De Guzman v.

CA
Facts:

Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings
those that he gathered to Manila for resale using 2 six-wheeler trucks. On the return trip
to Pangasinan, respondent would load his vehicle with cargo which various merchants
wanted delivered, charging fee lower than the commercial rates. Sometime in November
1970, petitioner Pedro de Guzman contracted with respondent for the delivery of 750
cartons of Liberty Milk. On December 1, 1970, respondent loaded the cargo. Only 150
boxes were delivered to petitioner because the truck carrying the boxes was hijacked
along the way. Petitioner commenced an action claiming the value of the lost
merchandise. Petitioner argues that respondent, being a common carrier, is bound to
exercise extraordinary diligence, which it failed to do. Private respondent denied that he
was a common carrier, and so he could not be held liable for force majeure. The trial
court ruled against the respondent, but such was reversed by the Court of Appeals.

Issues:

(1) Whether or not private respondent is a common carrier

(2) Whether private respondent is liable for the loss of the goods

Held:

(1) 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. Article 1732 also carefully avoids making any distinction between a
person or enterprise offering transportation service on a regular or scheduled basis and
one offering such service on an occasional, episodic or unscheduled basis. Neither does
Article 1732 distinguish between a carrier offering its services to the "general public,"
i.e., the general community or population, and one who offers services or solicits
business only from a narrow segment of the general population. It appears to the Court
that private respondent is properly characterized as a common carrier even though he
merely "back-hauled" goods for other merchants from Manila to Pangasinan, although
such backhauling was done on a periodic or occasional rather than regular or scheduled
manner, and even though private respondent's principal occupation was not the carriage
of goods for others. There is no dispute that private respondent charged his customers a
fee for hauling their goods; that fee frequently fell below commercial freight rates is not
relevant here. A certificate of public convenience is not a requisite for the incurring of
liability under the Civil Code provisions governing common carriers.

(2) Article 1734 establishes the general rule that common carriers are responsible for the
loss, destruction or deterioration of the goods which they carry, "unless the same is due
to any of the following causes only:

a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;

b. Act of the public enemy in war, whether international or civil;

c. Act or omission of the shipper or owner of the goods;

d. The character of the goods or defects in the packing or in the containers; and

e. Order or act of competent public authority."

The hijacking of the carrier's truck - does not fall within any of the five (5) categories of
exempting causes listed in Article 1734. Private respondent as common carrier is
presumed to have been at fault or to have acted negligently. This presumption, however,
may be overthrown by proof of extraordinary diligence on the part of private
respondent. We believe and so hold 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." we hold
that the occurrence of the loss must reasonably be regarded as quite beyond the control
of the common carrier and properly regarded as a fortuitous event. It is necessary to
recall that even common carriers are not made absolute insurers against all risks of
travel and of transport of goods, and are not held liable for acts or events which cannot
be foreseen or are inevitable, provided that they shall have complied with the rigorous
standard of extraordinary diligence.

NATIONAL CTEEL V CA

Facts:

Plaintiff National Steel Corporation (NSC) as Charterer and defendant Vlasons Shipping, Inc. (VSI) as Owner,
entered into a Contract of Voyage Charter Hire whereby NSC hired VSI’s vessel, the MV Vlasons I to make one

voyage to load steel products at Iligan City and discharge them at North Harbor, Manila. The handling, loading and
unloading of the cargoes were the responsibility of the Charterer.

The skids of tinplates and hot rolled sheets shipped were allegedly found to be wet and rusty. Plaintiff, alleging
negligence, filed a claim for damages against the defendant who denied liability claiming that the MV Vlasons I was

seaworthy in all respects for the carriage of plaintiff’s cargo; that said vessel was not a “common carrier” inasmuch as

she was under voyage charter contract with the plaintiff as charterer under the charter party; that in the course its
voyage, the vessel encountered very rough seas.

Issue:
Whether or not the provisions of the Civil Code on common carriers pursuant to which
there exists a presumption of negligence against the common carrier in case of loss or
damage to the cargo are applicable to a private carrier.

ISSUE: Whether or not VSI contracted with NSC as a common carrier or a private carrier.

Held:

No. In a contract of private carriage, the parties may freely stipulate their duties and obligations which perforce would

be binding on them. Unlike in a contract involving a common carrier, private carriage does not involve the general

public. Hence, the stringent provisions of the Civil Code on common carriers protecting the general public cannot
justifiably be applied to a ship transporting commercial goods as a private carrier.

It has been held that the true test of a common carrier is the carriage of passengers or goods, provided it has space,
for all who opt to avail themselves of its transportation service for a fee [Mendoza vs. Philippine Airlines, Inc., 90 Phil.

836, 842-843 (1952)]. A carrier which does not qualify under the above test is deemed a private carrier. “Generally,

private carriage is undertaken by special agreement and the carrier does not hold himself out to carry goods for the
general public.

Because the MV Vlasons I was a private carrier, the ship owner’s obligations are governed by the foregoing

provisions of the Code of Commerce and not by the Civil Code which, as a general rule, places the prima
facie presumption of negligence on a common carrier
First Philippine Industrial Corp. vs. CA
Facts:

Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in
January 1995, petitioner applied for mayor’s permit in Batangas. However, the
Treasurer required petitioner to pay a local tax based on gross receipts amounting to
P956,076.04. In order not to hamper its operations, petitioner paid the taxes for the
first quarter of 1993 amounting to P239,019.01 under protest. On January 20, 1994,
petitioner filed a letter-protest to the City Treasurer, claiming that it is exempt from
local tax since it is engaged in transportation business. The respondent City Treasurer
denied the protest, thus, petitioner filed a complaint before the Regional Trial Court of
Batangas for tax refund. Respondents assert that pipelines are not included in the term
“common carrier” which refers solely to ordinary carriers or motor vehicles. The trial
court dismissed the complaint, and such was affirmed by the Court of Appeals.

Issue:

Whether a pipeline business is included in the term “common carrier” so as to entitle

the petitioner to the exemption

Held:

Article 1732 of the Civil Code defines a "common carrier" as "any person, corporation,
firm or association engaged in the business of carrying or transporting passengers or
goods or both, by land, water, or air, for compensation, offering their services to the
public."

The test for determining whether a party is a common carrier of goods is:

(1) He must be engaged in the business of carrying goods for others as a public
employment, and must hold himself out as ready to engage in the transportation of
goods for person generally as a business and not as a casual occupation;

(2) He must undertake to carry goods of the kind to which his business is confined;

(3) He must undertake to carry by the method by which his business is conducted and
over his established roads; and

(4) The transportation must be for hire.

Based on the above definitions and requirements, there is no doubt that petitioner is a
common carrier. It is engaged in the business of transporting or carrying goods, i.e.
petroleum products, for hire as a public employment. It undertakes to carry for all
persons indifferently, that is, to all persons who choose to employ its services, and
transports the goods by land and for compensation. The fact that petitioner has a
limited clientele does not exclude it from the definition of a common carrier.

Calvo v. UCPB General Insurance Case Digest

Calvo v. UCPB General Insurance
G.R. No. 148496 March 19, 2002

Facts: Petitioner Virgines Calvo, owner of Transorient Container Terminal Services, Inc. (TCTSI),
and a custom broker, entered into a contract with San Miguel Corporation (SMC) for the transfer of
114 reels of semi-chemical fluting paper and 124 reels of kraft liner board from the port area to the
Tabacalera Compound, Ermita, Manila. The cargo was insured by respondent UCPB General
Insurance Co., Inc.
On July 14, 1990, contained in 30 metal vans, arrived in Manila on board “M/V Hayakawa Maru”.
After 24 hours, they were unloaded from vessel to the custody of the arrastre operator, Manila Port
Services, Inc. From July 23 to 25, 1990, petitioner, pursuant to her contract with SMC, withdrew the
cargo from the arrastre operator and delivered it to SMC’s warehouse in Manila. On July 25, the
goods were inspected by Marine Cargo Surveyors, reported that 15 reels of the semi-chemical
fluting paper were “wet/stained/torn” and 3 reels of kraft liner board were also torn. The damages
cost P93,112.00.

SMC collected the said amount from respondent UCPB under its insurance contract. Respondent on
the other hand, as a subrogee of SMC, brought a suit against petitioner in RTC, Makati City. On
December 20, 1995, the RTC rendered judgment finding petitioner liable for the damage to the
shipment. The decision was affirmed by the CA.

Issue: Whether or not Calvo is a common carrier?

Held: In this case the contention of the petitioner, that he is not a common carrier but a private
carrier, has no merit.

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 ancillary activity. Article 1732
also carefully avoids making any distinction between a person or enterprise offering transportation
service on a regular or scheduled basis and one offering such service on an occasional, episodic or
unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to
the "general public," i.e., the general community or population, and one who offers services or
solicits business only from a narrow segment of the general population. We think that Article 1733
deliberately refrained from making such distinction. (De Guzman v. CA, 68 SCRA 612)

Te concept of “common carrier” under Article 1732 coincide with the notion of “public service”, under
the Public Service Act which partially supplements the law on common carrier. Under Section 13,
paragraph (b) of the Public Service Act, it includes:

“ x x x every person that now or hereafter may own, operate, manage, or control in the Philippines,
for hire or compensation, with general or limited clientele, whether permanent, occasional or
accidental, and done for general business purposes, any common carrier, railroad, street railway,
traction railway, subway motor vehicle, either for freight or passenger, or both, with or without fixed
route and whatever may be its classification, freight or carrier service of any class, express service,
steamboat, or steamship line, pontines, ferries and water craft, engaged in the transportation of
passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice-refrigeration
plant, canal, irrigation system, gas, electric light, heat and power, water supply and power petroleum,
sewerage system, wire or wireless communications systems, wire or wireless broadcasting stations
and other similar public services. x x x”

FGU Insurance Corp. vs. GP Sarmiento Trucking Corp. and Lambert M.

Eroles

Facts

Respondent GP Sarmiento Trucking Company (GTS) undertook to transport

cargoes for Concepcion Industries Inc. when it collided with an unidentified truck,
causing damage to the cargoes. Petitioner, FGU, insurer of the shipment, paid to
Concepcion Industries the value of the covered cargoes. Then, as subrogee of
Concepcion Industries Inc., petitioner FGU sued GPS for breach of contract of
carriage for reimbursement. Instead of filing an answer, GPS filed a demurrer to
evidence, claiming that it could not be held liable as a common carrier because it
was only a private carrier, being the exclusive hauler only of Concepcion Industries
Inc. since 1988.

The lower court granted the motion, ruling that plaintiff FGU failed to prove
that GPS was a common carrier. The CA affirmed the trial court's order.
Issue

Whether or not GPS is considered a common carrier and may be presumed

negligent and therefore liable for damages.

Ruling

The Supreme Court held that GPS cannot be considered a common carrier as
it renders service exclusively to Concepcion Industries; that notwithstanding, GPS
cannot escape from liability since in culpa contractual, mere proof of the existence
of the contract and the failure of its compliance justify prima facie a corresponding
right of relief. Respondent driver, however, who is not a party to the contract of
carriage, may not be held liable under the agreement without concrete proof of his
negligence or fault.

Hence, the Supreme Court affirmed the assailed order of the trial court and
the CA insofar as the respondent driver was concerned, but GPS trucking company
was ordered to pay the petitioner FGU the value of the damaged and lost cargoes.

Philamgem vs. PKS Shippinf Company

Facts:

Davao Union Marketing Corporation (DUMC) contracted the services of respondent PKS Shipping
Company (PKS Shipping) for the shipment to Tacloban City of seventy-five thousand (75,000) bags
of cement worth Three Million Three Hundred Seventy-Five Thousand Pesos (P3,375,000.00).
DUMC insured the goods for its full value with petitioner Philippine American General Insurance
Company (Philamgen). During the transport, the barge where the bags of cement were loaded, sank.
Upon demand of payment by DUMC, Philamgen immediately paid them. Hence, it sought
reimbursement from PKS Shipping but the latter refused.

Issue:

Whether PKS Shipping is a common carrier or a private carrier; and

WON PKS Shipping exercised the required diligence over the goods they carry. Or, WON PKS
Shipping is liable.

Held:

PKS Shipping is a common carrier.

PKS Shipping has engaged itself in the business of carrying goods for others, although for a
limited clientele, undertaking to carry such goods for a fee. The regularity of its activities in this area
indicates more than just a casual activity on its part. Neither can the concept of a common carrier
change merely because individual contracts are executed or entered into with patrons of the carrier.

PKS Shipping is not liable.

