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

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

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

FACTS: Petitioner Maersk Line is engaged in the transportation of goods by sea, doing business in the Philippines through its general agent Compania General de Tabacos de Filipinas. Private respondent Efren Castillo, on the other hand, is the proprietor of Ethegal Laboratories, a firm engaged in the manutacture of pharmaceutical products. On November 12, 1976, private respondent ordered from Eli Lilly. Inc. of Puerto Rico through its (Eli Lilly, Inc.'s) agent in the Philippines, Elanco Products, 600,000 empty gelatin capsules for the manufacture of his pharmaceutical products. The capsules were placed in six (6) drums of 100,000 capsules each valued at US $1,668.71.Through a Memorandum of Shipment (Exh. "B"; AC GR CV No.10340, Folder of Exhibits, pp. 5-6), the shipper Eli Lilly, Inc. of Puerto Rico advised private respondent as consignee that the 600,000 empty gelatin capsules in six (6) drums of 100,000 capsules each, were already shipped on board MV "Anders Maerskline" under Voyage No. 7703 for shipment to the Philippines via Oakland, California. In said Memorandum, shipper Eli Lilly, Inc. specified the date of arrival to be April 3, 1977.

For reasons unknown, said cargo of capsules were mishipped and diverted to Richmond, Virginia, USA and then transported back Oakland, California. The goods finally arrived in the Philippines on June 10, 1977 or after two (2) months from the date specified in the memorandum. As a consequence, private respondent as consignee refused to take delivery of the goods on account of its failure to arrive on time.ISSUE: Whether or not Maersk Line is liable for damages resulting from delay in the delivery of the shipment in the absence in the bill of lading of a stipulation on the period of delivery.

PETITIONERS CONTENTION: Denying that it committed breach of contract, petitioner alleged in its that answer that the subject shipment was transported in accordance with the provisions of the covering bill of lading and that its liability under the law on transportation of good attaches only in case of loss, destruction or deterioration of the goods as provided for in Article1734 of Civil Code (Rollo, p. 16).Defendant Eli Lilly, Inc., on the other hand, filed its answer with compulsory and cross-claim. In its cross-claim, it alleged that the delay in the arrival of the the subject merchandise was due solely to the gross negligence of petitioner Maersk Line.RESPONDENTS CONTENTION: Private respondent alleging gross negligence and undue delay in the delivery of the goods, filed an action before the court a quo for rescission of contract with damages against petitioner.

RULING: TRIAL COURT: After trial held between respondent and petitioner, the court a quo rendered judgment dated January 8, 1982 in favor of respondent Castillo, the dispositive portion of which reads:IN VIEW OF THE FOREGOING, this Court believe (sic) and so hold (sic) that there was a breach in the performance of their obligation by the defendant Maersk Line consisting of their negligence to ship the 6 drums of empty Gelatin Capsules which under their own memorandum shipment would arrive in the Philippines on April 3, 1977 which under Art. 1170 of the New Civil Code, they stood liable for damages.APPELLATE COURT: On appeal, respondent court rendered its decision dated August 1, 1990 affirming with modifications the lower court's decision.

SUPREME COURT: We have carefully reviewed the decisions of respondent court and the trial court and both of them show that, in finding petitioner liable for damages for the delay in the delivery of goods, reliance was made on the rule that contracts of adhesion are void. Added to this, the lower court stated that the exemption against liability for delay is against public policy and is thus, void. Besides, private respondent's action is anchored on Article 1170 of the New Civil Code and not under the law on Admiralty (AC-GR CV No. 10340, Rollo, p. 14).In the case before us, we find that a delay in the delivery of the goods spanning a period of two (2) months and seven (7) days falls was beyond the realm of reasonableness. Described as gelatin capsules for use in pharmaceutical products, subject shipment was delivered to, and left in, the possession and custody of petitioner-carrier for transport to Manila via Oakland, California. But through petitioner's negligence was mishipped to Richmond, Virginia. Petitioner's insistence that it cannot be held liable for the delay finds no merit. #QUINTOSCase title: MAGELLAN MANUFACTURING MARKETING CORPORATION vs. COURT OF APPEALS, ORIENT OVERSEAS CONTAINER LINES and F.E. ZUELLIG, INC

Keyword: anahawPonente: J. Regalado

Doctrine: Unreasonable delay in the delivery of transported goods is sufficient ground for the abandonment of goods as provided in the code of commerce is also applicable to marine transportation.

Facts:Magellan Manufacturers Marketing Corp. (MMMC) entered into a contract with Choju Co. of Yokohama, Japan to export 136,000 anahaw fans for and in consideration of $23,220.00. Through its president, James Cu, MMMC then contracted F.E. Zuellig, a shipping agent to ship the anahaw fans through Orient Overseas Container Lines, Inc., (OOCL) specifying that he needed an on-board bill of lading and that transhipment is not allowed under the letter of credit. appellant MMMC paid F.E. Zuellig the freight charges and secured a copy of the bill of lading which was presented to Allied Bank However, when appellant's president James Cu, went back to the bank later, he was informed that the payment was refused by the buyer allegedly because there was no on-board bill of lading, and there was a transhipment of goods. As a result of the refusal of the buyer to accept, upon appellant's request, the anahaw fans were shipped back to Manila by appellees, for which the latter demanded from appellant payment of P246,043.43. Appellant abandoned the whole cargo and asked appellees for damages.

Issue:WON MMMMC should be liable for P52k when it exercised its option of Abandonment.

Petitioners contention:Private respondents be ordered to pay whatever petitioner was not able to earn from Choju Co., Ltd., amounting to P1 74,150.00 and other damages like attorneys fees since private respondents are to blame for the refusal of Choju Co., Ltd. to accept the Anahaw fans

Respondents contention:It alleged that the bill of lading clearly shows that there will be a transhipment and that petitioner was well aware that MV (Pacific) Despatcher was only up to Hongkong where the subject cargo will be transferred to another vessel for Japan. Private respondents also filed a counterclaim praying that petitioner be ordered to pay freight charges from Japan to Manila and the demurrages in Japan and Manila amounting to P298,150.93

TC:MMMMC cannot seek damages as it agreed to a transshipment of the goods and is liable for demurrages amounting to P298k incurred in Japan and Manila.

CA:MMMMC cannot seek damages as it agreed to a transshipment of the goods and is liable for demurrages amounting to P52k incurred in Japan. While the goods arrived in Manila in October 1980, appellant was notified of said arrival only in March 1981. No explanation was given for the delay in notifying appellant.

