time of the receipt of the packages. With respect to the boxes which sustained damages that are ascertainable due to its physical appearance, the proprietor of Y Dry Goods cannot file a claim anymore as the time period for filing such claim has already lapsed. With respect to damages upon goods which are not ascertainable from the physical appearance of the boxes and which would require the opening of the boxes, the claim for damages will only lie if it is brought within the 24-hour period. Page 164 of 191 Topic: Prescription of Claims under the COGSA (1992) A local consignee sought to enforce judicially a claim against the carrier for loss of a shipment of drums of lubricating oil from Japan under the COGSA after the carrier had rejected its demand. The carrier pleaded in its Answer the affirmative defense of prescription under the provisions of said Act inasmuch as the suit was brought by the consignee after one (1) year from delivery of the goods. In turn, the consignee contended that the period of prescription was suspended by the written extrajudicial demand it had made against the carrier within the oneyear period, pursuant to Article 1155 of the Civil Code providing that the prescription of actions is interrupted when there is a written extrajudicial demand by the creditors. a.) Has the action, in fact, prescribed? Why? b.) If the consignee‟s action were predicated on misdelivery or conversion of the goods, would your answer be the same? Explain briefly. ANSWERS: a.) Yes, the action has already been prescribed. In the case of DOLE Phil. Inc. v. Maritime Co, the period of one year under the COGSA is not suspended by a written extrajudicial demand. Section 3 of COGSA provides that the period of one year starts after the delivery of the goods or the date the goods should have been delivered.( DOLE Phil. Inc. v. Maritime Co., G.R. No. L-61352 February 27, 1987) In this case, 1 year has already lapsed from the time of delivery of the goods. Hence, the action has already prescribed. b.) No, the answer would not be the same. In the case of Ang vs Compania Maritima, the Court held that if the consignee‟s action is predicated on misdelivery or conversions of the goods, the provisions of COGSA would be inapplicable (Ang vs Compania Maritima, G.R. No. L-30805 December 26, 1984. In these cases, the Civil Code Prescriptive periods, including Art. 1155 of the Civil Code will apply. Page 165 of 191 Hence, if the consignee‟s actions were predicated on misdelivery or conversion of the goods, the prescriptive period under COGSA will not apply. Page 166 of 191 Topic: Carriage of Goods by Sea Act (1995) What is the prescriptive period for actions involving lost or damaged cargo under the Carriage of Goods by Sea Act? ANSWER: The prescriptive period for actions involving lost or damaged cargo under the Carriage of Goods by Sea Act is one year. The fourth paragraph of Section 3(6) of the Carriage of Goods by Sea Act provides that “the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after the delivery of the goods or the date when the goods should have been delivered.” Page 167 of 191 Topic: COGSA; Prescription of Claims (2000) RC imported computer motherboards from the United States and had them shipped to Manila aboard an ocean- going cargo ship owned by BC Shipping Company. When the cargo arrived at Manila seaport and delivered to RC, the crate appeared intact; but upon inspection of the contents, RC discovered that the items inside had all been badly damaged. He did not file any notice of damage or anything with anyone, least of all with BC Shipping Company. What he did was to proceed directly to your office to consult you about whether he should have given a notice of damage and how long a time he had to initiate a suit under the provisions of the Carriage of Goods by Sea Act (CA 65). What would your advice be? ANSWER: My advice would be that since the damage is not apparent, RC should give notice of the damage sustained by the cargo within 3 days. Moreover, I would advice RC to file the suit to recover the damage sustained by the cargo within one year from the date of the delivery of the cargo to him. Section 3 (6) of COGSA provides that “if the loss or damage is not apparent, the notice must be given within three days of the delivery. Said notice of loss or damage may be endorsed upon the receipt for the goods given by the person taking delivery thereof.” Also, Section 3 (6) of COGSA provides, “In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided, That if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been delivered.” In this case, RC has one year from the date of the delivery of the cargo to him to file the suit to recover the damage sustained by the cargo. Therefore, RC should file a suit to recover the damage within one year. Page 168 of 191 Topic: Prescriptive Period by COGSA (2010) AA entered into a contract with BB for the latter to transport ladies wear from Manila to France with transshipment via Taiwan. Somehow the goods were not loaded in Taiwan on time, hence, these