The vessel was suddenly tossed by waves of extraordinary height of six (6) to eight (8) feet
and buffeted by strong winds of 1.5 knots resulting in the entry of water into the barge’s hatches. The
official Certificate of Inspection of the barge issued by the Philippine Coastguard and the Coastwise
Load Line Certificate would attest to the seaworthiness of Limar I. As such, under Art. 1733, NCC,
common carriers are exempt from liability for loss, destruction, or deterioration of the goods due to
any of the following causes, among others:

Flood, storm, earthquake, lightning, or other natural disaster or calamity x x x

 Asia Lighterage and Shipping Inc. v. CA
Gr, No. 147246, August 19, 2003

FACTS:

Petitioner was contracted as carrier by a corporation from Portland, Oregon to deliver a cargo to the
consignee's warehouse at Pasig City. The cargo, however, never reached the consignee as the barge that
carried the cargo sank completely, resulting in damage to the cargo. Private respondent, as insurer,
indemnified the consignee for the lost cargo and thus, as subrogee, sought recovery from petitioner. Both
the trial court and the appellate court ruled in favor of private respondent.
The Court ruled in favor of private respondent. Whether or not petitioner is a common carrier, the Court
ruled in the affirmative. The principal business of petitioner is that of lighterage and drayage, offering its
barges to the public, although for limited clientele, for carrying or transporting goods by water for
compensation. Whether or not petitioner failed to exercise extraordinary diligence in its care and custody
of the consignee's goods, the Court also ruled in the affirmative. The barge completely sank after its towing
bits broke, resulting in the loss of the cargo. Petitioner failed to prove that the typhoon was the proximate
and only cause of the loss and that it has exercised due diligence before, during and after the occurrence.
HCISED

ISSUE:

Whether or Not the petitioner is a common carrier.

RULING: YES.

Petitioner is a common carrier whether its carrying of goods is done on an irregular rather than scheduled
manner, and with an only limited clientele. A common carrier need not have fixed and publicly known
routes. Neither does it have to maintain terminals or issue tickets. To be sure, petitioner fits the test of a
common carrier as laid down in Bascos vs. Court of Appeals. The test to determine a common carrier is
"whether the given undertaking is a part of the business engaged in by the carrier which he has held out to
the general public as his occupation rather than the quantity or extent of the business transacted." In the
case at bar, the petitioner admitted that it is engaged in the business of shipping and lighterage, offering its
barges to the public, despite its limited clientele for carrying or transporting goods by water for
compensation.

Article 1732 of the Civil Code defines common carriers as 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. Petitioner contends that it is not a common carrier but a
private carrier. Allegedly, it has no fixed and publicly known route, maintains no terminals, and issues no
tickets. It points out that it is not obliged to carry indiscriminately for any person. It is not bound to carry
goods unless it consents. In short, it does not hold out its services to the general public. In De Guzman vs.
Court of Appeals, we held that the definition of common carriers in Article 1732 of the Civil Code makes no
distinction between one whose principal business activity is the carrying of persons or goods or both, and
one who does such carrying only as an ancillary activity. We also did not distinguish between a person or
enterprise offering transportation service on a regular or scheduled basis and one offering such service on
an occasional, episodic or unscheduled basis. Further, we ruled that Article 1732 does not distinguish
between a carrier offering its services to the general public, and one who offers services or solicits business
only from a narrow segment of the general population.
Common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported
by them. They are presumed to have been at fault or to have acted negligently if the goods are lost,
destroyed or deteriorated. To overcome the presumption of negligence in the case of loss, destruction or
deterioration of the goods, deterioration of the goods, the common carrier must prove that it exercised
extraordinary diligence. There are, however, exceptions to this rule. Article 1734 of the Civil Code
enumerates the instances when the presumption of negligence does not attach: Art. 1734. Common
carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any
of the following causes only: (1) Flood, storm, earthquake, lightning, or other natural disaster or calamity; (2)
Act of the public enemy in war, whether international or civil; (3) Act or omission of the shipper or owner of
the goods; (4) The character of the goods or defects in the packing or in the containers; (5) Order or act of
competent public authority.

In the case at bar, the barge completely sank after its towing bits broke, resulting in the total loss of its
cargo. Petitioner claims that this was caused by a typhoon, hence, it should not be held liable for the loss of
the cargo. However, petitioner failed to prove that the typhoon is the proximate and only cause of the loss
of the goods, and that it has exercised due diligence before, during and after the occurrence of the
typhoon to prevent or minimize the loss. The evidence show that, even before the towing bits of the barge
broke, it had already previously sustained damage when it hit a sunken object while docked at the
Engineering Island. It even suffered a hole. Clearly, this could not be solely attributed to the typhoon. The
partly-submerged vessel was refloated but its hole was patched with only clay and cement. The patch
work was merely a provisional remedy, not enough for the barge to sail safely. Thus, when petitioner
persisted to proceed with the voyage, it recklessly exposed the cargo to further damage.
Cruz vs. Sun Holidays

Facts:
In 2000 newly weds Ruelito and his wife brought a package tour contract from Sun Holidays. The tour
was scheduled from September 9-11, 2016 inclusive of transportation to and from the resort. On the
last day, due to heavy rains the day before and heavy winds, the couple along with other guests trekked
to the other side of the beach where they boarded M/B Coco Beach III. Shortly after the boat sailed, it
started to rain and when the reached the open seas the wind got stronger causing the boat to tilt from
side to side and eventually capsized putting all passengers underwater. Ruelito and his wife perished
from the accident which, prompted his parents to filed a complaint for damages against Sun Holidays
alleging that the latter failed to observed extraordinary diligence as common carrier in allowing the boat
to sail despite a storm warning. Sun Holidays denied responsibility claiming that they are not a common
carrier hence they are only required to observe ordinary diligence and the accident was due to a
fortuitous event.

Issue:

W/N Sun Holidays is a common carrier within the ambit of the law hence liable for damages.

YES. Article 1732 of the Civil Code defining “common carriers” has deliberately refrained from making
distinctions on whether the carrying of persons or goods is the carrier’s principal business, whether it is
offered on a regular basis, or whether it is offered to the general public. The intent of the law is thus to
not consider such distinctions. Otherwise, there is no telling how many other distinctions may be
concocted by unscrupulous businessmen engaged in the carrying of persons or goods in order to avoid
the legal obligations and liabilities of common carriers.

The evidence shows that PAGASA issued 24-hour public weather forecasts and tropical cyclone warnings
for shipping on September 10 and 11, 2000 advising of tropical depressions in Northern Luzon, which
would also affect the province of Mindoro. By the testimony of Dr. Frisco Nilo, supervising weather
specialist of PAGASA, squalls are to be expected under such weather condition.

A very cautious person exercising the utmost diligence would thus not brave such stormy weather and
put other people’s lives At risk. The extraordinary diligence required of common carriers demands that
they take care of the goods or lives entrusted to their hands as if they were their own. This respondent
failed to do.
ESTRELLITA M. BASCOS, petitioner, vs.CA

Facts:
Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE), entered into a hauling contract
with Jibfair Shipping Agency Corporation whereby the former bound itself to haul the latter’s 2,000
m/tons of soya bean meal from Manila to Laguna.

CIPTRADE, through Rodolfo Cipriano, subcontracted with Estrellita M. Bascos (petitioner) doing
business under the name A.M. Bascos Trucking to deliver 400 sacks of soya bean meal from Manila to
Laguna. Petitioner failed to deliver the said cargo.

As a consequence, Cipriano paid Jibfair Shipping Agency of the amount of the lost goods and
demanded reimbursement from Bascos but the latter refused to pay, causing him to file a complaint.
The lower court rendered a decision in favor of Cipriano, which was affirmed by the Court of Appeals.
The Supreme Court is now faced with the following issues:

Whether or not the petitioner is a common carrier.

Whether or not hijacking is a force majeure.

Held:
Article 1732 of the Civil Code defines common carrier as a person, corporations, firms, or associations
engaged in the business of carrying or transporting passengers or goods, or both, by land, water or air,
for compensation, offering their services to the public. The test to determine a common carrier is”
whether the given undertaking is a part of the business engaged in by the carrier which he has held out
to the general public as his occupation rather than the quantity or extent of the business transacted."

Article 1732 does not distinguish between a carrier offering its services to the "general public,"
i.e., the general community or population, and one who offers services or solicits business only from a
narrow segment of the general population.

In De Guzman vs. Court of Appeals, the Court held that hijacking, not being included in the
provisions of Article 1734, must be dealt with under the provisions of Article 1735 and thus, the
common carrier is presumed to have been at fault or negligent. To exculpate the carrier from liability
arising from hijacking, he must prove that the robbers or the hijackers acted with grave or irresistible
threat, violence, or force.
The presumption of negligence was raised against petitioner. It was petitioner's burden to
overcome it.

Her own failure to adduce sufficient proof of extraordinary diligence made the presumption
conclusive against her.

AF Sanchez Brokerage vs CA and FGU Insurance

(Dec 21, 2004)

Facts:
AF Sanchez is engaged in a broker business wherein its main job is to calculate
customs duty, fees and charges as well as storage fees for the cargoes. Part also of
the services being given by AF Sanchez is the delivery of the shipment to the
consignee upon the instruction of the shipper.

Wyett engaged the services of AF Sanchez where the latter delivered the shipment
to Hizon Laboratories upon instruction of Wyett. Upon inspection, it was found out
that at least 44 cartons containing contraceptives were in bad condition. Wyett
claimed insurance from FGU. FGU exercising its right of subrogation claims
damages against AF Sanchez who delivered the damaged goods. AF Sanchez
contended that it is not a common carrier but a brokerage firm.

Issue:
Is AF Sanchez a common carrier?

Held:
SC held that Art 1732 of the Civil Code in defining common carrier does not
distinguish whether the activity is undertaken as a principal activity or merely as an
ancillary activity. In this case, while it is true that AF Sanchez is principally engaged
as a broker, it cannot be denied from the evidence presented that part of the
services it offers to its customers is the delivery of the goods to their respective
consignees.

Addendum: MAY NEGLIGENCE X E.DI OF GOOD FATHER KASI:

AF Sanchez claimed that the proximate cause of the damage is improper packing.
Under the CC, improper packing of the goods is an exonerating circumstance. But in
this case, the SC held that though the goods were improperly packed, since AF
Sanchez knew of the condition and yet it accepted the shipment without protest or
reservation, the defense is deemed waived.

Torres Madrid Brokerage Inc. vs Feb Mitsui and BMT

Facts:
Sony engaged the services of Torres Madrid Brokerage (TMBI) to facilitate, process, withdraw, and
deliver the shipment of various electronic goods from Thailand at the port to its warehouse in Biñan,
Laguna.
TMBI subcontracted the services of Benjamin Manalastas’ company, BMT Trucking services (BMT) to
transport the shipment as they do not own any delivery trucks. TMBI notified Sony and had no
objections of the arrangement.

4 BMT trucks picked up the shipment from the port on Oct. 7, 2000 but due to the truck ban they could
not undertake delivery immediately and bec the ff. Day was Sunday. BMT scheduled delivery on Oct. 9
2000. October 9 early morning however, only 3 trucks arrived at Sony’s Biñan warehouse. The 4th truck
was seen abandoned along Diversion Road in Filinvest, Alabang, Muntinlupa City at 12noon wherein
both the driver Rufo Lapesura and the shipments were missing.
Victor Torres, TMBI’s general manager, filed with NBI against Lapesura for’hijacking’
TMBI notified Sony of the loss and sent BMT a letter demanding payment for the lost shipment. BMT
refused so insisting the goods were ‘hijacked,’.
SONY filed an insurance claim with the Mitsui, the insurer of goods. Mitsui paid Sony P7,293,386.23.
After being subrogated to Sony’s rights, Mitsui sent TMBI a demand letter for payment of the lost goods.
TMBI refused to pay. Mitsui then filed a complaint against TMBI. TMBI impleaded BMT as a 3rd party
defendant, alleging BMT’s driver responsible and claimed BMT’s negligence as the proximate cause.
TMBI prayed that in te event it is held liable to Mitsui, it should be reimbursed by BMT.
RTC found BMT and TMBI jointly and solidarily liable. That they have been doing business since early
80’s and the same incident happened on Sony’s cargo in 1997 but neither sony nor its insurer filed a
complaint.
BMT AND TMBI appealed.
TMBI denied that it was a common carrier required to exercise extraordinary diligence and that ‘hijack’
is a fortuitous event.
BMT claimed that it exercised extraordinary diligence and ye loss result from a forfuitous event.