SCNo. Private respondents belatedly informed petitioner of the arrival of its goods in Manila and that if it wished to take delivery of the cargo it would have to pay P52k. Private respondents unequivocally offered petitioner the option of paying the shipping and demurrage charges in order to take delivery of the goods or of abandoning the same so that private respondents could sell them at public auction and thereafter apply the proceeds in payment of the shipping and other charges. There is no dispute that private respondents expressly and on their own volition granted petitioner an option with respect to the satisfaction of freightage and demurrage charges. Having given such option, especially since it was accepted by petitioner, private respondents are estopped from reneging thereon. Petitioner, on its part, was well within its right to exercise said option. Private respondents, in giving the option, and petitioner, in exercising that option, are concluded by their respective actions. To allow either of them to unilaterally back out on the offer and on the exercise of the option would be to countenance abuse of rights as an order of the day, doing violence to the long entrenched principle of mutuality of contracts.By analogy, this can also apply to maritime transportation. Further, with much more reason can petitioner in the instant case properly abandon the goods, not only because of the unreasonable delay in its delivery but because of the option which was categorically granted to and exercised by it as a means of settling its liability for the cost and expenses of reshipment. And, said choice having been duly communicated, the same is binding upon the parties on legal and equitable considerations of estoppel.CASE TITLE: Trans-Asia Shipping Lines vs. CAKEYWORD: Delayed AttorneyPONENTE: Justice Davide Jr.DOCTRINE: ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

FACTS: Plaintiff, Atty. Renato Arroyo, a public attorney, bought a ticket from defendant, a corporation engaged in inter-island shipping, for the voyage of M/V Asia Thailand vessel to Cagayan de Oro City from Cebu City on November 12, 1991.At around 5:30 in the evening of November 12, 1991, plaintiff boarded the M/V Asia Thailand vessel. At that instance, plaintiff noticed that some repair works were being undertaken on the engine of the vessel. The vessel departed at around 11:00 in the evening with only one (1) engine running.After an hour of slow voyage, the vessel stopped near Kawit Island and dropped its anchor thereat. After half an hour of stillness, some passengers demanded that they should be allowed to return to Cebu City for they were no longer willing to continue their voyage to Cagayan de Oro City. The captain acceded to their request and thus the vessel headed back to Cebu City.At Cebu City, plaintiff together with the other passengers who requested to be brought back to Cebu City, were allowed to disembark. Thereafter, the vessel proceeded to Cagayan de Oro City. Plaintiff, the next day, boarded the M/V Asia Japan for its voyage to Cagayan de Oro City, likewise a vessel of defendant.ISSUE: Whether or not defendant is guilty of fraud delay and negligence?PETITIONERS CONTENTION: plaintiff-appellant should not be faulted why he chose to disembark from the vessel with the other passengers when it returned back to Cebu City.RESPONDENTS CONTENTION: the private respondent offered no evidence to prove that his contract of carriage with the petitioner provided for liability in case of delay in departure, nor that a designation of the time of departure was the controlling motive for the establishment of the contract.RULING:TRIAL COURT: DISMISSED. Defendant did not hide the fact that the cylinder head cracked. Plaintiff even saw during its repair. If he had doubts as to the vessels capacity to sail, he had time yet to take another boat. The ticket could be returned to defendant and corresponding cash [would] be returned to him.Neither could negligence, bad faith or malice on the part of defendant be inferred from the evidence of the parties. When the boat arrived at [the] Port of Cebu after it returned from Kawit Island, there was an announcement that passengers who would like to disembark were given ten (10) minutes only to do so. By this announcement, it could be inferred that the boat will proceed to Cagayan de Oro City. If plaintiff entertained doubts, he should have asked a member of the crew of the boat or better still, the captain of the boat. APPELATE COURT: REVERSED.Under Article 1733 of the Civil Code, the petitioner was bound to observe extraordinary diligence in ensuring the safety of the private respondent. That meant that the petitioner was, pursuant to Article 1755 of the said Code, bound to carry the private respondent safely as far as human care and foresight could provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances. Award of damages for moral, exemplary, attorneys fee and cost of suit was given. It did not, however, allow the grant of damages for the delay in the performance of the petitioners obligation as the requirement of demand set forth in Article 1169 of the Civil Code had not been met by the private respondent. Besides, it found that the private respondent offered no evidence to prove that his contract of carriage with the petitioner provided for liability in case of delay in departure, nor that a designation of the time of departure was the controlling motive for the establishment of the contract.Hence the appeal for actual or compensatory damages.SUPREME COURT: In his complaint, the private respondent claims actual or compensatory, moral, and exemplary damages.Actual or compensatory damages represent the adequate compensation for pecuniary loss suffered and for profits the obligee failed to obtain.The Court of Appeals did not grant the private respondent actual or compensatory damages, reasoning that no delay was incurred since there was no demand, as required by Article 1169 of the Civil Code. This article, however, finds no application in this case because, as found by the respondent Court, there was in fact no delay in the commencement of the contracted voyage. If any delay was incurred, it was after the commencement of such voyage, more specifically, when the voyage was subsequently interrupted when the vessel had to stop near Kawit Island after the only functioning engine conked out. For the private respondent, such would be the loss of income if unable to report to his office on the day he was supposed to arrive were it not for the delay. This, however, assumes that he stayed on the vessel and was with it when it thereafter resumed its voyage; but he did not. As he and some passengers resolved not to complete the voyage, the vessel had to return to its port of origin and allow them to disembark. The private respondent then took the petitioners other vessel the following day, using the ticket he had purchased for the previous days voyage.Any further delay then in the private respondents arrival at the port of destination was caused by his decision to disembark. Had he remained on the first vessel, he would have reached his destination at noon of 13 November 1991, thus been able to report to his office in the afternoon. He, therefore, would have lost only the salary for half of a day. But actual or compensatory damages must be proved,[30] which the private respondent failed to do. There is no convincing evidence that he did not receive his salary for 13 November 1991 nor that his absence was not excused. #SANTOS,N.

