CASE TITLE: Fisher v. Yangco Steamship Co.

KEYWORD: Dynamite
PONENTE: Carson, J.
DOCTRINE: Common carriers in this jurisdiction cannot lawfully decline to accept a particular class of
goods for carriage to the prejudice of the traffic in these goods unless it appears that for some
sufficient reason the discrimination against the traffic in such goods is reasonable and necessary.
Grounds of the discrimination must be substantial ones.

FACTS: Plaintiff is a stockholder in the Yangco Steamship Company, owner of a large number of steam
vessels, duly licensed to engage in the coastwise trade of the Philippine Islands. That on or about June
10, 1912, the directors of the company adopted a resolution which was thereafter ratified and affirmed
by the shareholders of the company, expressly declaring and providing that the classes of
merchandise to be carried by the company in its business as a common carrier do not include
dynamite, powder, or other explosives.
ISSUE: Whether the refusal of the owners of a steam vessel duly licensed to engage in the coastwise
trade of the Philippine Islands and engaged in that trade as a common carrier, to accept for carriage
dynamite, powder, or other explosives from any and all shippers who may offer such explosives for
carriage or as to the suitableness of the vessel for the transportation of such explosives, or as to the
possibility that the refusal to accept such articles of commerce in a particular case may have the effect
of subjecting any person or locality or the traffic in such explosives to an undue, unreasonable, or
unnecessary prejudice or discrimination.
PETITIONERS CONTENTION: A common carrier in the Philippine Islands may decline to accept for
carriage any shipment of merchandise of a class which it expressly or impliedly declines to accept from
all shippers alike, as he contends the duty of a common carrier to carry for all who offer arises from
the public profession he has made, and is limited by it.
RESPONDENTS CONTENTION: Basically demanded and required the company the acceptance and
carriage of explosives --- SC was the one who explained the reason why.
RULING: The traffic in dynamite, gunpowder, and other explosives is vitally essential to the material
and general welfare of the people of these Islands. The refusal by a particular vessel, engaged as a
common carrier of merchandise in the coastwise trade of the Philippine Islands, to accept any or all of
the explosives for carriage would constitute a violation of the prohibitions against discriminations
penalized under the statute, unless it can be shown by affirmative evidence that there is so real and
substantial a danger of disaster necessarily involved in the carriage of any or all of these articles or
merchandise as to render such refusal a due or a necessary or a reasonable exercise of prudence and
discretion on the part of the shipowner. #PASCUA

CASE TITLE: MAERSK LINE vs.COURT OF APPEALS AND EFREN V. CASTILLO, doing business under the
name and style of Ethegal Laboratories
KEYWORD: Duties of Common Carriers
PONENTE:Bidin, J.
DOCTRINE:Saludo, Jr. v. Court of Appeals (207 SCRA 498 [1992]) this Court held: The oft-repeated rule
regarding a carrier's liability for delay is that in the absence of a special contract, a carrier is not an
insurer against delay in transportation of goods. When a common carrier undertakes to convey goods,
the law implies a contract that they shall be delivered at destination within a reasonable time, in the
absence, of any agreement as to the time of delivery. But where a carrier has made an express
contract to transport and deliver properly within a specified time, it is bound to fulfill its contract and is
liable for any delay, no matter from what cause it may have arisen.

FACTS: Petitioner Maersk Line is engaged in the transportation of goods by sea, doing business in the
Philippines through its general agent Compania General de Tabacos de Filipinas. Private respondent
Efren Castillo, on the other hand, is the proprietor of Ethegal Laboratories, a firm engaged in the
manutacture of pharmaceutical products. On November 12, 1976, private respondent ordered from Eli
Lilly. Inc. of Puerto Rico through its (Eli Lilly, Inc.'s) agent in the Philippines, Elanco Products, 600,000
empty gelatin capsules for the manufacture of his pharmaceutical products. The capsules were placed
in six (6) drums of 100,000 capsules each valued at US $1,668.71.
Through a Memorandum of Shipment (Exh. "B"; AC GR CV No.10340, Folder of Exhibits, pp. 5-6), the
shipper Eli Lilly, Inc. of Puerto Rico advised private respondent as consignee that the 600,000 empty
gelatin capsules in six (6) drums of 100,000 capsules each, were already shipped on board MV "Anders
Maerskline" under Voyage No. 7703 for shipment to the Philippines via Oakland, California. In said
Memorandum, shipper Eli Lilly, Inc. specified the date of arrival to be April 3, 1977.
For reasons unknown, said cargo of capsules were mishipped and diverted to Richmond, Virginia, USA
and then transported back Oakland, California. The goods finally arrived in the Philippines on June 10,
1977 or after two (2) months from the date specified in the memorandum. As a consequence, private
respondent as consignee refused to take delivery of the goods on account of its failure to arrive on
time.
ISSUE: Whether or not Maersk Line is liable for damages resulting from delay in the delivery of the
shipment in the absence in the bill of lading of a stipulation on the period of delivery.
PETITIONERS CONTENTION: Denying that it committed breach of contract, petitioner alleged in its
that answer that the subject shipment was transported in accordance with the provisions of the
covering bill of lading and that its liability under the law on transportation of good attaches only in
case of loss, destruction or deterioration of the goods as provided for in Article
1734 of Civil Code (Rollo, p. 16).
Defendant Eli Lilly, Inc., on the other hand, filed its answer with compulsory and cross-claim. In its
cross-claim, it alleged that the delay in the arrival of the the subject merchandise was due solely to the
gross negligence of petitioner Maersk Line.
RESPONDENTS CONTENTION: Private respondent alleging gross negligence and undue delay in the
delivery of the goods, filed an action before the court a quo for rescission of contract with damages
against petitioner.
RULING: TRIAL COURT: After trial held between respondent and petitioner, the court a quo rendered
judgment dated January 8, 1982 in favor of respondent Castillo, the dispositive portion of which reads:
IN VIEW OF THE FOREGOING, this Court believe (sic) and so hold (sic) that there was a breach in the
performance of their obligation by the defendant Maersk Line consisting of their negligence to ship the
6 drums of empty Gelatin Capsules which under their own memorandum shipment would arrive in the

Philippines on April 3, 1977 which under Art. 1170 of the New Civil Code, they stood liable for
damages.
APPELLATE COURT: On appeal, respondent court rendered its decision dated August 1, 1990
affirming with modifications the lower court's decision.
SUPREME COURT: We have carefully reviewed the decisions of respondent court and the trial court
and both of them show that, in finding petitioner liable for damages for the delay in the delivery of
goods, reliance was made on the rule that contracts of adhesion are void. Added to this, the lower
court stated that the exemption against liability for delay is against public policy and is thus, void.
Besides, private respondent's action is anchored on Article 1170 of the New Civil Code and not under
the law on Admiralty (AC-GR CV No. 10340, Rollo, p. 14).
In the case before us, we find that a delay in the delivery of the goods spanning a period of two (2)
months and seven (7) days falls was beyond the realm of reasonableness. Described as gelatin
capsules for use in pharmaceutical products, subject shipment was delivered to, and left in, the
possession and custody of petitioner-carrier for transport to Manila via Oakland, California. But through
petitioner's negligence was mishipped to Richmond, Virginia. Petitioner's insistence that it cannot be
held liable for the delay finds no merit. #QUINTOS
Case title: MAGELLAN MANUFACTURING MARKETING CORPORATION vs. COURT OF APPEALS, ORIENT
OVERSEAS CONTAINER LINES and F.E. ZUELLIG, INC
Keyword: anahaw
Ponente: J. Regalado
Doctrine: Unreasonable delay in the delivery of transported goods is sufficient ground for the
abandonment of goods as provided in the code of commerce is also applicable to marine
transportation.
Facts:
Magellan Manufacturers Marketing Corp. (MMMC) entered into a contract with Choju Co. of Yokohama,
Japan to export 136,000 anahaw fans for and in consideration of $23,220.00. Through its president,
James Cu, MMMC then contracted F.E. Zuellig, a shipping agent to ship the anahaw fans through Orient
Overseas Container Lines, Inc., (OOCL) specifying that he needed an on-board bill of lading and that
transhipment is not allowed under the letter of credit. appellant MMMC paid F.E. Zuellig the freight
charges and secured a copy of the bill of lading which was presented to Allied Bank However, when
appellant's president James Cu, went back to the bank later, he was informed that the payment was
refused by the buyer allegedly because there was no on-board bill of lading, and there was a
transhipment of goods. As a result of the refusal of the buyer to accept, upon appellant's request, the
anahaw fans were shipped back to Manila by appellees, for which the latter demanded from appellant
payment of P246,043.43. Appellant abandoned the whole cargo and asked appellees for damages.
Issue:
WON MMMMC should be liable for P52k when it exercised its option of Abandonment.
Petitioners contention:
Private respondents be ordered to pay whatever petitioner was not able to earn from Choju Co., Ltd.,
amounting to P1 74,150.00 and other damages like attorneys fees since private respondents are to
blame for the refusal of Choju Co., Ltd. to accept the Anahaw fans
Respondents contention:
It alleged that the bill of lading clearly shows that there will be a transhipment and that petitioner was
well aware that MV (Pacific) Despatcher was only up to Hongkong where the subject cargo will be
transferred to another vessel for Japan. Private respondents also filed a counterclaim praying that
petitioner be ordered to pay freight charges from Japan to Manila and the demurrages in Japan and
Manila amounting to P298,150.93
TC:
MMMMC cannot seek damages as it agreed to a transshipment of the goods and is liable for
demurrages amounting to P298k incurred in Japan and Manila.
CA:
MMMMC cannot seek damages as it agreed to a transshipment of the goods and is liable for