arrived in France "off-season." AA was only paid for onehalf (1/2) the value by the buyer. AA claimed damages from BB. BB invoked prescription as a defense under the Carriage of Goods by Sea Act. Considering the "loss of value" of the ladies wear as claimed by AA, is BB‟s defense tenable? Explain. ANSWER: No, the defense of BB is untenable. As held in the case of Mitsui O.S.K. Lines Ltd. v. Court of Appeals (GR No. 119571, March 11, 1998), the one-year prescriptive period in the Carriage of Goods Sea Act will apply only in cases where the goods were not delivered or were delivered in a damaged or deteriorated condition. Such prescriptive period does not apply to damages as a result of delay in the delivery of the goods. In the present case the goods were neither undelivered nor delivered in a damaged or deteriorated condition, thus the one-year prescriptive period in COGSA will not apply. Since COGSA is inapplicable, therefore, the prescription of the action is governed by Article 1144 of the Civil Code, which provides for a prescriptive period of ten years in case of actions based on a written contract. Page 169 of 191 SALVAGE LAW Topic: Salvage (1975) If the cargo of a vessel is saved entirely by another vessel, who in the latter vessel shall be entitled to the salvage reward? ANSWER: Under Sec. 13 of the Salvage Law, the reward for salvage or for assistance shall be divided between the owner, the captain, and the remainder of the crew of the latter vessel, so as to give the owner a half, the captain a fourth, and all the remainder of the crew the other fourth of the reward, in proportion to their respective salaries, in the absence of an agreement to the contrary. Page 170 of 191 C. WARSAW CONVENTION DAMAGE OR INJURY FOR WHICH THE CARRIER IS LIABLE Topic: Liability of Common Carriers for Loss of Luggage (2012) X took Philippine Airlines Flight PR 102 to Los Angeles, USA. She had two (2) luggage checked-in and was issued two (2) baggage checks. When X reached Los Angeles one (1) of the two (2) checked in luggage could not be found. Which statement is most accurate? a) PAL is liable for the loss of the checked- in luggage under the provisions of the Warsaw Convention on Air Transport. b) PAL is liable for the loss only if the baggage check expressly states that the airline shall be liable in case of loss. c) PAL cannot be held liable because that is the risk that a passenger takes when she checks- in her baggage. d) PAL can only be held liable if it can be proven that PAL was negligent. ANSWER: PAL is liable for the loss of the checked- in luggage under the provisions of the Warsaw Convention on Air Transport. Article 18 of the Warsaw Convention states that the carrier is liable for damage sustained in the event of the destruction or loss of, or of damage to, any registered luggage or any goods, if the occurrence which caused the damage so sustained took place during the carriage by air. Here, since X checked in her luggage with PAL and the loss occurred during the carriage by air, PAL will be liable for damages. In conclusion Option A is the correct answer. Page 171 of 191 LIMIT OF LIABILITY OF CARRIER Topic: Limit of liability of carrier (1993) A shipped thirteen (13) pieces of luggage through LG Airlines from Teheran to Manila as evidenced by LG Air Waybill which disclosed that the actual gross weight of the luggage was 180 kilograms. Z did not declare an inventory of the contents or the value of the thirteen (13) pieces of luggage. After the said pieces of luggage arrived in Manila, the consignee was able to claim from the cargo broker only twelve (12) pieces, with a total weight of 174 kilograms. X advised the airlines of the loss of one of the thirteen (13) pieces of luggage and of the contents thereof. Efforts of the airlines to trace the missing luggage were fruitless. Since the airlines failed to comply with the demand of X to produce the missing luggage, X filed an action for breach of contract with damages against the LG Airlines. In its answer, LG alleged that the Warsaw Convention which limits the liability of the carrier, if any, with respect to cargo to a sum of $20 per kilo or $9.07 per pound, unless a higher value is declared in advance and additional charges are paid by the passenger and the conditions of the contract as set forth in the air waybill, expressly subject the contract of the carriage of cargo to the Warsaw Convention. May the allegation of LG Airlines be sustained? Explain. ANSWER: Yes, the allegations of LG Airlines may be sustained. In the case of Pan American World Airways, Inc. vs. Rapadas, G.R. No. 60673, May 19, 1992, the Court stated that unless the contents of a cargo are declared or the contents of a lost luggage are proved by the satisfactory evidence other than the self-serving declaration of one party, the contract should be enforced as it is the only reasonable basis to arrive at a just award. The passenger or shipper is bound by the terms of the passenger ticket or the air waybill. In this case, in the absence of declaration by A, the LG Air