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

FACTS: CMC Trading A.G shipped on board the M/V Anangel Sky at Hamburg, Germany, 242 coils of various Prime Cold Steel sheets for transportation to Manila consigned to the Philippine Steel Trading Corp. The vessel arrived at the port of Manila and. Within the subsequent days, discharged the said cargo; Four (4) coils are said to be in bad order BO tally sheet #154974. Finding the four (4) coils in their damaged state to be unfit for the intended purpose, the consignee Philippine Steel trading Corporation declared the same as total loss. Despite receipt of formal demand, defendants-appellees refused to submit to the consignees claim. Consequently, plaintiff paid php503,086.50 and was subrogated to the latters rights and causes of action against defendants.Subsequently, plaintiff instituted this complaint for recovery of the amount paid by them, to the consignee as insured. Impugning the propriety of the suit exercised against due diligence and foresight required by law to prevent any damage/loss to said shipment, and that their liability, if there be any, should not exceed the limitations of liability provided for in the bill of lading and other pertinent laws.ISSUE: Whether or not petitioners have overcome the presumption of negligence of a common carrierRULING:TRIAL COURT: The RTC dismissed the complaint because respondent had failed to prove its claims with the quantum of proof required by law.COURT OF APPEALS: Reversed. CA ruled that petitioners are liable for the loss or damage of the goods shipped, because they had failed to overcome the presumption of negligence imposed on common carriers.SUPREME COURT: No. Well-settled is the rule that common carriers from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence and vigilance with respect to the safety of the goods and the passengers they transport. This strict requirement is justified by the fact that, without a hand or a voice in the preparation of such contract, the riding public enters into a contract of transportation with common carriers. Owing to this high degree of diligence required of them, common carrier, as a general rule, are presumed to have been at fault or negligent if the goods they transported deteriorated or got lost or destroyed.In the instant case, petitioners failed to prove that they observed extraordinary diligence and precaution which the law requires a common carrier to know and to follow to avoid damage to or destruction of the goods entrusted to it for safe carriage and delivery. #SUBIJANOa. As stated in the bill of lading, petitioners received the subject shipment in good order and condition in Hamburg, Germany.b. Prior to the unloading of the cargo, an inspection report prepared and signed by the representatives of both parties showed the steel bands broken, the metal envelopes rust-stained and heavily buckled, and the contents thereof exposed and rusty.c. Bad Order tally sheet number 154979 issued by Jardine Davies transport Services, Inc (the other petitioner), stated that the four (4) coils were in bad order and condition. Normally, a request for bad order survey is made in case there is an apparent or a presumed loss or damage.d. The certificate of Analysis stated that, based on the sample submitted and tested, the steel sheets found in bad order were wet with fresh water.e. Petitioners in a letter addressed to the Philippine Steel Coating Corporation and dated October 12, 1990. Admitted that they were aware of the condition of the four coils found in bad order and condition.CASE TITLE:TABACALERA INSURANCE CO. vs. NORTH FRONT SHIPPING SERVICES, INCKEYWORD:SACKSOF CORN GRAINSPONENTE:BELLOSILLO, J.:DOCTRINE: Common carrier is presumed negligent in case of loss, destruction, or deterioration of goods

FACTS: Sacks of corn grains were loaded on board North Front 77, vessel owned ny North Fronth Shipping and was consigned to Republic Flour Mills Corp.It was insured to several insurance companies. It turned out that there was shortage of the cargoes and the remaining merchandise was already moldy, rancid and deteriorating. The insurance companies paid the consignee and later claimed damages against respondent by way of subrogation.

ISSUE: Whether or not respondent exercised extraordinary diligence in transporting the sacks of corns.

PETITIONERS CONTENTION: The loss was exclusively attributable to the fault and negligence of the carrier. The Marine Cargo Adjusters hired by the insurance companies conducted a survey and found cracks in the bodega of the barge and heavy concentration of molds on the tarpaulins and wooden boards. They did not notice any seals in the hatches. The tarpaulins were not brand new as there were patches on them. They also discovered that the bulkhead of the barge was rusty.

RESPONDENTS CONTENTION: North Front Shipping Services, Inc., averred in refutation that it could not be made culpable for the loss and deterioration of the cargo as it was never negligent. Captain Solomon Villanueva, master of the vessel, reiterated that the barge was inspected prior to the actual loading and was found adequate and seaworthy. In addition, they were issued a permit to sail by the Coast Guard. The tarpaulins were doubled and brand new and the hatches were properly sealed. They did not encounter big waves hence it was not possible for water to seep in. He further averred that the corn grains were farm wet and not properly dried when loaded.

RULING:

TRIAL COURT: In favor of respondent.The contract entered into between North Front Shipping Services, Inc., and Republic Flour Mills Corporation was a charter-party agreement. As such, only ordinary diligence in the care of goods was required of North Front Shipping Services, Inc.

COURT OF APPEALS: In favor of respondent. As a common carrier required to observe a higher degree of diligence North Front 777 satisfactorily complied with all the requirements

SUPREME COURT: NO. Notwithstanding the charter agreement, respondent remains a common carrier hence bound to observe extraordinary diligence in the vigilance of the goods it tranports.When goods placed in its care are lost or damaged, the carrier is presumed to have been at fault or to have acted negligently. North Front Shipping Services, Inc., therefore has the burden of proving that it observed extraordinary diligence in order to avoid responsibility for the lost cargo. In this case the proofs presented by North Front Shipping Services, Inc., were insufficient to rebut the prima facie presumption of private respondent's negligence.It is not denied by the insurance companies that the vessel was indeed inspected before actual loading and that North Front 777 was issued a Permit to Sail. They proved the fact of shipment and its consequent loss or damage while in the actual possession of the carrier. Notably, the carrier failed to volunteer any explanation why there was spoilage and how it occurred. On the other hand, it was shown during the trial that the vessel had rusty bulkheads and the wooden boards and tarpaulins bore heavy concentration of molds. The tarpaulins used were not new, contrary to the claim of North Front Shipping Services, Inc., as there were already several patches on them, hence, making it highly probable for water to enter. Nonetheless, Republic Flour Mills is found guilty of contributory negligence because while it was seasonably informed about the arrival of goods it did not immediately start the unloading hence it should share at least 40% of the loss. #TA-A