demurrages amounting to P52k incurred in Japan. While the goods arrived in Manila in October 1980,
appellant was notified of said arrival only in March 1981. No explanation was given for the delay in
notifying appellant.
SC
No. Private respondents belatedly informed petitioner of the arrival of its goods in Manila and that if it
wished to take delivery of the cargo it would have to pay P52k. Private respondents unequivocally
offered petitioner the option of paying the shipping and demurrage charges in order to take delivery of
the goods or of abandoning the same so that private respondents could sell them at public auction and
thereafter apply the proceeds in payment of the shipping and other charges. There is no dispute that
private respondents expressly and on their own volition granted petitioner an option with respect to
the satisfaction of freightage and demurrage charges. Having given such option, especially since it was
accepted by petitioner, private respondents are estopped from reneging thereon. Petitioner, on its
part, was well within its right to exercise said option. Private respondents, in giving the option, and
petitioner, in exercising that option, are concluded by their respective actions. To allow either of them
to unilaterally back out on the offer and on the exercise of the option would be to countenance abuse
of rights as an order of the day, doing violence to the long entrenched principle of mutuality of
contracts.By analogy, this can also apply to maritime transportation. Further, with much more reason
can petitioner in the instant case properly abandon the goods, not only because of the unreasonable
delay in its delivery but because of the option which was categorically granted to and exercised by it
as a means of settling its liability for the cost and expenses of reshipment. And, said choice having
been duly communicated, the same is binding upon the parties on legal and equitable considerations
of estoppel.
CASE TITLE: Trans-Asia Shipping Lines vs. CA
KEYWORD: Delayed Attorney
PONENTE: Justice Davide Jr.
DOCTRINE: 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.
FACTS: Plaintiff, Atty. Renato Arroyo, a public attorney, bought a ticket from defendant, a corporation
engaged in inter-island shipping, for the voyage of M/V Asia Thailand vessel to Cagayan de Oro City
from Cebu City on November 12, 1991.
At around 5:30 in the evening of November 12, 1991, plaintiff boarded the M/V Asia Thailand vessel. At
that instance, plaintiff noticed that some repair works were being undertaken on the engine of the
vessel. The vessel departed at around 11:00 in the evening with only one (1) engine running.
After an hour of slow voyage, the vessel stopped near Kawit Island and dropped its anchor thereat.
After half an hour of stillness, some passengers demanded that they should be allowed to return to
Cebu City for they were no longer willing to continue their voyage to Cagayan de Oro City. The captain
acceded to their request and thus the vessel headed back to Cebu City.
At Cebu City, plaintiff together with the other passengers who requested to be brought back to Cebu
City, were allowed to disembark. Thereafter, the vessel proceeded to Cagayan de Oro City. Plaintiff, the
next day, boarded the M/V Asia Japan for its voyage to Cagayan de Oro City, likewise a vessel of
defendant.
ISSUE: Whether or not defendant is guilty of fraud delay and negligence?
PETITIONERS CONTENTION: plaintiff-appellant should not be faulted why he chose to disembark
from the vessel with the other passengers when it returned back to Cebu City.
RESPONDENTS CONTENTION: the private respondent offered no evidence to prove that his contract
of carriage with the petitioner provided for liability in case of delay in departure, nor that a designation
of the time of departure was the controlling motive for the establishment of the contract.
RULING:

TRIAL COURT: DISMISSED. Defendant did not hide the fact that the cylinder head cracked. Plaintiff
even saw during its repair. If he had doubts as to the vessels capacity to sail, he had time yet to take
another boat. The ticket could be returned to defendant and corresponding cash [would] be returned to
him.Neither could negligence, bad faith or malice on the part of defendant be inferred from the
evidence of the parties. When the boat arrived at [the] Port of Cebu after it returned from Kawit Island,
there was an announcement that passengers who would like to disembark were given ten (10) minutes
only to do so. By this announcement, it could be inferred that the boat will proceed to Cagayan de Oro
City. If plaintiff entertained doubts, he should have asked a member of the crew of the boat or better
still, the captain of the boat.
APPELATE COURT: REVERSED.
Under Article 1733 of the Civil Code, the petitioner was bound to observe extraordinary diligence in
ensuring the safety of the private respondent. That meant that the petitioner was, pursuant to Article
1755 of the said Code, bound to carry the private respondent safely as far as human care and foresight
could provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances.
Award of damages for moral, exemplary, attorneys fee and cost of suit was given. It did not, however,
allow the grant of damages for the delay in the performance of the petitioners obligation as the
requirement of demand set forth in Article 1169 of the Civil Code had not been met by the private
respondent. Besides, it found that the private respondent offered no evidence to prove that his
contract of carriage with the petitioner provided for liability in case of delay in departure, nor that a
designation of the time of departure was the controlling motive for the establishment of the contract.
Hence the appeal for actual or compensatory damages.
SUPREME COURT:
In his complaint, the private respondent claims actual or compensatory, moral, and exemplary
damages.Actual or compensatory damages represent the adequate compensation for pecuniary loss
suffered and for profits the obligee failed to obtain.
The Court of Appeals did not grant the private respondent actual or compensatory damages, reasoning
that no delay was incurred since there was no demand, as required by Article 1169 of the Civil Code.
This article, however, finds no application in this case because, as found by the respondent Court,
there was in fact no delay in the commencement of the contracted voyage. If any delay was incurred,
it was after the commencement of such voyage, more specifically, when the voyage was subsequently
interrupted when the vessel had to stop near Kawit Island after the only functioning engine conked out.
For the private respondent, such would be the loss of income if unable to report to his office on the day
he was supposed to arrive were it not for the delay. This, however, assumes that he stayed on the
vessel and was with it when it thereafter resumed its voyage; but he did not. As he and some
passengers resolved not to complete the voyage, the vessel had to return to its port of origin and allow
them to disembark. The private respondent then took the petitioners other vessel the following day,
using the ticket he had purchased for the previous days voyage.
Any further delay then in the private respondents arrival at the port of destination was caused by his
decision to disembark. Had he remained on the first vessel, he would have reached his destination at
noon of 13 November 1991, thus been able to report to his office in the afternoon. He, therefore, would
have lost only the salary for half of a day. But actual or compensatory damages must be proved,[30]
which the private respondent failed to do. There is no convincing evidence that he did not receive his
salary for 13 November 1991 nor that his absence was not excused. #SANTOS,N.

CASE TITLE: Belgian Overseas Chartering vs. Philippine First Insurance CO.
KEYWORD: PRESUMPTION OF NEGLIGENCE; CARRIAGE OF GOODS
DOCTRINE: Mere proof of delivery of the goods in good order to a common carrier and of their arrival
in bad order at their destination constitutes a prima facie case of fault or negligence against the
carrier.