Waybill, must be enforced. Therefore, LG Airlines‟ allegation must be sustained. Page 172 of 191 D. PUBLIC SERVICE ACT Topic: Certificate of Public Convenience (1983) Acme Transportation Co. has a Certificate of Public Convenience to operate buses in South Luzon and Eastern Visayas, including the Manila-Bicol-Samar-Leyte route. In order to get to Samar, its buses take a ferry from Matnog, Sorsogon, across the Babuyan Channel, an 8km ride more or less to the coastal town of Allen in Samar. Acme Transportation Co. finds that the fees it pays for the ferry come to a quite substantial amount each year and it calculates that it will be more economical to have its own ferry to transfer its buses. It therefore applies for an authorization to operate such a ferry as an additional unit of equipment for the exclusive use of its buses on the Manila-Leyte route. X Lighterage Services has been operating a ferry service on the said route for the past six years, objects on the following grounds: (a) the certificate of public convenience of Acme is to operate land transportation and it does not include ferry service which is already inter-island shipping. It therefore needs a new certificate of public convenience to operate inter-island operation, a mere authority to acquire and operate an additional unit not being sufficient, and (b) granting that the operation of said ferry is within Acme‟s certificate of public convenience, X Lighterage Service is a prior operator and since it is giving adequate service, there is no need for an additional ferry service on said route. In fact, Acme Transportation Co. has been availing itself of ferry services of X Lighterage Services for several years. Decide with reasons. ANSWER: Acme Transportation Co. must be granted the authority it applies for. With respect to the first objection of X Lighterage Services, the Supreme Court has decided in one case that when ferry service which connects two points on the opposite sides in an arm of the sea such as bay or the like, and does not involve great distances or too a long time to navigate, it is considered merely as a continuation or extension of the highway. Page 173 of 191 In the following case, Acme Transportation Co.‟s intended operation will only cover the ferrying of its buses from Sorsogon to Samar - a continuous and uninterrupted ride. Therefore, the ferry‟ services in question may still be considered land transportation within the scope of Acme Transportation Co.‟s present Certificate of Public Convenience. Hence there is no need for Acme Transportation Co. to obtain another certificate of Public Convenience for its planned ferry service. As for the second objection of X Lighterage Services, the Supreme Court has decided in one case that the fact that a prior transportation company offers a same provision of service that another company with a valid certificate of public convenience seeks to provide is not illegal per se. In this case, while X Lighterage Services, as a prior operator of services which Acme Transportation Co. allegedly intends to compete against, the latter‟s petition is only limited to offer services exclusively and therefore will not compete against X Lighterage Services. The fact that X Lighterage Services will lose Acme Transportation Co. as a customer is no justification to prevent the latter from ferrying its own busses to lessen its expenses, as long as it does not offer its services to others. Considering the foregoing, Acme Transportation Co.‟s application for authority must be granted and that objections of X Lighterage Services thereto are untenable. Page 174 of 191 Topic: Certificate of Public Convenience (1992) Antonio was granted a Certificate of Public Convenience (CPC) in 1986 to operate a ferry between Mindoro and Batangas using the motor vessel “MV Lotus”. He stopped operations in 1988 due to unserviceability of the vessel. In 1989, Basilio was granted a CPC for the same route. After a few months, he discovered that Carlos was operating on his route under Antonio‟s CPC. Because Basilio failed to file a complaint for illegal operations with the Maritime Industry Authority, Antonio and Carlos jointly filed an application for sale and transfer of Antonio‟s CPC and substitution of the vessel “MV Lotus” with another owned by Carlos. Should Antonio‟s and Carlos‟ joint application be approved? Give your reasons. ANSWER: No, Antonio‟s and Carlos‟ joint application should not be approved. In the case of Cohon vs. Court of Appeals (GR No. 83542, August 20, 1990), the court ruled that a certificate of public convenience is inseparable from the vessel covered. In this case, the CPC was issued for the operation of MV Lotus only. The unserviceability of the vessel covered by the certificate had likewise rendered ineffective the certificate itself, and the holder thereof may not legally transfer the same to another. Therefore, the joint application of Antonio and Carlos should not be approved because the CPC and the vessel MV Lotus, in which favor it was issued, are inseparable. Page 175 of 191 