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

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

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

SHORT FACTS: Judge QuiricoAbeto, with the necessary tickets, boarded the Philippine Air Lines' PI-C133 plane at the Mandurriao Airport, Iloilo City for Manila. After three weeks, it was ascertained that the plane crashed at Mt. Baco, Province of Mindoro. Plaintiff-appellee ConradaVda.deAbeto was appointed administratrix of the estate of Judge Abeto.ISSUE: whether or not the defendant is liable for violation of its contract of carriage (YES)RESPONDENTS CONTENTION: Defendant-appellant tried to prove that the plane crash at Mt. Baco was beyond the control of the pilot. The plane at the time of the crash was airworthy for the purpose of conveying passengers across the country as shown by the certificate of airworthiness issued by the Civil Aeronautics Administration (CAA). There was navigational error but no negligence or malfeasance on the part of the pilot. The plane had undergone 1,822 pre- flight checks, 364 thorough checks, 957 terminating checks and 501 after maintenance checks. Further, deviation from its prescribed route was due to the bad weather conditions between Mt. Baco and Romblon and strong winds which caused the plane to drift to Mt. Baco. Appellant argues that the crash was a fortuitous event and, therefore, defendant-appellant cannot be held liable under the provisions of Article 1174 of the New Civil Code. Appellant tried to prove that it had exercised all the cares, skill and diligence required by law on that particular flight in question.RULING:CFI OF ILOILO: the defendant-appellant did not exercise extraordinary diligence or prudence as far as human foresight can provide but on the contrary showed negligence and indifference for the safety of the passengers that it was bound to transport.SUPREME COURT:The prescribed airway of plane PI-C133 that afternoon of November 23, 1960, with Capt. de Mesa, as the pilot, was Iloilo-Romblon-Manila, denominated as airway "Amber l," and the prescribed elevation of the flight was 6,000 ft. The fact is, the plane did not take the designated route because it was some 30 miles to the west when it crashed at Mt. Baco. According to defendant's witness, Ramon A. Pedroza, Administrative Assistant of the Philippine Air Lines, Inc., this tragic crash would have not happened had the pilot continued on the route indicated. Assistant Director Cesar Mijares of the Civil Aeronautics Administration testified that the pilot of said plane was "off course". It is clear that the pilot did not follow the designated route for his flight between Romblon and Manila. The weather was clear and he was supposed to cross airway "Amber I" over Romblon; instead, he made a straight flight to Manila in violation of air traffic rules.At any rate, in the absence of a satisfactory explanation by appellant as to how the accident occurred, the presumption is, it is at fault. In an action based on a contract of carriage, the court need not make an express finding of fault or negligence on the part of the carrier in order to hold it responsible to pay the damages sought for by the passenger. By the contract of carriage, the carrier assumes the express obligation to transport the passenger to his destination safely and to observe extraordinary diligence with a due regard for all the circumstances, and any injury that might be suffered by the passenger is right away attributable to the fault or negligence of the carrier (Art. 1756, New Civil Code). This is an exception to the general rule that negligence must be proved. #TENORIO

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

SHORT FACTS: On August 11, 1978, as BLTB Bus No. 1046 was negotiating the bend of the highway (traversing Barangay Isabong, Tayabas, Quezon), it tried to overtake a Ford Fiera car just as Bus No. 404 of Superlines (driven by Ruben Dasco) was coming from the opposite direction. Seeing thus, Armando Pon (driver of the BLTB Bus) made a belated attempt to slacken the speed of his bus and tried to return to his proper lane. It was an unsuccessful try as the two (2) buses collided with each other. Collision resulted in the death of Aniceto Rosales, Francisco Pamfilo and Romeo Neri and in several injuries to Nena Rosales (wife of Anecito) and Baylon Sales, all passengers of the BLTB Bus. NenaVda. de Rosales and Baylon Sales and the surviving heirs of the deceased passengers instituted separate cases in the Court of First Instance of Marinduque against BLTB and Superlines together with their respective drivers praying for damages, attorney's fees and litigation expenses plus costs. Criminal cases against the drivers of the two buses were filed in the Court of First Instance of Quezon.ISSUE: Whether or not the action of the respondents is based on culpa contractual.PETITIONERS CONTENTION:1. Defendants BLTB and Superlines, together with their drivers Pon and Dasco, denied liability by claiming that they exercised due care and diligence and shifted the fault, against each other. They all interposed counterclaims against the plaintiffs and cross claims against each other.2. Petitioners also contend that "a common carrier is not an absolute insurer against all risks of travel and are not liable for acts or accidents which cannotbe foreseen or inevitable and that responsibility of a common carrier for the safety of its passenger prescribed in Articles 1733 and 1755 of the New Civil Code is not susceptible of a precise and definite formulation."RESPONDENTS CONTENTION: There was a breach of contract resulting to three deaths and injury to two passengers.RULING:TRIAL COURT: The lower court exonerated defendants Superlines and its driver Dasco from liability and attributed sole responsibility to defendants BLTB and its driver Pon, and ordered them jointly and severally to pay damages to the plaintiffs.APPELLATE COURT:Defendants BLTB and Armando Pon appealed from the decision of the lower court to respondent appellate court which affirmed with modification the judgment of the lower court as earlier stated.SUPREME COURT:1. The common carrier's liability for the death of or injuries to its passengers is based on its contractual obligation to carry its passengers safely to their destination. That obligation is so serious that the Civil Code requires "utmost diligence of very cautious person (Article 1755, Civil Code). They are presumed to have been at fault or to have acted negligently unless they prove that they have observed extraordinary diligence" (Article 1756, Civil Code). It must follow that both the driver and the owner must answer for injuries or death to its passengers. "The liability of BLTB is also solidarily with its driver (Viluan v. Court of Appeals, 16 SCRA 742, 747) even though the liability of the driver springs from quasi delict while that of the bus company from contract." pp. 17-19, Rollo)2. For the defense of force majeure or act of God to prosper the accident must be due to natural causes and exclusively without human intervention. #TORRESCASE TITLE:Saludovs Court of AppealsKEYWORD: corpse flight, billl of ladingPONENTE: REGALADO, J.:DOCTRINE: there is delivery to the carrier when the goods are ready for and have been placed in the exclusive possession, custody and control of the carrier for the purpose of their immediate transportation and the carrier has accepted them. Where such a delivery has thus been accepted by the carrier, the liability of the common carrier commences eoinstanti.