FACTS: CMC Trading A.G shipped on board the M/V Anangel Sky at Hamburg, Germany, 242 coils of
various Prime Cold Steel sheets for transportation to Manila consigned to the Philippine Steel Trading
Corp. The vessel arrived at the port of Manila and. Within the subsequent days, discharged the said
cargo; Four (4) coils are said to be in bad order BO tally sheet #154974. Finding the four (4) coils in
their damaged state to be unfit for the intended purpose, the consignee Philippine Steel trading
Corporation declared the same as total loss. Despite receipt of formal demand, defendants-appellees
refused to submit to the consignees claim. Consequently, plaintiff paid php503,086.50 and was
subrogated to the latters rights and causes of action against defendants.
Subsequently, plaintiff instituted this complaint for recovery of the amount paid by them, to the
consignee as insured. Impugning the propriety of the suit exercised against due diligence and foresight
required by law to prevent any damage/loss to said shipment, and that their liability, if there be any,
should not exceed the limitations of liability provided for in the bill of lading and other pertinent laws.
ISSUE: Whether or not petitioners have overcome the presumption of negligence of a common carrier
RULING:

TRIAL COURT: The RTC dismissed the complaint because respondent had failed to prove its claims
with the quantum of proof required by law.
COURT OF APPEALS: Reversed. CA ruled that petitioners are liable for the loss or damage of the
goods shipped, because they had failed to overcome the presumption of negligence imposed on
common carriers.
SUPREME COURT: No. Well-settled is the rule that common carriers from the nature of their business
and for reasons of public policy, are bound to observe extraordinary diligence and vigilance with
respect to the safety of the goods and the passengers they transport. This strict requirement is
justified by the fact that, without a hand or a voice in the preparation of such contract, the riding public
enters into a contract of transportation with common carriers. Owing to this high degree of diligence
required of them, common carrier, as a general rule, are presumed to have been at fault or negligent if
the goods they transported deteriorated or got lost or destroyed.
In the instant case, petitioners failed to prove that they observed extraordinary diligence and
precaution which the law requires a common carrier to know and to follow to avoid damage to or
destruction of the goods entrusted to it for safe carriage and delivery. #SUBIJANO
a. As stated in the bill of lading, petitioners received the subject shipment in good order and condition
in Hamburg, Germany.
b. Prior to the unloading of the cargo, an inspection report prepared and signed by the representatives
of both parties showed the steel bands broken, the metal envelopes rust-stained and heavily buckled,
and the contents thereof exposed and rusty.
c. Bad Order tally sheet number 154979 issued by Jardine Davies transport Services, Inc (the other
petitioner), stated that the four (4) coils were in bad order and condition. Normally, a request for bad
order survey is made in case there is an apparent or a presumed loss or damage.
d. The certificate of Analysis stated that, based on the sample submitted and tested, the steel sheets
found in bad order were wet with fresh water.
e. Petitioners in a letter addressed to the Philippine Steel Coating Corporation and dated October 12,
1990. Admitted that they were aware of the condition of the four coils found in bad order and
condition.
CASE TITLE:TABACALERA INSURANCE CO. vs. NORTH FRONT SHIPPING SERVICES, INC
KEYWORD:SACKSOF CORN GRAINS
PONENTE:BELLOSILLO, J.:
DOCTRINE: Common carrier is presumed negligent in case of loss, destruction, or deterioration of
goods
FACTS: Sacks of corn grains were loaded on board North Front 77, vessel owned ny North Fronth
Shipping and was consigned to Republic Flour Mills Corp.It was insured to several insurance
companies. It turned out that there was shortage of the cargoes and the remaining merchandise was
already moldy, rancid and deteriorating. The insurance companies paid the consignee and later
claimed damages against respondent by way of subrogation.
ISSUE: Whether or not respondent exercised extraordinary diligence in transporting the sacks of corns.
PETITIONERS CONTENTION: The loss was exclusively attributable to the fault and negligence of the
carrier. The Marine Cargo Adjusters hired by the insurance companies conducted a survey and found
cracks in the bodega of the barge and heavy concentration of molds on the tarpaulins and wooden

boards. They did not notice any seals in the hatches. The tarpaulins were not brand new as there were
patches on them. They also discovered that the bulkhead of the barge was rusty.
RESPONDENTS CONTENTION: North Front Shipping Services, Inc., averred in refutation that it could
not be made culpable for the loss and deterioration of the cargo as it was never negligent. Captain
Solomon Villanueva, master of the vessel, reiterated that the barge was inspected prior to the actual
loading and was found adequate and seaworthy. In addition, they were issued a permit to sail by the
Coast Guard. The tarpaulins were doubled and brand new and the hatches were properly sealed. They
did not encounter big waves hence it was not possible for water to seep in. He further averred that the
corn grains were farm wet and not properly dried when loaded.
RULING:
TRIAL COURT: In favor of respondent.The contract entered into between North Front Shipping
Services, Inc., and Republic Flour Mills Corporation was a charter-party agreement. As such, only
ordinary diligence in the care of goods was required of North Front Shipping Services, Inc.
COURT OF APPEALS: In favor of respondent. As a common carrier required to observe a higher
degree of diligence North Front 777 satisfactorily complied with all the requirements
SUPREME COURT: NO. Notwithstanding the charter agreement, respondent remains a common
carrier hence bound to observe extraordinary diligence in the vigilance of the goods it tranports.When
goods placed in its care are lost or damaged, the carrier is presumed to have been at fault or to have
acted negligently. North Front Shipping Services, Inc., therefore has the burden of proving that it
observed extraordinary diligence in order to avoid responsibility for the lost cargo. In this case the
proofs presented by North Front Shipping Services, Inc., were insufficient to rebut the prima facie
presumption of private respondent's negligence.
It is not denied by the insurance companies that the vessel was indeed inspected before actual loading
and that North Front 777 was issued a Permit to Sail. They proved the fact of shipment and its
consequent loss or damage while in the actual possession of the carrier. Notably, the carrier failed to
volunteer any explanation why there was spoilage and how it occurred. On the other hand, it was
shown during the trial that the vessel had rusty bulkheads and the wooden boards and tarpaulins bore
heavy concentration of molds. The tarpaulins used were not new, contrary to the claim of North Front
Shipping Services, Inc., as there were already several patches on them, hence, making it highly
probable for water to enter. Nonetheless, Republic Flour Mills is found guilty of contributory negligence
because while it was seasonably informed about the arrival of goods it did not immediately start the
unloading hence it should share at least 40% of the loss. #TA-A

CASE TITLE: FGU INSURANCE CORPORATION VS. G.P. SARMIENTO TRUCKING CORPORATION
KEYWORD: refrigerators, truck
PONENTE: VITUG, J.
DOCTRINE: Res ipsa loquitur (the thing speaks for itself; one is presumed to be negligent if he/she/it
had exclusive control of whatever caused the injury even though there is no specific evidence of an act
of negligence, and without negligence the accident would not have happened) generally finds
relevance whether or not a contractual relationship exists between the plaintiff and the defendant, for
the inference of negligence arises from the circumstances and nature of the occurrence and not from
the nature of the relation of the parties.

FACTS:G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver 30 units of Condura S.D. white
refrigerators aboard one of its Isuzu trucks, driven by Lambert Eroles from the plant site of Concepcion
Industries, Inc. In Alabang to the Central Luzon Appliances in Dagupan City. The truck collided with an
unidentified truck along McArthur highway in Bamban, Tarlac, causing it to fall into a deep canal and
resulting in damage to the cargoes. As insurer, FGU Insurance Corporation (FGU) paid to Concepcion
Industries , Inc. the value of the cargoes, and sought reimbursement from GPS. When GPS failed to
heed the claim, FGU filed a complaint for damages and breach of contract of carriage against GPS and
Lambert Eroles.
ISSUE: Whether or not GPS, either as a common carrier or a private carrier, may be presumed to have
been negligent when the goods it undertook to transport safely were subsequently damaged while in
its protective custody and possession.
PETITIONERS CONTENTION: GPS and Lambert Eroles are liable for damages. FGU only presented
evidence to establish the extent of the damage and the amount to be paid.
RESPONDENTS CONTENTION: GPS was the exclusive hauler only of Concepcion Industries, Inc., and
it was not engaged in business as a common carrier. GPS also claimed that the cause of damage was
purely accidental.
RULING:
TRIAL COURT: DENIED FGUs complaint for damages. FGU did not present any evidence to prove that
GPS is a common carrier. Therfore, the application of the law on common carriers is not warranted and
the presumption of fault or negligence in case of loss, damage or deterioration of goods during
transport is not availing. Law on obligations and contracts governs, so negligence is not presumed.
(Trial court granted GPS motion to dismiss.)
APPELLATE COURT:AFFIRMED the trial courts ruling in favor of GPS. Before there can be presumption
of negligence, the appellant must first prove that appellee is a common carrier. GPS is a private carrier.
SUPREME COURT:AFFIRMED the ruling of the RTC and the CA only insofar as Lambert Eroles is
concerned, but REVERSED as regards GPS. GPS was ordered to reimburse FGU.
GPS cannot be considered a common carrier as it is an exclusive contractor and hauler of Concepcion
Industries, Inc., but still, it cannot escape liability. GPS recognizes the existence of a contract of
carriage between it and Concepcion Industries, Inc. and admits that the cargoes were lost while in its
custody. In this case, failure of compliance with the obligation gives rise to a presumption of lack of
care and corresponding liability on the part of the contractual obligor.
In culpa contractual, the mere proof of the existence of the contract & the failure of its compliance
justify, prima facie, a corresponding right of relief. The law will not permit a party to be set free from
liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor
thereof.
Meanwhile, Lambert Eroles, not being a party to the contract of carriage between Concepcion
Industries, Inc. and GPS, and without concrete proof of negligence, may not be held liable. #TAN

CASE TITLE:Vda. deAbeto vs. Phil. Air Lines, Incorporated, 115 SCRA 489(1982)
KEYWORD: plane crash
PONENTE: RELOVA, J..
DOCTRINE: By the contract of carriage, the carrier assumes the express obligation to transport the
passenger to his destination safely and to observe extraordinary diligence with a due regard for all the
circumstances, and any injury that might be suffered by the passenger is right away attributable to the
fault or negligence of the carrier.