Topic: Certificate of Public Convenience; Conflict with local ordinance (1976) A was granted by the Board of Transportation a certificate of public convenience to operate 50 provincial buses, plying between Ilocos Norte and Manila passing through Rizal Avenue Extension then right on Doroteo Jose. Because of traffic congestion between the hours of 7 and 9 o‟clock in the morning, and 4 to 8 o‟clock in the evening, a municipal ordinance was passed prohibiting provincial buses from entering Manila on those hours but allowing them to use one shuttle bus for every 5 buses. A challenged the validity of the ordinance, on the ground that it infringes on his certificate of public convenience, and that he had acquired a vested right to enter Manila at anytime of the day, thru aforementioned route. Decide with reasons. ANSWER: The ordinance is valid. In the case of Lagman vs. City of Manila (GR No. L-23305, June 30, 1966), the Supreme Court ruled that under its charter, the City of Manila has the power to regulate the use of its streets. The Charter of the City of Manila is a special law and therefore prevails over the Public Service Act which is a law of general application. Applying the above case herein, the power of the Board of Transportation to grant certificates is subject to this provision of the charter of Manila especially that the later has the power to regulate activities within its territory. A has thus not acquired any vested right as alleged by him because such right is subject to a special law and cannot rely on the same to invalidate an ordinance. Therefore, the ordinance is valid because it proceeds from a special law which prevails over the Public Service Act. Page 176 of 191 Topic: Certificate of Public Convenience; Conflict with local ordinance (1993) The City of Manila passed an ordinance banning provincial buses from the city. The ordinance was challenged as invalid under the Public Service Act by X who had a certificate of public convenience to operate auto-trucks with fixed routes from certain towns in Bulacan and Rizal to Manila and within Manila. Firstly, he claimed that the ordinance was null and void because, among other things, it in effect amends his certificate of public convenience, a thing which only the Public Service Commission can do under Section 16(m) of the Public Service Act. Under said section, the commission is empowered to amend, modify or revoke a certificate of public convenience after notice and hearing. Secondly, he contended that even if the ordinance was valid, it is only the Commission which can require compliance with its provisions under Section 17 (j) of said Act and since the implementation of the ordinance was without sanction or approval of the Commission, its enforcement was unauthorized and illegal. 1.) May the reliance of X on section 16 (m) of the Public Service Act be sustained? Explain. 2.) Was X correct in his contention that under Section 17 (j) of the Public Service Act it is only the Commission which can require compliance with the provisions of the ordinance. Explain. ANSWER: 1.) No, the reliance of X on section 16 (m) of the Public Service Act may not be sustained In the case of Lagman vs. City of Manila (GR No. L-23305, June 30, 1966), the Court said that the power vested in the Public Service Commission under Section 16(m) is subordinate to the authority of the City of Manila under Section 18(hh) of its revised charter, to superintend, regulate or control the streets of the City of Manila. Applying the doctrine laid down in the aforementioned case, it is clear that the ordinance passed by the City of Manila is valid. Consequently, the City of Manila can regulate the entry of provincial buses therein. Page 177 of 191 Hence, X‟s reliance on Section 16(m) of the Public Service Act may not be sustained. 2.) No, X‟s contention that under Section 17(j) of the Public Service Act it is only the Commission which can require compliance with the provisions of the ordinance is not correct. As provided in the case of Lagman vs. City of Manila (GR No. L-23305, June 30, 1966), the powers conferred by law upon the Public Service Commission were not designed to deny or supersede the regulatory power of local governments over motor traffic in the streets subject to their control. Applying the ruling of the Court in Lagman in the instant case, the City of Manila has the power to enforce compliance with the ordinance as its authority to regulate motor traffic even without the concurrent requirement laid down by the Public Service Commission. Hence, X‟s contention is not correct. Page 178 of 191 Topic: Conditions for granting Certificate of Public Convenience (1995) What requirements must be met before a certificate of public convenience may be granted under the Public Service Act? ANSWER: As explained in the case of Kilusang Mayo Uno Labor Center v. Garcia (G.R. No. 115381, December 23, 1994), Section 16(a) of Commonwealth Act No. 86 or the Public Service Act, as amended, provides for the following requirements to be met before a certificate of public