Issue:
WON TMBI is a common carrier engaged in the business of transporting goods for the general public for
a fee
WON TMBI and BMT are solidarily liable to MITSUI
WON BMT is directly liable to Sony or Mitsui
WON BMT is liable to TMBI for breach of their contract of carriage

Ruling:

1.A brokerage may be considered a common carrier if it also undertakes to deliver the goods for its
customers. Common carriers are persons, corporations, firms or associations engaged in the business of
transporting passengers or goods or both, by land, water, or air, for compensation, offering their
services to the public. They are bound to observe extraordinary diligence for reasons of public policy in
the vigilance over the goods and in rhe safety of their passengers. The law does not disringuish between
one whose principal business activity is the carrying of goods and one who undertakes this task only as
an ancillary activity.TMBI’s delivery of the goods is an integral, albeit ancillary, part of its brokerage
services. As long as an entity holds itself to the public for the transport of goods as a business, it os
considered a common carrier regardless of whether it owns a vehicle or has actually to hire one.
Consequently, as in the case of theft or robbery of goods,, a common carrier is presumed to have been
at fault or to have acted negligently, unless it can prove that it observed extraordinary diligence. And
that a robbery attended by grave or irresistble threat, violence or force is a fortuitous event that
absolves the common carrier from liability.
In the present case, despite the subcontract, TMBI remained responsible for the cargo. Under Article
1763, a common carrier’s extraordinary responsibility lasts from the time these goods are
unconditionally placed in the possession of, and received by the carrier for transportation, until they are
delivered, actually or constructively, by the carrier to the consignee.TMBI simply argued that it was not a
common carrier bound to observe extraordinary diligence. Its failure to successfully establish this
premise carries with it the presumption of fault thus rendering it liably to Sony or Mitsui for breach of
contract

2.NO. TMBI’s liability to Mitsui does not stem from a quasi delict but from its breach of contract. Th e tie
that binds TMBI with Mitsui is contractual, albeit one that oassed on to Mitsui as a result of TMBI’s
contract of carriage with Sony to which Mitsui had been subrogated as an insurer. The legal reality that
results from this contractual tie precludes the application of quasi- delict

3.No. There is no direct contractual relationship existed between Sony/Mitsui. Mitsui did not even sue
BMT, much less prove any negligence on its part. There is no basis to directly hold BMT Liable to Mitsui
for quasi-delict

4.YES. By subcontracting the delivery, TMBI entered into its ownc contract of carriage with a fellow
common carrier. The cargo was lost after is transfer to BMT’s custody based on its contract with TMBI.
Following Article 1735, BMT Is presumed to be at fault.Since BMT failed to provethat it observed
extraordinary diligence, it is liable to TMBI for breach of their contract of carriage

TMBI is liable to Sony/Mitsui for breaching the contract of carriage. In turn, TMBI is entitled to
reimbursement from BMT due to the latter’s won breach of its contract of carriage with TMBI

Crisostomo v. CA
G.R. No. 138334, August 25, 2003, 409 SCRA 528

FACTS:

Petitioner contracted the services of respondent Caravan Travel and Tours International, Inc. to
arrange and facilitate her booking, ticketing and accommodation in a tour dubbed Jewels of Europe.
Pursuant to said contract, the travel documents and plane tickets were delivered to the petitioner
who in turn gave the full payment for the package tour on June 12, 1991. Without checking her travel
documents, petitioner went to NAIA on Saturday, June 15, 1991, to take the flight for the first leg of
her journey from Manila to Hongkong. To petitioner’s dismay, she discovered that the flight she was
supposed to take had already departed the previous day. She learned that her plane ticket was for
the flight scheduled on June 14, 1991. She thus called up Menor to complain. Subsequently, Menor
prevailed upon petitioner to take another tour- the British Pageant. Upon petitioner’s return from
Europe, she demanded from respondent the reimbursement of the difference between the sum she
paid for Jewels of Europe and the amount she owed respondent for the British Pageant tour.

Petitioner filed a complaint against respondent for breach of contract of carriage and damages
alleging that her failure to join Jewels of Europe was due to respondent’s fault since it did not clearly
indicate the departure date on the plane, failing to observe the standard of care required of a
common carrier when it informed her wrongly of the flight schedule. For its part, respondent
company, denied responsibility for petitioner’s failure to join the first tour, insisting that petitioner was
informed of the correct departure date, which was clearly and legibly printed on the plane ticket. The
travel documents were given to petitioner two days ahead of the scheduled trip. Respondent further
contend that petitioner had only herself to blame for missing the flight, as she did not bother to read
or confirm her flight schedule as printed on the ticket.

ISSUE:

Whether or not Caravan Travel & Tours International Inc. is negligent in the fulfilment of its obligation
to petitioner Crisostomo thus granting to the petitioner the consequential damages due her as a
result of breach of contract of carriage.

RULING:

Contention of petitioner has no merit. A contract of carriage or transportation is one whereby a

certain person or association of persons obligate themselves to transport persons, things, or news
from one place to another for a fixed price. Such person or association of persons are regarded as
carriers and are classified as private or special carriers and common or public carriers. Respondent
is not an entity engaged in the business of transporting either passengers or goods and is therefore,
neither a private nor a common carrier. Respondent did not undertake to transport petitioner from
one place to another since its covenant with its customers is simply to make travel arrangements in
their behalf. Respondent’s services as a travel agency include procuring tickets and facilitating travel
permits or visas as well as booking customers for tours.

The object of petitioner’s contractual relation with respondent is the service of arranging and
facilitating petitioners booking, ticketing and accommodation in the package tour. In contrast, the
object of a contract of carriage is the transportation of passengers or goods. It is in this sense that
the contract between the parties in this case was an ordinary one for services and not one of
carriage. Since the contract between the parties is an ordinary one for services, the standard of care
required of respondent is that of a good father of a family under Article 1173 of the Civil Code. The
evidence on record shows that respondent exercised due diligence in performing its obligations
under the contract and followed standard procedure in rendering its services to petitioner. As
correctly observed by the lower court, the plane ticket issued to petitioner clearly reflected the
departure date and time, contrary to petitioner’s contention. The travel documents, consisting of the
tour itinerary, vouchers and instructions, were likewise delivered to petitioner two days prior to the
trip. Respondent also properly booked petitioner for the tour, prepared the necessary documents
and procured the plane tickets. It arranged petitioner’s hotel accommodation as well as food, land
transfers and sightseeing excursions, in accordance with its avowed undertaking. The evidence on
record shows that respondent company performed its duty diligently and did not commit any
contractual breach. Hence, petitioner cannot recover and must bear her own damage.

DEGREE OF DILIGENCE and ARRASTRE

ASIAN TERMINALS, INC., petitioner, vs. DAEHAN FIRE AND MARINE INSURANCE CO., LTD., respondent.

Facts:

On 8July 2008 Doosan Corporation shipped 26 Boxes of printed alluminum sheets on board vessel
Heung-A Dragon owned by Dongnama Shipping Co., Ltd., it is covered by bill lading and consigned to
Access International. Doosan insured the shipment with Daehan Fire and Marine Insurance Co. Ltd.
under all risk marine cargo insurance policy.

The vessel arrived in Manila that was then unloaded under good condition and no survey were
conducted in the Equipment Interchange Receipt. Successively, the Access International requested from
the licensed broker, Victoria Lazo together with Asian Terminal Inc. a joint survey of shipment but still no
inspection was made.

Victoria Lazo and Asian Terminal then released the and delivered to Access International warehouse.
However, there were only 12 boxes that is accounted whole 14 boxes were missing amounting
$34,993.28. Thus Access International asked for the indemnifdication from Daehan Fire and marine
Insurance Co. amounting $45,728.81.

Daehan now filed a case represented by Smith Bell against DongnamaUNiship Inc. alleging that the loss
and damages was due to the fault of the Asian Terminal Inc. and Victoria Lazo. RTC: Dismissed the Case
on the groundsof insufficiency of evidence
CA: Reversed the Decision of RTC. Ordering Asian Terminal Inc. and Victoria Lazo to pay Daehan Fore
and Marine Insurance Co.
Issue:
Whether or not the Petitioner Asian Terminals Inc. is liable for the loss of the shipment notwithstanding
the acknowledgement by consignee’s broker/ representative in the Equipment Interchange Receipt that
the shipment was received in good order.
Held:

Yes. In the performance of its obligation, An Arrastre Operator should OBSERVE THE SAME DEGREE OF
DILIGENCE as that required of COMMON CARRIERS and warehouseman. Being a custodian of goods an
arrastre must take care of goods and turn them over to party entitled into possession.
In a burden of proof to show compliance in the obligation to deliver goods to appropriate party must
devolve upon arrastre operator. Since safe keeping of goods is its responsibility, it must prove that the
losses were not due to its negligence or to that of its employee.

Under claims and Liability, the contractor shall be solely liable for any injury or damages that may arise
on account of negligence or carelessness of CONTRACTOR. What is essential is knowledge beforehand of
the extent of risk to be undertaken by arrastre operator, as determined by the value of property.

Sps. Pereña vs. Sps. Zarate

FACTS:

Sps. Zarate, parents of Aaron Zarate, engaged the services of Sps. Pereña for the adequate and
safe transportation carriage of the former spouses’ son from their residence to his school.
During the effectivity of the contract of carriage, Aaron Zarate died in connection with a
vehicular/train collision which occurred while Aaron was riding the contracted carrier. At the
time of the said collision, there were no safety warning signs and railings at the site commonly
used for railroad crossing. The site of the collision was not intended by the railroad operator for
railroad crossing at the time of the collision. PNR refused to acknowledge any liability for the
collision. In Sps. Pereña’s defense, they adduces evidence to show that they had exercised the
diligence of a good father of a family in the selection and supervision of Alfaro, the driver, by
making sure that Alfaro had been issued a driver’s license and had not been involved in any
vehicular accident prior to the collision. The RTC ruled in favor of Sps. Zarate and held the
Pereñas and PNR jointly and severally liable for the death of Aaron plus damages. The CA
upheld the award for the loss of Aaron’s earning capacity, plus damages, and the award for
Attorney’s fees was deleted. Hence, this petition.

ISSUE:
WON the Pereñas and PNR are jointly and severally liable for damages.
HELD:
YES.
A school bus operator is a common carrier.The true test for a common carrier is not the quantity or extent
of business actually transacted, or the number of conveyances, BUT WHETHER the undertaking is a part
of the activity that he has held out to the general public as his business or occupation.

The defense of the Pereñas that they exercised the diligence of a good father of a family has no
merit because they operated as common carriers and that their standard of care was
extraordinary diligence, not the ordinary diligence of a good father of a family. The Pereñas,
acting as a common carrier, were already presumed to be negligent at the time of the accident
because death had occurred to their passenger. The presumption for negligence, being a
presumption of law, laid the burden of evidence on their shoulders to establish that they had
not been negligent. There is no question that the Pereñas did not overturn the presumption of
their negligence by credible evidence. Their defense of having observed the diligence of a good
father of a family in the selection and supervision of their driver was not legally sufficient. PNR
was also found guilty of negligence because it did not ensure the safety of others through the
placing of crossbars, signal lights, warning signs, and other permanent safety barriers to
prevent vehicles or pedestrians from crossing there. Hence, the Pereñas and PNR should jointly
and severally be liable for the death of Aaron Zarate.

Fisher v. Yangco Steamship Co.

G.R. No. L-8095, 31 March 1915, 31 Phil 1

FACTS:

Plaintiff is a stockholder in the Yangco Steamship Company, the 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, and expressly prohibiting the officers, agents and servants of
the company from offering to carry, accepting for carriage said dynamite, powder or other
explosives;”
Thereafter the respondent Acting Collector of Customs demanded and required of the company the
acceptance and carriage of such explosives; that he has refused and suspended the issuance of the
necessary clearance documents of the vessels of the company unless and until the company
consents to accept such explosives for carriage

ISSUE:

Whether the refusal of the owners and officers 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” is a valid act.

RULING:

The traffic in dynamite gun powder and other explosive is vitally essential to the material and general
welfare of the inhabitants of this islands and it these products are to continue in general use
throughout the Philippines they must be transported from water to port to port in various island which
make up the Archipelago.

It follows that a refusal by a particular vessel engage as a common carrier of merchandise in

coastwise trade in the Philippine Island to accept such explosives for carriage constitutes a violation.
The prohibition against discrimination penalized under the statute, unless it can be shown that there
is so Real and substantial danger of disaster necessarily involved in the courage of any or all of this
article of merchandise as to render such refusal a due or unnecessary or a reasonable exercise or
prudence and discretion on the part of the ship owner

U.S. v. Quinajon and Quitoriano

FACTS:

Defendants Pascual Quinajon and Eugenio Quitoriano have been engaged for more than four years in
the transportation of passengers and merchandise in the port of Currimao by means of virayes. They, by
means of their virayes and employees, unloaded 5,986 sacks of rice belonging to the provincial
government of Ilocos Norte from Manila and demanded from the provincial treasurer for the unloading
of each one 10 centavos which amounted to P598.60.

The prosecuting attorney of the Province of Ilocos Norte filed a complaint against the defendants stating
that the provincial government of Ilocos Norte suffered damaged in the sum of 359.16, inasmuch as it
should have paid only 239.44, in accordance with the said normal rate of 6 centavos for each package.
The provincial fiscal presented witnesses to prove that defendants entered into a special contract with
certain merchants, under and by virtue of the terms of which they charged and collected, for loading
merchandise in said port, the sum of 6 centavos for each package, without reference to its size or
weight.

Defendants were charged of violating Act No. 98 of the Civil Commission.

Said Act No. 98 is "An Act to regulate commerce in the Philippine Islands." Its purpose, so far as it is
possible, is to compel common carriers to render to all persons exactly the same or analogous service for
exactly the same price, to the end that there may be no unjust advantage or unreasonable
discrimination. It applies to persons or corporation engaged as common carriers of passengers or
property. A common carrier is a person or corporation whose regular business is to carry passengers or
property for all persons who may choose to employ and renumerate him. A common carrier is a person
or corporation who undertakes to carry goods or persons for hire.