SHORT FACTS: Judge QuiricoAbeto, with the necessary tickets, boarded the Philippine Air Lines' PIC133 plane at the Mandurriao Airport, Iloilo City for Manila. After three weeks, it was ascertained that
the plane crashed at Mt. Baco, Province of Mindoro. Plaintiff-appellee ConradaVda.deAbeto was
appointed administratrix of the estate of Judge Abeto.
ISSUE: whether or not the defendant is liable for violation of its contract of carriage (YES)
RESPONDENTS CONTENTION: Defendant-appellant tried to prove that the plane crash at Mt. Baco
was beyond the control of the pilot. The plane at the time of the crash was airworthy for the purpose of
conveying passengers across the country as shown by the certificate of airworthiness issued by the
Civil Aeronautics Administration (CAA). There was navigational error but no negligence or malfeasance
on the part of the pilot. The plane had undergone 1,822 pre- flight checks, 364 thorough checks, 957
terminating checks and 501 after maintenance checks. Further, deviation from its prescribed route was
due to the bad weather conditions between Mt. Baco and Romblon and strong winds which caused the
plane to drift to Mt. Baco. Appellant argues that the crash was a fortuitous event and, therefore,
defendant-appellant cannot be held liable under the provisions of Article 1174 of the New Civil Code.
Appellant tried to prove that it had exercised all the cares, skill and diligence required by law on that
particular flight in question.
RULING:
CFI OF ILOILO: the defendant-appellant did not exercise extraordinary diligence or prudence as far as
human foresight can provide but on the contrary showed negligence and indifference for the safety of
the passengers that it was bound to transport.
SUPREME COURT:
The prescribed airway of plane PI-C133 that afternoon of November 23, 1960, with Capt. de Mesa, as
the pilot, was Iloilo-Romblon-Manila, denominated as airway "Amber l," and the prescribed elevation of
the flight was 6,000 ft. The fact is, the plane did not take the designated route because it was some 30
miles to the west when it crashed at Mt. Baco. According to defendant's witness, Ramon A. Pedroza,
Administrative Assistant of the Philippine Air Lines, Inc., this tragic crash would have not happened had
the pilot continued on the route indicated. Assistant Director Cesar Mijares of the Civil Aeronautics
Administration testified that the pilot of said plane was "off course". It is clear that the pilot did not
follow the designated route for his flight between Romblon and Manila. The weather was clear and he
was supposed to cross airway "Amber I" over Romblon; instead, he made a straight flight to Manila in
violation of air traffic rules.
At any rate, in the absence of a satisfactory explanation by appellant as to how the accident occurred,
the presumption is, it is at fault. In an action based on a contract of carriage, the court need not make
an express finding of fault or negligence on the part of the carrier in order to hold it responsible to pay

10

the damages sought for by the passenger. By the contract of carriage, the carrier assumes the express
obligation to transport the passenger to his destination safely and to observe extraordinary diligence
with a due regard for all the circumstances, and any injury that might be suffered by the passenger is
right away attributable to the fault or negligence of the carrier (Art. 1756, New Civil Code). This is an
exception to the general rule that negligence must be proved. #TENORIO

CASE TITLE: BATANGAS LAGUNA TAYABAS BUS COMPANY & ARMANDO PON, petitioners, vs.
INTERMEDIA TE APPELLA TE COURT, THE HEIRS OF P AZ VDA. DE PAMFILO, THE HEIRS OF NORMA NERI,
and BAYLON SALES and NENA VDA. DE ROSALES, respondents.
KEYWORD: Overtaking of a bus on an ascending curved highway ; Needs Extraordinary Diligence
PONENTE: PARAS, J.
DOCTRINE: A driver of a motor vehicle is presumed negligent if he was violating any traffic regulation
at the time of the mishap, unless there is proof to the contrary. The common carrier's liability for death
or injury to its passengers is based on its contractual obligation to carry its passengers safely to their
destination; Utmost diligence of very cautious persons is required of them.

SHORT FACTS: On August 11, 1978, as BLTB Bus No. 1046 was negotiating the bend of the highway
(traversing Barangay Isabong, Tayabas, Quezon), it tried to overtake a Ford Fiera car just as Bus No.
404 of Superlines (driven by Ruben Dasco) was coming from the opposite direction. Seeing thus,
Armando Pon (driver of the BLTB Bus) made a belated attempt to slacken the speed of his bus and
tried to return to his proper lane. It was an unsuccessful try as the two (2) buses collided with each
other. Collision resulted in the death of Aniceto Rosales, Francisco Pamfilo and Romeo Neri and in
several injuries to Nena Rosales (wife of Anecito) and Baylon Sales, all passengers of the BLTB Bus.
NenaVda. de Rosales and Baylon Sales and the surviving heirs of the deceased passengers instituted
separate cases in the Court of First Instance of Marinduque against BLTB and Superlines together with
their respective drivers praying for damages, attorney's fees and litigation expenses plus costs.
Criminal cases against the drivers of the two buses were filed in the Court of First Instance of Quezon.
ISSUE: Whether or not the action of the respondents is based on culpa contractual.
PETITIONERS CONTENTION:
1. Defendants BLTB and Superlines, together with their drivers Pon and Dasco, denied liability by
claiming that they exercised due care and diligence and shifted the fault, against each other. They all
interposed counterclaims against the plaintiffs and cross claims against each other.
2. Petitioners also contend that "a common carrier is not an absolute insurer against all risks of travel
and are not liable for acts or accidents which cannot
be foreseen or inevitable and that responsibility of a common carrier for the safety of its passenger
prescribed in Articles 1733 and 1755 of the New Civil Code is not susceptible of a precise and definite
formulation."

11

RESPONDENTS CONTENTION: There was a breach of contract resulting to three deaths and injury
to two passengers.
RULING:
TRIAL COURT: The lower court exonerated defendants Superlines and its driver Dasco from liability
and attributed sole responsibility to defendants BLTB and its driver Pon, and ordered them jointly and
severally to pay damages to the plaintiffs.
APPELLATE COURT:Defendants BLTB and Armando Pon appealed from the decision of the lower court
to respondent appellate court which affirmed with modification the judgment of the lower court as
earlier stated.
SUPREME COURT:
1. The common carrier's liability for the death of or injuries to its passengers is based on its contractual
obligation to carry its passengers safely to their destination. That obligation is so serious that the Civil
Code requires "utmost diligence of very cautious person (Article 1755, Civil Code). They are presumed
to have been at fault or to have acted negligently unless they prove that they have observed
extraordinary diligence" (Article 1756, Civil Code). It must follow that both the driver and the owner
must answer for injuries or death to its passengers. "The liability of BLTB is also solidarily with its driver
(Viluan v. Court of Appeals, 16 SCRA 742, 747) even though the liability of the driver springs from quasi
delict while that of the bus company from contract." pp. 17-19, Rollo)
2. For the defense of force majeure or act of God to prosper the accident must be due to natural
causes and exclusively without human intervention. #TORRES
CASE TITLE:Saludovs Court of Appeals
KEYWORD: corpse flight, billl of lading
PONENTE: REGALADO, J.:
DOCTRINE: there is delivery to the carrier when the goods are ready for and have been placed in the
exclusive possession, custody and control of the carrier for the purpose of their immediate
transportation and the carrier has accepted them. Where such a delivery has thus been accepted by
the carrier, the liability of the common carrier commences eoinstanti.