SHORT FACTS: The petitioners mother, CrispinaGaldoSaludo, died in Chicago, Illinois. Pomierski and Son Funeral Home of Chicago (Pomierski), after embalming and securing a permit for the bodys disposition, and making the necessary preparations and arrangements for the shipment of the remains from Chicago to the Philippines, had booked the shipment with PAL thru the carriers agent Air Care International, with Pomierski F.H. as the shipper and Maria Saludo as the consignee. The requested routing was from Chicago to San Francisco on board Trans World Airlines (TWA) Flight 131 on October 27, 1976, and from San Francisco to Manila on board PAL Flight No. 107 of the same date, and from Manila to Cebu on board PAL Flight 149 of October 29, 1976. To confirm the said booking, PAL Airway Bill No. 079-ORD-01180454 was issued on Oct 26, 1976. On the same day, Pomierski brought the remains to C.M.A.S (Continental Mortuary Air Services) at the airport which made the necessary arrangements for the flight, transfer, etc. of the body. Maria SalvacionSaludo and SaturninoSaludo (petitioners) took the TWA flight 131, however, upon arrival at San Francisco, it was found out that the body was not in the said flight, instead it is in a plane to Mexico City, as there were two bodies at the terminal, and somehow were switched; It also turned out that TWA, under the same airway bill, had carried the shipment in a flight earlier than TWA Flight 131. Upon arriving at mexico the body was sent to San Francisco and arrived on October 28, 1976, and was subsequently sent to the Philippines, arriving on Oct 30, 1976, a day after its expected arrival. Petitioners filed a damage suit against both TWA and PAL for the delay.ISSUE: Whether or not the delay in the delivery of the remains of petitioners mother was due to the fault of respondent airline companiesPETITIONERS CONTENTION: Relying on the jurisprudencial dictum that a bill of lading is a prima facie evidence of the receipt of goods by the carrier, with an air way bill a bill of lading, Petitioners allege that private respondents upon receipt of the remains (as evidenced by the issuance of PAL Air Waybill No. 079- 01180454, dated Oct 26, 1967, by Air Care International as carriers agent) a delivery was made and therefore are charged with the responsibility to exercise extraordinary diligence, and their failure to exercise such resulted in the switching and/or misdelivery of the remains of CrispinaSaludo to Mexico causing gross delay in its shipment to the Philippines, and consequently, damages to petitionersRESPONDENTS CONTENTION:PAL: They are not liable for the switching on Oct 27, 1976 as it was not until October 28, 1976, that delivery to them was made.TWA: (not relevant to the topic) they followed the Airway bill despite of the earlier flight and such was not the cause of the misdelivery butRULING: Not LiableTRIAL COURT(Court of First Instance, Branch III, Leyte) : denied, lack of evidence to prove liabilityAPPELLATE COURT:denied, affirmed the decision of the lower court in toto; denied petitioners motion for reconsideration for lack of merit.SUPREME COURTA bill of lading is a written acknowledgment of the receipt of the goods and an agreement to transport and deliver them at a specified place to a person named or on his order. Such instrument may be called a shipping receipt, forwarders receipt and receipt for transportation. Under the Tariff and Customs Code, a bill of lading includes airway bills of lading. The two-fold character of a bill of lading is all too familiar; 1)it is a receipt as to the quantity and description of the goods shipped and 2) a contract to transport the goods to the consignee or other person therein designated, on the terms specified in such instrument. Ordinarily, a receipt is not essential to a complete delivery of goods to the carrier for transportation but, when issued, is competent and prima facie, but not conclusive, evidence of delivery to the carrier. It may be explained, varied or contradicted by parol or other evidence. (a) bill of lading may contain constituent elements of estoppel and thus become something more than a contract between the shipper and the carrier. x xx (However), as between the shipper and the carrier, when no goods have been delivered for shipment no recitals in the bill can estop the carrier from showing the true facts x xx. Between the consignor of goods and a receiving carrier, recitals in a bill of lading as to the goods shipped raise only a rebuttable presumption that such goods were delivered for shipment. As between the consignor and a receiving carrier, the fact must outweigh the recital.Explicit is the rule under Article 1736 of the Civil Code that the extraordinary responsibility of the common carrier begins from the time the goods are delivered to the carrier. This responsibility remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner exercises the right of stoppage in transitu, and terminates only after the lapse of a reasonable time for the acceptance of the goods by the consignee or such other person entitled to receive them. And, there is delivery to the carrier when the goods are ready for and have been placed in the exclusive possession, custody and control of the carrier for the purpose of their immediate transportation and the carrier has accepted them. Where such a delivery has thus been accepted by the carrier, the liability of the common carrier commences eoinstanti. Hence, while we agree with petitioners that the extraordinary diligence statutorily required to be observed by the carrier instantaneously commences upon delivery of the goods thereto, for such duty to commence there must in fact have been delivery of the cargo subject of the contract of carriage. Only when such fact of delivery has been unequivocally established can the liability for loss, destruction or deterioration of goods in the custody of the carrier, absent the excepting causes under Article 1734, attach and the presumption of fault of the carrier under Article 1735 be invoked.The facts in the case at bar belie the averment that there was delivery of the cargo to the carrier on October 26, 1976. PAL Airway Bill No. 079-01180454 was issued, not as evidence of receipt of delivery of the cargo on October 26, 1976, but merely as a confirmation of the booking thus made for the San Francisco-Manila flight scheduled on October 27, 1976.It was not until October 28, 1976 that PAL received physical delivery of the body at San Francisco, as duly evidenced by the Interline Freight Transfer Manifest of the American Airline Freight System. The body intended to be shipped as agreed upon was really placed in the possession and control of PAL on October 28, 1976 and it was from that date that private respondents became responsible for the agreed cargo under their undertakings in PAL Airway Bill No. 079-01180454.*The entire fault or negligence being exclusively with C.M.A.S. #YOROBE

CASE TITLE:Benito Macam vs. Court of AppealsKEYWORD: Bill of Lading Delivery of goods to holder of BOL or to the person who has a right to receive them.DOCTRINE: TRANSPORTATION; COMMON CARRIERS; DURATION OF EXTRAORDINARY RESPONSIBILITY -Article 1736 of the Civil Code provides -Art. 1736. The extraordinary responsibility of the common carriers lasts from the time the goods are unconditionally placed in the possession of and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of Article 1738.

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

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

RULING: TRIAL COURT: Ordered respondents to pay, jointly and severally, the value of the shipment plus attorneys fees in favour of petitioner Macam.COURT OF APPEALS: Ruling otherwise, the CA set aside the decision of the trial court and dismissed the complaint together with the counterclaims. It alleged that as established by previous similar transactions between the parties, shipped cargoes were sometimes actually delivered not to the consignee but to notify party GPC without need of the bills of lading or bank guarantee. Moreover, the bills of lading were viewed by respondent court to have been properly superseded by the telex instruction to effect the delivery to GPC.SUPREME COURT ruling in favour of the Respondents, since the subject shipment consisted of perishable goods and Solidbank pre-paid the full amount of the value thereof, it is not hard to believe the claim of respondent Wallem that petitioner indeed requested the release of the goods to GPC without presentation of the bills of lading and bank guarantee. Respondent Court analyzed the telex of petitioner in its entirety and correctly arrived at the conclusion that theConsignee referred to was not Pakistan Bank but GPC. Petitioner also failed to substantiate his claim that he returned to Solidbank the full amount of the value of the cargoes. In view of petitioners utter failure to establish the liability of respondents over the cargoes, no reversible error was committed by respondent court in ruling against him. The petition was denied.