convenience may be granted, to wit: a) The grantee must be a citizen of the Philippines or a corporation, co-partnership, association or joint-stock company constituted and organized under the laws of the Philippines; Provided, That sixty per centum (60%) of the stock or paid-up capital of any such corporation, co-partnership, association or joint-stock company must belong entirely to citizens of the Philippines; b) The grantee must be financially capable of undertaking the proposed service and meeting the responsibilities incident to its operation; and c) The grantee must prove that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner. Page 179 of 191 Topic: Conditions for granting Certificate of Public Convenience; Requirement of franchise (1981) The Continental Marble Corporation filed with the Board of Energy an application for Certificate of Public Convenience for the purpose of supplying electric power and light to its factory and its employees living within its compound. The application was opposed by Norzagaray Electric & Power Co., Inc., contending that the Continental Marble Corporation has not secured a franchise to operate and maintain an electric plant. Rule on the merits of the oppositor‟s contention with supporting reasons. ANSWER: The oppositor‟s contention is not tenable. As provided in Section 13(b) of the Public Service Act, and further, in the case of Teresa Electric & Power Co., Inc. vs. Public Service Commission (September 25, 1967; 21 SCRA 198), a franchise in this case is not necessary to operate and maintain an electric plant. Such a franchise is necessary only in order to operate and maintain an electric line or power plant and line for business purposes, that is, to render service to the general public for compensation. In the present scenario, the requirement of first securing a franchise to operate a public service should not be made to apply to Continental Marble Corporation which will only supply the electric power and light to its factory and its employees living within its compound. Thus, Norzagaray Electric & Power Co., Inc's argument is not tenable and should not be given due course. Page 180 of 191 Topic: Conditions for granting Certificate of Public Convenience; Requirement of franchise (1998) The Batong Bakal Corporation filed with the Board of Energy an application for a Certificate of Public Convenience for the purpose of supplying electric power and lights to the factory and its employees living within the compound. The application was opposed by the Bulacan Electric Corporation, contending that the Batong Bakal Corporation has not secured a franchise to operate and maintain an electric plant. Is the opposition‟s contention correct? ANSWER: No, the opposition‟s contention is not correct. Section 16(a) of the Public Service Act provides that to issue certificates which shall be known as certificates of public convenience, authorizing the operation of public service within the Philippines whenever the Commission finds that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner. Provided, That thereafter, certificates of public convenience and certificates of public convenience and necessity will be granted only to citizens of the Philippines or of the United States or to corporations, co-partnerships, associations or joint-stock companies constituted and organized under the laws of the Philippines; Provided, That sixty per centum of the stock or paid-up capital of any such corporations, co-partnership, association or joint-stock company must belong entirely to citizens of the Philippines or of the United States: Provided, further, That no such certificates shall be issued for a period of more than fifty years. Nothing in the above conditions requires that the applicant must obtain a franchise to operate as a public utility in order to be granted a Certificate of Public Convenience. As such, Batong Bakal Corporation may be granted the Certificate of Public Convenience even without a franchise granted in its favor. Therefore, the opposition‟s content is not correct because a franchise is not a condition for the grant of a certificate of public convenience. Page 181 of 191 Topic: Prior or old operator rule (1979) A bus line‟s service between Manila and Malolos is satisfactory. A new road is opened between said points and a new carrier applies for a certificate of public convenience to operate a bus line along the new road. The old bus line opposes, claiming that it should first be given an opportunity to extend its service. Which party would prevail? ANSWER: The old bus line would prevail. Under the Public Service Act, the following are the conditions that must be met in the grant of Certificate of Public Convenience (CPC); a. the grantee must be a citizen of the Philippines or a corporation or entity of 60% of which is owned by such citizens; b. the grantee must have sufficient financial capability to undertake the service; and c. the service will promote public interest and convenience in a proper and suitable manner. It is also provided under