SHORT FACTS: The petitioners mother, CrispinaGaldoSaludo, died in Chicago, Illinois. Pomierski and
Son Funeral Home of Chicago (Pomierski), after embalming and securing a permit for the bodys
disposition, and making the necessary preparations and arrangements for the shipment of the remains
from Chicago to the Philippines, had booked the shipment with PAL thru the carriers agent Air Care
International, with Pomierski F.H. as the shipper and Maria Saludo as the consignee. The requested
routing was from Chicago to San Francisco on board Trans World Airlines (TWA) Flight 131 on October
27, 1976, and from San Francisco to Manila on board PAL Flight No. 107 of the same date, and from
Manila to Cebu on board PAL Flight 149 of October 29, 1976. To confirm the said booking, PAL Airway
Bill No. 079-ORD-01180454 was issued on Oct 26, 1976. On the same day, Pomierski brought the
remains to C.M.A.S (Continental Mortuary Air Services) at the airport which made the necessary
arrangements for the flight, transfer, etc. of the body. Maria SalvacionSaludo and SaturninoSaludo
(petitioners) took the TWA flight 131, however, upon arrival at San Francisco, it was found out that the
body was not in the said flight, instead it is in a plane to Mexico City, as there were two bodies at the
terminal, and somehow were switched; It also turned out that TWA, under the same airway bill, had
carried the shipment in a flight earlier than TWA Flight 131. Upon arriving at mexico the body was sent
to San Francisco and arrived on October 28, 1976, and was subsequently sent to the Philippines,
arriving on Oct 30, 1976, a day after its expected arrival. Petitioners filed a damage suit against both
TWA and PAL for the delay.

12

ISSUE: Whether or not the delay in the delivery of the remains of petitioners mother was due to the
fault of respondent airline companies
PETITIONERS CONTENTION: Relying on the jurisprudencial dictum that a bill of lading is a prima
facie evidence of the receipt of goods by the carrier, with an air way bill a bill of lading, Petitioners
allege that private respondents upon receipt of the remains (as evidenced by the issuance of PAL Air
Waybill No. 079- 01180454, dated Oct 26, 1967, by Air Care International as carriers agent) a delivery
was made and therefore are charged with the responsibility to exercise extraordinary diligence, and
their failure to exercise such resulted in the switching and/or misdelivery of the remains of
CrispinaSaludo to Mexico causing gross delay in its shipment to the Philippines, and consequently,
damages to petitioners
RESPONDENTS CONTENTION:
PAL: They are not liable for the switching on Oct 27, 1976 as it was not until October 28, 1976, that
delivery to them was made.
TWA: (not relevant to the topic) they followed the Airway bill despite of the earlier flight and such was
not the cause of the misdelivery but
RULING: Not Liable
TRIAL COURT(Court of First Instance, Branch III, Leyte) : denied, lack of evidence to prove liability
APPELLATE COURT:denied, affirmed the decision of the lower court in toto; denied petitioners
motion for reconsideration for lack of merit.
SUPREME COURT
A bill of lading is a written acknowledgment of the receipt of the goods and an agreement to transport
and deliver them at a specified place to a person named or on his order. Such instrument may be
called a shipping receipt, forwarders receipt and receipt for transportation. Under the Tariff and
Customs Code, a bill of lading includes airway bills of lading. The two-fold character of a bill of lading is
all too familiar; 1)it is a receipt as to the quantity and description of the goods shipped and 2) a
contract to transport the goods to the consignee or other person therein designated, on the terms
specified in such instrument. Ordinarily, a receipt is not essential to a complete delivery of goods to
the carrier for transportation but, when issued, is competent and prima facie, but not conclusive,
evidence of delivery to the carrier. It may be explained, varied or contradicted by parol or other
evidence. (a) bill of lading may contain constituent elements of estoppel and thus become something
more than a contract between the shipper and the carrier. x xx (However), as between the shipper and
the carrier, when no goods have been delivered for shipment no recitals in the bill can estop the carrier
from showing the true facts x xx. Between the consignor of goods and a receiving carrier, recitals in a
bill of lading as to the goods shipped raise only a rebuttable presumption that such goods were
delivered for shipment. As between the consignor and a receiving carrier, the fact must outweigh the
recital.
Explicit is the rule under Article 1736 of the Civil Code that the extraordinary responsibility of the
common carrier begins from the time the goods are delivered to the carrier. This responsibility remains
in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper
or owner exercises the right of stoppage in transitu, and terminates only after the lapse of a
reasonable time for the acceptance of the goods by the consignee or such other person entitled to
receive them. And, there is delivery to the carrier when the goods are ready for and have been placed
in the exclusive possession, custody and control of the carrier for the purpose of their immediate
transportation and the carrier has accepted them. Where such a delivery has thus been accepted by
the carrier, the liability of the common carrier commences eoinstanti. Hence, while we agree with
petitioners that the extraordinary diligence statutorily required to be observed by the carrier
instantaneously commences upon delivery of the goods thereto, for such duty to commence there
must in fact have been delivery of the cargo subject of the contract of carriage. Only when such fact of

13

delivery has been unequivocally established can the liability for loss, destruction or deterioration of
goods in the custody of the carrier, absent the excepting causes under Article 1734, attach and the
presumption of fault of the carrier under Article 1735 be invoked.
The facts in the case at bar belie the averment that there was delivery of the cargo to the carrier on
October 26, 1976. PAL Airway Bill No. 079-01180454 was issued, not as evidence of receipt of delivery
of the cargo on October 26, 1976, but merely as a confirmation of the booking thus made for the San
Francisco-Manila flight scheduled on October 27, 1976.It was not until October 28, 1976 that PAL
received physical delivery of the body at San Francisco, as duly evidenced by the Interline Freight
Transfer Manifest of the American Airline Freight System. The body intended to be shipped as agreed
upon was really placed in the possession and control of PAL on October 28, 1976 and it was from that
date that private respondents became responsible for the agreed cargo under their undertakings in
PAL Airway Bill No. 079-01180454.
*The entire fault or negligence being exclusively with C.M.A.S. #YOROBE

CASE TITLE:Benito Macam vs. Court of Appeals

KEYWORD: Bill of Lading Delivery of goods to holder of BOL or to the person who has a right to
receive them.
DOCTRINE: TRANSPORTATION; COMMON CARRIERS; DURATION OF EXTRAORDINARY RESPONSIBILITY
-Article 1736 of the Civil Code provides -Art. 1736. The extraordinary responsibility of the common
carriers 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.

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FACTS: Petitioner is doing business as exporter of fresh fruits. In one transaction, respondent Wallem
(carrier) delivered the shipment (3,500 boxes of watermelon covered by Bill of Lading No. HKG 99012,
and 1,611 boxes of fresh mangoes covered by Bill of Lading No.HKG 99013.)directly to Great Prospect
Company (GPC) - the notify party, and not to Pakistan Bank, which is the consignee bank and without
the required bill of lading having been surrendered. Subsequently, GPC failed to pay Pakistan Bank
such that the latter, still in possession of the original bills of lading, refused to pay petitioner through,
Solidbank. Since Solidbank already prepaid petitioner the value of the shipment, it demanded payment
from respondent Wallem but was refused. Petitioner was thus constrained to return the amount
involved to Solidbank, then demanded payment from Wallem in writing, but to no avail.
Wallem submitted in evidence a telex dated 5 April 1989 as basis for delivering the cargoes to
GPC without the bills of lading and bank guarantee. The telex instructed delivery of various shipments
to the respective consignees without need of presenting the bill of lading and bank guarantee per the
respective shippers request since for prepaid shiptofrt charges already fully paid. Macam, however,
argued that, assuming there was such an instruction, the consignee referred to was Pakistan Bank and
not GPC.

ISSUE: Whether the respondents liable to the petitioner for releasing the goods to GPC without the
bills of lading or bank guarantee?
PETITIONERS CONTENTION: Petitioner sought collection of the value of the shipment of
P546,033.42 from respondents before the Regional Trial Court of Manila, based on delivery of the
shipment to GPC without presentation of the bills of lading and bank guarantee.
RESPONDENTS CONTENTION: Respondents contended that the shipment was delivered to GPC
without presentation of the bills of lading and bank guarantee per request of petitioner himself
because the shipment consisted of perishable goods. Respondents explained that it is a standard
maritime practice, when immediate delivery is of the essence, for the shipper to request or instruct the
carrier to deliver the goods to the buyer upon arrival at the port of destination without requiring
presentation of the bill of lading as that usually takes time. As proof thereof, respondents apprised the
trial court that for the duration of their two-year business relationship with petitioner concerning
similar shipments to GPC deliveries were effected without presentation of the bills of lading.