The Court emphasizes that the extraordinary responsibility of the common carriers lasts until actual or constructive delivery of the cargoes to the consignee or to the person who has a right to receive them. Pakistan Bank was indicated in the bills of lading as consignee whereas Great Prospect Company (GPC) was the notify party. However, in the export invoices GPC was clearly named as buyer/importer. Petitioner also referred to GPC as such in his demand letter to respondent Wallem and in his complaint before the trial court. This premise draws the Court to conclude that the delivery of the cargoes to GPC as buyer/importer which, conformably with Art. 1736 had, other than the consignee, the right to receive them was proper. #ABILOCASE TITLE: SAMAR MINING COMPANY, INC. vs. NORDEUTSCHER LLOYD and C.F. SHARP & COMPANY, INCKEYWORD: welded wedge wirePONENTE: Cuevas, JDOCTRINE: The carrier may be relieved of the responsibility for loss or damage to the goods upon actual or constructive delivery of the same by the carrier to the consignee, or to the person who has a right to receive them

SHORT FACTS:1) Plaintiff, now appellee, SAMAR MINING COMPANY, INC. made an importation of one (1) crate Optima welded wedge wire sieves through the M/S SCHWABENSTEIN a vessel owned by defendant-appellant NORDEUTSCHER LLOYD, (represented in the Philippines by its agent, C.F. SHARP & CO., INC.), which shipment is covered by Bill of Lading No. 18 duly issued to consignee SAMAR MINING COMPANY, INC.2) Bill of Lading No. 18 sets forth that the carrier undertook to transport the goods in its vessel, M/S SCHWABENSTEIN only up to the "port of discharge from ship-Manila and thereafter, the goods were to be transshipped by the carrier to the port of destination or "port of discharge of goods3) Upon arrival of the aforesaid vessel at the port of Manila, the aforementioned importation was unloaded and delivered in good order and condition to the bonded warehouse of AMCYL.4) The goods were however never delivered to, nor received by, the consignee at the port of destination Davao.5) Appellee Samar Mining sent letters of complaint, and later filed a formal claim for P1,691.93,the equivalent of $424.00 at that time, against defendants, but neither paid; hence, the instant suit was filed with AMCYL being brought as third party defendant.

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

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

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

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

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

SUPREME COURT: DENIEDUnder ART 1736, the carrier may be relieved of the responsibility for loss or damage to the goods upon actual or constructive delivery of the same by the carrier to the consignee, or to the person who has a right to receive them.Two undertakings appeared embodied and/or provided for in the Bill of Lading in question. The first is FOR THE TRANSPORT OF GOODS from Bremen, Germany to Manila. The second, THE TRANSSHIPMENT OF THE SAME GOODS from Manila to Davao, with appellant acting as agent of the consignee. At the hiatus between these two undertakings of appellant which is the moment when the subject goods are discharged in Manila, its personality changes from that of carrier to that of agent of the consignee. Thus, the character of appellant's possession also changes, from possession in its own name as carrier, into possession in the name of consignee as the latter's agent. Such being the case, there was, in effect, actual delivery of the goods from appellant as carrier to the same appellant as agent of the consignee. Upon such delivery, the appellant, as erstwhile carrier, ceases to be responsible for any loss or damage that may befall the goods from that point onwards. #AFANCASE TITLE: LU DO & LU YM CORPORATION vs. I. V. BINAMIRAKEYWORD: missing filmsPONENTE: BAUTISTA ANGELO, JDOCTRINE: While the goods are in its possession, it is but fair that it exercise extraordinary diligence in protecting them from damage, and if loss occurs, the law presumes that it was due to its fault or negligence. This is necessary to protect the interest the interest of the owner who is at its mercy. The situation changes after the goods are delivered to the consignee.

SHORT FACTS:Delta Photo Supply Company of New York shipped on board the M/S FERNSIDE at New York, U.S.A., 6 cases of films and/or photographic supplies consigned to the order of I. V. Binamira. A Bill of Lading was issued where the carrier and the consignee have stipulated to limit the responsibility of the carrier for the loss or damage that may be caused to the goods before they are actually delivered. The films were discharged at the port of Cebu by the stevedoring company hired by petitioner as agent of the carrier. The cargo was received by the Visayan Cebu Terminal Company, Inc., the arrastre operator appointed by the Bureau of Customs. During the discharge, the cargo was inspected by both the stevedoring company and the arrastre operator, and the films were found to be in good condition. But after it was delivered to respondent after 3 days, the same was examined by a surveyor and found out that some films and supplies were missing.ISSUE:Whether or not the carrier is responsible for the loss considering that the same occurred after the shipment was discharged from the ship and placed in the possession and custody of the customs authorities?PETITIONERS CONTENTION: (not mentioned in the case)RESPONDENTS CONTENTION: (not mentioned in the case)RULING:TRIAL COURT: AFFIRMED. The court rendered judgment ordering defendant to pay plaintiff the sum of P216.84, with legal interestAPPELLATE COURT: AFFIRMED. In this jurisdiction, a common carrier has the legal duty to deliver goods to a consignee in the same condition in which it received them. Except where the loss, destruction or deterioration of the merchandise was due to any of the cases enumerated in Article 1734 of the new Civil Code, a carrier is presumed to have been at fault and to have acted negligently, unless it could prove that it observed extraordinary diligence in the care and handling of the goods (Article 1735, supra). Such presumption and the liability of the carrier attach until the goods are delivered actually or constructively, to the consignee, or to the person who has a right to receive them (Article 1736, supra), and we believe delivery to the customs authorities is not the delivery contemplated by Article 1736, supra, in connection with second paragraph of Article 1498, supra, because, in such a case, the goods are then still in the hands of the Government and their owner could not exercise dominion whatever over them until the duties are paid. In the case at bar, the presumption against the carrier, represented appellant as its agent, has not been successfully rebutted.SUPREME COURT:REVERSED.It is now contended that the Court of Appeals erred in its finding not only because it made wrong interpretation of the law on the matter, but also because it ignored the provisions of the bill of lading covering the shipment wherein it was stipulated that the responsibility of the carrier is limited only to losses that may occur while the cargo is still under its custody and control.It is true that, as a rule, a common carrier is responsible for the loss, destruction or deterioration of the goods it assumes to carry from one place to another unless the same is due to any to any of the causes mentioned in Article 1734 on the new Civil Code. But this shall only apply when the loss, destruction or deterioration takes place while the goods are in the possession of the carrier, and not after it has lost control of them.The parties may agree to limit the liability of the carrier considering that the goods have still to go through the inspection of the customs authorities before they are actually turned over to the consignee. This is a situation where we may say that the carrier losses control of the goods because of a custom regulation and it is unfair that it be made responsible for what may happen during the interregnum. And this is precisely what was done by the parties herein. In the bill of lading that was issued covering the shipment in question, both the carrier and the consignee have stipulated to limit the responsibility of the carrier for the loss or damage that may be caused to the goods before they are actually delivered. #AGUILACASE TITLE: NATIONAL TRUCKING AND FORWARDING CORPORATION, vs. LORENZO SHIPPING CORPORATION,KEYWORD: CARE (Cooperative for American Relief Everywhere)PONENTE:Davide, Jr.DOCTRINE: In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier, because of its loss or of any other cause, he must give the latter a receipt for the goods delivered, this receipt producing the same effects as the return of the bill of lading.