this law that the first licensee will be protected in his investment and will not be subjected to ruinous competition. It is not therefore the policy of the law for the Philippine Service Commission to issue a certificate of public convenience to a second operator when a prior operator is rendering sufficient, adequate and satisfactory service, and who in all things and respects is complying with the rules and regulations of the Commission. Accordingly, priority should be given to the carrier who was first granted a certificate of public convenience provided that it is rendering sufficient, adequate and satisfactory service and who in all things and respects is complying with the rules and regulations of the Commission. In this case, the old bus line, being a prior holder of the CPC, should be given priority for the opportunity to extend its services on the new road so long as it can be shown that it is rendering sufficient, adequate and satisfactory service and who in all things and respects is complying with the rules and regulations of the Commission. Therefore, the old bus line should prevail and must first be given an opportunity to satisfy the transportation needs in the new road. Page 182 of 191 Topic: Prior or old operator rule; Conflict with prior applicant rule (1986) Mr. Mangasiwa applied for a certificate of public convenience to operate five jeepneys from the Batasang Pambansa area to Cubao, Quezon City. The application was opposed by Hallelujah Transit and Kingdom Bus Co., which were already serving in the area. They invoked the “prior or old operator rule” in their opposition. Mangasiwa, in turn, invoked the “prior applicant rule”. Discuss the “prior or old operator rule” and the limitations or provisos on its application. In case of conflict between the “prior or old operator rule” and the “prior applicant rule”, which rule shall prevail? Explain. ANSWER: In Batangas Transportation Co. vs. Orlanes (GR No. L-28865, December 19, 1928), it was ruled that the “prior or old operator rule” contemplates that so long as the first licensee keeps and performs the terms and conditions of its license and complies with the reasonable rules and regulations of the Commission and meets the reasonable demands of the public, it should have more or less of a vested and preferential right over a person who seeks to acquire another and a later license over the same route. Otherwise, the first license would not have protection on his investment, and would be subject to ruinous competition and thus defeat the very purpose and intent for which the Public Service Commission was created. In case of conflict between the “prior or old operator rule” and the “prior applicant rule”, the former must prevail. This can be deduced from Mindanao Bus Co. vs. Cagayan-Misamis Land Transportation Co. (GR No. 33689, March 13, 1931) where it was explained that while priority of application is a factor to be considered in the granting of a certificate of convenience, it does not necessarily control; and where more than one applicant are seeking certificates, the commission will consider whether the public convenience will be best served by granting a certificate of convenience to one particular applicant or to more than one. Page 183 of 191 Topic: Prior Operator Rule (2003) Bayan Bus Lines had been operating satisfactorily a bus service over the route Manila to Tarlac and vice versa via the McArthur Highway. With the upgrading of the new North Expressway, Bayan Bus Lines service became seemingly inadequate despite its efforts of improving the same. Pasok Transportation, Inc., now applies for the issuance to it by the Land Transportation Franchising and Regulatory Board of a certificate of public convenience for the same Manila-Tarlac-Manila route. Could Bayan Bus Lines, Inc., invoke the “prior operator” rules against Pasok Transportation, Inc.? Why? ANSWER: No, Bayan Bus Lines, Inc. cannot invoke the prior operator rule. According to prior operator rule, the first licensee will be protected in his investment and will not be subjected to ruinous competition. The Public Service Commission will not issue a certificate of public convenience to a second operator if there is a first operator who is rendering sufficient, adequate and satisfactory service, and who in all things and respects is complying with the rules and regulation of the Commission. In the case at bar, the services of Bayan Bus Lines became seemingly inadequate despite its efforts of improving the same. Thus, prior operator rule cannot be invoked because Bayan Bus Lines, the first operator, ceases to render sufficient, adequate and satisfactory service. Therefore, prior operator rule cannot be invoked by Bayan Bus Lines. Page 184 of 191 Topic: Power of the Commission to revoke or suspend certificate (1993) 1.) Robert is a holder of a certificate of public convenience to operate a taxicab service in Manila and suburbs. One evening, one of his taxicab units was boarded by three robbers as they escaped after staging a hold-up. Because of said incident, the Land Transportation Franchising and Regulatory Board revoked the certificate of public convenience of Robert on the ground that said operator failed to render safe, proper and adequate service as required under Section 19(a) of the Public Service Act. a.) Was the revocation of the certificate of public convenience of Robert justified? Explain b.) When can the Commission (Board) exercise its power to suspend or revoke certificate of public convenience? 