RULING:
TRIAL COURT: Ordered respondents to pay, jointly and severally, the value of the shipment plus
attorneys fees in favour of petitioner Macam.
COURT OF APPEALS: Ruling otherwise, the CA set aside the decision of the trial court and dismissed
the complaint together with the counterclaims. It alleged that as established by previous similar
transactions between the parties, shipped cargoes were sometimes actually delivered not to the
consignee but to notify party GPC without need of the bills of lading or bank guarantee. Moreover, the
bills of lading were viewed by respondent court to have been properly superseded by the telex
instruction to effect the delivery to GPC.
SUPREME COURT ruling in favour of the Respondents, since the subject shipment consisted of
perishable goods and Solidbank pre-paid the full amount of the value thereof, it is not hard to believe
the claim of respondent Wallem that petitioner indeed requested the release of the goods to GPC

15

without presentation of the bills of lading and bank guarantee. Respondent Court analyzed the telex of
petitioner in its entirety and correctly arrived at the conclusion that the
Consignee referred to was not Pakistan Bank but GPC. Petitioner also failed to substantiate his claim
that he returned to Solidbank the full amount of the value of the cargoes. In view of petitioners utter
failure to establish the liability of respondents over the cargoes, no reversible error was committed by
respondent court in ruling against him. The petition was denied.

The Court emphasizes that the extraordinary responsibility of the common carriers lasts until actual or
constructive delivery of the cargoes to the consignee or to the person who has a right to receive them.
Pakistan Bank was indicated in the bills of lading as consignee whereas Great Prospect Company (GPC)
was the notify party. However, in the export invoices GPC was clearly named as buyer/importer.
Petitioner also referred to GPC as such in his demand letter to respondent Wallem and in his complaint
before the trial court. This premise draws the Court to conclude that the delivery of the cargoes to GPC
as buyer/importer which, conformably with Art. 1736 had, other than the consignee, the right to
receive them was proper. #ABILO
CASE TITLE: SAMAR MINING COMPANY, INC. vs. NORDEUTSCHER LLOYD and C.F. SHARP & COMPANY,
INC
KEYWORD: welded wedge wire
PONENTE: Cuevas, J
DOCTRINE: The carrier may be relieved of the responsibility for loss or damage to the goods upon
actual or constructive delivery of the same by the carrier to the consignee, or to the person who has a
right to receive them
SHORT FACTS:
1) Plaintiff, now appellee, SAMAR MINING COMPANY, INC. made an importation of one (1) crate Optima
welded wedge wire sieves through the M/S SCHWABENSTEIN a vessel owned by defendant-appellant
NORDEUTSCHER LLOYD, (represented in the Philippines by its agent, C.F. SHARP & CO., INC.), which
shipment is covered by Bill of Lading No. 18 duly issued to consignee SAMAR MINING COMPANY, INC.
2) Bill of Lading No. 18 sets forth that the carrier undertook to transport the goods in its vessel, M/S
SCHWABENSTEIN only up to the "port of discharge from ship-Manila and thereafter, the goods were to
be transshipped by the carrier to the port of destination or "port of discharge of goods
3) Upon arrival of the aforesaid vessel at the port of Manila, the aforementioned importation was
unloaded and delivered in good order and condition to the bonded warehouse of AMCYL.
4) The goods were however never delivered to, nor received by, the consignee at the port of
destination Davao.
5) Appellee Samar Mining sent letters of complaint, and later filed a formal claim for P1,691.93,the
equivalent of $424.00 at that time, against defendants, but neither paid; hence, the instant suit was
filed with AMCYL being brought as third party defendant.

ISSUE: W/N defendants-appellants incur liability for the loss of the goods in question

16

PETITIONERs CONTENTION:
Defendants-appellants are liable for the value of goods never delivered to plaintiff consignee under the
bill of lading covering the subject shipment.

RESPONDENTS CONTENTION:
1) Appellant carrier contends that the extent of its responsibility and/or liability in the transshipment of
the goods in question are spelled out and delineated under Section 1, paragraph 3 of Bill of Lading No.
18, to wit:
The carrier shall not be liable in any capacity whatsoever for any delay, loss or damage occurring
before the goods enter ship's tackle to be loaded or after the goods leave ship's tackle to be
discharged, transshipped or forwarded ...
and in Section 11 of the same Bill, which provides:
... Pending or during forwarding or transshipping the carrier may store the goods ashore or afloat
solely as agent of the shipper and at risk and expense of the goods and the carrier shall not be liable
for detention nor responsible for the acts, neglect, delay or failure to act of anyone to whom the goods
are entrusted or delivered for storage, handling or any service incidental thereto

2) They now shirk liability for the loss, claiming that they have discharged the same in full and good
condition unto the custody of AMCYL at the port of discharge from ship Manila, and therefore,
pursuant to the aforequoted stipulation (Sec. 11) in the bill of lading, their responsibility for the cargo
had ceased.

RULING:
TRIAL COURT : GRANTED
The Court stated that defendants may recoup whatever they may pay plaintiff by enforcing the
judgment against third party defendant AMCYL which had earlier been declared in default.

SUPREME COURT: DENIED

Under ART 1736, the carrier may be relieved of the responsibility for loss or damage to the goods upon
actual or constructive delivery of the same by the carrier to the consignee, or to the person who has a
right to receive them.
Two undertakings appeared embodied and/or provided for in the Bill of Lading in question. The first is
FOR THE TRANSPORT OF GOODS from Bremen, Germany to Manila. The second, THE TRANSSHIPMENT
OF THE SAME GOODS from Manila to Davao, with appellant acting as agent of the consignee. At the

17

hiatus between these two undertakings of appellant which is the moment when the subject goods are
discharged in Manila, its personality changes from that of carrier to that of agent of the consignee.
Thus, the character of appellant's possession also changes, from possession in its own name as carrier,
into possession in the name of consignee as the latter's agent. Such being the case, there was, in
effect, actual delivery of the goods from appellant as carrier to the same appellant as agent of the
consignee. Upon such delivery, the appellant, as erstwhile carrier, ceases to be responsible for any loss
or damage that may befall the goods from that point onwards. #AFAN
CASE TITLE: LU DO & LU YM CORPORATION vs. I. V. BINAMIRA
KEYWORD: missing films
PONENTE: BAUTISTA ANGELO, J
DOCTRINE: While the goods are in its possession, it is but fair that it exercise extraordinary diligence
in protecting them from damage, and if loss occurs, the law presumes that it was due to its fault or
negligence. This is necessary to protect the interest the interest of the owner who is at its mercy. The
situation changes after the goods are delivered to the consignee.

SHORT FACTS:Delta Photo Supply Company of New York shipped on board the M/S FERNSIDE at
New York, U.S.A., 6 cases of films and/or photographic supplies consigned to the order of I. V. Binamira.
A Bill of Lading was issued where the carrier and the consignee have stipulated to limit the
responsibility of the carrier for the loss or damage that may be caused to the goods before they are
actually delivered. The films were discharged at the port of Cebu by the stevedoring company hired by
petitioner as agent of the carrier. The cargo was received by the Visayan Cebu Terminal Company, Inc.,
the arrastre operator appointed by the Bureau of Customs. During the discharge, the cargo was
inspected by both the stevedoring company and the arrastre operator, and the films were found to be
in good condition. But after it was delivered to respondent after 3 days, the same was examined by a
surveyor and found out that some films and supplies were missing.
ISSUE:Whether or not the carrier is responsible for the loss considering that the same occurred after
the shipment was discharged from the ship and placed in the possession and custody of the customs
authorities?
PETITIONERS CONTENTION: (not mentioned in the case)
RESPONDENTS CONTENTION: (not mentioned in the case)
RULING:
TRIAL COURT: AFFIRMED. The court rendered judgment ordering defendant to pay plaintiff the sum of
P216.84, with legal interest
APPELLATE COURT: AFFIRMED. In this jurisdiction, a common carrier has the legal duty to deliver
goods to a consignee in the same condition in which it received them. Except where the loss,
destruction or deterioration of the merchandise was due to any of the cases enumerated in Article
1734 of the new Civil Code, a carrier is presumed to have been at fault and to have acted negligently,
unless it could prove that it observed extraordinary diligence in the care and handling of the goods
(Article 1735, supra). Such presumption and the liability of the carrier attach until the goods are
delivered actually or constructively, to the consignee, or to the person who has a right to receive them
(Article 1736, supra), and we believe delivery to the customs authorities is not the delivery
contemplated by Article 1736, supra, in connection with second paragraph of Article 1498, supra,
because, in such a case, the goods are then still in the hands of the Government and their owner could
not exercise dominion whatever over them until the duties are paid. In the case at bar, the

18

presumption against the carrier, represented appellant as its agent, has not been successfully
rebutted.
SUPREME COURT:REVERSED.
It is now contended that the Court of Appeals erred in its finding not only because it made wrong
interpretation of the law on the matter, but also because it ignored the provisions of the bill of lading
covering the shipment wherein it was stipulated that the responsibility of the carrier is limited only to
losses that may occur while the cargo is still under its custody and control.
It is true that, as a rule, a common carrier is responsible for the loss, destruction or deterioration of the
goods it assumes to carry from one place to another unless the same is due to any to any of the
causes mentioned in Article 1734 on the new Civil Code. But this shall only apply when the loss,
destruction or deterioration takes place while the goods are in the possession of the carrier, and not
after it has lost control of them.
The parties may agree to limit the liability of the carrier considering that the goods have still to go
through the inspection of the customs authorities before they are actually turned over to the
consignee. This is a situation where we may say that the carrier losses control of the goods because of
a custom regulation and it is unfair that it be made responsible for what may happen during the
interregnum. And this is precisely what was done by the parties herein. In the bill of lading that was
issued covering the shipment in question, both the carrier and the consignee have stipulated to limit
the responsibility of the carrier for the loss or damage that may be caused to the goods before they
are actually delivered. #AGUILA
CASE TITLE: NATIONAL TRUCKING AND FORWARDING CORPORATION, vs. LORENZO SHIPPING
CORPORATION,
KEYWORD: CARE (Cooperative for American Relief Everywhere)
PONENTE:Davide, Jr.
DOCTRINE: In case the consignee, upon receiving the goods, cannot return the bill of lading
subscribed by the carrier, because of its loss or of any other cause, he must give the latter a receipt for
the goods delivered, this receipt producing the same effects as the return of the bill of lading.