SHORT FACTS: On June 5, 1987, the Republic of the Philippines, through the Department of Health (DOH), and the Cooperative for American Relief Everywhere, Inc. (CARE) signed an agreement wherein CARE would acquire from the United States government donations of non-fat dried milk and other food products from January 1, 1987 to December 31, 1989. In turn, the Philippines would transport and distribute the donated commodities to the intended beneficiaries in the country. The government entered into a contract of carriage of goods with herein petitioner National Trucking and Forwarding Corporation (NTFC). Thus, the latter shipped 4,868 bags of non-fat dried milk through herein respondent Lorenzo Shipping Corporation (LSC) from September to December 1988. The consignee named in the bills of lading issued by the respondent was AbdurahmanJama, petitioners branch supervisor in Zamboanga City. On reaching the port of Zamboanga City, respondents agent, Efren Ruste4 Shipping Agency, unloaded the 4,868 bags of non-fat dried milk and delivered the goods to petitioners warehouse. Before each delivery, Rogelio Rizada and Ismael Zamora, both delivery checkers of EfrenRuste Shipping Agency, requested Abdurahman to surrender the original bills of lading, but the latter merely presented certified true copies thereof. Upon completion of each delivery, Rogelio and Ismael asked Abdurahman to sign the delivery receipts. However, at times when Abdurahman had to attend to other business before a delivery was completed, he instructed his subordinates to sign the delivery receipts for him. Notwithstanding the precautions taken, the petitioner allegedly did not receive the subject goods. Thus, in a letter dated March 11, 1989, petitioner NTFC filed a formal claim for non-delivery of the goods shipped through respondent.In its letter of April 26, 1989, the respondent explained that the cargo had already been delivered to AbdurahmanJama. The petitioner then decided to investigate the loss of the goods. But before the investigation was over, AbdurahmanJama resigned as branch supervisor of petitioner. Noting but disbelieving respondents insistence that the goods were delivered, the government through the DOH, CARE, and NTFC as plaintiffs filed an action for breach of contract of carriage, against respondent as defendant, with the RTC of Manila.

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

RULING:TRIAL COURT:DENIED. The RTC ruled in favor of Lorenzo Shipping Corporation and ordered the plaintiffs, pursuant to the defendants counterclaim, to pay, jointly and solidarily, to the defendant, actual damages in the amount of P50,000.00, and attorneys fees in the amount ofP70,000.00, plus the costs of suit.APPELLATE COURT:DENIED. The CA affirmed the decision of the RTC in toto.SUPREME COURT:PARTIALLY GRANTED. The Supreme Court ruled in favor of Lorenzo Shipping Corporation on the issue on whether it is at fault or negligent as common carrier for the loss or deterioration of the goods. The SC stated that the respondent adequately proved that it exercised extraordinary diligence. Although the original bills of lading remained with petitioner, respondents agents demanded from Abdurahman the certified true copies of the bills of lading. They also asked the latter and in his absence, his designated subordinates, to sign the cargo delivery receipts. Citing Article 353 of the Code of Commerce which states: After the contract has been complied with, the bill of lading which the carrier has issued shall be returned to him, and by virtue of the exchange of this title with the thing transported, the respective obligations and actions shall be considered cancelled, . In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier, because of its loss or of any other cause, he must give the latter a receipt for the goods delivered, this receipt producing the same effects as the return of the bill of lading.On the issue on whether damages and attorneys fees are due respondent, The SC ruled in favor of the petitioners. It stated that respondent failed to show proof of actual pecuniary loss, hence, no actual damages are due in favor of respondent and that an adverse decision does not ipso facto justify an award of attorneys fees to the winning party. An award of attorneys fees, in the concept of damages requires factual and legal justifications and the court did not find anything in petitioners suit that justifies the award of attorneys fees. #AGUILARCASE TITLE: LRTA vs Navidad, G.R. No. 145804. February 6, 2003KEYWORD: LRTPONENTE: Vitug, J.

DOCTRINE:Such duty of a common carrier to provide safety to its passengers so obligates it not only during the course of the trip but for so long as the passengers are within its premises and where they ought to be in pursuance to the contract of carriage.

FACTS:On 14 October 1993, about half an hour past seven oclock in the evening, Nicanor Navidad, then drunk, entered the EDSA LRT station after purchasing a token (representing payment of the fare). While Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the security guard assigned to the area approached Navidad. A misunderstanding or an altercation between the two apparently ensued that led to a fist fight. No evidence, however, was adduced to indicate how the fight started or who, between the two, delivered the first blow or how Navidad later fell on the LRT tracks. At the exact moment that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was coming in. Navidad was struck by the moving train, and he was killed instantaneously.

ISSUE: Whether or not LRTA is liable for the death of Navidad

TRIAL COURT:judgment is hereby rendered in favor of the plaintiffs and against the defendants Prudent Security and Junelito Escartin ordering the latter to pay jointly and severally the plaintiffs.