2.) Pepay, a holder of a certificate of public convenience failed to register the complete number of units required in her certificate. However, she tried to justify such failure by the accidents that allegedly befell her, claiming that she was so shocked and burdened by the successive accidents and misfortunes that she did not know what she was doing, she was confused and thrown off tangent momentarily, although she always had the money and financial ability to buy new trucks or repair the destroyed one. Are the reasons given by Pepay sufficient grounds to excuse her from completing her units? Explain ANSWER: 1a.) No, the revocation of the certificate of public convenience was not justified. The problem is similar to the case of Manzanal vs. Ausejo (GR No. L-31056, August 4, 1988), where the Court held that a single hold-up incident which does not clearly link petitioner‟s taxicab cannot be comprehended as an unsafe, inadequate and improper service. Applying the ruling of the Court in this case, Robert cannot be said to be operating an unsafe, inadequate and improper service absent any evidence linking the operation of his taxicab service to the hold-up incident. Page 185 of 191 Hence, the revocation of Robert‟s certificate of public convenience was not justified. 1b.) Under Section 19(a) of the Public Service Act, the Commission can suspend or revoke a certificate of public convenience when the operator fails to provide a service that is safe, proper or adequate, and refuses to render any service which can reasonably be demanded and furnished. 2.) No, the reasons given by Pepay are not sufficient to excuse her from completing her units. As provided in Section 16(n) of the Public Service Act, the Commission shall have the power to suspend or revoke any certificate issued under the provisions of this Act whenever the holder thereof has violated or willfully contumaciously refused to comply with any order, rule or regulation of the Commission or any provision of this Act. In this case, the failure of Pepay to register the complete number of units as required is sufficient to suspend or revoke her certificate. Hence, the reasons given by Pepay are not sufficient to excuse her from completing her units. Page 186 of 191 Topic: Public utilities (2000) WWW Communications Inc. is an e-commerce company whose present business activity is limited to providing its clients with all types of information technology hardware. It plans to re-focus its corporate direction of gradually converting itself into a full convergence organization. Towards this objective, the company has been aggressively acquiring telecommunications businesses and broadcast media enterprises, and consolidating their corporate structures. The ultimate plan is to have only two organizations: one to own the facilities of the combined businesses and to develop and produce content materials, and another to operate the facilities and provide mass media and commercial telecommunications services. WWW Communications will be the flagship entity which will own the facilities of the conglomerate and provide content to the other new corporation which, in turn, will operate those facilities and provide the services. WWW Communications seeks your professional advice on whether or not its reorganized business activity would be considered a public utility requiring a franchise or certificate or any other form of authorization from the government. What will be your advice? ANSWER: My advice would be that the reorganized business activity of WWW Communications Inc. would not be considered a public utility requiring a franchise or certificate or any other form of authorization from the government. Section 20 of the Public Service Act provides for a list of acts requiring approval by successor agencies of the Public Service Commission. Paragraph b of the aforesaid section provides, “to establish, construct, maintain, or operate new units or extend existing facilities or make any other addition to or general extension of the service.” Herein, the reorganized business activity of WWW Communications Inc. does not fall under any of the enumerations under section 20. Particularly, it does not fall squarely under par. B since WWW Communications Inc. merely owns the facilities, but does not operate them. Page 187 of 191 Topic: Regulation of rates (1977) On September 1, 1971, then Public Service Commission in BC Case No. 70-3496 made permanent and effective immediately the provisional increase of rates by PLDT previously so authorized on the ground, among others, that public interest would be served thereby. Pending