The appellants admit that they are common carriers. They were found guilty and sentenced to pay a fine
of P200 and costs, and to return to the provincial government of the Province of Ilocos Norte the sum of
P359.16.

From that sentence each of the defendants appealed to this court.

ISSUE: Whether or not the defendants and appellants have violated Act No. 98.

HELD: YES.

It will be noted that the law requires common carriers to carry for all persons, either passengers or
property, for exactly the same charge for a like or contemporaneous service in the transportation of like
kind of traffic under substantially similar circumstances or conditions. The law prohibits common
carriers from subjecting any person, etc., or locality, or any particular kind of traffic, to any undue or
unreasonable prejudice or discrimination whatsoever.

The law does not require that the same charge shall be made for the carrying of passengers or property,
unless all the conditions are alike and contemporaneous. It is not believed that the law prohibits the
charging of a different rate for the carrying of passengers or property when the actual cost of handling
and transporting the same is different. It is not believed that the law intended to require common
carriers to carry the same kind of merchandise, even at the same price, under different and unlike
conditions and where the actual cost is different. It is when the price charged is for the purpose of
favoring persons or localities or particular kinds of merchandise, that the law intervenes and prohibits. It
is favoritism and discrimination which the law prohibits. The difference in charge must not be made to
favor one merchant, or shipper, or locality, to the disadvantage of another merchant, or shipper, or
locality. If the services are alike and contemporaneous, discrimination in the price charged is prohibited.

In the case at bar, there is no proof that the conditions were different. There is no proof that the
services rendered by the defendants for the different parties were unlike or even not contemporaneous.
There is no pretense that it actually cost more to handle the rice for the province than it did for the
merchants with whom the special contracts were made. From the evidence it would seem that there
was a clear discrimination made against the province. Discrimination is the thing which is specifically
prohibited and punished under the law.

Loadstar Shipping vs. Court of Appeals

315 SCRA 339, 1999

Facts: On November 19, 1984, loadstar received on board its M/V “Cherokee” bales of lawanit
hardwood, tilewood and Apitong Bolidenized for shipment. The goods, amounting to P6,067, 178.
Were insured for the same amount with the Manila Insurance Company against various risks
including “Total Loss by Total Loss of the Vessel”. On November 20, 1984, on its way to Manila from
the port of Nasipit, Agusan Del Norte, the vessel, along with its cargo, sank off Limasawa Island. As
a result of the total loss of its shipment, the consignee made a claim with loadstar which, however,
ignored the same. As the insurer, MIC paid to the insured in full settlement of its claim, and the latter
executed a subrogation receipt therefor. MIC thereafter filed a complaint against loadstar alleging
that the sinking of the vessel was due to fault and negligence of loadstar and its employees.

In its answer, Loadstar denied any liability for the loss of the shipper’s goods and claimed that the
sinking of its vessel was due to force majeure. The court a quo rendered judgment in favor of MIC.,
prompting loadstar to elevate the matter to the Court of Appeals, which however, agreed with the
trial court and affirmed its decision in toto. On appeal, loadstar maintained that the vessel was a
private carrier because it was not issued a Certificate of Public Convenience, it did not have a
regular trip or schedule nor a fixed route, and there was only “one shipper, one consignee for a
special crago”.

Issue: Whether or not M/V Cherokee was a private carrier so as to exempt it from the provisions
covering Common Carrier?

Held: Loadstar is a common carrier.

The Court held that LOADSTAR is a common carrier. It is not necessary that the carrier be issued a
certificate of public convenience, and this public character is not altered by the fact that the carriage
of the goods in question was periodic, occasional, episodic or unscheduled. Further, the bare fact
that the vessel was carrying a particular type of cargo for one shipper, which appears to be purely
co-incidental; it is no reason enough to convert the vessel from a common to a private carrier,
especially where, as in this case, it was shown that the vessel was also carrying passengers.

Article 1732 also carefully avoids making any distinction between a person or enterprise offering
transportation service on a regular or scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier
offering its services to the "general public," i.e., the general community or population, and one who
offers services or solicits business only from a narrow segment of the general population.

Home Insurance vs. American Steamship

23 SCRA 24

Facts: The Consorcio Pesquero del Peru of South America shipped jute bags of Peruvian fishmeal
through SS Crowborough, consigned to San Miguel Brewery, Inc. The cargo, which was insured by
Home Insurance Company, arrived at the port of Manila and was discharged to the lighters of the
Luzon Stevedoring Corporation. When the same was delivered to the consignee, there were
shortages amounting to P 12, 033.85, prompting the latter to pay against Luzon Stevedoring Co.

Because the others denied liability, Home Insurance paid San Miguel the insurance value loss. This
cost was brought by the former to recover indemnity from Luzon Stevedoring and the ship owner.
Luzon Stevedoring raised the defense that it deliver with due diligence in the same from the carrier.
Mexican Steamship Agencies denied liability on the ground that the charter party referred to in the
bills of lading, the charter, not the ship owner, was responsible for any loss or damage of the cargo.
Furthermore, it claimed to have exercised due diligence in stowing the goods and as a mere
forwarding agent, it was not responsible for losses or damages to the cargo.

Issue: Whether or not the stipulation in the charter party to owner’s non-liability was valid as to
absolve the American Steamship from liability loss?

Held: The Civil Code provision on common carriers should not be applied where the carrier is not
acting as such but as a private carrier. The stipulation in the charter party absolving the owner from
liability for loss due to the negligence of its agent is void only if the strict public policy governing
common carriers is applied. Such policy has no force where the public at large is not involved, as in
the case of a ship totally chartered for the use of a single party.

San Pablo v. Pantranco South Express, Inc.

G.R. No. L-61461, 21 August 1987, 153 SCRA 199

FACTS:

Pantranco – engaged in the land transportation business with PUB service for passengersand freight
and various certificates for public conveniences to operate passenger busesfrom Metro Manila to
Bicol Region and Eastern Samar; through its counsel, it wrote toMaritime Industry Authority
(MARINA) requesting authority to lease/purchase a vesselnamed M/V “Black Double” “to be used for
its project to operate a ferryboat service fromMatnog, Sorsogon and Allen, Samar that will provide
service to company buses and freighttrucks that have to cross San Bernardo Strait; request was
denied by MARINA
It nevertheless acquired the vessel MV “Black Double”; it wrote the Chairman of the Boardof
Transportation that it proposes to operate a ferry service to carry its passenger busesand freight
trucks between Allen and Matnog in connection with its trips to Tacloban Cityfor the purpose of
continuing the highway, which is interrupted by a small body of water,the said proposed ferry
operation being merely a necessary and incidental service to itsmain service and obligation of
transporting its passengers; that being so, it believed thatthere was no need for it to obtain a
separate certificate for public convenience to operatea ferry service Matnog to cater exclusively to its
passenger buses and freight trucks. BOTgranted the request. Cardinal Shipping Corporation and the
heirs of San Pablo filedseparate motions for reconsideration.

ISSUE:

WON a ferry service is an extension of the highway and thus is a part of theauthority originally
granted PANTRANCO; 2. WON a land transportation company can beauthorized to operate a ferry
service or coastwise or interisland shipping service along itsauthorized route as an incident to its
franchise without the need of filing a separateapplication for the same

HELD:

No.

Ferry- continuation by means of boats, barges, or rafts, of a highway or the connection of highways
located on the opposite banks of a stream or other body of water. The termnecessarily implies
transportation for a short distance, almost invariably between twopoints, which is unrelated to other
transportation

Ferry service- service either by barges or rafts, even by motor or steam vessels, betweenthe banks
of a river or stream to continue the highway which is interrupted by the body of water, or in some
cases to connect two points on opposite shores of an arm of the seasuch as bay or lake which does
not involve too great a distance or too long a time tonavigate(engaged in the coastwise trade)
,service between the different islands, involving more or less great distance and over moreor less
turbulent and dangerous waters of the open sea, to be coastwise or inter-islandservice; considered
coastwise or inter-island service conveyance of passengers, trucks and cargo from Matnog to Allen
is certainly not a ferryboat service but a coastwise or interisland shipping service. Under no
circumstance canthe sea between Matnog and Allen be considered a continuation of the highway.
While aferry boat service has been considered as a continuation of the highway when crossingrivers
or even lakes, which are small body of waters – separating the land, however, whenas in this case
the two terminals, Matnog and Allen are separated by an open sea it cannot be considered as a
continuation of the highway. PANTRANCO should secure a separate CPC for the operation of an
interisland or coastwise shipping. Its CPC as a bustransportation cannot be merely amended to
include this water service under the guisethat it is a mere private ferry service.

NATIONAL CTEEL V CA

Facts:

Plaintiff National Steel Corporation (NSC) as Charterer and defendant Vlasons Shipping, Inc. (VSI) as Owner,
entered into a Contract of Voyage Charter Hire whereby NSC hired VSI’s vessel, the MV Vlasons I to make one

voyage to load steel products at Iligan City and discharge them at North Harbor, Manila. The handling, loading and
unloading of the cargoes were the responsibility of the Charterer.

The skids of tinplates and hot rolled sheets shipped were allegedly found to be wet and rusty. Plaintiff, alleging
negligence, filed a claim for damages against the defendant who denied liability claiming that the MV Vlasons I was

seaworthy in all respects for the carriage of plaintiff’s cargo; that said vessel was not a “common carrier” inasmuch as
she was under voyage charter contract with the plaintiff as charterer under the charter party; that in the course its
voyage, the vessel encountered very rough seas.
Issue:
Whether or not the provisions of the Civil Code on common carriers pursuant to which
there exists a presumption of negligence against the common carrier in case of loss or
damage to the cargo are applicable to a private carrier.

ISSUE: Whether or not VSI contracted with NSC as a common carrier or a private carrier.

Held:

No. In a contract of private carriage, the parties may freely stipulate their duties and obligations which perforce would

be binding on them. Unlike in a contract involving a common carrier, private carriage does not involve the general

public. Hence, the stringent provisions of the Civil Code on common carriers protecting the general public cannot
justifiably be applied to a ship transporting commercial goods as a private carrier.

It has been held that the true test of a common carrier is the carriage of passengers or goods, provided it has space,
for all who opt to avail themselves of its transportation service for a fee [Mendoza vs. Philippine Airlines, Inc., 90 Phil.

836, 842-843 (1952)]. A carrier which does not qualify under the above test is deemed a private carrier. “Generally,

private carriage is undertaken by special agreement and the carrier does not hold himself out to carry goods for the
general public.

Because the MV Vlasons I was a private carrier, the ship owner’s obligations are governed by the foregoing
provisions of the Code of Commerce and not by the Civil Code which, as a general rule, places the prima
facie presumption of negligence on a common carrier

Planters Products vs. Court of Appeals

G.R. No. 101503 September 15, 1993

Facts: Planters Product Inc. purchased from Mitsubishi international corporation metric tons of Urea
fertilizer, which the latter shipped aboard the cargo vessel M/V Sun Plum owned by private
respondent Kyosei Kisen Kabushiki Kaisha. Prior to its voyage, a time charter-party on the vessel
respondent entered into between Mitsubishi as shipper/charterer and KKKK as ship owner, in Tokyo,
Japan.

Before loading the fertilizer aboard the vessel, (4) of her holds were presumably inspected by the
charterer’s representative and found fit to take a load of urea in bulk. After the Urea fertilizer was
loaded in bulk by stevedores hired by and under the supervision of the shipper, the steel hatches
were closed with heavy iron lids. Upon arrival of vessel at port, the petitioner unloaded the cargo
pursuant to the terms and conditions of the charter-party. The hatches remained open throughout
the duration of the discharge.

Upon arrival at petitioner’s warehouse a survey conducted over the cargo revealed a shortage and
the most of the fertilizer was contaminated with dirt. As such, Planters filed an action for damages.
The defendant argued that the public policy governing common carriers do not apply to them
because they have become private carriers by reason of the provisions of the charter-party.

Issue: Whether or not the charter-party contract between the ship owner and the charterer
transforms a common carrier into a private carrier?

Held: A charter party may either her be time charter wherein the vessel is leased to the charterer,
wherein the ship is leased to the charterer for a fixed period of time or voyage charter, wherein the
ship is leased for a single voyage. In both cases, the charter party provides for the hire of the vessel
only, either for a determinate time or for a single or consecutive voyage.