SHORT FACTS: On June 5, 1987, the Republic of the Philippines, through the Department of Health
(DOH), and the Cooperative for American Relief Everywhere, Inc. (CARE) signed an agreement wherein
CARE would acquire from the United States government donations of non-fat dried milk and other food
products from January 1, 1987 to December 31, 1989. In turn, the Philippines would transport and
distribute the donated commodities to the intended beneficiaries in the country. The government
entered into a contract of carriage of goods with herein petitioner National Trucking and Forwarding
Corporation (NTFC). Thus, the latter shipped 4,868 bags of non-fat dried milk through herein
respondent Lorenzo Shipping Corporation (LSC) from September to December 1988. The consignee
named in the bills of lading issued by the respondent was AbdurahmanJama, petitioners branch
supervisor in Zamboanga City. On reaching the port of Zamboanga City, respondents agent, Efren
Ruste4 Shipping Agency, unloaded the 4,868 bags of non-fat dried milk and delivered the goods to
petitioners warehouse. Before each delivery, Rogelio Rizada and Ismael Zamora, both delivery
checkers of EfrenRuste Shipping Agency, requested Abdurahman to surrender the original bills of
lading, but the latter merely presented certified true copies thereof. Upon completion of each delivery,
Rogelio and Ismael asked Abdurahman to sign the delivery receipts. However, at times when
Abdurahman had to attend to other business before a delivery was completed, he instructed his
subordinates to sign the delivery receipts for him. Notwithstanding the precautions taken, the
petitioner allegedly did not receive the subject goods. Thus, in a letter dated March 11, 1989,
petitioner NTFC filed a formal claim for non-delivery of the goods shipped through respondent.In its

19

letter of April 26, 1989, the respondent explained that the cargo had already been delivered to
AbdurahmanJama. The petitioner then decided to investigate the loss of the goods. But before the
investigation was over, AbdurahmanJama resigned as branch supervisor of petitioner. Noting but
disbelieving respondents insistence that the goods were delivered, the government through the DOH,
CARE, and NTFC as plaintiffs filed an action for breach of contract of carriage, against respondent as
defendant, with the RTC of Manila.

ISSUES: (1) Is respondent presumed at fault or negligent as common carrier for the loss or
deterioration of the goods? and (2) Are damages and attorneys fees due respondent?
PETITIONERS CONTENTION: Petitioner contends that the respondent is presumed negligent and
liable for failure to abide by the terms and conditions of the bills of lading; that AbdurahmanJamas
failure to testify should not be held against petitioner; and that the testimonies of Rogelio Rizada and
Ismael Zamora, as employees of respondents agent, Efren
Ruste Shipping Agency, were biased and could not overturn the legal presumption of respondents
fault or negligence.
RESPONDENTS CONTENTION: Respondent avers that it observed extraordinary diligence in the
delivery of the goods. Prior to releasing the goods to Abdurahman, Rogelio and Ismael required the
surrender of the original bills of lading, and in their absence, the certified true copies showing that
Abdurahman was indeed the consignee of the goods. In addition, they required Abdurahman or his
designated subordinates to sign the delivery receipts upon completion of each delivery.

RULING:TRIAL COURT:DENIED. The RTC ruled in favor of Lorenzo Shipping Corporation and ordered
the plaintiffs, pursuant to the defendants counterclaim, to pay, jointly and solidarily, to the defendant,
actual damages in the amount of P50,000.00, and attorneys fees in the amount ofP70,000.00, plus the
costs of suit.
APPELLATE COURT:DENIED. The CA affirmed the decision of the RTC in toto.
SUPREME COURT:PARTIALLY GRANTED. The Supreme Court ruled in favor of Lorenzo Shipping
Corporation on the issue on whether it is at fault or negligent as common carrier for the loss or
deterioration of the goods. The SC stated that the respondent adequately proved that it exercised
extraordinary diligence. Although the original bills of lading remained with petitioner, respondents
agents demanded from Abdurahman the certified true copies of the bills of lading. They also asked the
latter and in his absence, his designated subordinates, to sign the cargo delivery receipts. Citing Article
353 of the Code of Commerce which states: After the contract has been complied with, the bill of
lading which the carrier has issued shall be returned to him, and by virtue of the exchange of this title
with the thing transported, the respective obligations and actions shall be considered cancelled, . In
case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the
carrier, because of its loss or of any other cause, he must give the latter a receipt for the goods
delivered, this receipt producing the same effects as the return of the bill of lading.
On the issue on whether damages and attorneys fees are due respondent, The SC ruled in favor of the
petitioners. It stated that respondent failed to show proof of actual pecuniary loss, hence, no actual
damages are due in favor of respondent and that an adverse decision does not ipso facto justify an
award of attorneys fees to the winning party. An award of attorneys fees, in the concept of damages

20

requires factual and legal justifications and the court did not find anything in petitioners suit that
justifies the award of attorneys fees. #AGUILAR
CASE TITLE: LRTA vs Navidad, G.R. No. 145804. February 6, 2003
KEYWORD: LRT
PONENTE: Vitug, J.
DOCTRINE:
Such duty of a common carrier to provide safety to its passengers so obligates it not only during the
course of the trip but for so long as the passengers are within its premises and where they ought to be
in pursuance to the contract of carriage.
FACTS:
On 14 October 1993, about half an hour past seven oclock in the evening, Nicanor Navidad, then
drunk, entered the EDSA LRT station after purchasing a token (representing payment of the fare).
While Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the security guard
assigned to the area approached Navidad. A misunderstanding or an altercation between the two
apparently ensued that led to a fist fight. No evidence, however, was adduced to indicate how the fight
started or who, between the two, delivered the first blow or how Navidad later fell on the LRT tracks. At
the exact moment that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was coming
in. Navidad was struck by the moving train, and he was killed instantaneously.
ISSUE: Whether or not LRTA is liable for the death of Navidad
TRIAL COURT:
judgment is hereby rendered in favor of the plaintiffs and against the defendants Prudent Security and
Junelito Escartin ordering the latter to pay jointly and severally the plaintiffs.
COURT OF APPEALS:
judgment is hereby MODIFIED, by exonerating the appellants from any liability for the death of Nicanor
Navidad, Jr. Instead, appellees Rodolfo Roman and the Light Rail Transit Authority (LRTA) are held liable
for his death and are hereby directed to pay jointly and severally to the plaintiffs-appellees
SUPREME COURT:
YES.
the assailed decision of the appellate court is AFFIRMED with MODIFICATION but only in that (a) the
award of nominal damages is DELETED and (b) petitioner Rodolfo Roman is absolved from liability.
The law requires common carriers to carry passengers safely using the utmost diligence of very
cautious persons with due regard for all circumstances. Such duty of a common carrier to provide
safety to its passengers so obligates it not only during the course of the trip but for so long as the
passengers are within its premises and where they ought to be in pursuance to the contract of
carriage. The statutory provisions render a common carrier liable for death of or injury to passengers
(a) through the negligence or wilful acts of its employees or b) on account of willful acts or negligence
of other passengers or of strangers if the common carriers employees through the exercise of due
diligence could have prevented or stopped the act or omission. In case of such death or injury, a
carrier is presumed to have been at fault or been negligent, and by simple proof of injury, the
passenger is relieved of the duty to still establish the fault or negligence of the carrier or of its
employees and the burden shifts upon the carrier to prove that the injury is due to an unforeseen
event or to force majeure. In the absence of satisfactory explanation by the carrier on how the
accident occurred, which petitioners, according to the appellate court, have failed to show, the
presumption would be that it has been at fault, an exception from the general rule that negligence
must be proved.