appeal to the Supreme Court of BC Case No. 70-3496, PLDT filed on February 27, 1973 with the Board of Communications (successor to the Public Service Commission) another application for an across-the-board increase of 40% of its present authorized rates docketed as BC Case No. 73-011. On April 27, 1973, the Board of Communications issued an Order which provisionally authorized PLDT to charge a 35% across-the-board increase of its present authorized rates subject to the conditions stated therein. a.) In the case at bar, has the Board of Communications, as successor to the defunct Public Service Commission, the power to amend, modify or revoke rates to be charged by the PLDT? Explain. b.) May the order or decision of said Board on rates be stayed by a petition for certiorari in the Supreme Court? Why? ANSWER: a.) Yes, the Board of Commission has the power to amend, modify, or revoke rates charged by PLDT. As held by the Supreme Court, the power of the Board of Communications, as successor to the defunct Public Service Commission, to amend, modify or revoke or establish rates in lieu of those set forth in the final decision is affirmed in Section 16 (c) of the Public Service Act, as amended (PLDT vs. Medina, 20 SCRA 659), which rates shall immediately be operative (Sec. 33, Public Service Act as amended), provided a new case is filed therefore under separate docket in the Public Service Commission. Page 188 of 191 In the case at hand, applying the above-mentioned principles, the April 27 Order of the Board of Communications authorizing an across-the-board increase of 35%, notwithstanding the fact that PLDT applied for a 40% across-the-board, is valid because said board has the power to modify, among others, the rates charged by the PLDT pursuant to the Public Service Act as amended. Thus, said Board has the power to amend, modify, or revoke rates charged by PLDT. b.) No, such order cannot be stayed by a petition for certiorari in the Supreme Court. The order or decision of the Board for Public Service Commission and now the Board of Communications cannot be stayed by the institution of a petition for certiorari, or other special remedies in the Supreme Court, unless the Supreme Court shall so direct as provided under Section 37, Public Service Act, as amended; neither can it be stayed by an appeal (Section 4, Rule 44 of the Revised Rules of Court). (Gonzales vs. Public Service Commission, 61 SCRA 504). In the case at hand, applying the above-mentioned principle, a petition for certiorari will not stay the order of the Board of Communication dated April 27, 1973. It can only be stayed through the Supreme Court‟s express direction pursuant to Section 37 of the Public Service Act as amended. Thus, the order of the Board of Communication cannot be stayed by merely filing a petition for certiorari in the Supreme Court. Page 189 of 191 Topic: Regulation of rates (2011) Under the Public Service Act, an administrative agency has the power to approve provisionally the rates of public utilities without a hearing in case of urgent public needs. The exercise of this power is A. supervisory. B. absolute. C. discretionary. D. mandatory. ANSWER: C. discretionary. The Supreme Court ruled in a number of cases that an administrative agency may be empowered by law to approve provisionally, when demanded by urgent public need, rates of public utilities without a hearing. The reason is easily discerned from the fact that provisional rates are by their nature temporary and subject to adjustment in conformity with the definitive rates approved after final reading. Thus the Supreme Court sustained the provisional approval of increased rates by the Land Transportation Franchising and Regulatory Board and Toll Regulatory Board (Ceferino Padua, et al., v. Hon. Santiago Ranada, G.R. No. 141949, October 14, 2002) Page 190 of 191 YEAR ASSIGNMENTS PER STUDENT 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Almazar, Victor Emmanuel-2019; 1975 Angara, Patrick Alexis – 2018; 1976 Aquino, Jenica – 2017; 1976 Bongabong, Joshua – 2016; 1977 Camarao, Aeron -2014; 1977 Capuchino, Mafel – 2015; 1978 Clemente, Jellyn -2013; 1978 Crisostomo, Camille – 2012;1979 De Leon, Jea Belinda – 2011;1979 Dela Cruz, Alyssa – 2010; 1980 Dolor, Xylene – 2009;1980 Gamo, Norenz Jacob – 2008; 1981 Gomez, Donna Kris – 2007; 1981 Guerrero, Anna Charmaine – 2006; 1982 Hornilla, Ariadne Kirsten – 2005;1982 Icaro, Frederick – 2004;1983 Jimenez, Louise Ysabel – 2003; 1983 Mallari, Hazel Marie – 2002; 1984 Mamaril, Mariela Mae -2001; 1984 Mendiola, Glenn Mikko – 2000; 1985 Oliva, Pauline Antonette – 1999; 1985 Pimentel, Abbeylyn Erica – 1998; 1986 Roces, Suzanne – 1997; 1986 Salor, Jermile -1996; 1987 Senoran, Artlyn Gem – 1995; 1987 Tamaray, Paulinet Angela– 1994; 1988 Torres, Ronald Derick – 1993; 1988 Turrecha, Zennia – 1992: 1989 Villanueva, Christine Joy – 1991; 1990 Samaniego, Emil- 1991;1975 THE END Page 191 of 191

CommRev Aquino Bar Q & A (Transportation Law, 1975â 2019) [4F1920]

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