It is therefor imperative that such common carrier shall remain as such, notwithstanding the charter
of the whole or part of the vessel by one or more persons, provided the charter is limited to the ship
only, as in the case of a time-charter or voyage-charter. It is only when the charter includes both ship
and its crew as in bareboat or demise that it becomes a private carrier. Undoubtedly, a shipowner in
a time or voyage charter retains in possession and control of the ship, although her holds may be the
property of the charterer.
De Guzman v. CA
Facts:

Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings
those that he gathered to Manila for resale using 2 six-wheeler trucks. On the return trip
to Pangasinan, respondent would load his vehicle with cargo which various merchants
wanted delivered, charging fee lower than the commercial rates. Sometime in November
1970, petitioner Pedro de Guzman contracted with respondent for the delivery of 750
cartons of Liberty Milk. On December 1, 1970, respondent loaded the cargo. Only 150
boxes were delivered to petitioner because the truck carrying the boxes was hijacked
along the way. Petitioner commenced an action claiming the value of the lost
merchandise. Petitioner argues that respondent, being a common carrier, is bound to
exercise extraordinary diligence, which it failed to do. Private respondent denied that he
was a common carrier, and so he could not be held liable for force majeure. The trial
court ruled against the respondent, but such was reversed by the Court of Appeals.

Issues:

(1) Whether or not private respondent is a common carrier

(2) Whether private respondent is liable for the loss of the goods

Held:

(1) 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. Article 1732 also carefully avoids making any distinction between a
person or enterprise offering transportation service on a regular or scheduled basis and
one offering such service on an occasional, episodic or unscheduled basis. Neither does
Article 1732 distinguish between a carrier offering its services to the "general public,"
i.e., the general community or population, and one who offers services or solicits
business only from a narrow segment of the general population. It appears to the Court
that private respondent is properly characterized as a common carrier even though he
merely "back-hauled" goods for other merchants from Manila to Pangasinan, although
such backhauling was done on a periodic or occasional rather than regular or scheduled
manner, and even though private respondent's principal occupation was not the carriage
of goods for others. There is no dispute that private respondent charged his customers a
fee for hauling their goods; that fee frequently fell below commercial freight rates is not
relevant here. A certificate of public convenience is not a requisite for the incurring of
liability under the Civil Code provisions governing common carriers.

(2) Article 1734 establishes the general rule that common carriers are responsible for the
loss, destruction or deterioration of the goods which they carry, "unless the same is due
to any of the following causes only:

a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;

b. Act of the public enemy in war, whether international or civil;

c. Act or omission of the shipper or owner of the goods;

d. The character of the goods or defects in the packing or in the containers; and

e. Order or act of competent public authority."

The hijacking of the carrier's truck - does not fall within any of the five (5) categories of
exempting causes listed in Article 1734. Private respondent as common carrier is
presumed to have been at fault or to have acted negligently. This presumption, however,
may be overthrown by proof of extraordinary diligence on the part of private
respondent. We believe and so hold 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." we hold
that the occurrence of the loss must reasonably be regarded as quite beyond the control
of the common carrier and properly regarded as a fortuitous event. It is necessary to
recall that even common carriers are not made absolute insurers against all risks of
travel and of transport of goods, and are not held liable for acts or events which cannot
be foreseen or are inevitable, provided that they shall have complied with the rigorous
standard of extraordinary diligence.

NATIONAL CTEEL V CA

Facts:

Plaintiff National Steel Corporation (NSC) as Charterer and defendant Vlasons Shipping, Inc. (VSI) as Owner,
entered into a Contract of Voyage Charter Hire whereby NSC hired VSI’s vessel, the MV Vlasons I to make one

voyage to load steel products at Iligan City and discharge them at North Harbor, Manila. The handling, loading and
unloading of the cargoes were the responsibility of the Charterer.

The skids of tinplates and hot rolled sheets shipped were allegedly found to be wet and rusty. Plaintiff, alleging
negligence, filed a claim for damages against the defendant who denied liability claiming that the MV Vlasons I was

seaworthy in all respects for the carriage of plaintiff’s cargo; that said vessel was not a “common carrier” inasmuch as

she was under voyage charter contract with the plaintiff as charterer under the charter party; that in the course its
voyage, the vessel encountered very rough seas.

Issue:
Whether or not the provisions of the Civil Code on common carriers pursuant to which
there exists a presumption of negligence against the common carrier in case of loss or
damage to the cargo are applicable to a private carrier.

ISSUE: Whether or not VSI contracted with NSC as a common carrier or a private carrier.

Held:

No. In a contract of private carriage, the parties may freely stipulate their duties and obligations which perforce would

be binding on them. Unlike in a contract involving a common carrier, private carriage does not involve the general

public. Hence, the stringent provisions of the Civil Code on common carriers protecting the general public cannot
justifiably be applied to a ship transporting commercial goods as a private carrier.

It has been held that the true test of a common carrier is the carriage of passengers or goods, provided it has space,
for all who opt to avail themselves of its transportation service for a fee [Mendoza vs. Philippine Airlines, Inc., 90 Phil.

836, 842-843 (1952)]. A carrier which does not qualify under the above test is deemed a private carrier. “Generally,

private carriage is undertaken by special agreement and the carrier does not hold himself out to carry goods for the
general public.

Because the MV Vlasons I was a private carrier, the ship owner’s obligations are governed by the foregoing

provisions of the Code of Commerce and not by the Civil Code which, as a general rule, places the prima
facie presumption of negligence on a common carrier
First Philippine Industrial Corp. vs. CA
Facts:

Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in
January 1995, petitioner applied for mayor’s permit in Batangas. However, the
Treasurer required petitioner to pay a local tax based on gross receipts amounting to
P956,076.04. In order not to hamper its operations, petitioner paid the taxes for the
first quarter of 1993 amounting to P239,019.01 under protest. On January 20, 1994,
petitioner filed a letter-protest to the City Treasurer, claiming that it is exempt from
local tax since it is engaged in transportation business. The respondent City Treasurer
denied the protest, thus, petitioner filed a complaint before the Regional Trial Court of
Batangas for tax refund. Respondents assert that pipelines are not included in the term
“common carrier” which refers solely to ordinary carriers or motor vehicles. The trial
court dismissed the complaint, and such was affirmed by the Court of Appeals.

Issue:

Whether a pipeline business is included in the term “common carrier” so as to entitle

the petitioner to the exemption

Held:

Article 1732 of the Civil Code defines a "common carrier" as "any person, corporation,
firm or association engaged in the business of carrying or transporting passengers or
goods or both, by land, water, or air, for compensation, offering their services to the
public."

The test for determining whether a party is a common carrier of goods is:

(1) He must be engaged in the business of carrying goods for others as a public
employment, and must hold himself out as ready to engage in the transportation of
goods for person generally as a business and not as a casual occupation;

(2) He must undertake to carry goods of the kind to which his business is confined;

(3) He must undertake to carry by the method by which his business is conducted and
over his established roads; and

(4) The transportation must be for hire.

Based on the above definitions and requirements, there is no doubt that petitioner is a
common carrier. It is engaged in the business of transporting or carrying goods, i.e.
petroleum products, for hire as a public employment. It undertakes to carry for all
persons indifferently, that is, to all persons who choose to employ its services, and
transports the goods by land and for compensation. The fact that petitioner has a
limited clientele does not exclude it from the definition of a common carrier.

Calvo v. UCPB General Insurance Case Digest

Calvo v. UCPB General Insurance
G.R. No. 148496 March 19, 2002

Facts: Petitioner Virgines Calvo, owner of Transorient Container Terminal Services, Inc. (TCTSI),
and a custom broker, entered into a contract with San Miguel Corporation (SMC) for the transfer of
114 reels of semi-chemical fluting paper and 124 reels of kraft liner board from the port area to the
Tabacalera Compound, Ermita, Manila. The cargo was insured by respondent UCPB General
Insurance Co., Inc.
On July 14, 1990, contained in 30 metal vans, arrived in Manila on board “M/V Hayakawa Maru”.
After 24 hours, they were unloaded from vessel to the custody of the arrastre operator, Manila Port
Services, Inc. From July 23 to 25, 1990, petitioner, pursuant to her contract with SMC, withdrew the
cargo from the arrastre operator and delivered it to SMC’s warehouse in Manila. On July 25, the
goods were inspected by Marine Cargo Surveyors, reported that 15 reels of the semi-chemical
fluting paper were “wet/stained/torn” and 3 reels of kraft liner board were also torn. The damages
cost P93,112.00.

SMC collected the said amount from respondent UCPB under its insurance contract. Respondent on
the other hand, as a subrogee of SMC, brought a suit against petitioner in RTC, Makati City. On
December 20, 1995, the RTC rendered judgment finding petitioner liable for the damage to the
shipment. The decision was affirmed by the CA.

Issue: Whether or not Calvo is a common carrier?

Held: In this case the contention of the petitioner, that he is not a common carrier but a private
carrier, has no merit.

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 ancillary activity. Article 1732
also carefully avoids making any distinction between a person or enterprise offering transportation
service on a regular or scheduled basis and one offering such service on an occasional, episodic or
unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to
the "general public," i.e., the general community or population, and one who offers services or
solicits business only from a narrow segment of the general population. We think that Article 1733
deliberately refrained from making such distinction. (De Guzman v. CA, 68 SCRA 612)

Te concept of “common carrier” under Article 1732 coincide with the notion of “public service”, under
the Public Service Act which partially supplements the law on common carrier. Under Section 13,
paragraph (b) of the Public Service Act, it includes:

“ x x x every person that now or hereafter may own, operate, manage, or control in the Philippines,
for hire or compensation, with general or limited clientele, whether permanent, occasional or
accidental, and done for general business purposes, any common carrier, railroad, street railway,
traction railway, subway motor vehicle, either for freight or passenger, or both, with or without fixed
route and whatever may be its classification, freight or carrier service of any class, express service,
steamboat, or steamship line, pontines, ferries and water craft, engaged in the transportation of
passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice-refrigeration
plant, canal, irrigation system, gas, electric light, heat and power, water supply and power petroleum,
sewerage system, wire or wireless communications systems, wire or wireless broadcasting stations
and other similar public services. x x x”

FGU Insurance Corp. vs. GP Sarmiento Trucking Corp. and Lambert M.

Eroles

Facts

Respondent GP Sarmiento Trucking Company (GTS) undertook to transport

cargoes for Concepcion Industries Inc. when it collided with an unidentified truck,
causing damage to the cargoes. Petitioner, FGU, insurer of the shipment, paid to
Concepcion Industries the value of the covered cargoes. Then, as subrogee of
Concepcion Industries Inc., petitioner FGU sued GPS for breach of contract of
carriage for reimbursement. Instead of filing an answer, GPS filed a demurrer to
evidence, claiming that it could not be held liable as a common carrier because it
was only a private carrier, being the exclusive hauler only of Concepcion Industries
Inc. since 1988.

The lower court granted the motion, ruling that plaintiff FGU failed to prove
that GPS was a common carrier. The CA affirmed the trial court's order.
Issue

Whether or not GPS is considered a common carrier and may be presumed

negligent and therefore liable for damages.

Ruling

The Supreme Court held that GPS cannot be considered a common carrier as
it renders service exclusively to Concepcion Industries; that notwithstanding, GPS
cannot escape from liability since in culpa contractual, mere proof of the existence
of the contract and the failure of its compliance justify prima facie a corresponding
right of relief. Respondent driver, however, who is not a party to the contract of
carriage, may not be held liable under the agreement without concrete proof of his
negligence or fault.

Hence, the Supreme Court affirmed the assailed order of the trial court and
the CA insofar as the respondent driver was concerned, but GPS trucking company
was ordered to pay the petitioner FGU the value of the damaged and lost cargoes.

Philamgem vs. PKS Shippinf Company

Facts:

Davao Union Marketing Corporation (DUMC) contracted the services of respondent PKS Shipping
Company (PKS Shipping) for the shipment to Tacloban City of seventy-five thousand (75,000) bags
of cement worth Three Million Three Hundred Seventy-Five Thousand Pesos (P3,375,000.00).
DUMC insured the goods for its full value with petitioner Philippine American General Insurance
Company (Philamgen). During the transport, the barge where the bags of cement were loaded, sank.
Upon demand of payment by DUMC, Philamgen immediately paid them. Hence, it sought
reimbursement from PKS Shipping but the latter refused.

Issue:

Whether PKS Shipping is a common carrier or a private carrier; and

WON PKS Shipping exercised the required diligence over the goods they carry. Or, WON PKS
Shipping is liable.

Held:

PKS Shipping is a common carrier.

PKS Shipping has engaged itself in the business of carrying goods for others, although for a
limited clientele, undertaking to carry such goods for a fee. The regularity of its activities in this area
indicates more than just a casual activity on its part. Neither can the concept of a common carrier
change merely because individual contracts are executed or entered into with patrons of the carrier.

PKS Shipping is not liable.