COURT OF APPEALS:judgment is hereby MODIFIED, by exonerating the appellants from any liability for the death of Nicanor Navidad, Jr. Instead, appellees Rodolfo Roman and the Light Rail Transit Authority (LRTA) are held liable for his death and are hereby directed to pay jointly and severally to the plaintiffs-appellees

SUPREME COURT:YES.the assailed decision of the appellate court is AFFIRMED with MODIFICATION but only in that (a) the award of nominal damages is DELETED and (b) petitioner Rodolfo Roman is absolved from liability.

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

CASE TITLE: DANGWA TRANSPORTATION CO., INC. V. CAKEYWORD: Umbrella; BusPONENTE: REGALADO, JDOCTRINE: It is the duty of common carriers of passengers, including common carriers by railroad train, streetcar, or motorbus, to stop their conveyances a reasonable length of time in order to afford passengers an opportunity to board and enter, and they are liable for injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their conveyances while they are doing so.

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

CASE TITLE: La Mallorca vs. CA, GR L-20761, 27 July 1966KEYWORD: LA MALLORCAPONENTE: Barrera, J.DOCTRINE: The relation of carrier and passenger does not cease at the moment the passenger alights from the carriers vehicle at a place selected by the carrier at the point of destination, but continues until the passenger has had a reasonable time or reasonable opportunity to leave the current premises

SHORT FACTS: Robert De Alban and his family rode a bus owned by Joeben Bus Company. Upon reaching their desired destination, they alighted from the bus but Robert returned to get their baggage. However, his youngest daughter followed him without his knowledge. When he stepped into the bus again, the bus accelerated that resulting to Roberts daughter death. The bus ran over her.

ISSUE: Is the bus company liable?

PETITIONERS CONTENTION: La Mallorco contended that when the child was killed, she was no longer a passenger and therefore the contract of carriage terminated

RESPONDENTS CONTENTION: that the carrier's agent had NOT exercised the "utmost diligence" of a "very cautions person" required by Article 1755 of the Civil Code to be observed by a common carrier in the discharge of its obligation to transport safely its passengers. In the first place, the driver, although stopping the bus, nevertheless did not put off the engine. Secondly, he started to run the bus even before the bus conductor gave him the signal to go and while the latter was still unloading part of the baggages of the passengers Mariano Beltran and family. The presence of said passengers near the bus was not unreasonable and they are, therefore, to be considered still as passengers of the carrier, entitled to the protection under their contract of carriage.

RULING:

TRIAL COURT: Lower court rendered judgment against the plaintiff

APPELLATE COURT:Trial Court decision affirmed by CA, holding La Mallorca liable for quasi-delict and ordering it to pay P6,000 plus P400. La Mallorco contended that when the child was killed, she was no longer a passenger and therefore the contract of carriage terminated.

SUPREME COURT:On the question whether the liability of the carrier, as to the child who was already led a place 5 meters from the bus under the contract of carrier, still persists, we rule in the affirmative. It is a recognized rules that the relation between carrier and passengers does not cease at the moment the passenger alights from the carriers premises, to be determined from the circumstances. In this case, there was no utmost diligence. Decision of CA is MODIFIED, damages reduced from 6k down to 3k.#BRILLANTES

CASE TITLE:ABOITIZ SHIPPING vs. CAKEYWORD: carrier and passenger relationshipPONENTE:Regalado, J.DOCTRINE:Relationshp of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock or premises

FACTS:AnacletoViana boarded the vessel M/V Antonia, owned by Aboitiz Shipping Corporation, at the port at San Jose, Occidental Mindoro, bound for Manila. After said vessel had landed, the Pioneer Stevedoring Corporation took over the exclusive control of the cargoes loaded on said vessel pursuant to the Memorandum of Agreement between Pioneer and petitioner Aboitiz. The crane owned by Pioneer was placed alongside the vessel and one (1) hour after the passengers of said vessel had disembarked, it started operation by unloading the cargoes from said vessel. While the crane was being operated, AnacletoViana who had already disembarked from said vessel obviously remembering that some of his cargoes were still loaded in the vessel, went back to the vessel, and it was while he was pointing to the crew of the said vessel to the place where his cargoes were loaded that the crane hit him, pinning him between the side of the vessel and the crane. He was thereafter brought to the hospital where he later died.RESPONDENTS CONTENTON: Private respondents Vianas filed a complaint for damages against petitioner for breach of contract of carriage.PETITIONERS CONTENTION:Aboitiz denied responsibility contending that at the time of the accident, the vessel was completely under the control of respondent Pioneer Stevedoring Corporation as the exclusive stevedoring contractor of Aboitiz, which handled the unloading of cargoes from the vessel of Aboitiz.ISSUE: Whether or not Aboitiz is negligent and is thus liable for Vianas death.HELD: Yes. The victim AnacletoViana guilty of contributory negligence, but it was the negligence of Aboitiz in prematurely turning over the vessel to the arrastre operator for the unloading of cargoes which was the direct, immediate and proximate cause of the victim's death. The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock or premises. Once created, the relationship will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances, and includes a reasonable time to see after his baggage and prepare for his departure.TRIAL COURT:Aboitiz was ordered to pay the Vianas for damages incurred, and Pioneer was ordered to reimburse Aboitiz for whatever amount the latter paid the Vianas.COURT OF APPEALS:Affired the decision of the Trial Court except as to the amount of damages awarded to the Vianas since CA found the victim Viana guilty of contributory negligence, but holding that it was the negligence of Aboitiz in prematurely turning over the vessel to the arrastre operator for the unloading of cargoes which was the direct, immediate and proximate cause of the victims death.SUPREME COURT: Denied the petition of Aboitiz. It is of common knowledge that, by the very nature of petitioner's business as a shipper, the passengers of vessels are allotted a longer period of time to disembark from the ship than other common carriers such as a passenger bus. With respect to the bulk of cargoes and the number of passengers it can load, such vessels are capable of accommodating a bigger volume of both as compared to the capacity of a regular commuter bus. Consequently, a ship passenger will need at least an hour as is the usual practice, to disembark from the vessel and claim his baggage whereas a bus passenger can easily get off the bus and retrieve his luggage in a very short period of time. When the accident occurred, the victim was in the act of unloading his cargoes, which he had every right to do, from petitioner's vessel. As earlier stated, a carrier is duty bound not only to bring its passengers safely to their destination but also to afford them a reasonable time to claim their baggage.#CAPCO

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