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CASE TITLE: DANGWA TRANSPORTATION CO., INC. V. CA

KEYWORD: Umbrella; Bus
PONENTE: REGALADO, J
DOCTRINE: It is the duty of common carriers of passengers, including common carriers by railroad
train, streetcar, or motorbus, to stop their conveyances 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.

SHORT FACTS: Private respondents (Heirs of the late PedritoCudiamat) filed a complaint for damages
against petitioners for the death of PedritoCudiamat as a result of a vehicular accident which occurred
in 1985 at Benguet. Among others, it was alleged that while petitioner Theodore M. Lardizabal was
driving a passenger bus belonging to petitioner corporation in a reckless and imprudent manner, it ran
over its passenger, Pedrito. Instead of bringing Pedrito immediately to the nearest hospital, the said
driver, in utter bad faith and without regard to the welfare of the victim, first brought his other
passengers and cargo to their respective destinations before bringing said victim to the Lepanto
Hospital where he died.
ISSUE: WON there was breach of contract of carriage. YES.
PETITIONERS CONTENTION: They alleged that they had observed and continued to observe the
extraordinary diligence required in the operation of the transportation company and the supervision of
the employees, even as they add that they are not absolute insurers of the safety of the public at
large. It was the victim's own carelessness and negligence which gave rise to the subject incident.
RESPONDENTS CONTENTION: The incident took place due to the gross negligence of the driver and
as such, petitioners failed to observe their duty and obligation as common carrier in not observing
extra-ordinary diligence in the vigilance over the goods and for the safety of the passengers.
RULING:
TRIAL COURT: RULED IN FAVOR OF PETITIONERS. This Court is satisfied that Pedrito was negligent in
trying to board a moving vehicle, especially with one of his hands holding an umbrella and without
having given the driver or the conductor any indication that he wishes to board the bus. Equity
demands however that there must be something given to the heirs of the victim.
COURT OF APPEALS: RULED FOR PRIVATE RESPONDENTS. The victim did indicate his intention to
board the bus as declared by the witness to the effect that Pedrito was no longer walking and made a
sign to board the bus when the latter was still at a distance from him. The petitioners utterly failed to
observe their duty and obligation as common carrier to the end that they should observe extra-

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ordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them according to the circumstances of each case.
SUPREME COURT: RULED FOR PRIVATE RESPONDENTS. When the bus is not in motion, there is no
necessity for a person who wants to ride the same to signal his intention to board. A public utility bus,
once it stops, is in effect making a continuous offer to bus riders. Hence, it becomes the duty of the
driver and the conductor, every time the bus stops, to do no act that would have the effect of
increasing the peril to a passenger while he was attempting to board the same. The premature
acceleration of the bus in this case was a breach of such duty. #ASUNCION

CASE TITLE: La Mallorca vs. CA, GR L-20761, 27 July 1966

KEYWORD: LA MALLORCA
PONENTE: Barrera, J.
DOCTRINE: The relation of carrier and passenger does not cease at the moment the passenger alights
from the carriers vehicle at a place selected by the carrier at the point of destination, but continues
until the passenger has had a reasonable time or reasonable opportunity to leave the current premises
SHORT FACTS: Robert De Alban and his family rode a bus owned by Joeben Bus Company. Upon
reaching their desired destination, they alighted from the bus but Robert returned to get their
baggage. However, his youngest daughter followed him without his knowledge. When he stepped into
the bus again, the bus accelerated that resulting to Roberts daughter death. The bus ran over her.
ISSUE: Is the bus company liable?
PETITIONERS CONTENTION: La Mallorco contended that when the child was killed, she was no
longer a passenger and therefore the contract of carriage terminated
RESPONDENTS CONTENTION: that the carrier's agent had NOT exercised the "utmost diligence" of
a "very cautions person" required by Article 1755 of the Civil Code to be observed by a common carrier
in the discharge of its obligation to transport safely its passengers. In the first place, the driver,
although stopping the bus, nevertheless did not put off the engine. Secondly, he started to run the bus
even before the bus conductor gave him the signal to go and while the latter was still unloading part of
the baggages of the passengers Mariano Beltran and family. The presence of said passengers near the
bus was not unreasonable and they are, therefore, to be considered still as passengers of the carrier,
entitled to the protection under their contract of carriage.
RULING:
TRIAL COURT: Lower court rendered judgment against the plaintiff
APPELLATE COURT:Trial Court decision affirmed by CA, holding La Mallorca liable for quasi-delict and
ordering it to pay P6,000 plus P400. La Mallorco contended that when the child was killed, she was no
longer a passenger and therefore the contract of carriage terminated.
SUPREME COURT:On the question whether the liability of the carrier, as to the child who was already
led a place 5 meters from the bus under the contract of carrier, still persists, we rule in the affirmative.
It is a recognized rules that the relation between carrier and passengers does not cease at the moment
the passenger alights from the carriers premises, to be determined from the circumstances. In this

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case, there was no utmost diligence. Decision of CA is MODIFIED, damages reduced from 6k down to
3k. #BRILLANTES

CASE TITLE:ABOITIZ SHIPPING vs. CA

KEYWORD: carrier and passenger relationship
PONENTE:Regalado, J.
DOCTRINE:Relationshp of carrier and passenger continues until the passenger has been landed at the
port of destination and has left the vessel owner's dock or premises

FACTS:AnacletoViana boarded the vessel M/V Antonia, owned by Aboitiz Shipping Corporation, at the
port at San Jose, Occidental Mindoro, bound for Manila. After said vessel had landed, the Pioneer
Stevedoring Corporation took over the exclusive control of the cargoes loaded on said vessel pursuant
to the Memorandum of Agreement between Pioneer and petitioner Aboitiz. The crane owned by
Pioneer was placed alongside the vessel and one (1) hour after the passengers of said vessel had
disembarked, it started operation by unloading the cargoes from said vessel. While the crane was
being operated, AnacletoViana who had already disembarked from said vessel obviously remembering
that some of his cargoes were still loaded in the vessel, went back to the vessel, and it was while he
was pointing to the crew of the said vessel to the place where his cargoes were loaded that the crane
hit him, pinning him between the side of the vessel and the crane. He was thereafter brought to the
hospital where he later died.
RESPONDENTS CONTENTON: Private respondents Vianas filed a complaint for damages against
petitioner for breach of contract of carriage.
PETITIONERS CONTENTION:Aboitiz denied responsibility contending that at the time of the
accident, the vessel was completely under the control of respondent Pioneer Stevedoring Corporation
as the exclusive stevedoring contractor of Aboitiz, which handled the unloading of cargoes from the
vessel of Aboitiz.
ISSUE: Whether or not Aboitiz is negligent and is thus liable for Vianas death.
HELD: Yes. The victim AnacletoViana guilty of contributory negligence, but it was the negligence of
Aboitiz in prematurely turning over the vessel to the arrastre operator for the unloading of cargoes
which was the direct, immediate and proximate cause of the victim's death. The rule is that the
relation of carrier and passenger continues until the passenger has been landed at the port of
destination and has left the vessel owner's dock or premises. Once created, the relationship will not

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ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the
carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. All persons who
remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers,
and what is a reasonable time or a reasonable delay within this rule is to be determined from all the
circumstances, and includes a reasonable time to see after his baggage and prepare for his departure.
TRIAL COURT:Aboitiz was ordered to pay the Vianas for damages incurred, and Pioneer was ordered
to reimburse Aboitiz for whatever amount the latter paid the Vianas.
COURT OF APPEALS:Affired the decision of the Trial Court except as to the amount of damages
awarded to the Vianas since CA found the victim Viana guilty of contributory negligence, but holding
that it was the negligence of Aboitiz in prematurely turning over the vessel to the arrastre operator for
the unloading of cargoes which was the direct, immediate and proximate cause of the victims death.
SUPREME COURT: Denied the petition of Aboitiz. It is of common knowledge that, by the very nature
of petitioner's business as a shipper, the passengers of vessels are allotted a longer period of time to
disembark from the ship than other common carriers such as a passenger bus. With respect to the bulk
of cargoes and the number of passengers it can load, such vessels are capable of accommodating a
bigger volume of both as compared to the capacity of a regular commuter bus. Consequently, a ship
passenger will need at least an hour as is the usual practice, to disembark from the vessel and claim
his baggage whereas a bus passenger can easily get off the bus and retrieve his luggage in a very
short period of time. When the accident occurred, the victim was in the act of unloading his cargoes,
which he had every right to do, from petitioner's vessel. As earlier stated, a carrier is duty bound not
only to bring its passengers safely to their destination but also to afford them a reasonable time to
claim their baggage.#CAPCO

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