The vessel was suddenly tossed by waves of extraordinary height of six (6) to eight (8) feet
and buffeted by strong winds of 1.5 knots resulting in the entry of water into the barge’s hatches. The
official Certificate of Inspection of the barge issued by the Philippine Coastguard and the Coastwise
Load Line Certificate would attest to the seaworthiness of Limar I. As such, under Art. 1733, NCC,
common carriers are exempt from liability for loss, destruction, or deterioration of the goods due to
any of the following causes, among others:

Flood, storm, earthquake, lightning, or other natural disaster or calamity x x x

 Asia Lighterage and Shipping Inc. v. CA
Gr, No. 147246, August 19, 2003

FACTS:

Petitioner was contracted as carrier by a corporation from Portland, Oregon to deliver a cargo to the
consignee's warehouse at Pasig City. The cargo, however, never reached the consignee as the barge that
carried the cargo sank completely, resulting in damage to the cargo. Private respondent, as insurer,
indemnified the consignee for the lost cargo and thus, as subrogee, sought recovery from petitioner. Both
the trial court and the appellate court ruled in favor of private respondent.
The Court ruled in favor of private respondent. Whether or not petitioner is a common carrier, the Court
ruled in the affirmative. The principal business of petitioner is that of lighterage and drayage, offering its
barges to the public, although for limited clientele, for carrying or transporting goods by water for
compensation. Whether or not petitioner failed to exercise extraordinary diligence in its care and custody
of the consignee's goods, the Court also ruled in the affirmative. The barge completely sank after its towing
bits broke, resulting in the loss of the cargo. Petitioner failed to prove that the typhoon was the proximate
and only cause of the loss and that it has exercised due diligence before, during and after the occurrence.
HCISED

ISSUE:

Whether or Not the petitioner is a common carrier.

RULING: YES.

Petitioner is a common carrier whether its carrying of goods is done on an irregular rather than scheduled
manner, and with an only limited clientele. A common carrier need not have fixed and publicly known
routes. Neither does it have to maintain terminals or issue tickets. To be sure, petitioner fits the test of a
common carrier as laid down in Bascos vs. Court of Appeals. The test to determine a common carrier is
"whether the given undertaking is a part of the business engaged in by the carrier which he has held out to
the general public as his occupation rather than the quantity or extent of the business transacted." In the
case at bar, the petitioner admitted that it is engaged in the business of shipping and lighterage, offering its
barges to the public, despite its limited clientele for carrying or transporting goods by water for
compensation.

Article 1732 of the Civil Code defines common carriers as 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. Petitioner contends that it is not a common carrier but a
private carrier. Allegedly, it has no fixed and publicly known route, maintains no terminals, and issues no
tickets. It points out that it is not obliged to carry indiscriminately for any person. It is not bound to carry
goods unless it consents. In short, it does not hold out its services to the general public. In De Guzman vs.
Court of Appeals, we held that the definition of common carriers in Article 1732 of the Civil Code makes no
distinction between one whose principal business activity is the carrying of persons or goods or both, and
one who does such carrying only as an ancillary activity. We also did not distinguish between a person or
enterprise offering transportation service on a regular or scheduled basis and one offering such service on
an occasional, episodic or unscheduled basis. Further, we ruled that Article 1732 does not distinguish
between a carrier offering its services to the general public, and one who offers services or solicits business
only from a narrow segment of the general population.
Common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported
by them. They are presumed to have been at fault or to have acted negligently if the goods are lost,
destroyed or deteriorated. To overcome the presumption of negligence in the case of loss, destruction or
deterioration of the goods, deterioration of the goods, the common carrier must prove that it exercised
extraordinary diligence. There are, however, exceptions to this rule. Article 1734 of the Civil Code
enumerates the instances when the presumption of negligence does not attach: Art. 1734. Common
carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any
of the following causes only: (1) Flood, storm, earthquake, lightning, or other natural disaster or calamity; (2)
Act of the public enemy in war, whether international or civil; (3) Act or omission of the shipper or owner of
the goods; (4) The character of the goods or defects in the packing or in the containers; (5) Order or act of
competent public authority.

In the case at bar, the barge completely sank after its towing bits broke, resulting in the total loss of its
cargo. Petitioner claims that this was caused by a typhoon, hence, it should not be held liable for the loss of
the cargo. However, petitioner failed to prove that the typhoon is the proximate and only cause of the loss
of the goods, and that it has exercised due diligence before, during and after the occurrence of the
typhoon to prevent or minimize the loss. The evidence show that, even before the towing bits of the barge
broke, it had already previously sustained damage when it hit a sunken object while docked at the
Engineering Island. It even suffered a hole. Clearly, this could not be solely attributed to the typhoon. The
partly-submerged vessel was refloated but its hole was patched with only clay and cement. The patch
work was merely a provisional remedy, not enough for the barge to sail safely. Thus, when petitioner
persisted to proceed with the voyage, it recklessly exposed the cargo to further damage.
Cruz vs. Sun Holidays

Facts:
In 2000 newly weds Ruelito and his wife brought a package tour contract from Sun Holidays. The tour
was scheduled from September 9-11, 2016 inclusive of transportation to and from the resort. On the
last day, due to heavy rains the day before and heavy winds, the couple along with other guests trekked
to the other side of the beach where they boarded M/B Coco Beach III. Shortly after the boat sailed, it
started to rain and when the reached the open seas the wind got stronger causing the boat to tilt from
side to side and eventually capsized putting all passengers underwater. Ruelito and his wife perished
from the accident which, prompted his parents to filed a complaint for damages against Sun Holidays
alleging that the latter failed to observed extraordinary diligence as common carrier in allowing the boat
to sail despite a storm warning. Sun Holidays denied responsibility claiming that they are not a common
carrier hence they are only required to observe ordinary diligence and the accident was due to a
fortuitous event.

Issue:

W/N Sun Holidays is a common carrier within the ambit of the law hence liable for damages.

YES. Article 1732 of the Civil Code defining “common carriers” has deliberately refrained from making
distinctions on whether the carrying of persons or goods is the carrier’s principal business, whether it is
offered on a regular basis, or whether it is offered to the general public. The intent of the law is thus to
not consider such distinctions. Otherwise, there is no telling how many other distinctions may be
concocted by unscrupulous businessmen engaged in the carrying of persons or goods in order to avoid
the legal obligations and liabilities of common carriers.

The evidence shows that PAGASA issued 24-hour public weather forecasts and tropical cyclone warnings
for shipping on September 10 and 11, 2000 advising of tropical depressions in Northern Luzon, which
would also affect the province of Mindoro. By the testimony of Dr. Frisco Nilo, supervising weather
specialist of PAGASA, squalls are to be expected under such weather condition.

A very cautious person exercising the utmost diligence would thus not brave such stormy weather and
put other people’s lives At risk. The extraordinary diligence required of common carriers demands that
they take care of the goods or lives entrusted to their hands as if they were their own. This respondent
failed to do.
ESTRELLITA M. BASCOS, petitioner, vs.CA

Facts:
Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE), entered into a hauling contract
with Jibfair Shipping Agency Corporation whereby the former bound itself to haul the latter’s 2,000
m/tons of soya bean meal from Manila to Laguna.

CIPTRADE, through Rodolfo Cipriano, subcontracted with Estrellita M. Bascos (petitioner) doing
business under the name A.M. Bascos Trucking to deliver 400 sacks of soya bean meal from Manila to
Laguna. Petitioner failed to deliver the said cargo.

As a consequence, Cipriano paid Jibfair Shipping Agency of the amount of the lost goods and
demanded reimbursement from Bascos but the latter refused to pay, causing him to file a complaint.
The lower court rendered a decision in favor of Cipriano, which was affirmed by the Court of Appeals.
The Supreme Court is now faced with the following issues:

Whether or not the petitioner is a common carrier.

Whether or not hijacking is a force majeure.

Held:
Article 1732 of the Civil Code defines common carrier as a person, corporations, firms, or associations
engaged in the business of carrying or transporting passengers or goods, or both, by land, water or air,
for compensation, offering their services to the public. The test to determine a common carrier is”
whether the given undertaking is a part of the business engaged in by the carrier which he has held out
to the general public as his occupation rather than the quantity or extent of the business transacted."

Article 1732 does not distinguish between a carrier offering its services to the "general public,"
i.e., the general community or population, and one who offers services or solicits business only from a
narrow segment of the general population.

In De Guzman vs. Court of Appeals, the Court held that hijacking, not being included in the
provisions of Article 1734, must be dealt with under the provisions of Article 1735 and thus, the
common carrier is presumed to have been at fault or negligent. To exculpate the carrier from liability
arising from hijacking, he must prove that the robbers or the hijackers acted with grave or irresistible
threat, violence, or force.
The presumption of negligence was raised against petitioner. It was petitioner's burden to
overcome it.

Her own failure to adduce sufficient proof of extraordinary diligence made the presumption
conclusive against her.

AF Sanchez Brokerage vs CA and FGU Insurance

(Dec 21, 2004)

Facts:
AF Sanchez is engaged in a broker business wherein its main job is to calculate
customs duty, fees and charges as well as storage fees for the cargoes. Part also of
the services being given by AF Sanchez is the delivery of the shipment to the
consignee upon the instruction of the shipper.

Wyett engaged the services of AF Sanchez where the latter delivered the shipment
to Hizon Laboratories upon instruction of Wyett. Upon inspection, it was found out
that at least 44 cartons containing contraceptives were in bad condition. Wyett
claimed insurance from FGU. FGU exercising its right of subrogation claims
damages against AF Sanchez who delivered the damaged goods. AF Sanchez
contended that it is not a common carrier but a brokerage firm.
Issue:
Is AF Sanchez a common carrier?

Held:
SC held that Art 1732 of the Civil Code in defining common carrier does not
distinguish whether the activity is undertaken as a principal activity or merely as an
ancillary activity. In this case, while it is true that AF Sanchez is principally engaged
as a broker, it cannot be denied from the evidence presented that part of the
services it offers to its customers is the delivery of the goods to their respective
consignees.

Addendum: MAY NEGLIGENCE X E.DI OF GOOD FATHER KASI:

AF Sanchez claimed that the proximate cause of the damage is improper packing.
Under the CC, improper packing of the goods is an exonerating circumstance. But in
this case, the SC held that though the goods were improperly packed, since AF
Sanchez knew of the condition and yet it accepted the shipment without protest or
reservation, the defense is deemed waived.

Torres Madrid Brokerage Inc. vs Feb Mitsui and BMT

Facts:
Sony engaged the services of Torres Madrid Brokerage (TMBI) to facilitate, process, withdraw, and
deliver the shipment of various electronic goods from Thailand at the port to its warehouse in Biñan,
Laguna.
TMBI subcontracted the services of Benjamin Manalastas’ company, BMT Trucking services (BMT) to
transport the shipment as they do not own any delivery trucks. TMBI notified Sony and had no
objections of the arrangement.

4 BMT trucks picked up the shipment from the port on Oct. 7, 2000 but due to the truck ban they could
not undertake delivery immediately and bec the ff. Day was Sunday. BMT scheduled delivery on Oct. 9
2000. October 9 early morning however, only 3 trucks arrived at Sony’s Biñan warehouse. The 4th truck
was seen abandoned along Diversion Road in Filinvest, Alabang, Muntinlupa City at 12noon wherein
both the driver Rufo Lapesura and the shipments were missing.
Victor Torres, TMBI’s general manager, filed with NBI against Lapesura for’hijacking’
TMBI notified Sony of the loss and sent BMT a letter demanding payment for the lost shipment. BMT
refused so insisting the goods were ‘hijacked,’.
SONY filed an insurance claim with the Mitsui, the insurer of goods. Mitsui paid Sony P7,293,386.23.
After being subrogated to Sony’s rights, Mitsui sent TMBI a demand letter for payment of the lost goods.
TMBI refused to pay. Mitsui then filed a complaint against TMBI. TMBI impleaded BMT as a 3rd party
defendant, alleging BMT’s driver responsible and claimed BMT’s negligence as the proximate cause.
TMBI prayed that in te event it is held liable to Mitsui, it should be reimbursed by BMT.
RTC found BMT and TMBI jointly and solidarily liable. That they have been doing business since early
80’s and the same incident happened on Sony’s cargo in 1997 but neither sony nor its insurer filed a
complaint.
BMT AND TMBI appealed.
TMBI denied that it was a common carrier required to exercise extraordinary diligence and that ‘hijack’
is a fortuitous event.
BMT claimed that it exercised extraordinary diligence and ye loss result from a forfuitous event.

Issue:
WON TMBI is a common carrier engaged in the business of transporting goods for the general public for
a fee
WON TMBI and BMT are solidarily liable to MITSUI
WON BMT is directly liable to Sony or Mitsui
WON BMT is liable to TMBI for breach of their contract of carriage
Ruling:

1.A brokerage may be considered a common carrier if it also undertakes to deliver the goods for its
customers. Common carriers are persons, corporations, firms or associations engaged in the business of
transporting passengers or goods or both, by land, water, or air, for compensation, offering their
services to the public. They are bound to observe extraordinary diligence for reasons of public policy in
the vigilance over the goods and in rhe safety of their passengers. The law does not disringuish between
one whose principal business activity is the carrying of goods and one who undertakes this task only as
an ancillary activity.TMBI’s delivery of the goods is an integral, albeit ancillary, part of its brokerage
services. As long as an entity holds itself to the public for the transport of goods as a business, it os
considered a common carrier regardless of whether it owns a vehicle or has actually to hire one.
Consequently, as in the case of theft or robbery of goods,, a common carrier is presumed to have been
at fault or to have acted negligently, unless it can prove that it observed extraordinary diligence. And
that a robbery attended by grave or irresistble threat, violence or force is a fortuitous event that
absolves the common carrier from liability.
In the present case, despite the subcontract, TMBI remained responsible for the cargo. Under Article
1763, a common carrier’s extraordinary responsibility lasts from the time these goods are
unconditionally placed in the possession of, and received by the carrier for transportation, until they are
delivered, actually or constructively, by the carrier to the consignee.TMBI simply argued that it was not a
common carrier bound to observe extraordinary diligence. Its failure to successfully establish this
premise carries with it the presumption of fault thus rendering it liably to Sony or Mitsui for breach of
contract

2.NO. TMBI’s liability to Mitsui does not stem from a quasi delict but from its breach of contract. Th e tie
that binds TMBI with Mitsui is contractual, albeit one that oassed on to Mitsui as a result of TMBI’s
contract of carriage with Sony to which Mitsui had been subrogated as an insurer. The legal reality that
results from this contractual tie precludes the application of quasi- delict

3.No. There is no direct contractual relationship existed between Sony/Mitsui. Mitsui did not even sue
BMT, much less prove any negligence on its part. There is no basis to directly hold BMT Liable to Mitsui
for quasi-delict

4.YES. By subcontracting the delivery, TMBI entered into its ownc contract of carriage with a fellow
common carrier. The cargo was lost after is transfer to BMT’s custody based on its contract with TMBI.
Following Article 1735, BMT Is presumed to be at fault.Since BMT failed to provethat it observed
extraordinary diligence, it is liable to TMBI for breach of their contract of carriage

TMBI is liable to Sony/Mitsui for breaching the contract of carriage. In turn, TMBI is entitled to
reimbursement from BMT due to the latter’s won breach of its contract of carriage with TMBI

Crisostomo v. CA
G.R. No. 138334, August 25, 2003, 409 SCRA 528

FACTS:

Petitioner contracted the services of respondent Caravan Travel and Tours International, Inc. to
arrange and facilitate her booking, ticketing and accommodation in a tour dubbed Jewels of Europe.
Pursuant to said contract, the travel documents and plane tickets were delivered to the petitioner
who in turn gave the full payment for the package tour on June 12, 1991. Without checking her travel
documents, petitioner went to NAIA on Saturday, June 15, 1991, to take the flight for the first leg of
her journey from Manila to Hongkong. To petitioner’s dismay, she discovered that the flight she was
supposed to take had already departed the previous day. She learned that her plane ticket was for
the flight scheduled on June 14, 1991. She thus called up Menor to complain. Subsequently, Menor
prevailed upon petitioner to take another tour- the British Pageant. Upon petitioner’s return from
Europe, she demanded from respondent the reimbursement of the difference between the sum she
paid for Jewels of Europe and the amount she owed respondent for the British Pageant tour.

Petitioner filed a complaint against respondent for breach of contract of carriage and damages
alleging that her failure to join Jewels of Europe was due to respondent’s fault since it did not clearly
indicate the departure date on the plane, failing to observe the standard of care required of a
common carrier when it informed her wrongly of the flight schedule. For its part, respondent
company, denied responsibility for petitioner’s failure to join the first tour, insisting that petitioner was
informed of the correct departure date, which was clearly and legibly printed on the plane ticket. The
travel documents were given to petitioner two days ahead of the scheduled trip. Respondent further
contend that petitioner had only herself to blame for missing the flight, as she did not bother to read
or confirm her flight schedule as printed on the ticket.

ISSUE:

Whether or not Caravan Travel & Tours International Inc. is negligent in the fulfilment of its obligation
to petitioner Crisostomo thus granting to the petitioner the consequential damages due her as a
result of breach of contract of carriage.

RULING:

Contention of petitioner has no merit. A contract of carriage or transportation is one whereby a

certain person or association of persons obligate themselves to transport persons, things, or news
from one place to another for a fixed price. Such person or association of persons are regarded as
carriers and are classified as private or special carriers and common or public carriers. Respondent
is not an entity engaged in the business of transporting either passengers or goods and is therefore,
neither a private nor a common carrier. Respondent did not undertake to transport petitioner from
one place to another since its covenant with its customers is simply to make travel arrangements in
their behalf. Respondent’s services as a travel agency include procuring tickets and facilitating travel
permits or visas as well as booking customers for tours.

The object of petitioner’s contractual relation with respondent is the service of arranging and
facilitating petitioners booking, ticketing and accommodation in the package tour. In contrast, the
object of a contract of carriage is the transportation of passengers or goods. It is in this sense that
the contract between the parties in this case was an ordinary one for services and not one of
carriage. Since the contract between the parties is an ordinary one for services, the standard of care
required of respondent is that of a good father of a family under Article 1173 of the Civil Code. The
evidence on record shows that respondent exercised due diligence in performing its obligations
under the contract and followed standard procedure in rendering its services to petitioner. As
correctly observed by the lower court, the plane ticket issued to petitioner clearly reflected the
departure date and time, contrary to petitioner’s contention. The travel documents, consisting of the
tour itinerary, vouchers and instructions, were likewise delivered to petitioner two days prior to the
trip. Respondent also properly booked petitioner for the tour, prepared the necessary documents
and procured the plane tickets. It arranged petitioner’s hotel accommodation as well as food, land
transfers and sightseeing excursions, in accordance with its avowed undertaking. The evidence on
record shows that respondent company performed its duty diligently and did not commit any
contractual breach. Hence, petitioner cannot recover and must bear her own damage.

DEGREE OF DILIGENCE and ARRASTRE

ASIAN TERMINALS, INC., petitioner, vs. DAEHAN FIRE AND MARINE INSURANCE CO., LTD., respondent.

Facts:

On 8July 2008 Doosan Corporation shipped 26 Boxes of printed alluminum sheets on board vessel
Heung-A Dragon owned by Dongnama Shipping Co., Ltd., it is covered by bill lading and consigned to
Access International. Doosan insured the shipment with Daehan Fire and Marine Insurance Co. Ltd.
under all risk marine cargo insurance policy.

The vessel arrived in Manila that was then unloaded under good condition and no survey were
conducted in the Equipment Interchange Receipt. Successively, the Access International requested from
the licensed broker, Victoria Lazo together with Asian Terminal Inc. a joint survey of shipment but still no
inspection was made.
Victoria Lazo and Asian Terminal then released the and delivered to Access International warehouse.
However, there were only 12 boxes that is accounted whole 14 boxes were missing amounting
$34,993.28. Thus Access International asked for the indemnifdication from Daehan Fire and marine
Insurance Co. amounting $45,728.81.

Daehan now filed a case represented by Smith Bell against DongnamaUNiship Inc. alleging that the loss
and damages was due to the fault of the Asian Terminal Inc. and Victoria Lazo. RTC: Dismissed the Case
on the groundsof insufficiency of evidence

CA: Reversed the Decision of RTC. Ordering Asian Terminal Inc. and Victoria Lazo to pay Daehan Fore
and Marine Insurance Co.
Issue:
Whether or not the Petitioner Asian Terminals Inc. is liable for the loss of the shipment notwithstanding
the acknowledgement by consignee’s broker/ representative in the Equipment Interchange Receipt that
the shipment was received in good order.
Held:

Yes. In the performance of its obligation, An Arrastre Operator should OBSERVE THE SAME DEGREE OF
DILIGENCE as that required of COMMON CARRIERS and warehouseman. Being a custodian of goods an
arrastre must take care of goods and turn them over to party entitled into possession.
In a burden of proof to show compliance in the obligation to deliver goods to appropriate party must
devolve upon arrastre operator. Since safe keeping of goods is its responsibility, it must prove that the
losses were not due to its negligence or to that of its employee.

Under claims and Liability, the contractor shall be solely liable for any injury or damages that may arise
on account of negligence or carelessness of CONTRACTOR. What is essential is knowledge beforehand of
the extent of risk to be undertaken by arrastre operator, as determined by the value of property.

Sps. Pereña vs. Sps. Zarate

FACTS:

Sps. Zarate, parents of Aaron Zarate, engaged the services of Sps. Pereña for the adequate and
safe transportation carriage of the former spouses’ son from their residence to his school.
During the effectivity of the contract of carriage, Aaron Zarate died in connection with a
vehicular/train collision which occurred while Aaron was riding the contracted carrier. At the
time of the said collision, there were no safety warning signs and railings at the site commonly
used for railroad crossing. The site of the collision was not intended by the railroad operator for
railroad crossing at the time of the collision. PNR refused to acknowledge any liability for the
collision. In Sps. Pereña’s defense, they adduces evidence to show that they had exercised the
diligence of a good father of a family in the selection and supervision of Alfaro, the driver, by
making sure that Alfaro had been issued a driver’s license and had not been involved in any
vehicular accident prior to the collision. The RTC ruled in favor of Sps. Zarate and held the
Pereñas and PNR jointly and severally liable for the death of Aaron plus damages. The CA
upheld the award for the loss of Aaron’s earning capacity, plus damages, and the award for
Attorney’s fees was deleted. Hence, this petition.

ISSUE:
WON the Pereñas and PNR are jointly and severally liable for damages.
HELD:
YES.
A school bus operator is a common carrier.The true test for a common carrier is not the quantity or extent
of business actually transacted, or the number of conveyances, BUT WHETHER the undertaking is a part
of the activity that he has held out to the general public as his business or occupation.
 The defense of the Pereñas that they exercised the diligence of a good father of a family has no
merit because they operated as common carriers and that their standard of care was
extraordinary diligence, not the ordinary diligence of a good father of a family. The Pereñas,
acting as a common carrier, were already presumed to be negligent at the time of the accident
because death had occurred to their passenger. The presumption for negligence, being a
presumption of law, laid the burden of evidence on their shoulders to establish that they had
not been negligent. There is no question that the Pereñas did not overturn the presumption of
their negligence by credible evidence. Their defense of having observed the diligence of a good
father of a family in the selection and supervision of their driver was not legally sufficient. PNR
was also found guilty of negligence because it did not ensure the safety of others through the
placing of crossbars, signal lights, warning signs, and other permanent safety barriers to
prevent vehicles or pedestrians from crossing there. Hence, the Pereñas and PNR should jointly
and severally be liable for the death of Aaron Zarate.

Fisher v. Yangco Steamship Co.

G.R. No. L-8095, 31 March 1915, 31 Phil 1

FACTS:

Plaintiff is a stockholder in the Yangco Steamship Company, the 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, and expressly prohibiting the officers, agents and servants of
the company from offering to carry, accepting for carriage said dynamite, powder or other
explosives;”
Thereafter the respondent Acting Collector of Customs demanded and required of the company the
acceptance and carriage of such explosives; that he has refused and suspended the issuance of the
necessary clearance documents of the vessels of the company unless and until the company
consents to accept such explosives for carriage

ISSUE:

Whether the refusal of the owners and officers 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” is a valid act.

RULING:

The traffic in dynamite gun powder and other explosive is vitally essential to the material and general
welfare of the inhabitants of this islands and it these products are to continue in general use
throughout the Philippines they must be transported from water to port to port in various island which
make up the Archipelago.

It follows that a refusal by a particular vessel engage as a common carrier of merchandise in

coastwise trade in the Philippine Island to accept such explosives for carriage constitutes a violation.
The prohibition against discrimination penalized under the statute, unless it can be shown that there
is so Real and substantial danger of disaster necessarily involved in the courage of any or all of this
article of merchandise as to render such refusal a due or unnecessary or a reasonable exercise or
prudence and discretion on the part of the ship owner
U.S. v. Quinajon and Quitoriano

FACTS:

Defendants Pascual Quinajon and Eugenio Quitoriano have been engaged for more than four years in
the transportation of passengers and merchandise in the port of Currimao by means of virayes. They, by
means of their virayes and employees, unloaded 5,986 sacks of rice belonging to the provincial
government of Ilocos Norte from Manila and demanded from the provincial treasurer for the unloading
of each one 10 centavos which amounted to P598.60.

The prosecuting attorney of the Province of Ilocos Norte filed a complaint against the defendants stating
that the provincial government of Ilocos Norte suffered damaged in the sum of 359.16, inasmuch as it
should have paid only 239.44, in accordance with the said normal rate of 6 centavos for each package.

The provincial fiscal presented witnesses to prove that defendants entered into a special contract with
certain merchants, under and by virtue of the terms of which they charged and collected, for loading
merchandise in said port, the sum of 6 centavos for each package, without reference to its size or
weight.

Defendants were charged of violating Act No. 98 of the Civil Commission.

Said Act No. 98 is "An Act to regulate commerce in the Philippine Islands." Its purpose, so far as it is
possible, is to compel common carriers to render to all persons exactly the same or analogous service for
exactly the same price, to the end that there may be no unjust advantage or unreasonable
discrimination. It applies to persons or corporation engaged as common carriers of passengers or
property. A common carrier is a person or corporation whose regular business is to carry passengers or
property for all persons who may choose to employ and renumerate him. A common carrier is a person
or corporation who undertakes to carry goods or persons for hire.

The appellants admit that they are common carriers. They were found guilty and sentenced to pay a fine
of P200 and costs, and to return to the provincial government of the Province of Ilocos Norte the sum of
P359.16.

From that sentence each of the defendants appealed to this court.

ISSUE: Whether or not the defendants and appellants have violated Act No. 98.

HELD: YES.

It will be noted that the law requires common carriers to carry for all persons, either passengers or
property, for exactly the same charge for a like or contemporaneous service in the transportation of like
kind of traffic under substantially similar circumstances or conditions. The law prohibits common
carriers from subjecting any person, etc., or locality, or any particular kind of traffic, to any undue or
unreasonable prejudice or discrimination whatsoever.

The law does not require that the same charge shall be made for the carrying of passengers or property,
unless all the conditions are alike and contemporaneous. It is not believed that the law prohibits the
charging of a different rate for the carrying of passengers or property when the actual cost of handling
and transporting the same is different. It is not believed that the law intended to require common
carriers to carry the same kind of merchandise, even at the same price, under different and unlike
conditions and where the actual cost is different. It is when the price charged is for the purpose of
favoring persons or localities or particular kinds of merchandise, that the law intervenes and prohibits. It
is favoritism and discrimination which the law prohibits. The difference in charge must not be made to
favor one merchant, or shipper, or locality, to the disadvantage of another merchant, or shipper, or
locality. If the services are alike and contemporaneous, discrimination in the price charged is prohibited.
In the case at bar, there is no proof that the conditions were different. There is no proof that the
services rendered by the defendants for the different parties were unlike or even not contemporaneous.
There is no pretense that it actually cost more to handle the rice for the province than it did for the
merchants with whom the special contracts were made. From the evidence it would seem that there
was a clear discrimination made against the province. Discrimination is the thing which is specifically
prohibited and punished under the law.

Loadstar Shipping vs. Court of Appeals

315 SCRA 339, 1999

Facts: On November 19, 1984, loadstar received on board its M/V “Cherokee” bales of lawanit
hardwood, tilewood and Apitong Bolidenized for shipment. The goods, amounting to P6,067, 178.
Were insured for the same amount with the Manila Insurance Company against various risks
including “Total Loss by Total Loss of the Vessel”. On November 20, 1984, on its way to Manila from
the port of Nasipit, Agusan Del Norte, the vessel, along with its cargo, sank off Limasawa Island. As
a result of the total loss of its shipment, the consignee made a claim with loadstar which, however,
ignored the same. As the insurer, MIC paid to the insured in full settlement of its claim, and the latter
executed a subrogation receipt therefor. MIC thereafter filed a complaint against loadstar alleging
that the sinking of the vessel was due to fault and negligence of loadstar and its employees.

In its answer, Loadstar denied any liability for the loss of the shipper’s goods and claimed that the
sinking of its vessel was due to force majeure. The court a quo rendered judgment in favor of MIC.,
prompting loadstar to elevate the matter to the Court of Appeals, which however, agreed with the
trial court and affirmed its decision in toto. On appeal, loadstar maintained that the vessel was a
private carrier because it was not issued a Certificate of Public Convenience, it did not have a
regular trip or schedule nor a fixed route, and there was only “one shipper, one consignee for a
special crago”.

Issue: Whether or not M/V Cherokee was a private carrier so as to exempt it from the provisions
covering Common Carrier?

Held: Loadstar is a common carrier.

The Court held that LOADSTAR is a common carrier. It is not necessary that the carrier be issued a
certificate of public convenience, and this public character is not altered by the fact that the carriage
of the goods in question was periodic, occasional, episodic or unscheduled. Further, the bare fact
that the vessel was carrying a particular type of cargo for one shipper, which appears to be purely
co-incidental; it is no reason enough to convert the vessel from a common to a private carrier,
especially where, as in this case, it was shown that the vessel was also carrying passengers.

Article 1732 also carefully avoids making any distinction between a person or enterprise offering
transportation service on a regular or scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier
offering its services to the "general public," i.e., the general community or population, and one who
offers services or solicits business only from a narrow segment of the general population.

Home Insurance vs. American Steamship

23 SCRA 24

Facts: The Consorcio Pesquero del Peru of South America shipped jute bags of Peruvian fishmeal
through SS Crowborough, consigned to San Miguel Brewery, Inc. The cargo, which was insured by
Home Insurance Company, arrived at the port of Manila and was discharged to the lighters of the
Luzon Stevedoring Corporation. When the same was delivered to the consignee, there were
shortages amounting to P 12, 033.85, prompting the latter to pay against Luzon Stevedoring Co.

Because the others denied liability, Home Insurance paid San Miguel the insurance value loss. This
cost was brought by the former to recover indemnity from Luzon Stevedoring and the ship owner.
Luzon Stevedoring raised the defense that it deliver with due diligence in the same from the carrier.
Mexican Steamship Agencies denied liability on the ground that the charter party referred to in the
bills of lading, the charter, not the ship owner, was responsible for any loss or damage of the cargo.
Furthermore, it claimed to have exercised due diligence in stowing the goods and as a mere
forwarding agent, it was not responsible for losses or damages to the cargo.
Issue: Whether or not the stipulation in the charter party to owner’s non-liability was valid as to
absolve the American Steamship from liability loss?

Held: The Civil Code provision on common carriers should not be applied where the carrier is not
acting as such but as a private carrier. The stipulation in the charter party absolving the owner from
liability for loss due to the negligence of its agent is void only if the strict public policy governing
common carriers is applied. Such policy has no force where the public at large is not involved, as in
the case of a ship totally chartered for the use of a single party.

San Pablo v. Pantranco South Express, Inc.

G.R. No. L-61461, 21 August 1987, 153 SCRA 199

FACTS:

Pantranco – engaged in the land transportation business with PUB service for passengersand freight
and various certificates for public conveniences to operate passenger busesfrom Metro Manila to
Bicol Region and Eastern Samar; through its counsel, it wrote toMaritime Industry Authority
(MARINA) requesting authority to lease/purchase a vesselnamed M/V “Black Double” “to be used for
its project to operate a ferryboat service fromMatnog, Sorsogon and Allen, Samar that will provide
service to company buses and freighttrucks that have to cross San Bernardo Strait; request was
denied by MARINA
It nevertheless acquired the vessel MV “Black Double”; it wrote the Chairman of the Boardof
Transportation that it proposes to operate a ferry service to carry its passenger busesand freight
trucks between Allen and Matnog in connection with its trips to Tacloban Cityfor the purpose of
continuing the highway, which is interrupted by a small body of water,the said proposed ferry
operation being merely a necessary and incidental service to itsmain service and obligation of
transporting its passengers; that being so, it believed thatthere was no need for it to obtain a
separate certificate for public convenience to operatea ferry service Matnog to cater exclusively to its
passenger buses and freight trucks. BOTgranted the request. Cardinal Shipping Corporation and the
heirs of San Pablo filedseparate motions for reconsideration.

ISSUE:

WON a ferry service is an extension of the highway and thus is a part of theauthority originally
granted PANTRANCO; 2. WON a land transportation company can beauthorized to operate a ferry
service or coastwise or interisland shipping service along itsauthorized route as an incident to its
franchise without the need of filing a separateapplication for the same

HELD:

No.

Ferry- continuation by means of boats, barges, or rafts, of a highway or the connection of highways
located on the opposite banks of a stream or other body of water. The termnecessarily implies
transportation for a short distance, almost invariably between twopoints, which is unrelated to other
transportation

Ferry service- service either by barges or rafts, even by motor or steam vessels, betweenthe banks
of a river or stream to continue the highway which is interrupted by the body of water, or in some
cases to connect two points on opposite shores of an arm of the seasuch as bay or lake which does
not involve too great a distance or too long a time tonavigate(engaged in the coastwise trade)
,service between the different islands, involving more or less great distance and over moreor less
turbulent and dangerous waters of the open sea, to be coastwise or inter-islandservice; considered
coastwise or inter-island service conveyance of passengers, trucks and cargo from Matnog to Allen
is certainly not a ferryboat service but a coastwise or interisland shipping service. Under no
circumstance canthe sea between Matnog and Allen be considered a continuation of the highway.
While aferry boat service has been considered as a continuation of the highway when crossingrivers
or even lakes, which are small body of waters – separating the land, however, whenas in this case
the two terminals, Matnog and Allen are separated by an open sea it cannot be considered as a
continuation of the highway. PANTRANCO should secure a separate CPC for the operation of an
interisland or coastwise shipping. Its CPC as a bustransportation cannot be merely amended to
include this water service under the guisethat it is a mere private ferry service.

NATIONAL CTEEL V CA

Facts:

Plaintiff National Steel Corporation (NSC) as Charterer and defendant Vlasons Shipping, Inc. (VSI) as Owner,
entered into a Contract of Voyage Charter Hire whereby NSC hired VSI’s vessel, the MV Vlasons I to make one

voyage to load steel products at Iligan City and discharge them at North Harbor, Manila. The handling, loading and
unloading of the cargoes were the responsibility of the Charterer.

The skids of tinplates and hot rolled sheets shipped were allegedly found to be wet and rusty. Plaintiff, alleging
negligence, filed a claim for damages against the defendant who denied liability claiming that the MV Vlasons I was

seaworthy in all respects for the carriage of plaintiff’s cargo; that said vessel was not a “common carrier” inasmuch as

she was under voyage charter contract with the plaintiff as charterer under the charter party; that in the course its
voyage, the vessel encountered very rough seas.

Issue:
Whether or not the provisions of the Civil Code on common carriers pursuant to which
there exists a presumption of negligence against the common carrier in case of loss or
damage to the cargo are applicable to a private carrier.

ISSUE: Whether or not VSI contracted with NSC as a common carrier or a private carrier.

Held:

No. In a contract of private carriage, the parties may freely stipulate their duties and obligations which perforce would

be binding on them. Unlike in a contract involving a common carrier, private carriage does not involve the general

public. Hence, the stringent provisions of the Civil Code on common carriers protecting the general public cannot
justifiably be applied to a ship transporting commercial goods as a private carrier.

It has been held that the true test of a common carrier is the carriage of passengers or goods, provided it has space,
for all who opt to avail themselves of its transportation service for a fee [Mendoza vs. Philippine Airlines, Inc., 90 Phil.

836, 842-843 (1952)]. A carrier which does not qualify under the above test is deemed a private carrier. “Generally,

private carriage is undertaken by special agreement and the carrier does not hold himself out to carry goods for the
general public.

Because the MV Vlasons I was a private carrier, the ship owner’s obligations are governed by the foregoing

provisions of the Code of Commerce and not by the Civil Code which, as a general rule, places the prima
facie presumption of negligence on a common carrier

Planters Products vs. Court of Appeals

G.R. No. 101503 September 15, 1993

Facts: Planters Product Inc. purchased from Mitsubishi international corporation metric tons of Urea
fertilizer, which the latter shipped aboard the cargo vessel M/V Sun Plum owned by private
respondent Kyosei Kisen Kabushiki Kaisha. Prior to its voyage, a time charter-party on the vessel
respondent entered into between Mitsubishi as shipper/charterer and KKKK as ship owner, in Tokyo,
Japan.
Before loading the fertilizer aboard the vessel, (4) of her holds were presumably inspected by the
charterer’s representative and found fit to take a load of urea in bulk. After the Urea fertilizer was
loaded in bulk by stevedores hired by and under the supervision of the shipper, the steel hatches
were closed with heavy iron lids. Upon arrival of vessel at port, the petitioner unloaded the cargo
pursuant to the terms and conditions of the charter-party. The hatches remained open throughout
the duration of the discharge.

Upon arrival at petitioner’s warehouse a survey conducted over the cargo revealed a shortage and
the most of the fertilizer was contaminated with dirt. As such, Planters filed an action for damages.
The defendant argued that the public policy governing common carriers do not apply to them
because they have become private carriers by reason of the provisions of the charter-party.

Issue: Whether or not the charter-party contract between the ship owner and the charterer
transforms a common carrier into a private carrier?

Held: A charter party may either her be time charter wherein the vessel is leased to the charterer,
wherein the ship is leased to the charterer for a fixed period of time or voyage charter, wherein the
ship is leased for a single voyage. In both cases, the charter party provides for the hire of the vessel
only, either for a determinate time or for a single or consecutive voyage.

It is therefor imperative that such common carrier shall remain as such, notwithstanding the charter
of the whole or part of the vessel by one or more persons, provided the charter is limited to the ship
only, as in the case of a time-charter or voyage-charter. It is only when the charter includes both ship
and its crew as in bareboat or demise that it becomes a private carrier. Undoubtedly, a shipowner in
a time or voyage charter retains in possession and control of the ship, although her holds may be the
property of the charterer.